On August 21, 2018, the U.S. Environmental Protection Agency (EPA) released the long-awaited proposed rule to replace the Obama-era Clean Power Plan (CPP). The Affordable Clean Energy rule (ACE), signed by EPA Acting Administrator Andrew Wheeler on Monday, August 20, is meant to fulfill one of President Trump’s earliest promises to repeal the CPP. The CPP set national targets for reduction of carbon pollution from power plants, but was halted in federal litigation before it went into effect. 

The EPA’s overview of ACE explains that the new rule is grounded in the view that the CPP exceeded EPA’s authority. Rather than enforcing a national target, ACE establishes “emission guidelines for states to develop plans to address greenhouse gas emissions from existing coal-fired power plants.” ACE was informed by more than 270,000 public comments.

Instead of capping greenhouse gas emissions, the ACE seeks to improve efficiency at individual plants and offers states more flexibility to make heat rate improvements on a unit-by unit basis. (Heat rate improvements generally save fuel and reduce emissions.)

In a call with stakeholders, EPA Assistant Administrator for Air and Radiation Bill Wehrum stated that the rule has three primary objectives:

• Rebalancing the roles of state and federal authorities to ensure state primacy.
• Changing the framework of federal obligations to utilize Best Systems of Emission Reduction (BSER).
• Revising New Source Review for power plants.

A detailed fact sheet describes the rule’s proposed changes, including a projection that the rule will reduce carbon emissions by 2025, compared to a no-CPP scenario. EPA also projects that “[u]nder some scenarios, avoided compliance costs total $6.4 billion compared to the CPP.” The ACE rule is also expected to reduce U.S. retail electricity prices and increase coal production for power sector use by 2025.

While the proposed rule does not go as far as some of the president’s supporters would have preferred, the president held rallies in West Virginia to tout its predicted benefit for coal producers. He can be expected to regularly reference the rule while campaigning for Republican congressional candidates in the run-up to the mid-term elections in November.

The EPA will open a 60-day comment period from the date of publication in the Federal Register, and plans to hold a public hearing on the proposed rule.