This newsletter addresses EPA’s proposed Clean Power Plan regulatory and compliance developments.
Welcome to West Monroe Partners’ Clean Power Plan Regulatory Tracker – where we track and preview federal and state regulatory policies and developments as they affect the power sector. The newsletter addresses continual coverage of EPA’s Clean Power Plan regulatory and compliance developments.

It is done for now. President Barack Obama announced the U.S. Environmental Protection Agency’s (EPA) promulgation of the final Clean Power Plan on August 3, 2015 under section 111(d) of the Clean Air Act. In time, the Plan’s enactment will prove as historic a moment in history as the passage of the Clean Air Act itself. The Plan will cut U.S. carbon pollution from the power sector by 870 million tons, or 32 percent below 2005 levels, in 2030 and set the tone for international action to do the same. The Clean Air Act, passed by Congress in 1970, with major revisions made in 1977 and again in 1990, targeted air pollution, including acid rain and its precursors and damage to the stratospheric ozone layer. The Plan extends CCA regulations to include carbon emissions from power plants. 

Like transportation, power plants are the largest contributors to greenhouse gas emissions in the US, accounting for roughly one-third each of all carbon pollution emissions. Until CPP, there were no national limits on carbon. EPA’s action now sets a target and precedent internationally – with a goal of initiating serious international negotiations on climate change. US action will demonstrate leadership and almost certainly lead to serious action by other countries that until now were waiting for concrete action by the US. 

The US energy industry is currently experiencing a mix of generation technology advancements and revisions to regulatory policy that taken together represent a transformational change for energy providers and end-user customers. This transformational change is creating significant impacts today and will continue to influence utility, customer, and regulator dynamics over the coming decade. Changes in both utility business models and regulatory frameworks are emerging as traditional forms of power generation are experiencing increasing environmental, social, and economic challenges. These changes, coupled with actions necessary to comply with CPP requirements offer perhaps the best chance for fundamental and lasting change in the utility industry.

Durwood Zaelke, president of the Institute for Governance and Sustainable Development calls CPP promulgation “… the linchpin of the Administration’s domestic effort and international effort on climate change. It raises the diplomatic stakes in the run-up to Paris. He [the President] can take it on the road and use it as leverage with other big economies — China, India, Brazil, South Africa, Indonesia.”

Opponents of the rules estimate compliance will cost billions of dollars, loss of jobs in the fossil fuel industry, raise electricity rates, and slow the American economy. The Administration argues that the rules will create new jobs and industries in technology and clean energy, save consumers billions of dollars in energy costs, and provide additional health benefits by reducing emissions of pollutants that cause asthma and lung disease. We have to remember that the longer-term play here is a cleaner more resilient economy, and growth of new 21st century industries and jobs. 

Regards,
Paul A. DeCotis
(646) 998-9147
pdecotis@westmonroepartners.com