In the draft Clean Power Plan (CPP) rule, energy efficiency (EE) was included in Building Block 4 as a Best System of Emission Reduction (BSER), as defined in the Clean Air Act. While nuclear power was also included (Building Block 3), any plant that was either under construction or proposed was explicitly reflected in the state emission rate formula and thus negatively impacted compliance plan requirements. Both of these BSER options were modified in the final rule due to industry comments.
Energy efficiency was removed from Building Block 4 as a BSER since a large number of comments indicated: (1) the difficulty in measuring and verifying energy efficiency actions for compliance, and (2) that EE was “beyond the fence line” and thus outside EPA’s regulatory authority. The verification and persistence of reductions (assuming no rebound effect) in electric load by EE measures is more critical in CPP compliance than typical utility EE programs. An affected utility would be subject to penalties and could confront higher compliance costs in the future if the EE measures were not maintained at the stipulated level over the compliance period.
The other avoided emissions BSER was nuclear power. Nuclear power was included in the draft CPP as a compliance option in Building Block 3: (1) new/proposed nuclear plants were built into the emission rate algorithm; and (2) existing nuclear plants were given credit for 6% of their in-place capacity, to reflect nuclear capacity at risk. Both of these conditions negatively impacted state compliance by increasing their required emission rate.
The final CPP rule reflects several major changes in how nuclear power is credited for its zero carbon emissions:
The impact of these three revisions on solar, coal and nuclear capacity is illustrated in the following graphic.
While removing EE as a BSER was done to avoid litigation of EPA’s authority to control energy demand, its ultimate impact on state compliance plans is unknown due to expressed concerns about the ability to verify the persistence of avoided emissions. Alternatively, inclusion of avoided emissions from nuclear power plants, both new and uprates, will have a more significant positive impact on the ability of states with nuclear plants to meet their CPP targets, while simultaneously achieving other Clean Air Act requirements.