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Clean Power Plan

A handbook released today walks state consumer advocates through EPA’s Clean Power Plan, a complex rulemaking made all the more difficult to unpack due to the degree of flexibility provided to states. Effective participation of consumer advocates in the compliance process is essential to protect the interests of ratepayers.

Yes, it does. Unfortunately, some confusion persists about how energy efficiency measures can be applied to mass-based compliance within the Clean Power Plan. Fortunately, the answer can be summarized in two sentences: (1) In any situation, energy efficiency is a cost-effective way to reduce demand for electricity, both reducing emissions and helping to avoid or defer other mass-based compliance actions. (2) States can take action to develop customized plans to further encourage energy efficiency as a means for meeting mass-based compliance.

Emissions trading programs are a long-established mechanism used by environmental regulators to reduce air pollution from the electric sector. In this series of posts, we explore how EPA has designed the Clean Power Plan to facilitate the buying and selling of credits representing emissions reductions at fossil-fuel fired power plants. Part 1 focused on rate-based trading. Part 2 explores how states can trade allowances representing tons of CO2 emissions.

Under EPA’s final Clean Power Plan, states must submit initial compliance plans or demonstrate progress toward that goal by September 2016. The Synapse Clean Power Plan Toolkit can help state agencies, public interest groups, and others zero in on cost-effective compliance plan options for any state or region affected by the rulemaking.

In a series of recent briefs on the consumer costs of low-emissions futures, Synapse demonstrates that a Clean Energy Future scenario that exceeds the emissions targets of EPA’s Clean Power Plan can also lower electricity bills nationwide. The idea that investing heavily in clean energy and energy efficiency programs will save households money may be surprising to some, but in the third and final brief in the series, released today, Synapse discusses the logic behind why this is the case and why—if it’s so appealing—states haven’t already embarked on similar trajectories.

In this series of posts, we explore how EPA has designed the Clean Power Plan to facilitate the buying and selling of credits representing emissions reductions at fossil-fuel fired power plants. Part 1 focuses on rate-based trading. Part 2 will explore how states can trade allowances representing tons of CO2 emissions.

EPA’s final Clean Power Plan differs from the version proposed last year in several non-trivial ways. In fact, the basic framework of the rule—the way in which the EPA sets states’ targets for emissions reductions and the options for meeting those targets—has changed. As part of our ongoing series of webinars on the final Clean Power Plan, Synapse will present a webinar next Tuesday that drills into the details of EPA’s new method for calculating states’ targets and the differences between the seven compliance pathways (of which there were two in the proposed rule).

A key challenge that EPA, state agencies, and public interest groups involved in Clean Power Plan compliance planning are likely to face during the development of state plans, trading program initiation, and compliance demonstration, has to do with how emissions displacement interacts with state compliance options—and rate-based options in particular.

EPA’s Clean Power Plan, released this past Monday, offers many more options for compliance than were available in the proposed rule. More on these pathways plus a link to detailed slide deck after the jump.

On August 3, EPA released the final version of its Clean Power Plan. This rule establishes emission reduction guidelines for existing power plants aimed at reducing carbon dioxide (CO2) emissions 32 percent below 2005 levels. The final rule includes some important difference from the version proposed last year. As public agencies, interest groups, and electric-sector experts scramble in the next days and weeks to first absorb and then analyze the rule, we offer our early assessment of the top eight things planners and advocates should know about the final Clean Power Plan, and compare each point to the proposed rule.

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