The United States Environmental Protection Agency (U.S. EPA) proposed a replacement, named the Affordable Clean Energy (ACE) rule, to the Obama-era Clean Power Plan (CPP). The CPP was fiercely challenged by states and industry as an overreach and never went into effect after a stay by the U.S. Supreme Court.

The Ohio Chamber supported the challenge to the CPP. The previous legal interpretation of the Clean Air Act, since rescinded by the Trump administration, ignored the act’s text, the agency’s historical understanding of the limit of its regulatory powers and the authority of states over their electricity portfolios and could have forced a massive restructuring of electricity generation in the United States.

The ACE rule proposes an entirely different approach to regulating greenhouse gas (GHG) emissions from existing coal-fired power plants by defining the best system of emission reduction (BSER) for GHG emissions as heat-rate improvements taken at the plant level rather than the generation shifting found in the CPP. U.S. EPA also seeks to amend the New Source Review (NSR) program to encourage efficiency upgrades at generating units meant to cut GHG emissions. Finally, the proposed rule seeks to direct the states on how to implement emission reductions.

With the publication of the proposed rule in the federal register, a comment period of 60 days will commence. The ACE rule notes that US EPA intends to provide states three years to develop state implementation plans (SIPs). In the event of U.S. EPA disallowing a SIP, the agency would then have two years to complete a federal implementation plan.

The ACE rule charts an entirely new path from U.S. EPA on GHG regulation. As the Ohio Chamber reviews the action, please submit feedback or questions to Zack Frymier, Director, Energy and Environmental Policy.