Katherine L. Vaccaro, left, and Megan A. Elliott, right, of Manko Gold Katcher & Fox.

Just weeks ago, the Trump administration proposed its long-awaited answer to the Obama-era Clean Power Plan (CPP). The CPP was the first federal endeavor to regulate greenhouse gas emissions (GHGs) from existing fossil-fuel fired power plants following the U.S. Supreme Court's decision in Massachusetts v. EPA (2007) that carbon dioxide and other GHGs are air pollutants under the Clean Air Act (CAA) and, therefore, can be regulated by the Environmental Protection Agency (EPA). But the CPP's fate was marred from the start, with the rule's detractors immediately rushing to challenge the rule in federal court, and the Supreme Court ultimately deciding in early 2016 to halt implementation of the rule pending the outcome of the litigation in the lower court.

At the same time, then-candidate Donald Trump was already touting his plans to repeal the CPP and replace it with a solution that more thoroughly considered the coal industry's needs. Then shortly after taking office, President Trump issued an executive order to roll back Obama's climate change initiatives, focusing on the CPP. Jumping ahead to August 2018, the EPA has now released its proposal for replacing the CPP. The proposed rule is known as the Affordable Clean Energy (ACE) rule (83 Fed. Reg. 44,746 (Aug. 31, 2018)). But does the ACE rule deliver the sharp turn away from the CPP that the Trump administration promised? This article takes a closer look at the ACE rule and how it stacks up against the CPP.

Scope of Authority Granted to States

Like the CPP, the ACE rule would establish guidelines for states to develop state implementation plans (SIPs) to reduce carbon emissions from existing fossil-fuel fired power plants. But unlike the CPP, the ACE rule does not prescribe any presumptive standards of performance and, instead, allows the states to determine, on a case-by-case basis, the standards that can be achieved through the best system of emissions reductions (BSER) under CAA Section 111(d). Furthermore, where the CPP interpreted BSER as extending to “beyond the fence line” emissions reduction practices, such as replacing coal-fired plants with renewables and switching to natural gas, the ACE rule reads Section 111(d) more narrowly, limiting emissions reduction measures to on-site “heat rate improvements” (HRI).

The proposed rule identifies a menu of candidate HRI technologies that states can choose from in developing their SIPs. These candidate technologies include so-called intelligent sootblowers, boiler feed pumps, air heater and duct leakage controls, and variable frequency drives, among others. The ACE rule would also allow states to consider the “cost, suitability and potential improvement” that each technology would bring to an individual plant. As part of this evaluation, states can weigh a plant's age and remaining useful life, two important factors that were not permitted to be considered under the CPP. The ACE rule would even allow states to apply to exempt certain affected sources from performance standards altogether.