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8 Things to Know about the Final Affordable Clean Energy Rule

July 18, 2019

By Jennifer Seinfeld
Senior Project Manager, Environmental Division

On June 19, 2019, EPA issued the “Affordable Clean Energy Rule” (the “ACE Rule,” published in the Federal Register on July 8, 2019; originally proposed August 31, 2018).  More than 500,000 public comments and oral testimony from more than 200 people were received during the public comment period for the ACE rule.

The final ACE rule is largely similar to the proposed one. However, the proposed notice included revisions to EPA’s New Source Review (NSR) permitting program; the final rule states that EPA intends to take final action on the proposed NSR reforms in a separate rulemaking action.

Below are eight things stakeholders should know about the final ACE rule:

1. The Clean Power Plan (CPP) rule is no more.

With the ACE rulemaking, EPA formally repealed the Obama Administration’s CPP rule.

2. Only existing coal-fired electric generating units (EGUs) are being regulated.

While the CPP included other EGUs, such as gas-fired combustion units, only coal-fired EGUs will be regulated under the ACE Rule. EPA states that standards for other types of EGUs may be developed in a future rulemaking.

3. The ACE Rule includes a list of Best System of Emissions Reduction (BSER) as heat rate improvement (HRI) measures.

The rule does not set a presumptive numeric emission limit. The candidate technologies and the expected ranges of emission reductions are provided in the table below.

4. States (not EPA) will establish the standards of performance for individual affected EGUs.

The standards will be expressed as the mass of CO2 emitted per megawatt-hour. Although EPA has provided guidance on the expected effectiveness of HRIs, states may set standards for individual EGUs that fall outside of the EPA-identified ranges with consideration given to unit-specific factors including costs, remaining useful life of the EGU, and the degree to which HRIs have already been implemented.

5. Emissions averaging or trading between units is not allowed.

Each coal-fired EGU must be evaluated to determine an appropriate HRI and emissions standard—a reversal from the proposed rule that allowed for averaging among units at a given plant.

6. Proposed changes to the permitting applicability criteria under the NSR air permitting program were not included.

EPA stated that NSR changes would be addressed in a separate rulemaking. Excluding changes to the NSR program in the ACE rulemaking may effectively preclude some HRIs from being considered. If an HRI triggers NSR permitting (e.g., blade path upgrades or redesigned/replaced economizers), states may consider the time required to obtain an NSR permit a barrier to implementing a particular HRI.

7. Affected sources will effectively have up to five years to come into compliance.

The ACE Rule requires states to submit plans within three years of the final rule, then sources have up to an additional two years to reach compliance.

8. State regulators and affected EGUs both face challenges.

There is no model rule or presumptively approvable standards. Each state must develop an implementation plan that includes distinct standards, timelines and enforcement provisions. Because of the absence of any federally-mandated standard, the regulated community likely will see variations from state to state. Moreover, states will not be allowed to rely on regional programs such as the Regional Greenhouse Gas Initiative in the Mid-Atlantic and northeastern states; rather states must develop individual standards for each EGU.

Moving forward with ACE

The earliest compliance date for the ACE Rule is five years out and implementation delays are likely due to litigation. In addition, many existing coal-fired units are not expected to be operating in five years. Considering these factors, the ACE Rule may not have a significant impact on slowing the overall pace of coal generation retirements.

However, for those coal-fired units that plan to be around and need to comply with the ACE Rule, some significant capital expenditures may be on the not-too-distant horizon.

About the Author:

Jennifer is a degreed chemical engineer with more than 30 years of environmental experience, with a particular emphasis in the air quality field.  Ms. Seinfeld has experience in all technical and managerial phases of complex environmental projects, including conduct of due diligence, site selection and environmental constraints analyses for greenfield and brownfield projects.  Within the air quality environmental arena, she has substantial experience with the New Source Review (NSR) program, including both Prevention of Significant Deterioration (PSD) and Nonattainment NSR permitting programs. In addition to managing efforts to acquire the requisite environmental permits and approvals, Jennifer has also managed and provided technical input into many National Environmental Policy Act (NEPA) projects, including developing Resource Reports, as well as drafting Environmental Assessments (EAs) and Environmental Impact Statements (EISs). Do you have questions for Jennifer? You can email her at jennifer.seinfeld@powereng.com

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