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What the Affordable Clean Energy Act Could Mean for U.S. Energy Consumers

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In August, the federal Environmental Protection Agency (EPA) proposed sweeping changes in how the U.S. regulates greenhouse gas emissions from existing coal-fired power plants. The Affordable Clean Energy (ACE) rule, if enacted, would replace the Obama-era Clean Power Plan (which itself never became law under the threat of a Trump administration-era EPA repeal).

What is ACE, and what could it mean for U.S. energy consumers? Here are some key take-aways:

  • The ACE rule shifts more regulatory power to individual states. With ACE, states would be able to write their own regulations for coal-fired power plants, and then submit them to the EPA for review and approval. States would submit plans to establish “patterns of performance” for existing coal plants.

  • Compared to the Clean Power Plan, ACE provides more limited options to reduce greenhouse gas emissions from power plants. Under the new rule, options are limited to those that can be achieved on-site, such as improving a plant’s heating efficiency. The Clean Power Plan, by contrast, emphasized statewide emissions reductions efforts that allowed for the use of more technologies and resources.

  • Under ACE, power plants would need to lower greenhouse gas emissions by a significantly lower amount than would have been required under the Clean Power Plan.

  • ACE could, at least temporarily, throw a lifeline to a struggling coal industry. In recent years, the U.S. energy market has shifted away from coal-fired power plants due to an abundance of low-cost natural gas, renewables, and a desire by investors, shareholders, and customer for cleaner energy options. More than 200 coal plants have been retired since 2010. An estimated 13.5 Gigawatts of U.S. coal capacity is slated for closure in 2018 alone. ACE could allow some coal plants to run longer than previously anticipated.

The ACE rule is currently under a 60-day public comment period, and the EPA is expected to issue a final rule in early 2019. ACE is expected to face legal challenges, as it does not address a key 2009 endangerment finding that forms the justification for the EPA requiring a carbon control program.

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Posted: August 28, 2018