• Bloomberg


The Obama administration on Monday was to issue rules to cut carbon emissions from U.S. power plants, a move designed to secure the president’s legacy on climate and one which has already influenced the campaigns of those who want to succeed him.

The Environmental Protection Agency (EPA) will finalize measures that promise to upend a century of electrical power generation, as it prods states and utilities to use less coal and more wind, solar and natural gas. The plan, estimated to cost $8.4 billion, is among the most complex in agency history and is expected to face a series of contentious legal challenges from states and coal producers.

Elements of the plan were released Sunday by the White House, ahead of the full roll-out. The rules are designed, in part, to put the U.S. on track to meet the goal President Barack Obama laid out as part of negotiations for a global accord on climate change. Those talks are set to conclude this at the Paris climate conference in December.

“It’s time for America, and the world, to act on climate change,” Obama said in a video message released on the White House Twitter feed.

The final rule aims to accomplish a 32 percent reduction in carbon emissions from the nation’s fleet of power plants by 2030, compared with 2005 levels, against 30 percent in the EPA’s original 2014 proposal. Emissions are already down 15 percent from that peak.

The plan will accomplish this in part by giving states credit for solar or wind projects that break ground over the next few years, before the rule takes effect in 2022. It will also force utilities to run natural gas plants more or encourage customers to use less electricity.

Power generation, specifically the burning of coal to make electricity, is the biggest source of carbon pollution in the U.S., and until now there was no cap on those emissions.

“The way electricity is being produced is being significantly transformed,” said Michael Brune, president of the Sierra Club. “It will amount to a move away from fossil fuels toward clean energy.”

Power plants burning coal produce almost 40 percent of the nation’s electricity, down from about half just a few years ago. That’s forecast to decline more as these rules kick in.

The administration has bowed to industry demands, though, and will include a safety valve that will delay the rules for individual states if they threaten the reliability of electricity delivery, according to EPA Administrator Gina McCarthy. “We really don’t expect the safety valve to ever have to be used,” McCarthy said in a media conference call Sunday.

The general EPA plan is actually a set of targets for the states. States will have to submit plans to the agency by 2018 on how it will achieve the EPA-mandated goal, which begin to bite in 2022 and phase in through 2030.

The EPA’s initial proposal would have forced states with a lot of natural gas plants and scope for renewable power growth, such as Arizona, to make cuts in emissions of more than 50 percent by 2030.

Meanwhile, coal-heavy states including Kentucky, West Virginia, Wyoming and Montana faced cuts of 21 percent or less. The EPA tweaked its forecasts for the amount of natural gas and renewable-energy growth it estimates can be accomplished in those states.

“At the end of the day, you will see state goals more uniform,” said Brian Deese, a White House adviser on energy and climate.

The White House says that while it’s backing off on an initial deadline for the rule and making other changes to help states, the final plan will lead to more reductions in greenhouse gases long term because it will boost carbon-free energy and rely less on switching from coal to natural gas. The incentive plan will also reward states that submit plans to the White House early.

“The states that join the race first, and run it the fastest, will win both more investment in clean technologies and less air pollution for their communities,” Fred Krupp, president of the Environmental Defense Fund, a nonprofit group, said in a statement.

Democratic presidential candidate Hillary Rodham Clinton said the plan is “a significant step forward” in meeting the threat of climate change.

“It sets a smart federal standard that gives states the flexibility to choose how to reduce carbon pollution most effectively,” Clinton said in a statement, adding that it promotes a healthier environment and a stronger economy.

The Republican National Committee said in response to Clinton’s statement that Obama’s plan will have “devastating consequences” for the economy and cost jobs.

One thing the EPA did not do is bend to complaints from utilities and discard a separate proposal to require new coal plants to use expensive carbon-capture technology. While the only coal plant now under construction has carbon capture, that rule could mean no more coal plants are built in the U.S., industry critics say.

“EPA’s final Clean Power Plan reflects political expediency, not reality for supplying the nation with low cost reliable power,” said Hal Quinn, president of the National Mining Association. On Monday, the group was to file a stay to try to stop the plan from going into effect, he said.

The regulation is also expected to face lawsuits from coal-dependent states, coal producers and some utilities or power cooperatives. They argue the EPA is exceeding its authority and forcing a reorganization of power generation for which it doesn’t have the legal mandate.

“State leaders are angry that EPA has finalized an unprecedented interference into state authority over energy regulation and markets, clearly inconsistent with statutory and constitutional principles,” Scott Segal, a lawyer in Washington, said in a research note Friday.

Obama pledged the U.S. will cut greenhouse-gas emissions 26-28 percent by 2025 as part of United Nations-led negotiations for a global climate accord. With the changes in this regulation, the U.S. will be on track to meet that goal, according to the White House.

One advantage of boosting renewables and relying less on natural gas is that the emission reductions after 2030 will be greater, Deese said.

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