The Environmental Protection Agency Clean Power Plan (CPP) affects every state differently based on the unique emissions profile of individual states, the K&L Gates law firm said in a Sept. 11 analysis of the EPA plan.
Key policymakers in places like the West Coast and Northeast tend to support the carbon dioxide reduction plan. But places like Texas, the Southeast and the Intermountain West tend to oppose the Obama administration plan.
That’s the assessment by K&L Gates, a firm that has more than 2,000 lawyers on five continents. Authors of the report included William J. Moltz; Alyssa A. Moir; Michael L. O’Neill; Daniel C. Kelly-Stallings and Tara C. Garcia.
In August, the EPA announced the final version of the proposed rule that would have states draft implementation plans to cut power sector CO2 32 percent by 2030.
While the U.S. Court of Appeals for the D.C. Circuit has already rejected a request by a group of 15 states for an emergency stay of the EPA rule, expect additional lawsuits as states begin working on their plan, the K&L Gates said.
The target-based approach is in some ways similar to the structure of EPA’s National Ambient Air Quality Standards. Although NAAQS are set on a nationwide basis, under the CPP every state has a different carbon target based on a calculus that includes the state’s emissions profile and energy mix, K&L Gates firm noted.
“Thus, some states (like Montana and West Virginia) are subject to greater emission reductions than other states (like Idaho and Maine),” the law firm said.
Some governors and environmental agency heads in the Northeast—all of which at one point in time were members of the Regional Greenhouse Gas Initiative — publicly support the CO2 rule and have, for the most part, expressed confidence in their states’ abilities to meet the plan’s stated goals.
This is despite the fact that some states in the Northeast are facing very stringent CO2 reduction targets under the plan.
“Using a rate-based goal approach, state goals nationwide fall in a range between 771 lbs/MWh on the low end (for states with only natural gas plants) to 1,305 lbs/MWh on the high end (for states with only coal and oil plants),” according to the analysis. “The average 2030 goal for the seven states in the Northeast region that come within the CPP’s reach is 821 lbs/MWh—a goal that is on the low end of this range.”
Leaders in the Northeast appear optimistic about meeting CPP targets because state efforts across the region for reducing CO2 emissions are already under way. Before the final rule was announced, New York already had a plan in place to cut greenhouse gases 80 percent by the year 2050.
Similarly, the majority of Rhode Island’s power plants burn gas, which emits about half the CO2 of coal, and the state has begun looking increasingly toward renewable generation with the construction of the nation’s first offshore wind farm near Block Island.
Also the Clean Power Plan does have its critics in the Northeast. “States with a comparatively larger number of coal-fired plants in the region, such as New Jersey, have already challenged the EPA’s adoption of the rule,” the law firm said.
“The Plan will have deep and long-lasting impacts on a group of states in the middle of the continent that includes Kentucky, Pennsylvania, Ohio, Indiana, and West Virginia,” the firm said. Of those five states, Pennsylvania is the only one that didn’t sign onto the aforementioned legal motion for an emergency stay.
Pennsylvania has 78 coal-fired plants and faces a 33.3 percent reduction target. While Pennsylvania’s Democratic Governor is “committed to making the Clean Power Plan work,” Pennsylvania’s compliance plan seemingly would require review by the GOP-controlled legislature, K&L Gates said.
Kentucky must reduce its emissions rate by more than 40 percent or lower its total carbon emissions from 91.3 million to 63.1 million tons by 2030, according to the analysis.
Ohio, Indiana, and West Virginia are united in their opposition.
West Virginia faces a 37 percent emissions reduction target—up 10 percent from the proposed rule, and appears fully committed to fighting the rule. At the same time, West Virginia regulators are now considering whether to put all their chips in a litigation strategy or hedge their bets by simultaneously creating a state plan.
States in the Southeast or bordering the region tend to face some of the stiffest compliance targets.
For example, Maryland must reduce its CO2 emissions rate by about 37 percentby 2030. Tennessee must lower its emissions rate by nearly 40 percent.
Other states, like Florida and Virginia, do not face especially onerous emissions goals but will nevertheless have to take action to meet their targets. The region’s reliance on legacy coal generating assets, coupled with skepticism toward federal regulation of environmental issues, suggests that the Southeast will remain at the forefront of any challenge to the CPP, K&L Gates said.
K&L Gates finds that the CO2 rule is viewed differently by West Coast states and states in the Intermountain West.
“The West Coast states are optimistic about their ability to comply with the Plan. California has virtually eliminated coal from its energy mix and has been a national leader in cutting greenhouse gas emissions,” the law firm said.
California and some of its coastal neighbors, hope that the rule will boost the economy through increased interest in energy efficiency and renewable energy.
Oregon’s emissions target was reduced from 48 percent in the proposed rule to 20 percent in the final rule, placing the final target below the state’s previously adopted statewide emissions reductions goals.
The situation is similar in Washington, where state regulators are hopeful that the state can meet its emissions targets largely by complying with existing law. In large part, this is due to the fact that Washington’s only remaining coal-fired power plant is scheduled to be shut down entirely by 2025, and Washington’s existing laws on carbon emissions are reasonably aggressive.
The same is true in some, but not all, of the Intermountain West states. Nevada, for example, is believed to be on its way to meeting its targets and has visions of riding the wave of anticipated demand for renewables to become a net energy exporter.
Some reports have Colorado being as much as 75 percent of the way toward meeting its target, but the state will still need to take some action due to the fact that roughly half of its energy came from coal in 2014. Colorado also has untapped renewable potential that it is already moving to utilize.
The situation is more complicated in other Mountain West states. For example, Montana and Wyoming have been identified as two of the “biggest losers” under the final version of the plan, with their emissions targets more than doubling from the draft rule, K&L Gates said.
In Wyoming, major changes will need to be made because 90 percent of the state’s energy came from coal in 2013. On the other hand, states like Montana, Utah, and Wyoming are believed to have huge untapped potential for renewable energy, especially wind power.
Meanwhile, Arizona and Utah are leading the charge to oppose the EPA CO2 plan. Arizona faces a 52 percent emissions reduction target due to its widespread coal- and gas-fired electricity generation.
Idaho has one of the lowest emissions targets nationwide at 10 percent, but has limited options for making reductions.
Tribal interests are also affected. The Navajo Nation faces closure of coal-fired plants and coal mines in Arizona and Utah, foreclosing a major revenue source for the tribe.
Texas has been vocal in its opposition. Texas’ opposition is in some respects understandable. Texas has relatively stringent emissions reduction requirements, so some stakeholders are challenging some of EPA’s assumptions in calculating its target, K&L Gates said.
Texas has a robust natural gas industry that would have benefitted under the draft Plan. However, the State now anticipates that the CPP will result in changes to power dispatch protocols that will constrain these benefits.
Reactions are similar in Oklahoma and Louisiana, both of which had joined earlier legal challenges to the rule.
Arkansas, dependent on coal for over half of its electricity in 2013 and facing a nearly 38 percent reduction, is walking the line. Republican Gov. Asa Hutchinson vowed to continue fighting the final rule while also promising to work with industries and consumers to determine a lowest cost option to compliance.
In the upper Midwest, which is rich in wind and sun and with already-established renewable portfolios, states are generally on track to meet the CPP’s targets.
While Minnesota has already closed more than a dozen coal-fired plants, the state still gets about 55 percent of its electricity from coal. Minnesota expects to generate 28.5 percent of its power from renewable sources by 2030.
In Iowa, where wind energy already makes up more than 28 percent of the state’s electricity production, EPA projected that even without the CO2 plan, the state would surpass its 2027 emissions target by 2020.
Michigan is more conflicted. With its existing 10 percent renewable energy standard and energy efficiency mandate, together with a proposed plan for low-carbon power investment and energy waste reduction, initial state assessment of the final plan indicated that Michigan could meet its 39.4 percent reduction target. However, citing concerns regarding increased electricity costs and job loss from one of the oldest coal-fired power fleets in the country, the state joined the petition seeking an emergency stay of the CPP.
Coal-heavy Kansas faces a 43 percent reduction in its carbon emissions rate, a 19 percent increase from the proposed rule. While the state has made major recent gains in wind production, it does not have natural gas combined-cycle units subject to the CPP to see it through a ramp-up to renewables. The state’s Department of Health has stated that it believes the CPP is unattainable.
In Midwest states that are either heavily coal-dependent or without effective renewable portfolios, such as Wisconsin and Nebraska, state officials have petitioned for an emergency stay of the CPP, and are considering renewed legal action questioning EPA’s authority to adopt the regulations and/or joining the “just say no” campaign in its refusal to implement state plans, the law firm said.
Some Midwest states have also been looking at potential options for regional CO2 trading, K&L Gates said.