A Cooperative Federalism Approach to Energy is an ACE

The Environment Protection Agency (EPA) overstepped its boundaries under the Obama administration with the Clean Power Plan (CPP). In 2016, the Supreme Court ruled that the Clean Air Act (CAA) was seeking to regulate “outside the fence line” of individual power plants.  According to the EPA’s website, several states, trade associations, labor unions, and rural electric co-ops have expressed their opposition to the CPP. The proposed Affordable Clean Energy (ACE) rule would devolve the authority over energy regulation from the federal government to the states. If the proposed rule is put into action, the states would be given a timeline of three years to prepare their own standards “that meet federal guidelines consistent with current law.”

Many contend that deregulating EPA policy is harmful to the environment. However, as the EPA’s analysis shows, ACE would simultaneously reduce greenhouse gas emissions from current levels and provide an estimated $6.4 billion in savings more than the CPP. The ACE outlines four main components in its approach to regulating greenhouse gas emissions:

  • Defines the “best system for emission reduction” for existing power plants as onsite heat-rate efficiency improvements.
  • Provides a list of “candidate technologies” states can use to establish standards of performance and incorporate into their plans.
  • It aligns regulations under CAA section 111(d) to give states adequate time and flexibility to develop their own plans.
  • Lastly, it updates the News Source Review (NSR) permitting program to further promote efficiency improvements at existing power plants.

Diffusing authority to the states and allowing them to establish standards of performance, helps states to pursue agendas that coincide with their regional economy. This new proposed rule would empower states and foster energy independence. It assumes that states have a better understanding of the natural resources within their borders. States would be able to determine which of the “candidate technologies” can be used for their specified resources and then determine the result of emission reductions. ACE provides a new approach to energy regulation that would provide greater savings and help reduce greenhouse gas emissions.

This cooperative federalism approach to energy regulation would provide an estimated $400 million per year in net annual benefits. In addition, the EPA estimates that this new rule could potentially reduce CO2 emissions by up to 1.5% from projected levels by 2030. This reduction would be the equivalent of taking approximately 5.3 million cars off the road. Further research by the EPA suggests that once states have fully implemented this proposal, CO2 emissions from the U.S. power sector will have been reduced by between 33-34% below 2005 levels, which is higher than the predicted levels of CO2 emission reductions under the CPP. When compared to the CPP, ACE would protect the environment as well as accrue direct benefits. The CPP primarily addressed co-benefits, which provided a skewed representation of its potential benefits. Not only would ACE provide direct benefits, but it would also reduce CO2 and other greenhouse gas emissions.