The Union of Concerned Scientists today announced release of a report which attempts to document that the renewable energy “building block” in EPA’s Clean Power Plan is not sufficiently aggressive. The report argues that, just relying on existing trends and compliance with renewable energy standards, renewable energy can supply 23% of electricity sales nationally by 2030, well above the 12% assumed by EPA. This would translate into a 40% reduction in GHG emissions, rather than the 30% that EPA says the proposed CPP would attain.
I don’t know if UCS is correct, though I’ve assumed that EPA’s projections are conservative, in order to make it easy for the skeptical to support the plan. I’m interested here in two legal issues implicitly raised in the UCS report. EPA, in regulating under § 111(d) of the Clean Air Act, must establish standards of performance based on the “best system of emission reduction” (which must take into account the cost of emission reductions). UCS’s fundamental argument is that EPA’s system is not the “best,” because EPA can obtain greater reductions than what it has proposed with almost no impact on electricity prices.
The administrative law question would then be whether promulgation of the CPP as currently drafted would be arbitrary and capricious because it would not represent BSER. I think that would be an uphill battle, but it would of course depend on the record ultimately before EPA when it promulgates the final rule.
The flip side of this issue is not new; it’s been at the core of all the questions raised about the CPP. As I’ve noted in the past, I’m sympathetic to EPA here. Climate change is a real problem. Congress hasn’t enacted legislation putting a price on carbon. EPA feels it must do something and wants to make its rules take as much advantage of market incentives as the law will allow. I get all that. What I don’t get is how the building blocks of the CPP, other than the required heat rate improvements at generation facilities, constitute “standards of performance for any existing source….” How can that be, when most of the plan has nothing to do with emissions from sources?
I think I hope EPA wins that battle, but it does not seem a foregone conclusion to me. If EPA does win, it will be interesting to see if UCS can persuade a court that EPA has failed to require what is in fact the “best” system of emissions reduction, because they have not given renewable energy its full and proper role.
I am highly skeptical of the UCS assertion that greater reliance on renewables will not result in much higher electricity prices. Notwithstanding the just-announced forecast of 30% higher electricity prices in our area coincident with reduced reliance on cheap fossil fuels, this premise can be further questioned by even a casual examination of the cost implications of renewables implementation projects like wind farms 10-20+ miles offshore.
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