EPA pledges flexibility for states in power plant rule

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Environmental Protection Agency head Gina McCarthy sought to reassure state energy regulators Monday that the upcoming rule to reduce greenhouse gas emissions from existing power plants would give states a great deal of flexibility.

The regulation, which is central to President Obama's climate change agenda, will mandate that states develop plans to reduce greenhouse gas emissions from power plants but will give them discretion over how to reach those goals.

“It needs to be incredibly smartly crafted … to make sure that it provides the flexibilities that states needs while we’re continuing to provide the impetus for carbon pollution reductions that we need,” McCarthy said at an event hosted by the Bipartisan Policy Center and the National Association of Regulatory Utility Commissioners (NARUC).

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McCarthy said that states that have already worked to reduce greenhouse gas emissions will be recognized for their efforts.

“States that are out in front can continue to be there and get rewarded for that and recognized for it, while states that haven’t yet gone down this road can craft a way to do that in a time frame that will be meaningful for them, that will provide them the opportunity to gear up and do things that are useful to their energy system, as well as our collective environment,” McCarthy said.

President Obama has ordered the EPA to propose the standards for existing power plants by this June, so they can be finalized by June 2015 and then made effective a year later. The White House Office of Management and Budget started to review the proposal last week, which is the final step before the EPA can publish the rule and gather formal input from the public.

State flexibility is very important to the states, said Colette Honorable, NARUC's president.

“We requested that EPA consider giving the states the flexibility to fashion solutions that work for them,” Honorable said.

NARUC wants the EPA to recognize that different geographic considerations, climates, mixes of energy sources, budgets and other considerations should be taken into account to give states leeway in how they reduce emissions.

McCarthy said the final rule is likely to take those factors into account. She noted that the section of the Clean Air Act that gives the EPA authority to write the rule is relatively vague.

“There is enormous flexibility in the definition of a state plan and our ability to look at a timeline for achieving that, for submitting the plan, and for achieving the reductions,” she said.

“It is an absolute collaboration between the federal and state government,” McCarthy said of the process. “This is a partnership if there ever was one.”

McCarthy also assured the audience that the regulation would not be an emissions cap-and-trade program, and it would take into account the life cycles of electricity generation equipment, in an effort to avoid rules that “exclusively need to be met by putting very expensive technology on facilities that won’t be around for a while.”