Troutman Sanders LLP: The President’s Climate Action Plan and the Electricity Industry

Troutman Sanders LLP: The President’s Climate Action Plan and the Electricity Industry

By Todd R. Coles, Peter S. Glaser, Bonnie A. Suchman

President Obama released a sweeping climate plan (Plan) on June 25, 2013, using his authority to both address greenhouse gas (GHG) emissions and to prepare for the impacts of climate change. The plan, which consists of a wide variety of executive actions, has three key pillars: (1) cut carbon pollution in America; (2) prepare the United States for the impacts of climate change; and (3) lead international efforts to combat global climate change. While the Plan contains proposals to promote such measures as energy efficiency and advanced transportation technologies, much of the focus of the Plan is on the electric generation sector.

One key provision in the Plan deals with GHG emissions from power plants. The Plan announced the issuance of a Presidential Memorandum directing the Environmental Protection Agency (EPA) to issue GHG performance standards for both new and existing power plants. In the Presidential Memorandum, also issued on June 25, 2013, EPA is directed to re-propose GHG performance standards for new power plants no later than September 20, 2013, with a final rule to be issued in “a timely fashion.” With respect to modified, reconstructed and existing power plants, EPA is directed to issue a proposal by June 1, 2014, and to issue final standards, regulations, or guidelines by June 1, 2015. These regulations must require that States, by June 30, 2016, submit plans for controlling GHG emissions from existing power plants in accordance with EPA’s guidelines. In developing the standards, EPA is to engage with States and industry and to follow a set of six principles set forth in the Presidential Memorandum.

The Plan promotes increased renewable generation as a way to reduce GHG emissions. Under the Plan, the President has set a goal to double renewable generation by 2020. In furtherance of this goal, the Department of the Interior is directed to permit 10 gigawatts of renewable generation on federal lands by 2020. The Plan also designates Red Rock Hydroelectric Plant on the Des Moines River in Iowa as the first-ever hydropower project to participate in the Infrastructure Permitting Dashboard for high priority projects. The Department of Defense is committed under the Plan to deploy 3 gigawatts of renewable energy on military installations by 2025. Federal agencies will set a new goal of 100 megawatts of installed renewable capacity across the federally subsidized housing by 2020. According to the Plan, the federal government will consume 20 percent of its electricity from renewable sources by 2020 – more than double the current goal of 7.5 percent. And the United States will work with international trading partners towards global free trade in clean energy technologies.

The Plan also supports more conventional generation technologies that can address climate change. According to the Plan, the Department of Energy will issue a draft solicitation that would make up to $8 billion in loan guarantee authority available for a wide array of advanced fossil energy and efficiency projects to support innovative technologies. The Obama Administration will encourage our international partners to switch from coal to gas for electricity production, as well as deploy nuclear energy and clean coal technologies. Under the Plan, the President also calls for an end to U.S. government support for public financing of new coal plants overseas, except where there is no feasible alternative or if the facility deploys carbon capture and sequestration technologies.

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