On August 3, 2015, the US Environmental Protection Agency (EPA) released its final rule for the Clean Power Plan (CPP). This is a significant and positive step toward reducing CO₂ emissions from existing electric power plants in the coming years, while creating billions of dollars in economic benefits and maintaining a reliable and resilient grid.  

The structure of the Plan is broadly intact from the proposal, in that the goal-setting is separated from compliance – i.e., the goals set for each state do not dictate how a state must comply to achieve its goals. However, based on more than four million comments received on the proposed rule, EPA made significant and positive changes related to the determination of the Best System of Emission Reduction (BSER), making the final rule more equitable among states, and ensuring more transparent, verifiable and enforceable compliance from states.

Most notably in the final rule, energy efficiency has been removed from the goal-setting. It is crucial to note that this does nothing to impact the viability of energy efficiency as the fastest, easiest and most cost-effective compliance mechanism available to states.  EPA continues to encourage energy efficiency as a least-cost compliance mechanism, by including it in the proposed federal plan; through state economic analyses which conservatively project 1% energy efficiency per year; by double-crediting for early implementation of energy efficiency in low income communities; and expanded allowance for flexibility through trading of energy efficiency credits or allowances.

There is still opportunity to strengthen implementation of the final rule, to support a cleaner environment and a more robust economy. EPA is seeking comments on the proposed federal plans; the proposed model rules; draft evaluation, measurement and verification (EM&V) guidance within the proposed model rule; and the Clean Energy Incentive Program. The Alliance will work to ensure that cost-effective energy efficiency is proscribed in the implementation guidance to its fullest extent, and will continue to encourage state and federal policy makers and regulators to encourage cost-effective energy efficiency as a least cost resource for compliance. Comments are due within 90 days of the publication in the Federal Register, which is expected by mid-to-late October. EPA will not accept comments on the first part of the Clean Power Plan, which establishes the goals through BSER.

Full Fact Sheet

To download the Alliance’s summary of the Clean Power Plan and the valuable role energy efficiency has in it, click here.