From Illegal Overreach to Thoughtful Restraint

The Obama administration’s environmental agenda can be neatly summed up by the word “overreach.” No order from the administration better defined this overreach than the Clean Power Plan (CPP), better known as the Costly Power Plan. It was nothing if not ambitious.

With one stroke, President Obama’s EPA shrugged off 45 years of legal interpretation of the Clean Air Act (CAA) and worked with NGOs to craft a plan that would remake the nation’s power system while usurping states’ regulatory authority over their power grids. Astounding, regressive costs, enormous job losses, and grave threats to energy diversity and grid reliability were brushed aside. The CPP was to be the president’s signature environmental measure but it collapsed under its own weight. The very architecture of the CPP was its undoing.

Unlawful and exorbitantly costly, it would have placed an enormous burden on the U.S. economy for insignificant environmental gain. Rightfully, the Supreme Court stayed the CPP’s implementation and the Trump administration and the EPA have taken up the task of repealing and replacing it.

The proposed replacement plan, the Affordable Clean Energy (ACE) rule, restores regulatory authority to the states, returns to the original boundaries of the CAA, and offers environmental progress without crushing the economy and eroding the foundation of the electric grid. We have traded punitive, illegal overreach for thoughtful restraint.

To fully appreciate the value of the EPA’s ACE rule, it’s worth digging into the gruesome details of the CPP near-miss. The Costly Power Plan was rife with problems. Here are the top five:

1. It was unlawful– Despite arguments to the contrary, Sec. 111 (d) of the Clean Air Act didn’t give EPA the authority to transform a state’s energy grid. EPA ignored 45 years of interpretation that limited its authority to regulating discrete sources within a fence line. EPA reached far beyond its power to remake the nation’s power system.
2. It was economically destructive – The CPP was estimated to cost consumers an additional $214 billion for electricity between 2022 and 2030. More than 40 states would have faced double digit increasesin the cost of wholesale electricity. Sixteen states would have faced wholesale power price increases of at least 25 percent. Low-income and fixed-income families would have been hardest hit by rising energy costs. According to the Energy Information Administration’s analysis of reduced demand for coal under the plan, coal-related employment would have fallen by 127,000 high-wage jobs by 2040.
3. Most states opposed it– A majority of states challenged the legality of the plan and following the Supreme Court’s issuance of a stay on its implementation in February of 2016, 29 states stopped working on plans to implement its requirements.
4. It would have weakened energy diversity– An analysis of the plan projected the closure of 41,000 MW of coal-based generating capacity – an amount capable of serving 24 million homes. Our coal fleet is the foundation of the nation’s diverse electricity grid, providing our most reliable and resilient power. IHS Markit recently found that the current diversified U.S. electric supply portfolio, which is anchored by coal, reduces the cost of electricity by about $114 billion per year and lowers the average retail price of electricity by 27 percent. The CPP would have eroded that valuable fuel diversity and its cost savings.
5. It would have offered no significant environmental benefits– The plan would have reduced global temperatures by 0.018 degrees C by the year 2100, atmospheric concentrations of CO2 by less than one percent and sea level rise by 0.3 millimeters.

While the CPP looked to punish the coal industry, and consequently consumers, the industry continues to make progress on emissions reductions. Emissions of sulfur dioxide, nitrogen oxides and particulate matter have been reduced by more than 93 percent since 1970, thanks to nearly $122 billion in investments in emissions controls. Industry is expected to spend an additional $5 billion through 2020.