On Monday, President Obama and the EPA unveiled the final version of the Clean Power Plan, a rule that will reduce carbon dioxide emissions from fossil fuel-fired power plants. Assuming the Clean Power Plan survives an expected avalanche of legal challenges,  the rule will reduce CO₂ emissions from power plants by 32 percent from 2005 levels by 2030. The 32 percent target is higher than the 30 percent target in the 2014 proposed rule, and individual state goals were not adjusted equally to achieve this higher target creating clear winners and losers. For example, Kentucky’s final emission rate goal is 27% lower than what the EPA proposed for Kentucky in 2014 and Indiana’s final emission rate goal is 19% lower, while Mississippi’s final emission rate goal is 37% higher and Tennessee’s final goal is 4% higher than the proposed rule. Another big change is that states will have two more years – until 2022 instead of 2020 – to start meeting emission-reduction requirements. The final rule also places more emphasis on renewable energy sources, which marks a significant shift from the earlier version that sought to speed up a transition from coal-fired power to natural gas plants.

The final rule consists of three main elements: 1) source-specific CO₂ emission performance rates representing the best system of emission reduction for two subcategories of affected Electric Generating Units — fossil fuel-fired electric utility steam generating units and stationary combustion turbines; 2) state-specific CO₂  emission rate goals which the states are expected to achieve when EGUs in each state meet the source-specific performance rates; and 3) guidelines for state implementation plans (SIPs). States are required to submit SIPs by September 2016 but may request an extension until September 2018. States may choose to have carbon emissions measured by rate (based on the pounds of CO₂  emitted for each megawatt hour of electricity produced) or by mass (based on the total tons of CO₂ produced).

A summary of the rule can be found at the EPA’s website, and we will continue to monitor any new developments.