In June, the EPA proposed a rule designed to limit carbon dioxide emissions from existing power plants. The rule provides flexibility to states as to how to achieve the reduction goals; however, some states who will be charged with administering the program have expressed concern over the proposed rules’ frontloading of carbon emission reductions and the selection of a single year, 2012, for establishing each state’s baseline. In Georgia, for instance, the EPA has already taken into account two proposed nuclear facilities that have yet to be constructed. The State of Georgia asserts that if Georgia Power experiences delays or the facilities are ultimately not constructed, the state could have extreme difficulty in meeting its carbon reductions.

Some states argue that using a multiyear approach would have allowed the EPA to compensate for fluctuations such as normal weather patterns or economic changes that can skew a single year’s performance. Gina McCarthy, the current EPA administrator, has indicated that she is open to revising the proposed rule based on concerns expressed by states and the affected industries. One option being discussed by various agencies would be a multistate emissions trading program similar to the regional greenhouse gas initiative currently employed in the northeast, or California’s emissions trading program. As currently drafted, the proposed rule allows states to enter into multistate arrangements where emissions trading programs would be feasible.

For more information regarding the proposed carbon dioxide rule, please contact Phillip Hoover.