A coalition of more than 25 states, including Minnesota as of last week, and various cities have petitioned the U.S. Court of Appeals for the District of Columbia for review of the Trump administration’s promulgation of the Affordable Clean Energy Rule (ACE Rule).  The ACE Rule repeals the Obama administration’s Clean Power Plan (CPP) and sets a new course for federal regulation of carbon (CO2) emissions from power plants.

Under the CPP, states were required to develop plans to reduce CO2 emissions by meeting either state-specific mass caps (tons/year) or state-specific emission rate intensity limits (lb/netMWh). Under the ACE Rule, states are authorized to set plant-specific standards based on what existing coal plants can do “inside the fence line” through efficiency measures, referred to as heat-rate improvements (HRIs).  In setting each plant’s specific emission rate standards, states may consider source-specific factors, such as remaining useful life and cost.

States will have three years to submit implementation plans and EPA will have 12 months to review and approve/disapprove state implementation plans after the plans are determined to be complete. The U.S. Environmental Protection Agency (EPA) has offered minimal guidance about what the compliance plans should ultimately look like, so states will likely have discretion in how they implement the ACE Rule, although states would need to justify a more stringent approach to EPA if they propose a more stringent plan than required by the ACE Rule.

In any event, litigation over regulation of coal-fired power plant CO2 emissions is proceeding in earnest, with the possibility that the U.S. Supreme Court will ultimately be asked to decide the extent of EPA’s authority under the Clean Air Act to regulate CO2.