On June 2, 2014, the United States Environmental Protection Agency (EPA) announced a proposed rule, called the Clean Power Plan, limiting nationwide carbon dioxide (CO2) emissions from existing fossil fuel-fired stationary combustion turbines and electric utility steam generating units by 30 percent from 2005 levels by 2030 (the Rule). Under the Rule, EPA would use its regulatory power pursuant to Section 111 of the Clean Air Act to set state-specific target emissions cuts that will be implemented at the state level beginning in 2020. While the Rule seeks a 30% reduction in emissions nationwide, each state would have a different goal based on its ability to implement the emission reduction methods available under the Rule. States that currently rely most heavily on coal-fired generation and will have the most difficulty introducing renewable generation will be required to make the smallest emission reductions.

Under the Rule, states will be required to submit their implementation plans to EPA by June 30, 2016 (with the ability to apply to EPA for one- or two-year extensions). During the “phase-in” period from 2020 through 2029, states will be required to meet interim emissions performance goals based on their average emissions throughout the period. Unlike regulations for new power plants, however, the Rule does not set a firm emissions cap for generating facilities, instead allowing states flexibility in attaining the target reductions.