Consistent with President Obama’s Climate Action Plan, EPA today published two sets of proposed rules, which it refers to as “carbon pollution standards,” relating to greenhouse gas emissions from fossil fuel-fired electric generating units - for existing stationary sources (79 Fed. Reg. 3480) and for modified and reconstructed sources (79 Fed. Reg. 34980). The publication of these proposals starts the clock running on comments, which are due on or before October 16, 2014.

EPA had previously proposed carbon pollution standards for newly constructed fossil fuel-fired power plants on January 8, 2014. (79 Fed. Reg. 1430). These proposals have the potential to impact a far greater number of sources than those that are directly subject to it. According to EPA, its proposed standards reflect the “best system of emission reduction” or BSER that has been adequately demonstrated, taking into account cost and non-air quality health and environmental impacts and energy requirements. EPA has grouped BSER control measures into four “building blocks” that include: (1) lowering the carbon intensity of generation by effecting heat rate improvements at individual affected units; (2) reducing emissions of the most carbon-intensive affected units by shifting generation to less carbon-intensive existing natural gas combined cycle units; (3) reducing the emissions of carbon-emitting units by expanding the amount of new, lower (or no) carbon-intensity generation; and (4) reducing the emissions of carbon-emitting units by increasing demand-side energy efficiency. Once the rules are finalized, states then will determine what mix of building blocks to utilize and develop their own implementation plans to achieve compliance. Legal challenges to the final rules likely will be filed.

The initial step for any business potentially affected by these proposals is to file comments. Haynes and Boone has assembled a multi-disciplinary Greenhouse Gas (GHG) Working Group to assist clients in evaluating potential impacts of these proposals on them, including in assisting them in providing comments. If you are interested in obtaining such an evaluation, please contact an attorney in the Firm’s Greenhouse Gas Working Group.