EPA’s Affordable Clean Energy Rule and Related Issues: Frequently Asked Questions

EPA’s Affordable Clean Energy Rule and Related Issues: Frequently Asked Questions

EPA’s Affordable Clean Energy Rule and
August 13, 2020
Related Issues: Frequently Asked Questions
Kate C. Shouse,
In 2019, the U.S. Environmental Protection Agency (EPA) completed its reconsideration of a
Coordinator
Clean Air Act (CAA) rulemaking for greenhouse gas (GHG) emissions from existing fossil-fuel-
Analyst in Environmental
fired power plants. Specifically, the agency repealed the Clean Power Plan (CPP) and
Policy
promulgated new guidelines for coal-fired power plants in the Affordable Clean Energy (ACE)

rule. EPA based these actions on its conclusion that the CPP exceeded CAA authority by using
Jonathan L. Ramseur
measures that applied to the power sector as a whole rather than measures implemented at an
Specialist in Environmental
individual facility. EPA also promulgated new general regulations to implement the ACE rule
Policy
and any future emission guidelines issued under CAA Section 111(d).

EPA promulgated the CPP in 2015 to limit GHG emissions—specifically, carbon dioxide
Linda Tsang
(CO
Legislative Attorney
2)—from existing fossil-fuel-fired power plants. The CPP was the subject of ongoing

litigation and never went into effect. In 2017, EPA reviewed the CPP in response to Executive
Order (E.O.) 13783, which directed federal agencies to “review existing regulations and policies
that potentially burden the development or use of domestically produced energy resources.”

EPA’s review concluded that the CPP exceeded EPA’s statutory authority. The agency therefore
proposed repeal of the CPP in 2017 and a rule to replace it in 2018.
The structure and major provisions of the final ACE rule largely resemble those EPA proposed in August 2018. For example,
the ACE rule defines the best system of emission reduction (BSER) for existing, coal-fired power plant CO2 emissions as
“heat rate improvement” measures, also known as efficiency improvements. EPA stated that it lacked adequate information
to establish a BSER for other types of existing fossil-fuel-fired units, particularly natural-gas-fired units. Similar to the
proposal, the ACE rule does not establish a binding, numeric performance standard for CO2 emissions from existing coal-
fired units. Rather, EPA identified six candidate technologies, which it characterized as the “most impactful” in the 2018
proposal, along with operating and maintenance practices that states must evaluate in establishing a standard of performance
for each source in their state plans under CAA Section 111(d). Noting that many state and industry commenters requested a
presumptive standard or additional clarity, EPA specified the level of emissions reductions achievable using the candidate
technologies. States, however, must ultimately establish a rate-based standard and have the option to establish performance
standards reflecting a heat rate improvement that falls outside of these ranges.
EPA analyzed the ACE rule and the CPP repeal impacts separately, projecting emission changes under each rule in 2025,
2030, and 2035. The agency projected “modest” CO2 reductions (less than 1%) under the final ACE rule compared to a
baseline, which excludes the CPP. In its separate CPP repeal analysis, EPA projected CO2 reductions ranging from zero to
3.5% under several CPP implementation scenarios compared to a baseline without the CPP. EPA considered these
projections as well as power sector trends and concluded that “the most likely result” of implementing the CPP would be “no
change in emissions.” Others have modeled different assumptions than EPA to assess the CPP repeal and reached different
conclusions about projected emission changes.
EPA also finalized revisions to the general implementing regulations under CAA Section 111. The revisions codify EPA’s
current interpretation that states have “broad discretion” to establish and apply emission standards consistent with the BSER.
Among other things, EPA lengthened the timeline specified in federal regulations for development and review of state plans.
EPA did not finalize the proposed revision to the applicability test for certain power plants under New Source Review (NSR).
The NSR program generally requires emission limits based on the best available control technology when new facilities are
built or when an existing facility makes a change that increases emissions above specified thresholds. Historically, NSR
applicability determinations have been contentious and extensively litigated. According to EPA, the NSR changes that were
included in the ACE proposal would prevent NSR from discouraging the installation of energy-efficiency measures. EPA
stated that it intends to take final action on the proposed NSR changes at a later date.
Twenty-three states, the District of Columbia, and seven municipalities are challenging the CPP repeal and ACE rule in the
U.S. Court of Appeals for the D.C. Circuit. A coalition of 21 states has intervened in the litigation in support of EPA. Various
other public interest organizations, industry groups, and Members of Congress are also participating in the litigation.
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Contents
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 2
Q: How much does the generation of electricity contribute to total U.S. GHG
emissions? ........................................................................................................................ 2
Q: How much progress has the United States made in reducing GHG emissions
and meeting emission targets? ......................................................................................... 5
Q: What are the Clean Air Act (CAA) Section 111 requirements? ..................................... 6
Q: How does the CAA Section 111 define standards of performance and best
system of emission reduction? .......................................................................................... 7
Q: What is a “state plan”? ................................................................................................... 7
Q: What is the difference between a “state plan” and a “state implementation
plan”? ............................................................................................................................... 8
Q: What was the Clean Power Plan (CPP)? ........................................................................ 9
Q: Did the CPP ever take effect? ........................................................................................ 9
Q: Did EPA promulgate GHG performance standards for new and modified
power plants under the CAA? .......................................................................................... 9
Q: What is the status of GHG performance standards for new and modified power
plants? ............................................................................................................................ 10
Q: Do the CPP repeal and ACE rules have implications for EPA’s other GHG
rulemakings or the endangerment finding?..................................................................... 11
Repeal of the Clean Power Plan ..................................................................................................... 11
Q: Why did EPA repeal the CPP? ...................................................................................... 11
Q: How has EPA’s interpretation of Section 111 authority changed from its
interpretation in the CPP? .............................................................................................. 12
Q: Has anyone challenged the CPP repeal in court? ......................................................... 13
Affordable Clean Energy (ACE) Final Rule ................................................................................. 13
Q: What is the ACE rule? .................................................................................................. 13
Q: Why did EPA promulgate the ACE rule? ..................................................................... 14
Q: To whom does the ACE rule directly apply? ............................................................... 14
Q: What types of facilities are affected by the final rule? ................................................. 14
Q: What is the BSER under the ACE rule? ....................................................................... 15
Q: What are the ACE rule’s performance standards for CO2 emissions? ......................... 15
Q: Why did EPA not establish a numeric or presumptively approvable CO2
performance standard in the ACE rule? ......................................................................... 16
Q: What are the candidate technologies under the ACE rule? .......................................... 17
Q: How will states establish CO2 emission performance standards? ................................ 19
Q: Can states establish CAA Section 111(d) performance standards less stringent
than otherwise expected from implementing the BSER? .............................................. 19
Q: What are the next steps to implement the ACE rule and what is the timeline?............ 21
Q: When do existing coal-fired EGUs have to comply with performance
standards established by states under the ACE rule? ..................................................... 22
Q: What information must a state include in the state plan submission for existing
coal-fired units? ............................................................................................................. 22
Q: How does the ACE rule interact with existing GHG emission reduction
programs in the states, such as the Regional Greenhouse Gas Initiative and
California’s climate policies? ........................................................................................ 23
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Q: Can states use emission reduction measures outside the “candidate
technologies” list to establish the ACE rule’s performance standards? ......................... 24
Q. Why did EPA exclude natural gas co-firing from the BSER? ...................................... 25
Q: Why didn’t EPA establish a BSER for other fossil-fuel-fired units? ........................... 26
Litigation Challenging the CPP Repeal and the ACE Rule ........................................................... 28
Q: Who is challenging the CPP Repeal, the ACE rule, and the revised
implementing regulations? ............................................................................................. 28
Q: Who are the respondents and intervenors in support of the rules?............................... 30
Q: What are the main legal issues in the litigation? .......................................................... 30
Q: What is the status of the litigation? .............................................................................. 35
EPA’s Updated Analysis of the CPP Repeal and the ACE Rule: Emission Impacts,
Benefits, and Costs ..................................................................................................................... 35
Q: How did EPA estimate the emission impacts of the final rules repealing the
CPP and promulgating the ACE rule?............................................................................ 35
Q: What CO2 emission effects did EPA estimate from the CPP repeal and from
the ACE rulemakings? ................................................................................................... 37
Q: How do the CO2 emission projections in the final ACE rule compare with
prior EPA CO2 emission projections? ............................................................................ 40
Q: What non-CO2 emission effects did EPA estimate from the CPP repeal and
ACE rulemakings? ......................................................................................................... 42
Q: Would the ACE rule’s HRI lead to potential “rebound effects”? ................................. 44
Q: What are EPA’s estimated costs and benefits of the proposed repeal of the
CPP? .............................................................................................................................. 47
Q: What are EPA’s estimated costs and benefits of the final ACE rule? .......................... 47
Q: How did EPA estimate the climate benefits? ............................................................... 48
Q: What are the implications of using the “interim SC-CO2” estimates to estimate
climate benefits? ............................................................................................................ 49
Q: How did EPA estimate the human health co-benefits? ................................................ 50
Q: What are the implications of EPA’s approach to co-benefits in the ACE
analysis? ......................................................................................................................... 52
General Implementing Regulations for Section 111(d) ................................................................ 54
Q: What are the general implementing regulations for Section 111(d)? ........................... 54
Q: What changes did EPA make to the schedules for submission and review of
state plans and federal plans? ......................................................................................... 55
Q: Why did EPA establish new schedules for submission and review of state plans
and federal plans? .......................................................................................................... 55
EPA Postpones Decision Regarding New Source Review (NSR) Changes .................................. 56
Q: What changes to New Source Review applicability did EPA propose in August
2018?.............................................................................................................................. 56
Q: Why did EPA propose changes to NSR applicability in the ACE proposal? ............... 57
Q: What is the status of the changes EPA proposed for NSR in the ACE proposal? ........ 57
Issues for Congressional Consideration ........................................................................................ 57
CAA Regulation of GHG Emissions ....................................................................................... 58
Federal and State Roles to Implement the ACE Rule ............................................................. 59
Role of Benefit-Cost Analysis in CAA Rulemakings ............................................................. 60

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Figures
Figure 1. GHG Emissions by Economic Sector .............................................................................. 3
Figure 2. Percentage of Total Electricity Generation by Energy Source ......................................... 4
Figure 3. U.S. GHG Emissions (Net) .............................................................................................. 6
Figure 4. States and Municipalities Participating in the ACE Rule and CPP Repeal
Litigation .................................................................................................................................... 29
Figure 5. EPA Projections of CO2 Emissions in the Electric Power Sector .................................. 39
Figure 6. Comparison of EPA Reference Case Scenarios ............................................................. 41
Figure 7. EPA Estimates of CO2 Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030) .................................................................................... 45
Figure 8. EPA Estimates of SO2 Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030) .................................................................................... 46
Figure 9. EPA Estimates of NOx Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030) .................................................................................... 47

Tables
Table 1. EPA Projections of CO2 Emissions in the Electric Power Sector .................................... 38
Table 2. EPA Projected Non-CO2 Emissions in the Electric Power Sector ................................... 42
Table 3. EPA Projected Changes in Non-CO2 Emissions in the Electric Power Sector ................ 43
Table 4. Timing Requirements ...................................................................................................... 55

Contacts
Author Information ........................................................................................................................ 62

Congressional Research Service

Introduction
In 2019, the U.S. Environmental Protection Agency (EPA) finalized its repeal of the Clean Power
Plan (CPP) rulemaking and promulgated new emissions guidelines for existing coal-fired electric
utility generating units (EGUs), more commonly referred to as power plants,1 in the Affordable
Clean Energy (ACE) rule.2 These actions stem from a legal interpretation of Section 111 of the
Clean Air Act (CAA). EPA also finalized new general regulations to implement the ACE rule and
any future emission guidelines issued under CAA Section 111(d).
EPA promulgated the CPP in 2015 to limit greenhouse gas (GHG) emissions—specifically,
carbon dioxide (CO2)3—resulting from the combustion of fossil fuels at existing fossil-fuel-fired
EGUs. CO2 emissions account for about 82% of U.S. GHG emissions and over 98% of the GHG
emissions in the electric power sector.4 The CPP was litigated and never went into effect due to a
stay issued by the Supreme Court in February 2016. Challenges to the CPP centered on the rule’s
legal justification and EPA’s methodology to establish national CO2 emission performance rates.
In 2017, EPA reviewed the CPP under Executive Order (E.O.) 13783, which directed federal
agencies to “review existing regulations and policies that potentially burden the development or
use of domestically produced energy resources.”5 EPA’s review concluded that the CPP exceeded
EPA’s statutory authority by using measures that applied to the power sector as a whole rather
than measures carried out within an individual facility. The agency therefore proposed repeal of
the CPP in 2017.
In 2018, the EPA proposed three actions in the ACE rule.6 First, EPA proposed to replace the CPP
with new emission guidelines for existing coal-fired EGUs. Second, EPA proposed revised
regulations to implement emission guidelines under CAA Section 111(d). Third, EPA proposed to
modify an applicability determination for New Source Review (NSR), a CAA preconstruction
permitting program for new and modified stationary sources.7
Debate surrounding CO2 performance standards and EPA’s interpretation of its CAA authority
continues with the repeal of the CPP and issuance of the ACE rule. Stakeholders have expressed
divergent views regarding EPA’s interpretation of its CAA authority and its best system of
emission reduction (BSER) determination under Section 111(d). Twenty-three states, the District
of Columbia, seven municipalities, and various stakeholders are challenging the CPP repeal and

1 The term power plant is a general term referring to a facility that has at least one electric utility generating unit to
generate electricity. This report uses the terms power plant and electric utility generating unit (EGU) interchangeably.
2 EPA, “Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions from Existing Electric
Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations,” 84 Federal Register 32534,
July 8, 2019 (hereinafter “ACE Final Rule”).
3 Under the CAA, the pollutants regulated in the CPP and the ACE rule are GHGs with standards expressed in the form
of CO2 limits. See 40 C.F.R. §60.5705a (for the ACE rule); 40 C.F.R. §60.5705(a) (for the repealed CPP).
4 EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2017, April 2019.
5 Executive Order 13783, 82 Federal Register 16093 §7 (March 31, 2017). For more information on this executive
order, see CRS Legal Sidebar WSLG1789, New Executive Order Directs Agencies to Revise or Rescind Climate
Change Rules and Policies, by Linda Tsang.
6 EPA, “Emission Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions
to Emission Guideline Implementing Regulations; Revisions to New Source Review Program,” 83 Federal Register
44761, August 31, 2018 (hereinafter “ACE Proposal”).
7 For more information see CRS Report R45393, EPA’s Affordable Clean Energy Proposal, by Kate C. Shouse,
Jonathan L. Ramseur, and Linda Tsang.
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ACE rule.8 Twenty-one states and other stakeholders have intervened in the litigation in support
of the CPP repeal and ACE rule.9
In order to provide information about the repeal of the CPP, promulgation of the ACE rule and
related actions, and litigation, this report presents a series of questions and responses and
concludes with a discussion of issues for congressional consideration.
For a detailed discussion of EPA’s 2018 ACE proposal, see CRS Report R45393, EPA’s
Affordable Clean Energy Proposal, by Kate C. Shouse, Jonathan L. Ramseur, and Linda Tsang.
For a detailed discussion of the legal issues, see CRS Legal Sidebar LSB10325, EPA Replaces the
Clean Power Plan with the Affordable Clean Energy Rule, by Linda Tsang; and CRS Legal
Sidebar LSB10199, EPA Proposes New Permitting Test for Power Plant Modifications, by Linda
Tsang.
Background
Q: How much does the generation of electricity contribute to total U.S. GHG
emissions?
A: Anthropogenic (i.e., man-made) GHG emissions are generated throughout the United States
from millions of discrete sources: vehicles, power plants, industrial facilities, households,
commercial buildings, and agricultural activities (e.g., soils and livestock).10 According to EPA,
since 1990, GHG emissions from fossil fuel combustion—coal, natural gas, and petroleum—have
accounted for 74%-78% of total U.S. GHG emissions.11 As illustrated by Figure 1, the electricity
sector historically accounted for the largest percentage of U.S. GHG emissions from fossil fuel
combustion. However, due to declines in the electricity sector emissions over the past decade, the
transportation sector surpassed electricity in 2016. In 2018, the transportation sector accounted
for 28% and the electricity sector accounted for 27% of total U.S. GHG emissions.

8 See Docket, Am. Lung Assoc. v. EPA, No. 19-1140 (D.C. Cir.).
9 See Docket, Am. Lung Assoc. v. EPA, No. 19-1140 (D.C. Cir.).
10 GHGs in the atmosphere trap radiation as heat, warming the earth’s surface and oceans. The primary GHGs emitted
by humans (and estimated by EPA in its annual inventories) include CO2, methane, nitrous oxide, sulfur hexafluoride,
chlorofluorocarbons, hydrofluorocarbons, and perfluorocarbons. While both natural and human-related sources release
GHGs and influence climate, “current climate scientific assessment states high confidence (extremely likely) that
human influence is the dominant cause of the observed warming over the past half-century.” For additional discussion,
see CRS Report R45086, Evolving Assessments of Human and Natural Contributions to Climate Change, by Jane A.
Leggett.
11 In 2018 (the most recent year of available data), these emissions accounted for 75% of total U.S. GHG emissions.
See Table ES-2 in EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, April 2020.
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Figure 1. GHG Emissions by Economic Sector
1990-2018

Source: Prepared by CRS; data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, April
2020, Table 2-10, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-
2018.
Notes: Mil ion metric tons of CO2 equivalent is used because GHGs vary by global warming potential (GWP).
GWP is an index developed by the Intergovernmental Panel on Climate Change (IPCC) that allows comparisons
of the heat-trapping ability of different gases over a period of time, typically 100 years. Consistent with
international GHG reporting requirements, EPA’s most recent GHG inventory (April 2020) uses the GWP
values presented in the IPCC’s 2007 Fourth Assessment Report. The IPCC has since updated the 100-year GWP
estimates, with some increasing and some decreasing.
CO2 emissions from fossil fuel combustion account for over 98% of the GHG emissions in the
electric power sector.12 Multiple factors have played a role in the CO2 emission decrease in the
electricity sector. One key factor is the electricity generation portfolio. Electricity is generated
from a variety of fuels and sources in the United States. Some fuels and sources—nuclear,
hydropower, and some renewables—directly produce no CO2 emissions with their electricity
generation. Fossil fuels, on the other hand, generate different amounts of CO2 emissions per unit
of generated electricity. The amount of CO2 emitted during fossil-fuel-fired electricity generation
is dependent upon the carbon content of the fuel and the efficiency of the generating unit in which
it is combusted, among other variables. For example, natural-gas-fired electricity from a
combined cycle unit typically yields approximately 43% of the CO2 emissions of coal-fired

12 See Table 2-11 in EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, April 2020.
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electricity from a steam unit per kilowatt-hour of electricity.13 Therefore, shifting the U.S.
electricity generation portfolio to lower-emissions fuel sources and more efficient technologies
would likely (all else being equal) reduce CO2 emissions from the electricity sector, which in
turn, would likely reduce total U.S. GHG emissions. Figure 2 illustrates the changes in the
electricity portfolio from 2005 to 2019. Highlighted changes include the following:
 Coal’s contribution to total electricity generation decreased from 50% to 23%.
 Natural gas’s contribution to total electricity generation increased from 19% to
38%.
 Non-hydro renewable energy (wind and solar) generation increased from 2% to
11%.
Figure 2. Percentage of Total Electricity Generation by Energy Source
2005-2019

Source: Prepared by CRS; data from EIA, Electric Power Monthly, Table 1.1, http://www.eia.gov/beta/epm/.
Notes: Renewable sources include wind, utility scale solar, wood fuels, landfil gas, biogenic municipal solid
waste, other biomass, and geothermal. Petroleum includes petroleum liquids and petroleum coke. Estimates of
small-scale solar generation are not included in the above figure. EIA started estimating this generation in 2014. If
estimated small-scale solar generation were included in the renewables generation for 2019, the percentage of
total generation for renewables (non-hydro) would increase from 11% to 12%.
Several factors likely played a role in these recent changes, including technological advances in
energy production (e.g., hydraulic fracturing) and federal and state policies, including federal tax
policies14 and states’ renewable portfolio standards.15 These factors have influenced the

13 For further discussion, see CRS Report R44090, Life-Cycle Greenhouse Gas Assessment of Coal and Natural Gas in
the Power Sector, by Richard K. Lattanzio.
14 See CRS Report R44852, The Value of Energy Tax Incentives for Different Types of Energy Resources, by Molly F.
Sherlock.
15 See, for example, Database of State Incentives for Renewables and Efficiency, Map of Renewable Portfolio Standard
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deployment of these technologies and resources and impacted the relative price differences
between energy sources, particularly coal, natural gas, and renewable sources. These market
forces have played a role in the retirement of coal-fired power plants: Between 2007 and 2018,
the number of coal-fired power plants decreased from 351 to 206, and according to the Energy
Information Administration (EIA), more retirements are planned in coming years.16
Q: How much progress has the United States made in reducing GHG
emissions and meeting emission targets?
A: Figure 3 illustrates total U.S. GHG emissions between 1990 and 2018. As the figure indicates,
U.S. GHG emissions increased 20% between 1990 and 2007. The economic downturn in 2008
and 2009 resulted in a decrease of energy consumption (including electricity) across all economic
sectors. This decline played a key role in the 10% decrease in emission levels during that time.
Between 2010 and 2017, emissions continued to decrease by 8%. Between 2017 and 2018,
emissions increased by 3% and were roughly equivalent to emission levels in 1995. As discussed
above, changes in the nation’s electricity generation portfolio played a key role in this more
recent decline.
In addition, Figure 3 compares recent U.S. GHG emission levels to the 2020 and 2025 emissions
goals previously made by the United States pursuant to the United Nations Framework
Convention on Climate Change’s 2009 Copenhagen Accord and 2015 Paris Agreement,
respectively.17 As the figure indicates, 2018 U.S. GHG emission levels were 10% less than 2005
emissions levels. For more information about trends in CO2 emissions from electricity generation
and the factors that impact emission levels in that sector, see CRS Report R45453, U.S. Carbon
Dioxide Emissions in the Electricity Sector: Factors, Trends, and Projections, by Jonathan L.
Ramseur. For an overview of U.S. energy issues, including U.S. energy consumption and changes
in the fuels used to generate electricity, see CRS Report R44854, 21st Century U.S. Energy
Sources: A Primer, coordinated by Michael Ratner.

Policies, as of June 2019, https://www.dsireusa.org/resources/detailed-summary-maps/.
16 EIA, Electric Power Annual, Table 4.1, https://www.eia.gov/electricity/annual/; and EIA, “More U.S. Coal-Fired
Power Plants Are Decommissioning as Retirements Continue,” July 26, 2019, https://www.eia.gov/todayinenergy/
detail.php?id=40212.
17 For more on U.S. commitments and pledges under the UNFCCC (U.S. Treaty Document 102-38), see CRS Report
R44092, Greenhouse Gas Pledges by Parties to the United Nations Framework Convention on Climate Change and
CRS Report R44609, Climate Change: Frequently Asked Questions About the 2015 Paris Agreement.
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Figure 3. U.S. GHG Emissions (Net)
Compared to 2020 and 2025 Emissions Targets

Source: Prepared by CRS; data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018,
2020, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks.
Notes: Net GHG emissions includes net carbon sequestration from land use, land use change, and forestry. This
involves carbon removals from the atmosphere by photosynthesis and storage in vegetation. See the note in
Figure 1regarding “Mil ion metric tons of CO2-equivalent.”
Q: What are the Clean Air Act (CAA) Section 111 requirements?
A: CAA Section 111 requires EPA to establish nationally uniform, technology-based standards for
categories of industrial facilities, also referred to as stationary sources of air pollution.18 These
standards were intended to help prevent new pollution problems and to “level the playing field for
states competing for industrial growth,” for example, by removing incentives for states or
communities to weaken air pollution standards in order to attract industry.19
CAA Section 111(b) directs EPA to establish maximum emission levels (called New Source
Performance Standards, or NSPS) for new and modified major stationary sources—power plants,
steel mills, and smelters, for example. To set the emission levels, EPA determines the BSER that
has been “adequately demonstrated,” taking costs and any non-air-quality health and
environmental impacts and energy requirements impacts into account.20
Section 111 also addresses existing stationary sources of pollution. Section 111(d) requires EPA to
promulgate regulations, which EPA has historically referred to as “emission guidelines.”21 These

18 42 U.S.C. §7411(b).
19 Robert J. Martineau Jr. and Michael K. Stagg, “New Source Performance Standards,” in The Clean Air Act
Handbook, ed. Julie R. Domike and Alec C. Zacaroli, 4th ed. (Chicago: American Bar Association, 2016).
20 42 U.S.C. §7411(a)(1).
21 For emission guidelines promulgated prior to ACE, EPA defines emission guideline at Title 40, Section 60.21(e), of
the Code of Federal Regulations. For ACE and any future emission guidelines, EPA defines emission guideline at Title
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emission guidelines establish binding requirements that states must address when they develop
plans to regulate the existing sources, which EPA refers to as “designated facilities.”22 In
particular, states must establish performance standards reflecting the BSER for existing sources,
which is determined by EPA. States, in their plans, provide for implementation and enforcement
of the standards. EPA cannot compel a state to submit a state plan pursuant to CAA Section
111(d). However, if a state does not submit a satisfactory plan by EPA’s regulatory deadline,
CAA Section 111(d) directs EPA to prescribe a plan for the state, often described as a federal plan
(42 U.S.C. §7411(d)(2)).
Q: How does the CAA Section 111 define standards of performance and best
system of emission reduction?
A: The term standards of performance appears multiple times in CAA Section 111, including in
both the Section 111(b) provisions relating to new sources and the Section 111(d) provisions
relating to existing sources in a source category. Section 111(a) defines standard of performance
as
[A] standard for emissions of air pollutants which reflects the degree of emission limitation
achievable through the application of the best system of emission reduction which (taking
into account the cost of achieving such reduction and any non-air quality health and
environmental impact and energy requirements) the Administrator determines has been
adequately demonstrated.23
Under this definition, EPA must determine the BSER that is “adequately demonstrated,”
considering certain factors. Then, EPA or states, as applicable, must base the emissions standard
on the degree of emission limitation that is “achievable” through the BSER. The CAA does not
define these component terms within the definition of standard of performance.
Courts have expanded on the CAA Section 111 definition of the term standards of performance
and EPA’s interpretation of its component terms, but they have done so generally with respect to
NSPSs under Section 111(b) rather than emission guidelines for existing sources under Section
111(d).24 For detailed discussion about EPA’s current interpretation of its authority to determine
the BSER under Section 111, see the questions and answers in the “Repeal of the Clean Power
Plan” section.
Q: What is a “state plan”?
A: A “state plan” refers to a plan that provides for the implementation and enforcement of CAA
Section 111(d) performance standards.25 For example, under the ACE rule, states are to develop
plans detailing the implementation and enforcement of performance standards for CO2 emissions

40, Section 60.21a(e).
22 42 U.S.C. §7411(d)(1). For EPA’s definition of designated facility for emission guidelines promulgated prior to
ACE, see 40 C.F.R. §60.21(b). For EPA’s definition of designated facility for ACE and any future emission guidelines
established after July 8, 2019, see 40 C.F.R. §60.21a(b).
23 CAA §111(a)(1), 42 U.S.C. §7411(a)(1).
24 See, for example, Lignite Energy Council v. EPA, 198 F.3d 930, 933 (D.C. Cir. 1999); Sierra Club v. Costle, 657
F.2d 298 (D.C. Cir. 1981); ASARCO Inc. v. EPA, 578 F.2d 319 (D.C. Cir. 1978); Essex Chemical Corp. v.
Ruckelshaus, 486 F.2d 427 (D.C. Cir. 1973); Portland Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir.
1973).
25 42 U.S.C. §7411(d)(1). States also prepare “state plans” under CAA Section 129, which authorizes air emission
limits for solid waste incineration units. See 42 U.S.C. §7429(b)(2).
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from coal-fired EGUs. In general, states develop Section 111 plans based on the emission
guidelines, which include the BSER determination, issued by EPA and in accordance with federal
procedural requirements and then submit them to EPA for review.26 The state plans approved by
EPA are published in federal regulatory code (40 C.F.R. Part 62).27 If a state does not submit a
satisfactory plan by EPA’s regulatory deadline, CAA Section 111(d) directs EPA to prescribe a
plan for the state, described as a federal plan in the ACE rule.28
Q: What is the difference between a “state plan” and a “state implementation
plan”?
A: These terms refer to plans developed by states under different sections of the CAA. A “state
plan” is a plan that provides for the implementation and enforcement of CAA Section 111(d)
performance standards.29 A “state implementation plan” (SIP) is the collection of regulations and
documents developed under CAA Section 110 to ensure compliance with federal air quality
standards, known as National Ambient Air Quality Standards (NAAQS).30
State plans and SIPs establish limits for different kinds of air pollutants and differ in scope of
sources covered.31 A SIP sets forth procedures for compliance with NAAQS for six pollutants,
known as “criteria pollutants” (carbon monoxide, lead, nitrogen dioxide, ozone, particulate
matter, and sulfur dioxide [SO2]).32 A SIP establishes an emissions budget for diverse emission
sources in the state, including power plants, industrial plants, incinerators, and motor vehicles.
The scope of a state plan is relatively narrower than a SIP, given that EPA has historically issued
Section 111(d) performance standards for “specialized types of emission sources that emit
discrete types of pollutants.”33 State plans apply to “designated pollutants,” which EPA has
defined to include performance standards for new sources under Section 111(b) and to exclude
criteria pollutants and hazardous air pollutants (HAPs).34 Examples of designated pollutants

26 EPA cannot compel a state to submit a state plan pursuant to CAA Section 111(d). If a state does not submit a
satisfactory plan by EPA’s regulatory deadline, CAA Section 111(d) directs EPA to prescribe a plan for the state (42
U.S.C. §7411(d)).
27 This part also contains federal plans issued for states that did not submit adequate plans.
28 42 U.S.C. §7411(d)(2).
29 42 U.S.C. §7411(d)(1). States also prepare “state plans” under CAA Section 129, which authorizes air emission
limits for solid waste incineration units (42 U.S.C. §7429(b)(2)).
30 42 U.S.C. §7410. See also EPA, Basic Information about Air Quality SIPs, https://www.epa.gov/sips/basic-
information-air-quality-sips.
31 EPA guidance explains that because “emissions standards applicable to industries on a nationwide basis” (such as
Section 111 performance standards and Section 112 National Emission Standards for Hazardous Air Pollutants) are
codified in the Code of Federal Regulations, they are not included in federally approved SIPs. EPA observed that while
states “typically adopt” federal emission standards into their SIPs, EPA does not adopt those provisions into the
federally approved SIP because such provisions are already enforceable through the federal Code of Federal
Regulations. See EPA, SIP Processing Manual, “What’s Not in a SIP,” https://cfpub.epa.gov/oarwebadmin/sipman/
sipman/mContent.cfm?chap=1&filePos=8.
32 42 U.S.C. §§ 7408(a)(1), 7410. For more information about NAAQS requirements, see CRS Report RL30853, Clean
Air Act: A Summary of the Act and Its Major Requirements, by Kate C. Shouse and Richard K. Lattanzio. For a
summary of current NAAQS for all six criteria pollutants and links to the history of standards for each of these
pollutants, see EPA, “NAAQS Table,” https://www.epa.gov/criteria-air-pollutants/naaqs-table.
33 See generally 40 C.F.R. Part 62. See also Martineau and Stagg, “New Source Performance Standards,” pp. 342-343.
34 40 C.F.R. §60.21(e).
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include sulfuric acid mist from sulfuric acid plants, fluoride emissions from phosphate fertilizer
plants, and nonmethane organic emissions from landfills.35
Q: What was the Clean Power Plan (CPP)?
A: EPA promulgated the CPP in 2015 to limit CO2 emissions from existing fossil-fuel-fired power
plants.36 EPA set national performance standards for CO2 emissions from existing fossil-fuel-fired
power plants under the authority of CAA Section 111(d). One national performance standard
would have applied to existing electric steam generating units (which are mostly coal), and the
other applied to existing stationary combustion turbines—for example, natural gas combined
cycle (NGCC) units. EPA based these standards on the BSER, a statutory term used to define a
performance standard under CAA Section 111. EPA determined the BSER for the CPP based on a
collection of measures that it referred to as three “building blocks”: (1) improving the heat rate at
coal-fired units, (2) shifting generation from coal-fired units to lower-emitting natural gas units,
and (3) shifting generation from fossil fuel units to renewable energy generation. The CPP also
set individual state targets for average emissions from existing power plants based on the CO2
performance standards. Although EPA set state-specific targets, states were to determine how to
reach these goals. For additional details about the CPP as EPA promulgated it in 2015, see CRS
Report R44341, EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked
Questions, by James E. McCarthy et al.
Q: Did the CPP ever take effect?
A: No. The CPP was the subject of ongoing litigation and was never implemented due to a stay
from the Supreme Court.37 The Court dismissed the litigation challenging the CPP as moot after
EPA finalized its repeal of the CPP and the ACE rule.38
Q: Did EPA promulgate GHG performance standards for new and modified
power plants under the CAA?
A: Yes. In 2015, EPA promulgated GHG performance standards for new and modified power
plants under CAA Section 111(b) concurrent to the 111(d) standards for existing plants in the
CPP.39 Once EPA lists a source category, such as fossil-fuel-fired EGUs, Section 111(b) requires
EPA to establish NSPS for new and modified sources within a listed source category.40 Once EPA
promulgates NSPS under Section 111(b) for new or modified sources in that category, Section
111(d) then directs EPA to establish procedures for the states to submit plans establishing

35 See generally 40 C.F.R. Part 62. See also Martineau and Stagg, “New Source Performance Standards,” pp. 342-343.
36 The pollutants regulated in the CPP and the ACE rule are GHGs with standards expressed in the form of CO2 limits.
40 C.F.R. §60.5705a (for the ACE rule); 40 C.F.R. §60.5705(a) (for the repealed CPP). EPA, “Carbon Pollution
Emission Guidelines for Existing Stationary Sources: Final Rule,” 80 Federal Register 64661, October 23, 2015
(hereinafter CPP Final Rule).
37 The Supreme Court in 2016 stayed the implementation of the CPP pending resolution of the lawsuit challenging its
legality. Order in Pending Case, West Virginia v. EPA (S. Ct. No. 15A773, Feb. 9, 2016),
https://www.supremecourt.gov/orders/courtorders/020916zr_21p3.pdf.
38 Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Sept. 17, 2019).
39 EPA, “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary
Sources: Electric Generating Units; Final Rule,” 80 Federal Register 64510, October 23, 2015.
40 42 U.S.C. §7411(b)(1).
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standards of performance for existing sources that would be subject to NSPS if they were new,
unless they are subject to an exclusion under Section 111(d).41
As promulgated in 2015, the NSPS for new and modified power plants would have relied in part
on carbon capture and sequestration (CCS) technology to reduce emissions by about 20%
compared to the emissions of what was then considered a state-of-the-art coal-fired plant without
CCS. Stakeholders challenged the 2015 GHG performance standards for new and modified power
plants in court, but the court paused the litigation pending completion of EPA’s review and any
resulting rulemaking.42
Q: What is the status of GHG performance standards for new and modified
power plants?
A: The GHG performance standards for new and modified power plants remain in effect, though
EPA proposed to revise them on December 6, 2018.43 The December 2018 proposal is a separate
rulemaking from the CPP repeal and ACE rulemakings.
In the December 2018 proposal for new and modified power plants, EPA determined that the
BSER for newly constructed coal-fired units would be the most efficient demonstrated steam
cycle in combination with the best operating practices from exiting units. This proposed BSER
would replace the determination from the 2015 rule, which identified the BSER as partial CCS.
According to the agency, “the primary reason for this proposed revision is the high costs and
limited geographic availability of CCS.”44 The semiannual regulatory agenda estimated a final
decision by December 2020.45 As of July 2020, EPA has not yet finalized this proposal. According
to EPA’s status report in the paused litigation challenging the 2015 GHG performance standards
for new and modified power plants, the agency continues to review the comments submitted on
the proposed rule and plans to send the final rule package to the Office of Management and
Budget (OMB) for interagency review in the early summer of 2020.46

41 42 U.S.C. §7411(d)(1). One of the legal issues raised in the CPP and ACE rule litigation challenges EPA’s
interpretation of CAA Section 111(d)(1)(A). This provision excludes, among other things, from Section 111(d)
regulation “any existing source for any air pollutant (i) for which air quality criteria have not been issued or which is
not included on a list published under section 108(a) or emitted from a source category which is regulated under [CAA]
section 112.” Id. The Section 108(a) exclusion refers to “criteria” air pollutants under the NAAQS program. Id.
§§7408-7410. The Section 108(s) exclusion does not apply because EPA has not listed GHGs as criteria pollutants.
Under the CPP, EPA explained that the Section 112 exclusion “does not bar the regulation under CAA section 111(d)
of non-HAP [hazardous air pollutants] from a source category, regardless of whether that source category is subject to
standards for HAP under CAA section 112.” CPP Final Rule at 64711-15. See also Section 112 Exclusion discussion in
CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA, by Linda
Tsang. Petitioners that challenged the CPP and are challenging the ACE rule argue that sources, and not air pollutants,
regulated under other CAA Section 112 to limit HAPs, such as existing fossil-fuel-fired EGUs, are excluded from
EPA’s scope of Section 111(d) authority. Id. See also “Q: What are the main legal issues in the litigation?”
42 EPA Status Report, North Dakota v. EPA at 3-4, No. 15-1381 (D.C. Cir. Apr. 24, 2020). In 2017, the court ordered
the petitions for review of the 2015 GHG performance standards for new and modified power plants to be held in
abeyance (paused) pending further order of the court.
43 EPA, “Review of Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed
Stationary Sources: Electric Utility Generating Units,” 83 Federal Register 65424, December 20, 2018.
44 Additional information, including a link to the proposed rule, a fact sheet, and an economic impact analysis, can be
found at https://www.epa.gov/stationary-sources-air-pollution/proposal-nsps-ghg-emissions-new-modified-and-
reconstructed-egus.
45 Office of Management and Budget (OMB), Semiannual Regulatory Agenda, EPA, RIN 2060-AU58, Spring 2020,
https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=2060-AU58.
46 EPA Status Report, North Dakota v. EPA at 4, No. 15-1381 (D.C. Cir. Apr. 24, 2020). In 2017, the court ordered the
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Q: Do the CPP repeal and ACE rules have implications for EPA’s other GHG
rulemakings or the endangerment finding?
A: In 2009, EPA issued two findings under CAA Section 202, referred to collectively as the
“GHG endangerment finding.” EPA found (1) that GHGs currently in the atmosphere potentially
endanger public health and welfare and (2) that new motor vehicle emissions cause or contribute
to that pollution.47 EPA subsequently promulgated regulations under CAA authority to limit GHG
emissions from motor vehicles, the power sector, the oil and gas industry, and other sources.
Neither the CPP repeal nor the promulgation of the ACE rule reconsiders EPA’s 2009 GHG
endangerment finding.48 Without reconsidering the GHG endangerment finding, EPA appears to
have a continuing obligation to limit GHG emissions under the CAA.49 Separate from the CPP
repeal and ACE rulemaking, EPA has proposed specific changes to other GHG regulations,
including those for motor vehicles and for the oil and gas sector. For a brief overview of these
proposed changes, see CRS Report R45451, Clean Air Act Issues in the 116th Congress, by James
E. McCarthy, Kate C. Shouse, and Richard K. Lattanzio.
Repeal of the Clean Power Plan
Q: Why did EPA repeal the CPP?
A: EPA bases the CPP repeal on a change in its legal interpretation of its authority under CAA
Section 111 from its interpretation in the CPP. EPA concluded that the CPP exceeded CAA
statutory authority in setting the BSER as a combination of on- and off-site emission reduction
measures that applied to the entire existing source category.50 Because the CPP BSER was based,
in part, on “beyond-the-source” measures (i.e., measures that apply to the source category as a
whole or to entities entirely outside the regulated source category), EPA, after reconsidering the
relevant statutory text, structure, and purpose of CAA Section 111, asserts that the CPP

petitions for review of the 2015 GHG performance standards for new and modified power plants to be held in abeyance
(paused) pending further order of the court. Id. at 3-4.
47 Specifically, EPA’s first finding was that “elevated concentrations of greenhouse gases in the atmosphere may
reasonably be anticipated to endanger the public health and to endanger the public welfare of current and future
generations.” See EPA, “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a)
of the Clean Air Act,” Final Rule, 74 Federal Register 66496 and 66516, December 15, 2009. The Supreme Court
upheld EPA’s “endangerment finding” in Util. Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).
48 In the lawsuits challenging the CPP and the ACE rule, petitioners claimed that EPA failed to make the required
endangerment finding under CAA Section 111 and that EPA could not rely on the endangerment finding that it made in
2009 in the context of CAA Section 202 for motor vehicles. See, for example, Brief of Pac. Legal Found., Tex. Pub.
Policy Found., Morning Star Packing Co., Merit Oil Co., Loggers Ass’n of N. Cal., and Norman Brown in Supp. of
Pet’rs 20-24, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Feb. 23, 2016) (challenging the CPP); Statement of Issues
to be Raised by Petitioner Texas Public Policy Foundation, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Oct, 7,
2019) (challenging the ACE rule).
49 See Massachusetts v. EPA, 549 U.S. 497, 533 (2007) (“Under the clear terms of the Clean Air Act, EPA can avoid
taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides
some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.”).
50 The CPP repeal is one of three separate and distinct rulemakings published in the same Federal Register notice. The
CPP repeal is published at pp. 32522-32 in EPA, “Repeal of the Clean Power Plan; Emission Guidelines for
Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions to Emission Guidelines
Implementing Regulations,” 84 Federal Register 32534, July 8, 2019. Hereinafter, “CPP repeal” refers to pp. 32522-32
of this Federal Register notice.
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“significantly exceeded” its authority.51 Based on this revised interpretation, EPA repealed the
CPP and limited the BSER in the ACE rule to emission reduction measures that owners and
operators can apply directly on site at individual existing EGUs.
In the CPP repeal and ACE rule, EPA contends that it has discretion to change its interpretation of
its legal authority so long as it provides a “reasonable explanation” for the change.52 The Supreme
Court has explained that “[a]gencies are free to change their existing policies as long as they
provide a reasoned explanation for the change…. But the agency must at least ‘display awareness
that it is changing position’ and ‘show that there are good reasons for the new policy.’ … [A]n
‘[u]nexplained inconsistency’ in agency policy is ‘a reason for holding an interpretation to be an
arbitrary and capricious change from agency practice.’”53
Q: How has EPA’s interpretation of Section 111 authority changed from its
interpretation in the CPP?
A: EPA’s interpretation of its CAA Section 111 authority in the ACE rule is narrower than its
previous interpretation in the CPP. As discussed above, CAA Section 111(a) requires standards of
performance to reflect the emissions reductions achievable through “application” of the BSER. In
the CPP, EPA reasoned that the “system” in the BSER reflected the “overall source category,”
taking into account the “unique characteristics of CO2 pollution and the unique, interconnected
and interdependent manner in which affected EGUs and other generating sources operate within
the electricity sector.”54 Under this interpretation, EPA based the CPP BSER for existing fossil-
fuel-fired EGUs on three “building blocks”: (1) improving the heat rate at coal-fired units, (2)
shifting generation to lower-emitting natural gas units, and (3) shifting generation from fossil fuel
units to renewable energy generation.55
In the CPP repeal, EPA presents a different view of its authority to determine the BSER under
Section 111. EPA asserts that the “application” of the BSER referenced in CAA Section 111(a)
“unambiguously limits the BSER to those systems” that can be “applied” or “put into operation at
a building, structure, facility, or installation.”56 In other words, EPA contends that the CAA does
not authorize the agency to select as the BSER measures that apply to the source category as a
whole or to entities entirely outside the regulated source category. EPA states that the CPP
“beyond-the-source” approach “ignored or misinterpreted” the plain text of the CAA that “clearly
precluded the unsupportable reading” of Section 111 used in the CPP to choose emission
reduction measures that are not directly applied to the regulated EGU.57
To support its interpretation that the BSER must be source-specific, EPA points to an “explicit
statutory link” between the CAA’s Section 165 Prevention of Significant Deterioration (PSD)
permitting program and Section 111 standards.58 Section 111 emission standards (as derived from

51 CPP Repeal, p 32523.
52 ACE Final Rule, p. 32523.
53 Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125-26 (2016), quoting FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009) and National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S.
967, 981 (2005) (internal citations omitted).
54 CPP Final Rule, p. 64726.
55 See “Q: What was the Clean Power Plan (CPP)?” for a discussion of the CPP “building blocks.”
56 CPP Repeal, p. 32524.
57 CPP Repeal, p. 32527.
58 CPP Repeal, p. 32525.
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the BSER) act as a “floor” (minimum) for emission limits in PSD permits.59 The permitting
authority bases the PSD emission limits only on source- or facility-specific best available
emission control technologies. EPA contends that if Section 111 emission standards are the
“floor” for source-specific emission limits in PSD permits, EPA must base the BSER (and the
emission standards established by applying the BSER) only on what is achievable at an individual
source.60 In comparison, in the CPP, EPA did not apply PSD program policies or interpretations to
its BSER determination because it interpreted the PSD permitting program as distinct from
Section 111(d) emission guidelines.61 In the CPP, EPA observed that the PSD permitting program
applies to individual modified or new sources in contrast to Section 111(d) guidelines that apply
to an entire source category.62
The ACE rule and the CPP also diverge in their interpretation of the Section 111(d) provision that
allows states to consider the “remaining useful life of an existing source” and “other factors”
when “applying” a standard of performance to a particular source. In the ACE rule, EPA interprets
this provision to allow states to consider these factors when “establishing” emission standards,
including the costs of implementing heat rate improvement (HRI) and technical feasibility.63 EPA
acknowledges that consideration of such factors could result in source-specific emission
standards “that reflect a value of HRI that falls outside” the emission reduction ranges that EPA
identified for each technology.64 The CPP, in contrast, allowed states to consider these factors
only when determining how to apply the national emission standards to existing EGUs and
prohibited states from making “adjustments” to the mandatory statewide emission reduction goals
based on these source-specific factors.65
Q: Has anyone challenged the CPP repeal in court?
A: Yes. Parties have filed petitions in the U.S. Court of Appeals for the D.C. Circuit challenging
CPP repeal and the ACE rule as of July 8, 2019.66 See “Litigation Challenging the CPP Repeal
and the ACE Rule” below for questions related to the litigation.
Affordable Clean Energy (ACE) Final Rule
Q: What is the ACE rule?
A: The final ACE rule establishes emission guidelines for states to use when they develop and
submit plans to EPA that establish standards to reduce CO2 emissions67 from existing coal-fired

59 42 U.S.C. §7479(3).
60 CPP Repeal, p. 32525.
61 EPA, Response to Comments, CPP Final Rule, chap. 1.2, pp. 100-01.
62 EPA, Response to Comments, CPP Final Rule, chap. 1.2, pp. 100-01.
63 ACE Final Rule, p. 32549.
64 ACE Final Rule, p. 32549.
65 CPP Final Rule, p. 64870.
66 See Petition for Review, Am. Lung Assoc. v. EPA, No. 19-1140 (D.C. Cir. July 8, 2019).
67 In the ACE rule, EPA states that the “air pollutant regulated in this final action is GHGs. However, the standards in
this rule are expressed in the form of limits solely on emissions of CO2, and not the other constituent gases of the air
pollutant GHGs.” CPP Repeal, p. 32534. See 40 C.F.R. §60.5705a.
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units. The ACE rule’s emission guidelines present EPA’s BSER determination for CO2 emissions
from existing coal-fired EGUs.68
Q: Why did EPA promulgate the ACE rule?
A: EPA’s promulgation of NSPS GHG standards for new and modified EGUs under CAA Section
111(b) triggered the requirements for existing sources under CAA Section 111(d).69 Repeal of the
CPP—the 111(d) rulemaking that EPA promulgated concurrent to the GHG NSPS in 2015—
meant that EPA had to promulgate a new rule to fulfill its obligation under CAA Section 111(d)
for existing sources.
Q: To whom does the ACE rule directly apply?
A: The final ACE rule directs the governor (or the governor’s designee) of each state in the
contiguous United States to submit a state plan to EPA by July 8, 2022.70 A state plan should
establish standards of performance based on the BSER for designated facilities in that state’s
jurisdiction and provide for the implementation and enforcement of those standards. The final
rule also requires states in the contiguous United States without any designated facilities (i.e.,
coal-fired EGUs) to submit a “negative declaration letter” to EPA in lieu of a state plan. EPA
expects state plan submissions from 43 of the 48 contiguous states and negative declarations from
the remaining five (California, Idaho, Maine, Rhode Island, and Vermont).71
The final ACE rule does not explain why its emission guidelines do not apply to non-contiguous
states.72 The 2015 CPP final rule likewise did not apply to non-contiguous states. The final CPP
rule stated that EPA did not have the information or tools required to establish the BSER in non-
contiguous states and U.S. territories, concluding that it would determine how to address CAA
Section 111(d) requirements in those areas at a later date.73
Q: What types of facilities are affected by the final rule?
A: Under the ACE rule, state plans will establish CO2 performance standards for each “affected
steam generating unit,” which EPA refers to as a “designated facility.”74 EPA defined designated
facility as a coal-fired electric utility steam generating unit (coal-fired EGU) that was in operation
or had commenced construction on or before January 8, 2014, exceeds a specified nameplate
capacity and base load rating, and burns coal for more than 10% of the average annual heat input
during the three previous calendar years.75
EPA did not establish the BSER for integrated gasification combined cycle (IGCC) units, oil- or
natural-gas-fired utility boilers, or fossil-fuel-fired stationary combustion turbines and therefore

68 ACE Final Rule, p. 32521.
69 EPA described the existing Section 111(b) requirements as the “requisite predicate for applicability of CAA section
111(d).” ACE Final Rule, p. 32533.
70 40 C.F.R. §60.5710a and §60.5800a.
71 ACE Final Rule, p. 32573.
72 Similarly, the preamble to the 2018 ACE proposal does not discuss why it excludes non-contiguous states.
73 For additional discussion, see CRS Report R44341, EPA’s Clean Power Plan for Existing Power Plants: Frequently
Asked Questions, by James E. McCarthy et al.
74 40 C.F.R. §60.5700a.
75 ACE Final Rule, p. 32533. See also 40 C.F.R. §60.5805a.
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excluded these EGUs from the definition of designated facility.76 For more information, see “Q:
Why didn’t EPA establish a BSER for other fossil-fuel-fired units?”
Q: What is the BSER under the ACE rule?
A: EPA determined that efficiency improvements, also known as “heat rate improvements” or
HRI, are the BSER to reduce CO2 emissions from existing coal-fired EGUs.77
The “heat rate” measures the amount of energy that a power plant uses to generate one kilowatt-
hour of electricity.78 A power plant with a lower, more efficient heat rate uses less fuel to generate
the same amount of electricity as a power plant with a higher heat rate. Using less fuel per
kilowatt-hour may result in lower emissions of CO2 as well as lower levels of SO2 and nitrogen
oxides (NOx).79
HRI is affected by a number of factors, such as the age and type of EGU. For more information,
see CRS Report R43343, Increasing the Efficiency of Existing Coal-Fired Power Plants, by
Richard J. Campbell. For more information about HRI and potential emission impacts, see “Q:
Would the ACE rule’s HRI lead to potential “rebound effects”?”
EPA identified other “systems of GHG emission reduction”—such as natural gas co-firing, use of
biomass, and CCS—that the agency concluded did not meet the criteria for the BSER.80 For
information about EPA’s consideration of natural gas co-firing, see “Q. Why did EPA exclude
natural gas co-firing from the BSER?” For information about EPA’s consideration of biomass,
CCS, and other systems of GHG emission reduction, see “Q: Can states use emission reduction
measures outside the “candidate technologies” list to establish the ACE rule’s performance
standards?”
Q: What are the ACE rule’s performance standards for CO2 emissions?
A: Similar to the ACE proposal, the final ACE rule does not establish a binding, numeric
performance standard for CO2 emissions from existing coal-fired units. Rather, EPA established a
list of candidate technologies, comprising six HRI measures and improved operation and
maintenance practices, which states “must evaluate in establishing a standard of performance for
that source in their state plans under CAA section 111(d).”81 As in the proposal, the final ACE
rule presents ranges of expected HRI improvements for the candidate technologies, expressed as a
percentage improvement, for three size-based categories of coal-fired EGUs.82 The estimated
potential HRI improvements for the six candidate technologies at existing coal-fired EGUs ranges

76 ACE Final Rule, p. 32533. See also 40 C.F.R. §60.5780a
77 ACE Final Rule, p. 32532.
78 EIA, Analysis of Heat Rate Improvement Potential at Coal-Fired Power Plants, May 19, 2015, https://www.eia.gov/
analysis/studies/powerplants/heatrate/.
79 EIA, Analysis of Heat Rate Improvement Potential at Coal-Fired Power Plants.
80 ACE Final Rule, pp. 32543-32549. EPA clarified that states can use natural gas co-firing as a compliance measure,
however. See ACE Final Rule, p. 32555.
81 ACE Final Rule, p. 32536.
82 For final rule, see ACE Final Rule, Table 1, p. 32537. For proposal, see ACE Proposal Table 1, p. 44757.
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from 0.1% to 2.9%.83 States must ultimately establish a rate-based standard. They also have the
option to establish performance standards reflecting an HRI “that falls outside of these ranges.”84
Q: Why did EPA not establish a numeric or presumptively approvable CO2
performance standard in the ACE rule?
A: EPA discussed several reasons why it did not establish a numeric CO2 performance standard or
specify a standard that, while not required, would meet the requirements for EPA approval (i.e.,
“presumptively approvable”). First, EPA asserted that “CAA Section 111(d)(1) squarely places
the responsibility of establishing a standard of performance for an existing designated facility on
the state as part of developing a state plan.”85 Second, EPA determined that it could not establish
national performance standards due to variation among existing coal-fired units.86 Factors that
may affect HRI potential for a particular unit include, but are not limited to, the EGU’s “past and
projected utilization rate, maintenance history, and remaining useful life.”87 Third, EPA concluded
that states are best positioned to account for site-specific considerations that influence HRI
potential.88
According to EPA, many commenters supported this “unit-specific, state-led” approach because
“it is not possible to adopt uniform, nationally applicable standards of performance based on
implementation of particular HRI technologies because each individual unit is subject to a unique
combination of factors that can affect the unit’s heat rate and HRI potential, many of which are
geographically driven and outside the control of a source.”89 EPA noted that Section 111(d) of the
CAA directs the agency “to permit states to take such factors into consideration as they develop
plans to establish performance standards for existing sources within their jurisdiction.”90
Other commenters disagreed with this “unit-specific, state-led” approach and viewed it as
inconsistent with the CAA legislative history as well as past practice to determine BSER based on
a specific emission reduction technology. These commenters concluded that the unit-specific,
state-led approach would not result in significant emission reductions. EPA disagreed, responding
that designating a “specific set of emission reduction technologies” and operational practices as
the BSER are consistent with the statute. EPA responded further that this approach “recognizes
the challenges of applying a single specific emission reduction technology within such a diverse
population of designated facilities.”91
Some commenters maintained that EPA has a statutory responsibility to establish the level of
stringency for the performance standards. According to EPA, these commenters stated that “EPA
is legally obligated to identify ‘the degree of emission limitation achievable through the
application of the [BSER]’ (i.e., a level of stringency) because such degree of emission limitation
is inextricably linked with the determination of the BSER, which is the EPA’s statutory role and

83 ACE Final Rule, p. 32537.
84 ACE Final Rule, p. 32538.
85 ACE Final Rule, p. 32550.
86 ACE Final Rule, p. 32536.
87 ACE Final Rule, p. 32536.
88 ACE Final Rule, pp. 32535-6.
89 ACE Final Rule, pp. 32535-6.
90 ACE Final Rule, p. 32536.
91 ACE Final Rule, p. 32536.
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responsibility.”92 EPA responded that the ACE rule’s presentation of ranges of expected HRI
improvements fulfills the agency’s statutory obligation to specify the “level of emissions
reductions achievable using the candidate technologies.”93
The lack of a numeric performance standard introduces uncertainty about the level of stringency
expected from implementation of HRI measures under the ACE rule. EPA reported that
“numerous” state and industry commenters requested a presumptive standard or additional clarity
about the CO2 performance standards. Other states commented that they “heartily approve” of the
CPP repeal and of aspects of the proposed ACE rule, in particular that, in their view, the proposal
affords “the States sufficient flexibility to comply with federal environmental mandates without
disrupting the flow of affordable, reliable electricity to their citizens and the nation as a whole.”94
The National Association of Clean Air Agencies (NACAA), which represents air pollution control
agencies in 35 states, the District of Columbia, four territories and 116 metropolitan areas,95
recommended that EPA provide states “presumptively approvable” language for state plans as
well as “presumptively approvable standards.”96 NACAA commented that such presumptively
approvable language or standards “need not restrict state flexibilities” and that “EPA could
present these as options in the rule and specify in all cases that states remain free to craft
alternative compliance approaches consistent with the emission guidelines.”97
EPA did not identify “presumptively approvable” standards in the final ACE rule. EPA concluded
that it was “reasonable” for the agency to present “the ‘degree of emission limitation achievable
through application of the BSER’ as a set of ranges of values, rather than a single number, that
reflects application of the candidate technologies as a whole,” given that source-specific factors
may result in “varying degrees of reductions” when implementing the BSER at a particular unit.98
Q: What are the candidate technologies under the ACE rule?
A: EPA finalized a list of “candidate technologies”—six HRI measures and improved operating
and maintenance (O&M) procedures—that constitute the BSER.99 Under the ACE rule, states
“will consider” the candidate technologies and “other factors when establishing unit-level
standards of performance.”100

92 ACE Final Rule, p. 32537.
93 ACE Final Rule, p. 32537. See ACE Final Rule, Table 1, p. 32537, for ranges of the percentage of potential HRI
improvement.
94 CRS did not identify comments from these states regarding their views on presumptively approvable standards. See
letter from the States of West Virginia, Alabama, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan,
Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Wisconsin, and Wyoming
and the Mississippi Department of Environmental Quality and the Mississippi Public Service Commission to EPA,
ACE rulemaking docket, EPA-HQ-OAR-2017-0355-24627, October 31, 2018, pp. 6-9, https://www.regulations.gov/.
95 As of March 2020. See NACAA, “About NACAA,” http://www.4cleanair.org/about.
96 NACAA recommends that “[a]t a minimum” EPA “provide example calculations that convert sample HRI
percentages drawn from EPA’s candidate technologies, both individually and in combination, across a representative
inventory of sources into the rate-based CO2/MWh emission rate standard EPA is requiring for the performance
standards.” Letter from NACAA to EPA, ACE rulemaking docket, EPA-HQ-OAR-2017-0355-23788, October 31,
2018, p. 4, https://www.regulations.gov/.
97 Letter from NACAA to EPA, p. 4.
98 ACE Final Rule, p. 32538.
99 ACE Final Rule, pp. 32536-37.
100 ACE Proposal, p. 44757.
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The candidate technologies list has not changed from the ACE proposal.101 It includes the
following:
 Neural Network/Intelligent Sootblowers
 Boiler Feed Pumps
 Air Heater and Duct Leakage Control
 Variable Frequency Drives
 Blade Path Upgrade (Steam Turbine)
 Redesign/Replace Economizer
 Improved O&M Practices.
According to EPA, these are the “most impactful” candidate technologies “because they can be
applied broadly and are expected to provide significant HRI without limitations due to geography,
fuel type, etc.”102 EPA estimated that HRI potential from the six HRI measures on the candidate
technologies list ranges from 0.1% to 2.9%, and that HRI potential from O&M practices may
range from zero to less than 2.0% depending on the unit’s historical O&M practices.103
The two candidate technologies reported in the EPA analysis showing highest HRI potential are
steam turbine blade upgrades and the redesign/replacement of the economizer for cooling system
heat recovery. These two technologies also have, according to EPA, the greatest potential of the
candidate technologies to trigger preconstruction permitting requirements under the NSR
program.104 EPA has asserted, based on stakeholder comments, that “if such HRI trigger NSR, the
resulting requirements for analysis, permitting, and capital investments will greatly increase the
cost of implementing those HRI technologies and, in the absence of NSR reforms, states will be
more likely to determine that those technologies are not cost-effective when analyzing ‘other
factors’ in determining a standard of performance for an individual facility.”105
EPA has proposed, but not yet finalized, a revision to the applicability test for certain power
plants under NSR. EPA stated in the final ACE rule that it intends to take final action on the
proposed NSR changes at a later date.106 EPA decided to retain the two candidate technologies—
steam turbine blade upgrades and redesign/replace economizer—on the final list of candidate
technologies because the agency “still expects these technologies to be generally applicable
across the fleet of existing EGUs, and because the costs of the technologies are generally
economical and reasonable.”107 EPA estimated the potential impact of applying the candidate
technologies and projected “modest” emission changes under the ACE rule policy scenario
compared to the reference scenario. See “Q: What CO2 emission effects did EPA estimate from
the CPP repeal and from the ACE rulemakings?” For more information about EPA’s
determination that HRI is the best system of emission reduction to reduce CO2 emissions from

101 ACE Proposal, p. 44757.
102 ACE Final Rule, p. 32536.
103 ACE Final Rule, p. 32537.
104 The NSR program generally requires emission limits based on the best available control technology when new
facilities are built or when existing facilities make a change that increases emissions above specified thresholds.
Historically, NSR applicability determinations have been contentious and extensively litigated.
105 ACE Final Rule, p. 32537.
106 ACE Final Rule, p. 32521.
107 ACE Final Rule, p. 32537.
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existing coal-fired EGUs. For the agency’s consideration of other systems of GHG emission
reduction, see “Q: What is the BSER under the ACE rule?”
The final ACE rule does not limit states’ consideration of performance standards to the candidate
technologies list, though EPA clarified that certain measures, such as biomass co-firing, cannot be
used for compliance. See “Q: Can states use emission reduction measures outside the “candidate
technologies” list to establish the ACE rule’s performance standards?” for additional discussion.
Q: How will states establish CO2 emission performance standards?
A: Although the ACE rule does not require a specific method for states to develop performance
standards, EPA described two steps that it views as a “reasonable” approach for states to follow
and document in their state plans.108 First, EPA expects states to establish unit-specific CO2
performance standards by calculating an emissions rate reflecting application of the BSER—that
is, the candidate technologies—at each unit.109 For example, a state might apply the BSER to a
designated facility’s average emission rate from the previous three years or to a projected
emission rate under specific conditions.110 Second, states have discretion to tailor the emission
rates based on site-specific considerations, such as remaining useful life and cost.111 That is, states
are to consider the candidate technologies listed as the BSER—including EPA’s estimated ranges
of HRI potential—but states may calculate a performance standard for a particular unit that falls
outside of the range of EPA’s estimated HRI potential due to site-specific factors.112 Under EPA’s
current interpretation of CAA Section 111(d), states may establish performance standards that are
less stringent than the “standard that would result from a direct application of the BSER identified
by the EPA.”113
EPA also clarified that a state may determine that one or more of the six candidate technologies
“should not be part of the methodology to calculate the EGU’s standard of performance because
of remaining useful life or other factors.”114
Finally, the ACE final rule requires states to set a rate-based standard in the form of an allowable
emission rate.115
Q: Can states establish CAA Section 111(d) performance standards less
stringent than otherwise expected from implementing the BSER?
A: EPA interprets the CAA as requiring the agency to allow states to establish Section 111(d)
performance standards that, based on site-specific considerations, are less stringent than the
“standard that that would result from a direct application of the BSER identified by the EPA.”116
The agency based this interpretation on CAA Section 111(d)(1)(B), which directs EPA to

108 EPA clarified that states may conduct these steps sequentially or concurrently. ACE Final Rule, p. 32550.
109 ACE Final Rule, pp. 32549-50.
110 ACE Final Rule, p. 32550.
111 ACE Final Rule, pp. 32550, 32551.
112 ACE Final Rule, p. 32551.
113 ACE Final Rule, p. 32553.
114 EPA noted that the state should document its rationale and analysis, for example, “by explaining that such
technology has already been implemented by a particular source.” ACE Final Rule, p. 32550.
115 ACE Final Rule, p. 32555.
116 ACE Final Rule, pp. 32553, 32570.
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promulgate federal regulations that “shall permit the State in applying a standard of performance
to any particular source under a plan submitted under this paragraph to take into consideration,
among other factors, the remaining useful life of the existing source to which such standard
applies.”117 EPA concluded that “Congress explicitly envisioned under CAA section 111(d)(1)(B)
that states could implement standards of performance that vary from the EPA’s emission
guidelines under appropriate circumstances.”118
Prior to the ACE rule, the general regulations implementing CAA Section 111(d) specified that
state plans for health-based pollutants must be as stringent as the emission guideline established
by EPA unless the state demonstrates, on a case-by-case basis, that a source meets certain
factors.119 Previously referred to as the “variance provision,”120 it allowed a state to apply less
stringent standards for health-based pollutants if the state demonstrated any of the following
factors applied to a particular emission source:
 unreasonable cost of control resulting from plant age, location, or basic process
design;
 physical impossibility of installing necessary control equipment; or
 other factors specific to the facility (or class of facilities) that make application of
a less stringent standard or final compliance time significantly more
reasonable.121
EPA noted that promulgation of this provision predated the statutory language in CAA Section
111(d)(1)(B) that “the EPA permit states to take into account remaining useful life and other
factors.”122 As part of the new implementing regulations for Section 111(d) that EPA promulgated
with the ACE rule, the agency included a provision intended to reflect CAA Section 111(d)(1)(B).
The new provision, codified at Title 40, Section 60.24a(e), of the Code of Federal Regulations,
incorporates the statutory phrase remaining useful life but otherwise presents the same source-
specific factors that were previously codified at Section 60.24(f). The new provision reads as
follows:
(e) In applying a standard of performance to a particular source, the State may take into
consideration factors, such as the remaining useful life of such source, provided that the
State demonstrates with respect to each such facility (or class of such facilities):
(1) Unreasonable cost of control resulting from plant age, location, or basic process design;
(2) Physical impossibility of installing necessary control equipment; or
(3) Other factors specific to the facility (or class of facilities) that make application of a
less stringent standard or final compliance time significantly more reasonable.123

117 42 U.S.C. §7411(d)(1)(B).
118 ACE Final Rule, p. 32570.
119 40 C.F.R. §60.24(f).
120 EPA referred to the provision at Title 40, Section 60.24(f), of the Code of Federal Regulations as the “variance
provision” prior to promulgation of ACE. EPA stated that it will no longer refer to this section or its corollary under the
new implementing regulations as the “variance provision.” Instead, EPA will refer to these provisions as “remaining
useful life and other factors.” ACE Final Rule, p. 32570.
121 40 C.F.R. §60.24(f). Paragraph c specifies that state plans for health-based pollutants must be as stringent as the
emission guideline established by EPA.
122 ACE Final Rule, p. 32570.
123 40 C.F.R. §60.24a(e).
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The final rule requires a state that factors remaining useful life or other site-specific
considerations into their determination of performance standards to “describe, justify, and
quantify how the considerations were made in its plan.”124
States may also consider factors not listed in Section 60.24a(e), provided the state “adopts a
reasonable approach and adequately explains that approach in its submission to the EPA.”125 In
describing the codified list of site-specific factors as “nonexclusive,” EPA concluded that it is not
possible to define “each and every circumstance that states may consider when applying a
standard of performance under CAA section 111(d).”126 EPA provided examples of other site-
specific factors that may “influence decisions to invest in technologies to meet a potential
performance standard,” including “timing considerations like expected life of the source, payback
period for investments, the timing of regulatory requirements, and … space or other physical
barriers to implementing certain HRIs at specific units.”127 EPA concluded that ultimately “many
of these ‘other factors’ that can affect the application of the BSER candidate technologies distill
down to a consideration of cost.”128
Q: What are the next steps to implement the ACE rule and what is the
timeline?
A: States are to develop performance standards for designated facilities—that is, existing, coal-
fired EGUs129—in their jurisdictions and establish these performance standards through state
plans.130 States will also provide for the implementation and enforcement of the performance
standards in the state plans. State plans are due to EPA by July 8, 2022.131
EPA is to determine whether a state plan is complete within 60 days of receiving the plan but no
later than six months of receipt.132 Within 12 months of the completeness determination, EPA is to
determine whether the plans are “satisfactory” under CAA Section 111(d)(2)(A) and either
approve or disapprove the plan or portion of the plan through a notice-and-comment
rulemaking.133 EPA is to promulgate a federal plan if (1) the state fails to submit a plan, (2) EPA
determines that the state plan is incomplete, or (3) EPA disapproves the state plan.134 After
determining that any of these circumstances applies, EPA has two years to issue the federal plan.
This schedule for state and federal plans is specified in the implementing regulations for CAA
Section 111(d). For discussion about changes to this schedule promulgated in the ACE rule, see

124 ACE Final Rule, p. 32554.
125 ACE Final Rule, p. 32571.
126 40 C.F.R. §60.24a(e). See also ACE Final Rule, pp. 32553, 32571.
127 ACE Final Rule, p. 32553.
128 ACE Final Rule, p. 32553.
129 For purposes of ACE, EPA defined designated facility as a coal-fired electric utility steam generating unit (coal-
fired EGU) that commenced construction as of January 8, 2014, exceeds a specified nameplate capacity and base load
rating, and burns coal for more than 10% of the average annual heat input during the three previous calendar years.
EPA clarified that a “designated facility refers to a single EGU that is affected” by the ACE emission guidelines. ACE
Final Rule, p. 32533.
130 The final rule also requires states in the contiguous United States without any designated facilities to submit a
“negative declaration letter” to EPA in lieu of a state plan. 40 C.F.R. §§60.5710a, 60.5800a.
131 40 C.F.R. §§60.5710a, 60.5800a.
132 40 C.F.R. §60.27a(g).
133 40 C.F.R. §60.27a(b). See also ACE Final Rule, p. 32568.
134 40 C.F.R. §60.27a(c). See also ACE Final Rule, p. 32568.
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“Q: What changes did EPA make to the schedules for submission and review of state plans and
federal plans?”
Q: When do existing coal-fired EGUs have to comply with performance
standards established by states under the ACE rule?
A: The date that the performance standards go into effect will be determined by each state’s plan.
As previously noted, states will first need to develop performance standards for each affected unit
in their jurisdictions and provide for implementation and enforcement through the state plans.
State plans that contain compliance schedules longer than two years from the date of state plan
submission to EPA must also include provisions for increments of progress.135 Prior to the ACE
rule, the requirement to include provisions for “increments of progress” applied to plans with
compliance schedules longer than 12 months from the date of submission to EPA.136 EPA updated
timing criteria for this requirement to align with the changes it finalized to the schedule of state
plan submission and EPA review. For information about these schedule changes, see “Q: What
changes did EPA make to the schedules for submission and review of state plans and federal
plans?”
Q: What information must a state include in the state plan submission for
existing coal-fired units?
A: State plans must establish Section 111(d) performance standards for designated units and
provide for their implementation and enforcement.137 First, to document establishment of
performance standards, state plans are to explain how the state applied the BSER to each source
and how the state considered other factors, such as remaining useful life, into the determination of
the unit-specific standard.138 State plans “must adequately document and demonstrate the process
and underlying data used to establish standards of performance” under the ACE rule so that EPA
can “understand and replicate” the state’s calculations.139 In particular, a state plan must identify
each EGU within the state’s jurisdiction that is subject to the ACE rule along with the emissions
and operational data used to establish the performance standard for each unit. A state that
considers the remaining useful life of a unit must “specify the exact date by which” the unit will
no longer supply electricity to the grid.140 States that determine that HRI are not feasible at any
particular unit must present the basis for that conclusion, including supporting data or metrics.
Second, each state plan must specify how the state will implement and enforce the performance
standards so that “EPA can review and identify measures that assure transparent and verifiable
implementation.”141 According to EPA, state plans should demonstrate that the performance
standards will be “quantifiable, permanent, verifiable, and enforceable.”142

135 EPA regulations define increments of progress as “steps to achieve compliance which must be taken by an owner or
operator of a designated facility.” 40 C.F.R. §60.21a(h). See also ACE Final Rule, p. 32568.
136 40 C.F.R. §§60.24(e)(1), 60.21(h).
137 ACE Final Rule, p. 32558.
138 EPA, Fact Sheet: The Affordable Clean Energy Rule, 2019, https://www.epa.gov/sites/production/files/2019-06/
documents/bser_and_eg_fact_sheet_6.18.19_final.pdf.
139 ACE Final Rule, p. 32558.
140 A state may revise the state plan if the retirement date changes. ACE Final Rule, p. 32558.
141 ACE Final Rule, p. 32558.
142 ACE Final Rule, p. 32559.
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Q: How does the ACE rule interact with existing GHG emission reduction
programs in the states, such as the Regional Greenhouse Gas Initiative and
California’s climate policies?
A: Various U.S. states have already required power sector GHG emission reductions. California
established a cap-and-trade program that took effect in 2013. California‘s cap covers multiple
GHGs, which account for approximately 85% of California’s GHG emissions.143 In addition to its
emissions cap, California has adopted a range of other climate change mitigation policies (e.g.,
renewable energy portfolio standards).144
A coalition of states from the Northeast and Mid-Atlantic regions established the Regional
Greenhouse Gas Initiative (RGGI).145 RGGI is a cap-and-trade system that took effect in 2009
and currently involves 10 states.146 RGGI applies to CO2 emissions from electric power plants
with capacities to generate 25 megawatts or more. While each state adopts its own regulations
implementing RGGI, most have promulgated regulations similar to a model rule.
In addition, Massachusetts has adopted GHG emission requirements beyond its commitment to
RGGI.147 Pursuant to the 2008 Massachusetts Global Warming Solutions Act, the state’s
Department of Environmental Protection promulgated regulations in 2017 requiring GHG
emission reductions from several specific source categories.
Some states raised concerns about how the ACE rule will interact with existing state and local
programs. The interaction of the ACE rule and state and local GHG reduction programs has
implications for state planning efforts. For example, it may be more efficient for states to rely on
existing, non-federal GHG emission reduction programs to fulfill the ACE rule requirements
rather than implementing separate state and federal standards for the same emission sources.
NACAA observed that the ACE proposal was “silent on this topic” and described it as a “critical
and complex issue for many air agencies.”148 NACAA requested EPA to ensure the final ACE rule
“does not interfere with existing state and local programs including cap-and-trade programs and
state-level GHG reduction goals” and that the ACE rule does not “prevent states from choosing to
go further in stringency than the federal standard.”149
Additional state coalitions provided perspectives on federal-state interactions under the ACE rule.
For example, the National Conference of State Legislatures commented that the proposed ACE
rule would provide “significant authority and flexibility to states, allowing them to work within
an overall framework while taking into account state and regional differences, ensuring sufficient
flexibility for each state to determine how to best achieve nationally set goals.”150 Similarly, a

143 For more details, see the California Air Resources Board, “Cap-and-Trade Program,” https://www.arb.ca.gov/cc/
capandtrade/capandtrade.htm.
144 See California Air Resources Board, “Cap-and-Trade Program.”
145 See CRS Report R41836, The Regional Greenhouse Gas Initiative: Background, Impacts, and Selected Issues, by
Jonathan L. Ramseur.
146 Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey (rejoined in 2020), New
York, Rhode Island, and Vermont.
147 For more information, see Massachusetts Department of Environmental Protection, Background Document on
Proposed, New and Amended Regulation, 2016, https://www.mass.gov/guides/reducing-ghg-emissions-under-section-
3d-of-the-global-warming-solutions-act.
148 Letter from NACAA to EPA, pp. 4-5.
149 Letter from NACAA to EPA, pp. 4-5.
150 The National Conference of State Legislatures (NCSL) represents the legislatures of states, territories, and
commonwealths in the United States. Letter from NCSL to EPA, ACE rulemaking docket, EPA-HQ-OAR-2017-0355-
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coalition of states commented that the proposed ACE rule affords “the States sufficient flexibility
to comply with federal environmental mandates without disrupting the flow of affordable, reliable
electricity to their citizens and the nation as a whole.”151
The final ACE rule does not prohibit states from implementing GHG programs under state
authority. It is unclear, though, whether state plans that incorporate RGGI or other non-federal
GHG emission reduction programs will meet the ACE rule requirements. First, EPA stated that it
does not “prejudge the approvability of a state plan.”152 Second, the agency questioned whether it
has statutory authority to approve state plans that include standards more stringent than those that
would result from application of the BSER. While EPA found “merit” in some commenters’ view
that the agency lacks authority to approve state plans establishing more stringent standards, the
agency did not specify whether it agrees with this view.153 Instead, EPA concluded it would
consider this question as it evaluates an individual state plan.154
EPA asserted that regardless of stringency, the agency lacks statutory authority to approve state
plan requirements on entities other than existing, coal-fired EGUs—that is, those units qualifying
as designated facilities under the ACE rule. According to EPA, CAA Section 111(d)(1) “clearly
contemplates that state plans may only contain requirements for existing sources, and not other
entities.”155
Q: Can states use emission reduction measures outside the “candidate
technologies” list to establish the ACE rule’s performance standards?
A: States may rely on measures that are not on the candidate technologies list to establish
performance standards in their state plans provided that the measures meet EPA’s criteria.156
EPA’s criteria are as follows:
(1) The compliance measures must be capable of being applied to and at the source and (2)
compliance measure must be measurable at the source using data, emissions monitoring
equipment or other methods to demonstrate compliance, such that they can be easily
monitored, reported, and verified at the unit.157
CCS is one example of an emission reduction measure excluded from the candidate technologies
list that states may use as a compliance measure in state plans. EPA concluded that although CCS
is not “broadly applicable to the entire existing coal-fired power plant fleet,” it may be a
“technically feasible and an economically viable control option … under very specific
circumstances.”158 Natural gas co-firing is another example.159 (For more information about why

23602, October 31, 2018, pp. 1-2, https://www.regulations.gov/.
151 Letter from the States of West Virginia, Alabama, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana,
Michigan, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Wisconsin, and
Wyoming; the Mississippi Department of Environmental Quality; and the Mississippi Public Service Commission to
EPA, ACE rulemaking docket, October 31, 2018, EPA-HQ-OAR-2017-0355-24627, pp. 6-9
https://www.regulations.gov/.
152 ACE Final Rule, p. 32560.
153 ACE Final Rule, p. 32560.
154 ACE Final Rule, p. 32560.
155 ACE Final Rule, p. 32560.
156 ACE Final Rule, p. 32555.
157 ACE Final Rule, p. 32555.
158 ACE Final Rule, pp. 32547-48.
159 ACE Final Rule, p. 32555.
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EPA excluded natural gas co-firing from the BSER, see “Q. Why did EPA exclude natural gas co-
firing from the BSER?”).
EPA prohibited certain measures from use in state plans as compliance measures based on its
conclusion that they do not meet the compliance measure criteria. These measures are biomass
co-firing and averaging-and-trading.160 EPA concluded that biomass co-firing did not meet the
criteria because the “biomass firing in and of itself does not reduce emissions of CO2 emitted
from that source. Specifically, when measuring stack emissions, biomass emits more CO2 per Btu
than fossil fuels, thereby increasing the CO2 emission rate at the source.”161
The prohibition of averaging-and-trading—either across units at the same plant or between units
located at different plants—as a compliance measure in the final rule marks a partial change from
proposal. EPA had proposed to allow states to include in their plans “emissions averaging among
[affected] EGUs across a single facility” but not between affected and non-affected units or
between units at separate facilities.162 EPA’s definition of an individual EGU as a “designated
facility” in the final rule led the agency to conclude that it could not allow emissions averaging
across EGUs at the same plant. EPA concluded that it lacks authority to allow states to average
emissions across multiple “designated facilities,” even if such units are located at the same
plant.163 That is, EPA’s “determination that individual EGUs are subject to regulation under the
ACE rule precludes the Agency from attempting to change the basic unit from an EGU to a
combination of EGUs for purposes of the ACE rule implementation.”164
EPA stated more broadly that “trading is not permissible under CAA section 111.” EPA concluded
that trading is not consistent with its current interpretation that CAA Section 111 requires a
system of emission reduction to “be applied to and at an individual source and would lead to
emission reductions from that source.” EPA observed that “the nature of trading as a compliance
mechanism is such that some sources would not need to apply any pollution control techniques at
all in order to comply with a cap-and-trade scheme.”165
Q. Why did EPA exclude natural gas co-firing from the BSER?
A. EPA excluded natural gas co-firing166 from the ACE rule BSER based on its conclusion that a
BSER based on natural gas co-firing would: (1) cost more than applying the HRI candidate
technologies, (2) encourage inefficient use of natural gas, and (3) pose greater costs and

160 ACE Final Rule, p. 32555.
161 ACE Final Rule, pp. 32547, 32557-58. Stakeholders disagree about whether particular types of biomass are carbon
neutral. EPA is developing a proposed action to establish the treatment of biogenic CO2 emissions from the use of
certain biomass feedstocks at stationary sources under various CAA programs. See OMB, Semiannual Regulatory
Agenda, EPA, RIN 2060-AU03, Fall 2019, https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&
RIN=2060-AU03; OMB, Semiannual Regulatory Agenda, EPA, RIN 2060-AU03, Spring 2020,
https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=2060-AU03. A discussion of this topic is
beyond the scope of this report. For more information about biomass, see CRS Report R41603, Is Biopower Carbon
Neutral?, by Kelsi Bracmort.
162 ACE Proposal, p. 44767.
163 ACE Final Rule, pp. 32556-7.
164 ACE Final Rule, p. 32556.
165 ACE Final Rule, p. 32557.
166 According to EPA in the ACE rule, natural gas co-firing refers to the period when coal-fired utility boilers use
natural gas for startup operations, for maintaining the unit in “warm standby,” or for nitrogen oxide control (either
directly as a combustion fuel or in configuration referred to as natural gas reburn). ACE Final Rule, p. 32544.
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challenges for units that currently have limited or no access to natural gas.167 Among other things,
EPA analyzed fuel use data from the EIA. EPA concluded that while “nearly 35 percent of coal-
fired units” co-fired with natural gas in 2017, few of the units co-fired natural gas in an amount
greater than 5% of the total annual heat input, suggesting to EPA that most of the natural gas was
used as a secondary fuel for unit startup or to maintain the unit in “warm standby” rather than as a
primary fuel to generate electricity.168 While EPA excluded natural gas co-firing from the BSER,
the agency also noted that states may use natural gas co-firing as a compliance measure in state
plans.169 For more information about use of non-BSER measures for compliance, see “Q: Can
states use emission reduction measures outside the “candidate technologies” list to establish the
ACE rule’s performance standards?”
Stakeholder views regarding BSER and natural gas co-firing varied. Some stakeholders
commented that natural gas co-firing should not be part of the BSER under the ACE rule because,
for example, natural gas co-firing is not sufficiently cost-effective, there may not be a reliable
supply of gas to co-fire, or it could negatively affect the unit’s heat rate.170 Other stakeholders
disagreed and recommended natural gas co-firing as the BSER, based partly on analysis of the
same fuel use data from EIA. According to EPA, these stakeholders concluded that natural gas co-
firing at coal plants is “technically feasible, readily available, achieves significant emission
reductions, and may be the most cost-effective option for some facilities.”171 One stakeholder
estimated that “a highly cautious approach to increasing natural gas co-firing would more than
double the emissions reductions under ACE” and observed that the costs of co-firing are
comparable to the costs of heat rate improvements.172
Q: Why didn’t EPA establish a BSER for other fossil-fuel-fired units?
A: EPA determined that it lacks “adequate information” to establish a BSER for other types of
existing fossil-fuel-fired units, such as IGCC units and natural-gas-fired power plants.173 (Natural-
gas-fired power plants, such as NGCC units, are also referred to as stationary combustion
turbines.174) EPA reported that it “is still evaluating the data for EGUs not covered by the ACE

167 ACE Final Rule, p. 32545.
168 ACE Final Rule, p. 32543.
169 ACE Final Rule, p. 32555.
170 EPA, EPA’s Responses to Public Comments on the EPA’s Proposed Emission Guidelines for Greenhouse Gas
Emissions From Existing Electric Utility Generating Units, June 2019, https://www.regulations.gov (Document ID
EPA-HQ-OAR-2017-0355-26741, hereinafter “ACE RTC”). See chap. 4, p. 7.
171 Some stakeholders also recommended that EPA include natural gas co-firing on the list of HRI candidate
technologies. ACE Final Rule, p. 32544.
172 See Resources for the Future, 10 Big Little Flaws in EPA’s Affordable Clean Energy Rule, July 2019, pp. 4-5,
https://www.rff.org/documents/2138/IB_19-05_Burtraw_Keyes_4.pdf; and Resources for the Future, Letter to EPA
Docket, EPA-HQ-OAR-2017-0355-25898, October 31, 2018, p. 24, https://www.regulations.gov.
173 ACE Final Rule, p. 32533. IGCC technology uses a gasifier to turn a feedstock—for example, coal or other carbon-
based feedstock—into pressurized gas, which then fuels a combined cycle turbine to generate electricity. According to
the National Energy Technology Laboratory, coal is the most commonly used feedstock in IGCC operations. See
National Energy Technology Laboratory, “Commercial Power Production Based on Gasification,”
https://www.netl.doe.gov/research/Coal/energy-systems/gasification/gasifipedia/igcc. The ACE final rule defines IGCC
as “a combined cycle facility that it designed to burn fuels containing 50 percent (by heat input) or more solid-derived
fuel not meeting the definition of natural gas plus any integrated equipment that provides electricity or useful thermal
output to either the affected facility or auxiliary equipment.” 40 C.F.R. §60.5805a.
174 Stationary combustion turbines that are used to generate electricity are generally fueled by natural gas. The ACE
final rule defines simple cycle and combined cycle units as stationary combustion turbines. It defines stationary
combustion turbine as the equipment “that provides electricity or useful thermal output to the combustion turbine
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rule,” noting that “only a handful” of IGCC units are in operation.175 EPA stated that it “may issue
emission guidelines” for stationary combustion turbines at a later date.176
Comment letters revealed support for and opposition to EPA’s decision not to identify a BSER for
stationary combustion turbines in the ACE rule. According to EPA, some commenters observed
that “natural gas-fired stationary combustion turbines are already highly efficient” and concluded,
among other things, that “available emission reductions at natural gas-fired stationary combustion
turbines would likely be expensive or would likely provide only small overall reductions.”177
Other commenters disagreed with EPA’s decision and, according to EPA, these commenters
stated that because EPA issued regulations under Section 111(b) for new natural-gas-fired turbines
(including both simple cycle and combined cycle natural gas units), EPA is required under
Section 111(d) to issue emission guidelines for the same category of existing natural gas units.178
Commenters that favored setting a BSER for stationary combustion turbines further
recommended that EPA consider various technology options, including HRI, natural gas co-firing,
CCS, and generation shifting.179
Commenters likewise expressed varying opinions regarding EPA’s conclusion that it lacks
“adequate information” to determine the BSER for existing stationary combustion turbines.
According to EPA, some commenters who supported EPA’s determination cited a “lack of
information currently in the record.”180 For example, commenters stated that the cost is rarely
reported for “hot gas path upgrades,” which they described as a “key action to improve gas
turbine performance” but with “limited applicability.”181 Other commenters, though, pointed to
information contained in rulemaking records—for example, public comments and analyses
developed through the 2015 rulemakings for new and modified EGUs and the CPP—and asserted
that EPA has not explained why the available information is “insufficient for the EPA to include
HRI technologies at gas-fired plants in the BSER.”182 Commenters noted, according to EPA, that
the agency’s decision not to establish a BSER in the ACE rule “is not based on a reasoned
rejection of the evidence or any thoughtful conclusion that the described emission reduction
opportunities are not adequately demonstrated.”183

engine, heat recovery system or auxiliary equipment.” For the complete definitions, including the types of equipment
specified, see 40 C.F.R. §60. 5805a.
175 ACE RTC, see chap. 2, p. 12.
176 ACE RTC, see chap. 2, p. 27.
177 ACE RTC, see chap. 2, p. 23. Others suggest that older combustion turbines may not be as efficient as NGCC units.
See, for example, Darrell Proctor, “Efficiency Improvements Mark Advances in Gas Turbines,” Power Magazine,
January 3, 2018, https://www.powermag.com/efficiency-improvements-mark-advances-in-gas-turbines/; and S. C.
Bhatia, “Cogeneration,” in Advanced Renewable Energy Systems (New Delhi, India: Woodhead Publishing India,
2014), pp. 490-508.
178 Commenters stated that the GHG endangerment finding and the 2015 promulgation of CO2 performance standards
under CAA Section 111(b) for new and modified fossil-fuel-fired EGUs requires EPA to issue emission standards for
existing stationary combustion turbines and IGCC units. ACE RTC, see chap. 2, p. 12.
179 ACE RTC, see chap. 2, pp. 13-21. EPA stated that “because basing BSER on generation shifting is precluded by
CAA section 111, the Agency is repealing the CPP and cannot consider generation shifting as part of the BSER in any
future action” (ACE RTC, chap. 2, p. 20). For more information about EPA’s interpretation of CAA Section 111, see
“Repeal of the Clean Power Plan.”
180 According to EPA, “Commenters stated that the Agency should not set a BSER for NGCCs given the lack of
information currently in the record.” ACE RTC, see chap. 2, p. 13.
181 ACE RTC, see chap. 2, p. 12.
182 ACE RTC, see chap. 2, p. 14.
183 ACE RTC, see chap. 2, p. 14.
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Litigation Challenging the CPP Repeal and the ACE
Rule
Q: Who is challenging the CPP Repeal, the ACE rule, and the revised
implementing regulations?
A: The American Lung Association and the American Public Health Association were the first
parties to file a petition for review of the CPP repeal, ACE rule, and revised implementing
regulations (the “rules”) in the D.C. Circuit on the day the rules were published in the Federal
Register, July 8, 2019.184 Soon after, 22 states, the District of Columbia, and seven municipalities
filed petitions for review.185 The State of Nevada has intervened in support of the petitioning
states and municipalities, raising the number of states challenging the rules to 23 states.186 See
Figure 4 for states involved in the litigation. As identified in litigation documents,187 other
petitioners challenging the rules include 11 environmental organizations,188 several energy trade
associations,189 six power companies, and an association of power companies.190 Many of the
petitioners challenging the rules intervened in support of EPA in the litigation challenging the
CPP.191 Collectively, the court refers to this group of petitioners as the “Coordinating
Petitioners.”192 Various stakeholders have submitted briefs as amici curiae in support of these
petitioners.193 Several Members of Congress filed amici curiae briefs opposing the CPP repeal
and ACE rule.194

184 See Petition for Review, Am. Lung Ass’n v. EPA, No. 19-1140 (D.C. Cir. July 8, 2019).
185 See Petition for Review, New York v. EPA, No. 19-1165 (D.C. Cir. Aug. 13, 2019) (California, Colorado,
Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New
Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin,
the District of Columbia, City of Boulder, City of Chicago, City of Los Angeles, City of New York, City of
Philadelphia, and City of South Miami). The City and County of Denver filed a separate petition for review. City and
County of Denver, Colorado v. EPA, No. 19-1777 (D.C. Cir. Sept. 4, 2019).
186 The State of Nevada voluntarily withdrew its petition for review and intervened in support of the other petitioning
states and municipalities. See Orders, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Nov. 18-19, 2019) (granting
motion to voluntarily dismiss Nevada’s petition for review, No. 19-1189; granting motion to intervene in support of the
state and municipalities petitioners).
187 Unopposed Motion of Coordinating Petitioners for Extension and Modification of Briefing Schedule, Am. Lung
Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Mar. 19, 2020).
188 See Petition for Review, Appalachian Mountain Club v. EPA, No. 19-1166 (D.C. Cir. Aug. 14, 2019); Chesapeake
Bay Foundation, Inc. v. EPA, No. 19-1173 (D.C. Cir. Aug. 29, 2019);
189 See Petition for Review, Am. Wind Energy Ass’n, and Solar Energy Industries Ass’n v. EPA, No. 19-1173 (D.C.
Cir. Sept. 6, 2019); Petition for Review, Biogenic CO2 Coalition v. EPA, No. 19-1185 (D.C. Cir. Sept. 5, 2019);
Advanced Energy Economy v. EPA, No. 19-1186 (D.C. Cir. Sept. 6, 2019).
190 Consolidated Edison, Inc. v. EPA, No. 19-1188 (D.C. Cir. Sept. 6, 2019).
191 See CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA, by
Linda Tsang for discussion of parties involved in the CPP litigation.
192 Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Mar. 23, 2020).
193 See, e.g., State and Muni. Petitioners’ Opening Brief at v-vi, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr.
17, 2020) (listing amici curiae that notified the court that they would submit briefs in support of the Coordinating
Petitioners).
194 See Brief for Members of Congress as Amici Curiae in Support of Petitioners, Am. Lung Ass’n. v. EPA, No. 19-
1140 (D.C. Cir. Apr. 24, 2020) (opposing the CPP repeal); Brief for U.S. Senators Sheldon Whitehouse, Jeff Merkley,
Kirsten Gillibrand, Brian Schatz, and Edward J. Markey as Amici Curiae in Supporting the State and Muni. Petitioners,
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Several coal and mining companies and industry groups are challenging EPA’s underlying
authority to issue the ACE rule under CAA Section 111(d).195 And the Biogenic CO2 Coalition is
petitioning EPA’s refusal to recognize biogenic CO2 emission from biomass fuel as carbon
neutral or exempt from regulation under the ACE rule.196 Under CAA Section 307(b), the
deadline for filing a petition for review of the rules with the D.C. Circuit was September 6,
2019.197 The court has consolidated all the petitions into one lead case, American Lung
Association v. EPA.198
Figure 4. States and Municipalities Participating in the ACE Rule and CPP Repeal
Litigation
Consolidated Petitions: American Lung Ass’n v. EPA, No. 19-1140 (D.C. Circuit)

Source: Prepared by CRS from litigation filing in American Lung Ass’n v. EPA, No. 19-1140 (D.C. Cir.).
Notes: The map also includes the petitioner, District of Columbia.

Pub. Health and Envtl. Petitioners, Power Co. Petitioners, and Clean Energy Trade Ass’n. Petitioners, Am. Lung Ass’n.
v. EPA, No. 19-1140 (D.C. Cir. Apr. 24, 2020) (opposing the ACE rule).
195 See Petition for Review, Westmoreland Mining Holdings LLC v. EPA, No. 1176 (D.C. Cir. Sept. 5, 2019); Petition
for Review, North Am. Coal Corp. v. EPA, No. 19-1179 (D.C. Cir. Sept. 5, 2019); Robinson Enterprises, Inc. v. EPA,
No. 19-1175 (D.C. Cir. Sept. 6, 2019).
196 See Petition for Review, Biogenic CO2 Coalition v. EPA, No. 19-1185 (D.C. Cir. Sept. 5, 2019).
197 42 U.S.C. §7607(b).
198 Clerk’s Order, Am. Lung Ass’n v. EPA, No. 19-1140 (D.C. Cir. Sept. 2019) (issuing various orders consolidating
petitions through September 11, 2019).
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Q: Who are the respondents and intervenors in support of the rules?
A: Respondents in the litigation are EPA and its Administrator (as of July 2020), Andrew
Wheeler, in his official capacity.199 Parties that have intervened in support of respondents include
21states.200 See Figure 4. In total, 44 states, seven cities, and the District of Columbia are
participating in the litigation.201
Other parties intervening in support of the EPA include three labor unions, a public utility
commission, a number of rural electric cooperatives and an association representing them, several
industry and trade groups, and more than a dozen fossil-fuel-related companies and local electric
utilities.202 The National Association of Home Builders has submitted an amicus curiae brief in
support of the respondents.203
Petitioning states, municipalities, and public health and environmental organizations have
intervened on behalf of EPA to defend the agency’s underlying CAA authority to issue the ACE
rule and oppose a regulatory exemption or relaxation of emission standards for biogenic CO2
emissions.204
Q: What are the main legal issues in the litigation?
A: Petitioners challenge various aspects of the CPP repeal and the ACE rule as “arbitrary,
capricious and not in accordance with law.”205 Under CAA Section 307(d), a court may reverse an

199 See Joint Proposal on Briefing Schedule and Format by EPA and Other Parties, No. 19-1140 (D.C. Cir. Dec. 18,
2019). The Department of Justice represents the respondents.
200 See Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Nov. 18, 2019) (granting motions to intervene by
Alabama, Alaska, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana,
Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, Wyoming). The
State of West Virginia led a coalition of 20 states, not including North Dakota, to intervene in support of the ACE rule
and CPP repeal. Motion of West Virginia and 20 States, State Officers, and State Agencies to Intervene as
Respondents, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Sept. 12, 2019). The State of North Dakota intervened
separately. North Dakota’s Motion to Intervene, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Sept. 6, 2019).
201 The six states not participating in the litigation at this time are Arizona, Florida, Idaho, Iowa, New Hampshire, and
Tennessee. Of these six states, Idaho is the only state that does not have any affected EGUs under the ACE rule. ACE
Final Rule, p. 32573.
202 Orders, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Sept. 11, 2019, Nov. 18, 2019) (granting motions to
intervene by various industry groups and associations and power companies).
203 Brief of Amicus Curiae National Association of Home Builders in Support of Respondents, Am. Lung Ass’n. v.
EPA, No. 19-1140 (D.C. Cir. June 23, 2020).
204 Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Nov. 18, 2019) (granting motions to intervene by various
industry groups and associations and power companies). See Initial Brief for Pub. Health and Envtl. Respondent-
Interverors at 20, Am. Lung Ass’n. v. EPA, No. 19-1140 (July 16, 2020) (arguing that “neither science nor law
supports Biogenic Petitioner’s claims that biomass combustion is categorically carbon neutral, or that EPA lacks
authority to regulate biogenic emissions.”) [hereinafter Public Health and Env’tl Intervernors’ Br.].
205 See, e.g., State and Muni. Petitioners’ Opening Brief at 22, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr.
17, 2020) [hereinafter States and Muni. Pet’rs Br.] Although several petitioners also challenged EPA’s revised Section
111 implementing regulations in their petitions for review and statement of the issues, these petitioners did not set forth
their legal arguments related to the revised implementing regulations in their briefs. See, e.g., State and Muni.
Nonbinding Statement of Issues at 6, New York v. EPA, No. 19-1165 (consolidated with No. 19-1140) (D.C. Cir Oct.
7, 2019); Public Health and Env’tl Petitioners’ Joint Nonbinding Statement of Issues at 8, Am. Lung Ass’n. v. EPA,
Nos. 1140, 1166 (D.C. Cir. Oct. 7, 2019); Petitioner’s Nonbinding Statement of Issues at 8, Chesapeake Bay Found.,
Inc. v. EPA, (D.C. Cir. Oct. 7, 2019). In general, petitioners forfeit a legal argument if they fail to raise that argument in
their brief. See Petit v. Dep’t of Educ., 675 F.3d 769, 779 (D.C. Cir. 2012) (ruling appellants waived a legal claim that
was not raised in their opening brief); New York v. EPA, 413 F.3d 3, 20 (2005) (“That [legal] argument was not made
by industry petitioners in their opening brief and is therefore waived.”).
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agency action that the court finds to be, among other things, “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law” or “without observance of procedure
required by law.”206 This section highlights some of the petitioners’ legal arguments presented in
their opening briefs but does not provide a comprehensive preview of the petitioners’ legal issues
presented to the court for or against the rules.207
Various legal issues raised in the litigation challenging the CPP repeal and the ACE rule,
including the scope of EPA’s authority and its interpretation of the BSER under CAA Section
111, were central to the legal challenges to the CPP. For example, Coordinating Petitioners argue
that the CPP repeal and ACE rule are unlawful because EPA interpreted CAA Section 111 as
unambiguously limiting the BSER to measures that can be installed and implemented at each
individual existing coal-fired EGU.208 In the CPP, EPA asserted that the “system” in the BSER
reflected the “overall source category” of fossil-fuel-fired EGUs, taking into account the “unique
characteristics of CO2 pollution and the unique, interconnected and interdependent manner in
which affected EGUs and other generating sources operate within the electricity sector.”209
In contrast, in the CPP repeal and the ACE rule, EPA reasons that the CPP “beyond-the-source”
approach “ignored or misinterpreted” the plain text of the CAA that “clearly precluded the
unsupportable reading” of Section 111 used in the CPP to choose emission reduction measures
that are not directly applied to the regulated EGU.210 In its brief, EPA further argues that the CPP
adopted an “impermissibly broad view of EPA’s authority” that “cannot be correct” because,
among other reasons, Congress provided no “clear statement” delegating such broad authority to
EPA.211 Intervening state and industry groups support EPA’s arguments and further assert that the
CPP repeal must be upheld to avoid “displac[ing] traditional state authority over energy
generation” and “the serious constitutional question of whether Congress can delegate those
fundamental policy decisions to EPA.”212
EPA’s interpretation of the scope of its authority to consider various emission reduction measures
in determining the BSER was a divisive issue among the parties in the CPP litigation.213

206 42 U.S.C. §7607(d)(9).
207 See States and Muni. Pet’rs Br.; Initial Opening Brief of Public Health & Envtl. Petitioners, Am. Lung Ass’n. v.
EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter Public Health and Env’tl Pet’rs Br.]; Opening Brief of
Petitioners American Wind Energy Ass’n, Advanced Energy Economy, & Solar Energy Ind. Ass’n, Am. Lung Ass’n.
v. EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter AWEA Br.]; Opening Brief of Petitioners Consolidated
Edison, Inc., Exelon Corp., Nat’l Grid USA, N.Y. Power Auth., Power Cos. Climate Coal., Pub. Serv. Enterprise Grp.
Inc., & Sacramento Muni. Util. Dist., Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter
Consol. Edison Br.]; Initial Brief for Petitioner Biogenic CO2 Coalition, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C.
Cir. Apr. 17, 2020) [hereinafter Biogenic CO2 Br.]; Brief of Petitioner Robinson Enter., Inc. et al., Am. Lung Ass’n. v.
EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter Robinson Br.]; Coal Industry Petitioners Opening Brief,
Westmoreland Mining Holdings LLC & N. Am. Coal Corp. v. EPA, Nos. 19-1176 & No. 1179, (and consolidated
cases) (D.C. Cir. Apr. 17, 2020) [hereinafter Coal Indus. Br.]. This report does not address the legal issues that amici
curiae have raised in their briefs in support of the Coordinating Petitioners.
208 See, e.g., States and Muni. Pet’rs Br. at 23-26; Public Health and Env’tl Pet’rs Br. at 15-19; AWEA Br. at 5-14;
Consol. Edison Br. at 8-17.
209 CPP Rule, p. 64726.
210 CPP Repeal, p. 32527.
211 Proof Brief for the U.S. EPA, and EPA Admin. Andrew Wheeler at 50, 97-108, Am. Lung Ass’n. v. EPA, No. 19-
1140 (June 16, 2020) [hereinafter EPA Brief].
212 Proof Brief for State and Industry Intervenors for Respondent in Support of the Clean Power Plan Repeal at 3-4,
Am. Lung Ass’n. v. EPA, No. 19-1140 (July 16, 2020).
213 See CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA, by
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Coordinating Petitioners are also challenging EPA’s selection of HRI as the BSER in the ACE
rule. Coordinating Petitioners argue that EPA (1) unreasonably limited the BSER to heat rate
improvements and (2) “arbitrarily dismissed” measures such as generation-shifting from fossil
resources to lower- or zero emission resources, using carbon capture, and reducing use of high-
emitting sources when determining the BSER.214 Because EPA rejected these measures from the
BSER determination, Coordinating Petitioners allege that the BSER fails to reduce adequately
CO2 emissions from existing EGUs.215 In its brief, EPA maintains that the “only systems available
across the fleet, at reasonable cost, were the suite of heat rate improvement methods EPA selected
as the BSER” and that its BSER determination is “rational and supported by the record.”216
Intervening state and industry groups support EPA’s BSER determination and further argue that
the ACE rule “correctly reflects that BSER targets improvements to a source’s emissions
performance, not a reduction in total emissions from a source or source category.”217
Coordinating Petitioners also challenge the limits and responsibilities the ACE rule places on the
states. For example, they argue that EPA erroneously limited (1) the compliance measures that
states may include in their state plans and (2) the state’s ability to include emission standards that
are more stringent than the BSER.218 Certain petitioners assert that restricting the states’ ability to
adopt standards more stringent than the BSER is inconsistent with CAA Section 116,219 which
provides that nothing in the CAA denies the states the right “to adopt or enforce (1) any standard
or limitation respecting emissions of air pollutants or (2) any requirement respecting control or
abatement of air pollution” so long as such standard, limitation, or control is at least as stringent
as one “in effect under an applicable implementation plan or under section 7411” of the act.220 In
response, EPA argues that the petitioners’ claims that the ACE rule restricts state implementation
options are unripe for judicial review because EPA has not taken final agency action on a state
plan (i.e., approve or disapprove a state plan).221
Further, petitioners allege that EPA failed to set CO2 emission limits for existing gas-fired power
plants in the ACE rule as required by CAA Section 111(d).222 The scope of sources covered under
Section 111(d) includes “any existing source” that would be subject to NSPSs under Section
111(b) if it was newly constructed.223 Because EPA has issued NSPSs under CAA Section 111(b)
for new natural-gas-fired turbines (including both simple cycle and combined cycle natural gas
units), petitioners assert that EPA is required under Section 111(d) to issue emission guidelines for

Linda Tsang.
214 See, e.g., AWEA Br. at 5-9; Consol. Edison Br. at 17-23; Consol. Edison Br. at 17-23; Public Health and Env’tl
Pet’rs Br. at 31-40.
215 See, e.g., States and Muni. Pet’rs Br. at 58-61; Public Health and Env’tl Pet’rs Br. at 27-41; AWEA Br. at 10-14;
Consol. Edison Br. at 17-23. Petitioners also allege that EPA has not reasonably explained its change in position that
the “rebound effect,” in which emission reductions from improved efficiency at coal-fired plants are offset by emission
increases if those plants increase their operations. Public Health and Env’tl Pet’rs Br. at 28-31.
216 EPA Brief at 51-52.
217 Proof Brief for State and Industry Intervenors for Respondent Regarding ACE Rule at 3, Am. Lung Ass’n. v. EPA,
No. 19-1140 (July 16, 2020).
218 See, e.g., States and Muni. Pet’rs Br. at 66-67; Consol. Edison Br. at 23-31. In addition, the Biogenic CO2 Coalition
claims that EPA erred in disqualifying biomass co-firing as a compliance measure for regulated facilities to meet
emissions limits under the ACE rule. See Biogenic CO2 Br. at 7-33.
219 See id.
220 42 U.S.C. § 7416.
221 EPA Brief at 243-44.
222 See, e.g., States and Muni. Pet’rs Br. at 27-28, 69-70; Public Health and Env’tl Pet’rs Br. at 40-44.
223 42 U.S.C. §b7411(d)(1).
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the same category of existing natural gas units.224 In its brief, EPA asserts that Section 111(d) does
not impose a mandatory duty or deadline to promulgate regulations for “any existing source.”225
For further discussion of this issue, see “Q: Why didn’t EPA establish a BSER for other fossil-
fuel-fired units?”
Petitioning coal and mining companies and industry groups are challenging EPA’s underlying
authority to issue the ACE rule under CAA Section 111(d), echoing issues raised in the CPP
litigation.226 These petitioners claim that EPA failed to make the required endangerment finding
under CAA Section 111 and that EPA can rely on neither previous endangerment findings made in
the 1970s related to SO2, nitrogen dioxide, and particulate matter emissions from steam
generators and combustion turbines nor the endangerment finding made in 2009 in the context of
GHG emission from motor vehicles.227 They also argue that Section 111(d) bars EPA from
regulating CO2 emissions from power plants in any manner because power plants are a source
category regulated under Section 112 for mercury and other HAPs.228
In its response, EPA argues that an endangerment finding is required only when EPA seeks to
regulate new sources under Section 111(b) and that Section 111(d) does not require EPA to make
a separate endangerment finding when regulating existing sources.229 Intervening states,
municipalities, and public health and environmental organizations reiterate the agency’s
argument.230 These groups further assert that EPA made an endangerment finding in its 2015
GHG performance standards for new and modified power plants, which concluded that power
plant CO2 emissions harm public health and welfare and that power plants significantly contribute
to atmospheric CO2.231
Similar to the CPP litigation, the coal and mining industry petitioners are challenging EPA’s
interpretations of the different House and Senate versions of Section 111’s reference to Section
112 exclusion in the 1990 CAA amendments.232 In 1990, Congress replaced and removed the
former HAP listing process in Section 112(b)(1)(A) with a list of nearly 200 HAPs set forth in
Section 112(b).233 In doing so, Section 111(d)’s cross-reference to the deleted Section
112(b)(1)(A) became obsolete. Both the House and the Senate offered different amendments to
address the Section 112 cross-reference that were both passed and signed into law.234 The
provisions amended Section 111(d)(1)(A)(i), which excludes from regulation any air pollutant
that is included on:

224 See, e.g., Public Health and Env’tl Pet’rs Br. at 40-43.
225 EPA Brief at 158-61.
226 See generally Robinson Br.; Coal Indus. Br.
227 See, e.g., Robinson Br. at 20; Coal Indus. Br. at 7-19.
228 See, e.g., Coal Indus. Br. at 20-35.
229 EPA Brief at 163-68.
230 Page-proof Brief for State and Municipal Respondent-Intervenors at 12-24, Am. Lung Ass’n. v. EPA, No. 19-1140
(July 16, 2020); [hereinafter State and Muni. Intervenors’ Br.]; Public Health and Env’tl Intervenors’ Br at 19.
231 See Public Health and Env’tl Intervenors’ Br. at 18-19 (citing 80 Fed. Reg. 64,510, 64,517-24 (Oct. 23, 2015));
State and Muni. Intervenors’ Br. at 19-24.
232 See Section 112 Exclusion discussion in CRS Report R44480, Clean Power Plan: Legal Background and Pending
Litigation in West Virginia v. EPA, by Linda Tsang. See also Coal Indus. Br. at 20-35.
233 42 U.S.C. §7412(b).
234 P.L. 101-549, §§108(g), 302(a) (1990).
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House-originated
“a list published under section [1]08(a) or emitted from a source
amendment
category which is regulated under section [1]12 of this title”235
Senate-originated
“a list published under section [1]08(a) or [1]12(b)”236
amendment
Industry petitioners assert that the House-originated amendment as published in the U.S. Code
superseded the Senate’s “superfluous scrivener’s amendment.”237 Based on the House-originated
provision, they argue that EPA is barred from regulating power plants under Section 111(d) for
CO2 because power plants are a source category regulated under Section 112 for mercury and
other HAPs.238 In both the CPP and the ACE rule, EPA maintains that the Section 112 exclusion
in Section 111(d) “does not bar the regulation of GHGs from power plants notwithstanding that
power plants are regulated for HAP under section 112.”239 The court did not resolve this issue in
the CPP litigation because it dismissed the case as moot after EPA finalized the CPP repeal and
ACE rule.240
Other petitioners representing some industries, trade associations, and think tanks claim that EPA
cannot use its authority under CAA Section 111 to regulate GHGs.241 These petitioners assert that
EPA must establish NAAQS under CAA Sections 108-110 for air pollutants in the “ambient air”
emitted from “numerous or diverse” sources that “endanger” human health or welfare.242 Because
CO2 in the ambient air is emitted by numerous or diverse sources, petitioners claim that EPA
“impermissibly circumvented” the NAAQS procedures by regulating CO2 emissions under
Section 111 without first establishing a NAAQS for CO2.243 In the petitioners’ view, EPA may
establish emission standards under Section 111 only to supplement an established NAAQS.244 In
its brief, EPA contends that it does not have a mandatory obligation to regulate GHGs under the
NAAQS program and is not “bound” to regulate CO2 emissions in a particular manner or order
that the petitioners prefer.245

235 P.L. 101-549, §108(g), 104 Stat. 2399, 2467 (1990), codified at 42 U.S.C. §7411(d)(1)(A)(i) (emphasis added). The
House-originated provision appears in both the U.S. Code and the Statutes at Large. Note that CO2 also is not listed as a
criteria pollutant under CAA Section 108(a).
236 P.L. 101-549, §302(a), 104 Stat. 2399, 2574 (1990) (emphasis added). The Senate-originated provision is included
in the Statutes at Large but not the U.S. Code. EPA has regulated HAPs from power plants under CAA Section 112 as
part of its mercury and air toxics standards. For the status of these standards, see CRS In Focus IF11078, EPA
Reconsiders Benefits of Mercury and Air Toxics Limits, by Kate C. Shouse.
237 See, e.g., Coal Indus. Br. at 20-35.
238 See Coal Indus. Br. at 20-35 (challenging the ACE rule). See also Opening Br. of Petitioners’ on Core Legal Issues
Pet'rs Br. Core Legal Issues at 61-74, West Virginia v. EPA, No. 15-1363 (D.C. Cir. February 19, 2016). Note that CO2
is not listed as a criteria pollutant under a NAAQS under CAA Section 108(a).
239 See EPA, Response to Comments, ACE rule, Chapter 1, Legal Authority, at 10-19 (referencing the preamble to the
CPP for the basis of EPA’s position on this issue, 80 Fed. Reg. 64662, 64710-64715 (Oct. 23, 2015)). See also EPA
Brief at 50-51, 172-90.
240 Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Sept. 17, 2019).
241 Robinson Br. at 8-20.
242 42 U.S.C. §§7408-7410.
243 Robinson Br. at 11.
244 Id. at 8-20.
245 EPA Brief at 193-97.
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Q: What is the status of the litigation?
A: On March 23, 2020, the D.C. Circuit issued a revised briefing schedule for the parties.246 All
parties must submit their final briefs by August 13, 2020.247 The court has scheduled the oral
argument for October 8, 2020.
EPA’s Updated Analysis of the CPP Repeal and the
ACE Rule: Emission Impacts, Benefits, and Costs
Q: How did EPA estimate the emission impacts of the final rules repealing the
CPP and promulgating the ACE rule?
A: EPA conducted power sector modeling to estimate emission changes under different scenarios.
Given EPA’s treatment of the CPP repeal and the ACE rule as “separate and distinct” final
actions,248 the agency analyzed the emission impacts from each rulemaking separately. The
sequence of these two final rulemakings had implications for the baseline scenario used to
estimate each policy scenario’s incremental emission impacts.
To analyze the first final rule—the repeal of the CPP—EPA modeled three scenarios of CPP
implementation and compared those emissions projections to a baseline or “reference” scenario
that excluded standards of performance under CAA Section 111(d) for CO2 emissions. The
reference scenario represents “business-as-usual” conditions that “would be expected under the
market and regulatory conditions in the electricity and related sectors in the absence” of the
rule.249 This comparison allowed EPA to estimate the impacts from repealing, and not replacing,
the CPP. The reference and CPP implementation scenarios are as follows:
 Reference case: This is a baseline scenario. EPA assumes business-as-usual
market and regulatory conditions in the power sector based on, among other
things, projections from the EIA’s Annual Energy Outlook 2019.
 CPP with intrastate trading:250 This scenario assumes that states begin to
implement the 2015 CPP final rule in 2022 by utilizing a mass-based approach
with intrastate trading only. This and the two other CPP scenarios below assume
no incremental demand-side energy efficiency investments and no requirements
for states to address emissions from new sources.
 CPP with regional trading and three-year delay: This scenario assumes that
states begin to implement the CPP in 2025 by utilizing a mass-based approach
and regional trading. EPA assumes a three-year CPP compliance delay due to the
rule’s uncertain legal status in the court system, with final goals in 2033 instead

246 Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Mar. 23, 2020).
247 Id.
248 EPA, Regulatory Impact Analysis for the Repeal of the Clean Power Plan, and the Emission Guidelines for
Greenhouse Gas Emissions from Existing Electric Utility Generating Units, June 2019, pp. 1-2, 2-1,
https://www.epa.gov/stationary-sources-air-pollution/regulatory-impact-analysis-repeal-clean-power-plan-and-emission
(hereinafter “Final RIA”).
249 Final RIA, p. 3-4.
250 EPA refers to this scenario as “CPP with Limited Trading” in the Final RIA. See p. 2-36.
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of 2030. Regional trading involves six regions based on existing electricity
interconnections and regional trading systems (e.g., RGGI).
 CPP with national trading and three-year delay: This scenario is the same as
the “CPP with regional trading and three-year delay” scenario except that (1) it
assumes national trading instead of regional trading, and (2) EPA excludes
California and the RGGI states from the national trading in this scenario, as these
states have more stringent reduction requirements.
To analyze implementation of the second final rule—the ACE rule—EPA compared projected
emissions from an illustrative ACE rule implementation scenario to a reference scenario that
excluded standards of performance under CAA Section 111(d) for CO2 emissions.251 That is, EPA
analyzed the ACE rule as “a separate action that occurs only after repeal of the CPP.”252 EPA
analyzed a second reference scenario that included changes made by the Bipartisan Budget Act of
2018 (P.L. 115-123) to Internal Revenue Code Section 45Q, which provides a tax credit for
specific CCS activities.253 The illustrative ACE rule implementation scenario modeled application
of HRI at coal-fired EGUs beginning in 2025.254 This scenario assumed that HRI potential and
costs differ based on unit size and efficiency. EPA characterized the analysis as “illustrative,”
because “HRI potential can vary significantly from unit to unit,” and states may consider various
factors when applying the performance standards.255
This ACE rule implementation scenario differed from those analyzed at proposal because EPA did
not finalize the proposed revision to the applicability test for certain power plants under NSR.256
At proposal, two of the three ACE rule scenarios in EPA’s analysis accounted for “benefits from
the proposed revisions to NSR.”257 Details about the scenarios analyzed for the final ACE rule are
presented below.
 Reference case: This is a baseline scenario. EPA assumes business-as-usual
market and regulatory conditions in the power sector based on, among other
things, projections from the EIA’s Annual Energy Outlook 2019. In particular,
this scenario does not include implementation of the 2015 CPP final rule.
 Reference case with 45Q: This baseline scenario is identical to the above
scenario, but it also includes changes made by the Bipartisan Budget Act of 2018
(P.L. 115-123) to Internal Revenue Code Section 45Q, which provides a tax
credit for specific CCS activities.258 The 2018 act increased the 45Q tax credit
linearly from $22.66 to $50 per ton from 2017 to 2026 for CO2 captured and

251 EPA used the same reference scenario to analyze the final CPP repeal rule and the final ACE rule.
252 Final RIA, p. 1-5.
253 26 U.S.C. §45Q.
254 EPA selected 2025 as “an approximation for when the standards for performance under the final rule might be
implemented.” Final RIA, p. 3-6.
255 Final RIA, p. 1-7.
256 ACE Final Rule, p. 32521.
257 In the two ACE scenarios that accounted for the proposed NSR change, EPA assumed that two additional HRI
technologies—steam turbine upgrade and redesign/replacement of the economizer—would be available to facilities.
For details, see EPA, Regulatory Impact Analysis for the Proposed Emission Guidelines for Greenhouse Gas Emissions
from Existing Electric Utility Generating Units; Revisions to Emission Guideline Implementing Regulations; Revisions
to New Source Review Program, 2018, pp. 1-13 to 1-19, https://www.epa.gov/sites/production/files/2018-08/
documents/utilities_ria_proposed_ace_2018-08.pdf.
258 26 U.S.C. §45Q.
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permanently stored and from $12.83 to $35 per ton over the same period for CO2
captured and used as a tertiary injectant (typically for enhanced oil recovery).259
 ACE rule policy scenario: This scenario assumes HRI at coal-fired EGUs. EPA
divided the affected EGUs into 12 groups based on their current generation
capacity (megawatts) and heat rate (British Thermal Units per kilowatt-hour).
EPA assumed that each group would be able to achieve different HRIs: The least
efficient EGUs would make larger HRIs, ranging from 2.8% to 3.2%, the most
efficient EGUs would not make any improvements, and the middle groups would
make HRIs ranging from 0.8% to 2.1%. Based on these ranges, EPA determined
that the average capacity-weighted HRI was 1.5%.260 EPA assumed that the HRI
changes would be made in 2025 and would not change over time.
EPA incorporated “routine data updates” and more current projections into the power sector
modeling for both of the final rules. Among other things, EPA included more current energy
demand projections from the EIA’s Annual Energy Outlook as well as an updated inventory of
state and federal power sector regulations.261
Q: What CO2 emission effects did EPA estimate from the CPP repeal and from
the ACE rulemakings?
A: EPA’s power sector modeling projected modest CO2 emission changes—and in some cases, no
changes in CO2 emissions—under each rulemaking.262 Table 1 presents EPA’s projected emission
levels between 2030 and 2050 for the reference scenario, the three CPP scenarios, and the ACE
rule policy scenario.
EPA modeled three CPP policy scenarios and compared them to a reference scenario. One of the
three CPP scenarios—“CPP with national trading and three-year delay”—projected zero or close
to zero changes in CO2 emissions compared to the reference scenario.263 The other two CPP
scenarios projected some CO2 emissions changes compared to the reference scenario in various
years, ranging from less than one-half percent to about 4% decrease. The “CPP with intrastate
trading” scenario, which assumed that CPP implementation would begin in 2022, projected
greater CO2 reductions compared to the “CPP with regional trading and three-year delay”
scenario. EPA concluded, based on its modeling analysis and its consideration of power sector
trends,264 that repealing the CPP “under current and reasonably projected market conditions and

259 For more details, see CRS In Focus IF11578, CO2 Underground Injection Regulations: Selected Differences for
Enhanced Oil Recovery and Geologic Sequestration, by Angela C. Jones; and CRS Report R44902, Carbon Capture
and Sequestration (CCS) in the United States, by Peter Folger.
260 In the ACE proposed rule, EPA applied uniform HRI percentages to each affected EGU. In the proposed rule,
EPA’s modeling scenarios assumed a fleet-wide HRI of 2% and 4.5% under NSR implementation conditions.
261 EPA’s power sector modeling included AEO 2018. See Final RIA, pp. 3-4 to 3-5.
262 The electric power sector analysis (i.e., modeling results) is available at https://www.epa.gov/airmarkets/analysis-
final-ace-rule.
263 Unrounded estimates range from zero percent change to less than one-half percent change compared to the baseline
in various years.
264 EPA reported that it considered power sector changes, including fuel prices, technology changes and the age of
different portions of the generating fleet, and “recent commitments by many utilities that include long-term CO2
reductions across the EGU fleet.” Final RIA, pp. ES-2, 2-1.
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regulatory implementation is not anticipated to have a meaningful effect on emissions of CO2 or
other pollutants or regulatory compliance costs.”265
EPA’s power sector modeling projected modest emission changes under the ACE rule policy
scenario compared to the reference scenario. As shown in Table 1, the modeling projected that
CO2 emissions would decrease about 1% compared to the reference scenario in 2030 and 2035,
and it projected zero or close to zero change in 2040, 2045, and 2050.266 EPA characterized the
projected CO2 reductions under the ACE rule as “small compared to the recent market-driven
changes that have occurred in the electric sector.”267
Table 1. EPA Projections of CO2 Emissions in the Electric Power Sector
Comparison of EPA Reference and Policy Modeling Scenarios (2030-2050)
Projected CO2 Emission Levels
Percentage Change in CO2 Emissions
EPA Scenario
(MMTCO2)
Compared to Reference Case
2030
2035
2040
2045
2050
2030
2035
2040
2045
2050
Reference case
1,581
1,559
1,604
1,595
1,585
—
—
—
—
—
CPP with
1,525
1,512
1,553
1,555
1,550
-4%
-3%
-3%
-2%
-2%
intrastate trading
CPP with regional
1,572
1,550
1,593
1,594
1,585
-1%
-1%
-1%
0%
0%
trading and 3-year
delay
CPP with national
1,581
1,559
1,604
1,595
1,586
0%
0%
0%
0%
0%
trading and 3-year
delay
ACE policy
1,571
1,551
1,599
1,596
1,585
-1%
-1%
0%
0%
0%
scenario
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule.
Figure 5 illustrates EPA CO2 emission projections in the electric power sector from 2021 to 2050
for each of these scenarios. The top portion of the figure compares the CO2 emission projections
to actual CO2 emissions in the electric power sector between 1990 and 2017. The lower portion
provides a closer look at the differences between the scenarios EPA modeled.
The table and the figure indicate that the emission estimates for the ACE rule policy scenario
closely track the reference case estimates. In 2045, the ACE rule policy emissions are one metric
ton higher than the reference case, which some might argue is evidence of a rebound effect, as
discussed below. See “Q: Would the ACE rule’s HRI lead to potential “rebound effects”?”

265 Final RIA, p. 2-5.
266 Unrounded estimates range from zero percent change to less than one-half percent change compared to the baseline
in various years.
267 EPA, Fact Sheet: Regulatory Impact Analysis for the Affordable Clean Energy Rule (ACE) and Clean Power Plan
Repeal, June 2019, p. 1, https://www.epa.gov/sites/production/files/2019-06/documents/
ace_ria_fact_sheet_6.18.19_final.pdf.
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Figure 5. EPA Projections of CO2 Emissions in the Electric Power Sector
Actual CO2 Emissions and EPA Scenarios

Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule. Actual emissions from EPA, Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990-2018, April 2020, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-
emissions-and-sinks.
Note: The same EPA scenarios for references cases and CPP and ACE policy scenarios between 2020 and 2050
that are plotted in the top graph are plotted on an expanded scale in the bottom graph to provide a more
detailed view.
EPA points out that its emission projections contain uncertainty. In addition to the factors
identified by EPA that provide uncertainty for all the scenarios—electricity demand, natural gas
supply and demand, and long-term planning by utilities—the agency describes “considerable
uncertainty” that is particular to its ACE rule policy scenario. In its Regulatory Impact Analysis of
the final rule, EPA states that “there is inadequate and incomplete information regarding how
states might specifically implement this rule, and the estimated range of costs and impacts
presented in this chapter is based on the assumptions.”268

268 Final RIA, pp. 3-29.
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Q: How do the CO2 emission projections in the final ACE rule compare with
prior EPA CO2 emission projections?
A: Comparing EPA’s emission projections in the 2019 final ACE rule with projections from the
2015 final CPP rule is challenging for several reasons. First, the CO2 emission baseline conditions
in the electric power sector changed between 2015 and 2019 (e.g., see the changes in the
electricity generation profile in Figure 2 above). These changes impact the stringency of
emission reduction programs. For example, in 2015, EPA estimated that the CPP would reduce
CO2 emissions from the electric power sector by 32% in 2030 from 2005 levels compared to a
reference case scenario prepared for the CPP rule. In its 2019 final ACE rule, EPA estimated that
its reference case scenario (without the CPP) would reduce CO2 emissions from the electric
power sector by 34% in 2030 from 2005 levels.269
As illustrated in Figure 6, EPA’s reference case scenarios have changed over the past four years.
The different reference case scenarios are a result of the recent decreases in CO2 emissions in the
electric power sector (as discussed above). As the figure indicates, emissions decreased by 15%
between 2014 and 2017. Therefore, when EPA promulgated the CPP in 2015, the rule appeared
more stringent (compared to its 2015 baseline) than it does today, because many of the emission
reductions that would have been required by the CPP have already occurred. As previously noted,
several factors likely played a role in recent power sector emission changes, including
technological advances in energy production (e.g., hydraulic fracturing) and federal and state
policies, including federal tax policies270 and states’ renewable portfolio standards.271 For more
information, see “Q: How much does the generation of electricity contribute to total U.S. GHG
emissions?”

269 CRS identified one study that used EPA’s modeling framework to estimate emissions under the CPP repeal and
ACE final rule. The authors estimated emissions reductions using an “updated version of the CPP,” which included
revised assumptions regarding renewable energy use, national trading, energy efficiency improvements, and
mechanisms to address emissions from new sources. See Kathy Fallon Lambert et al., Carbon Standards Re-Examined:
An Analysis of Potential Emissions Outcomes for the Affordable Clean Energy Rule and the Clean Power Plan, July
17, 2019, https://cdn1.sph.harvard.edu/wp-content/uploads/sites/2343/2019/07/Carbon-Standards-Re-
Examined_Final1.pdf.
270 See CRS Report R44852, The Value of Energy Tax Incentives for Different Types of Energy Resources, by Molly F.
Sherlock.
271 See, for example, Database of State Incentives for Renewables and Efficiency, Map of Renewable Portfolio
Standard Policies, as of October 2018, http://ncsolarcen-prod.s3.amazonaws.com/wp-content/uploads/2018/10/
Renewable-Portfolio-Standards-2018.pdf.
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Figure 6. Comparison of EPA Reference Case Scenarios

Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule; and data from analysis for the CPP final rule.
Some observers have noted that the underlying assumptions in the CPP scenarios modeled by
EPA in 2015 differ from the assumptions in the CPP scenarios the agency modeled in 2019.272 For
example, in its 2015 CPP final rule analysis, EPA assumed that CPP implementation would result
in energy efficiency improvements.273 This assumption effectively lowered the demand for
electricity generation and therefore emissions from electricity.274 EPA does not include energy
efficiency assumptions in its 2019 analysis. In addition, in EPA’s 2015 final rule analysis, the
relevant CPP scenario included a mechanism to account for potential emissions from new
generation sources.275 The CPP scenarios considered in the 2019 analysis do not have this
requirement. As highlighted above, in its 2019 analysis EPA assumed a three-year implementation
in two of the CPP scenarios compared to the assumed start date considered in the 2015 CPP

272 Lambert et al., Carbon Standards Re-Examined; and Arjun Krishnaswami, “EPA’s Monkey Business Hides ACE
Rule Emissions Increase,” Natural Resources Defense Council, June 2019, https://www.nrdc.org/experts/arjun-
krishnaswami/epas-monkey-business-hides-ace-rule-emissions-increases.
273 EPA defined demand-side energy efficiency measures as an “extensive array of technologies, practices and measures
that are applied throughout all sectors of the economy to reduce energy demand while providing the same, or better,
level and quality of service” (EPA, Demand-Side Energy Efficiency Technical Support, August 2015,
https://www.regulations.gov/document?D=EPA-HQ-OAR-2017-0355-0048). Examples include utilities offering
technical services such as audits and retrofit, installation of more efficient products and equipment in residential or
commercial buildings, or undertaking home energy audits leading to customized whole home retrofits.
274 EPA did not model specific energy efficiency measures in the 2015 CPP Regulatory Impact Analysis (RIA) but
rather assumed that demand-side energy efficiency efforts would reduce electricity demand by approximately 8%
compared to a business-as-usual scenario. EPA based this estimate on its review of historical state programs and the
literature. See EPA, Regulatory Impact Analysis for the Clean Power Plan Final Rule, Table 3-2, October 23, 2015,
https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37105 (hereinafter “2015 CPP RIA”); and EPA,
Demand-Side Energy Efficiency Technical Support.
275 EPA included this mechanism (described as a “new source complement”) to account for the requirement that states
using a mass-based target approach must address the potential for emissions leakage in their state plans. For more
details see CRS Report R44341, EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions, by
James E. McCarthy et al.
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analysis. All else being equal, the impacts of these different assumptions in the 2019 modeled
CPP scenarios likely diminish the potential emission reductions of the 2015 CPP.
Q: What non-CO2 emission effects did EPA estimate from the CPP repeal and
ACE rulemakings?
A: EPA’s power sector modeling also projected changes in non-CO2 emissions under each
rulemaking. Specifically, the modeling analysis projected changes in emissions of SO2, NOx, and
HAPs, including mercury. While these pollutants have implications for air quality and public
health,276 they are not directly targeted by the CPP (or CPP repeal) or the ACE rule. Table 2
presents EPA’s projected non-CO2 emission levels for 2030, 2035, and 2040 for the reference
scenario; the three CPP scenarios; and the ACE rule policy scenario. Table 3 presents the
emission changes as a percentage.
EPA’s power sector modeling projected modest changes nationally in non-CO2 pollutants under
most scenarios compared to the reference scenario. Across the CPP policy scenarios and the ACE
rule policy scenario, the “CPP with intrastate trading” scenario showed the highest emission
changes compared to the reference scenario. The remaining two CPP scenarios and the ACE rule
scenario generally projected emission changes less than 1% from the baseline at the national
level.
EPA’s modeling analysis of the ACE rule “projects both decreased and increased levels of [fine
particulate matter] and ozone, depending on the location,” compared to the reference scenario.277
Some stakeholders raised concerns that regional increases in non-CO2 pollutants would “make it
harder for some areas” to meet existing federal air quality standards.278 EPA responded that the
updated modeling for the final ACE rule projected nationwide decreases compared to the
reference scenario. EPA also discussed its consideration of rebound effects. For more details
about projected changes in non-CO2 emissions at a sub-national level, see “Q: Would the ACE
rule’s HRI lead to potential “rebound effects”?”
Table 2. EPA Projected Non-CO2 Emissions in the Electric Power Sector
Comparison of EPA Reference and Modeling Scenarios (2030-2040)
Projected SO2 Emission
Projected NOx Emission
Projected Hg Emission
Levels
Levels
Levels
(thousand metric tons SO2)
(thousand metric tons NOx)
(metric tons Hg)
EPA
Scenario
2030
2035
2040
2030
2035
2040
2030
2035
2040
Reference
case
803
741
736
735
683
673
4.0
3.7
3.7
CPP with
intrastate
trading
774
698
707
691
646
633
3.9
3.5
3.6

276 For example, SO2 and NOx are criteria pollutants regulated under the CAA that directly affect air quality. SO2 and
NOx are also “precursor emissions” that contribute to the formation of particulate matter and ozone, which are likewise
regulated under the CAA.
277 Final RIA, p. 4-8.
278 ACE RTC, see chap. 7, p. 6.
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Projected SO2 Emission
Projected NOx Emission
Projected Hg Emission
Levels
Levels
Levels
(thousand metric tons SO2)
(thousand metric tons NOx)
(metric tons Hg)
EPA
Scenario
2030
2035
2040
2030
2035
2040
2030
2035
2040
CPP with
regional
trading and
3-year delay
797
733
725
729
678
667
4.0
3.6
3.7
CPP with
national
trading and
3-year delay
805
740
737
735
683
673
4.0
3.7
3.7
ACE policy
scenario
798
735
733
728
678
670
4.0
3.6
3.7
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule.
Notes: NOx based on estimated annual NOx emissions.
Table 3. EPA Projected Changes in Non-CO2 Emissions in the Electric Power Sector
Comparison of EPA Reference and Modeling Scenarios (2030-2040)
Projected SO2 Emission
Projected NOx Emission
Projected Hg Emission
Levels
Levels
Levels
(thousand metric tons SO2)
(thousand metric tons NOx)
(metric tons Hg)
EPA
Scenario
2030
2035
2040
2030
2035
2040
2030
2035
2040
Reference
case
—
—
—
—
—
—
—
—
—
CPP with
intrastate
trading
-3.6%
-5.8%
-3.9%
-6.0%
-5.3%
-6.0%
-4.5%
-3.4%
-3.8%
CPP with
regional
trading and
3-year delay
-0.8%
-1.2%
-1.5%
-0.8%
-0.8%
-0.9%
-0.7%
-1.0%
-1.0%
CPP with
national
trading and
3-year delay
0.2%
-0.2%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
ACE policy
scenario
-0.6%
-0.8%
-0.4%
-0.9%
-0.8%
-0.5%
-0.7%
-0.6%
-0.3%
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule.
Notes: NOx based on estimated annual NOx emissions. Positive values signify an estimated increase in emissions
relative to the baseline. Negative values signify an estimated decrease in emissions relative to the baseline.
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Q: Would the ACE rule’s HRI lead to potential “rebound effects”?
A: The “heat rate” measures the amount of energy that a power plant uses to generate one
kilowatt-hour of electricity.279 A power plant with a lower, more efficient heat rate uses less fuel
to generate the same amount of electricity as a power plant with a higher heat rate. Using less fuel
per kilowatt-hour may result in lower emissions of CO2 as well as SO2 and NOx. HRI can also
lead to greater use of the more efficient fossil-fuel-fired power plants, which contributes to a
“rebound effect.” That is, coal-fired power plant efficiency gains achieved from HRI may lead to
increased electricity generation from these units, thereby increasing absolute emissions and, to
some extent, offsetting the emission reductions from the HRI.
In its 2015 CPP final rule, EPA stated that
applying building block 1 [HRI at coal-fired EGUs] in isolation can result in a “rebound
effect” that undermines the emissions reductions otherwise achieved by heat rate
improvements.280
However, in its 2018 proposed ACE rule, EPA stated that its
analysis indicates that the system-wide emission decreases due to reduced heat rate are
likely to be larger than any system-wide increases due to increased operation.281
EPA reached a similar conclusion in its 2019 final ACE rule:
The EPA conducted updated modeling and analysis for the final ACE rule … and
confirmed that aggregate CO2 emissions from the group of designated facilities are
anticipated to decrease (outweighing any potential CO2 increases related to increased
generation by certain units).282
Although EPA estimated that in 2030 the aggregate (i.e., nationwide) power sector CO2 emissions
would decrease under the ACE rule scenario, EPA estimated some state-level increases in
emissions. EPA projected that CO2 emissions would increase in 15 states (and the District of
Columbia) in 2030 compared to the agency’s reference case. Figure 7 illustrates the results from
EPA’s modeling. The figure compares the ACE rule policy scenario with EPA’s reference case
scenario in 2030. The results ranged from a decrease of 11.0% (Tennessee) to an increase of 1.6%
(Minnesota).

279 EIA, Analysis of Heat Rate Improvement Potential at Coal-Fired Power Plants.
280 CPP Final Rule, p. 64787.
281 ACE Proposal. CRS identified one study that examined the potential for a rebound effect using modeling
information EPA provided with the 2018 proposed ACE rule. See Amelia T. Keyes et al., “The Affordable Clean
Energy Rule and the Impact of Emissions Rebound on Carbon Dioxide and Criteria Air Pollutant Emissions,”
Environmental Research Letters, April 9, 2019.
282 ACE Final Rule, p. 32543. CRS identified one study that examined the potential for a rebound effect under the final
ACE rule. The authors used EPA’s modeling framework to analyze a scenario that included the 45Q tax credit and
NSR reform and concluded that the “magnitude of state-level emissions rebound of the ACE rule, and the resulting
local air quality and health impacts, are likely to be larger than the magnitude estimated in the final ACE RIA.”
Lambert et al., Carbon Standards Re-Examined.
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Figure 7. EPA Estimates of CO2 Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030)

Source: Prepared by CRS. Data from EPA’s power sector analysis for the final ACE rule at https://www.epa.gov/
airmarkets/analysis-final-ace-rule and data from analysis for the CPP final rule. Figure does not include Alaska and
Hawaii because the ACE rule does not apply to those states.
Similarly, EPA projected that under the ACE rule scenario, SO2 and NOx emissions would
decrease nationally while increasing at the state level in some states. EPA projected that SO2 and
NOx emissions would decrease nationally by 0.6% and 0.9%, respectively, in 2030 compared to
the reference scenario. SO2 and NOx emissions would also increase by at least 1% in six states
and four states, respectively, compared to the reference case in 2030.283 Figure 7 and Figure 8
illustrate the SO2 and NOx results, respectively, from EPA’s modeling. Each figure compares the
ACE rule policy scenario with EPA’s reference case scenario in 2030. The projected SO2 changes
in 2030 ranged from a decrease of 17% (Tennessee) to an increase of nearly 4% (Oklahoma). The
projected NOx changes in 2030 ranged from a decrease of 19% (Tennessee) to an increase of 3%
(Georgia).

283 CRS analysis of data from EPA’s power sector analysis for the ACE final rule at https://www.epa.gov/airmarkets/
analysis-final-ace-rule; and data from analysis for the CPP final rule.
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Figure 8. EPA Estimates of SO2 Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030)

Source: Prepared by CRS. Data from EPA’s power sector analysis for the final ACE rule at https://www.epa.gov/
airmarkets/analysis-final-ace-rule and data from analysis for the CPP final rule. Figure does not include Alaska and
Hawaii because the ACE rule does not apply to those states.
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Figure 9. EPA Estimates of NOx Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030)

Source: Prepared by CRS. Data from EPA’s power sector analysis for the final ACE rule at https://www.epa.gov/
airmarkets/analysis-final-ace-rule; and data from analysis for the CPP final rule. Figure does not include Alaska and
Hawaii because the ACE rule does not apply to those states.
Q: What are EPA’s estimated costs and benefits of the proposed repeal of the
CPP?
A: EPA quantified the estimated emission impacts of repealing the CPP under several scenarios
but did not monetize the associated benefits and costs. While EPA’s modeling projected CO2
emission changes under two of the CPP scenarios, EPA concluded that “the most likely result” of
implementing the CPP would be “no change in emissions and therefore no [changes in monetized
costs or benefits] relative to a world without the CPP.”284 EPA stated that it does not expect
repealing the CPP “to have a meaningful effect on emissions of CO2 or other pollutants or
regulatory compliance costs.”285 EPA based this conclusion on its power sector modeling as well
as its consideration of power sector trends, including fuel prices, technology changes, the age of
different portions of the generating fleet, and “recent commitments by many utilities that include
long-term CO2 reductions across the EGU fleet.”286
Q: What are EPA’s estimated costs and benefits of the final ACE rule?
A: EPA estimated the value of the costs and benefits associated with projected emission changes
under an illustrative ACE rule policy scenario. EPA reported the compliance costs as the projected

284 Final RIA, p. 2-1.
285 Final RIA, p. 2-5.
286 Final RIA, pp. ES-2, 2-1.
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additional cost for the power industry to implement HRI. These estimates also include the
expected costs for monitoring, reporting, and recordkeeping.287 On the benefits side, EPA
estimated the “climate-related” benefits from changes in CO2 emissions under the ACE rule. EPA
also estimated human health benefits of reductions in exposure to ambient fine particulate matter
(PM2.5) and ozone. These are referred to as “co-benefits” because the ACE rule does not directly
target these pollutants. In particular, EPA projected changes in SO2 and NOx emissions—
precursor emissions that contribute to the formation of particulate matter (PM) and ozone—and
estimated the value of changes in human exposure to PM2.5 and ozone.288
The agency’s analysis showed that the combined domestic climate benefits and human health co-
benefits estimates would outweigh the compliance cost estimates. The present value of the net
benefits from these comparisons ranged from $1.1 billion to $8.8 billion, depending on the
discount rate, over a 15-year period (2023-2037).289 EPA estimated the present value of the ACE
rule compliance costs as $1.6 billion over a 15-year period (2023-2037) and the present value of
the combined domestic climate benefits and human health co-benefits as $4.6 billion to $10
billion over the same period (2023-2037).290
EPA’s analysis also presented less favorable benefit-cost comparisons. EPA excluded the
estimated human health co-benefits from these comparisons, describing it as a way to consider
the benefit of reducing the “targeted pollutant” (CO2) against the compliance cost.291 These
“targeted pollutant” benefit-cost comparisons showed that compliance costs would outweigh the
domestic climate benefits, with the present value of net costs ranging from $910 million (7%
discount rate) to $980 million (3% discount rate) over a 15-year period (2023-2037).292 The
present value of the estimated compliance costs remained the same in these comparisons—$1.6
billion at a 3% discount rate—and outweighed the present value of the estimated domestic
climate benefits—$640 million at a 3% discount rate.293 For more information about EPA’s
consideration of co-benefits, see “Q: How did EPA estimate the human health co-benefits?”
Q: How did EPA estimate the climate benefits?
A: EPA used a power sector model to estimate the change in CO2 emissions and then applied the
social cost of carbon dioxide (SC-CO2) to estimate the economic value of the associated climate

287 ACE Final Rule, p. 32562.
288 EPA did not quantify the health risks associated with ambient concentrations of SO2 and NOx that are independent
of PM2.5 and ozone. EPA also did not monetize the projected ancillary reductions in mercury emissions, citing “data,
resource, and methodological limitations.” See Final RIA, chap. 4.
289 Traditionally, benefit-cost comparisons are shown as estimates of the “net impact,” which is the difference between
total costs and total benefits. “Net benefits” result when the benefits outweigh the costs, and “net costs” result when the
costs outweigh the benefits. Regarding the ACE analysis, the present value of estimated net benefits over the period
2023-2037 is $3.0 billion to $8.8 billion at a 3% discount rate and $1.1 billion to $4.1 billion at a 7% discount rate.
These net benefit estimates account for both estimated domestic climate benefits and estimated human health co-
benefits. Final RIA, p. 6-9.
290 Present value calculated at a 3% discount rate. EPA also calculated the present value at a 7% discount rate: Costs
were an estimated $970 million, and the corresponding climate benefits and health co-benefits ranged from $2.1 billion
to $5 billion. See Final RIA, p. 6-9.
291 Final RIA, pp. ES-9 to ES-10.
292 Final RIA, p. 6-8.
293 Present value calculated for years 2023-2037. EPA also calculated present value for 2023-2037 at a 7% discount
rate: Costs were an estimated $970 million, and the corresponding domestic climate benefits were an estimated $62
million.
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change impacts.294 The SC-CO2 is an estimate of the monetary value of impacts associated with
changes in CO2 emissions in a given year. It includes net changes in agricultural productivity,
property damage from increased flood risk, and changes in energy system costs, such as reduced
costs for heating and increased costs for air conditioning.295 For each year of the analysis, EPA
applied two SC-CO2 estimates—one that was discounted at a 3% rate and the other discounted at
a 7% rate.296 (Discounting, which is standard practice in benefit-cost analysis, allows for apples-
to-apples comparisons of economic impacts that occur at different times.) The SC-CO2 estimates
that EPA used to value emissions changes in the years 2025-2035 are as follows: $7-$9 per metric
ton of CO2 emissions (in 2016 dollars) using a 3% discount rate and $1-$2 per metric ton of CO2
emissions (in 2016 dollars) using a 7% discount rate.297
The SC-CO2 estimates used in the ACE rule analysis garnered stakeholder interest, in particular
with respect to their scope and the use of a 7% discount rate. EPA developed these SC-CO2 values
in 2017, based on E.O. 13783, and labeled them as “interim values.”298 The interim SC-CO2
estimates are domestic values, meaning that they are intended to measure the projected impacts of
climate change anticipated to occur within U.S. borders.
EPA also applied global SC-CO2 estimates to the estimated CO2 reductions in a sensitivity
analysis. The global SC-CO2 estimates applied to emissions changes in the years 2025-2035 are
as follows: $53-$63 per metric ton of CO2 emissions (in 2016 dollars) using a 3% discount rate
and $6-$9 per metric ton of CO2 emissions (in 2016 dollars) using a 7% discount rate.299 EPA did
not report those global climate benefits in comparison to the ACE rule compliance costs.
Q: What are the implications of using the “interim SC-CO2” estimates to
estimate climate benefits?
The domestic perspective and use of a 7% rate lowered the SC-CO2 estimates compared to the
estimates used in previous analyses, including the agency’s 2015 analysis of the CPP.300 EPA
attributed its focus on domestic SC-CO2 estimates and the application of the 7% discount rate to
direction given in E.O. 13873 and OMB Circular A-4.301
Stakeholders disagree about whether EPA should use domestic or global SC-CO2 values. Those
recommending use of global values have concluded that there is no clear distinction between
domestic and global climate change impacts and that a domestic SC-CO2 understates the benefits
to the United States because of spillover effects—that is, climate impacts that occur outside U.S.

294 EPA multiplied the SC-CO2 estimates for a given year by the estimated CO2 emissions reduction in that same year
to estimate the monetary value of the associated climate benefits.
295 CRS In Focus IF10625, Social Costs of Carbon/Greenhouse Gases: Issues for Congress, by Jane A. Leggett.
296 SC-CO2 values vary depending on the year of emissions. SC-CO2 values are calculated using models that translate
changes in emissions into economic impacts through a multi-step process. EPA ran three models using five
socioeconomic scenarios and two discount rates, which resulted in many estimates. EPA selected the average SC-CO2
at each discount rate (3% and 7%) in a given year for use in the analysis.
297 Final RIA, p. 4-4.
298 As part of a broader executive order, E.O. 13783, the Trump Administration withdrew the SC-CO2, social cost of
methane, and social cost of nitrous oxide estimates developed by an Obama Administration interagency working group.
299 Final RIA, pp. 7-7 to 7-8.
300 Between 2009 and 2016, federal agencies used SC-CO2 estimates in regulatory analysis that were global measures
and discounted at rates of 2.5, 3, and 5%.
301 Final RIA, p. 4-2.
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borders could nonetheless affect the U.S. economy.302 Other stakeholders disagree with this
position. Those who disagreed with the previous Administration’s focus on global values
criticized the comparison of impacts measured on different scales—global benefits versus
domestic costs—and concluded that using a global SC-CO2 overstates the benefits of a country-
specific rulemaking. That is, the benefit-cost comparison may seem more favorable when
counting benefits that accrue to non-U.S. populations but would be less favorable when
considering only the U.S. benefits.303
Stakeholders also disagree about the discount rate used to calculate the SC-CO2.304 The
intergenerational aspect of climate change makes selection of a discount rate challenging when
calculating the SC-CO2—in part because it has implications for how much the current generation
values the climate change impacts experienced by future generations.305
Environmental and public interest groups have generally emphasized the intergenerational
considerations and recommended that the federal government use lower discount rates or rates
that decline over time. Industry groups have generally recommended higher rates, such as the 7%
rate. The published literature largely shows application of lower discount rates in climate change
studies. According to the National Academies, the majority of climate change impacts studies
cited in the Intergovernmental Panel on Climate Change Fifth Assessment Report (2014) used
rates of no more than 5%.306
While there is no consensus on the appropriate rate to choose in an intergenerational context, it is
well understood that higher discount rates result in lower present values and that lower discount
rates result in higher present values.307 In addition, the literature shows that SC-CO2 estimates are
highly sensitive to discount rate selection.
For more information about scope and discount rate considerations and the range of stakeholder
views on these factors, see CRS In Focus IF10625, Social Costs of Carbon/Greenhouse Gases:
Issues for Congress, by Jane A. Leggett and CRS Report R45119, EPA’s Proposal to Repeal the
Clean Power Plan: Benefits and Costs, by Kate C. Shouse.
Q: How did EPA estimate the human health co-benefits?
A: EPA estimated the human health co-benefits of reductions in exposure to ambient PM2.5 and
ozone under the final ACE rule.308 First, EPA projected changes in SO2 and NOx emissions, which

302 For additional discussion about the critiques of global versus domestic SC-CO2, see CRS Report R45119, EPA’s
Proposal to Repeal the Clean Power Plan: Benefits and Costs, by Kate C. Shouse.
303 For additional discussion about the critiques of global versus domestic SC-CO2, see CRS Report R45119, EPA’s
Proposal to Repeal the Clean Power Plan: Benefits and Costs, by Kate C. Shouse.
304 The choice of a discount rate has implications for how much one values current consumption over future
consumption. Higher discount rates give less present value to benefits or costs that accrue in the future, whereas lower
discount rates give more present value.
305 For example, the current generation must select a discount rate on behalf of the future generation and without the
benefit of input from the future generation. It also raises questions about the extent to which the current generation
would account for the future generation’s potential preferences, particularly if doing so comes at the expense of the
current generation.
306 National Academies of Sciences, Engineering, and Medicine (NAS), Valuing Climate Damages: Updating
Estimation of the Social Cost of Carbon Dioxide (Washington, DC: National Academies Press, 2017), p. 168,
https://doi.org/10.17226/24651.
307 NAS, Valuing Climate Damages, p. 161.
308 ACE Final Rule, pp. 32562-3. See also Final RIA, chap. 4.
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are precursor emissions that contribute to the formation of PM2.5 and ozone.309 EPA then
conducted air quality modeling to project changes in PM2.5 and ozone concentrations associated
with the projected changes in SO2 and NOx emissions. Next, EPA used the Benefits Mapping and
Analysis Program—Community Edition model to quantify the human health impacts and
economic value of the projected air quality changes. These estimates represented the value of
reductions in premature deaths and illnesses, such as non-fatal heart attacks and asthma,
associated with exposure to PM2.5 and ozone.310 The value of avoided premature deaths accounts
for most of the monetized co-benefits—98% of the estimated value of the co-benefits related to
PM2.5 and 90% of the estimated value of the co-benefits related to ozone.311
EPA’s analysis and presentation of the human health co-benefits has garnered stakeholder
interest. Specifically, EPA excluded the co-benefits from some of the ACE rule benefit-cost
comparisons, describing it as a way to consider the benefit of reducing the “targeted pollutant”
(CO2) against the compliance cost.312 In other cases, EPA omitted the PM-related health co-
benefits below specified thresholds for PM2.5, reporting only the PM-related health co-benefit
above the threshold.313 EPA stated that the application of the thresholds provides “insight into the
level of uncertainty in the estimated PM2.5 mortality benefits.”314 EPA based one threshold on the
current federal air quality standard for PM2.5—12 micrograms per cubic meter (μg/m3)—and
omitted deaths attributable to PM2.5 concentrations less than 12 μg/m3. EPA based the second and
lower threshold on the “lowest measured level” of PM2.5 from the two long-term studies it used to
estimate deaths related to PM2.5. For the lowest measured level threshold, EPA omitted deaths
attributable to PM2.5 at or below the lowest measured level of the Krewski et al. 2009 study (5.8
μg/m3) and the Lepeule et al. 2012 study (8 μg/m3).315 EPA selected these thresholds because the
agency has greater confidence in the estimates that fall within the “bulk of observed” PM2.5
concentrations in the Krewski et al. 2009 study and the Lepeule et al. 2012 study.
For more information about co-benefit considerations, see CRS Report R44840, Cost and Benefit
Considerations in Clean Air Act Regulations, by James E. McCarthy and Richard K. Lattanzio
and CRS Report R45119, EPA’s Proposal to Repeal the Clean Power Plan: Benefits and Costs,
by Kate C. Shouse.

309 EPA did not quantify the health risks associated with ambient concentrations of SO2 and NOx that are independent
of PM2.5 and ozone. Final RIA, p. 4-6.
310 EPA based estimated reductions in non-fatal heart attacks on reduced exposure to PM2.5. EPA based the asthma-
related impacts associated with exposure to PM2.5 and exposure to ozone on exacerbation of asthma symptoms in
individuals with asthma ages 6-18. See Final RIA, Table 4-4, for a complete list of the human health impacts
considered.
311 Final RIA, p. 4-23.
312 Final RIA, pp. ES-9 to ES-10.
313 EPA refers to the thresholds as “alternative concentration cut-points” and applied them to health benefits related to
PM2.5 exposure; EPA did not apply any thresholds to the estimated ozone health co-benefits. See Table 6 in the ACE
Final Rule, p. 32563.
314 Final RIA, p. 4-26.
315 See Final RIA, pp. 4-26 to 4-28. EPA used each study to estimate benefits and the results from a range with one
“low” estimate and one “high” estimate. EPA used the lowest measured level from each study to adjust the high and
low PM2.5 co-benefits. See also D. Krewski et al., “Extended Follow-Up and Spatial Analysis of the American Cancer
Society Linking Particulate Air Pollution and Mortality,” Health Effect Institute Research Report, vol. 140 (2009); and
J. Lepeule et al., “Chronic Exposure to Fine Particles and Mortality: An Extended Follow-Up of the Harvard Six Cities
Study from 1974 to 2009,” Environmental Health Perspectives, vol. 120, no. 7 (2012), pp. 965-70.
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Q: What are the implications of EPA’s approach to co-benefits in the ACE
analysis?
A: EPA’s “targeted pollutant” approach excluded the co-benefits from some of the ACE rule
benefit-cost comparisons. This approach departed from previous analyses, such as the 2015 CPP
analysis. EPA’s benefit-cost analysis did not serve as the basis for the final ACE rule—which was
based on EPA’s current legal interpretation about the BSER—but is nonetheless consequential,
because it may set a precedent for the way EPA accounts for co-benefits in future rulemaking
analyses.316 Separate from the final ACE rule, EPA is developing a proposal related to its
treatment of benefits in air pollution regulatory analyses.317
Consideration of co-benefits and other indirect impacts is typically viewed as a principle of
benefit-cost analysis and consistent with federal guidance. A federal guidance document entitled
“OMB Circular A-4” directs agencies to “look beyond the direct benefits and direct costs” of a
rulemaking and quantify and monetize co-benefits as well as adverse impacts not already
considered in the direct cost estimates.318 Likewise, EPA’s Guidelines for Preparing Economic
Analyses recommends that the agency’s economic analysis “include directly intended effects and
associated costs, as well as ancillary (or co-) benefits and costs.”319 EPA described its approach as
“consistent” with OMB Circular A-4 because even though some of the benefit-cost comparisons
exclude co-benefits, other parts of the agency’s analysis report the co-benefits and include them
in some of the benefit-cost comparisons.320 As discussed further below, stakeholder opinion varies
regarding this approach.
EPA’s use of thresholds to estimate PM2.5 mortality impacts also diverged from past analyses and
lowered some of the estimated health co-benefits under the ACE rule, specifically the portion of
benefits related to reductions in PM2.5.321 According to EPA’s ACE rule analysis, the percentages
of monetized health co-benefits attributable to PM2.5 were as follows:
 78%-81% (assuming no threshold),

316 In responding to public comments on co-benefits, EPA clarified that its benefits analysis does not provide
“information on which the agency is relying in making its determination of the BSER or other determinations in the
ACE final rule. This information is presented for disclosure in compliance with relevant executive orders.” ACE RTC,
see chap. 7, p. 60.
317 According to the Spring 2020 Semiannual Regulatory Agenda, the proposal will seek to “provide the public with a
better understanding on how EPA is evaluating benefits and costs when developing Clean Air Act regulatory actions
and allow the public to provide better feedback to EPA on potential future proposed rules.” See RIN 2060-AU51 at
https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=2060-AU51.
318 OMB Circular A-4 refers to co-benefits as “ancillary benefits.” OMB Circular A-4, “Regulatory Analysis,”
September 17, 2003, p. 26.
319 EPA, National Center for Environmental Economics, Guidelines for Preparing Economic Analyses, May 2014, p.
11-2, https://www.epa.gov/environmental-economics/guidelines-preparing-economic-analyses.
320 ACE RTC, see chap. 7, p. 57.
321 EPA applied the same threshold approach to the co-benefits estimates in its 2018 analysis of the ACE proposal and
in its 2017 analysis of the proposed CPP repeal. CRS is unaware of analyses conducted under prior Administrations
that used thresholds to adjust the monetized co-benefit estimates. Examples of EPA analyses from prior
Administrations that did not apply thresholds to the co-benefit estimates include 2015 CPP RIA and Regulatory Impact
Analysis for the Stationary Internal Combustion Engine NESHAP, February 2004, https://www3.epa.gov/ttn/ecas/docs/
ria/ic-engines_ria_final-rice-engines_2004-02.pdf. For additional examples of EPA analyses, conducted under each
Administration dating back to the President Reagan, that have incorporated co-benefits, see letter from Institute for
Policy Integrity, New York University School of Law, to EPA, Docket ID EPA-HQ-OAR-2017-0355, October 31,
2018, p. 18, https://www.regulations.gov.
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 51%-80% (assuming lowest measured level threshold),322 and
 5%-9% (assuming PM2.5 NAAQS threshold).323
Historically, EPA has reported lower confidence in benefits that occur from reductions at lower
concentrations of PM2.5 while clarifying that less confidence does not mean there are no benefits
at lower concentrations. EPA has also stated that “scientific evidence provides no clear dividing
line” to specify an exposure level at which the agency has low confidence in the mortality
impacts.324 EPA’s 2015 CPP analysis concluded that “the best estimate of benefits includes
benefits both above and below the levels of” the federal air quality standard and described this
practice as consistent with scientific evidence and reviews of the independent Clean Air Scientific
Advisory Committee.325 While EPA has previously used benchmark concentration levels to
examine the uncertainty of estimated PM2.5 mortality benefits, the ACE analysis differed by
applying benchmark concentrations as thresholds when monetizing some of the co-benefits.326
EPA’s ACE analysis stated that use of benchmark concentrations (i.e., thresholds) was intended to
“increase transparency rather than imply a specific lower bound on the size of the ancillary health
co-benefits.”327 The agency’s application of thresholds, however, effectively considers two
dividing lines by omitting a fraction of the health co-benefits from some of its benefit-cost
comparisons.
Stakeholder opinion on consideration of co-benefits varies. For example, stakeholders critical of
EPA’s 2015 CPP analysis commented that inclusion of the monetized co-benefits made it difficult
to understand the impact of the CPP on CO2.328 More recently, some stakeholders commented that
EPA should not use co-benefits to justify promulgation of the ACE rule.329 Other stakeholders
agreed with EPA’s approach to co-benefits in the ACE rule, which they viewed as striking “a
better balance between the need to focus on the pollutant to be targeted by the regulation (CO2),
while also quantifying the ancillary benefits of reducing non-targeted pollutants (SO2, NOx,
PM2.5).”330 Other stakeholders disagreed with EPA’s “targeted pollutant” approach, commenting
that the use of a threshold effectively establishes a dividing line, which the scientific literature
does not support, and that exclusion of co-benefits is inconsistent with OMB guidance and
“decades of EPA statements and practice.”331 In addition, a 2019 article offering “an economic
perspective” observed that individuals and corporations in the private market “account for the

322 Refers to the “lowest measured level” of PM2.5 from two long-term studies. See “Q: How did EPA estimate the
human health co-benefits?”
323 Final RIA, p. 4-30.
324 Final RIA, p. 4-26.
325 EPA, EPA’s Responses to Public Comments on the EPA’s Carbon Pollution Emission Guidelines for Existing
Stationary Sources, Docket ID EPA-HQ-OAR-2013-0602-37106. See chap. 8, §§8.7-8.9, p. 102.
326 EPA’s 2015 CPP analysis used the lowest measured levels from published studies as a benchmark concentration
level to examine the uncertainty of estimated PM2.5 mortality benefits. Specifically, it presented the portion of the
population exposed to annual mean PM2.5 levels at or above different concentrations. The 2015 RIA did not use the
benchmark concentration levels to adjust the monetized estimates. The 2015 analysis also clarified that EPA did not
view this benchmark as a threshold below which benefits fell to zero. See 2015 RIA, p. 4-39.
327 Final RIA, p. 6-10.
328 EPA, EPA’s Responses to Public Comments on the EPA’s Carbon Pollution Emission Guidelines for Existing
Stationary Sources, Docket ID EPA-HQ-OAR-2013-0602-37106. See chap. 8, §§8.7-8.9, pp. 90-93.
329 ACE RTC, see chap. 7, pp. 52-53.
330 ACE RTC, see chap. 7, pp. 52-53.
331 Letter from Institute for Policy Integrity to EPA, p. 14.
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whole suite of benefits when deciding on a purchase or investment” and concluded that omission
of co-benefits in a regulatory analysis “amounts to distorting analysis.”332
For more information about co-benefit considerations and related stakeholder views, see CRS
Report R44840, Cost and Benefit Considerations in Clean Air Act Regulations, by James E.
McCarthy and Richard K. Lattanzio and CRS Report R45119, EPA’s Proposal to Repeal the
Clean Power Plan: Benefits and Costs, by Kate C. Shouse.
General Implementing Regulations for
Section 111(d)
Q: What are the general implementing regulations for Section 111(d)?
A: The general implementing regulations establish procedures for state plans submitted under
CAA Section 111. The general implementing regulations for CAA Section 111 are different from
source-specific regulations that EPA has promulgated under CAA Section 111(d), such as the
ACE rule. EPA refers to the ACE rule and other source-specific regulations promulgated under
CAA Section 111(d) as “emission guidelines.”333 Whereas the general implementing regulations
establish procedures for state plan submissions, the emission guidelines establish binding
requirements that states are required to address when they develop plans to regulate the existing
sources.
EPA first promulgated the general regulations to implement CAA Section 111(d) in 1975 and
codified them at Title 40, Part 60, Subpart B, of the Code of Federal Regulations. In July 2019,
EPA promulgated a new set of implementing regulations in the same Federal Register notice as
the final ACE rule.334 EPA codified the new implementing regulations in a new subpart, Title 40,
Part 60, Subpart Ba.
EPA did not repeal the Subpart B regulations and chose to apply the Subpart Ba regulations
prospectively in order to provide regulatory certainty.335 Specifically, the Subpart Ba regulations
apply to the ACE rule, “ongoing emission guidelines,”336 and all future emission guidelines
promulgated under CAA Section 111(d).

332 Joseph E. Aldy, Benefits Are Benefits—Regardless of How They Are Legally Obtained, Environmental Law
Institute, May/June 2019, https://scholar.harvard.edu/files/jaldy/files/aldy_forum_2019_may-june.pdf.
333 For emission guidelines promulgated prior to ACE, EPA defines emission guideline at Title 40, Section 60.21(e), of
the Code of Federal Regulations. For ACE and any future emission guidelines, EPA defines emission guideline at Title
40, Section 60.21a(e).
334 EPA determined that the “new implementing regulations are a separate and distinct rulemaking” from the final ACE
rulemaking. For simplicity, this report refers to the Federal Register notice promulgating ACE and new implementing
guidelines as “ACE Final Rule.” See ACE Final Rule, p. 32564.
335 EPA also retained the Subpart B regulations because they apply to regulations promulgated under CAA Section 129,
which address waste incineration. The Subpart B regulations will continue to apply to EPA regulations promulgated
under CAA Section 129. ACE Final Rule, p. 32564.
336 EPA refers to “ongoing emission guidelines” where state plan submittal and review processes are still ongoing for
existing CAA Section 111(d) emission guidelines. See ACE Final Rule, p. 32564.
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link to page 60 link to page 60 link to page 60 link to page 60 link to page 60

Q: What changes did EPA make to the schedules for submission and review of
state plans and federal plans?
A: The implementing regulations for CAA Section 111(d) specify timing requirements for the
submission and review of state plans as well as federal plans. The schedule for submission and
review of state and federal plans presented in Subpart Ba regulations differs from the schedule in
Subpart B regulations, as shown in Table 4.
Table 4. Timing Requirements
Submission and Review of CAA Section 111(d) State and Federal Plans (40 C.F.R. Part 60)
Subpart B
Subpart Ba
Action
(Existing regulations)
(New regulations)
State submission timinga
9 months after EPA promulgates
3 years after EPA promulgates final
final emission guidelines
emission guidelines
EPA completeness checkb
Not applicable
Within 60 days of receiving the plan
but no later than six months of
receipt
EPA action on state plan submission 4 months after submittal deadlinec
12 months after EPA determines
state plan is completed
EPA promulgation of federal plan, as 6 months after submittal deadline
2 years after finding of plan
relevante
submission to be incomplete,
finding of failure to submit a plan, or
disapproval of a plan
Source: CRS, as adapted from EPA, ACE Final Rule, Table 8, p. 32565.
Notes:
a. The Subpart B regulations allow the EPA Administrator to, “whenever he determines necessary, extend the
period for submission of any plan” (40 C.F.R. §60.27(a)). The Subpart Ba regulations allow EPA to “shorten
the period for submission” of state plans (40 C.F.R. §60.27a(a)).
b. The Subpart Ba regulations require EPA to make a “completeness check,” determining whether a state plan
is complete (40 C.F.R. §60.27a(g)).
c. The Subpart B regulations require EPA to determine whether to approve or disapprove the plan or portion
of the plan (40 C.F.R. §60.27).
d. The Subpart Ba regulations require EPA to determine, within 12 months of the completeness
determination, whether the plans are “satisfactory” under CAA Section 111(d)(2)(A) and either approve or
disapprove the plan or portion of the plan (40 C.F.R. §60.27a(b)).
e. EPA issues a federal plan in the event that a state fails to submit a state plan, if EPA disapproves a state plan,
or if EPA determines a state plan is incomplete.
Q: Why did EPA establish new schedules for submission and review of state
plans and federal plans?
A: EPA established new schedules for submission and review of state plan and federal plans
because the agency concluded that the Subpart B schedule was inconsistent with the CAA.337
CAA Section 111(d) directs EPA to establish a state plan procedure “similar to that provided by
section 110.”338 Noting that the 1990 CAA amendments revised the “timing requirements” for

337 ACE Final Rule, p. 32567.
338 42 U.S.C. §7411(d)(1); 42 U.S.C. §7410.
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submission and review of SIPs as well as federal implementation plans (FIPs) in Section 110,
EPA changed the schedule for state plans and federal plans “under CAA section 111(d) to be
consistent with the current timing requirements for SIPs and FIPs under section 110.”339
According to EPA, some commenters disagreed with the new schedules for review of state plans.
These commenters concluded that it was “inappropriate” to use the same schedules used for SIPs
because “section 111(d) states plans are narrower in scope and less complex than section 110
SIPs.”340 For example, state plans address one source category, such as power plants, whereas
SIPs cover various types of sources from which emission reductions are required to meet federal
air quality standards. EPA acknowledged some of the differences between state plans and SIPs
but concluded that “[e]stablishment of standards performance under CAA section 111(d) state
plans also may not be as straightforward as commenters suggest,” noting among other things that
states must consider source-specific factors that would “necessitate development of a different
standard than the degree of emission limitation that the EPA identifies.”341
EPA Postpones Decision Regarding New Source
Review (NSR) Changes
Q: What changes to New Source Review applicability did EPA propose in
August 2018?
One of the three actions that EPA proposed in the August 2018 ACE rule focused on NSR, a CAA
preconstruction permitting program for new and modified stationary sources. The NSR program
generally requires emission limits based on the best available control technology when new
facilities are built or when existing facilities make a change that increases emissions above
specified thresholds. Historically, NSR applicability determinations have been contentious and
extensively litigated.342 In August 2018, EPA proposed to revise the test used to determine
whether physical or operational changes to an EGU constitute a “major modification” that
triggers NSR. The proposed revision would not be mandatory. Rather, states would have the
option to incorporate it into state regulations.343
The current test for an NSR permit, which is codified in the NSR regulations,344 requires
consideration of emissions increases on an annual basis. EPA proposed to consider whether the
modification at an existing EGU would increase CO2 emissions on an hourly basis. Under the
proposal, NSR would not be triggered if the modification to an existing EGU does not increase
emissions on an hourly basis. These EGUs would not be required to meet CO2 emission limits
based on the “best available control technology” assessment, even if the modification leads to an
increase in annual emissions.345

339 ACE Final Rule, p. 32567.
340 ACE Final Rule, p. 32567.
341 ACE Final Rule, pp. 32567-68.
342 For more about the history of NSR, including efforts by prior Administrations to modify the program, see CRS
Report R43699, Key Historical Court Decisions Shaping EPA’s Program Under the Clean Air Act, by Linda Tsang.
343 ACE Proposal, p. 44782.
344 40 C.F.R. §§52.21(b)(2)(i), 52.21(b)(23)(i). See also 40 C.F.R. Part 50, Subpart I.
345 On the other hand, if the modification increases hourly emissions, the owner or operator would need to continue
with the NSR applicability test as it is currently codified (ACE Proposal, pp. 44780-44781).
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Q: Why did EPA propose changes to NSR applicability in the ACE proposal?
A: EPA explained that the proposed NSR revision would, in part, facilitate “prompt
implementation of a revised CAA Section 111(d) standard for EGUs.”346 EPA noted that “over the
years, some stakeholders have asserted that the NSR rules discourage companies” from
implementing energy-efficiency projects.347 EGUs that adopt HRI measures—that is, the BSER
proposed under the ACE rule—and operate more efficiently may be used for longer time periods,
thereby increasing annual emissions and potentially triggering NSR under existing regulations.
Under the ACE proposal, NSR would not be triggered if the EGU modification did not increase
emissions on an hourly basis, even if the modification increases annual emissions.
Some stakeholders have suggested that the proposed NSR revision has broader implications for
the energy and air quality programs.348 For example, one state agency described ACE as “a
significant overhaul” of NSR that would increase the number of “projects that are excluded from
requirements to install reasonable controls,” thereby allowing “poorly controlled and
grandfathered sources to continue to operate without cost-effective controls.”349
Q: What is the status of the changes EPA proposed for NSR in the ACE
proposal?
A: As of July 2020, EPA has not finalized the proposed revision to the applicability test under
NSR for certain power plants. The final ACE rule did not explain why EPA did not finalize the
NSR proposal but noted that EPA intends to take final action at a later date. EPA projected that it
would finalize this proposal in December 2020.350
Issues for Congressional Consideration
The CPP and the ACE rule present different legal interpretations of CAA Section 111 authority.
EPA’s 2017 review concluded that the CPP exceeded EPA’s statutory authority by using
measures that applied to the power sector as a whole rather than measures carried out within an
individual facility. The final ACE rule applies a narrower interpretation than the CPP of the
BSER, defining it as on-site HRIs for existing coal-fired units. These interpretations arguably
raise broader questions about CAA regulation of GHG emissions. The ACE rulemaking may also
raise questions about state and federal roles under the CAA and how benefit-cost analysis may
inform decisionmaking. The remainder of this section discusses issues that Congress may
consider regarding EPA’s interpretation and implementation of the CAA.

346 ACE Proposal, pp. 44775-44776.
347 ACE Proposal, p. 44775. EPA has previously sought to address this concern through the rulemaking process, most
recently through a 2007 proposed rulemaking that was never finalized. See EPA, “Supplemental Notice of Proposed
Rulemaking for Prevention of Significant Deterioration and Nonattainment New Source Review: Emission Increases
for Electric Generating Units; Proposed Rule,” 72 Federal Register 26202, May 8, 2007.
348 Letter from William T. Pound, Executive Director, National Conference of State Legislatures, et al., to Andrew
Wheeler, EPA Administrator, September 13, 2018, https://www.regulations.gov, see EPA-HQ-OAR-2017-0355-21870.
349 Letter from John Linc Stine, Commissioner, Minnesota Pollution Control Agency, to Andrew Wheeler, EPA
Administrator, September 17, 2018, https://www.regulations.gov, see EPA-HQ-OAR-2017-0355-21873.
350 OMB, Semiannual Regulatory Agenda, EPA, RIN 2060-AU58, Spring 2020.
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link to page 33 link to page 33

CAA Regulation of GHG Emissions
EPA and stakeholders continue to debate the scope of EPA’s authority and its methods for
regulating GHG emissions under the CAA. EPA’s varying legal interpretations and regulatory
approaches to regulating GHG emissions from existing power plants has raised novel issues that
policymakers and the courts have not addressed previously. Because of the interconnected nature
of the power sector, EPA’s legal interpretation and regulatory approach in the CPP are distinct
from previous Section 111(d) guidelines for other industries.351
Although the Supreme Court clarified EPA’s authority to regulate GHGs under specific CAA
programs in Massachusetts v. EPA and subsequent cases,352 regulatory developments and judicial
decisions raise questions concerning the breadth of EPA’s authority under CAA Section 111 to
consider various emission reduction measures for existing industrial sources of pollution.353 As
discussed in this report, stakeholders critical of the ACE rule have argued that EPA has authority
to expand the scope of the BSER to achieve greater emissions reductions by including other
systems of emission reduction and other types of EGUs.354 Other stakeholders view EPA’s
authority under CAA Section 111 as limited to measures implemented directly at the designated
facility regardless of GHG reduction policy goals.355 Stakeholders and EPA may continue to
litigate and debate the scope of EPA’s authority to regulate GHG emissions under CAA Section
111.
Many in Congress have taken an active interest in EPA’s interpretation of its authority to
determine the BSER under CAA Section 111 for power plants. For example, some Members of
Congress filed amici curiae briefs opposing the CPP repeal and ACE rule. In one amici curiae
brief filed by 68 Members of the House of Representatives and six Senators, the Members argue
that the CPP was a “lawful exercise of the authority that Congress conferred on EPA when it
enacted the CAA.”356 Another amici curiae brief filed by five Senators assert that the court should
vacate the ACE rule because it is “the product of EPA political leadership uninterested in the
science or economics of climate change and completely beholden to the fossil-fuel industry via
close political, financial, and professional ties” and “constitutes an illegal delegation of the
agency’s rulemaking authority to private entities: fossil-fuel companies and organizations
representing their interests.”357 In 2016, several Members of Congress also filed amici curiae

351 In the ACE rule, EPA states that prior to the CPP, all previous Section 111(b) NSPS and Section 111(d) emission
guidelines “applied technologies, techniques, processes, practices, or design modifications directly to individual
sources.” ACE Final Rule, p. 32526.
352 Massachusetts v. EPA, 549 U.S. 497 (2007). See, e.g., Util. Air Regulatory Group v. EPA, 573 U.S. 302, 314-334
(2014); Am. Elec. Power Co. v. Connecticut, 564 U.S. 410 (2011).
353 EPA has also considered GHG emissions from other sectors in separate rulemakings. In 2016, EPA promulgated
emission standards for methane, a GHG, under Section 111(b) for the oil and gas sector without a cause and contribute
finding. EPA subsequently proposed to rescind these limits on methane. For more information about Section 111
regulations applicable to the oil and gas sector, see CRS Report R42986, Methane and Other Air Pollution Issues in
Natural Gas Systems, by Richard K. Lattanzio. EPA has also proposed and finalized a cause and contribute finding for
GHG emissions from aircraft. For more information, see CRS Report R40506, Cars, Trucks, Aircraft, and EPA Climate
Regulations, by James E. McCarthy and Richard K. Lattanzio.
354 See “Litigation Challenging the CPP Repeal and the ACE Rule.”
355 See “Litigation Challenging the CPP Repeal and the ACE Rule.”
356 Brief for Members of Congress as Amici Curiae in Support of Petitioners at 2-4, Am. Lung Ass’n. v. EPA, No. 19-
1140 (D.C. Cir. Apr. 24, 2020).
357 Brief for U.S. Senators Sheldon Whitehouse, Jeff Merkley, Kirsten Gillibrand, Brian Schatz, and Edward J. Markey
as Amici Curiae in Supporting the State and Muni. Petitioners, Pub. Health and Envtl. Petitioners, Power Co.
Petitioners, and Clean Energy Trade Ass’n. Petitioners at 3-4, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr.
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briefs on both sides of the CPP litigation. A brief opposing the CPP argued, among other things,
that EPA “usurped the role of Congress” through the CPP’s “expansive regulatory requirements”
that went beyond the fenceline of affected power plants or to require fuel switching to reduce CO2
emissions.358 A brief in support of the CPP argued, among other things, that Congress conferred
“broad authority” on EPA and that the CPP is “consistent with the text, structure, and history” of
the CAA.359
Progress toward more ambitious GHG targets supported by some Members360 would likely
require reductions throughout the economy, not just the power sector. The electricity sector has
historically accounted for the largest percentage of anthropogenic U.S. CO2 emissions, though
transportation activities have more recently accounted for a slightly larger share. Congress may
consider whether and how regulatory tools under the CAA could support cost-effective economy-
wide strategies that may reduce GHG emissions from the power sector as well as the
transportation, industrial, commercial, and residential sectors.
Federal and State Roles to Implement the ACE Rule
Congress may consider how the final ACE rule may affect federal and state roles to implement
CAA Section 111(d), in particular with respect to establishing performance standards for existing
sources. The ACE rule does not establish a binding, numeric performance standard for CO2
emissions from existing coal-fired units. The ACE rule allows states to establish CAA Section
111(d) performance standards that, based on site-specific considerations, are less stringent than
the standard expected to result from a direct application of the BSER identified by the EPA. EPA
characterized this approach as consistent with the “cooperative federalism structure of CAA
section 111,” noting that while the agency determines the degree of emission limitation
achievable through application of the BSER, states “have considerable discretion under section
111(d) and the ACE Rule, so long as they reasonably exercise this discretion and adequately
explain their choices.”361 Some stakeholders agree with this unit-specific, state-led approach,
while others disagree.362 Those who disagree maintain that allowing unit-specific HRIs as the
BSER would not result in significant emission reductions and that it is “inconsistent with the
EPA’s role under the CAA: to establish a minimum level of environmental protection and to
allow states the flexibility to be more protective.”363
While EPA emphasizes that states have primary responsibility in establishing performance
standards for existing units under CAA Section 111, EPA also limits some of the compliance
measures that states may allow under the ACE rule. For example, under EPA’s current
interpretation of CAA Section 111(d), the ACE rule bars states from using averaging and trading
or biomass co-firing as compliance measures, even if these measures may be more cost-effective.

24, 2020).
358 Brief for Members of Congress as Amici Curiae in Support of Petitioners at 13-25, West Virginia v. EPA, No. 15-
1363 (D.C. Cir. Feb. 23, 2016).
359 Brief for Current Members of Congress and Bipartisan Former Members of Congress as Amici Curiae in Support of
Respondents at 8-14, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Mar. 31, 2016).
360 For example, S. 3269, the Clean Economy Act of 2020, sets and aims to meet a national goal of net-zero GHG
emissions by 2050.
361 ACE RTC, see chap. 3, p. 3. See also ACE Final Rule, p. 32567. EPA cites Title 42, Section 7411(d)(1)(B), of the
U.S. Code, among other things, as the basis for its interpretation.
362 ACE Final Rule, p. 32536.
363 ACE RTC, see chap. 3, p. 3.
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In addition, this report discussed some states’ concerns about implementing the ACE rule. For
example, NACAA reported that establishing unique performance standards for each unit in a
state’s jurisdiction would draw on limited agency resources and staff hours and possibly trigger a
public review process.364 Further, some states are concerned that the lack of uniform, national
emission standards in the ACE rule could increase their litigation risks as stakeholders may
challenge the standards the state sets for each EGU. Congress may consider the interaction of the
ACE rule and state and local GHG reduction programs and the resulting implications for state
planning efforts. For example, it may be more efficient for states to rely on existing, non-federal
GHG emission reduction programs to fulfill the ACE rule requirements rather than implementing
separate state and federal standards for the same emission sources. While the ACE rule does not
prohibit states from implementing GHG programs under state authority, it is unclear whether state
plans that incorporate non-federal GHG emission reduction programs would meet the ACE rule
requirements. This may raise questions about how these states would demonstrate compliance
with the ACE rule in addition to continuing their participation in non-federal GHG programs.
Role of Benefit-Cost Analysis in CAA Rulemakings
Benefit-cost analysis is one of various factors that inform the development and promulgation of
regulations. Other factors include legal considerations, technical feasibility, statutory criteria, and
ethical considerations. EPA based the CPP repeal and promulgation of the ACE rule on a change
in the agency’s legal interpretation of Section 111(d) of the CAA. The benefit-cost analysis of the
ACE rulemaking is nonetheless consequential because it reveals methodological changes relative
to prior analyses, such as EPA’s 2015 CPP analysis.
Congress may consider how policy choices have influenced EPA’s benefit and co-benefit
estimates in ACE and other CAA rulemakings. While some changes may reflect technical
updates, such as using more recent emissions projections in the modeling analysis, other changes
involve some degree of policy choices, such as what discount rate to use or how much weight to
give to the co-benefits in the benefit-cost comparisons. This report described changes in the way
EPA estimates the SC-CO2, a metric used to monetize the benefit of CO2 reductions, under two
Administrations. The SC-CO2 estimates used in the ACE rule analysis garnered stakeholder
interest, in particular with respect to their domestic scope and the use of a 7% discount rate.
Reliance on domestic SC-CO2 values meant that the main benefit-cost analysis considered only
domestic benefits of the ACE rule, excluding benefits that occur outside the United States.
Reliance on the 7% discount rate makes certain assumptions regarding how much the current
generation values the climate change impacts experienced by future generations. The domestic
perspective and use of a 7% rate lowered the SC-CO2 estimates compared to the estimates used in
EPA’s 2015 analysis of the CPP.365
This report also described changes in EPA’s assessment of the human health co-benefits under the
final ACE rule. EPA excluded the co-benefits from some of the ACE rule benefit-cost
comparisons, describing it as a way to consider the benefit of reducing the “targeted pollutant”
(CO2) against the compliance cost.366 In other cases, EPA omitted the PM-related health co-
benefits below two specified thresholds for PM2.5, reporting only the PM-related health co-benefit

364 Letter from NACAA to EPA, p. 5.
365 Between 2009 and 2016, federal agencies used SC-CO2 estimates in regulatory analyses that included global
measures and discount rates of 2.5, 3, and 5%.
366 Final RIA, pp. ES-9 to ES-10.
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above the thresholds.367 While EPA has previously used these thresholds—based on “benchmark
concentration levels”—to examine the uncertainty of estimated PM2.5 mortality benefits, the ACE
analysis differed by applying benchmark concentrations as thresholds when monetizing some of
the co-benefits.368 EPA’s ACE analysis stated that use of benchmark concentrations was intended
to “increase transparency rather than imply a specific lower bound on the size of the ancillary
health co-benefits.”369 The agency’s application of thresholds, however, effectively considers two
dividing lines—the lowest measured level and the primary PM2.5 NAAQS—by omitting a
fraction of the health co-benefits from some of its benefit-cost comparisons.
Congress, in its oversight role, may wish to consider whether EPA’s analysis of the ACE rule
adheres to federal economic guidance while incorporating current, peer-reviewed economic
methods. For example, the ACE analysis raises questions about how omitting information—that
is, the co-benefit estimates—from some cases impacts transparency. Some stakeholders agreed
with EPA’s approach to co-benefits in the ACE rule, describing it as a way to “better balance”
consideration of benefits from the targeted pollutant with consideration of co-benefits. Other
stakeholders disagreed with EPA’s “targeted pollutant” approach, commenting that the scientific
literature does not support use of a threshold and that exclusion of co-benefits is misleading and
inconsistent with OMB guidance and past EPA practice.
EPA’s benefit-cost analysis for the ACE rule may set a precedent for the way EPA accounts for
co-benefits in future rulemaking analyses. Separate from the final ACE rule, EPA is developing a
proposal related to its treatment of benefits in air pollution regulatory analyses.370 In its oversight
role, Congress may wish to consider this forthcoming proposal, in particular what kind of
guidance that proposal may offer regarding the scope of benefits considered in EPA’s analyses
(e.g., domestic and global climate benefits), the selection of discount rates to assess climate
change impacts, and the weight given to benefits and ancillary impacts.
Beyond questions about how EPA estimates benefits and costs, Congress could consider
development of legislation that addresses how EPA and other federal agencies factor benefits and
costs into rulemaking decisions. For example, Congress may explore opportunities to clarify how
much weight an agency gives to benefits and ancillary impacts. Such legislation may involve
consideration of the tension between providing more specific direction to the agencies and
allowing an agency sufficient discretion to tailor its approach as warranted. While legislative
direction may provide greater consistency across administrations, it may also limit an agency’s
discretion to consider case-specific factors and apply its evolving understanding of the science
and economics.

367 EPA based one threshold on the current federal air quality standard for PM2.5—12 μg/m3—and omitted deaths
attributable to PM2.5 concentrations less than 12 μg/m3. EPA based the second and lower threshold on the “lowest
measured level” of PM2.5 from the two long-term studies it used to estimate deaths related to PM2.5. For the lowest
measured level threshold, EPA omitted deaths attributable to PM2.5 at or below the lowest measured level of the
Krewski et al. 2009 study (5.8 μg/m3) and the Lepeule et al. 2012 study (8 μg/m3).
368 EPA’s 2015 CPP RIA used the lowest measured levels from published studies as a benchmark concentration level to
examine the uncertainty of estimated PM2.5 mortality benefits. Specifically, it presented the portion of the population
exposed to annual mean PM2.5 levels at or above different concentrations. The 2015 CPP RIA did not use the
benchmark concentration levels to adjust the monetized estimates. The 2015 CPP RIA also clarified that EPA did not
view this benchmark as a threshold below which benefits fell to zero. See 2015 CPP RIA, p. 4-39.
369 Final RIA, p. 6-10.
370 See RIN 2060-AU51 at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=2060-AU51.
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Author Information

Kate C. Shouse, Coordinator
Linda Tsang
Analyst in Environmental Policy
Legislative Attorney

Jonathan L. Ramseur

Specialist in Environmental Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
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