Clean Power Plan Repeal Will Save $33 Billion in Compliance Costs

'The war on coal is over'

Emissions spew out of a large stack at the coal-fired Morgantown Generating Station on Oct. 10 in Newburg, Maryland / Getty Images
Emissions spew out of a large stack at the coal-fired Morgantown Generating Station on Oct. 10 in Newburg, Maryland / Getty Images
October 10, 2017

Repealing the Clean Power Plan will save $33 billion in costs passed onto energy consumers, according to senior Trump administration officials.

The Environmental Protection Agency formally began the process of repealing the Obama era rules on limiting carbon emissions of power plants on Tuesday, with Administrator Scott Pruitt declaring the "war on coal is over."

The EPA entered a Notice of Proposed Rulemaking into the Federal Register and will be open 60 days for public comment.

White House officials said repealing the regulations, which set strict emission standards for coal-burning power plants, was following through on President Donald Trump's promises to protect the coal industry.

The Clean Power Plan was central to the Obama administration's climate change agenda. The regulations aimed to reduce carbon emissions by an average of 35 percent and were finalized in August 2015. Conservative groups estimated the regulations would cost a quarter of a million jobs and shrink the coal industry by nearly half. Coal production fell by at least 29 percent during the Obama administration.

The regulations were immediately challenged in court and never went into effect after the Supreme Court issued a stay on the Clean Power Plan in February 2016.

"The Obama administration pushed the bounds of their authority so far with the CPP that the Supreme Court issued a historic stay of the rule, preventing its devastating effects to be imposed on the American people while the rule is being challenged in court," Pruitt said in a statement. "We are committed to righting the wrongs of the Obama administration by cleaning the regulatory slate. Any replacement rule will be done carefully, properly, and with humility, by listening to all those affected by the rule."

Senior administration officials said repealing the regulations would save $33 billion in avoided compliance costs by 2030. Compliance costs would eventually be passed down to consumers, leading to higher energy costs, they said.

The White House said repealing the Clean Power Plan was returning the EPA to its original scope of authority under the Clean Air Act. Officials cited section 111 (d) of the law, which relied on states to set their own pollutant standards achievable to each state, rather than a top-down federal government approach.

The Clean Power Plan would have forced states to change their energy portfolios from fossil fuels to renewable energy. Eventually, to comply by 2030, states would need to switch entirely from coal and natural gas to wind and solar. Officials said states still could make decisions to diversify their energy supplies, after the regulation is repealed.

The administration said it would also issue a proposed rule seeking comments from the public on next steps after the repeal is implemented.

"EPA will respect the limits of statutory authority," Pruitt said. "The CPP ignored states' concerns and eroded longstanding and important partnerships that are a necessary part of achieving positive environmental outcomes."

"We can now assess whether further regulatory action is warranted; and, if so, what is the most appropriate path forward, consistent with the Clean Air Act and principles of cooperative federalism," he said.

Conservative and free-market groups praised the administration's decision to reverse the Clean Power Plan.

"This is a huge step toward dismantling the Obama Administration's war on affordable energy," said Myron Ebell, director of the Competitive Enterprise Institute. "Repealing the CPP will spur new investment and create new jobs in energy-intensive manufacturing and resource industries. States will now not be forced to close coal-fired power plants or replace them with more expensive and less reliable types of energy."

"The war on fossil fuels is nearing an end," said Tim Huelskamp, a former congressman who now runs the Heartland Institute. "This is a wise, science-based decision by Administrator Scott Pruitt and President Donald Trump. The real winners here are not only coal miners and coal states, but all those Americans who simply can't afford massive increases in their energy bills as a result of the Clean Power Plan."