EPA’s Proposed Greenhouse Gas Regulations 

for Existing Power Plants: Frequently Asked 

Questions 

James E. McCarthy 

Specialist in Environmental Policy 

Robert Meltz 

Legislative Attorney 

Jane A. Leggett 

Specialist in Energy and Environmental Policy 

Jonathan L. Ramseur 

Specialist in Environmental Policy 

Alissa M. Dolan 

Legislative Attorney 

June 9, 2014 

Congressional Research Service 

7-5700 

www.crs.gov 

R43572 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 

Summary 

Taking action to address climate change by reducing U.S. emissions of greenhouse gases (GHGs) 

is among President Obama’s major goals. At an international conference in Copenhagen in 2009, 

he committed the United States to reducing emissions of greenhouse gases 17% by 2020, as 

compared to 2005 levels. At the time, 85 other nations also committed to reductions. 

Since U.S. GHG emissions peaked in 2007, a variety of factors—some economic, some the effect 

of government policies at all levels—have brought the United States more than halfway to 

reaching the 2020 goal. Getting the rest of the way would likely depend, to some degree, on 

continued GHG emission reductions from electric power plants, which are the largest source of 

U.S. emissions. 

In June 2013, the President released a Climate Action Plan that addressed this and other climate 

issues. At the same time, he directed the Environmental Protection Agency (EPA) to propose 

standards for “carbon pollution” (i.e., carbon dioxide, the principal GHG) from existing power 

plants by June of this year and to finalize them in June 2015. Under the President’s timetable, by 

June 2016, states would be required to submit to EPA plans to implement the standards. 

On June 2, 2014, EPA responded to the first of these directives by releasing the proposed 

standards. 

The proposal relies on authority given EPA by Congress decades ago in Section 111(d) of the 

Clean Air Act (CAA). This section has been little used—the last use was in 1996—and never 

interpreted by the courts, so a number of questions have arisen regarding the extent of EPA’s 

authority and the mechanisms of implementation. EPA tends to refer to the regulations as 

“guideline documents”—although that term is not used in the statute—perhaps to indicate that the 

section is intended to give primary authority to the states. The proposed guideline document 

would set interim (2020s averages) and final (2030) emission rate goals for each state based on 

four “building blocks”—broad categories that describe different reduction measures; in general, 

however, the policies to be adopted to reach these goals would be determined by the states, not 

EPA. 

EPA faced a number of issues in developing the proposed regulations: 

• How large a reduction in emissions would it propose, and by when? 

• What year would it choose as the base against which to measure progress? 

• How flexible would it make the regulations? Would it adopt a “mass-based” limit 

on total emissions or a rate-based (e.g., pounds of carbon dioxide per megawatthour of electricity) approach? 

• What role might allowance systems play in meeting the goals? 

• Will compliance be determined only by the actions of power companies (i.e., 

“inside the fence” actions) or will actions by energy consumers (“outside the 

fence”) be part of compliance strategies? 

• Would states and power companies that have already reduced GHG emissions 

receive credit for doing so? What about states and power generators with high 

levels of emissions, perhaps due to heavy reliance on coal-fired power? Would 
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they be required to reduce emissions more than others, less than others, or the 

same? 

• What role would there be for existing programs at the state and regional levels, 

such as the Regional Greenhouse Gas Initiative (RGGI), and for broader 

greenhouse gas reduction programs such as those implemented pursuant to 

California’s AB 32? 

This report summarizes EPA’s proposal and answers many of these questions. In addition to 

discussing details of the proposed rule, the report addresses a number of questions regarding the 

reasons EPA is proposing this rule; EPA’s authority under Section 111 of the CAA; EPA’s 

previous experience using that authority; the steps the agency must take to finalize the proposed 

rule; and other background questions. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

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Contents 

Background ...................................................................................................................................... 1

Q: Why is EPA proposing this rule? .................................................................................... 1

Q: What other steps has EPA taken to reduce GHG emissions? ......................................... 2

Q: How much progress has the United States made in reducing GHG emissions? ............ 3

Q: How much does the generation of electricity contribute 

to total U.S. GHG emissions? .......................................................................................... 3

Statutory Authority .......................................................................................................................... 4

Q: Under what authority is EPA proposing these regulations? ........................................... 4

Q: How is the term “standards of performance,” required by Section 111(d), 

defined in statute and case law? ....................................................................................... 5

Q: When has EPA previously used this authority? .............................................................. 6

Q: Why has Section 111(d) been infrequently used? .......................................................... 7

Q: What relationship does this proposal have to EPA’s January 2014 proposal 

of GHG standards for new fossil-fueled power plants? ................................................... 7

Q: Is the rule released on June 2 a final rule? ..................................................................... 8

The Proposed Rule ........................................................................................................................... 8

Q: By how much would the proposed rule reduce CO2 emissions? .................................... 8

Q: Did EPA propose more than one option for the standards? ............................................ 9

Q: What is the range of state emission-rate goals? ............................................................ 10

Q: How did EPA establish the state-level goals in the proposed rule? .............................. 11

Q: Would states and companies that have already reduced GHG emissions receive 

credit for doing so?......................................................................................................... 14

Q: How does EPA’s proposed rule interact with existing GHG emission reduction 

programs in the states, namely the Regional Greenhouse Gas Initiative and 

California’s cap-and-trade system? ................................................................................ 14

Q: What role is there for “outside-the-fence” emission reductions? ................................. 15

Next Steps ...................................................................................................................................... 15

Q: What are the next steps? How will EPA finalize this rule? .......................................... 15

Q: What role does OIRA (i.e., the White House) play in developing the final rule? ........ 15

Q: When will the final rule take effect, and how will it be implemented? ........................ 16

Q: What happens if a state fails to submit an adequate plan by the 

appropriate deadline? ..................................................................................................... 17

Costs and Benefits of the Rule ....................................................................................................... 17

Q: What role will cost play in EPA’s choice of emission standards? ................................ 17

Q: What are EPA’s estimates of the costs of this rule? ...................................................... 18

Q: What are the benefits EPA estimates for the proposed Section 111(d) rule? ................ 18

Q: Under Section 111(d), are the benefits of the rule required to exceed its cost? ........... 19

Congressional Review ................................................................................................................... 20

Q: Does the Congressional Review Act apply to the proposed rule? ................................ 20

For Further Information ................................................................................................................. 21

Q: Who are the CRS contacts for questions regarding this rule? ...................................... 21
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Figures 

Figure 1. Percent Change in U.S. Greenhouse Gas (GHG) Emissions, the Economy, and 

Population ..................................................................................................................................... 4

Figure 2. U.S. CO2 Emissions from Electricity Generation, Historical and Projected .................. 10

Tables 

Table 1. State CO2 Emission Performance Goals, 2030 ................................................................ 12

Contacts 

Author Contact Information........................................................................................................... 22
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

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n June 2, 2014, the Environmental Protection Agency (EPA) released proposed standards 

for greenhouse gas (GHG) emissions from existing fossil-fueled power plants under 

Section 111(d) of the Clean Air Act.1

Agency rules are not considered to be formally proposed until they are published in the Federal 

Register. However, a prepublication copy of the rule and various supporting materials were 

posted on EPA’s website (http://www2.epa.gov/carbon-pollution-standards/clean-power-planproposed-rule) the day that the proposed rule was signed. 

Publication in the Federal Register will begin a public comment period. The length of that 

comment period will be 120 days. Comments can be submitted by Members and the public on 

http://www.regulations.gov (docket number EPA-HQ-OAR-2013-0602). The agency will hold 

public hearings in Denver, Atlanta, Pittsburgh, and Washington, DC, during the week of July 28 

in addition to allowing submission of written comments. 

Prior to this rule’s release, EPA had already conducted a significant amount of outreach to 

interested parties. According to Bloomberg BNA, “Senior Environmental Protection Agency 

officials consulted with at least 210 separate groups representing a broad range of interests in the 

Washington, DC, area and held more than 100 meetings and events with additional organizations 

across regional offices as the agency prepared its carbon pollution regulation for existing power 

plants.”2

 

The proposal generated a substantial amount of interest even before its release, because the 

economy and the health, safety, and well-being of the nation depend on a reliable and affordable 

power supply. Congressional committees have asked EPA officials numerous questions about the 

rule, and individual Members have written EPA to express concerns regarding the rule’s potential 

impacts.3

 

In order to provide basic information about EPA’s pending action, this report addresses the 

proposal in a Q&A format. 

Background 

Q: Why is EPA proposing this rule? 

A: EPA is proposing emissions guidelines to limit carbon dioxide (CO2) emissions from existing 

power plants under Section 111(d) of the Clean Air Act (CAA) for a variety of reasons. Some 

important context includes the following: 

 

1

 42 U.S.C. §7411(d). 

2

 “EPA Consulted with Hundreds of Groups on Carbon Rule for Existing Power Plants,” Daily Environment Report, 

April 8, 2014. For EPA’s discussion of the pre-proposal outreach effort, see Section III of the Preamble to the proposed 

rule, “Stakeholder Outreach and Conclusions,” pp. 79-95, at http://www2.epa.gov/sites/production/files/2014-05/

documents/20140602proposal-cleanpowerplan.pdf. 

3

 See, for example, the letter from a bipartisan group of 47 Senators to EPA Administrator Gina McCarthy, May 22, 

2014, at http://www.fischer.senate.gov/public/_cache/files/79d2321e-175c-4456-b4c7-f9b600e15288/5.22.14-senateghg-dear-colleague-letter.pdf. 

O
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• the Supreme Court in Massachusetts v. EPA in 2007 determined that “air 

pollutant,” as used in the CAA, covers GHGs;4

• in December 2010, EPA entered into a settlement agreement to issue New Source 

Performance Standards for electricity generating units (EGUs) under Section 

111(b) of the CAA, which, in turn, prompts EPA’s responsibilities under Section 

111(d), covering existing EGUs;5

 and 

• in the context of U.S. commitments under a 1992 international treaty, the United 

Nations Framework Convention on Climate Change (UNFCCC), President 

Obama pledged in 2009 to reduce U.S. GHG emissions by 17% below 2005 

levels by 2020.6

Q: What other steps has EPA taken to reduce GHG emissions? 

A: EPA has already promulgated GHG emission standards for light-duty and medium- and heavyduty vehicles, using its authority under Section 202 of the CAA.7

 Light-duty vehicles (cars, 

SUVs, vans, and pickup trucks) and medium- and heavy-duty vehicles (including buses, heavy 

trucks of all kinds, and on-road work vehicles) are collectively the largest emitters of GHGs other 

than power plants. Together, on-road motor vehicles accounted for nearly 25% of U.S. GHG 

emissions in 2012. 

Under the promulgated rules, standards for light-duty vehicles first took effect for Model Year 

(MY) 2012. Allowable GHG emissions will be gradually reduced each year from MY 2012 

through MY 2025. In MY 2025, emissions from new vehicles must average about 50% less per 

mile than in MY 2010. The standards for heavier-duty vehicles began to take effect in MY 2014. 

They will require emission reductions of 6% to 23%, depending on the type of engine and 

vehicle, when fully implemented in MY 2018. A second round of standards, to address MY 2019 

and later medium- and heavy-duty vehicles, is currently under development at EPA.8

EPA’s position is that the promulgation of standards for motor vehicles also triggered Clean Air 

Act requirements that new major stationary sources of emissions (power plants, refineries, etc.) 

obtain permits for their GHG emissions, and install the Best Available Control Technology, as 

determined by state and EPA permit authorities on a case-by-case basis, prior to construction. 

This view, however, is currently being challenged in the Supreme Court.9

 These requirements 

 

4

 Massachusetts v. EPA, 549 U.S. 497 (2007), actually involved GHG emissions from motor vehicles, not power plants. 

In 2011, however, the Court explicitly ruled that “air pollutant” includes GHGs when applied to power plants under 

Section 111. American Elec. Power Co., Inc. v. Connecticut, 131 S. Ct. 2527, 2537-38 (2011). 

5

 See CRS Report R41103, Federal Agency Actions Following the Supreme Court’s Climate Change Decision in 

Massachusetts v. EPA: A Chronology, by Robert Meltz, p. 6. 

6

 See CRS Report R40001, A U.S.-Centric Chronology of the United Nations Framework Convention on Climate 

Change, by Jane A. Leggett; and CRS Report R43120, President Obama’s Climate Action Plan, coordinated by Jane 

A. Leggett. 

7

 See CRS Report R40506, Cars, Trucks, and Climate: EPA Regulation of Greenhouse Gases from Mobile Sources, by 

James E. McCarthy and Brent D. Yacobucci, and CRS Report R42721, Automobile and Truck Fuel Economy (CAFE) 

and Greenhouse Gas Standards, by Brent D. Yacobucci, Bill Canis, and Richard K. Lattanzio. 

8

 For additional information on these requirements, see CRS Report R40506, Cars, Trucks, and Climate: EPA 

Regulation of Greenhouse Gases from Mobile Sources, by James E. McCarthy and Brent D. Yacobucci. 

9

 Utility Air Regulatory Group v. EPA, No. 12-1146. A decision by the Court is expected by the end of June 2014. 
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have been in place since 2011, but have been limited by EPA’s “Tailoring Rule” to the very largest 

emitters—fewer than 200 facilities, so far.10

Q: How much progress has the United States made in reducing 

GHG emissions? 

A: The question of how much progress has been made depends on the base year chosen for 

comparison. In 2012, U.S. GHG emissions were 6,526 million metric tons (mmt) of CO2-

equivalent11—slightly less than 5% above 1990 emission levels. This is 10% below GHG 

emission levels in 2005, and more than halfway toward meeting President Obama’s pledge to 

reduce U.S. GHG emissions to 17% below 2005 levels by 2020. U.S. GHG emissions peaked in 

2007 at 7,325 mmt CO2e. 

As shown in Figure 1, during the period from 1990 to 2012, U.S. economic activity, measured as 

gross domestic product (GDP, adjusted for inflation), rose 73% while population increased 26%. 

Q: How much does the generation of electricity contribute 

to total U.S. GHG emissions? 

Electricity generation accounted for about 31% of all U.S. GHG emissions in 2012. GHG 

emissions from electricity generation rose during 1990 to 2012 by 11%, while all other sources of 

GHG emissions grew by an average of 2%. GHG emissions from electricity generation in 2005 

were 32% above 1990 levels, peaking in 2007 at 2,413 mmt CO2e. 

In its 2014 Annual Energy Outlook, the U.S. Energy Information Administration (EIA) projected 

emissions from electricity generation to rise 3.6% from 2012 to 2020, assuming no further 

regulatory actions.12 EIA’s reference case projection would put electricity generation emissions at 

12% below 2005 levels in 2020. Presumably, the EPA-proposed regulations for existing power 

plants will lower any future EIA projections. 

 

10 The validity of EPA’s Tailoring Rule is now before the Supreme Court. See ibid. 

11 CO2-equivalents (CO2e) result from weighting the mass of emissions of a GHG (e.g., methane, sulfur hexafluoride, 

etc.) by its effect, relative to the effect of CO2, on radiative forcing of the climate system over a specified time period 

(usually 100 years). Using this method, gases of different atmospheric lifetimes and potencies can be compared or 

added. Various assumptions affect the relative warming potential of different GHG compounds. 

12 U.S. Energy Information Administration (EIA), “Annual Energy Outlook 2014,” Table 18. Carbon Dioxide 

Emissions by Sector and Source, May 7, 2014, http://www.eia.gov/forecasts/aeo/tables_ref.cfm. 
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Figure 1. Percent Change in U.S. Greenhouse Gas (GHG) Emissions, 

the Economy, and Population 

CO2, +5%

Six GHGs, +5%

GDP (Inflation 

Adjusted), +73%

Population, +26%

U.S. Pledge:

17% below 2005, 

3% below 1990

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

19901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012

Percentage Change from 1990 Baseyear

Source: CRS figure, using GHG emissions data from United States Environmental Protection Agency. The U.S. 

Inventory of Greenhouse Gas Emissions and Sinks: 1990-2012, EPA 430-14-003, April 15, 2014; and GDP and 

population data from U.S. Bureau of Economic Analysis, National Economic Accounts, “Table 7.1. Selected Per 

Capita Product and Income Series in Current and Chained Dollars,” accessed May 27, 2014. 

Note: GDP, or “gross domestic product,” is one measure of national economic activity. 

Statutory Authority 

Q: Under what authority is EPA proposing these regulations? 

A: EPA’s proposed regulations are required by CAA Section 111(d).13 This provision calls on 

states to submit plans to EPA imposing “standards of performance” for pollutants emitted by 

existing stationary sources. The Section 111(d) mandate applies narrowly, however. It applies 

only when the pollutant (1) is neither covered by a National Ambient Air Quality Standard nor 

listed as a “hazardous air pollutant” under CAA Section 112,14 and (2) would be regulated under a 

 

13 42 U.S.C. §7411(d). 

14 The CAA regulates emissions from stationary sources in multiple ways, three of which are relevant here. The first 

way is by National Ambient Air Quality Standards, reserved for harmful but not extremely hazardous pollutants from 

“numerous or diverse mobile or stationary sources.” CAA §108(a)(1)(B); 42 U.S.C. §7408(a)(1)(B). NAAQSs are 

implemented by source-specific emission limits imposed by states in “state implementation plans.” CAA §110; 42 

U.S.C. §7410. The second way is by federally prescribed national emission standards for hazardous air pollutants, that 

is, particularly harmful pollutants. CAA §112; 42 U.S.C. §7412. And the third, of interest here, is by federally 

(continued...) 
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“new source performance standard” (NSPS) under Section 111(b) if the existing source were a 

new source. CO2 already meets precondition (1).15 CO2 will meet precondition (2) once EPA’s 

proposed NSPS for CO2 emissions from fossil-fuel power plants are finalized, probably early next 

year. 

The trigger that requires EPA to use Section 111(d) is Section 111(b). Section 111(b) requires EPA 

to issue NSPSs for any stationary source category on an EPA-maintained list of source categories 

that “cause[], or contribute[] significantly to, air pollution which may reasonably be anticipated to 

endanger public health or welfare.” Once an NSPS is promulgated—to reiterate, for new sources 

in the source category—Section 111(d) is triggered for emissions of the same pollutant from 

existing sources in the source category, if the preconditions described above are met.16 That is the 

basis for EPA’s June 2 proposal. The intersection between these two rules is addressed below. 

Q: How is the term “standards of performance,” required by Section 111(d), 

defined in statute and case law? 

A: The act 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 nonair quality health and 

environmental impact and energy requirements) the Administrator determines has been 

adequately demonstrated.17

This definition makes clear that EPA’s main task is to define the “best system of emission 

reduction,” considering the indicated factors, on which the standard for emissions will be based. 

Most of the terms in the definition are themselves undefined in the act, leaving wide latitude for 

EPA interpretation.18 This wide latitude is important in part because CAA Section 111 applies the 

phrase “standard of performance” to both new and existing facilities in the listed source category, 

yet is generally assumed to be more flexible and less stringent when applied to existing sources, 

reflecting implementation challenges in existing facilities compared to new ones. Supporting this 

assumption is that certain definition terms—such as “best,” “taking into account cost,” and 

“adequately demonstrated”—seem to accommodate comfortably the different technological and 

economic circumstances of existing facilities versus new ones. It should also be noted that 

 

(...continued) 

prescribed standards of performance for new stationary sources. CAA §111; 42 U.S.C. §7411. 

15 There is an alternate reading of this precondition, owing to the fact that in the 1990 amendments to the CAA, 

inconsistent House and Senate amendments to Section 111(d) were enacted. Under the House amendment, Section 

111(d) standards of performance are barred for air pollutants “emitted from a source category ... regulated under 

Section 112” (emphasis added), the section covering hazardous air pollutants. Because fossil-fuel power plants are 

indeed a source category regulated under Section 112, this argument concludes that Section 111(d) does not allow EPA 

to restrict GHG emissions from existing such plants. The Senate amendment, on the other hand, places off limits only 

air pollutants, rather than source categories, regulated under Section 112. GHGs are not regulated under Section 112, 

so the Senate amendment poses no obstacle to EPA’s June 2 proposal. EPA’s Legal Memorandum accompanying the 

June 2 proposed regulations provides an extended explanation of why the agency follows the Senate amendment. 

16 See, e.g., American Elec. Power Co., Inc. v. Connecticut, 131 S. Ct. 2527, 2537 (2011). 

17 CAA §111(a)(1); 42 U.S.C. §7411(a)(1). 

18 The term “air pollutant” is defined in CAA Section 302 and, important here, has been held by the Supreme Court, 

with specific reference to Section 111, to include GHGs. American Elec. Power, 131 S. Ct. at 2537. 
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Section 111(d) itself says that states may consider an existing facility’s remaining useful life 

“among other factors.” 

Although all of the court interpretation of the CAA’s definition of “standard of performance” 

stems from the phrase’s use for new stationary sources, the cases arguably still shed light on how 

the definition might apply under Section 111(d) to the standards of performance that states are 

required to submit for existing sources. A full review of this case law is beyond the scope of this 

report. (EPA recently has offered its own, however.)19 However, in light of ubiquitous claims that 

Section 111(d) affords EPA great flexibility as to what it may accept in state plans, it is worth 

keeping in mind that whatever states submit must, as Section 111(d) explicitly requires, include 

“standards of performance.” That means that EPA’s calculation of each state-specific emissionreduction goal must be based on measures that are “system[s] of emission reduction.”20 Whether 

some of the “building blocks” EPA proposed on June 2 as components of a system of emission 

reduction—such as boosting use of renewable fuels, reducing electricity demand, and investing in 

“smart grid” technology—constitute “systems of emission reduction” is not clear. 

The shorthand for this flexibility issue that EPA faces is whether the state-specific emissionreduction goals EPA prescribes must be based solely on measures taken “inside the fence line” of 

specific plants, or whether “outside the fence line” measures can be considered part of a system 

of emission reduction. 

Finally, the emission standards prescribed in EPA’s June 2 proposal must be based on state 

approaches that are not only “system[s] of emission reduction,” but also the “best” of such 

systems, considering the factors in the standard of performance definition.21 Case law holds that 

EPA has “broad discretion” to weigh these factors.22

Q: When has EPA previously used this authority? 

A: EPA has only promulgated rules under Section 111(d) a handful of times: excluding guideline 

documents for incineration facilities, which rely in large part on a different section of the act, the 

Code of Federal Regulations contains only two Section 111(d) guideline documents.23

 

19 EPA’s legal interpretation of “standard of performance” can be found in three places: (1) the preamble to the 

agency’s proposed rule for new power plants: Standards of Performance for Greenhouse Gas Emissions from New 

Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 1430, 1462-1467 (January 8, 2014); (2) the 

preamble to the June 2 proposed rule; and (3) an EPA-prepared Legal Memorandum accompanying the June 2 

proposed rule, available at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technicaldocuments. See, e.g., Essex Chemical Corp. v. Ruckelshaus, 486 F. 2d 427, 433 (D.C. Cir. 1973) (to be “adequately 

demonstrated,” the “system of emission reduction” must be “reasonably reliable, reasonably efficient, and reasonably 

expected to serve the interests of pollution control without becoming exorbitantly costly in an economic and 

environmental way”). 

20 42 U.S.C. §7411(a)(1). 

21 Id.

22 Sierra Club v. Costle, 657 F.2d 298, 321 (D.C. Cir. 1981). Accord, Lignite Energy Council v. U.S. EPA, 198 F.3d 

930, 933 (D.C. Cir. 1999). 

23 The two guideline documents in the C.F.R. are “Emission Guidelines and Compliance Times for Municipal Solid 

Waste Landfills,” at 40 C.F.R. 60.30c, and “Emission Guidelines and Compliance Times for Sulfuric Acid Production 

Units,” at 40 C.F.R. 60.30d. EPA also appears to have issued four guideline documents that do not appear in the C.F.R. 
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EPA’s most recent attempt to use the authority was in the Clean Air Mercury Rule (CAMR, 

2005), when EPA promulgated standards for mercury emissions from new power plants under 

Section 111(b) and set up a cap-and-trade system under Section 111(d) for existing power plants. 

In the final CAMR rule,24 EPA apportioned a nationwide budget for mercury emissions among 

individual states. Each state was required to submit an implementation plan to EPA within 18 

months of the rule’s promulgation, detailing the controls it would impose on the coal-fired power 

plants within the state to meet the state’s emissions budget. States could adopt EPA’s emissions 

trading rule or choose to achieve the mandated reductions in some other way. If a state did 

neither, the cap-and-trade program outlined in CAMR was proposed as a Federal Implementation 

Plan (FIP). EPA set state-level budgets for a period beginning in 2010 (four and a half years after 

promulgation), and for a second period beginning in 2018. 

The D.C. Circuit Court of Appeals vacated CAMR’s 111(b) standards for new power plants in a 

2008 decision,25 so these 111(d) guidelines for existing power plants were never implemented. 

The court did not rule on whether the flexible approach taken by EPA for mercury controls (i.e., a 

cap-and-trade system) met the requirements of Section 111(d). 

The most recent successful use of Section 111(d) came in 1996, when EPA used the authority to 

impose requirements on emissions of methane and non-methane organic compounds from 

landfills.26 These regulations required the use of control equipment and set numeric emission 

limits for designated facilities (large landfills), with a compliance deadline of 30 months after the 

effective date of the state plan submitted to EPA. State plans were required to be submitted within 

nine months of promulgation of the Section 111(d) rule. 

Q: Why has Section 111(d) been infrequently used? 

A: As mentioned earlier, Section 111(d) can be used only for pollutants that are neither criteria 

pollutants (i.e., EPA has not set National Ambient Air Quality Standards for them under Section 

109 of the act) nor hazardous air pollutants (HAPs), as identified in Section 112 of the act.27 This 

is a relatively small number of pollutants. CO2, being neither a criteria pollutant nor a HAP, falls 

into that universe.28

Q: What relationship does this proposal have to EPA’s January 2014 proposal 

of GHG standards for new fossil-fueled power plants? 

A: EPA’s January 2014 proposal for new fossil-fuel power plants was made under CAA Section 

111(b). As discussed earlier, once EPA sets such a New Source Performance Standard under 

Section 111(b), Section 111(d) is triggered for existing sources in the same source category if the 

 

24 U.S. EPA, Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating 

Units, Final Rule, 70 Federal Register 28606, May 18, 2005. 

25 New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008). The court found that EPA was obligated to promulgate standards 

for mercury and other hazardous air pollutants under Section 112 of the act, and therefore vacated the NSPS under 

Section 111(b). 

26 U.S. EPA, Standards of Performance for New Stationary Sources and Guidelines for Control of Existing Sources: 

Municipal Solid Waste Landfills, Final Rule, 61 Federal Register 9905, March 12, 1996. 

27 But see note 15 above. 

28 See also the first question under “Statutory Authority,” above. 
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pollutant in question is neither covered by a NAAQS nor listed as a hazardous air pollutant.29 CO2 

satisfies this precondition, so EPA’s January 2014 proposal for new power plants, once made 

final, will obligate the agency and the states to regulate CO2 emissions from existing fossil-fueled 

power plants. 

Those likely to be regulated under Section 111(d) presumably are well aware of the 111(b)-111(d) 

linkage—no 111(b) NSPS means no 111(d) standards of performance for existing sources in the 

same category. Thus, even though the January 2014 proposal of NSPSs for new power plants will 

affect very few plants, it is nearly certain that once finalized, the rule will be vigorously 

challenged in court by utilities operating existing power plants potentially subject to the June 2 

proposal under Section 111(d). 

Q: Is the rule released on June 2 a final rule? 

A: No. It is a proposed rule, on which EPA will take public comment. Under Section 307(d) of the 

CAA,30 EPA is required to issue a proposed rule and hold a public comment period before issuing 

a final rule. The final rule may be changed from the proposal, so long as EPA provides an 

explanation in the Federal Register of the reasons for any major changes. At the least, when the 

agency promulgates a final version of the rule, it must provide a response to each of the 

significant comments, criticisms, and new data submitted during the proposed rule’s public 

comment period. 

The Proposed Rule 

Q: By how much would the proposed rule reduce CO2 emissions? 

A. EPA’s proposed Section 111(d) rule does not set a future level of emissions from existing 

electricity generators. The proposal sets state goals for emission rates—as pounds of CO2

emissions per megawatt-hour of electricity produced—not absolute emissions. It has been widely 

reported that the rule would require a 30% reduction in CO2 emissions by 2030, compared to the 

level of emissions in 2005; but this is simply EPA’s estimate of the rule’s effect nationwide, not 

what the rule requires. 

Effects on CO2 emissions are calculated by computer models projecting the quantity of electricity 

produced by each state under the rule, multiplied by EPA’s proposed state emission-rate goals. 

The actual emissions in the future will depend on how states choose to comply with the 

promulgated rule and how much electricity is generated (and at what generation units). 

In 2012, CO2 emissions from electricity generation were 2,023 million metric tons (mmt), or 

about 38% of total U.S. CO2 emissions (excluding emissions and removals by land use and 

forestry).31 EPA projects that the proposed Section 111(d) rule, Option 1—State Compliance, 

would reduce CO2 emissions from electricity generation to 1,682 mmt when states reach their 

 

29 However, see note 15 above. 

30 42 U.S.C. §7607(d). 

31 U.S. Environmental Protection Agency, The U.S. Inventory of Greenhouse Gas Emissions and Sinks: 1990-2012,

Washington, DC: 2014. 
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“final” emission rate goals in 2030. This would be an approximate absolute emissions reduction 

of 17% from 2012 levels, the base year for the proposed rule, and about 30% below the 2005 

level of CO2 emissions from U.S. electricity generation.32 EPA’s modeling of the rule also 

estimates interim reductions, as illustrated in Figure 2. 

The 2030 “final goals” for states’ emissions rates would continue as long as the rule remains in 

place. As Figure 2 illustrates, absolute CO2 emissions from electricity generation would likely 

increase after 2030 at the rate of growth of electricity production (unless very low- or no-emitting 

fuels make going beyond the emissions rate standard economically attractive). 

Q: Did EPA propose more than one option for the standards? 

A: EPA proposed only one set of emission rate standards (labeled Option 1 in the proposal), but it 

asked for comment on an alternative set (labeled Option 2) in which the final state goals would be 

less stringent and would have to be attained more quickly—by 2025, five years earlier than under 

Option 1. 

Besides offering an alternative option for comment, the agency also identified two ways in which 

states could comply with either the proposed standards or the alternative: a State Compliance 

Approach or a Regional Compliance Approach. The goals would be the same for the two 

compliance approaches. Under the State Compliance Approach, each state would pursue its goal 

on its own—as is typically the case in CAA State Implementation Plans. However, under the 

Regional Approach, states voluntarily could join with other states to implement multistate 

compliance approaches (e.g., maintaining the nine-state cap-and-trade system under the Regional 

Greenhouse Gas Initiative). Under the Regional Compliance Approach, states would have 

additional time to submit implementation plans, and the costs and benefits of compliance are 

estimated by EPA to be somewhat lower than under the State Compliance Approach. 

Because it serves as the base of EPA’s proposal, in the remainder of this report, we generally 

focus on the Option 1—State Compliance Approach. 

 

32 The base year for the proposed rule is 2012, although some have reported it as 2005. The comparison with emissions 

in 2005 may be relevant because of President Obama’s pledge in 2009 to reduce total U.S. GHG emissions 17% below 

the 2005 level by 2020. 
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Figure 2. U.S. CO2 Emissions from Electricity Generation, Historical and Projected 

Source: CRS figure from U.S. Environmental Protection Agency, The U.S. Inventory of Greenhouse Gas Emissions 

and Sinks: 1990-2012, Washington, DC: 2014; and EPA spreadsheet “Illustrative State compliance scenario for 

Option 1,” available at http://www.epa.gov/airmarkets/powersectormodeling/cleanpowerplan.html. 

Note: EPA-projected emissions converted from short tons to metric tons by CRS. 

Q: What is the range of state emission-rate goals? 

A: The proposal sets interim emission-rate goals for each state for the period from 2020 to 2029 

and a final goal for 2030. The proposed 2030 goals range from 215 pounds of CO2 per megawatthour in Washington State to 1,783 pounds in North Dakota. In general, states that rely on coal for 

a high percentage of their total power generation would be allowed higher emission rates than 

states that rely more heavily on natural gas, nuclear, and renewable power. Table 1 shows the 

final (2030) goals for each state ranked from highest average emissions allowed to lowest. 

The data presented here are based on the agency’s proposed approach. The agency also asked for 

comment on an alternative option that would shorten the compliance period from 10 years to 5 

(i.e., a final goal reached in 2025), with a less stringent set of CO2 emission rates. Under both the 

proposed and alternative options, the agency also proposes to allow submission of multistate 

plans, the effects of which might differ slightly from the single-state approach. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 11 

Q: How did EPA establish the state-level goals in the proposed rule? 

A: EPA describes the rule as having four “building blocks,” which were used to generate statespecific emission rate goals. The first of these calls for “heat-rate” (i.e., efficiency) improvements 

at coal-fired power plants (i.e., reductions in the amount of heat, as measured in Btu’s, necessary 

to generate a megawatt-hour of electricity). Since CO2 emissions are directly related to the 

amount of coal burned, a reduction in the heat rate of a given percentage would lead to a 

reduction in CO2 emissions of the same percentage. For each state’s coal-fired power plants, the 

agency began by determining an average CO2 emission rate (in pounds of CO2 per megawatthour), using data for 2012. Based on its review of relevant engineering studies and emissions 

data, EPA determined that coal-fired plants could reasonably be expected to reduce their average 

heat rate by 6%, so the agency reduced each state’s 2012 CO2 emission rate from coal-fired units 

by that percentage. For example, if a state’s coal-fired power plants averaged 2,000 pounds of 

CO2 emissions per megawatt-hour in 2012, the first building block would set a state-wide goal of 

1,880 pounds. 

The second building block is based on “dispatch changes” among a state’s electric generating 

units (EGUs). As demand for power rises over the course of a day, the system operator or regional 

transmission organization calls into service (“dispatches”) additional generating units. As demand 

decreases in the evening, these additional units are taken off-line. The same principle applies as 

demand fluctuates over the course of a year. Because coal-fired plants take hours or days to ramp 

up to their design capacity, and because they have traditionally been cheaper to operate than most 

other sources, they have tended to be dispatched before natural-gas-fired units. In the last five 

years, this order of dispatch has been changing, however, and the rule would set a goal of 

increasing the dispatch of natural-gas-combined-cycle (NGCC) plants, which have lower CO2

emissions per megawatt-hour generated, in place of higher emission coal- and oil-fired power.33

For goal-setting purposes, the rule assumes that a state’s NGCC plants will be dispatched 70% of 

the time, rather than the current average of 55%. The additional NGCC power is assumed to 

replace a portion of the state’s coal-fired and other higher CO2 emitting sources, thus reducing the 

rate of CO2 emissions per megawatt-hour generated. 

 

33 According to EPA, NGCC units can produce as much as 46% more electricity from a given input of Btu’s than coalfired steam EGUs. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

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Table 1. State CO2 Emission Performance Goals, 2030 

(lbs. of CO2 emitted per net megawatt-hour of electricity generated) 

State 2030 State Goal 

North Dakota 1,783 

Montana 1,771 

Kentucky 1,763 

Wyoming 1,714 

West Virginia 1,620 

Missouri 1,544 

Indiana 1,531 

Kansas 1,499 

Nebraska 1,479 

Ohio 1,338 

Utah 1,322 

Hawaii 1,306 

Iowa 1,301 

Illinois 1,271 

Wisconsin 1,203 

Maryland 1,187 

Tennessee 1,163 

Michigan 1,161 

Colorado 1,108 

Alabama 1,059 

Pennsylvania 1,052 

New Mexico 1,048 

Alaska 1,003 

North Carolina 992 

Arkansas 910 

Oklahoma 895 

Louisiana 883 

Minnesota 873 

Delaware 841 

Georgia 834 

Virginia 810 

Texas 791 

Rhode Island 782 

South Carolina 772 

South Dakota 741 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 13 

State 2030 State Goal 

Florida 740 

Arizona 702 

Mississippi 692 

Nevada 647 

Massachusetts 576 

New York 549 

Connecticut 540 

California 537 

New Jersey 531 

New Hampshire 486 

Maine 378 

Oregon 372 

Idaho 228 

Washington 215 

Source: U.S. EPA. 

Notes: Because Vermont and the District of Columbia lack affected 

sources, no goals were proposed for these jurisdictions. In addition, 

no goals were proposed for Indian country or for U.S. territories. The 

agency does plan to establish goals for areas of Indian country and 

possibly for some U.S. territories in the future. EPA requested 

comment on how it should proceed in these cases. 

The third building block assumes the use of additional low- or no-carbon emitting power sources, 

principally renewable energy. To estimate how much power could be expected to come from 

renewable sources, EPA grouped the states into six regions and developed state-specific goals 

based on the average of existing renewable portfolio standards34 applicable in 2020 in each 

region. The agency used these averages to compute regional growth factors for renewable 

electricity, which it applied to each state’s initial (2012) renewable energy generation level. This 

additional electricity from zero-emission energy sources lowers the states’ CO2 emission rates. A 

similar adjustment was made for under-construction and “at-risk” nuclear power units.35

The fourth building block reduces the emissions rate by including demand-side energy efficiency 

programs. Although some states currently have more stringent energy efficiency requirements 

than others, EPA assumes that by 2030, all states can implement such programs, with roughly 

similar results. These programs are assumed to reduce power demand by roughly 9% to 12% in 

each state by 2030. 

 

34 Renewable portfolio standards, adopted by about 29 states and the District of Columbia (as of March 2013), require 

retail electricity suppliers to supply a minimum percentage or amount of their retail electricity load with electricity 

generated from eligible sources of renewable energy, as defined by the state. For additional information, see the 

Database of State Incentives for Renewables and Efficiency, at http://www.dsireusa.org/. 

35 EPA identified five nuclear units under construction in Georgia, South Carolina, and Tennessee, and 5.7 gigawatts of 

nuclear units (about 6% of the nation’s nuclear capacity) at risk of retirement. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 14 

For an example of how these building blocks were used to produce a state emission-rate goal, see 

EPA’s “Goal Computation Technical Support Document” at http://www2.epa.gov/sites/

production/files/2014-05/documents/20140602tsd-goal-computation.pdf. 

Q: Would states and companies that have already reduced GHG emissions 

receive credit for doing so? 

A: States do not receive “credit” in their goals for efficiency measures already taken. Whether 

individual power companies will receive credit will be decided by states as they develop their 

implementation plans. The rule requires each state to submit an implementation plan to EPA that 

identifies what measures/regulations the state will implement to reach its goal. 

Q: How does EPA’s proposed rule interact with existing GHG emission 

reduction programs in the states, namely the Regional Greenhouse Gas 

Initiative and California’s cap-and-trade system? 

A number of U.S. states have taken action requiring greenhouse gas (GHG) emission reductions. 

The most aggressive actions have come from a coalition of states from the Northeast and MidAtlantic regions—the Regional Greenhouse Gas Initiative36—and California.37 

The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade system involving nine states 

that took effect in 2009.38 RGGI applies to CO2 emissions from electric power plants with 

capacities to generate 25 megawatts or more. 

Pursuant to legislation passed in 2006, California established a cap-and-trade program that took 

effect in 2013. California’s cap covers multiple GHGs and when fully implemented in 2015, will 

apply to multiple sectors, covering approximately 85% of California’s GHG emissions. 

Although EPA’s proposed rule measures state compliance in terms of a CO2 emissions rate, EPA 

allows states considerable flexibility in terms of meeting its emissions rate goals. For example, 

EPA’s new regulations would allow states to meet their CO2 emissions rate goals using massbased reduction programs, such as cap-and-trade systems. States can establish new programs to 

meet their goals or use existing programs and regulations. Moreover, states can meet their goals 

individually or collaborate with other states to create (or use existing) multistate plans. EPA 

provides states with additional time to submit their plans if states decide to combine their efforts. 

EPA used 2012 data to prepare each state’s emission rate goals. The proposed rule does not have a 

process for providing credit for emissions reductions made prior to 2012. However, EPA points 

out that states that began action prior to 2012, including a shift to less carbon-intensive energy 

 

36 See CRS Report R41836, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Policymakers, by 

Jonathan L. Ramseur. 

37 In addition, EPA states that 38 states have renewable portfolio standards or goals, and utilities in 47 states have 

demand-side energy efficiency programs. See p. 31 of EPA proposed rule at http://www2.epa.gov/sites/production/

files/2014-05/documents/20140602proposal-cleanpowerplan.pdf. 

38 Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. 

New Jersey participated in the program from 2009 through the end of 2011. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 15 

sources or energy efficiency improvements, will be “better positioned” to meet state-specific 

emission rate goals.39

Q: What role is there for “outside-the-fence” emission reductions? 

A: Because the states will decide how to reduce emission rates to reach the EPA-set goals, this 

question is not directly answered in the proposed rule. In setting the goals for each state, however, 

EPA clearly anticipated that some reductions will come from actions taken by actors other than 

power companies or specific EGUs (actions that have been referred to as “outside-the-fence” 

reductions). One of the four building blocks of the proposed rule is the application of demandside energy efficiency measures, such as the installation of more efficient lighting products, better 

insulation, and more efficient electric appliances. In the Preamble to the proposed rule, EPA states 

its intention to establish a “toolbox of decision support resources” for the states, which will 

include outside-the-fence measures such as energy efficiency and renewable energy policies and 

programs.40

Next Steps 

Q: What are the next steps? How will EPA finalize this rule? 

A: On June 2, EPA made the rule and various supporting materials available on its website. The 

rule will appear in the Federal Register (FR) after the agency sends the rule to the Office of the 

Federal Register and the rule is formatted for publication. Publication in the FR begins the formal 

comment period, which will run 120 days. As noted earlier, EPA plans four public hearings during 

the week of July 28 (in Denver, Atlanta, Pittsburgh, and Washington, DC), as well as taking 

written comments on the regulations.gov website.41 

After the close of the comment period, EPA will consider the comments it received, revise the 

rule to the extent it determines that to be appropriate, and prepare additional supporting materials. 

Then, upon completion of its internal consideration, the agency will forward a draft final rule to 

the Office of Information and Regulatory Affairs (OIRA) at the White House Office of 

Management and Budget. 

Q: What role does OIRA (i.e., the White House) play in developing the 

final rule? 

A: OIRA/interagency review is a normal part of the rulemaking process for most federal 

agencies. Under Executive Order (E.O.) 12866, OIRA oversees an interagency review process; it 

 

39 See p. 474 of EPA’s proposed rule at http://www2.epa.gov/sites/production/files/2014-05/documents/

20140602proposal-cleanpowerplan.pdf. 

40 See pages 527-528 of the proposed rule at http://www2.epa.gov/sites/production/files/2014-05/documents/

20140602proposal-cleanpowerplan.pdf. 

41 The written submissions, transcripts of any public hearings, and all EPA supporting documents are available to the 

public in a regulatory docket at http://www.regulations.gov. The docket number for this rule is EPA-HQ-OAR-2013-

0602. 
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Congressional Research Service 16 

also generally conducts meetings with principal stakeholders. These meetings are known as 

“12866 meetings,” and OIRA posts information about them on its website.42

This interagency review process sometimes results in significant changes to a rule. At the least, 

OIRA will seek to ensure that EPA has developed a rule that addresses concerns raised during the 

comment period, that the rule is supported by the agency’s Regulatory Impact Analysis43 and any 

other accompanying analyses, that the rule is legally defensible, and that the rule is consistent 

with the President’s policy priorities. 

Under E.O. 12866, OIRA reviews are to be completed within 90 days of a rule’s submission by 

the regulatory agency, but often they extend for longer periods.44 This rule is not likely to 

languish at OIRA, however. In directing EPA to develop the rule, in June 2013, the President 

established a schedule for promulgation and implementation, directing EPA to promulgate a final 

rule by June 1, 2015. Given the high priority placed on this rule by the President, both EPA and 

OIRA are likely to make every effort to adhere to that schedule. 

E.O. 12866 requires both regulatory agencies and OIRA to disclose certain information about 

how OIRA’s regulatory reviews are conducted. Specifically, agencies are required to identify for 

the public (1) the substantive changes made to rules between the draft submitted to OIRA for 

review and the action subsequently announced and (2) changes made at the suggestion or 

recommendation of OIRA. OIRA is required to provide agencies with a copy of all written 

communications between OIRA personnel and parties outside of the executive branch, and a list 

of the dates and names of individuals involved in substantive oral communications. 

After the completion of review, the EPA Administrator will sign the final rule and send it to the 

Federal Register for promulgation.45 

Q: When will the final rule take effect, and how will it be implemented? 

A: Once finalized, major rules generally may take effect no sooner than 60 days after publication 

in the Federal Register.

46 Assuming that the final rule is signed June 1, 2015, it would likely be 

effective sometime in the summer of 2015. According to the schedule announced by the 

President, the states would then have until June 30, 2016, to submit plans detailing how they will 

implement its provisions. 

EPA has proposed some modifications to the schedule for the state plan submissions, however. 

Under the proposed rule, states will be allowed to request an additional year for submission of a 

complete plan, provided that they have taken “meaningful steps” toward completion by the 2016 

deadline. States choosing to participate in a multistate plan would have until June 30, 2018, to 

submit the plan. 

 

42 See http://www.reginfo.gov. 

43 Regulatory Impact Analyses, required under Executive Order 12866, provide an agency’s analysis of the expected 

costs and benefits of a rule. See additional discussion under “Costs and Benefits of the Rule,” below. 

44 Executive Order 12866, “Regulatory Planning and Review,” 58 Federal Register 51735, October 4, 1993. For an 

electronic copy of this executive order, see http://www.whitehouse.gov/omb/inforeg/eo12866.pdf. 

45 For additional discussion of OIRA’s role in the federal rulemaking process, see CRS Report RL32397, Federal 

Rulemaking: The Role of the Office of Information and Regulatory Affairs, coordinated by Maeve P. Carey. 

46 5 U.S.C. §801(a)(3)(A). 
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Q: What happens if a state fails to submit an adequate plan by the 

appropriate deadline? 

A: EPA cannot compel a state to submit a Section 111(d) plan. Rather, should a state fail to 

submit a satisfactory plan by EPA’s deadline, CAA Section 111(d) authorizes EPA to prescribe a 

plan for the state. This authority is the same, Section 111(d) says, as EPA’s authority to prescribe 

federal implementation plans (FIPs) when a state fails to submit a state implementation plan to 

achieve a NAAQS.47 Questions have been raised as to whether EPA has the authority to include in 

its EPA-promulgated plans all the measures, such as demand-side energy efficiency requirements, 

that states may include in their 111(d) plans. 

Costs and Benefits of the Rule 

Q: What role will cost play in EPA’s choice of emission standards? 

A: Under Section 111(a)(1)’s definition of “standards of performance,” EPA must consider cost in 

developing the regulations. In addition, Section 111(d)(1) states, “Regulations of the 

Administrator under this paragraph 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.” 

EPA’s regulations implementing this language (40 C.F.R. 60.22(b)), which were promulgated in 

1975 and 1989, provide additional detail: 

(b) Guideline documents published [by EPA] under this section will provide information for 

the development of State plans, such as: 

(1) Information concerning known or suspected endangerment of public health or welfare 

caused, or contributed to, by the designated pollutant. 

(2) A description of systems of emission reduction which, in the judgment of the 

Administrator, have been adequately demonstrated. 

(3) Information on the degree of emission reduction which is achievable with each system, 

together with information on the costs and environmental effects of applying each system to 

designated facilities. 

(4) Incremental periods of time normally expected to be necessary for the design, 

installation, and startup of identified control systems. 

(5) An emission guideline that reflects the application of the best system of emission 

reduction (considering the cost of such reduction) that has been adequately demonstrated for 

designated facilities, and the time within which compliance with emission standards of 

equivalent stringency can be achieved. The Administrator will specify different emission 

guidelines or compliance times or both for different sizes, types, and classes of designated 

 

47 CAA §110(c); 42 U.S.C. §7410(c). 
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Congressional Research Service 18 

facilities when costs of control, physical limitations, geographical location, or similar factors 

make subcategorization appropriate. 

(6) Such other available information as the Administrator determines may contribute to the 

formulation of State plans. 

Q: What are EPA’s estimates of the costs of this rule? 

A: EPA estimates the cost of the proposed rule at $7.3 billion to $8.8 billion annually in 2030. 

Because states will determine how to comply with the goals established by the final rule, EPA 

refers to these cost estimates as “illustrative” and notes that they “do not represent the full suite of 

compliance flexibilities states may ultimately pursue.”48 EPA describes the cost estimate as 

including “the net change in the annualized cost of capital investment in new generating sources 

and heat rate improvements at coal steam facilities, the change in the ongoing costs of operating 

pollution controls, shifts between or amongst various fuels, demand-side energy efficiency 

measures, and other actions associated with compliance.”49

Although the rule may impose $7.3 billion to $8.8 billion in annual control costs by 2030, EPA 

estimates that the average monthly residential electricity bill will decline by 9% in 2030, as 

consumption of electricity declines due to efficiency measures.50

Q: What are the benefits EPA estimates for the proposed Section 111(d) rule? 

A: In the Preamble to the proposed rule, EPA cites monetized CO2-reduction benefits of the rule 

to be $30 billion in 2030 (in 2011 dollars) and the health-related co-benefits of the rule to be an 

additional $23 billion to $59 billion.51 

In the accompanying Regulatory Impact Analysis, the agency provides additional detail, 

including ranges of benefits based on a variety of assumptions. EPA’s estimates for Option 1—

State Compliance, in the Regulatory Impact Analysis range from $22 billion to $88 billion in 

2020, rising to $36 billion to $150 billion in 2030.52 These estimates include benefits of slowing 

climate change, as well as avoiding premature deaths and illnesses from other air pollution. With 

estimated compliance costs of about $7.5 billion in 2020 rising to a maximum of $8.8 billion in 

 

48 EPA, Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants and 

Emission Standards for Modified and Reconstructed Power Plants, June 2014, p. ES-7, at http://www2.epa.gov/sites/

production/files/2014-06/documents/20140602ria-clean-power-plan.pdf. 

49 Ibid., p. ES-8 (footnote omitted). 

50 Preamble to the proposed rule, p. 558, at http://www2.epa.gov/sites/production/files/2014-05/documents/

20140602proposal-cleanpowerplan.pdf. 

51 This estimate is for Option 1—Regional Compliance, using a 3% discount rate, which reflects the preference of most 

people to have money now rather than in the future. EPA, prepublication version of the proposed rule, June 2, 2014, p. 

53, at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule. 

52 All in 2011 dollars. These estimates are for EPA’s Option 1 proposal with state compliance, on which CRS focuses 

as it best reflects the rule as proposed by EPA. Benefits for Option 2 and/or regional compliance would be slightly 

lower, particularly because EPA estimates that the regional compliance alternative would achieve fewer emission 

reductions. EPA, Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants 

and Emission Standards for Modified and Reconstructed Power Plants, June 2014, at http://www2.epa.gov/sites/

production/files/2014-06/documents/20140602ria-clean-power-plan.pdf. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 19 

2030, EPA expects that its Section 111(d) proposal would yield net benefits of $26 billion to $50 

billion in 2020, rising to $49 billion to $84 billion in 2030.53

EPA expects its Section 111(d) proposal to avoid some degree of greenhouse gas-induced climate 

change, by directly reducing CO2 (the major human-related greenhouse gas), and by reducing 

atmospheric concentrations of ozone, particulate matter, and other pollutants, all of which also 

influence climate change. EPA estimates the benefits of reducing CO2 emissions (i.e., the climate 

benefits, excluding the health-related co-benefits) to range from $5 billion to $ 52 billion in 2020, 

rising to a range of $10 billion to $94 billion in 2030. The benefits of slowing climate change are 

about 13% to 76% of the total monetized benefits of the proposed rule, depending on the 

assumptions selected. 

EPA calculated the benefits of avoided climate change by multiplying tons of CO2 emission 

reductions in each year by corresponding ranges of “social costs of carbon” (SCC) in that year. 

The SCC is an estimate of the avoided costs of future climate change per ton of CO2 avoided. 

EPA uses the ranges of values published by an Interagency Working Group on the Social Costs of 

Carbon in November 2013.54 Stakeholders have critiqued these SCC estimates, with some arguing 

the range should be lower and others higher. 

EPA expects that the 111(d) proposal simultaneously will reduce other air pollutants, avoid 

premature deaths and illnesses, and reduce material damages. Under most assumptions, the 

majority of monetized benefits EPA estimated for its proposal come from reductions, or “cobenefits” of pollutants other than CO2. EPA valued the co-benefits of its Section 111(d) proposal 

at $24 billion to $62 billion in 2030. 

EPA did not quantify other expected co-benefits of this rule, including reduced exposures to 

several hazardous air pollutants (such as mercury and hydrogen chloride), carbon monoxide, and 

reduced direct exposures to sulfur dioxide (SO2) and nitrogen oxides (NOx). EPA also did not 

quantify pollution effects on ecosystems or visibility. 

Q: Under Section 111(d), are the benefits of the rule required to exceed its cost? 

A: Section 111(d) does not impose a cost-benefit test. E.O. 12866, however, states that “in 

choosing among alternative regulatory approaches, agencies should select those approaches that 

maximize net benefits (including potential economic, environmental, public health and safety, and 

other advantages; distributive impacts; and equity), unless a statute requires another regulatory 

approach.”55

 

53 Using the full range of benefits reported in the Regulatory Impact Analysis using several discount rates. 

54 Interagency Working Group on Social Cost of Carbon, United States Government. Technical Support Document: - 

Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis - Under Executive Order 12866. 

Washington, DC: Office of Management and Budget, November 2013. http://www.whitehouse.gov/sites/default/files/

omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf. 

55 Ibid., Section 1. 
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Congressional Review 

Q: Does the Congressional Review Act apply to the proposed rule? 

The Congressional Review Act (CRA) provides a mechanism by which Congress may review and 

disapprove of agency rules through passage of a joint resolution that is eligible for expedited 

procedures in the Senate.56 If passed by both houses of Congress, such a joint resolution would be 

sent to the President for his signature or veto. 

It does not appear that the CRA applies to proposed rules issued by an agency. Arguably a 

proposed rule does not satisfy the CRA definition of a “rule.”57 A proposed rule is not “designed 

to implement, interpret, or prescribe law or policy”;58 instead, it is generally created by the 

agency as a draft with which to solicit and receive public comments.59 Additionally, arguably a 

proposed rule has no “future effect” because a proposed rule may not go into effect until 

comments are received and considered by the agency and a final rule is published in the Federal 

Register.

60

The Government Accountability Office (GAO) specifically advises agencies not to submit 

proposed rules to Congress or GAO under the CRA.61 In 2014, Senator Mitch McConnell 

requested62 that GAO analyze Congress’s authority to consider a CRA resolution disapproving of 

EPA’s proposed rule entitled “Standards of Performance for Greenhouse Gas Emissions from 

New Stationary Sources: Electric Utility Generating Unit.”63 In his letter, Senator McConnell 

argued that this proposed rule was different from other proposed rules because a provision of the 

CAA “gives immediate legal effect to the notice of proposed rulemaking.”64 In its response, GAO 

limited its analysis to three questions regarding GAO’s role in the CRA and its precedents 

analyzing whether specific agency actions are rules under the CRA.65 It concluded that “the terms 

of [the] CRA, and its supporting legislative history, clearly do not provide a role for GAO with 

regard to proposed rules, and do not require agencies to submit proposed rules to GAO.”66

 

56 5 U.S.C. §§801-808. 

57 5 U.S.C. §804(3). 

58 Id.; see 5 U.S.C. §551(4). 

59 See 5 U.S.C. §553(b). 

60 See 5 U.S.C. §553(c). 

61 GAO, “Congressional Review Act (CRA) FAQs,” available at http://www.gao.gov/legal/congressact/cra_faq.html#6 

(“[Question:] Should agencies submit proposed rules to GAO? [Answer:] No. Agencies should only submit major, 

nonmajor, and interim final rules to GAO.”). 

62 Letter from the Honorable Mitch McConnell to the Honorable Gene L. Dodaro, Comptroller General, Government 

Accountability Office, January 16, 2014 [hereinafter McConnell GAO Letter]. 

63 79 Federal Register 1430, January 8, 2014. 

64 McConnell GAO Letter, supra note 62, at 1; see 42 U.S.C. §7411(a)(2). 

65 Letter from Susan A. Poling, General Counsel, Government Accountability Office, to the Honorable Harry Reid, 

Mitch McConnell, Barbara Boxer, and Thomas Carper, May 29, 2014 (regarding GAO’s Role and Responsibility 

Under the Congressional Review Act) at 1 [hereinafter GAO May 2014 CRA Letter]. Specifically, GAO “agreed to 

answer three questions: (1) what is GAO’s role under CRA and what type of agency action triggers that role; (2) what 

role does GAO play under CRA with regard to a proposed rule; and (3) do prior GAO opinions under CRA examining 

final agency actions outside of the rulemaking process provide precedent in answering these questions.” Id. 

66 Id. at 5. 
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Congressional Research Service 21 

Furthermore, it stated that prior GAO decisions found “that an agency action constituted a rule for 

CRA purposes ... [if] the action imposed requirements that were both certain and final.”67 Since 

proposed rules “are proposals for future agency action that are subject to change ... and do not 

have a binding effect on the obligations of any party,”68 GAO concluded they are “not a triggering 

event for CRA purposes.”69 However, GAO also noted that because the CRA’s expedited 

procedure for review of agency rules was enacted pursuant to Congress’s constitutional authority 

to establish its own procedural rules,70 it is for “Congress to decide whether [the] CRA would 

apply to a resolution disapproving a proposed rule.”71

For a broad discussion of congressional options for addressing EPA’s greenhouse gas regulations, 

see CRS Report R41212, EPA Regulation of Greenhouse Gases: Congressional Responses and 

Options, by James E. McCarthy. 

For Further Information 

Q: Who are the CRS contacts for questions regarding this rule? 

A: CRS analysts, listed below, cover areas related to the proposed rule. 

Area of Expertise Name Phone Email 

Clean Air Act Jim McCarthy 7-7225 jmccarthy@crs.loc.gov 

Legal issues Rob Meltz 7-7891 rmeltz@crs.loc.gov 

Climate change Jane Leggett 7-9525 jaleggett@crs.loc.gov 

State GHG emission programs Jonathan Ramseur 7-7919 jramseur@crs.loc.gov 

Carbon capture and sequestration Pete Folger 7-1517 pfolger@crs.loc.gov 

Electric utilities Richard Campbell 7-7905 rcampbell@crs.loc.gov 

Regulatory process Maeve Carey 7-7775 mcarey@crs.loc.gov 

Congressional Review Act Alissa Dolan 7-8433 adolan@crs.loc.gov 

 

67 Id. at 8. 

68 Id. 

69 Id. at 6. 

70 See U.S. CONST., art. I, §5, cl. 2. 

71 GAO May 2014 CRA Letter, supra note 65, at 9. 
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants 

Congressional Research Service 22 

Author Contact Information 

James E. McCarthy 

Specialist in Environmental Policy 

jmccarthy@crs.loc.gov, 7-7225 

Jonathan L. Ramseur 

Specialist in Environmental Policy 

jramseur@crs.loc.gov, 7-7919 

Robert Meltz 

Legislative Attorney 

rmeltz@crs.loc.gov, 7-7891 

Alissa M. Dolan 

Legislative Attorney 

adolan@crs.loc.gov, 7-8433 

Jane A. Leggett 

Specialist in Energy and Environmental Policy 

jaleggett@crs.loc.gov, 7-9525