In August 2018, the U.S. Environmental Protection Agency (EPA) proposed the "Affordable Clean Energy" (ACE) rule. ACE would modify provisions for existing power plants under two major Clean Air Act (CAA) programs. Among other things, ACE would "replace the Clean Power Plan (CPP)," a greenhouse gas (GHG) rulemaking that EPA promulgated under CAA Section 111(d) in 2015. ACE would also modify an applicability determination for New Source Review (NSR), which is a CAA preconstruction permitting program intended to ensure that new and modified stationary sources of air pollution do not significantly degrade air quality. EPA proposed ACE in response to Executive Order 13783, in which President Trump directed federal agencies to "review existing regulations and policies that potentially burden the development or use of domestically produced energy resources." Among the order's specific directives was that EPA review the CPP, which was one of the Obama Administration's key actions directed at reducing GHG emissions. EPA's review also led the agency to convene an "NSR Reform Task Force" to assess opportunities to simplify the NSR application and review process. Congress has also considered questions about NSR. A House hearing , held in early 2018, highlighted some long-standing and divergent views on the NSR program. Witnesses speaking in favor of NSR emphasized the program's health and environmental benefits, while other stakeholders described it as an outdated, cumbersome impediment to economic growth. For example, one of the witnesses testified that the complexities and costs of the NSR permitting process discourage pollution control and energy efficiency projects. In addition, two bills— H.R. 3127 and H.R. 3128 —were introduced in the 115 th Congress that would amend the CAA definition of modification , a key term in determining NSR applicability. Notable interest in the CPP and subsequent proposals to repeal or replace it reflects the perceived importance of their potential effects on the economy and the health, safety, and well-being of the nation. Some stakeholders contend that the U.S. economy would be adversely affected by controls on GHG emissions from power plants. At the same time, national and international scientific assessments of climate change have concluded that there is an increasing likelihood of "severe, pervasive and irreversible" GHG-induced impacts. After EPA proposed the CPP in 2014, the agency received more than 4.3 million public comments, the most ever for an EPA rule. EPA responded by making numerous changes to the rule between proposal and promulgation. Congressional and public interest has continued since EPA promulgated the CPP final rule in 2015. This report provides background information about the CAA and GHG emissions from the power sector and highlights some of the major components of EPA's ACE proposal. The topics discussed do not represent an exhaustive list of the proposal's elements. For a more comprehensive analysis of the CPP, see CRS Report R44341, EPA's Clean Power Plan for Existing Power Plants: Frequently Asked Questions , by [author name scrubbed] et al. For an analysis of the CPP's potential impact on the electric power sector, see CRS Report R44265, EPA's Clean Power Plan: Implications for the Electric Power Sector , by [author name scrubbed]. The report does not provide a legal analysis of the actions and legal interpretations proposed in ACE. For a detailed discussion of legal issues, see: CRS Legal Sidebar LSB10198, EPA Proposes the Affordable Clean Energy Rule to Replace the Clean Power Plan , by [author name scrubbed]. CRS Legal Sidebar LSB10199, EPA Proposes New Permitting Test for Power Plant Modifications , by [author name scrubbed]. CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA , by [author name scrubbed]. CRS Legal Sidebar LSB10016, EPA Proposes to Repeal the Clean Power Plan , by [author name scrubbed]. This section provides background information on sources of U.S. GHGs emissions (particularly CO 2 ), CAA Section 111, the CPP, and NSR. Anthropogenic 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). CO 2 emissions from fossil fuel combustion account for the largest percentage (76% in 2016) of total U.S. GHG emissions. Historically, the electricity sector accounted for the largest percentage of U.S. CO 2 emissions from fossil fuel combustion. However, the transportation sector surpassed electricity in 2016. In 2017, the transportation sector accounted for 37% and the electricity sector accounted for 34% of U.S. CO 2 emissions from fossil fuel combustion. In previous decades (1973-2010), CO 2 emissions from electricity generation followed an upward course—similar to electricity generation levels in the same time period, as illustrated in Figure 1 . In 2010, their courses diverged. Although electricity generation has remained relatively flat in recent years (2010-2017), CO 2 emissions have generally continued to decline. In 2017, electricity generation was equivalent to generation levels in 2010, while CO 2 emissions were 23% below 2010 levels. Multiple factors impact CO 2 emission levels from the electricity sector. One key factor in CO 2 emission levels is the electricity generation portfolio. Electricity is generated from a variety of sources in the United States. Some sources—nuclear, hydropower, and some renewables—directly produce no CO 2 emissions with their electricity generation. Fossil fuels, on the other hand, generate different amounts of CO 2 emissions per unit of generated electricity. For example, natural-gas-fired electricity from a combined cycle unit yields approximately 43% of the CO 2 emissions of coal-fired electricity per kilowatt-hour of electricity. Therefore, shifting the U.S. electricity generation portfolio to lower emissions sources would likely have (all else being equal) a considerable impact on CO 2 emissions from the electricity sector, which in turn, would likely reduce total U.S. GHG emissions. As illustrated in Figure 2 , recent changes in the U.S. electricity generation portfolio between 2005 and 2017 have played a key role in electric power emission levels: Coal's contribution to total electricity generation decreased from 50% to 30%. Natural gas's contribution to total electricity generation increased from 19% to 32%. Non-hydro renewable energy (wind and solar) generation increased from 2% to 10%. Structural changes in the electricity sector are likely playing a role in the electricity generation portfolio changes described above. Over the last decade (2007-2017), the electricity-generating capacity (measured in megawatts) of coal-fired power plants has decreased by 19%, while natural gas capacity has increased by 45%, and (non-hydro) renewable sources has increased by 445%. If these recent changes in the electricity generation portfolio continue, U.S. CO 2 emissions may continue to decline as well—assuming the emission levels in other economic sectors, particularly the transportation sector, do not offset the reductions. As discussed in the section " CO2 Emissions Projections " below, recent analyses of CO 2 emissions project further declines in the near term under baseline scenarios. 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. These standards establish a consistent baseline for pollution control that competing firms must meet and thereby remove any incentive for states or communities to weaken air pollution standards in order to attract industry. They also conserve clean air to accommodate future growth as well as for its own benefits. CAA Section 111(b) establishes 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. The emission levels are determined by the best system of emission reduction (BSER) "adequately demonstrated," taking costs and any non-air-quality health and environmental impacts and energy requirements impacts into account. Section 111 directs EPA to determine what constitutes the BSER. 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." These emission guidelines establish binding requirements that states are required to address when they develop plans to regulate the existing sources in their jurisdictions. In particular, states must establish performance standards for existing sources reflecting the BSER, which is determined by EPA. States, in their plans, provide for their implementation and enforcement of the standards. Similar to Section 110 of the CAA—which requires states to develop and revise implementation plans to achieve EPA's National Ambient Air Quality Standards (NAAQS) and subsequent changes to those standards—Section 111(d) directs EPA to establish state plan "procedures." EPA promulgated these procedures in 1975 and codified them at 40 C.F.R. Part 60, Subpart B. In the CPP, EPA established "emission guidelines for states to follow in developing plans to reduce" GHGs from existing fossil-fuel-fired power plants. Specifically, the CPP set national performance standards for CO 2 emissions from existing fossil-fuel-fired power plants. One national performance 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 BSER. The agency determined BSER based 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. The CPP rule also set individual state targets for average emissions from existing power plants based on the CO 2 performance standards.