Obama’s Power-Plant Rule Said to Include Boost for Renewables

(Bloomberg) — The Obama administration plans to offer new
incentives for solar and wind energy in its plan to cut power-plant emission as a way to counter delaying the initial deadline
by two years, a person familiar with the rule said.

The renewable incentives will allow deeper cuts in carbon
emissions in the long term while giving more flexibility to
states that must implement the rule, said the official who
sought anonymity before an official announcement.

As the White House prepares to announce the final rules
meant to combat climate change within the next few days, it’s
preparing arguments to show it will both boost the economy and
end up leaving consumers paying lower energy bills.

“There really is no overstating how big this year is for
climate change,” White House Chief of Staff Denis McDonough
said Wednesday at a Washington forum on the issue hosted by the
New Republic. “We will finalize a stronger rule.”

McDonough, who didn’t answer questions, spoke a day after
the Environmental Protection Agency posted a slide on its
website showing milestones to implement the standard. The one-page document, first disclosed by EnergyWire, showed the rule
taking effect in 2022, two years later than proposed last year.
Utilities and power producers have pushed for a longer phase in,
saying the 2020 initial deadline was unworkable.

‘Design Mockup’

The document, which has been removed from the EPA site,
said the rule would be released Aug. 3. That document doesn’t
mention the incentive discussed by the person familiar with the
plan, who asked not to be identified because the rule is under
review at the White House.

An EPA spokeswoman, Melissa Harrison, said the document was
a “Web design mockup” but declined to comment on the pending
release of the plan.

The first U.S. rules on carbon emissions from power plants
are among the most sweeping and complex in the EPA’s history,
and promise to upend a century of electricity generation and
distribution. They are the centerpiece of Obama’s fight to
combat climate change, the issue he’s made a top priority of his
final two years in the White House.

McDonough said the power-plant rule would help promote an
international agreement to cut greenhouse gas emissions later
this year. He said that deal should include measures to deliver
more stringent reductions over time.

Industry Foes

The EPA’s standards for fossil-fuel power plants, the top
source of the emissions blamed for global warming, has drawn
fire from coal producers, manufacturers, state officials and
Republicans, led by Senate Majority Leader Mitch McConnell of
Kentucky. He has urged governors to refuse to submit plans to
meet the goals set out by the EPA.

The EPA has said it would back off the initial deadline to
give utilities more time to shut aging coal plants and adjust
the power distribution network to handle more natural gas or
renewable resources. A specific extension to 2022 hadn’t been
announced.

Even with more time, however, the final rule also could
change in a way that would reward states for accelerating their
pursuit of solar or wind projects. Environmentalists said the
agency undercounted the likely rate of expansion of renewables
and the pace of steps to be energy efficient. New estimates of
solar costs, which show a drop as production costs fall, could
also prompt a bigger share of renewable growth, they say.

The EPA also is considering a plan to give credit to
renewable projects that start before the rule kicks in. Under
the proposal issued last year, states would have an incentive to
wait until 2020 to begin new solar or wind projects. Advanced
Energy
Economy, which represents companies such as Alstom S.A.
and FirstSolar Inc., said states should be allowed to bank the
credits for those early reductions for use later.

To contact the reporter on this story:
Mark Drajem in Washington at
mdrajem@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net
Steve Geimann

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