Affordable Clean Energy Rule Primer

Affordable Clean Energy Rule Primer


On June 19, 2019, Environmental Protection Agency (EPA) Administrator Wheeler signed the final version of
the Affordable Clean Energy rule, the Trump Administration’s repeal and replacement of the Obama-era Clean Power Plan. The rule establishes guidelines for states to develop carbon emissions reductions standards for existing coal-fired power plants.

What is the Affordable Clean Energy rule?

The Affordable Clean Energy rule (ACE) is a rule implemented by the Environmental Protection Agency that establishes guidelines for states to develop plans to reduce carbon emissions from existing coal-fired power plants under Section 111(d) of the Clean Air Act. The rule identifies on-site “Heat Rate Improvement” as the “best system of emission reduction” for reducing carbon emissions at roughly 600 coal plants located at approximately 300 facilities across thecountry.

The rule also identifies candidate technologies that states can choose from when developing plans. States will have three years to develop plans that set performance standards for existing coal-fired power plants and the associated emissions reduction targets. In the event that a state fails to develop a sufficient plan, EPA would have two years to develop a federal plan to set performance standards for that state.

How is the Affordable Clean Energy Rule different than the Clean Power Plan (CPP)?

While there are extensive differences between the two rules, at the highest level, ACE and CPP discrepancies fall under four major categories; these include the level of authority given to states, ambition of carbon emissions reductions, scope, and timing.

1. Federal vs State Authority:

The CPP established carbon reductions targets for states and allowed them to develop their own plans to achieve those targets. The ACE rule provides states the authority to set their own standards for coal-fired plants citing the flexibility this enables to set standards down to the unit level.

2. CO2 Emission Reduction Targets:

When finalized in 2015, the CPP aimed to achieve a 32% reduction in national power sector CO2 emissions by
2030. Updated projections from EPA in the new rule eliminated CPP emissions projections. The proposed rule included projections that showed the CPP would have achieved 35% reductions relative to a 2005 baseline by 2030 and implementation of ACE will result in a 34% drop in emissions. One reason the ACE would have such a modest impact is a result of progress in power sector CO2 emissions since the CPP was finalized in 2015; the U.S. has already achieved 87.5% of the emissions reductions required under the Clean Power Plan, (with a reduction of 28% in 2017 over 2005 levels), according to data from the 2019 Sustainable Energy in America Factbook.

3. Scope of BSER:

The CPP established carbon emissions reduction targets in the electricity sector through the implementation of three building blocks: (1) efficiency improvements at coal plants, (2) fuel switching from coal to natural gas, and (3) swapping higher emitting coal generation for zero-emitting generation like solar and wind. Thus, the CPP allowed both onsite (or “inside-the-fence”) measures as well as offsite (“outside-the-fence”) generation-shifting measures to be used in achieving emissions reductions.

The EPA has determined that these “outside-the-fence” measures are beyond its authority under the Clean Air Act, so the ACE focuses only on the first building block: efficiency improvements at coal plants.

4. Timing:

The ACE rule increases the length of the implementation timeline at each stage of implementation:

  • States have 3 years to submit plans from July 8, 2019 (for CPP, this period was 9 months)
  • EPA has 12 months to take action on state plans once submitted (for CPP, 4 months)
  • EPA has 2 years to develop a federal plan after disapproval of a state plan, EPA would then implement the federal plan (for CPP, 6 months)
    In total the length of time for developing state plans after the rule is finalized increases from 13-18 months under CPP to 4-6 years under the ACE rule. See the EPA’s comparison of the two rules for more information.


    The ACE Rule is expected to be challenged in court, which may or may not impact implementation of the rule.

    How is the final ACE rule different than the proposed rule released in 2018?

    The proposed rule amended the New Source Review air permitting program. The previous version would have allowed power companies seeking to renovate an existing power plant to use an hourly-based accounting method rather than an annual one for determining emissions impacts. This accounting shift could have led to fewer regulatory thresholds being triggered when efficiency improvements were made. EPA has removed changes to the NSR program in the final ACE rule and has signaled it will publish plant-specific changes to the NSR over on a separate regulatory track.

    For a more detailed review of the Clean Power Plan, click here.


    Editor’s note: this article originally appeared on the Clean Energy Business Network


    The Clean Energy Business Network (CEBN) works to advance the clean energy economy through policy, public education, and business support for small- and medium-size energy companies. Started in 2009 by The Pew Charitable Trusts, the CEBN is now a small business division of the Business Council for Sustainable Energy. The CEBN represents 3,000+ business leaders across all 50 U.S. states working with a broad range of clean energy and transportation technologies.

    Andy Barnes is the Program Manager for the Clean Energy Business Network, providing support for overall operations and leading the CEBN’s communications outreach and events planning. Prior to taking on this role, Andy served as a Policy Associate at the Business Council for Sustainable Energy. Andy previously interned with the White House Council on Environmental Quality in the Office of Energy and Climate Change. He has also worked as a program fellow for the Solar Foundation and as a research assistant at David Gardiner and Associates, a sustainability consulting firm. Andy holds an M.S. in Environmental Science and M.P.A. degrees from the School of Public and Environmental Affairs at Indiana University and a B.A. in Psychology with a minor in Environmental Social Sciences from the University of Southern California.


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