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California Sees Vindication, Opportunities from EPA Rules

As strong advocates for government-backed climate change mitigation efforts, California officials are viewing the U.S. Environmental Protection Agency’s (EPA) power plant emission rules as the state's shining moment with a chance to gain momentum for its now eight-year implementation of comprehensive climate change programs, including a cap-and-trade system that could benefit from the federal EPA rules.

While holding general positive reactions to the Obama administration's latest climate change push, California will continue to comment on and review the EPA rules as they go through the public comment phase, led by the California Air Resources Board and the state's two major energy regulators, the California Public Utilities Commission and the California Energy Commission (CEC).

Robert Weisenmiller, a veteran energy policy stakeholder in the state and the current CEC chairman, told NGI in an interview Tuesday that his state's concerns about the federal rules setting back California's aggressive programs have been alleviated by the flexibility EPA appears to be providing in implementing the new rules. In addition, he hopes the EPA endorsement of cap-and-trade as one of the mitigation tools will lead to other states joining California's two-year-old cap-trade program (see Daily GPI, May 30).

"To address climate change you have to address greenhouse gas [GHG] reductions, and California has been a poster child for the rest of the nation in many respects for decades for what you can do with energy efficiency, renewables and good energy policy," said Weisenmiller. He now thinks that the federal program will complement California's progress to date.

Based on his early reading of the EPA rules, the federal government is giving adequate flexibility to use many of the same tools California is already using, such as cap-and-trade, said Weisenmiller. "So, if anything, we are seeing an amplification of what we are doing," he said.

Other states wanting to use cap-and-trade can set up their own programs or join California's existing effort, Weisenmiller said. "We would like to think that at least some of the states will connect with the California program."

More states joining the California cap-and-trade program would give the effort more liquidity, which Weisenmiller said should help lower the costs of the overall program. "That could be a real win for everybody," he said.

Weisenmiller said the proposed EPA rules are a "clever way" of driving down GHG emissions while not imposing too much command-and-control, inflexible regulations. The rules recognize there is a wide spectrum for where various states are in addressing climate change.

"This allows different states to catch up without having a severe impact on any one state or set of states," Weisenmiller said.

He noted that on a national basis the EPA rules advocate co-firing or switching to natural gas-fired generation, which has limited impact in California, but a much broader impact nationally. "There has already been a shift from coal to gas in other parts of the country, and presumably this will accelerate that shift," he said.

Weisenmiller views the approach EPA is taking as adopting the state implementation plan approach that has traditionally been used in federal air quality regulation.

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