Publication
CFPB's non-sufficient funds and overdraft fees proposals
The CFPB recently proposed two rules that would restrict the imposition of non-sufficient funds fees and overdraft fees.
Publication | August 2015
On August 3, 2015, the U.S. Environmental Protection Agency ("EPA") issued its final Clean Power Plan, which establishes historic new standards and emission guidelines intended to reduce carbon pollution from power plants.1 The EPA adopted the Final Rule after considering input received through outreach to the power industry and its regulators, as well as over four million public comments submitted to the agency. The Final Rule includes several important changes from the proposed rule issued last year, including a new "reliability safety valve" and extended compliance periods.2 Notwithstanding the revisions, this Final Rule presents sweeping new clean power requirements for the energy industry and establishes the first-ever carbon emissions ceiling for power plants. The Final Rule, which becomes effective 60 days after its publication in the Federal Register, will impact power market participants across the generation base, and will present significant compliance challenges as well as market opportunities should it ultimately survive expected legal challenges and come into force.
Specifically, the Clean Power Plan sets standards to reduce carbon dioxide ("CO2") emissions by 32 percent from 2005 levels by 2030. These cuts represent a further 9 percent reduction to those announced in the Proposed Rule. The Final Rule proposes interim and final target rates of CO2 emissions for each state. Progress towards meeting the target rates can be measured as rate-based (in pounds per megawatt hour), mass-based (in total short tons of CO2), or mass-based state goals with new source complement measured in total short tons of CO2.
The CO2 emissions target assumes how much a state could reduce emissions using three carbon-reducing measures, or building blocks, which the EPA has identified as the "best system of emission reduction" ("BSER") under Section 111(d) of the Clean Air Act. The building blocks are:
The EPA eliminated from the Final Rule a potential fourth building block, increased demand‐side energy efficiency.
The Final Rule's BSER analysis builds on current investments in renewable technologies, including a greater reliance on new renewable energy than in the Proposed Rule, and takes into account recent reductions in the cost of clean energy technology. The BSER analysis also indicates that assumed continued cost reductions for renewable energy and shifting generation away from coal may impact wholesale market prices. Specifically, the EPA's analysis indicates that shifting more generation from coal to natural gas would put upward pressure on power prices but that replacing some existing generators with renewables would yield lower prices because of lower variable costs.
The Clean Power Plan includes guidelines for the states' development, submittal, and implementation of plans to reduce emissions. Each state is required to develop and implement a plan to ensure that the power plants in that state – either individually, collectively, and possibly in combination with other measures – achieve both the interim CO2 emissions performance rates over the period of 2022 to 2029, and final CO2 emission performance rates, rate-based goals or mass-based goals by 2030. States may choose between two plan types to meet their goals: (1) an emission standards plan, which includes source-specific requirements for all affected power plants within the state, or (2) a state measures plan, which includes a mixture of measures implemented by the state, such as renewable energy standards and programs to improve residential energy efficiency, that must result in affected power plants meeting the state's mass-based goal.
Coordination with several areas of federal and state government will be required to fully implement the Clean Power Plan. The following implementation elements are of particular interest:
The Clean Power Plan is anticipated to affect all major areas of the generation base:
Along with the Final Rule, the EPA concurrently proposed a federal plan to implement the requirements of the Clean Power Plan in states that fail to submit an approvable state plan.4 The proposed FIP ultimately relies on a carbon credit marketplace, setting forth two distinct trading programs – mass-based or rate-based – of which the EPA plans to finalize only one. The FIP is intended to be adopted by states that do not have their own approvable plan, and provides model rules from which states can develop presumptively approvable state plans, that also can be linked with other similar state plans and any federal plan for trading purposes. The EPA expects to complete the FIP next year after receiving feedback from states and other parties. The EPA will accept comments on the proposed FIP for 90 days following its publication in the Federal Register.
States and affected industry participants will inevitably mount legal challenges to the Final Rule. Among other legal theories, they may claim that Congress never provided the EPA the authority under the Clean Air Act to encourage emission-control methods that lie outside the "fenceline" of a power plant, such as changing the dispatch of natural gas and increased renewable energy use. The U.S. Court of Appeals for the District of Columbia Circuit ruled on June 9, 2015 that a group of private corporations and state governments could not challenge the regulation before the EPA released the final version of the Clean Power Plan.5
The Clean Power Plan will ultimately strengthen a fast-growing trend toward lower-emitting energy. In the days and years ahead, the Clean Power Plan will loom large, as states subject to the Final Rule decide on steps towards complying (or not complying), and resulting shifts begin to manifest across the power sector.
1 Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (issued Aug. 3, 2015, Federal Register cite pending) ("Final Rule" or "Clean Power Plan").
2 Notice of Proposed Rulemaking, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 34830 (June 18, 2014) ("Proposed Rule").
3 EPA-DOE-FERC Coordination on Implementation of the Clean Power Plan (Aug. 3, 2015), https://www.ferc.gov/media/headlines/2015/CPP-EPA-DOE-FERC.pdf.
4 Notice of Proposed Rulemaking, Federal Plan Requirements for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations (issued Aug. 3, 2015, Federal Register cite pending) ("Federal Implementation Plan" or "FIP").
5 In re: Murray Energy Corp., D.C. Cir., Nos. 14-1112, 11-1451 (June 9, 2015).
Publication
The CFPB recently proposed two rules that would restrict the imposition of non-sufficient funds fees and overdraft fees.
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