HKS Faculty Research Working Paper Series
HKS Working Paper No. RWP15-059
October 2015
Abstract
The Environmental Protection Agency issued a final rule that defines a broad and complicated
set of standards for controlling carbon dioxide (CO2) emissions from affected electricity
generating units. (Environmental Protection Agency, 2015b) The proposed national average
reduction by 2030 is 32% from the 2005 level of emissions, about half of which has already
occurred. (Environmental Protection Agency, 2015j) The rules for new power plants are
relatively straightforward and imply little more than reinforcing the current economic choice of
natural gas over coal fired generation, given current projections for the price of natural gas. The
Clean Power Plan rules for existing power plants arise under a different section of the Clean Air
Act and present a more complicated picture. The result has implications for the nature and
degree of future limitations on carbon dioxide emissions from the electricity sector. In addition,
some versions of the possible implementation plans could have material implications for the
operations of Regional Transmission Organizations under the regulations of the Federal Energy
Regulatory Commission. The purpose here is to highlight some of the possible directions for
relevant policies of electricity system operators.
Citation
Hogan, William W. "Electricity Markets and the Clean Power Plan." HKS Faculty Research Working Paper Series RWP15-059, October 2015.