This month, the Environmental Protection Agency (EPA) did some spring cleaning and took steps toward 31 significant deregulatory actions. Utilities and American electricity consumers will benefit from averted blackouts and billions of dollars of savings because the EPA is reconsidering unworkable greenhouse gas emissions (GHG) standards on power plants.
The Clean Power Plan 2.0, which was finalized in May 2024, requires coal-fired and new natural gas-fired power plants operating past 2039 to capture 90% of their carbon emissions by 2032 or shut down. Constructing new natural gas plants wouldn’t be viable under the rule—if left intact. The Biden EPA claimed that massive emissions reductions were possible and cost-reasonable with carbon capture technology in seven short years.
The legality of the rule is in question. The original Clean Power Plan, an Obama-era regulation, was struck down in the 2022 Supreme Court opinion in West Virginia v. EPA. The justices concluded that the EPA did not have “clear congressional authorization” to answer “major questions” such as the composition of fuel sources of the U.S. power grid. While the U.S. Supreme Court declined to pause the Clean Power Plan 2.0 in late 2024, the justices did acknowledge that “the applicants have shown a strong likelihood of success on the merits” in court.
Dispatchable power plants and steady baseload power like natural gas, coal, and nuclear are the backbone of the U.S. electric grid—accounting for 78% of current U.S. electricity generation. But retirements of these reliable assets are accelerating. The U.S. Energy Information Agency reports that generators plan to retire 65% more capacity in 2025 than in 2024—almost all coal and natural gas. In December 2024, the North American Electric Reliability Corporation warned that the grid operator serving much of the Midwest is at a high risk of generation shortfalls in normal peak conditions beginning in 2025. The culprit? Accelerating coal and natural gas plant retirements coinciding with rising electricity demand.
EPA Administrator Lee Zeldin recommitted in a Wall Street Journal op-ed to “continue to protect human health and the environment while unleashing America’s full potential.” It’s hard to imagine how the Biden EPA’s emissions rule—which would have caused devastating blackouts and incurred billions of dollars of costs, according to Always On Energy Research—could have adequately protected human health in a cold winter. It takes only a reminder of Winter Storm Uri, which claimed the lives of 247 Texans in February 2021, to understand the importance of reliable power.
Coal-heavy regions like the Midwest stood to suffer most from bad policies like the Clean Power Plan 2.0, and it’s a good thing that utilities will soon be allowed to keep reliable coal generation on the table. However, the process of reconsidering, new rulemaking, and inevitable litigation could take years. The grid isn’t out of the woods yet.