New Report: EPA's Clean Power Plan Can Positively Impact Regional Wholesale Power Markets with Coordinated State Planning

May 28, 2015

States that participate in organized wholesale power markets run by Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs) should coordinate their state planning efforts in conjunction with other states in the system to comply with proposed carbon emission regulations, according to a recent Analysis Group report. In "Carbon Control and Competitive Wholesale Markets: Compliance Paths for Efficient Market Outcomes," Senior Advisor Susan Tierney and Vice President Paul Hibbard highlight a number of issues and offer recommendations for states to address the US Environmental Protection Agency's (EPA) proposed Clean Power Plan, which seeks to reduce the US electric system's CO2 emissions by 30 percent from 2005 levels by 2030. The independent report, supported by funding from the Electric Power Supply Association, presents various intra- and inter-state compliance options and their implications.

Noting that the EPA offers flexibility in how states decide to meet the Clean Power Plan's goals, the authors "encourage states with electric generating units in organized wholesale power markets to coordinate the development of state plans so that they can elect to participate in a common, mass-based multi-state emissions-trading program" that covers both existing units and any new systems that enter the market in the future. "We hope that states will decide for themselves that this is the pathway toward a least-cost compliance strategy for CO2 emissions reductions and an efficient, reliable power system for the benefit of their consumers."

Read the report

Read the EPSA press release