Fitch Ratings, a Securities and Exchange Commission-designated statistical ranking organization, released its findings on the Environmental Protection Agency’s (EPA) final Clean Power Plan on Tuesday.
The group said the new mandates will be a challenge for the power sector, but that the plan appears to be less onerous than the 2014 draft.
The EPA’s final regulations actually increase the carbon-emissions reduction percentage, from 30 percent of 2005 levels by 2030 to 32 percent, but it has made it easier for states to reach that reduction. Specifically, they now have more time to submit their plans – until 2018 – and the start of compliance measurements has been delayed by two years, until 2020.
Additionally, the EPA refined its four building blocks that states are meant to use to cut carbon emissions, removing energy efficiency and putting less emphasis on an early switch from coal to gas, among other measures. The plan also incorporates industry comments on reliability concerns, with updates from the proposal requiring states to assess their reliability impact as part of their implementation plans. It also allows states to revise their plans if issues arise and creates a “reliability safety valve,” wherein critical plants can remain online.
While the plan makes for easier implementation than the original draft, it still will require significant investment in power infrastructure and transmission networks, Fitch Ratings said.
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