This morning, President Obama and the EPA unveiled the Clean Power Plan. When fully implemented, this comprehensive plan will revolutionize our energy system, improve public health, and mitigate the severe impacts of climate change. To clear up any confusion, this article will present everything you need to know about the plan, compiled from the official website. But first, here is an introduction from President Obama:

What are the goals?

The major goal of this plan is to cut carbon emissions in power plants throughout the country, while encouraging investments in renewable energy and energy efficiency. Not only will this help stem the effects of climate change, but also protect public health in the United States. According to the EPA, once fully implemented, the Clean Power Plan will help prevent 3,600 premature deaths, 1,700 heart attacks, 90,000 asthma attacks, and 300,000 missed work and school days, which is equivalent to between 13 and 34 billion dollars in health benefits. To break this down further, for every dollar invested, American families can expect to see up to $4 in health benefits. While each state will have their own set of goals, there are also nationwide goals which must be reached by 2030:
  • Sulfur dioxide emissions will be 90% below 2005 levels.
  • Nitrogen oxide emissions will be 72% below 2005 levels.
  • Carbon emissions cut by 870 million tons, 32% below 2005 level and equivalent to more 166 million cars.

How does the plan work?

Rather than the federal government imposing a comprehensive plan from above, states will develop and implement their own specific path to meet the goals proposed by the EPA. States will have to reach the interim carbon dioxide (CO2) performance rates between 2022 and 2029, and the final goal by 2030. Each interim and final goal is split into two subcategories:
  • Fossil fuel-fired electric steam generating units (e.g. coal and oil)
  • Natural gas-fired combined cycle generating units.
To increase flexibility, the EPA established three ways for states to reach their targets:
  • A rate-based state goal measured in pounds per megawatt hour.
  • A mass-based state goal measured in total short tons of CO2
  • A mass-based state goal with a new source complement measured in short tons of CO2.
If state governments have issues reaching their coal, oil, and natural gas plant emission goals, they can construct a state measures plan, which will take many other factors into account such as renewable energy standards and programs to improve residential energy efficiency, as long as one of the state's mass-based goals is reached. Another cost-effective option for states is emissions trading, which is a program where states can trade emission rate credits. This approach is useful for reducing the cost of compliance, creating incentives for early reductions and further emissions reductions, promote innovation, and increase flexibility. States must submit their initial plans on September 6th, 2016, and their final plans two years after. States will then have 15 years to fully implement the measures, which include planning and demonstration phases, and can also include multi-year "step down" goals, to provide maximum flexibility in approaching their final targets.

Why do we need this plan?

Power plants currently produce one-third of all domestic greenhouse gas emissions, the largest source in the United States. While the transition to renewable energy is already improving health and decreasing emissions, the Clean Power Plan will accelerate the process. The plan will also help cut asthma attacks, hospitalizations, and a variety of other diseases as outlined above. Organizations like the American Lung Association, the American Public Health Association, and the American Academy of Pediatrics have already applauded the plan. Beyond these direct health impacts, the temperatures are rising around the world. The ten warmest years on record have occurred since 1998. Unstable weather patterns are bringing extreme storms which have a high price tag and have destroyed communities throughout the country. According to the climate change section of the White House website, the damage from these storms since 2012 alone have been more than $100 billion. The Clean Power Plan is needed to mitigate these effects.

Will this plan effect the reliability of our electric grid?

The EPA has considered reliability very carefully while reviewing the plan, and were sure to include an extended compliance period and phased-in reduction period, so that utilities and state governments wouldn't have to cut corners with a rushed plan. As outlined above, there are many different approaches for reaching the goals so each state can choose the path which is most effective for their energy system. Each plan must take reliability issues into account, and also include mechanisms for if there are unanticipated issues in implementing the plan, or other emergencies which prevent full compliance.

How will the plan promote renewable energy?

The plan includes a Clean Energy Incentive Program, which will promote early investments in wind and solar power, as well as demand-side energy efficiency programs in low-income communities. States which achieve these results by 2021 will have their funds matched with Emission Rate Credits (ERCs) equivalent to 300 million short tons of CO2 emissions. Wind or solar projects will receive 1 credit for each MWh of generation, and demand-side Energy Efficiency projects will receive 2 credits for each MWh of avoided generation. While this program isn't mandatory, the benefits for state participation are clear and will help continue the expansion of zero-emission electricity sources across the United States.

Will my electric bills go up?

Conservative politicians frequently use the argument that investing in renewable energy and distributed energy generation, while cutting back on dirty fossil fuels will increase our electricity costs. According to EPA estimates, by 2030, consumers will save about $7 per month on their electric bill. A recent study from researchers at the Georgia Institute of Technology have confirmed that reducing greenhouse gas emissions from power plants can be cost-efficient. The price of renewable energy is decreasing rapidly, and as solar and wind panels reach economies of scale, our electric costs will decrease. Not only will we save money on our bills but the study suggests that the push for energy efficiency will actually spark economic growth, increasing our national GDP. These findings are also proven in a separate study by energy research firm, Synapse Energy Economics. According to their analysis, our monthly bills would actually be $35 per month lower by 2030 if the Clean Power Plan is fully implemented.