Carbon Emissions

Cap-and-trade to get fresh look with EPA power plant rule

An upcoming Environmental Protection Agency rule cutting greenhouse gas emissions from existing power plants could spawn more regional cap-and-trade programs and greater electricity collaboration, according to industry experts.

The EPA rule, which is expected to be announced June 2 and is the cornerstone of President Obama's climate change strategy, likely will preserve ways for states to band together to reach emissions cuts sought by the agency, insiders have said about the closely guarded proposal. Interest in joint measures could be high because of the broad scope the EPA is leaning toward for implementing the rule.

"There's early conversations among states that regional pooling of their resources would be desirable because of the interconnectedness of their grids," Tim Profeta, director of the Nicholas Institute for Environmental Policy Solutions at Duke University, said on a conference call with reporters.

That's because the EPA is looking at using an "outside the fenceline" tactic for imposing the rule. That means it would regulate the power sector across the entire spread of the electric grid -- from the coal-fired generators to the transmission lines to the distribution utilities that send electricity to customers -- rather than at individual smokestacks.

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