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- CPP repealed: As expected, the Administrator of the US Environmental Protection Agency (EPA), Mr. Scott Pruitt, repealed the Obama-era CPP regulation aimed at forcing generators to reduce CO2 emissions by 32% from 2005 levels by 2030
- CPP was like forcing car manufacturers to pay Tesla: The only way to achieve the CPP objective would have been for coal-fired generators to buy Renewable Energy Credits (REC) to offset CO2 emissions from its own plants, which is tantamount to subsidizing competitors’ generation
- This would be equivalent to car manufacturers paying Tesla $X/car for every non-electric car that they sell to the consumers
- EPA asks the industry for help in writing new regulations but what could be recommended? This was not expected. Regardless, we would expect that any proposed recommendations would involve inside-the-fence solutions
- Conclusion: We are not surprised at the repeal of CPP; however, we are somewhat puzzled by the EPA’s request of the power industry to help it write new regulations regarding CO2.