Arguments for and against the Clean Power Plan



What’s the EPA saying?

The CPP (Clean Power Plan) is the first major nationwide initiative proposed by the EPA (U.S. Environmental Protection Agency) as a step towards a cleaner environment. The EPA accepts that the move towards renewables is already happening. It said that the CPP will accelerate the move and help achieve the 32% emission reduction target by 2030—compared to the levels in 2005. It projects climate benefits of $20 billion and health benefits of $14–$34 billion from the CPP. The EPA also said that the plan will help avoid 3,600 premature deaths, 1,700 heart attacks, and 90,000 asthma attacks due to reduced pollution.

It sounds like good news for solar (TAN) power companies like FirstSolar (FSLR) SunPower (SPWR), and SunEdison (SUNE). Well, let’s see what the opponents of the CPP have to say.

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Arguments against the CPP

Various stakeholders including politicians, coal miners (KOL), and utilities (XLU) have conveyed displeasure in regards to the CPP.

First, some believe that the move to renewables and away from coal will drive the electricity prices higher. Renewable power plants cost more to build than coal-based plants. Regulated utilities get a certain percentage, typically 10.50%, of return on equity embedded in the tariff. In short, if they build new renewable plants, the tariffs could increase.

Some states are also complaining about tight deadlines for submission and the implementation of the plan. We’ll look at the key challenges before the CPP in the next part of the series.


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