News & Publications

Rail Law Alert No. 16

Potential Impact on the Public Transportation Sector of EPA's Clean Power Plan Proposed Rule to Reduce U.S. Power Plant Carbon Emissions by 2030

On June 2, 2014, the Environmental Protection Agency (EPA) announced the highly anticipated “Clean Power Plan Proposed Rule” to regulate greenhouse gas emissions for existing fossil fuel-fired power plants (the Proposed Rule). While the Proposed Rule does not directly touch upon public transportation, it would likely create issues and opportunities for public transportation providers as the electricity market changes.

The Proposed Rule seeks to achieve a nationwide 30 percent reduction in carbon dioxide emissions from existing fossil fuel-fired power plants by 2030, based on 2005 emission levels. Under the Proposed Rule, each state would be responsible for developing its own plan to reach state-specific goals set by EPA. If implemented as a final rule, the Proposed Rule will have far-reaching effects across the U.S. economy and environment, including stimulating demand for additional renewable energy supply and energy efficiency efforts.

Transit systems that are dependent on electricity-powered transportation, such as commuter systems operating on Amtrak’s Northeast Corridor, as well as most light rail and streetcar, and of course electric on-road vehicles, should consider the effect of their states’ plans on long term electricity rates, as they may impact cost estimates for current and future planned operations.

The need for states and utility companies to reduce emissions could also result in increased opportunities, and perhaps subsidies, for transportation agencies to invest in or implement energy efficiency measures. The Proposed Rule might also lead to incentives for developing zero-emission energy sources, such as solar and wind, at transportation facilities and on other publicly owned property.