The EPA’s proposal to regulate power plants through carbon emission caps has caused speculation that more states will join the Regional Greenhouse Gas Initiative (RGGI) as a means of complying with the new regulations. The RGGI uses a cap-and-trade program to regulate carbon emissions in its member states.

Several factors make the RGGI an attractive solution to some states. Joining the RGGI would allow states to plug into an existing compliance system rather than creating one from scratch. It would also give states an additional two years to comply with the proposed EPA rule, and the program has the potential to generate funding for green energy programs that could economically benefit the state.  However, the RGGI faces serious challenges to adoption in many states. Politically, cap-and-trade proposals are not viable in states with Republican governors or Republican-controlled legislatures. Further, critics claim that the addition of larger states to the RGGI would cause electricity prices to spike for member states, and that states should investigate cheaper options of complying with the EPA’s proposed rule.

For more information regarding the regulation of power plants, contact Phillip Hoover or Andrew Bauer.