The Environmental Protection Agency will receive public input on the long-awaited carbon emission rules for the nation’s power sector, set to cut annual compliance costs by an estimated $400 million compared to the more stringent Obama-era restrictions it replaces. The agency’s “Affordable Clean Energy Rule” gives states the discretion to choose from a list of “candidate technologies” to improve efficiency at coal-fired generators and set performance standards for individual facilities, in a break from the previous standards that called for deeper cuts that went beyond plant upgrades. A number of states have vowed to challenge the EPA’s weaker regulation. (EPA-HQ-OAR-2017-0355)

The Federal Energy Regulatory Commission will discuss an agreement allowing Exelon Corp.’s Mystic 8 and 9 natural gas-fired generating units to collect cost-of-service payments to stay in operation. Following Exelon’s bids to retire the money-losing plant in 2022, ISO New England Inc. asked the commission for waivers to maintain the units, arguing that the loss of the 1,700 megawatts of capacity and closure of the accompanying Distrigas liquefied natural gas terminal would lead to “unacceptable fuel security risks”. FERC denied the grid operator’s request in July and ordered it to file permanent revisions to address regional fuel security needs by July 2019. The New England Power Generators Association estimated that out-of-market support for the generator could displace up to about 1,300 megawatts of otherwise economic resources and suppress prices by up to $642 million in the grid’s next auction. (ER18-1639)

The Federal Energy Regulatory Commission is scheduled to receive comments on PJM Interconnection LLC’s sweeping changes to rules governing its capacity market. FERC rejected the grid operator’s plans to shore up its annual capacity auction, which regulators see as under threat from a growing influx of subsidized generation. The commission proposed another approach in late June under which PJM would expand its minimum offer price rule to all sponsored resources regardless of resource type and also establish an alternative mechanism, allowing subsidized generators to be removed from the capacity auction. The commission expects to issue a final ruling by early January 2019. (ER18-2222)

A federal appeals court is scheduled to hold oral arguments in a challenge against the U.S. Environmental Protection Agency’s Cross-State Air Pollution Rule in compliance with air quality standards for sulfur dioxide, a harmful pollutant emitted from coal-fired power plants and factories. The agency has begun to rely more on modeling instead of monitoring to gauge air quality, a trend which has given rise to disputes over which areas are in attainment of the federal limits, known as national ambient air quality standards. Areas failing to meet the standards face strict limits on economic development. The case is State of Wisconsin v. U.S. EPA (16-1406).

A federal appeals court will consider a dispute arising over the U.S. Environmental Protection Agency’s final Renewable Fuel Standards for 2017 and Biomass-Based Diesel Volume for 2018. The regulator is being challenged by Coffeyville Resources Refining & Marketing LLC and Wynnewood Refining Company LLC, companies that operate refineries in Kansas and Oklahoma and which are forced to comply with the standard. The program, established in 2007, directs the agency to set annually increasing blending mandates for renewable fuel use in the transportation sector to reach 36 billion gallons by 2022. Both companies are subsidiaries of CVR Energy Inc. The case is Coffeyville Resources Refining & Marketing, LLC v. EPA (17-1044).