Overview

  • The EPA's Clean Power Plan will require Texas to achieve mass reductions of 4% by 2022 and 18% by 2030 from covered units compared to 2012
  • Raises many policy questions on how Texas can best meet that challenge:
    • State-mandated (i.e. non-market) efficiency and renewables?
    • Rate-based or mass-based?
    • Interstate trading?
    • Harvest renewable potential for export?
    • How to allocate CO2 allowances under mass-based?
  • Each option has pros and cons, with very different implications for reliability, economic efficiency, customer costs, and asset values
  • Texas may need to design its own implementation approach to maintain consistency with efficient dispatch within the energy-only market and avoid "leakage" 

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