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While utilities and utility commissions across the country grapple with how to comply with more stringent federal air emission regulations, North Carolina coal-fired power plants have already invested in pollution controls that will ease compliance and could save consumers millions, thanks to a 2002 state law to improve air quality. North Carolina’s experience suggests that other states might discover advantages to moving ahead of proposed and foreseeable federal regulations, especially when these efforts can simultaneously address noncompliance with existing federal regulations and state environmental goals.

With the Clean Smokestacks Act, North Carolina required the state’s investor-owned utilities, Duke Energy and Progress Energy, to reduce coal-plant sulfur dioxide (SO ₂) and nitrogen oxide (NO _x) emissions approximately 70 percent by 2013. Clean Smokestacks set an 11-year compliance schedule, allowed Duke and Progress to decide how to reduce emissions, and provided for recovery of compliance costs. The significant drop in SO ₂ and other emissions has created between $6 and $16 billion in health benefits for North Carolina residents and helped the state’s two fine-particulate nonattainment areas and six of seven eight-hour-ozone nonattainment areas achieve the national ambient air quality standards. As a co-benefit of new SO ₂ and NO _x controls, mercury emissions from coal-fired power plants dropped 63 percent between 2002 and 2009.

The now-merged utilities’ plants in North Carolina are well positioned to comply with the Mercury and Air Toxics Standards (MATS) and the Clean Air Interstate Rule (CAIR) as a result of investments to comply with Clean Smokestacks, including the more stringent CAIR budgets effective in 2015. When the U.S. Court of Appeals for the D.C. Circuit rejected the Cross State Air Pollution Rule (CSAPR), it left CAIR in place until EPA replaces CSAPR. North Carolina electricity sector emissions in 2010—less emissions from units scheduled to retire—are below the prior 2014 CSAPR caps and CAIR 2015 caps (though this doesn’t factor in emissions from new and existing generation units, which will have to operate at higher capacity to replace generation from retiring units). EPA modeling of the MATS rule similarly projects that all Duke and Progress coal units in North Carolina can comply with the acid gas emissions standard using currently installed control technologies.

Seeking Certainty

In its ruling on CSAPR, the D.C. Circuit directed EPA to develop a new rule to address interstate air pollution as expeditiously as possible. While the D.C Circuit has found EPA’s previous attempts to regulate in these areas to be flawed—including the CAIR, CSAPR and Clean Air Mercury Rule—the court has also affirmed the agency’s mandate to establish rules governing interstate transport of air pollution and hazardous emissions from power plants.

Frequent litigation over new EPA rules contributes to complexity, but also provides space for states to move ahead on matters that coincide with state public health or environmental