Dive Brief:

• The Environmental Protection Agency will extend the timeline for states to implement its proposed Clean Power Plan by two years, the New York Times reports, giving states until 2022 to begin showing compliance with emissions reductions plans. 
• States will also be given longer than planned in the original draft regulation to design their compliance plans and submit them to the EPA for approval, unnamed agency sources told the Times. The proposed regulations would have required states to submit plans by 2016, with an option for a year extension. The plans would now be due in 2018.
• The EPA will reportedly include incentives in the final plan for states that file compliance plans and show action on them sooner, but no details were released on other contentious issues, such as how the final plan will account for nuclear generation, energy efficiency, or if it will include a mechanism to ensure electric reliability.
• The final plan will be released Aug. 3, 2015, according to an EPA timeline obtained by EnergyWire that was posted to an EPA website.

Dive Insight:

An extended compliance timeline was the top request from power sector stakeholders and state regulators when they filed their comments on the Clean Power Plan last year, and it remained the number one priority in the frantic final days of lobbying on the regulations, EnergyWire reported earlier this week.

Many states and utilities, especially those most reliant on coal, told the agency that the 2020 deadline, by which they would have tobegin showing meaningful emissions reductions, is unworkable and could cause significant reliability issues. 

The EPA appears to have taken those warnings seriously, as unnamed sources tell the New York Times and EnergyWire that the agency's final plan will extend the timeline, allowing states until Sept. 6, 2018 to submit final compliance plans:

What remains unclear is how the agency will handle a slew of other contentious regulatory issues in its final version of the rule, which aims to cut carbon emissions from the power sector 30% below 2005 levels by 2030. 

In addition to an extended compliance deadline, many coal-heavy states and utilities asked the EPA to include options to safeguard reliability, commonly dubbed a "reliability safety valve."

Proposals to ensure reliability have ranged from calls for a nationwide price on carbon — supported by Exelon, the nation's largest nuclear generator — to a regulatory loophole that would exempt states from pollution caps when reliability is threatened by very high electric demand or extreme weather events.

Also still up in the air is how the agency will account for new nuclear generation, renewables, and energy efficiency. States and utilties with new nuclear plants on the books have argued that the draft proposal, which included in-construction nuclear plants as a part of a state's baseline emissions, should have regarded them as new sources and counted the planned zero-carbon plants toward emissions goals. Other stakeholders took issue with the way EPA accounted for renewable generation that is transported across state lines.

Though the extended compliance timeframe may placate some of the Clean Power Plan's critics in the electricity sector, industry observers don't expect it to put an end to the legal and political wrangling surrounding the regulatory package. Earlier this week a 14-state coalition appealed to the D.C. Circuit Court to have the rule overturned, and a handful of states — Oklahoma, Kentucky, Wisconsin, Texas and Mississippi among them — have hinted they may not file compliance plans with the EPA.

The final rule will reportedly be released next week, on Aug. 3. Legal observers expect the Supreme Court to have the final say on the plan's legality, but that case could be years in the future.