Power Plant Performance Standards and Tax Credit Interactions: Impacts of Design Decisions and the Inflation Reduction Act on the U. S. Power Sector

The U.S. Environmental Protection Agency is drafting new and existing source performance standards for the U.S. power sector under Sections 111(b) and (d) of the Clean Air Act, respectively. This analysis uses EPRI’s US-REGEN model to assess the potential implications of these rules for power sector investment decisions, operations, emissions, and costs. This modeling indicates that performance standard design decisions—especially their flexibility/trading provisions, form, and stringency—can materially alter electric sector outcomes.