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Thanks to the Supreme Court, it is a very difficult proposal to talk about.

The Environmental Protection Agency just shoved power plants towards the renewable energy transition. But don’t expect supporters to crow about it.
On Thursday, the EPA took the long-awaited step of proposing greenhouse gas limits for new and existing power plants. If finalized and implemented, the rules would vastly reduce carbon pollution from the power sector by 2040 and mark the first time ever that the nation’s electricity system is subject to federal climate restrictions.
But first the rules must survive the sharply conservative Supreme Court, which has blocked previous attempts at regulating power-plant pollution. And so environmentalists and Biden officials will be forced to walk a rhetorical and legal tightrope: In order to keep the all-important rules alive, they will have to describe them as not very significant at all. And even though the rules will likely increase renewables’ share of U.S. power generation, few green groups will brag about it.
Why? Because they are dancing around a major Supreme Court ruling, West Virginia v. EPA, that came out last year.
In the case, the Court struck down the Clean Power Plan, President Barack Obama’s 2015 attempt at regulating climate pollution from power plants. Obama’s plan treated each state’s power plants as a single system, then let each state choose how to cut carbon pollution from that system. States could shut down plants or create a carbon-trading scheme. They could even link multiple carbon markets together to establish a de facto national cap-and-trade market.
That went too far beyond the EPA’s authority under the Clean Air Act, the Court ruled. Although the Court said that the agency could, in theory, issue rules to cut greenhouse gases from the electricity sector, those rules had to keep “within the fenceline” of each power plant.
The EPA could no longer get fancy when it wanted to regulate climate pollution. It could only use blunter, command-and-control technological mandates to reduce carbon pollution from each type of power plant, the Court said. And any technologies that it required had to be both “cost-reasonable” and “adequately demonstrated,” that is, affordable and feasible to install at scale.
The EPA’s new proposal tries to hew within those guidelines. The agency has determined that the best available technology to reduce emissions directly from fossil-fuel-burning power plants is to install carbon-capture equipment. Carbon-capture-and-storage technology, or CCS, is now affordable and feasible, the agency asserts.
“There’s a 100% chance that this will be challenged in court,” Michael Gerrard, a Columbia Law professor and the director of the Sabin Center for Climate Change Law, told us. “The debate will largely be about if CCS is ‘adequately demonstrated.’”
At stake, too, is the question of whether the rules represent a Trojan horse — that although the proposal appears to comply with the Court’s guidelines, the expense and hassle of installing carbon-capture equipment is meant to force utilities to shift to renewables anyway.
That could in fact be the rules’ practical effect. (Some environmentalists will admit — although not on the record — that they like the rules for this reason.) States and utilities can achieve the new standards any way they want, and in many cases they will find that shutting down a power plant and replacing it with wind, solar, and batteries is cheaper than installing new carbon scrubbers. Even with the Inflation Reduction Act’s new subsidies, carbon capture could prove to be more expensive or complicated than other options. CCS requires a network of pipelines and wells to inject carbon underground; wind, solar, and batteries mostly require open land.
Power plant regulations by the EPA could add 17 to 170 gigawatts of solar and wind to the grid by 2035, compared to the growth that is expected from the Inflation Reduction Act alone, according to Ben King, an analyst at the Rhodium Group, an energy-research firm.
At the absolute high end, renewables would command 5% more market share in the United States than they would otherwise, he said. (These estimates were based on an analysis of a similar, though not identical, version of the EPA’s proposal.)
Any legal challenges will leave the EPA’s lawyers in a difficult position. The agency must show that carbon capture is viable and not cost-prohibitive; and make it clear that the regulations are flexible for states and utilities, giving them a number of ways to meet the standard; and downplay the fact that in many cases the cheapest way to comply will in fact be to transition to renewables and batteries.
The industry, ever-desperate to evade regulations, has already begun to insinuate that carbon capture technology is not yet commercially available — a shift in tone from its typical enthusiasm for the technology — and therefore cannot be the basis for any standard. As we previously reported, Southern Company, a utility that has championed CCS, told EPA that the technology was “many years away” from becoming a reality.
“The irony here is that for many years, the industry talked about clean coal, and clean coal meant coal with CCS. And they were claiming that it worked, that it was available. And now they’ve switched. They say that now, years later, after a lot of technological development and billions of dollars of research, it’s not available,” Gerrard told us.
Supporters argue that the EPA’s new regulations are backed by precedent. The agency has long mandated that coal plants install technology that “scrubs” sulfur-dioxide emissions out of their exhaust streams, Eric Gimon, a senior fellow at the think tank Energy Innovation, told us.
As those rules have started to bite, some companies found that it was cheaper simply to shut coal plants down than install the scrubbers. Two years ago, a power company called Amaren determined it made more sense to shut down its Rush Island coal plant in Missouri 15 years earlier than planned rather than pay for upgrades to comply with the standard.
“Was it illegal for the EPA to build a standard that way? No, it’s perfectly reasonable,” Gimon said. “It’s like, ‘We put in a standard. We know you can comply with this standard at a cost. It's not astronomical, but if you think you can do better by retiring the unit and doing something else, knock yourself out.’ That's how it’s worked.”
Whether the EPA’s rules are upheld or not, the long-term future of the most carbon-intensive power plants on the grid — coal plants — is not in doubt.
“The grid is undergoing its own transformation of increasing renewables and decreasing fossil fuels,” Jay Duffy, litigation director at Clean Air Task Force, told us. In March, the Energy Information Administration projected that coal-fired generation would drop to about 50% of its current levels within eight years.
“No regulation,” he said, “is going to change that transition.”
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The data center boom is everywhere you look in U.S. economic and emissions data.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
It isn’t exactly a new thought, but I’ve been struck recently by how many trends in America’s economic and environmental data are fundamentally about the data center boom and the return of electricity demand:
First, the Energy Information Administration reported this week that U.S. emissions grew by more than 2% last year, driven by surging electricity demand and an increase in coal-fired generation. What caused that higher power demand? New factories and data centers — as well as record summertime cooling demand.
Second, many of the new factories driving that higher power demand are themselves producing goods that are … let’s say … data center-adjacent. There are the enormous new semiconductor fabs, of course. But Ford and General Motors have also set up new production lines (or repurposed old ones) to manufacture grid-scale batteries to meet power demand.
Third, take a look at the recent U.S. spending on private non-residential construction — in other words, everything American companies are building that is not houses, condos, or apartments.
The construction industry’s spent almost $60 billion on data centers over the past year, which is more than it spent on all other office buildings combined (and more than it spent building warehouses, too). Just a handful of categories — data centers, power plants, electricity infrastructure, and certain kinds of electronics manufacturing — now make up a third of all U.S. private non-residential construction investment. They’ve never made up such a large share of construction spending since data collection began in 2014.
As The New York Times recently noted, the American economy is unusually dependent on the American stock market right now — and the stock market is unusually dependent on artificial intelligence. This week, investors started to balk at the enormous spending hyperscalers are planning to keep building out the AI boom; Alphabet’s shares dropped 8% this week after it boosted its planned 2026 capital expenditure and signaled 2027 will be even bigger. If the data center boom started to slow down in earnest, then more than just that budget will change.
Speaking of which, my colleague Emily Pontecorvo wrote earlier this week about how many businesses are struggling to even estimate their carbon emissions from artificial intelligence. The carbon accounting startup Watershed recently unveiled a new formula to help companies get a sense of their AI-related emissions.
But even that formula is still limited by the amount of data hyperscalers publish — and they don’t publish that much. Google, for instance, is the only AI company that has (laudably) provided estimates of its emissions on a per-prompt basis. Yet no company has published its per-token emissions, or how emissions sync up with particular models or regions.
So Emily asked Google: Why aren’t you — or any other model provider — disclosing this kind of data yet?
The tech company didn’t get back to us until after we’d published Emily’s story. But its response was interesting enough that I wanted to quote some of it here.
The problem is “industry consensus,” Cooper Elsworth, a Google spokesperson, told us. “There is currently very little consensus on how to comprehensively and fairly measure the serving environmental impact of generative AI (such as text generation),” he wrote. “Without standardized, ‘apples-to-apples’ frameworks, it is difficult to compare different providers accurately.”
That’s partly because energy use — and emissions data — can vary from site to site and depend on “custom-built hardware, software compilers, and advanced inference techniques.” And he claimed Google doesn’t always have the measurement hardware in place to provide such specific estimates: “Providing precise, repeatable data requires highly advanced measurement infrastructure,” he said. “For example, software-based energy monitoring tools often suffer from sampling biases. For our study, we had to step away from top-down averages and directly measure actual energy at the physical power supply unit (PSU) level across our deployed fleet. Not all providers have the telemetry or data sets required to benchmark their operations at this level of granularity.”
Read Emily’s story to understand the other reasons why estimating — or even “guesstimating” — AI-related carbon emissions is so challenging.
A conversation with Emma Uridge of the Kansas Health Institute.
This week’s conversation is with Emma Uridge, analyst with the Kansas Health Institute. Uridge spent copious hours analyzing state and local laws on data center development to best understand how policymakers are responding to the potential environmental public health impacts of large AI infrastructure, including power and water. The report, which came out this week, also goes in depth into those health impacts. I reached out to her to discuss what she sees as must-watch territory for our readers on this emerging policy arena.
Our conversation was lightly edited for clarity.
What is actually being done on policy when it comes to data centers — beyond moratoria of course?
So first I’d like to just talk about the point of moratoria. It’s helpful to talk about how these policies emerge in the first place. One area where moratoria are helpful is when a data center is proposed but the county has no approach for how they’d like to potentially regulate them. That’s temporary, most of the time. It lets local governments conduct research on the various impacts and also negotiate community benefits, ones that can mitigate any potential negative impacts — like Lancaster Pennsylvania, which instituted a community benefit agreement that maximized the potential benefits of development while mitigating what large data centers can do. That agreement looked at capping municipal water use at 20,000 gallons per day and requiring 100% clean energy. It had financial penalties for non-compliance. The company also committed $20 million to their local economic development and clean energy fund. There are ways to negotiate with developers.
We also see amendments to existing zoning. Data center proposals are increasingly popping up in rural areas, many of which are unzoned, so there’s no way a county can negotiate unless there’s a moratorium in place.
Other policy solutions include different performance standards or requiring on-site renewable energy, like what Jefferson County, Missouri, looked at. Also setback requirements, mandatory noise buffers, ending by-right zoning.
Where are local governments getting ideas for regulating data centers?
A lot of the technical information comes from developers. That can in cases be seen as a biased source of information. I wouldn’t say there’s a dedicated group providing assistance to local governments when a project is proposed — which is a similar story to wind industry development, where we have only a handful of consultants who provide technical advice. It can be really helpful to get a multi-disciplinary approach to hearing information. It can be helpful to have the utility commission, public health folks, those in academia, as well as the developer.
As of right now, especially in rural areas, local governments have a hard task of balancing pushback while getting the most accurate, evidence-based, neutral information to make decisions. That balance can be contentious.
What is the federal government doing on data center policy? How is the Trump administration approaching it?
A few things there. In the early days, the drive was for AI expansion and to be competitive with foreign adversaries. Now due to the amount of public pushback in red and blue localities and a more cautious approach.
I’m not seeing a lot of actual policy movement at this time.
I know the EPA is looking at the chemicals used in cooling data centers because when that water is cycled through the system, some of it is discharged into the water system, so they’re looking at the Toxic Substances and Control Act for monitoring that.
How much of an impact does this minimal federal role have on industry behavior?
Y’know, this isn’t specific to data centers. This is true for all kinds of large-scale development: there’s a need to require some sort of federal monitoring and regulation.
That’s where I see an emerging role for public health. At the federal level, there could be policy movement towards requiring some sort of environmental monitoring at data centers to make sure they’re operating responsibility. Looking at specific water use relative to water availability and what happens when there’s a time of severe, persistent drought. With air quality too — we’ve seen areas where the grid isn’t as reliable so their diesel generators are kicking on more and affecting air quality for residents.
We’re just not seeing all of that right now. We need corporate disclosure.
What do you see as the most important public health impacts from data center development?
It varies by localities. The most discussed obviously is water usage. One thing I’d note about my conversations with folks enthusiastic around emerging tech is, there are still questions that need to be asked about the capacity of localities to support a data center. Like a small town in Kansas may only be using 40% of their water for their utility needs. If a data center came online, how much of that water goes to the data center?
One area underexplored within the public health discipline is energy poverty and energy security. The ability of a household to meet the needs of everything energy provides in our lives. It’s known we have an aging electric grid but we’re not talking enough about large-scale blackouts when the grid is not sufficient to support some of these new data centers.
Plus more of the week’s big development fights.
1. Laramie County, Wyoming — Meta is fighting the fine it received in the Cheyenne data center water pollution controversy, and the conflict between the tech giant and the city’s small board of public utilities is continuing to spill out into the public.
2. Niagara County, New York — This county just rejected a solar project’s highway work permits in a show of retaliation against the state’s Office of Renewable Energy Siting.
3. Barron County, Wisconsin — The anti-solar protest is the new campaign stop in deep red Wisconsin.
4. Chesapeake, Virginia — A large battery storage project on the Virginia coastline is on the rocks amidst rampant local opposition.
5. Lewis County, West Virginia — West Virginia is now a key battleground in the fight over transmission, as a line spanning all of West Virginia and Maryland — and cutting through Data Center Alley in Virginia — causes compounding consternation.