From the Clean Power Plan to the Affordable Clean Energy Rule : How Regulated Entities Adapt to Regulatory Change and Uncertainty

Regulated entities often struggle to adapt to regulatory change and uncertainty. This is particularly true in the power and utilities sectors, where the scope and scale of project-level planning and management is broad, and changes to these processes can be highly disruptive. Regulatory disruption notwithstanding, some companies adapt to regulatory change and uncertainty better than others. Presently, there is a gap in understanding what these regulatory adaptation best practices might be for the power and utilities sectors.When the federal Environmental Protection Agency (“EPA”) publicly proposed the Clean Power Plan (“CPP”) in 2014, stakeholders in the power and utilities sectors were forced to reckon with the possibility that the CPP would prompt profound changes in the regulatory landscape. As of writing, however, the EPA has since proposed to repeal the CPP and replace it with the Affordable Clean Energy (“ACE”) rule, a decision that significantly relaxes regulatory obligations for power companies. The ACE rule will be challenged in federal court, and its future remains in doubt.This case study will focus on the CPP as a means of investigating the best practices and ongoing challenges of adapting to regulatory uncertainty. The study will provide an in-depth analysis of the approach taken by three companies whose projects and/or financial investments would be implicated by the CPP. The three companies have been interviewed by the Author, and have developed unique and potentially transformative approaches to regulatory uncertainty, while at the same time offering cautionary tales and lessons learned