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EPA Carbon Rule Allows Utilities to Swap ‘Negawatts’ for Megawatts

By emphasizing energy efficiency as an option for reducing greenhouse gas emissions, the U.S. Environmental Protection Agency is giving states the flexibility to find the most cost-effective path to compliance. “By Auffhammer’s Yoga Theorem,” Fowlie writes, “the outcome of an emissions regulation that supports compliance flexibility will be less costly than a rule that limits states’ compliance options. Under the auspices of the Clean Air Act, the EPA has rolled out its metaphorical yoga mat and demonstrated some serious regulatory flexibility.” Under the draft rule, “on the demand side of the fence, the state can pursue efficiency improvements in order to reduce the total quantity of electricity generated while increasing its negawatts.”