As opposed to the expansive Clean Power Plan rule, which aimed to reduce carbon emissions 32% below 2005 levels by 2030, EPA says the revision could reduce 2030 CO2 emissions by 0.7% to 1.5%, a reduction that it says will be gained by improving the heat rate of coal plants.

However, industry observers say that despite the rollback, the low cost of natural gas plants and renewables will continue to make them the preferred choice for electricity generation and drive down CO2 emissions.

“The Clean Power Plan merely accelerated the market trends, i.e., reduced generation from coal-fired facilities,” says Steve Weiler, a partner at the international law firm Dorsey & Whitney with a focus on natural gas and electricity.

“Trump’s revised plan seeks to make coal generation more accessible," Weiler adds. "To this apparent victory for the coal industry is likely to be short-lived. In the end, market forces, not regulation, will prevail, no matter how hard the administration tries."

President Trump, his administration and several groups contend that the Obama proposal exceeded the EPA’s authority by requiring changes “beyond the fence line” of power plants, including encouraging changes in how electricity was dispatched. Dozens of states and groups took the administration to court on the grounds that EPA exceeded its authority.

The Trump proposal puts states in charge of reducing emissions from power plants under the Clean Air Act section 111 (d). The rule gives states “flexibility to set standards that are tailored,” Bill Wehrum, head of EPA’s Office of Air and Radiation, said in a conference call with reporters about the proposal.

EPA won’t set a floor or a ceiling for such state-specific emissions reduction targets, but states also can’t say they will take no action, Wehrum says.

Under the proposal, the EPA would finalize guidelines to determine a suite of best systems of emission reductions. Using this EPA-endorsed set of reduction techniques, each state would have three years to establish its own set of emission-reduction standards and submit those standards to EPA, which would then have a year to approve the state’s plan.

The changes could help some coal plants to continue operating by making it easier for utilities to reinvest in them without triggering a costly New Source Review (NSR). Under the proposal, states could set hourly, rather than annual, emission triggers for NSR. 

The NSR program requires owners to get a permit before building a new source of air pollution or modifying an existing source in a way that would increase its annual emissions.

Electric utilities say the program discourages them from making investments that would improve a plant's efficiency, because such improvements would allow a plant to run more often and therefore generate more emissions on a yearly basis.  

“Certain coal plants are economic on a fuel/O&M basis," Travis Kavulla, a public utility commissioner in Montana, tweeted. "But they face a reinvest-or-close decision. If reinvestment is unencumbered by New Source Review and you have the prospect of running the plant for 10 years (as opposed to, say, 5, then today's EPA decision is non-trivial,”

New York and California have already said they would sue the Trump administration over the new proposal, which will be open for 60 days for public comments.