Clean Power Plan Opponents Prepare Arguments for Lawsuits
Finally, with the publication of the final Clean Power Plan in the Federal Register, I thought a final bullet with an overview of the litigation that what will dominate the APC industry for the next couple of ears would be helpful to ICAC members:
Staying the Rule:
The first skirmish in the upcoming litigation will be states and industries opposed to the rule asking the court to halt its implementation until the litigation is resolved.
To win a stay from the court, opponents must show that they have a high probability of winning the case on its merits and that they would face irreparable harm by allowing the rule to go into effect in the meantime. Although the first emissions reductions are not required until 2022, states opposed to the Clean Power Plan are expected to argue that marshalling the resources necessary to develop the plans required to implement EPA rule will constitute an irreparable loss of time and money should the rule later be overturned. However, getting the court to grant a stay will be an uphill battle, because EPA has extended the initial compliance deadline and proposed a model federal plan that states can use to draft their own compliance strategy. Opponents doubt that the petitioners will be able to meet the bar for getting a stay.
Petitioners are expected to revive many of the same arguments they made about the agency's fundamental legal authority to even issue the carbon dioxide standards. Key among those challenges will be whether setting hazardous air pollutant standards for power plants under Section 112 of the Clean Air Act negates EPA's ability to issue carbon dioxide standards under Section 111(d).
EPA issued the Clean Power Plan under Section 111(d) of the Clean Air Act, which was last amended in 1990. At that time, two conflicting amendments, one passed by the House and one passed by the Senate, were adopted for that provision. The Senate language merely bars EPA from regulating pollutants under Section 111(d) that are already subject to emissions limits under Section 112. The House amendment goes further, opponents of the Clean Power Plan say, barring EPA from regulating industrial source categories under Section 111(d) for which it has already issued emissions standards under Section 112, as it has with power plants. EPA regulates hazardous air pollutants from power plants with the mercury and air toxics standards (MATS) rule under Section 112.
While both amendments were signed into law, only the House amendment appears in the U.S. Code, while both amendments appear in the statutes at large. Opponents of the Clean Power Plan argue that the House amendment was more substantive and therefore should take precedence. Opponents contend that the plain language of the Clean Air Act will make it difficult for EPA to argue it can pursue standards for power plants under both sections 111 and 112.
Best System of Emissions Reduction Design:
EPA significantly revised the final Clean Power Plan from its proposed version in an effort to shore up its legal foundation. Among the changes were extending the initial compliance date from 2020 to 2022 and revisions to its best system of emissions reduction (BSER) determination dropping energy efficiency requirements for states. However, opponents contend the Clean Power Plan still represents an unprecedented approach by EPA, requiring power plants to achieve emissions reductions from beyond the fenceline of their own facilities by shifting generation to cleaner natural gas or renewable energy. Previous rules under Section 111 only focused on the emissions reductions that could be achieved within regulated facilities themselves. Another potential vulnerability to the rule will be that including natural gas and renewable power generation in the emissions rate calculations effectively creates a performance standard for existing power plants that is more stringent than that being imposed on new units.
Opponents of the Clean Power Plan are also expected to renew constitutional arguments against the rule, although those challenges are less likely to be persuasive to judges than those grounded in the Clean Air Act itself. Harvard Professor Laurence Tribe, who represented Peabody Energy in early challenges to the Clean Power Plan, had argued to the D.C. Circuit that the Clean Power Plan violates the 10th Amendment because it commandeers state resources to enforce a federal regulation. Energy policies remain the purview of state regulators and not EPA, he argued. Those arguments will likely be raised again, however judges would be much less likely to strike the rule on constitutional grounds than they would for statutory reasons.
One other avenue for opponents seeking to block the Clean Power Plan will be legal challenges to the EPA's new source performance standards (NSPS) for new power plants issued under Section 111(b) of the Clean Air Act. The Clean Air Act only allows the agency to regulate existing sources under Section 111(d) if it has already regulated new units under Section 111(b). The primary challenge to the NSPS will be EPA's decision to set a carbon dioxide emissions rate for new coal-fired units that effectively would require the use of partial carbon capture technology with its underlying assumption that carbon capture and sequestration technology for new coal-fired power plants is commercially available.