United States: EPA Given Additional Time To Ponder Next Steps On Clean Power Plan As Court Grants Another Stay

Last Updated: August 25 2017
Article by Van P. Hilderbrand Jr and Marian C. Hwang

Over the last week, the U.S. Court of Appeals for the District of Columbia Circuit stayed two high-profile litigations concerning the regulation of carbon dioxide emissions from new and existing coal-fired power plants. By granting the U.S. Environmental Protection Agency's requested stays, the Court provided the agency with additional time to weigh its options on whether to suspend, revise, or rescind the rules.

Clean Power Plan Litigation Stayed Additional 60-Days

On August 8, 2017, the Court extended the stay of the Clean Power Plan litigation, State of West Virginia v. EPA (Consolidated Case No. 15-1363), for an additional 60 days. This is the second 60-day extension; the first stay was granted by the Court on April 28, 2017. The Clean Power Plan requires existing stationary power plants to reduce their CO2 emissions by 32 percent from a 2005 baseline by 2030.

The stays follow the White House's March 28, 2017 Executive Order 13783, entitled "Promoting Energy Independence and Economic Growth," that directs U.S. EPA Administrator Pruitt to review the Clean Power Plan to ensure it aligns with the Administration's priorities. In other words, to review and publish for notice and comment a proposed rule to suspend, revise, or rescind the rule.

In support of the stays, the U.S. EPA argued that the Court should allow the agency more time to complete its review of its regulatory and administrative options and preserve judicial resources. In contrast, Clean Power Plan supporters contend that since the Court heard en banc oral arguments back on September 27, 2016, it should issue a decision on the merits. If not, a remand to the agency would be preferable to holding the litigation in abeyance indefinitely. The recent stay order does require the U.S. EPA to provide monthly status reports to the Court, which may provide some clarity on the future of the rule, but it appears that we will have to wait another two months for a more definite resolution.

The Supreme Court halted the implementation of the rule in February 2016 and remanded the challenge to the U.S. Court of Appeals for the District of Columbia. If there is a decision on the merits, the question will certainly be appealed to the Supreme Court.

U.S. EPA Reminded of its Statutory Obligation to Regulate Greenhouse Gases

The recent stay order included a concurring statement by Circuit Judges David S. Tatel and Patricia A. Millett pointing out that the U.S. EPA has an "affirmative statutory obligation to regulate greenhouse gases" under the U.S. Supreme Court's decision in Massachusetts v. EPA, 549 U.S. 497 (2007). The judges expressed concern that an indefinite delay in the litigation could impede the U.S. EPA from complying with that obligation.

To fulfill this obligation, the U.S. EPA may be looking to replace, not rescind the rule. Reports from a late-July meeting between the U.S. Chamber of Commerce, the National Association of Manufacturers, the Office of Management and Budget, and U.S. EPA staff, indicated that regulated industry is looking for a new, revised plan that still limits power plants' emissions, but is narrower in scope than the current Clean Power Plan.

Instead of viewing the electricity system as an interconnected entity that requires regulation beyond a coal-fired plant's physical parameters, a new plan may focus on efficiency and other on-site operational improvements solely at the plants themselves, and would not take the same "outside the fence-line" approach to regulating emissions sought by the current Plan. Some stakeholders are also pressuring the U.S. EPA to attack its underlying obligation and overturn the agency's 2009 finding that greenhouse gases endanger the public health and welfare. Many agree that this task would be extremely difficult as the agency would be required to show scientific evidence that greenhouse gases are not contributing to climate change. In the face of so much evidence to the contrary and that humans are contributing to the greenhouse gases, this may prove impossible.

As this issue progresses and U.S. EPA considers its options, please check back to the blog for further updates.

Court Also Stayed Litigation Concerning Carbon Pollution Standards for New, Modified, and Reconstructed Power Plants

In other news, on August 10, 2017, the same court, the U.S. Court of Appeals for the District of Columbia, granted the U.S. EPA's request to stay the North Dakota v. EPA (Consolidated Case No. 15-1381) litigation. This case concerns the EPA's final rule, Standards of Performance for Greenhouse Gases from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units (80 Fed. Reg. 64509), which regulates CO2 emissions from new coal-fired power plants. The March 28, 2017 Executive Order also directs EPA Administrator Pruitt to review this regulation and possibly suspend, revise, or rescind the rule.

Many view this ruling as inconsequential as no new coal-fired plants are in the development pipeline. Several factors have contributed to this reality including more competitively priced and available natural gas, more difficulty in financing such projects, and the growth of low-cost renewable energy sources.

The status of these litigations has been discussed before on this blog on April 6, 2017 - Environmental and Energy Policy Round-Up: Status of Regulations and Key Decisions under the New Administration and on May 23, 2017 - Update - Environmental and Energy Policy Round-Up: Status of Regulations and Key Decisions under the New Administration.

Amici Curiae Participation in Clean Power Plan Litigation

Van P. Hilderbrand Jr. assisted a consortium of major consumer brand companies with significant energy footprints in nearly every state in the nation prepare and file a joint Amici Curiae brief in the U.S. Court of Appeals for the District of Columbia Circuit supporting the Clean Power Plan. The motion to participate and brief described the challenges that these major brands from diverse industries face in procuring electricity from low- and zero- greenhouse gas emitting sources, and the challenges that climate related risks pose to their businesses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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