Abby L. Harvey
GHG Monitor
8/28/2015
The Environmental Protection Agency, in drafting the final version of its carbon emissions standards for existing coal-fired power plants made changes so significant that some argue the agency has put itself in a precarious situation. “The final rule may well be more vulnerable, but careful analysis will need to provide those answers. For example, the final rule may have mandated new provisions or relied on new methodologies that were not really part of the record when public comments were filed. If those changes are too great, the rule could have an additional problem under administrative law,” Scott Segal, co-head of the federal government relations and strategic communications practices at Bracewell & Giuliani LLP, said following the rule’s release on Aug. 3.
If the changes made are in fact too significant, a legal argument could be made that the final rule is fundamentally different to the proposed rule and thus would require additional public comment.
In the final version of the Clean Power Plan, the EPA sought to address several legal arguments made against the rule in its proposed version. The rule sets carbon emission reduction targets for each state (except Vermont, Hawaii, and Alaska) and requires them to create action plans to meet those targets.
In the draft rule, the EPA suggested (but did not mandate) the use of demand-side energy efficiency programs as a means to meet state goals. This action was beyond the agency’s authority, opponents said, and in turn it was dropped from the final rule.
The final rule also allows states more time to develop action plans, extending the initial compliance date by two years from 2020 to 2022.
These changes were suggested in the more than 4 million comments the agency received on the rule. The sheer number of comments received may be significant enough to thwart arguments that the plan has been changed too much, Ann Weeks, senior counsel with the nongovernmental Clean Air Task Force, told GHG Monitor this week. “Remember how many comments they got and remember how many things they asked for comment on. There’s really nothing that they did that they didn’t presage in the request for comment. They really asked for comment about everything and they got comments about everything,” Weeks said.
Weeks added that the changes made to the rule are not significant enough, in her opinion, to warrant such a legal challenge. The standard under the Clean Air Act is, … even if they didn’t give enough notice, that the issue would have to be of such fundamental importance to the outcome of what they did that it would have changed it fundamentally. So, even if there was a notice problem, I don’t see anything like that, and I don’t really see a notice problem,” she said.
The changes made to the final rule, such as the exclusion of demand-side energy efficiency, might have been sufficent to successfully answer legal arguments brought against the rule in its proposed version, Richard Revesz, director of the Institute for Policy Integrity at the New York University School of Law, told GHG Monitor recently. “I think there are number of legal changes that are important to focus on. One is … dropping building block four, the energy efficiency building block because EPA is not claiming any authority or any interest in regulating the amount of energy that is produced, and that will significantly simplify the task of providing the legal support for the rule,” Revesz said.
As for other legal arguments made against the rule in its proposed version, they didn’t hold water in the proposed version and don’t hold water now, Revesz said. Perhaps the most notable argument against the rule is that EPA does not have authority to regulate carbon from coal-fired power plants under section 111(d) of the Clean Air Act because these units are already regulated for other pollutants under section 112. According to opponents, the Clean Air Act does not allow a source to be regulated under both sections 111(d) and 112. Coal-fired power plants are regulated under section 112.
There exist two amendments to the Clean Air Act, Revesz said, a Senate version and a House version, one of which gives EPA authority to regulate carbon from coal-fired power plants under section 111(d) and one that does not. Only the amendment that would prevent the EPA from regulating carbon has been published, however, which has created a headache for EPA.
“The opponents of the Clean Power Plan claim fancifully that somehow or another the Senate amendment doesn’t exist,” Revesz said. “They refer to it as ghost law or phantom law, or non-existent law. The reality is that the Senate amendment was voted on by both chambers in both the House and the Senate, and it was signed by the President and that makes it law. The House amendment also is part of the law.”
States Beginning Legal Challenges Early
Under the Clean Air Act, a regulation must be published to the Federal Register prior to legal challenge. This, however, has not stopped a group of 15 states from filing a petition with the U.S. Court of Appeals’ D.C. Circuit calling for a stay of the rule.
The petition, filed Aug. 13, argues that “the Rule unusually imposes dates certain for the submission of State Plans – September 6, 2016, and September 6, 2018 – regardless of when the massive Rule is published. With this firm deadline, the Rule requires States to spend significant and irrecoverable sovereign resources now to begin preparing their State Plans.”
Attorneys general from West Virginia, Alabama, Arkansas, Florida, Indiana, Kansas, Louisiana, Michigan, Nebraska, Ohio, Oklahoma, South Dakota, Wisconsin, Wyoming, and Kentucky signed the petition.
Beyond the fact that the petition is premature, Revesz said, he does not believe the states have made a case for a stay. “I think it’s extremely unlikely that a stay will be granted because, even after publication in the Federal Register, I don’t think that the challengers can meet the requirements for getting a stay granted,” he said. “First they’d have to show high likelihood of success on the merits, which I think they’ll have difficulty showing, and second and more importantly you have to show irreparable harm, but the Clean Power plan, in the final rule, gives states considerably more time to submit their plan than the proposed rule … in light of that, it’s not clear why states would suffer irreparable harm.”
Weeks echoed this sentiment. “The legal threshold to get a stay is pretty high and I’m not seeing it satisfied,” she said, “but that’s all obviously going to play out in court.”
Congressional Game Plan Questioned
Lawmakers in Congress opposed to the rule have been fighting it since it was proposed last year. Two bills have been moved through the chambers each that would halt the rules until all legal challenges are resolved. These bills are unlikely to pass the president’s desk, however, and it remains uncertain if those behind the bills would have enough votes to overturn a veto.
Senate Majority Leader Mitch McConnell (R-Ky.) proposed a more inventive tactic in late April at a hearing of the Senate Appropriations Interior, Environment, and Related Agencies Subcommittee. At the hearing, McConnell quoted a section of the Clean Air Act he said would give Congress oversight over a portion of the rule.
Within the proposed regulations, EPA has supported the development of multistate programs. Such agreements, however, would have to be approved by an act of Congress, McConnell said. “I’d like to acquaint you with section 102(c) of the Clean Air Act requirements,” McConnell said, going on to state that under that section of the Clean Air Act congressional consent is required for cooperative agreements, such as the multistate programs suggested in the proposed regulation. “’Unless and until it’s been approved by Congress,’” McConnell said, quoting the section. “Doesn’t seem ambivalent to me. I can assure you that as long as I’m majority leader of the Senate, this body’s not going to be signing off on any backdoor energy tax.”
However, according to Revesz and Weeks, this threat is not significant. “The argument that Senator McConnell made applies to interstate compacts,” Revesz explained. “Interstate compacts are a very specific form of agreement. It doesn’t apply to the kind of multi-state trading markets that could be set up under the Clean Power Plan unless they were set up formally as compacts. The Constitution gives compacts a very specified meaning. No one contemplates that the clean power plan will be implemented by means of interstate compact.”
