On June 2, 2014, EPA proposed a rule outlining the “Clean Power Plan”—what it called a “commonsense plan to cut carbon pollution from power plants.” The proposed rules would require existing power plants to reduce their carbon dioxide emissions 30% from 2005 levels by the year 2030. CO2 emissions have already been falling over the past decade, with the levels dropping 12% between 2005 and 2012 alone. See U.S. Energy Information Administration, Monthly Energy Review. This is the latest move in the Obama’s administration quest for overall greenhouse gas reductions; prior initiatives have focused on increased efficiency guidelines for the transportation sector and new restrictions on high-potency greenhouse gases such as hydrofluorocarbons and methane.
After EPA went public with its proposed rule, various states and industry groups voiced their concerns over what they claim are drastic and untenable policies.
Congress Attacks EPA’s Purse Strings
In the most recent move against the proposed rule, the Committee on Appropriations for the House of Representatives has put forth a bill that would effectively block the proposed rule from being implemented and significantly defund EPA. The bill allots funding that is $409 million below the President’s request and includes policy provisions to stop “unnecessary, job-killing regulations by federal agencies such as the EPA.”
The bill passed 29-19, and will now go to the floor for a vote by the full House. Despite this initial success, John Podesta, a Senior Advisor to the President, has said that Republican pushback to the President’s environmental agenda—such as this defunding bill—have a “zero percent chance” of working.
Murray Energy Corporation Files Suit
This is only the most recent in a string of attacks against the proposed rule, however. The first entity to challenge the proposed rule was Murray Energy Corporation, which filed a petition for extraordinary writ with the D.C. Court of Appeals on June 18. See Murray Energy Corp. v. EPA, No. 14-1112 (D.C. Cir.). Murray’s petition claims that the proposed rulemaking is illegal because EPA has exceeded its authority by issuing the rule under § 111(d). The petition states that the Clean Air Act prohibits EPA from double regulation, which would result here because emissions from existing coal-fired power plants are already regulated under § 112 of the Act and therefore cannot be regulated under § 111(d). Normally administrative rules cannot be challenged until they become finalized, but Murray wrote that it is within the court’s power to take action to stop a proposed rule under “extraordinary circumstances.”
Attorneys General from Nine States File Brief in Support
Then, on June 25, nine states joined together in support of the Murray suit, filing an amicus brief with the D.C. court. The attorneys general—spearheaded by West Virginia Attorney General Patrick Morrisey—bolstered Murray’s arguments that EPA’s proposed rule is illegal and violates “specific prohibitions” found in the Clean Air Act. The amicus brief further explains that EPA is relying on a drafting error to insert ambiguity into § 111(d) where none exists.
Prior to filing the brief, Morrisey sent a letter to EPA Administrator Gina McCarthy in which he voiced similar concerns and discussed that West Virginia would be “uniquely harmed” by the proposed rule.
Clean Power Plan – Proposed Rule Highlights
The current proposed rule sets out new source performance standards for new and existing power sources under § 111(d) of the Clean Air Act. Section 111(d) is a unique provision that has only been used five times in the history of the CAA. Under § 111(d), the proposed rule tasks states with the primary role of setting up emission-reduction programs within EPA guidelines. EPA retains the authority to take over the program from the state if the state fails to achieve the guidelines. The proposed 30% reduction rate represents a nationwide target; there are then state-by-state mandatory targets and interim benchmarks to achieve, based on several state-specific criteria. Each state will be required to set up its own program to comply with its emissions budget.
According to Roger Martella, EPA’s former General Counsel, the computation of a state’s emission budget is based on four elements. The first factor presupposes that, as a baseline, all coal-fired power plants could be 6% more efficient. Then, EPA factored in what it determined was the state’s natural gas capabilities, meaning that states could essentially be penalized for not taking full advantage of transitioning to natural gas. Similarly, EPA also examined and factored in the state’s capability for employing alternative, “cleaner” forms of energy. Finally, EPA looked at the opportunity each state had to reduce the demand for energy. EPA used these factors to set each state’s emission budget.
Many aspects of the proposed rules have raised concerns, from the computation of the state budgets to EPA’s authority to promulgate such a rule.
This article was authored by Jennelle D. Arthur, Jackson Kelly PLLC. For more information on the author, see here.