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News & Press: Regulatory

Clarifying the Mud on CPP

Thursday, September 29, 2016   (0 Comments)
Posted by: Floyd Gilzow
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Arguments on one case challenging the Clean Power Plan (CPP) have been completed in front of the U.S. Court of Appeals for the District of Columbia Circuit, but what comes next is not clear. The Court will carefully consider all the legal arguments and then after the November elections render a verdict in West Virginia, et al. v. EPA, et al., with little impact on the operation of any power plants. The verdict, regardless of the way it goes, will be immediately appealed to the Supreme Court of the United States (SCOTUS).

To fully understand where this case stands, one must realize that opponents also argue over whether the CPP should have been filed as a rule in the first place. While all the attention has focused on the CPP court cases, the more important separate case involves section 111(b) of the Clean Air Act (CAA) where the EPA found that carbon dioxide was a danger to the health and welfare of the citizens of the United States. The EPA administrator then has the ability under law to create rules to control emissions from NEW future power plants. The CAA goes on to give the administrator the legal ability to regulate emissions from existing power plants under section 111(d). 
The judicial irony is that the court cases on regulations governing existing power plants are moving more quickly through the system than those covering the new plants. We are likely to know whether EPA erred in issuing regulations governing CO2 emissions from existing power plants before we know about new power plants. In fact, theoretically we could find ourselves in a situation where the court finds the CPP is legal until they overrule the rules for new plants, and then they would have to invalidate the CPP.

Setting aside this unusual twist, there are three basic objections being argued to regulations on power plant carbon dioxide.

First, it is argued that EPA cannot achieve its goal of a 32 percent reduction by requiring generation owners to modify the activities of others beyond the “fenceline”. Those include implementing energy efficiency programs, installing zero emission generation, and shifting from coal-based generation to natural gas or zero emission generation.  

A second argument will revolve around a provision in the Clean Air Act which says that sources regulated under any other section of the CAA cannot be regulated under section 111. That may mean that power plants regulated under section 112 cannot be regulated for CO2 emissions until Congress adds them to the list of criteria pollutants, like ozone, sulfur dioxide and particulate matter.

Finally, there will be considerable discussion about whether EPA went too far in making changes to the original draft rule when it created the CPP. Opponents will argue that the public never had the opportunity to challenge significant provisions in the final rule because they didn’t exist in the draft. 

Accepting this argument to invalidate the rule would create two new complications, and some legal observers call this the “sleeper issue” of the entire challenge. First the court could invalidate the rule, without ever ruling on the legal provisions of the rule at all. In addition, it could also create all sorts of future challenges to federal rules where there are significant changes between draft rules and final rules. That’s an issue that courts seem to have not addressed in depth in the past.

And finally, there is the sticky issue of an empty seat on the Supreme Court when these cases arrive in the docket. The issues they raise are simply too big for the court to ignore, and a tied ruling doesn’t give either side enough of a legal victory to accomplish much. A 4-4 ruling on the court (which split 5-4 on several key environmental cases before the death of Justice Antonin Scalia) would affirm the lower court decision but provide no precedent for future cases.

So what happens? It’s likely that the District Court will drag its feet to give SCOTUS time to get its ninth judge confirmed in the Senate after the Presidential Election, and for both cases to land in the Supreme Court for a concurrent decision on both cases, or at least allow the court to rule on the new source regulations before having to tackle the thorny issue existing sources.

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