Federal Government Publishes Controversial Clean Power Plan Rule

A coalition of 24 states filed a lawsuit on Friday challenging the Obama Administration’s signature environmental regulation, the Clean Power Plan, in response to the regulation being published in the Federal Register last Friday, October 23.

West Virginia Attorney General Patrick Morrisey is leading the litigation against the plan which he has called, “the single most onerous and illegal regulations that we’ve seen coming out of D.C. in a long time.”

In Wisconsin, both Governor Scott Walker and Attorney General Brad Schimel have denounced the rule. The governor stated the rule would unnecessarily harm families and kill manufacturing jobs in the state. AG Schimel called the rule “an unlawful plan to radically restructure the ways electricity is produced and consumed throughout the country.”

The final version of the rule’s national standard requires states to cut 32 percent of their carbon emissions based on levels recorded in 2005. The proposed rule required a 30 percent reduction. The rule’s renewable energy standard also increased with the EPA excepting renewable energy to rise to 28 percent of the electrical grid’s capacity by 2030. The proposed rule had expected renewable energy to comprise 22 percent of the grid’s capacity.

The use of coal is also expected to drop to 27 percent of the grid’s energy creation instead of 31 percent (currently coal makes up 39 percent of energy production and creates 77 percent of CO2 emissions nationally). However, states have a longer window to begin complying with the standards. The first compliance date has been extended from 2020 to 2022.

Also relevant, Wisconsin’s interim targets are now less, but stringent but its 2030 goal was tightened: in the final rule the 2022-2029 target is 1,364 CO2 lbs/net MWh (less stringent than 2014 draft target of 1,281 CO2 lbs/net MWh). However the final rule 2030 Target is more stringent: 1,176 CO2 lbs/net MWh (compared to 2014 2030 target of 1,203 lbs/MWh). The EPA claims these standards will save approximately $45 billion a year through shrinking energy use, reducing health care costs related to asthma, lung cancer and other respiratory illnesses caused by air pollution.

The challengers previewed their legal arguments earlier this year when they sought to block EPA from finalizing the rule. This attempt was denied by the D.C. Circuit Court because the parties couldn’t challenge the rule before it was published in the Federal Register.

One major argument is a challenge to EPA’s authority to issue the regulations at all under section 111(d) of the Clean Air Act. This argument stems from the fact that the Senate and House passed two separate versions of section 111(d), both of which are meant to prevent EPA from issuing duplicative regulations. In the House version, 111(d) prohibits EPA from regulating an emission source (power plants) that are already regulated by section 112 of the Clean Air Act. Section 112 already regulates power plants. If the court finds that the House version applies, then EPA does not have authority to regulate green house gases under the Clean Power Plan. In the Senate version, 111(d) states that EPA cannot regulate a pollutant already regulated by another rule. EPA argues they have not regulated green house gases previously, so under the Senate rule they should have the authority to promulgate this rule. EPA will argue that they have deference to determine which version of section 112 applies and the court should respect their deference.

The other major argument is that the Clean Air Act requires EPA to set standards for pollution reduction that are based on the “best system of emission reduction” that has been “adequately demonstrated.” The challenging states argue that certain technological requirements necessary to reduce emissions to the minimum acceptable level under the rule have not been adequately demonstrated on a commercial scale.