Attorneys general say ‘numerous legal defects’ provide grounds for invalidation of EPA proposed plan for existing plants

By Paul Ciampoli, News Director, American Public Power Association
From the December 1, 2014 issue of Public Power Daily; Originally published November 26, 2014
The U.S. Environmental Protection Agency’s proposed plan to reduce carbon dioxide emissions from existing power plants “has numerous legal defects, each of which provides an independent basis to invalidate the rule in its entirety,” 17 attorneys general said in Nov. 26 comments filed at the EPA.
In June, EPA proposed emission guidelines for carbon dioxide emissions from existing fossil fuel-fired power plants, invoking its authority under Section 111(d) of the Clean Air Act (CAA).EPA’s proposal “attempts to use the Clean Air Act to override states’ energy policies and impose a national energy and resource-planning policy that picks winners and losers based solely on EPA’s policy choices, forcing states to favor renewable energy sources and demand-reduction measures over fossil fuel-fired electric production,” the attorneys general said in their comments. “But the Clean Air Act generally and Section 111(d) specifically do not give EPA that breathtakingly broad authority to reorganize states’ economies,” they said.

The attorneys general said that the proposed rule is unlawful because, among other things, EPA has chosen to regulate coal-fired power plants under Section 112 of the Clean Air Act. Section 111(d) specifically prohibits EPA from invoking that same section of the law [Section 111(d)] where the “source category . . . is regulated under” Section 112, the attorneys general said.

“Given the multitude of legal deficiencies in its proposal, some of which go to the heart of its authority to regulate fossil-fuel-fired power plants under Clean Air Act Section 111(d), EPA should honor the Act’s core statutory limitations on its authority and formally determine that Section 111(d) standards are not appropriate for fossil fuel-fired power plants,” they argued.

If EPA does finalize Section 111(d) standards for fossil-fuel-fired power plants, “it should not perpetuate the unlawful act by attempting to reorganize states’ energy economies, but should instead promulgate emission guidelines based on the best system of emission reduction that is actually achievable at individual facilities, which states could then consider in establishing performance standards to individual power plants in their jurisdictions,” the attorneys general added.

Stating that the EPA’s Mercury and Air Toxics Standard rule will cause the retirement of more than 34 gigawatts of fossil fuel-fired electric generating capacity, the attorneys general went on to cite a NERA Economic Consulting study that projects the EPA’s proposed plan for existing plants will result in between 46 and 169 additional gigawatts of capacity being retired unless EPA makes significant corrections.

Specifically, the study projects coal-unit retirements of between 97 and 220 gigawatts, as compared to 51 gigawatts under a baseline scenario, the attorneys general said.

“Retirements on this scale are likely to seriously threaten the reliability of our nation’s electric supply,” they argued. “State regulators and industry stakeholders have warned that the proposal will force them to choose between meeting its requirements at the risk of potentially violating” Federal Energy Regulatory Commission reliability mandates, “or complying with those mandates at the risk of failure to comply with the proposal.”

The attorneys general also said that the plant retirements “are likely to impose significant costs on ordinary citizens throughout the country. The NERA study projects an increase in total consumer energy costs of between $366 billion and $479 billion over the period 2017-2031.”

The comments were submitted by attorneys general from the following states: West Virginia, Oklahoma, Nebraska, Alabama, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Montana, North Dakota, Ohio, South Carolina, South Dakota, Utah and Wyoming.

WECC also weighs in

Meanwhile, the Western Electricity Coordinating Council (WECC) is recommending that the agency provide adequate time to identify reliability implications of proposed state compliance plans.

WECC on Nov. 25 posted its comments to EPA on WECC’s website. Since WECC does not operate, site, or own generation or transmission infrastructure, it has no direct economic interest in how states comply with the EPA’s proposed plan, it noted.

“However, the implementation plans that states will develop to comply with the proposed Clean Power Plan will drive BES changes that must be assessed to assure continued reliable operation of the Western Interconnection,” WECC went on to say.

WECC said that the EPA should allow at least 180 days following the filing of state compliance plans for the North American Electric Reliability Corporation (NERC), WECC, and other reliability entities to concurrently evaluate the potential reliability impacts of those plans.

The proposed plan “is complex and could have far-reaching and possibly unforeseen impacts. The success of a state’s compliance plan and the reliability” of the bulk electric system “are best served if the complying states and participating utilities, transmission planning regions, and other stakeholders are provided ample time for reliability analyses,” WECC said. This would provide additional time for evaluation of reliability implications, multi-state planning and infrastructure investments, the council said.

WECC also said that the EPA should create and communicate a process for reliability entities such as WECC to highlight reliability implications of any state compliance plan in the Western Interconnection.

“As the reliability assurer for the Western Interconnection, WECC requests that the EPA consider the range of [bulk electric system] reliability issues that may result from the implementation” of the proposed plan “and allow time for necessary studies and reliability assessments, state planning, and industry development processes.”

WECC recommended creating a process within the proposed plan that considers timing adjustments or the granting of extensions if there is a demonstrable reliability need identified. “Once states develop implementation plans, WECC will be able to consider additional analyses to understand the reliability impact on an interconnection-wide basis,” the council added.

Public power concerns shared at EPA power plants hearing

By Theresa Pugh, Director of Environmental Services, American Public Power Association
Published July 31, 2014 at blog.publicpower.org

On June 2, 2014, the U.S. Environmental Protection Agency released a proposed rule, under Section 111(d) of the Clean Air Act, to reduce carbon dioxide emissions from existing fossil-fueled power plants. EPA hopes to release the final rule in June 2015 and is now accepting comments on the rule and holding public hearings across the country.

Yesterday, I shared the American Public Power Association’s perspective on the proposed rule at a public hearing in Washington, D.C. and reiterated our key concerns:

  • The proposal goes well beyond what is permissible under the Clean Air Act’s Section 111(d).
  • EPA is mandating specific CO2 reduction requirements for states, which is a problem because the proposed rule provides no role for states in setting or modifying those standards. States know best what they can do.
  • The proposed rule tries to do too much too fast. It is “front-loaded,” requiring most emission reductions by 2020. Coupled with stringent compliance requirements, the 2020 deadline does not give states enough time to come up with plans, have them approved by EPA, and achieve their reductions.
  • EPA claims it offers states “flexibility” but that’s just a myth. In constructing its “building blocks” to determine a state’s reduction requirement, EPA has relied on such aggressive assumptions that its severely limits state compliance options. The building blocks have actually become roadblocks to success.
  • States do not get full credit for actions they took to invest in renewable energy and energy efficiency measures prior to 2012 [see our blog post on early action]. This penalizes states that have been “out in front” on emission reductions.
  • The reduction requirements for some states will force the premature closing of coal and natural gas-fired units, with heavy capital investment, that still have useful lives. And when fossil-fueled plants are shut down prematurely, reliable power supply — and customers’ electric bills — will feel the pain.
  • The state requirements do not take into account the fact that electricity demand is rising, thanks to population growth and an increase in energy-intensive manufacturing. Renewables and energy efficiency measures alone won’t be enough to meet the increasing demand for power.

APPA will continue to voice its concerns, submit written comments by the Oct. 16, 2014 deadline, and work to ensure that public power utilities are able to honor their commitment to keep the lights on at affordable prices, while continuing to care for the environment.