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In legal maneuver, states and green groups ask US EPA to reconsider CO2 rule

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In legal maneuver, states and green groups ask US EPA to reconsider CO2 rule

Environmental groups and states opposing the U.S. Environmental Protection Agency's replacement for the Obama-era Clean Power Plan have filed petitions for reconsideration aimed at addressing legal issues they claim were impossible to anticipate during the rulemaking phase for the regulation.

In a Sept. 6 petition, a coalition of groups led by the Environmental Defense Fund argued that the replacement rule dubbed the Affordable Clean Energy, or ACE, rule "departs considerably" from the actions and rationales that the EPA presented in the run-up to its finalization. A coalition of 22 states, the District of Columbia and eight local governments submitted a similar petition to the EPA the same day.

Unveiled in August 2018, the ACE rule is intended to serve as what the Trump administration and supporters of the regulation have described as a legal alternative to the Clean Power Plan. That Obama-era rule, which sought to curb planet-warming carbon dioxide emissions from existing fossil fuel-fired power generators, was stayed by the U.S. Supreme Court before it could take effect.

After receiving more than 1.8 million public comments, the EPA in June issued a final ACE rule that determined efficiency upgrades known as heat-rate improvements at coal-fired power plants are the "best system of emission reduction" under Section 111 of the Clean Air Act. The final rule stands in stark contrast to the Clean Power Plan, which adopted a broader interpretation of that section of the statute and encouraged states to shift away from coal-fired power to cleaner sources of energy.

One of the central issues likely to arise in the legal challenge to the ACE rule is whether Trump EPA's interpretation of Section 111 of the Clean Air Act is reasonable.

In their Sept. 6 petition, however, environmental groups asserted that the EPA introduced new legal interpretations in the final ACE rule that the public did not have the opportunity to address in public comments. Doing so violated the Clean Air Act's requirement to disclose "the major legal interpretations" underlying proposed rules when they are published in the Federal Register, they argued.

Among other concerns, the groups also took issue with the ACE rule's final regulatory impact analysis.

Unlike the ACE proposal, which used the Clean Power Plan as a baseline, the EPA compared the final ACE rule against a "No CPP," or business-as-usual, base case. That allowed the EPA to largely eliminate 1,400 annual air pollution-related deaths the agency initially projected to occur under the ACE proposal when compared to the Clean Power Plan. The shift also elided a projected 3% increase in annual CO2 emissions by 2025 under the ACE proposal as compared to the Clean Power Plan, the groups said.

Under White House Office of Management and Budget guidance, agencies are required to assess the costs and benefits of new regulatory actions that rescind existing rules using the rule being repealed as a baseline, the groups noted.

In the final ACE rule, the EPA maintained that the most likely result of implementing the Clean Power Plan would be "no change in emissions" and therefore would not lead to any cost changes or changes in health benefits. The agency therefore determined that comparing the ACE rule against a "No CPP" baseline was appropriate and consistent with Office of Management and Budget guidance.

The petitions for reconsideration will be included in the ACE rule's rulemaking docket, effectively introducing the legal issues into the public record so that they can potentially be raised in the related court case before the U.S. Court of Appeals for the District of Columbia Circuit if the EPA chooses to reject them.

Also on Sept. 6, nine power companies — including Pacific Gas and Electric Co., Consolidated Edison Inc., Exelon Corp. and National Grid PLC — challenged the rule in the D.C. Circuit, arguing the ACE rule's interpretation of the Clean Air Act ignores the interconnected nature of the electricity grid.