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'Pick your poison': Supporters fire back against Clean Power Plan's purported flaws

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Essential Energy Insights - January 2021


'Pick your poison': Supporters fire back against Clean Power Plan's purported flaws

TheU.S. EPA's many supporters defended the Clean Power Plan in briefs submitted toa federal appeals court March 29, assailing the rule's opponents' that the rule isunlawful and that the agency lacks authority to regulate power plants forcarbon dioxide.

Severalenvironmental groups hosted a call midday as the briefs trickled in to the U.S.Court of Appeals for the District of Columbia Circuit, attacking one of the primaryarguments against the rule: that the EPA cannot regulate carbon from powerplants under Section 111(d), when those sources are already regulated for otherpollutants under Section 112.

TheEPA has three ways of regulating pollutants from sources such as power plants.Sections 108-110 deal with criteria pollutants and notable regulations includethe National Ambient Air Quality Standards, which have individual standards forozone, sulfur dioxide and other pollutants. Under Section 112, Congress maintainsa list of pollutants deemed hazardous, which the EPA has used to promulgate theMercury and Air Toxics Standards under this provision. The final category isSection 111, a catch-all for pollutants that do not fit under any section.Congress left this section fairly ambiguous to ensure that no gaps in coverageare left by the other categories.

Accordingto Natural Resources Defense Council's David Doniger, the opponents' positionthat power plants' carbon dioxide emissions cannot be regulated under Section111(d) when their mercury emissions are regulated under Section 112 would meanthat EPA could regulate just one pollutant from a power plant and thereforeforce the agency into a "pick your poison" approach to controllingpollution. He further asserted that the Clean Power Plan's opponents recently "contrived"this argument as a way to bring down the Clean Power, and the claim has novalidity under the Clean Air Act.

TheClean Power Plan established statewide carbon dioxide emission standards forexisting fossil fuel-fired electric generating units with the goal of cuttingCO2 emissions 32% as measured from a 2005 baseline by 2030. The U.S. SupremeCourt on Feb. 9 stayedthe rule, rendering it unenforceable while the litigation proceeds even thoughno court has ruled on the merits of the legal challenge. Oral arguments arescheduled before the D.C. Circuit June 2. The EPA offered its to the petitioners inthe case March 28, defending the agency's authority to regulate carbon and theClean Power Plan itself.

Amongthe parties offering a defense of the Clean Power Plan was a coalition of 18states plus some cities and counties impacted by climate change. The states largelysupported the EPA'sarguments, but also offered their own thoughts on why the court should rejectthe legal challenge to the rule.

Whilethe petitioners' claimed that states have exclusive control over the energy mixin their borders, the supportive states noted that the "energy mix"has long been constrained by Congress, "which has delegated authority tofederal agencies over many aspects of operating power plants." Forexample, if a state wants to incentivize new hydroelectric dams or nuclearpower plants, FERC and the Nuclear Regulatory Commission, respectively, wouldhave jurisdiction to approve such projects.

"Concurrentfederal jurisdiction over aspects of running a power plant properly reflectsthe fact that many of those aspects likely affect multiple states due to safetyand environmental risks that cross state lines, as well as the interconnectednature of the electricity market," the states wrote. "EPA's pollutionregulations are simply another federal constraint that states and power plantsmust heed in this complex area of overlapping state and federal authority."

Thesupportive states added that EPA's regulation of pollution falls squarelywithin the agency's authority delegated by Congress. However, if the agencycould not affect change to a state's energy choices, the supportive states saidthe agency's ability to regulate air pollution would be difficult if notimpossible. In fact, the interpretation of state authority and the Clean AirAct presented by the rule's opponents would suggest power plants are shieldedfrom all pollution regulation, even though they emit air pollutants, the briefsaid.

"Therule's permissible focus on pollution reduction rather than direct energyregulation is demonstrated by the fact that it is agnostic about the specificmeans by which states and power plants achieve the rule's emission limits,"the states wrote.

Moreover,if the EPA cannot regulate carbon under Section 111(d), the states argued thatthe Clean Air Act would allow some sources to go unregulated when the pollutantat issue does not fit in either the criteria or hazardous categories. Such aloophole would contradict Congress' intent in establishing for the agency to regulatepollution, and exempt from dual regulation other sources already regulatedunder Section 112, including petroleum refineries, landfills, and fertilizerplants.

Separately,renewable energy trade groups Advanced Energy Economy, American Wind EnergyAssociation and Solar Energy Industries Association the rule's opponents ofcherry-picking evidence to show that the EPA's chosen best system of emissionreduction, or BSER, is unlawful.

TheBSER is the basis for rules promulgated under Section 111(d), and in the caseof the Clean Power Plan, includes three building blocks — improving the heatrate of existing facilities, shifting generation from higher-emitting powerplants to lower-emitting resources, and increasing renewable generation – thatstates can leverage in creating their plans. The trade groups said that whilethe petitioners may disagree with the EPA's determinations, they have notproven that the agency failed to participate in reasonable decisionmaking inarriving at those three reduction strategies.

Thetrade groups also defended the trading provisions of the Clean Power Plan,arguing that the rule does not require unwilling states to establish such aprogram, but instead provides other ways for power plants to meet the rule'sgoals without carbon trading. For instance, they said plants can comply withthe rule by directly investing in renewable generation or entering intobilateral contracts to procure such generation.

, subsidiaryNational Grid Generation LLC,PG&E Corp.subsidiary Pacific Gas andElectric Co., EdisonInternational subsidiary SouthernCalifornia Edison Co., and some municipal utilities the trading portion ofthe rule. The EPA simply offered trading as a way for power plants to "cross-invest"in renewable reductions elsewhere instead of taking direct actions themselves,they maintained.

Theutilities also assailed the rule's opponents' claim that the Clean Power Planis flawed because the EPA did not impose a national trading program on allstates, but instead left the decision up to states to add trading to theirplans.

"EPAprovided states flexibility to decide on the contours of a trading program thatwould best suit their respective generating units, rely upon existing tradingprograms, or eschew trading altogether; that is not a fault, but a virtue ofthe rule," the utilities wrote.

The utilitiesalso disputed the assertion that the Clean Power Plan will undermine thereliability of the power grid. "Petitioners' reliability claims aredivorced from the realities of how the electricity grid operates and changes inthe generation mix are actually planned for and accommodated," they wrote."The power companies and broader industry have successfully reducedemissions within their generation portfolios without compromising reliabilityand will continue to do so under the rule."