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Clean Power Plan supporters vow to fight repeal

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Essential Energy Insights - September 17, 2020

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Clean Power Plan supporters vow to fight repeal

Backers of the U.S. Environmental Protection Agency's Clean Power Plan promised not to go down without a fight as the Trump administration works to repeal the carbon-cutting regulation.

On Oct. 10, EPA Administrator Scott Pruitt proposed to overturn the rule, formally setting one of President Donald Trump's key campaign promises in motion. The Obama-era rule required states to hit individual carbon emissions rate limits at existing fossil fuel-fired power plants and offered several "building blocks" to achieve those cuts, including increased reliance on lower-emitting natural gas.

Pruitt said the Clean Power Plan exceeds the EPA's statutory authority and would have generated $33 billion in compliance costs by 2030. But defenders of the rule said Pruitt downplayed the Clean Power Plan's benefits and inflated its costs, which the Obama administration estimated at $5.1 billion to $8.4 billion, depending on compliance options.

The EPA cannot revoke the rule until after a 60-day comment period, but Clean Power Plan proponents are already promising a fight.

Opponents ready to sue

When Pruitt officially repeals the rule, "we [will] take his dirty power plan to court," David Doniger, director of the Natural Resources Defense Council's climate and clean air program, promised during an Oct. 10 call with reporters.

Earthjustice, which represents Sierra Club as part of a legal team defending the Clean Power Plan, made a similar promise. "We anticipate filing a court challenge once the repeal is finalized," the group said.

Those pledges came after New York Attorney General Eric Schneiderman said he would sue the EPA to stop the repeal. New York is part of a coalition of 25 states, cities and counties that intervened to defend the Clean Power Plan in a legal challenge before the U.S. Court of Appeals for the District of Columbia Circuit. The court has yet to rule on the case but could do so before the EPA completes its repeal, Doniger said.

If the EPA eliminates the Clean Power Plan, Doniger vowed to push for a replacement rule that still requires deep emissions cuts. Among other options, the Natural Resources Defense Council would promote generation shifting from coal- to natural gas-fired plants or the installation of carbon capture and storage systems. Those options, which were among the Clean Power Plan's building blocks, would likely be disregarded by the Trump administration given opposition from many states and coal and power industry groups.

Several utilities opposing the Clean Power Plan have voiced support for a less stringent successor rule, fearing a lack of regulation could open generators up to citizen lawsuits. The EPA has considered a replacement rule that would require efficiency rate improvements at existing power plants, but doubts remain on whether the agency will introduce anything.

"He's hedging on whether there would be a replacement," Doniger said of Pruitt.

Those concerns were shared by former EPA Administrator Gina McCarthy, who was in charge of the agency when it finalized the Clean Power Plan in August 2015.

"A proposal to repeal the Clean Power Plan without any timeline or even a commitment to propose a rule to reduce carbon pollution, isn't a step forward, it's a wholesale retreat from EPA's legal, scientific and moral obligation to address the threats of climate change," McCarthy said. "The Supreme Court has concluded multiple times that EPA is obligated by law to move forward with action to regulate greenhouse gases, but this administration has no intention of following the law."

Sean Donahue, an attorney with Donahue & Goldberg, said in an interview Oct. 10 that EPA's proposal for repealing the Clean Power Plan was "to a remarkable degree a compendium of the very same legal arguments that the challengers to the" Clean Power Plan made in court.

Donahue is representing the Environmental Defense Fund in the Clean Power Plan lawsuit before the D.C. Circuit. He argued the position of the non-governmental organizations backing the Clean Power Plan before the court last year.

"The fact that we're now going to go on a new administrative proceeding and then come back to court over those very arguments is kind of remarkable and lamentable given that there is actually some time pressure here," he said, citing the need to rein in carbon emissions and ward off further harmful effects of climate change.

Legal arguments against

Amanda Garcia, a staff attorney with the Southern Environmental Law Center, said, "There's no question that EPA has the obligation to address carbon pollution," and it ultimately will be "up to the courts, not Administrator Pruitt, to say what the law is."

Garcia added that the law center would be submitting comments on the proposed repeal of the Clean Power Plan highlighting "some of the shortcomings that we see in terms of fulfilling EPA's duty to regulate carbon emissions at a time we're seeing increasing impacts from climate change in the southeast with sea level rise and storms."

Jeffery Dennis, special counsel at Jenner & Block, predicted that the biggest stumbling block EPA may face on the path to repealing the Clean Power Plan is the EPA's 2009 endangerment finding, which determined that greenhouse gas emissions endanger the public health and welfare.

The courts have consistently upheld that the Clean Air Act requires the EPA to set standards for source categories that contribute to those emissions. The substance of that finding is not at issue in the proposed rule, the notice specified. "So I think the next thing to watch for is what does EPA decide to do with that," Dennis said.

Roman Kramarchuk, head of energy policy and technology analytics for PIRA Energy, said in an interview Oct. 10, "If you get rid of the endangerment finding, then you no longer have a regulatory requirement to address CO2. That's something that's still out there as a possibility."

"If they don't go back and undo the endangerment finding they will have to go with a new plan and it's very likely they would come back with a plan with much more inside-the-fence regulation," Kramarchuk said.

On the other hand, Jeff Holmstead, former Assistant Administrator of EPA for Air and Radiation and counsel to the Electric Reliability Coordinating Council, said the Oct. 10 rulemaking was "not breaking any new legal ground."

"It is simply returning to the position that EPA had taken, under all prior administrations except the Obama administration, regarding the way in which industrial facilities can be regulated under a particular provision of the Clean Air Act," he continued. "To justify the [Clean Power Plan], the Obama administration came up with a new and tortured interpretation of this 45-year old provision."

Molly Christian is a reporter for S&P Global Market Intelligence, and Jasmin Melvin is a reporter for S&P Global Platts. S&P Global Market Intelligence, S&P Global Platts and PIRA Energy are divisions of S&P Global Inc.