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States argue recent smog rulings support petitions targeting upwind coal plants

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States argue recent smog rulings support petitions targeting upwind coal plants

The states of Delaware and Maryland told a federal appeals court on Oct. 8 that a recent ruling by the same court supports their position in a legal battle over smog-forming emissions from upwind coal plants that drift across state lines.

In late 2018, both states sued the U.S. Environmental Protection Agency over its denial of petitions submitted under the Clean Air Act's good neighbor provision that targeted emissions from roughly three dozen coal-fired power plants in Indiana, Kentucky, Ohio, Pennsylvania and West Virginia.

In rejecting those petitions, the EPA stated that the downwind states had failed to meet their burden of proof showing that cost-effective emission reduction measures were readily available. At the same time, the agency concluded that its decision to "close out" a 2016 update to the Obama administration's Cross-State Air Pollution Rule sufficiently addressed the upwind states' good neighbor obligations under the statute.

The Clean Air Act's good neighbor provision prohibits upwind states from significantly interfering with downwind states' ability to comply with the National Ambient Air Quality Standards, or NAAQS, which regulate ground-level ozone a key ingredient in smog. In 2008, the EPA reduced the ozone NAAQS from 80 parts per billion to 75 ppb and lowered the standard again in 2015 to 70 ppb.

In a consolidated lawsuit, Delaware and Maryland argued that the Trump administration's close-out rule inappropriately determined that all remaining nonattainment regions for both standards in the eastern U.S. will be in compliance by 2023, or two years later than the deadline required under the NAAQS. That argument was opposed by coal plant operators including American Electric Power Co. Inc. subsidiaries Appalachian Power Co. and Indiana Michigan Power Co., and Duke Energy Corp. subsidiaries Duke Energy Indiana, LLC and Duke Energy Kentucky Inc.

With the case fully briefed, the U.S. Court of Appeals for the District of Columbia Circuit in a separate Sept. 13 ruling told the EPA to rework its 2016 update to Cross-State Air Pollution Rule. There, the court found that the Obama-era regulation impermissibly allowed upwind states to continue producing significant levels of interstate emissions beyond downwind states' NAAQS attainment deadlines. That prompted the D.C. Circuit on Oct. 2 to vacate the EPA's close-out rule, finding the regulation rested on the same flawed legal interpretation of the Clean Air Act that the court rejected less than a month earlier.

While acknowledging that the Oct. 2 ruling covered "similar subject matter," the EPA argued in an Oct. 3 letter to the judges hearing the litigation of the Maryland/Delaware petitions that the decision should have "little bearing" on its denials of those petitions. In fact, the agency contended that the Oct. 2 ruling confirmed it can consider "the amount of upwind states' contribution and the cost of abating them."

But attorneys for Maryland and Delaware pushed back on that assertion in their own Oct. 8 letter, arguing the EPA is unable to rely on any of the cost determinations it made in its close-out rule because that regulation was completely vacated. Those determinations included conclusions that certain emissions controls were too costly to incorporate into that rule's emission allowance trading framework, the states noted.

The pending consolidated D.C. Circuit case involving the good neighbor petitions is State of Maryland v. EPA (No. 18-1285).