One of the main arguments leveled against the Obama-era Clean Power Plan could also be used to unravel the Trump administration's proposed replacement rule, according to 20 attorneys general representing midwestern and southern states.
The argument — the so-called 111(d)/112 exclusion theory — was raised in the protracted legal battle over the Clean Power Plan, which was issued by the U.S. Environmental Protection Agency in 2015. Two years later, the same argument has resurfaced as the Trump EPA proceeds with its scaled-back replacement: the Affordable Clean Energy, or ACE, rule.
The Clean Power Plan sought to reduce climate-changing carbon dioxide emissions from existing coal-fired plants by 32% below 2005 levels by 2030 by encouraging a shift toward renewable and gas-fired power generation. Under that rule, states were given three main compliance options: improving the heat rate of existing coal-fired power plants, relying more heavily on lower-emitting existing natural gas plants, and boosting the use of renewable energy sources such as wind and solar.
The plan encountered stiff resistance immediately, with a coalition of 27 states and industry groups challenging the regulation in the U.S. Court of Appeals for the District of Columbia Circuit on the grounds that the EPA had overstepped its authority under the Clean Air Act. The U.S. Supreme Court eventually stayed the Clean Power Plan in 2016 before it could take effect and remanded the rule back to the D.C. Circuit for further argument.
There, opponents asserted that coal-fired power plants could not be regulated for carbon emission under Section 111(d) of the Clean Air Act because they are already subject to the Obama-era Mercury and Air Toxics Standards, or MATS rule, under Section 112 of the act. Lawyers for the U.S. Department of Justice contended that a series of changes to the Clean Air Act in 1990 was not meant to prevent regulation under Section 111(d) of nonhazardous air pollutants such as carbon from power plants, even if those facilities are regulated for air toxics under Section 112.
Background
The 111(d)/112 exclusion dates back to a confusing series of amendments the U.S. Senate and House made to the Clean Air Act around 1990. The Senate's amendment stated that pollutants can be regulated under Section 111(d) so long as they are not on a list created under other sections of the Clean Air Act, while the House amendment's language has been interpreted by Clean Power Plan opponents to preclude regulation of the same source under both Section 111(d) and Section 112.
The EPA has made several attempts over the years to clear up the confusion, even dedicating space in the lengthy Clean Power Plan regulatory document to further bolster its authority to use Section 111(d) for carbon. The rule's detractors were not convinced, asserting during oral arguments on the rule that the EPA lacked authority to use 111(d) to promulgate it.
West Virginia Solicitor General Elbert Lin argued the House amendment should hold the most weight, while DOJ attorney Amanda Shafer Berman noted that municipal solid waste landfills are regulated under both sections of the law. U.S. Supreme Court Justice Brett Kavanaugh, then a D.C. Circuit judge, appeared skeptical of Lin's assertions, referring to the two amendments as a "hall of mirrors." D.C. Circuit Judge Cornelia Pillard said calling simultaneous oversight under Sections 112 and 111(d) "double regulation" would be like saying that making motorists drive on the right side of the road while obeying the speed limit is double regulation.
MATS review
The D.C. Circuit held the Clean Power Plan litigation in abeyance to allow the incoming Trump administration to review the regulation, and the EPA unveiled the ACE rule Aug. 21. The proposal, also promulgated under Section 111(d), would require states to establish their own emission standards for individual coal-fired power plants based on a menu of seven optional heat-rate improvements. Proponents of the plan have said the rule's "inside the fenceline" approach represents a legal alternative to the Clean Power Plan.
However, state attorneys generals are urging the EPA to first delist coal-fired power plants from mercury regulation under Section 112. The agency is in the midst of reviewing the cost-benefit analysis the Obama administration used to justify the MATS rule, a process that could make the regulation vulnerable to a legal challenge.
"The plain text of the [Clean Air Act] simply requires EPA to choose: either continue to regulate coal-fired plants under its 'Mercury and Air Toxics Standards,' which are issued under the purview of section 112 … or stop regulating those sources under that rule and regulate them under section 111 (that is, via ACE) instead," West Virginia Attorney General Patrick Morrisey and 19 other state attorneys general said in Oct. 31 comments. "Once that choice is made and the specter of double regulation is removed, ACE would no longer be haunted by the prospect of section 112 exclusion."
In a general sense, allowing states to regulate mercury under Section 111(d) would give them greater flexibility, Andrew Grossman, a partner at Baker Hostetler, said in a Nov. 6 interview. Baker Hostetler also filed comments on behalf of the National Bituminous Coal Group urging the EPA to ensure coal-fired power plants are no longer regulated under Section 112. "Everybody expects that these types of emissions would still be regulated," Grossman said.
Ann Weeks, an attorney with the Clean Air Task Force, said in a Nov. 6 interview that delisting coal plants from Section 112 is easier said than done. "You don't just snap your fingers and delist," she said, noting that the EPA would need to meet a lengthy set of criteria first. Weeks also noted that the MATS rule regulates additional air toxins that can cause serious illnesses. "You would have to show something that science won't allow you to show."
The Clean Air Task Force said in its own public comments that the ACE rule is illegal under the Clean Air Act because it would actually increase CO2 emissions. Over the EPA's 28-year policy modeling horizon, 18 states are projected to have higher emissions, resulting in 193 million tons of additional CO2 compared to establishing no rule at all, the group said.
The return of the 111(d)/112 exclusion theory prompted Clean Power Plan supporters to reiterate the stance that the D.C. Circuit should decide the pending case before the ACE rule proceeds. "We've emphasized that the fact that many of the issues raised in the CPP repeal-replacement rulemaking are the same as presented in the West Virginia v. EPA case [which the D.C. Circuit has held in abeyance] is a reason the court should decide the case," said Sean Donahue, an environmental attorney with Donahue & Goldberg.
