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Court scrutinizes Clean Power Plan foes' constitutional, feasibility arguments

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Court scrutinizes Clean Power Plan foes' constitutional, feasibility arguments

The U.S. Court of Appeals for the District of ColumbiaCircuit wrapped up a marathon session of oral arguments on the late Sept. 27by questioning opponents' claims that the carbon-cutting rule isunconstitutional and that the U.S. EPA failed to show its goals are achievable,among other issues.

After probingthe legality of generation-shifting and promulgating the rule under Section111(d) of the Clean Air Act, the en banc panel of judges delved into whether theEPA infringed on states' authority, gave sufficient notice and chance forcomment on changes between the proposed and final rule, and demonstrated thatthe generation-shifting the rule will require is achievable.

The Clean Power Plan allows states to form their ownimplementation plans or choose a federal one that the EPA has yet to craft.Despite those options, David Rivkin Jr., an attorney for state petitioners,told the court the rule gives states "no choice at all" and "commandeersthousands of state officials," making the regulation unconstitutional.

Judge David Tatel said the structure of the Clean Power Planis similar to the Americans with Disabilities Act, a federal law that isimplemented through state policies. He continued to return to this analogy: Ifthe federal government can require states to implement accessibleinfrastructure and other accommodations for people with disabilities under thatact, why is it unconstitutional for the EPA to require states to work withpower plants to implement the Clean Power Plan?

Rivkin responded that the EPA is telling states that "theywant them to engage in generation-shifting." Judge Patricia Millett,however, noted that the Clean Power Plan does not specifically prescribe anysingle compliance action.

Harvard Law School constitutional law professor LaurenceTribe said he does not believe there is anything unconstitutional about theADA. But had Congress been unable to issue that legislation and instead anagency took up the gauntlet to force states to develop "mini ADAs,"then the ADA would be unconstitutional. Tribe said that is precisely what theadministration and EPA did in issuing the Clean Power Plan. Tribe previouslyserved as an adviser to President Barack Obama's 2008 campaign. He wasrepresenting Peabody Energy Corp.and other non-state petitioners in the arguments.

Clean Power Plan defenders maintained that the EPA wasacting within its regulatory boundaries.

"States have the classic cooperative federalism choiceof regulating power plants' carbon dioxide emissions themselves through a stateplan or declining to do so, in which case EPA regulates private sourcesdirectly through a federal plan," said Amanda Shafer Berman, a lawyer forthe Department of Justice representing the EPA. If states decline to form theirown implementation plans, Berman said they incur no penalties or sanctions,unlike other cases where federal regulations were deemed unconstitutional fortheir state impacts.

Judge Brett Kavanaugh asked if providing power was not astate function. Berman responded that power production was largely carried out byprivate entities in coordination with regional grid operators.

Berman also dismissed petitioners' comparisons between theClean Power Plan case and a separate one — UtilityAir Regulatory Group v. EPA — where the U.S. Supreme Court ruled EPAoverstepped its authority in wanting to regulate carbon from small stationarysources. The court did, however, generally uphold the EPA's authority torequire greenhouse gas controls for larger sources. Berman saidthat case does not compare to the current matter because the Clean Power Planpertains to an emissions source — power plants — that is already heavilyregulated under the Clean Air Act.

Notice issues

The court next heard arguments from non-state petitionerattorney Thomas Lorenzen, who claimed that the EPA unlawfully added specific,nationwide carbon emissions rate limits for coal- and gas-fired plants in thefinal rule that were not part of the proposed rule.

Lorenzen said Clean Air Act Sections 307(b) and (d)'sreconsideration provisions, which only allow issues to be raised for judicialreview if they were objected to during the public comment period, "do notapply to failure of notice" because petitioners did not know about thecoal and gas limits until the rule was final.

Department of Justice attorney Norman Rave Jr. counteredthat the EPA received a wave of comments on potential subcategories for coaland gas plants and that states and affected sources should have expectedchanges to the final rule.

Judge Cornelia Pillard asked what type of detailspetitioners wanted, pointing to the EPA's assertions that it "had millionsof comments … hundreds of meetings, that a lot of what they did that'sdifferent [in the final rule] is stuff that was proposed by industry."

John Barker, an attorney for state petitioners, said therewas "no number" with regard to sub-category specific rates in theproposed rule.

"It is usual and normal for an agency when it realizesthat the approach in its proposed rule is not going to work to republish therule. … That's all that we're asking to be done here," Barker said.

The EPA has received 38 petitions for reconsideration of therule, Rave said.

Demonstration argument

The day wrapped up with discussions of whether the EPA demonstratedthat the generation-shifting the rule will likely require can be met by allstates, an issue that stoked heavy questioning from the justices.

William Brownell, an attorney for non-state petitioners,said the EPA failed to show that emissions credits from renewable energysources under the Clean Power Plan will be enough to allow fossil fuel-firedunits to keep running to meet demand while still be in compliance with the rule.

"The rule's requirement … has not been demonstrated norshown to be achievable," Brownell said.

But Kavanaugh said the "idea of administrative practiceis to come up with a program that hasn't been used before, but that doesn'tmean it's not adequately demonstrated necessarily."

Judge Judith Rogers added later that the EPA has beenstudying electric generation trends "for decades" and thatspeculating what is achievable when states have yet to submit theirimplementation plans would be "premature." Tatel repeatedobservations from Kevin Poloncarz, a lawyer representing power companies thatsupport the Clean Power Plan, that generating shifting is now "business asusual" for most utilities.

Brownell responded that fossil energy-rich states likeMontana, Wyoming and North Dakota will struggle to meet the rule's targets.

Millett went on to ask what states can do if they are havingtrouble complying with the rule despite good faith efforts.

"I have no doubt that EPA would be available to consultwith the state in this process as it went on," said Brian Lynk, aDepartment of Justice lawyer speaking on behalf of the EPA.

The words of Supreme Court justice Antonin Scalia, who diedin February, also loomed large during the arguments, including those he wrotein penning the UARG decision in 2014."When an agency claims to discover in a long-extant statute an unheraldedpower to regulate 'a significant portion of the American economy,' we typicallygreet its announcement with a measure of skepticism," Scalia wrote.

Noting that Section 111(d) is a rarely used article of theClean Air Act, Kavanaugh said Scalia's words "might have been written withthis case in mind."

The DOJ's Eric Hostetler attempted to explain why Scalia'swords did not fit the Clean Power Plan "to a T," as Judge ThomasGriffith suggested. Hostetler said the EPA is not to expand its authority tohundreds of new emissions sources, as it was in the rule under review in UARG.

Hostetler further defended the EPA's use of Section 111(d)of the Clean Air Act, pointing out that it was previously used to regulate leadcontent in gasoline. "You might not use the fire extinguisher in yourhouse until there's a fire. That doesn't mean you shouldn't use it when yourhouse is on fire," Hostetler said.