The Clean Power Plan’s Day in Court

Yesterday, the U.S. Federal Appeals Court for the District of Columbia heard oral arguments on the legality of the Clean Power Plan (CPP), the nation’s first rule placing federal limits on carbon pollution from power plants, which until recently were the nation’s largest source of emissions. Carbon pollution is one of the greatest threats to wildlife, communities and habitat.

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What is the Clean Power Plan?

The Clean Power Plan places first-ever federal limits on carbon pollution from power plants. Photo from usgs.gov

The Clean Power Plan places first-ever federal limits on carbon pollution from power plants. Photo from usgs.gov

The CPP will cut harmful carbon pollution emissions from power plants 32% by 2030. In crafting the final CPP, the Environmental Protection Agency looked at three building blocks: efficiency measures at existing coal plants, shifting electric generation to existing and lower emitting gas fired plants, and bringing on line more renewable power generation to formulate emission reduction targets for states. Under the rule, the states are then able to flexibly draft their own plans to meet these targets or have EPA issue a plan for the state.

However, the Supreme Court has issued a stay (or pause) so states’ obligations to move forward with plans have been put on hold while the legal process plays out.

What Issues are Before the Court?

Industry is challenging the substance and process of the CPP. Likely given the weight of the case, in a unique move, the entire bench (en banc) for the federal appeals court is hearing the case. Generally, just three judges hear the case.

The Clean Power Plan will help moose, which are suffering from warmer weather and climate change. Photo by Belle Chasse

The Clean Power Plan will help moose, which are suffering from warmer weather and climate change. Photo by Belle Chasse

There are several issues the court is considering, some of the key issue observers are focused on is the following:

Generation Shifting

Under the applicable law, Section 111 of the Clean Air Act, EPA is supposed to base emissions reductions targets on the best systems of emissions reductions that has been adequately demonstrated. Looking at the industry, EPA sensibly concluded that the best system – from both an emissions reduction and cost standpoint – was shifting power generation from dirty to cleaner sources.

Despite the fact that generation shifting is easier and less costly for industry to do, industry has challenged this “generation shifting” approach to calculating targets. Industry is arguing that EPA should limit the targets to what can be gained with improvements to existing coal plants, such as the expensive and unproven carbon capture and storage.

Such an approach not only fails to be the “best system”, but it is costly and something industry or the states are unlikely to primarily rely on for compliance regardless. This argument by industry is largely an attempt to deprive the rule of meaningful reduction targets.

Confusion over Hazardous Air Pollutants Sources

Industry is also focusing on a quirk in the law. When the Clean Air Act Amendments were passed in 1990, two versions of the bill became law without being reconciled: one version passed by the House, and one by the Senate. The Senate version made clear that Section 111 could regulate pollutants that were not already regulated by Section 112, which governs hazardous air pollutants, even if the source is regulated under Section 112 for a different pollutant. The House version had ambiguous language that industry is using to argue that if a source is regulated under Section 112 for any pollutant, it cannot be regulated under Section 111 even if the pollutant at issue (e.g. carbon dioxide) is not otherwise regulated.

In resolving this ambiguity, EPA looked to the structure and purpose of the Act to determine that sources can be regulated under both Sections 111 and 112 in order to ensure that all pollutants are properly controlled. Since most power plants are regulated under Section 112, industry’s argument would essentially make Section 111 – and the Clean Power Plan – meaningless.

Procedural Issues

Industry is also arguing that EPA’s changes to the rule, such as looking more regionally at the electric grid to determine state targets, were substantial enough between the draft and final rule as to rob them of proper process. EPA is arguing that the final rule changes were predictable and followed from the draft rule.

Possible Outcomes

NWF is working hard to transition our economy to cleaner sources of energy, like these offshore wind turbines in Rhode Island - the first in the United States. The Clean Power Plan will help speed the transition to clean, responsible energy. Photo by Jim Murphy

NWF is working hard to transition our economy to cleaner sources of energy, like these offshore wind turbines in Rhode Island. Photo by Jim Murphy

While it is hard to predict outcomes, the EPA has crafted a very solid rule that is based on the realities of our electric sector and existing trends in our energy sector as coal wanes and renewable sources rapidly grow. That said, the variety of outcomes is wide. The rule could be upheld in its entirety, it could be completely thrown out in a manner that makes it very hard for EPA to take further action to achieve meaningful cuts, or EPA could be forced to make modifications to the rule.

A decision from the court is likely later this year or early next year. The case is almost certain to go back to the Supreme Court. In deciding on the stay, the Court split 5-4 with the now deceased Justice Scalia voting for the stay. If his seat is not filled, and the Court splits 4-4, the lower court decision will stand. If a new justice is appointed before the case is heard, she or he may be the deciding vote.

What Should States Do?

Meanwhile, about 20 states are already working towards compliance. This is in large part because generation shifting is already occurring. While coal use and production has fallen 29% over the last decade, solar and wind are by far the fastest growing sources of power. Solar and wind power now combine to provide about 4 times of the number of jobs as coal in the U.S.

The renewable energy future is upon us, and with it will come reductions in harmful carbon pollution that hurts wildlife. A dozen states already have more than 10% of their power coming from wind, and solar energy has doubled seven times in the last 15 years.

So then, the question is whether the CPP and other policies will work to ensure this transformation takes place quickly enough to avoid the worst of climate impacts to wildlife.

What the court decides will play a big role in how our race against the clock turns out.

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