Update on Clean Power Plan Litigation
September 12, 2017
By: Chris M. Hunter
On September 7, 2017, the Environmental Protection Agency (“EPA”) filed a Status Report in the ongoing Clean Power Plan litigation (State of West Virginia v. EPA), which has been pending before the D.C. Circuit Court of Appeals for two years. Link.
The Obama Administration first released a draft version of the “Clean Power Plan” rules for existing coal-fired electric generating plants in June of 2014. A coalition of industry and states immediately filed suit in the D.C. Circuit Court of Appeals (the Clean Air Act provides for direct review of rules in that appeals court) to block implementation of the rule, but that initial challenge was denied as premature.
EPA finalized the Clean Power October 23, 2015. The final rule created a CO2 budget for states that cannot be met by existing coal-fired units. Instead, the rule depends on widespread “trading” by which states can meet their budgets only if coal-fired units are not run and power is generated by gas or renewable sources.
Soon after the Clean Power Plan was finalized, the group of states (led by West Virginia) and industry representatives again challenged the rule in the D.C. Circuit Court of Appeals. By order of January 21, 2015, the Circuit Court denied the stay, but the Petitioners immediately sought a stay from the U.S. Supreme Court, which the high Court granted on February 9, 2016.
Donald Trump was highly critical of the Clean Power Plan during his presidential campaign. Shortly, after taking office, President Trump signed an Executive Order, “Promoting Energy Independence and Economic Growth,” § 1(c), 82 (Fed. Reg. 16,093 (Mar. 28, 2017)), which required federal agencies to immediately suspend, revise, or rescind existing regulations that unduly burden domestic energy production. The executive order became President Trump’s first step towards fulfilling his campaign promise of rescinding the Clean Power Plan. Next, the President directed the Justice Department to ask the D.C. Circuit Court to forego or postpone consideration of the challenges to the Clean Power Plan. In March 2017, EPA filed a motion to hold the case in abeyance pending its review and forthcoming rulemaking. The D.C. Circuit Court granted a 60 day abeyance in April 2017, with a 60 day extension by order dated August 8, 2017. The Circuit Court directed EPA to file status reports at 30-day intervals.
In light of the U.S. Supreme Court’s decision in Massachusetts v. EPA (holding that greenhouse gases fit the Clean Air Act’s definition of “air pollutants”) and EPA’s December 2009 Clean Air Act § 202(a) “endangerment finding” regarding GHGs, EPA is required to regulate GHGs. Thus, it cannot simply rescind the Clean Power Plan without putting forth an alternative.
EPA’s most recent status report is noteworthy because the agency represents that it has begun the interagency review process of the alternative to the Clean Power Plan and has transmitted a draft proposed rule to the OMB Office of Information and Regulatory Affairs (“OIRA”). Once OIRA and EPA finish their internal review of the draft rule, the EPA Administrator will sign the proposed rule, and EPA publish it in the Federal Register for public comment. EPA reports that the proposed rule will likely be signed in the Fall of 2017. Given the controversy surrounding regulation of greenhouse gases, EPA’s proposed alternative to the Clean Power Plan will likely generate a great deal of public comments. Moreover, once the new rules are finalized, they will undoubtedly be the subject of yet another round of legal challenges.
This article was authored by Chris M. Hunter, Jackson Kelly, PLLC.