15 governors question legality of EPA rule proposal in letter to Obama

Source: Jean Chemnick, E&E reporter • Posted: Wednesday, September 10, 2014

Governors of 15 fossil fuel-heavy states took swings yesterday at U.S. EPA’s proposed climate rule for existing power plants, targeting the proposal’s legal underpinnings and practical feasibility.

In a letter to President Obama, the governors warn that EPA had built its draft rule on a shaky legal foundation.

Making an argument that’s been made before in Capitol Hill debates and in legal petitions over the past year, the governors say unresolved statutory language dating back to the Clean Air Act Amendments of 1990 precludes EPA from regulating the same pollution sources under the law’s Sections 111(d) and 112 even if the agency is acting in two separate emission categories.

EPA’s supporters say the agency should get deference when there is doubt about congressional intent, but the governors call the decades-old disagreement between House and Senate amendments “unambiguous.”

Even if the agency does have legal authority to regulate power plants under 111(d), they write, that section’s language confines any rules to the physical boundaries of power plants. In its June 2 rollout of the proposal, EPA drew on a suite of systemwide reduction options — including demand-side efficiency and renewable energy — when determining state obligations.

“In addition to these legal prohibitions, the rule poses numerous practical problems for state compliance,” the governors wrote. “These problems reflect your administration’s decision to move forward with the proposed regulation without considering or understanding — among other crucial matters — our state energy markets and infrastructure needs.”

They asked whether the Obama administration believes the federal government would claim the right to enforce state policies — such as renewable energy standards — if they were included in state-written plans for the rule.

Other concerns for the governors: the siting of new zero-carbon power generation, the feasibility of building new natural gas transmission infrastructure to support gas-fired plants to replace higher carbon coal-fired power, and questions about the disposal of nuclear waste.

They also noted that some states produce power that is sold across state lines, but the energy-producing states bear most of the burden for making emission reductions.

“The economic health of our nation depends on accomplishing a balanced energy and environment policy,” they wrote. “States should be pursuing a strategy that achieves its objectives without severely harming our economies and pitting states against one another.”

The letter covers well-trodden ground. Some of the states represented on the letter have already joined legal petitions challenging EPA’s right to regulate, and industry has signaled that it intends to challenge any rule that extends beyond a power plant’s fence line.

These questions could also play out as states prepare to implement the rule.

At a House Energy and Commerce Subcommittee hearing yesterday, Ken Anderson, a member of the Public Utility Commission of Texas, said his state might be reluctant to write a state implementation plan (SIP) that goes beyond the fence line because its officials would worry whether they were “handing the keys to our whole system in effect over to EPA, and perhaps even more challenging, to various third parties who would then have the ability to file federal civil lawsuits to enforce the SIP.”

He said that Texas’ regulatory agencies are not yet focused on whether or not to write a plan, but that they had been advised that a SIP could undermine challenges to the EPA rule.