Another industry group asks agency to regulate carbon

Source: Niina Heikkinen, E&E News reporter • Posted: Friday, September 22, 2017

More power companies are calling on U.S. EPA to regulate greenhouse gases rather than nix the Clean Power Plan.

The Coalition for Innovative Climate Solutions, a group that represents electric generating companies and service providers in 19 states, is asking EPA to provide industry with “regulatory certainty” by developing a replacement for the Obama-era regulation on carbon emissions from power plants.

Representatives for CICS, whose members include Xcel Energy Inc., Ameren Corp. and Entergy Corp., met with staff from EPA and the White House Office of Management and Budget last week to discuss how the agency might replace the rule. The meeting comes as EPA prepares to propose a rollback of the Clean Power Plan this fall.

The agency is expected to either do away with the Clean Power Plan or begin the process of replacing the rule with a weakened version that would focus on regulating carbon emissions at the facility level. If EPA does pursue the latter option, which many supporters and opponents of the rule think is the most legally defensible approach, the agency would be acknowledging that it has to regulate carbon dioxide. This would go against far-right conservatives, some of whom have pushed EPA Administrator Scott Pruitt to stop regulating carbon emissions under the Clean Air Act and to scrap EPA’s underlying endangerment finding, a cornerstone of climate action.

CICS members say that having some version of the Clean Power Plan on the books will help the electric generating industry plan for the future. Regulating carbon could also prevent the creation of a “regulatory vacuum” that could put member companies at risk of citizen lawsuits for not controlling emissions, the group said.

“The electric industry, which has decades-long planning horizons, requires long-term regulatory certainty to make infrastructure investment and related business decisions,” CICS wrote in a Sept. 13 white paper the group submitted to OMB.

Unlike the Obama-era Clean Power Plan, which would have set state-level emissions targets, the power companies called for those targets to be based on what individual facilities could achieve. This “inside the fence line” approach would take into account technological feasibility and costs to achieve the reductions, according to CICS.

CICS isn’t the first industry representative to ask EPA to provide some sort of regulation for carbon emissions from power plants. The U.S. Chamber of Commerce and the National Association of Manufacturers told EPA and OMB in July that they support EPA developing a more limited regulatory approach (Climatewire, Aug. 1).

In June, a number of CEOs from the power industry flew to Washington to meet with Pruitt and urged him to replace the Clean Power Plan rather than get rid of it (Climatewire, June 22).

David Doniger, director of the Natural Resources Defense Council’s climate and clean air program, said Pruitt could float a number of different legal arguments for repealing the Clean Power Plan. One of them could claim that EPA doesn’t have the authority to regulate carbon emissions because it was already regulating mercury under a different section of the Clean Air Act. Pruitt may also argue that the rule invaded the constitutional power of states, and that the previous administration had forced a change in the “energy mix.”

Doniger noted that EPA would face legal challenges for any replacement plan that raises emissions. He said there’s “no way” Pruitt could legally sustain efforts to repeal the endangerment finding.

Doniger added that while companies may not have liked Obama’s Clean Power Plan, the current situation is creating more uncertainty for the industry.

“The power industry knew where it was going, and they knew what EPA had done, but it was doable and it was predictable. All this litigation and the election results have done is scramble any ability for them to know where this is going,” he said.

In its white paper, CICS called for the agency to give states “broad authority” to come up with their own plans for emissions reductions. That could include allowing states to achieve emissions reductions through equivalent state programs. CICS asked that EPA clearly lay out how the administration would encourage “cooperative federalism.”

“States are in a better position than EPA to assess their own energy resources, identify constraints and opportunities, determine which measures can be implemented on a manageable time table, and develop appropriate programs and measures,” the white paper reads.

Members also asked EPA to give credit to companies that had already made progress toward cutting emissions through actions like performance upgrades and plant retirements.

CICS added that EPA should act quickly to replace the Clean Power Plan but noted that it would take “considerable” time to develop and implement plans to comply with it.

It suggested that EPA propose new guidelines in the beginning of 2019 and finalize them by the end of that year. States would then have two years to develop their own plans by the end of 2021. Compliance for the rule could then begin Jan. 1, 2035, and would “allow a flexible, phased approach.”

Along with EPA and OMB staff, the September meeting included Frank Prager, vice president of policy and federal affairs of Xcel Energy, as well as Megan Berge and Bill Bumpers, partners at the law firm Baker Botts LLP who represented CICS.

Berge declined to discuss any details of the group’s requests or the meeting itself. Prager could not be reached for comment by press time.