EPA delays power plant rules, will write model reg for states 

Source: Jean Chemnick, E&E reporter • Posted: Thursday, January 8, 2015

U.S. EPA will put off finalizing its greenhouse gas rules for new, modified and existing power plants until midsummer, acting EPA air chief Janet McCabe said today.

The new schedule means deadlines will slip for all three regulations.

McCabe also announced EPA will begin writing a federal model rule for the Clean Power Plan for existing power generators.

The model, which will also be final this summer, will offer guidance to states as they begin to assess ways to comply with the rule and will show what EPA would impose if they fail to submit approvable state plans by deadlines beginning in 2016.

McCabe attributed the delays in finalizing the three rules to EPA’s choice to extend the public comment period for the existing power plant rule by six additional weeks last fall — a decision she said on the press call “unavoidably and, we believe, completely appropriately added time to our schedule.” The agency also issued a notice of data availability in October that asked for stakeholder comment on several alternatives to the original draft.

The additional time will give the agency an opportunity to sort through more than 2 million comments for the rules for existing and modified power plants, and another 2 million for the new source rule filed ahead of its public comment deadline May 9.

Treating the rules as a package, McCabe said, will allow EPA to address “crosscutting topics” that run through all three rules, including the way natural gas units would be treated in both the new and existing regulations.

The delay means the agency will miss a statutory deadline for finalizing the new power plant rule tomorrow, one year after the proposal was published in the Federal Register. But stakeholders have few practical options for enforcing that timeline, and environmentalists have said they’re more interested in getting the right rule than in avoiding incremental delays.

President Obama’s Climate Action Plan called for the existing power plant rule to be final by June 1, 2015. Proposals for existing and modified plants were issued last June 2.

The new schedule will push the timeline back for legal challenges to the three rules. It will mean the new Republican Congress must wait to attack the regulations using the Congressional Review Act. Those challenges can only be launched against final rules.

Industry and its allies have said that all three rules are vulnerable to court challenge.

The new power plant rule, written under the Clean Air Act’s Section 111(b), would require all new coal-fired generating units to use carbon capture and storage (CCS) to reduce their emissions. But coal industry advocates plan to challenge the basis for EPA’s determination that CCS is ready to be deployed commercially, noting that no U.S. power plants currently use CCS (see related story).

The rule for new facilities must be in place before EPA finalizes its June 2 proposal for existing power plants, and a successful challenge to the new source rule could scuttle both regulations.

While McCabe emphasized that EPA would prefer to see states write their own plans to carry out the existing-plant rule, she said EPA’s model rule could be imposed on states if they opt not to write their own.

“What this is about is to make sure we’re ready if we should need such a thing,” she said.

Lawmakers and regulators in Texas and a few other states have suggested they might not write a plan because they believe it will be thrown out in court.

At least one state also faces internal legal barriers that might prevent it from complying with the federal law. Kentucky has enacted a law that would limit its state agency to writing a plan that would require only emissions cuts that can be achieved inside the property line at a power plant — a hurdle the state’s own officials have said could prevent the state from writing an approvable plan.

David Doniger, climate policy director at the Natural Resources Defense Council, said EPA’s announcement actually keeps implantation of its rules on track.

“The agency today underscored the importance of staying on schedule — and it is. EPA also made clear that it will have ready a federal implementation plan for any state that fails to come up with its own,” he said. “So it’s full speed ahead for the Clean Power Plan, which will deliver America’s first-ever limits on power plant carbon pollution, the main culprit fueling dangerous climate change.”

But while today’s announcement pushes back EPA’s deadlines to finalize the rules, it does nothing to change state deadlines to write and submit Clean Power Plan implementation strategies. Those begin in June 2016 — less than a year after the agency plans to have issued a final rule.

Opportunities for extensions exist, but Thomas Lorenzen, a former Justice Department environmental lawyer now in private practice at Dorsey & Whitney, said states are already feeling a time crunch on this rulemaking.

“To provide less than a year to states seems very, very aggressive,” he said.

McCabe dismissed questions on the call about whether EPA might have pushed back the deadline to frustrate legal or legislative challenges, but Lorenzen said delaying the final new source rule might have its strategic advantages.

“Putting the two out together allows the courts to look at them all as a whole package and potentially allows more time for development of carbon capture,” he said.

The coal industry, meanwhile, said EPA’s promise to write a federal model is further evidence that it is “doubling down” on a regulation that will be hazardous to the economy.

“The administration is turning a deaf ear to mounting concerns being raised by energy experts, grid operators and state officials and is instead continuing its ‘go at it alone’ mentality — all to fulfill a misguided presidential legacy,” said Mike Duncan, president and CEO of the American Coalition for Clean Coal Electricity.