Mich. to write compliance plan even as AG seeks stay of rule

Source: Elizabeth Harball, E&E reporter • Posted: Thursday, September 3, 2015

Michigan’s Republican governor yesterday announced the state will craft its own plan to comply with U.S. EPA’s new requirements to curb power plant emissions, even though the state’s attorney general has joined a group petitioning for an emergency stay of the rule.

“The best way to protect Michigan is to develop a state plan that reflects Michigan’s priorities of adaptability, affordability, reliability and protection of the environment,” Gov. Rick Snyder (R) said in a statement. “We need to seize the opportunity to make Michigan’s energy decisions in Lansing, not leave them in the hands of bureaucrats in Washington, D.C.”

Michigan Attorney General Bill Schuette (R) was among 15 state attorneys general who requested an emergency stay on the Clean Power Plan shortly after the final rule was released (EnergyWire, Aug. 14). It appears Snyder’s administration has opted to distance itself from that action.

“The AG is pursuing that case in his individual capacity, and at this time there are no plans for the state to join the current challenges,” Michigan Agency for Energy Director Valerie Brader said yesterday during a call with reporters.

In an emailed statement, a spokeswoman for Schuette said that while the attorney general “remains committed to stopping overregulation and excessive mandates from the EPA,” he “remains hopeful about the plan the Governor’s office is developing.”

During yesterday’s call, Brader and Department of Environmental Quality Director Dan Wyant joined the governor in stressing that the decision for Michigan to write its own plan was made to maximize the state’s control over how it complies with the final rule.

Following a review by the Michigan Agency for Energy, the state Public Service Commission, the state Department of Environmental Quality and the state Economic Development Corp., “the team determined that with robust stakeholder engagement, Michigan can identify a reasonable path to compliance,” Brader said. “We believe that a state plan will be far more beneficial to Michigan than any federal plan.”

State sees contradictions

Under the final Clean Power Plan, EPA is requiring Michigan to reduce its emissions rate by 39.4 percent, compared to 31.3 percent under the proposed rule.

Brader said the state was pleased that the initial compliance deadline was pushed to 2022, but she also expressed disappointment that EPA did not give Michigan credit for its efforts to reduce carbon emissions before 2012.

Additionally, the state argues it is still grappling with contradictory demands from the federal government under EPA’s rule to reduce power plant emissions and the Federal Energy Regulatory Commission’s requirement that the state keep coal-burning plants in Michigan’s Upper Peninsula online for reliability purposes (Greenwire, Feb. 19).

“The rule fails to address what would happen if a future, similar federal order was issued and the plant violated a new pollution law as a result of filing that order,” Brader said.

While the state intends to meet EPA’s deadlines, “it is actually impossible for Michigan to meet all the EPA requirements for a final plan before 2018,” Brader added. “EPA requirements for a final plan include enforceability, which will require us to move through our administrative rules process, which is a lengthy process.”

In March, Snyder presented the state’s Legislature with a plan that would reduce Michigan’s heavy reliance on coal (EnergyWire, June 30). Brader said that although Snyder’s vision was not crafted with the Clean Power Plan in mind, “we’re not seeing anything in this rule that would contradict what he was looking at as a wise future for Michigan.”

National group pans decision

Wyant of the Michigan DEQ said the state will engage with stakeholders to weigh participation in an interstate carbon trading program to comply with the rule.

The industry-backed American Energy Alliance blasted the state’s claim that writing its own plan will help it retain control over how the rule is implemented. AEA President Thomas Pyle said in a statement, “The governor claims this approach ‘retains control’ for Michigan, yet the opposite is true,” adding, “implementing this regulation, when serious legal challenges persist, effectively hands over the keys to Michigan’s energy future to unelected bureaucrats in Washington.”

A wide variety of other interest groups, including environmentalists, renewable energy advocates, utilities and religious organizations, came out in full-throated support of the governor’s decision.

“With carbon controls for utilities on the way, Michigan public power would much rather work with our Michigan regulators to establish the best approach, because Michigan DEQ understands the value of public power and has always worked with us to find reasonable, flexible, best-cost approaches to clean air improvements,” the Michigan Municipal Electric Association said in a statement.

The Michigan Chemistry Council urged the state to “consider all available options to ensure that Michigan’s ratepayers aren’t saddled with a huge energy bill.”

“We recognize the ongoing legal challenges to this regulation, and support Gov. Snyder’s decision to craft a State Implementation Plan (SIP) that can best protect Michigan’s ratepayers if those challenges are unsuccessful,” the industry group said in a statement.

“People who normally don’t agree on much are expressing support for the plan,” said Judy Palnau, a spokeswoman for the Michigan Agency for Energy and the Michigan Public Service Commission. “We are hearing from a lot of folks who decided that it’s important that they get their view out on this.”

Colo. AG also sues

Colorado’s Republican attorney general, Cynthia Coffman, on Friday announced her state also will sue EPA to halt implementation of the Clean Power Plan, one day after Gov. John Hickenlooper (D) said his state could easily meet the agency’s emission reduction targets and would not benefit from a lawsuit (E&ENews PM, Aug. 27).

“The rule is an unprecedented attempt to expand the federal government’s regulatory control over the states’ energy economy,” Coffman said in a statement. “The face of Colorado’s economy could be forever changed and that will be reflected in lost jobs, higher utility rates, and an altered energy industry.”