Some opponents say EPA looking good after oral arguments

Source: Rod Kuckro, E&E reporter • Posted: Monday, October 3, 2016

With time to reflect on the way Tuesday’s nearly seven hours of oral arguments on U.S. EPA’s Clean Power Plan unfolded, some of those aligned with opponents of the rule anticipate an uphill battle with the U.S. Court of Appeals for the District of Columbia Circuit.

“It appeared to me that it was going to be upheld, and I think that’s the general consensus,” said Ray Gifford, an energy lawyer with Wilkinson Barker Knauer LLP and a former chairman of the Colorado Public Utilities Commission.

“You can count six or seven [judges in favor of EPA] pretty readily,” he said of the 10-judge panel that heard the landmark case.

Gifford was in the courtroom the entire time on behalf of a client that filed an amicus brief in support of petitioners that want to see the rule to curb carbon emissions from power plants voided.

“EPA portrayed [the rule] as gradual, not radical, simple, achievable, flexible, and the D.C. Circuit really seemed to buy that. And you didn’t have the counternarrative emerge that the petitioners would want that this is a totalistic transformation of the U.S. electric industry,” Gifford said.

“Institutionally, the court was not poised to overturn this rule,” he said.

An attorney aligned with public power interests who spent the day in court felt similarly.

“I never like to presume where judges are going to rule. But coming out of it, I do think EPA is more likely to win. But I would be surprised if they uphold their rule in its entirety. My gut says it may be a win for EPA, but it’s going to be messy,” the attorney said, noting that the D.C. Circuit “tends to be pretty deferential to federal agencies.”

If opponents of the EPA rule are to prevail, it would likely be on the statutory argument that EPA does not have the authority to propose such an economically consequential rule without a clear statement from Congress, the attorney and Gifford agreed.

Neither came away from the courtroom believing the opponents had convinced the judges of the merits of arguments regarding the constitutionality of the rule, faulty notice or conflicting legislative wording in the Clean Air Act that’s guiding the plan. “The judges didn’t seem very receptive” to those arguments, the attorney said.

Gifford, a former electricity regulator, thought the discussion between the judges and attorneys “was so abstract it struck me that the court didn’t fully appreciate what [this rule] is asking the states to do. The institutional ability [of states] to actually put this into effect is enormous, and I don’t think anybody appreciates that.”

“This is a helluva thin reed on which to premise a fairly elaborate and certainly ambitious regulatory system,” Gifford said.

“Issues are going to break out in the states as this moves forward — I think we’re going to see a lot of fights between utilities. The states that hate it the most are the ones that are going to have the most work to do, and they are going to be the most resistant to doing anything,” he said.

Jim Matheson, the new CEO of the National Rural Electric Cooperative Association, said he thinks it’s “dangerous to read too much into” the back and forth between the judges and the attorneys for the petitioners and respondents.

The fact that the arguments went so much longer than anticipated “reflects the complexity of the issue,” said Matheson, a former seven-term Democratic member of the U.S. House from Utah who took on the NRECA job 10 weeks ago.

“It tells us that however this plays out over time, I don’t think it’s a big win or a big loss — I think there’s going to be a nuanced and complex decision” by the D.C. Circuit that will lean in EPA’s favor.

When he represented Utah as a Democrat in the House, Matheson voted against the Waxman-Markey bill that would have established a nationwide cap-and-trade regime for carbon dioxide.

“It wasn’t equitable by any means” insofar as how emissions allowances were allocated among states, he said, calling the measure “a gift” to states with hydropower and nuclear plants. “I thought the interregional transfer of wealth and money wasn’t fair.”

Today, Matheson concedes that for NRECA’s 950 members in 47 states, the electric generation and clean energy landscape is different than in 2009.

“There’s a range of thought and opinion across all of them” on the Clean Power Plan because “across different members it has a different impact,” especially because of a co-op’s size.

Whether the tone of the oral arguments will influence states and utilities that are opposed to the rule to reconsider decisions to “put down their pencils” is unclear.

Some of the states that are petitioners “are still working on plans,” the public power attorney said.

“Some folks probably will just wait it out, other folks may re-evaluate, and others have been [working on compliance] anyway,” he said.

“I don’t think that a state that has really dug in its heels is going to change its mind because the oral argument didn’t go as well as they had hoped,” he said. “It’s the D.C. Circuit; it’s pretty deferential. The odds are still in EPA’s favor.”