U.S. CHAMBER OF COMMERCE

Getting it Right the Second Time

By Heath Knakmuhs

 Back in June 2014, the Environmental Protection Agency issued its proposed regulations to address greenhouse gas emissions from electric generating units, or EGUs.  A little over a year later, this proposal was finalized as the so-called Clean Power Plan (CPP).  A flawed process from the beginning led to a finished product with many substantive problems, which is why we were a leading party to litigation on the rule.  The CPP was crafted behind closed doors, using the work of a small group of environmental activists’ as the blueprint for the EPA’s final rule.  Minimal stakeholder outreach was conducted until the nearly fully baked Clean Power Plan was introduced to the public.

Earlier this year, the Trump Administration announced its intentions to abandon the rule—which had been stayed by the Supreme Court—and to start over.  They’re off to a good start.  The EPA’s Advanced Notice of Proposed Rulemaking (ANPRM) issued yesterday is what real stakeholder outreach looks like.  The EPA has now commenced an open process to solicit input on a broad range of questions from all interested stakeholders.  Instead of being presented with a fully baked proposal, the ANPRM is an important (and previously omitted) step toward making future EPA greenhouse gas regulations affordable, achievable, and durable, while also abiding by the statutory limitations inherent in the Clean Air Act.        

Not only does the ANPRM kick off the first truly transparent process to develop these regulations, but it also appropriately emphasizes the Clean Air Act’s allocation of responsibilities between state and federal entities.  In particular, the EPA now seeks comments on its development of the Best System of Emission Reduction, or the available and demonstrated cost-effective methods for reducing greenhouse gas emissions at EGUs.  With this input, the EPA will then formulate “guidelines” for the states, which will then be tasked with formulating compliance plans based both upon (1) the input provided by the EPA guidelines; and (2) the actual facilities present in the states and their particular characteristics.  Thus, the proscriptive one-size-fits-all construction of the CPP is gone, and the federalist underpinning of the Clean Air Act has been restored.

 Beware of the states that may argue that the EPA’s current recognition of the Clean Air Act’s statutory limitations will lead to lower than optimal greenhouse gas emission reductions.  While we have maintained that the Clean Air Act is not the right tool to tackle greenhouse gas emissions, it remains the only tool that Congress has provided.  Thus, the ANPRM acknowledges that while the Clean Air Act limits the scope of emissions reductions that can be imposed by the EPA upon regulated entities, the Clean Air Act does not prohibit states from more aggressively regulating emissions within their borders.  Thus all states, including high-cost electricity states such as California or New York, are free to pursue more stringent standards if they so choose.

The ANPRM proposes a collaborative effort with stakeholders to understand the types of improvements that can be made – both physically to plant facilities and operationally to how those facilities are maintained and operated – to improve the efficiency of the regulated EGUs.  Equally important, it does so while being mindful that not all such improvements can be implemented at every regulated source.  Instead, the EPA has signaled its intent to let states decide the availability of cost-effective upgrades to their respective EGUs, consistent with the fact that state regulators have far greater knowledge of the characteristics of the power plants physically sited within their borders.  With this recognition, applicable improvements can be linked to the appropriate facilities, without unrealistic compliance obligations being based upon unrealistic, one-size-fits-all EGU upgrade assumptions.   

 The EPA is proposing that all stakeholders submit comments within sixty days of the ANPRM’s publication in the Federal Register.  This represents sixty more days of public input than was provided before the privately drafted Clean Power Plan proposal was first unveiled.  Yesterday marked the beginning of a collaborative approach among the federal government, states, and all stakeholders to develop a more durable and achievable approach to addressing carbon emissions.  We look forward to participating in this effort, and to the development of guidelines that lower emissions, preserve America’s energy advantage, and respect the boundaries of the Clean Air Act.

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