CLIMATE

Republican statehouse gains load the dice for anti-EPA bills

Environmentalists are girding for an onslaught of new state bills to delay or kill U.S. EPA's Clean Power Plan as state legislatures return to work beginning this week with Republicans now in control of two-thirds of the nation's legislative chambers.

November's midterm elections gave the GOP new majorities in 11 legislative chambers, placing 68 of the nation's 98 partisan chambers in its control. And greens worry that these new Republican strongholds could be fertile ground for legislative proposals by the conservative American Legislative Exchange Council that would make it harder to implement the greenhouse gas rule for the existing power plants.

ALEC acts as a clearinghouse for state bills aimed at limiting regulation across a broad swath of topics, including the environment. The group did not respond to calls for this story.

"We're definitely seeing ALEC escalating its environmental rhetoric because there are more Republicans in charge of the legislatures, or we're watching or tracking to see what that really means," said Aliya Haq of the Natural Resources Defense Council.

Lawmakers from two states -- Virginia and Missouri -- prefiled legislation before those legislatures returned for the new session on Jan. 8 that could affect the states' ability to submit implementation plans to comply with EPA's deadlines beginning in 2016.

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One draft pending in Missouri, to be offered by state Sen. Gary Romine (R), would require the state Division of Environmental Quality to submit a blueprint of any implementation plan for a Clean Air Act or Clean Water Act rule to the Legislature and the governor for review one month ahead of filing it with EPA, complete with an assessment of its potential economic costs. If lawmakers don't move to block it, the measure would travel to EPA for its approval.

The proposal would affect implementation of the existing-plant rule in much the same way as a law Pennsylvania enacted in October would. It requires state officials to report to the Legislature on plans to implement the Clean Power Plan only. A similar draft is also pending in the Virginia Senate to be offered by state Sen. Charles Carrico (R).

The bills are derived from an ALEC proposal that would have required legislatures to approve any state plan -- in effect, a state version of the "Regulations from the Executive in Need of Scrutiny (REINS) Act," a bill likely to be reintroduced this Congress to limit the executive branch's rulemaking powers.

The Pennsylvania law and Carrico's and Romine's proposals do not require legislative action, though Haq said they would create an "unnecessary delay" before state agencies can submit their plans to EPA for approval. But Missouri Rep. Mike Moon (R) is planning to introduce a more sweeping bill that would bar state agencies from implementing any federal regulation written under any law without approval from both the Legislature and its Joint Committee on Administrative Rules.

While it would not stop the state from writing an implementation strategy for the existing-power-plant rule, a law already on the books in Kentucky seems likely to ensure that any plan the Kentucky Energy and Environment Cabinet writes will be rejected by EPA.

The Kentucky law -- enacted last April and based on another ALEC model bill -- would bar the Kentucky agency from writing a plan that encourages fuel switching from coal to natural gas, increased use of renewable energy or energy efficiency. These three areas and heat-rate improvements at coal-fired power plants are the "building blocks" EPA used to set state emissions targets under the rule. The proposal would require Kentucky to cut its utility-sector emissions by 18 percent below 2012 levels by 2030.

Carrico sponsored legislation in Virginia last year that, like Kentucky's law, would have limited the commonwealth's plan to "widely deployed efficiency measures" on site at plants (Greenwire, Jan. 30, 2014). But his bill was overhauled in committee, and the version that eventually became law called for a study only and passed without opposition from environmentalists.

Virginia's Legislature is now wholly in the control of Republicans after the November election, so Carrico's new proposal might stand a better chance of progressing even if Gov. Terry McAuliffe (D) does not sign it into law.

Republicans have commanding majorities in both chambers of Missouri's Legislature, though the state also has a Democratic governor.

Kentucky, Pennsylvania and Virginia are three of the eight states that currently have laws on the books that deal with EPA's existing-power-plant rule, though most are limited in scope and would not affect compliance. Seventeen states have adopted nonbinding resolutions.

Bluegrass stakes

Kentucky seems destined to be the nation's test case for what happens to a state that enacts laws that make it impossible to comply with the Clean Power Plan.

That would be the law's effect, said the state official tasked with writing Kentucky's plan, barring some "creative" interpretation of the law that ignores the clear intent of the state Legislature, which passed it unanimously.

Kentucky's Assistant Secretary for Climate Policy John Lyons said state officials submitted comments to EPA as if the state's environmental agency could write a plan that went beyond the fence line, but in reality regulators would have to confine their work to modest heat-rate improvements on site at power plants. EPA assumes the nation's coal-fired power fleet can improve its efficiency enough to cut carbon by 6 percent. But Lyons said his state's coal units -- which provide more than 90 percent of the state's power -- could improve theirs by no more than 2 percent.

So Kentucky is on track to submit a plan to EPA that fulfills only a fraction of its obligations under the rule and that EPA will reject. And Lyons acknowledges that the state as a result will eventually be subject to the federal implementation plan EPA will release this summer.

"Would that be detrimental to where we now are and where we could take ourselves if we were given the latitude to do our own plan?" he said. "It's a big risk."

The state has a burgeoning manufacturing base because it has cheap power supplied overwhelmingly by coal, he noted. A federal plan not tailored to Kentucky's concerns might do less to insulate consumers from rising rates.

"And not being able to chart your own course is certainly not a palatable thing, and not something that the Cabinet would recommend that we allow to happen in the state," he said.

Lyons said he was not doing outreach to lawmakers, but he wasn't shy about offering an opinion.

"I think it's in our best interest to put together a plan that benefits Kentucky and supports our interests here," he said.

Nor is a federal implementation plan the only weapon in EPA's arsenal, should the agency choose to use it. EPA could pull transportation funding from a state that refuses to comply with its Clean Air Act rules or even impose a de facto moratorium on industrial expansion in the state. The Clean Air Act allows the federal agency to require new facilities that will be major emissions sources to offset up to double their proposed emissions -- a burden that could stifle the manufacturing sector Kentucky's law seeks to protect.

Kentucky is assigned one of the nation's lightest targets under the rule, and Bill Becker, executive director of the National Association of Clean Air Agencies, said the final rule EPA publishes next summer is likely to incorporate many of the additional concerns states raised in the public comments.

EPA showed flexibility in October, he said, when it issued a set of proposed alternatives to the draft rule. Among many other things, the document asked for comment on whether EPA should reduce states' near-term reduction targets -- something more than one state has asked it to do.

"The ALEC representatives are espousing legislative positions to fix problems that they haven't even given EPA time to solve, especially since the agency has acknowledged that it's going to do its best to solve them," Becker said.

Tying the hands of state agencies would do nothing to reduce federal requirements, he said. It would just mean the state has fewer options for how to fulfill them. Kentucky would have to cut its CO2 output by 18 percent just through efficiency upgrades at coal plants.

Not a party-line battle?

But not everyone takes such a dim view of Kentucky's law and its consequences.

Bill Bissett, president of the Kentucky Coal Association, said the possibility of a federal implementation plan was part of the discussion when Kentucky lawmakers debated and passed the law last year.

"It's something that we continue to monitor," he said.

But Bissett said state lawmakers chose to move ahead with the law to send EPA the message that Kentucky had serious concerns about how it would fair under EPA regulations and to limit their impact while the courts sort out whether the rule will go forward.

"Several of the lawyers we talk to -- and they rarely talk in such optimistic terms -- suggest that this will likely never occur because there are a lot of legal issues here," he said. "But Kentucky cannot afford to wait to see what happens legally because the specter of these regs are already forcing public utilities to make decisions now that are going to have long-range effects."

He noted that EPA's proposal allows for a one-year extension for submission of state implementation plans and said lawmakers, utilities and public utility commissions would ultimately decide together whether changes to the law are warranted.

In the meantime, Bissett said he expected other states to adopt similar proposals not because their legislatures are increasingly controlled by Republicans but because it is good policy to do so.

"I think our opponents would suggest it breaks down along party lines, but definitely in Kentucky that's not the case," he said.

A Democrat-controlled state Legislature passed the law and Gov. Steve Beshear (D) signed it, he noted. And state Attorney General Jack Conway (D) -- who is likely to be the Democratic nominee for governor this year -- has already signed on to a lawsuit with 11 other attorneys general calling on EPA to rescind the rule.

Twitter: @chemnipot | Email: jchemnick@eenews.net

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