REGULATION

Most states suing EPA's climate rule are also mulling how to comply

Legal opposition to U.S. EPA's Clean Power Plan roared into action in recent weeks, with Mississippi being the latest of 27 states now challenging the regulation in court.

But a review of how all the suing states are approaching the climate rule reveals that even though a state may be litigating the Clean Power Plan, it doesn't mean it's not actively considering how to achieve the required emissions cuts.

Few suing states are not publicly discussing how they might comply with the rule; most in this category have Republican governors with presidential aspirations. And in recent weeks, the "just say no" strategy encouraged by Senate Majority Leader Mitch McConnell (R-Ky.) seems to have faded away.

"I think many of them are proceeding ahead even if it's only the umbrella of Plan B, and I think that's wise," said Ken Colburn, a principal at the Regulatory Assistance Project, which advises state regulators on the Clean Power Plan.

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"Most are having stakeholder meetings, and certainly the discussions between [public utility commissions] and air regulators are well under way now since even before the proposed rule," he added. "I think those developments are proceeding as though they are going to be necessary without any advertising."

For example, Indiana Gov. Mike Pence (R) in July joined five other governors in threatening not to write a state compliance plan. The document, submitted to EPA, outlines how a state might meet the rule's targets.

"If your administration proceeds to finalize the Clean Power Plan, and the final rule has not demonstrably and significantly improved from the proposed rule, Indiana will not comply," Pence wrote.

But when contacted last week, soon after Indiana joined on to the multi-state lawsuit challenging EPA, a spokeswoman said the governor has not yet decided whether to submit a plan.

"As [Pence] weighs this decision, he is meeting with stakeholders to hear their reasons for and against submitting a plan," the spokeswoman wrote in an email. "He has also directed the relevant state agencies to work with the Governor's Office to develop an understanding of what a plan could look like so that Indiana's options are fully understood."

'Looking at all options'

Even EPA's staunchest opponents are saying it would be impractical to ignore the climate rule altogether.

"We are looking at all options," said Bryan Shaw, head of the Texas Commission on Environmental Quality. "As part of our efforts to suggest that a [court-ordered] stay would be appropriate is recognizing that in order to fully understand this rule, we're having to go forward as if we're going to submit a plan, as if we're not going to submit a plan, as if there's going to be a request for an extension, so we are working to work through all that."

Much of this is because the parties charged with actually achieving the carbon emissions reductions -- air regulators, power companies and grid operators -- want to know their state's strategy might work as soon as possible.

In Michigan, the first state to announce it will be writing a compliance plan while suing EPA, leaders argued that this strategy will ensure that the compliance plan doesn't end up in federal control. This decision was quickly applauded by many of the state's power companies (Greenwire, Sept. 2).

And Oklahoma's secretary of energy and environment recently acknowledged that power generators have begged state leaders to avoid having a federal plan imposed by EPA; he vowed that this will not occur, although he still denied that the state will be submitting a compliance plan (ClimateWire, Oct. 27).

"I think even where you have a small number of governors who came out previously saying they were not going to submit a plan ... there may be reasons that stakeholders in those states are saying, 'We would really like to see the state go through the process of developing a plan; that's going to make it easier for us to comply,'" said Gabriel Pacyniak, climate change mitigation program manager at the Georgetown Climate Center and an adjunct professor at Georgetown Law.

N.C., Texas consider 'inside the fence line' gambit

States must submit at least an initial plan with a request for an extension to EPA by next September, and the agency is requiring all states to have finalized compliance plans by September 2018.

Not all the plans may be what EPA has in mind, however.

North Carolina is discussing the possibility of submitting an "inside the fence line" or a "Building Block 1" plan. It would only require emissions reductions at power plants (EnergyWire, Nov. 5).

Shaw of Texas said his state is also attracted to this option, but both he and North Carolina regulators are aware that this would almost guarantee that EPA would impose a federal plan on his state.

"Filing a 'Building Block 1' plan is one that you could argue is a plan that we think is legal, from the standpoint of what EPA should have written in the rule," Shaw said, but he also acknowledged that doing so could have "unintended consequences."

And while the "just say no" strategy appears to have dissolved, in most states with Republican governors who have or had presidential aspirations, there is limited -- if any -- public discussion on a Clean Power Plan compliance strategy.

Under New Jersey Gov. Chris Christie (R), Bob Martin, the state's Department of Environmental Protection commissioner, recently submitted a declaration to EPA saying that crafting a state plan will be "extremely complex, time-consuming and costly." He argued that there is too little time for the state to analyze how it might comply.

When asked if the state is planning to submit an initial plan in September, a DEP spokesman declined to comment.

La. defers to the next governor

Echoing Texas, a spokeswoman for Louisiana Gov. Bobby Jindal (R) reiterated the state's staunch opposition to the Clean Power Plan, adding that the state is "considering all options to mitigate the damage [of] this federal overreach."

The decision on whether or not to submit a state plan to EPA, she added, will be left to the candidate who wins the state's upcoming gubernatorial election. Depending on the outcome, this means Louisiana is another former "just say no" state that may be submitting a compliance plan, after all. John Bel Edwards, a Democrat, is currently leading Sen. David Vitter (R) in the polls.

Robert Nordhaus, a partner at Van Ness Feldman LLP in Washington, D.C., and an expert on federal environmental regulation, said submitting a compliance plan to EPA shouldn't interfere with a state's legal opposition to the Clean Power Plan.

"A state doesn't have to say exactly what it's going to do in the initial submission. I think it could make it clear that they are submitting [a plan] under protest," said Nordhaus, who is not involved with litigation against the Clean Power Plan. "I think that much of the litigation is not going to be directed to 'Well, this is impossible; we could never do it.' Rather, 'Even if we could do it, it's unlawful and beyond EPA's authority.'"

How might state air regulators and public utility commissioners -- leaders with a major stake in how states comply with the Clean Power Plan -- be hindered by the tricky politics surrounding EPA's climate rule? It might not be that burdensome, said Colburn of the Regulatory Assistance Project.

"They all know the realities. They might wish it were otherwise for whatever reason, but they know that if they are in a position where they can be working on a Plan B, that the interests of that will not be served by them saying anything about it," said Colburn. "I don't think that many are frustrated; I think they just recognize it as their current reality -- 'It's changed before; it'll change again' kind of thing."

Reporter Emily Holden contributed.

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