REGULATION

EPA's Clean Power Plan timeline delay may help repel legal challenges

Pushing forward the Clean Power Plan's starting date to 2022 will appease some critics and could bolster U.S. EPA's defenses against lawsuits.

But EPA's final rule will have to ensure overall emissions reductions to keep environmental advocates and international climate negotiators happy.

The regulation expected to be released next week will ask states to start complying in 2022, instead of 2020, and give them more time to submit final proposals for cutting power-sector carbon emissions, according to a timeline posted to EPA's website and reported first by E&E (EnergyWire, July 29).

Other changes to the rule -- including to interim and final goals for states -- could have a major impact on what that timeline shift would mean.

The timeline suggests EPA would give states until Sept. 6, 2016, to submit "initial" plans and until Sept. 6, 2018, to submit "final" plans. The draft rule would require state plans or requests for yearlong extensions by 2016 and would give only states working together until 2018 to send in proposals.

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Thomas Lorenzen, a partner at law firm Crowell & Moring and a former defender of EPA rules for the Justice Department, said the change would respond "to a complaint that many had raised that the development of these [state implementation plans] is going take more than a year because, in many cases, it will require passage of legislation and then amendment of regulations after that, within the states."

"A lot of these states have legislatures that meet only every other year or only for abbreviated sessions," he said.

Lorenzen said the changes could be meant to weaken critics' arguments that courts should stay the rule. "This now provides the states additional time to do those things and arguably, from EPA's view, lessens any likelihood of irreparable harm," Lorenzen added.

Many argued that the draft rule's interim goals that would require states to meet an average emissions rate between 2020 and the end of 2029 were too steep.

The changes also could address "arguments many had made that 2020 was too soon and you basically have a cliff where suddenly you have to switch everybody over to natural gas from coal and there isn't the infrastructure, there are no pipelines, there's no access to natural gas, and you would have chaos," Lorenzen said.

"We've got to see the final details of the rule, and it still may be truly problematic for many states and for many utilities, but again these are efforts to sort of temper the early impacts of the rule and may well be, in part, designed to give EPA a legal strategy to fend off stay motions."

Mixed reviews from renewable supporters

The Solar Energy Industries Association says that if the deadlines do move forward, they could give states more time to incentivize renewable energy, rather than natural gas, to comply with mandated emissions levels.

But the Union of Concerned Scientists said the revision was unnecessary and EPA will need to provide assurances it won't weaken the regulation.

"If the EPA does decide to delay compliance timelines, I'll be looking for assurance that the overall emission reductions achieved by the rule stay strong, early action by states is incentivized, and any delay won't jeopardize the U.S.'s 2025 international commitment of a 26 to 28 percent reduction in economywide emissions," said UCS President Ken Kimmell.

Other environmental groups said they would need to see the full, final rule before determining what individual changes might mean.

"We are not commenting on isolated elements of the final CPP till we can evaluate the total package," said David Doniger, a senior attorney for the Natural Resources Defense Council.

Liz Perera, the Sierra Club's climate policy director, said the group is "waiting until we see the final standard to comment on the full impact of this delay."

"In general, we never like to see delays in regulation," Perera said. "But we really want to evaluate it on balance with everything else" in the final rule.

Rick Umoff, manager of state regulatory affairs for SEIA, said states would see the shift as providing more flexibility and "breathing room," and he expects they will take advantage of an incentive EPA could reportedly offer for states that act early to implement renewable energy.

EPA could provide some type of credit for pre-2022 action that could count toward interim state goals, or the administration could propose some financial incentive -- which a Republican-led Congress would likely reject, those familiar with the options say.

"This just gives them a little more planning time [in terms of what policies they want to pursue], and that was one of the No. 1 asks of the states," Umoff said.

Umoff said he thinks EPA is trying to consider ways to encourage early adoption of renewable energy so they won't "overrely on natural gas, from an emissions perspective and also the impact on the ratepayer perspective."

Analysis from the U.S. Energy Information Administration has suggested the Clean Power Plan would shift power generation to natural gas in the beginning years before moving states toward renewable energy later on.

If EPA can ensure that carbon reductions happen at the same level as the proposed rule, the timeline changes could assuage some states.

Frank Maisano, senior principal with law firm Bracewell & Giuliani, said states that are already supportive will remain so, and states that are fighting the rule won't be mollified by timeline changes.

"You have to look at states like Arizona and Arkansas and Florida, and see how they respond," he said.

Maisano said the two extra years could push some solar power growth in states where it is already happening, including Iowa and New Mexico.

"Those things are already happening in those places without the Clean Power Plan because the market is allowing them to do it in those places," because it's cost-effective and has already gone through the regulatory process, he said. But he added that he doubts time changes will mobilize renewables in states that aren't pursuing them.

Utility-sector reaction guarded

Emily Fisher, associate general counsel at the Edison Electric Institute, said, "It is difficult to assess the impact of any changes to the compliance timeline in the absence of information about other key changes that may have been made to the final rule, and how any such changes impact the state goals and methods of compliance."

She noted that EEI's members -- investor-owned utilities -- asked EPA to provide "sufficient time for states to craft compliance plans and then subject them to critical reliability reviews, and we are hopeful the final guidelines will address this issue."

"However, providing states with more time to craft plans is not the same as giving companies more time to achieve compliance based on those plans. In fact, it could possibly shorten the compliance period, which is why it is critical that the final guidelines provide a range of flexible tools to help achieve the reduction goals," Fisher said.

Joe Nipper, senior vice president for regulatory affairs at the American Public Power Association, said the timing change "sounds good on the face of it."

"We are cautiously optimistic, but other important elements combined with that delay will actually tell us whether it makes it easier for a state to comply or not," he said. "I suspect for some states it probably will be easier; for other states it may not be."

"While we advocated for additional time to comply with the regulations, we look forward to reviewing the final rule and remain deeply concerned about top officials describing it as 'stronger' than the proposal," said Debbie Wing, spokeswoman for the National Rural Electric Cooperative Association.

The American Coalition for Clean Coal Electricity said the "two additional years for states to comply with its wholly unworkable regulations is irrelevant" because consumer electricity prices will still rise. "We will do everything in our power to get them thrown out," said ACCCE spokeswoman Laura Sheehan.

Reporter Jean Chemnick contributed.

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