As U.S. EPA crafts a model federal implementation plan for states to comply with the Clean Power Plan, should states work to tailor their own mechanisms, or are there benefits to plugging in to the agency's FIP? During today's OnPoint, Robert Sussman, a principal at Sussman & Associates and a former senior policy counsel at EPA, discusses compliance options for states. He also explains why he believes there could be significant changes to EPA's proposal in its final rule.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Bob Sussman, a principal at Sussman & Associates and a former senior policy counsel at EPA. Bob, it's nice to have you back on the show.
Robert Sussman: Great to be here.
Monica Trauzzi: Bob, EPA recently announced it would be establishing a model federal implementation plan for states to comply with the Clean Power Plan, which is expected to be finalized later this year. What's EPA's strategy for creating this model rather than just having states sort of do their own thing?
Robert Sussman: Well, I think EPA wants to send a message here that if the states don't step up and submit acceptable plans, EPA is prepared to implement the Clean Power Plan using federal authority, and I think it's very important for the states to know that and also for the states to have a pretty good idea what a federal implementation plan will mean for them if EPA goes in that direction.
Monica Trauzzi: So what's happening, then, behind the scenes at EPA? How are they crafting the model considering the wide-ranging needs of the various stakeholders?
Robert Sussman: Right. It's going to be a challenge for EPA, but I think we need to start from the premise that EPA has a narrower range of tools to use than the states would have if they go ahead and develop implementation plans on their own. I think EPA has given the states a lot of implementation discretion. There are a lot of choices that EPA is leaving to the states, and of course, the states can draw on state law and state programs fairly liberally in deciding how to beat the federal goals. If EPA goes ahead with a FIP in a state, I don't think it's going to be any less stringent than the state plan, but I think it's going to be a lot less flexible, and for that reason, I think states really need to think hard about whether they want to put themselves in the position of having EPA impose a FIP.
Monica Trauzzi: So are there states that are kind of thinking behind the scenes of whether they should create their own plan or take EPA's model?
Robert Sussman: Well, I think there's a lively debate out there in some circles, and there is a school of thought that I call the Just Say No school, which is that states are better off if they don't submit implementation plans and they let EPA impose FIPs. I think that is dangerous thinking. I think that is likely to backfire on states because when they see the EPA's FIP, they will probably say, gee, we could have done a much better job if we had utilized the discretion that EPA is giving us under the Clean Power Plan.
Monica Trauzzi: And those states are probably also banking on the fact that this is going to get tied up in court for some time and potentially struck down.
Robert Sussman: Well, that's true, and there will clearly be litigation. It will probably go all the way to the Supreme Court, and there will be a period of uncertainty here, but I don't think anybody should assume at this point in time that the courts are going to strike down the Clean Power Plan. We really don't know. I think EPA will have pretty strong arguments to make. I'm all in favor of judicial review and states exercising their legal remedies, but I think to take one step beyond that and say we're not going to develop and submit an implementation plan is a big mistake.
Monica Trauzzi: There are also groups like the National Association for Clean Air Agencies that are creating model implementation plans that will offer a menu of options for states. Could these types of plans be a good option, a good possibility for states?
Robert Sussman: Well, I think they're a good starting point and they may expedite the planning process in the states by offering a toolkit that the states could use, but I think at the end of the day, each state has a responsibility to develop a plan which is the right plan for that state, considering its mix of energy sources, considering its unique policies relating to energy efficiency, renewables and so forth. So I think at the end of the day, the states need to step up.
Monica Trauzzi: In a recent blog post, you took aim at Southern Co. for their public comments on the Clean Power Plan, and the comments stood out to you because they were particularly aggressive, you say, against the plan. Southern is a major player in the utility game, so if they're highlighting critical issues that they see with the plan, does EPA just simply have no choice but to listen to what this big stakeholder is saying?
Robert Sussman: Well, I'm personally confused and perplexed by Southern's position on the Clean Power Plan because the reality is that Southern has done quite a bit to reduce greenhouse gas emissions. They reduced greenhouse gas emissions by a third between 2007 and 2012, and when you look at their website, they're in the middle of a radical restructuring of their generation fleet, and it will undoubtedly lead to more renewables, less coal, more nuclear, CCS, and therefore their emissions are going to continue to go down.
So I certainly respect their right to oppose the Clean Power Plan, and I certainly respect their view that the EPA is exceeding its authority, but I do think that their comments would be much more helpful to everybody if they talked about what they are doing to reduce emissions and tried to relate that to the Clean Power Plan so we get a sense of, well, is the Clean Power Plan not well-designed? Are the emission reduction goals, for example, good goals but the Clean Power Plan is not the right way to go about achieving them? Those are important issues that I think Southern docked in its comments, and frankly I think it's a missed opportunity. And to your point of whether EPA will consider what they had to say, I think if Southern had taken a somewhat different tack in its comments and offered more in the way of constructive recommendations, then there would have been a lot more for EPA to chew on.
Monica Trauzzi: The larger overarching question that we're all looking at is how dramatically the plan will change from the draft to the final that's expected later this year. What are the key areas you've identified that EPA absolutely needs to address in that final plan?
Robert Sussman: Right. Well, I think EPA needs to address the state goals. There have been a lot of criticisms that the state goals are not fair, they're tilted too strongly toward some states and not strongly enough toward other states, and so I think EPA is going back to the drawing board on the state goals. I think that means that EPA is also going back to the drawing board on the building blocks, the four building blocks, because those are the drivers of the state goals, and I think we're going to see significant changes in those areas. I think the compliance timeline is very much up for discussion within EPA and the administration.
There's been, I think, a lot of legitimate comment that the 2020 goals are too stringent or too ambitious, there needs to be more flexibility at the front end. I believe EPA has heard that and is going to respond, maybe not as fully as everybody would like, but I do believe that the 2020 compliance targets will be relaxed to some extent. But I think when we get to 2030, the reduction targets are certainly not going to be any less stringent than they are in the proposal, and they may even be a little more stringent because I think many folks have persuasively argued that there's more room for renewables and growth in renewables than the EPA plan allows and probably there's more room for greater ramp-up to natural gas than the plan currently contemplates. So flexibility on the front end, changes in the state goals, changes in the building blocks, but a 2030 target which is no less stringent and maybe more stringent.
Monica Trauzzi: All right. Very interesting. A lot to watch over the next few months. Thank you for coming on the show.
Robert Sussman: Yeah, thank you, Monica.
Monica Trauzzi: Very interesting. And thanks for watching. We'll see you back here tomorrow.
[End of Audio]