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Power Plant Cases in the Supreme Court

by Jacob Hollinger

The Supreme Court’s 2013 term just began but it is already shaping up to be an important one for power plant owners and operators.  Three points stand out: First, on October 7, the Court denied cert. in Luminant Generation Co. LLC v. EPA, a case in which several power companies were challenging the Environmental Protection Agency’s (EPA) current approach to regulating air emissions during startup, shutdown and malfunction (SSM) events.  The Court’s action leaves in place a Fifth Circuit decision which upheld EPA’s approach, at least as applied to the Clean Air Act state implementation plan (SIP) for the State of Texas.  More importantly, the Court’s action is likely to bolster EPA’s confidence as it pursues its ongoing rulemaking concerning the SSM provisions in 39 other SIPs, a rulemaking in which EPA has proposed eliminating affirmative defenses for excess emissions that occur during “planned” SSM events.  More information about EPA’s ongoing SSM rulemaking can be found here:  https://www.epa.gov/airquality/urbanair/sipstatus/emissions.html.

Second, the Court is actively considering whether to hear an industry challenge to EPA’s regulation of greenhouse gases under the Clean Air Act’s (CAA) prevention of significant deterioration (PSD) program.  The Court currently has before it eight cert. petitions seeking review of the D.C. Circuit’s August 2012 decision in Coalition for Responsible Regulation v. EPA, 684 F.3d  102 (D.C. Cir. 2012).  That decision rejected industry challenges to EPA’s four “core” greenhouse gas (GHG) regulations – the Endangerment Finding, in which EPA concluded that carbon dioxide emissions from motor vehicles contribute to air pollution reasonably anticipated to endanger public health and welfare; the Tailpipe Rule, in which EPA set motor vehicle GHG emission limits; the Timing Rule, in which EPA announced that GHGs are “subject to regulation” under the CAA as of January 2, 2011; and the Tailoring Rule, in which EPA announced that with respect to GHG emissions it was raising the statutory threshold for PSD applicability.  A central point of dispute in the Coalition matter is whether EPA’s conclusion that it is required to regulate motor vehicle GHG emissions means that EPA must also regulate stationary source GHG emissions.  We should know shortly whether the Supreme Court will address that dispute.

Finally, the Court is scheduled to hear oral argument on December 8 concerning EPA’s Cross State Air Pollution Rule, a rule which the D.C. Circuit invalidated last summer.  The Supreme Court’s eventual decision in that case, EPA v. EME Homer City Generation, L.P., No. 12-1182, is likely to be extremely significant for power plant owners regardless of which side prevails.  A ruling in EPA’s favor will reinstate stringent emission limits on upwind power plants, but a ruling against EPA may simply lead to more stringent emission limits being imposed in downwind states.  In all events, the case concerns a complex and difficult problem – interstate air pollution – and the Supreme Court’s decision is likely to clarify EPA’s authority to address that problem.

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Appeals Court Forcefully Validates EPA’s Emerging Program for Controlling Emissions of Greenhouse Gases

by Jeffrey D. Watkiss

A unanimous panel of the U.S. Court of Appeals for the D.C. Circuit in Coalition for Responsible Regulation, Inc. v. EPA decisively affirmed against industry and state challenges EPA’s developing programs for regulating emissions of greenhouse gases. Those programs respond to the U.S. Supreme Court ruling in Massachusetts v. EPA, 549 U.S. 497 (2007) that greenhouse gases are an air pollutant subject to regulation under the U.S. Clean Air Act (CAA). As EPA moves ahead to implement the new programs, natural gas-fired and renewable generation will increasingly if not completely, displace new investment in coal-fired generation.


In direct response to the Massachusetts decision, EPA issued an Endangerment Finding for a single air pollutant defined as comprising an aggregate group of six long-lived and directly emitted greenhouse gases that are “well mixed” in the atmosphere and cause global climate change: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydroflourocarbons (HFC), perflourocarbons (PFC), and sulfur hexafluoride (SF6). Affirming EPA,the panel explained that the CAA requires EPA to answer only two questions in connection with endangerment: whether greenhouse gas may reasonably be anticipated to endanger the public health and welfare and whether motor-vehicle emissions cause or contribute to that endangerment. These are scientific determinations, the court explained, that are not informed by “performing cost-benefit analyses, gauging the effectiveness of whatever emission standards EPA would enact, [or] predicting society’s adaptive response to the dangers or harms caused by climate change.”

The panel dismissed as “little more than a semantic trick” the petitioners’ complaint that EPA improperly “delegated” its scientific determinations to the Intergovernmental Panel on Climate Change (IPCC), the U.S. Global Climate Research Program and the National Research Council by relying on the research compiled and synthesized by those research bodies. The panel ruled that EPA “reviewed existing scientific evidence” that included syntheses of individual studies and research,” including 18,000 peer-reviewed scientific studies in the case of the IPCC. The panel rejected the petitioners’ argument that EPA itself was required to perform those studies:   “EPA is not required to re-prove the existence of the atom every time it approaches a scientific question.” As to Texas’ complaint that EPA did not identify the atmospheric concentration that endanger public health or welfare, the panel held that such a threshold is not required by the CAA. The opposite is what is required: a case-by-case “sliding scale” that sounds the alarm as danger is approached. 


Challenges to the Tailpipe Rule and the panel’s discussion of those challenges were brief, but consequential. The petitioners did not challenge the substance of the Tailpipe Rule, but instead argued that EPA arbitrarily and capriciously ignored the automatic consequence of setting this standard for new motor vehicle emissions of greenhouse gases: Once a standard is set for regulating the emissions of greenhouse gases from new motor vehicles, then EPA becomes obligated to also set a New Source Review performance standard and operating permits for major stationary sources of greenhouse gas emissions. EPA consideration of collateral costs associated with triggering standards for major stationary sources is not permitted, the [...]

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