Business, states open legal fire on EPA’s Clean Power Plan rule

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24 states file suit over massive EPA regulation ramp-up

Critics say regulations will crush coal industry, boost electricity rates

The legal barrage to halt the Environmental Protection Agency’s radical Clean Power Plan has begun.

A broad coalition of U.S. industry and business, including the U.S. Chamber of Commerce,  the National Association of Manufacturers, and an armada of other business and industry organizations, has  asked the D.C. District of the federal Court of Appeals to prevent any further action on the Plan until the court can decide its overall legal status.

The coalition filed a motion at their first opportunity on Friday to stay EPA’s long-awaited final rule governing the  plan, immediately after the agency published the rule in the Federal Register—the official birth notice of the long-gestating plan to drastically remake the entire U.S. electrical system, and among other things  create a nationwide trading system for carbon emissions that was blocked by the Senate in 2009.

The business coalition argues that a huge, unprecedented and illegal expansion of EPA authority over the country’s entire electrical power system  will cause “irreparable harm” unless complicated planning process ordained by the rule is halted  while that legal battle over the entire program is  fought, a process likely to last through most of 2016, if not longer.

In support of their argument they provided testimony not only from business groups but also trade unions and even school boards to buttress their concerns about the disastrous potential effects of failing to halt the process while the legal battles continue.

CLICK HERE FOR THE BUSINESS GROUP MOTION TO THE COURT

At  least 26 state Attorneys General  associations and as-yet uncounted numbers of individual companies separately asked the appeals court for a stay of  the rule on roughly similar grounds.

As a motion by 24 states to the appeals court puts it,  an  “unprecedented, unlawful attempt by an environmental regulator to reorganize the nation’s energy grid” is  intended to force the States and other bodies to make “immediate” and irreversible decisions  to plan compliance with EPA’s rule before courts have ruled whether the plan is legal or not.

CLICK HERE FOR THE STATE MOTION TO THE COURT

“Every American industry is affected by the rule,” declared Karen Harbert, president and CEO  of the U.S. Chamber’s Institute for 21st Century Energy, at a call-in press conference today to explain the action.

The opponents argue that in broad legal terms, EPA’s plan depends on the selective misinterpretation of some 300 words in the Clean Air Act that have never previously been used to regulate carbon emissions in such sweeping fashion.

The interpretation of little-known section 111 (d) of the Clean Air Act extends far beyond the setting of standards for individual sources—which the opponents argue is the sole basis of the law—to push states and regions into enforcing the cuts on a much more sweeping basis.

Under the rule, U.S. states have until September 2016 to create plans that implement customized levels of carbon emission reductions established by EPA, or seek a 2-year extension if that proves impossible. EPA decides if they get the extension, but adds that those granted the reprieve must provide an update of their plans in 2017.

Full compliance with the emissions reductions goes into effect in 2022—two years later than EPA originally declared it would-- and they are supposed to produce 32 per cent reductions in emissions from existing power plants by 2030.

States that do not come up with plans that EPA deems satisfactory, or choose not to follow the new rules, will get EPA-designed plans instead—none of which have so far been seen.

Those deadlines, both states and business groups argue, are largely intended to force states to choose  in advance to shut down at a minimum roughly 11,000 megawatts of U.S. coal-fired power states by 2016, force mammoth reliance on new and unproven sources of renewable energy, and likely undercut the stability of the entire national U.S. electricity supply—and even then force suppliers to use a cap-and-trade system of emissions reduction certificates to stave off some of the drastic changes.

As one piece of evidence, the business petitioners  point out that the final version of EPA’s rule sets emission levels for existing U.S. power plants that are about 7 per cent lower, for existing coal-fired plants, and  22 per cent lower, for existing natural gas-fired plants—that for brand-new facilities of either type.

Indeed, the business groups argue that under the published rule,” a new coal or gas plant with state-of-the-art controls could not achieve the emission rate [it] demands.”

“This disparity makes clear that the ‘existing source’ ceilings cannot be achieved by existing sources themselves,”  but business groups argue, but essentially are pushing energy providers into deep reliance on renewables and a cap-and-trade regime that was turned down in the U.S. Congress in 2009, something that EPA Administrator McCarthy has denied.

“Bottom line: the EPA has dramatically overstepped its authority,” said Karen Harned,  executive director of the National Federation of Independent Business’  Small Business Legal Center, which joined the 300,000-member Chamber in opposing the rule.

In response to questions, Linda Kelly, senior vice-president of the National Association of Manufacturers, charged that it was “pretty clear” that the timing of EPA’s publication of the final rule  was “related” to the Obama Administration’s desire to show leadership at the upcoming, United Nations-sponsored climate change summit in Paris, where world leaders intend to adopt a nation-by-nation approach to setting global carbon emission standards.

Said Kelly:  “The Clean Air Act was not designed as a tool for climate negotiations.”

For its part, EPA has argued, in the words of EPA Administrator Gina McCarthy, that its new rule “has strong scientific and legal foundations, provides states with broad flexibilities to design and implement plans, and is clearly within EPA's authority under the Clean Air Act.”

The agency has also declared that it “provided unprecedented outreach before and after the proposed Plan was issued,”  and considered 4.3 million comments in response to the proposal.

McCarthy has pointed to the two-year extension in the planning process for the huge energy makeover as proof of EPA’s flexibility and the reasonableness of the planning process.

“States and utilities told us they needed more time, and we listened,” she declared on an in-house blog.

The business groups rejoinder is  that while their comments were filed, they weren’t taken into account. Evidently, a majority of U.S. states—at least 26 out of 49 affected—to a significant extent agree.

Whether the opponents get the breathing space they say they need is itself going to take time to discover. Even an expedited appeals court hearing of the arguments for a stay of EPA’s timetable of execution could spill over into early 2016.

The business opponents to EPA’s plan would not second-guess the appeals court by saying whether they would go to the U.S. Supreme Court if their plea for a stay fails.

Speaking for the U.S. Chamber of Commerce, however, Institute for 21st Century Energy  CEO Harbert declared that her group “preserves all legal options through the entirety of the process.”