DC Power Plan Update

On September 27th the DC Circuit Court held hearings on the Clean Power Plan (CPP), an action that many have wanted since its proposal by the Environmental Protection Agency (EPA) last August. While the courts declined to hear motions regarding the Plan until final rules were released, last October’s final version prompted a tidal wave of legal challenges.

Once the dust settled that November, twenty-seven states and thirteen other groups challenged the law while eighteen states and several other groups came to the defense of the act. While the DC Circuit Court originally declined to issue a stay pending the conclusion of legal actions, an appeal to the US Supreme court was successful on that front. Further adding to the momentousness of the hearing, the Circuit Court elected to hold the hearing “en banc,” meaning that all ten judges would hear the case rather than the traditional three.

Arguments against the Plan last week took two forms: whether or not the Plan was transformational (i.e. it represented a significant change in how carbon was regulated) and if there was dissonance between sections 111(d) and 112 of the Clean Air Act. Arguments were spearheaded by West Virginia Solicitor General Elbert Lin on the side of those challenging the CPP and by Eric Hostetler of the Department of Justice representing the EPA. Transformation Concerning the question of transformation of the CPP, Hostetler argued that the CPP represented a continuation of the precedent set in 2007’s DC Circuit ruling, Massachusetts et al v. EPA that gave the EPA the ability to regulate greenhouse gasses –including carbon- if it deemed them a significant threat to public health. Lin countered, stating that the mandate to shift generation from higher carbon emitters to those that created less carbon was indeed transformational as it represented not only regulation of individual plants but of entire generation systems.

For their parts the judges pressed both sides. Lin was asked if the true impact of the CPP on the coal and power industry would be, in fact, significant and also to what degree generation shifting was mandated, as the CPP provides several other pathways to compliance. Hostetler was met with a certain amount of incredulousness over his claim that the CPP was business-as-usual owing to the EPA’s prior description of the Plan as “urgent.” It was also pointed out that Gina McCarthy, Administrator of the EPA, used the term “transformational,” when describing the CPP. All three parties, the challengers, supporters, and judges, mentioned the desire for Congress to take a stronger role in this debate. Double Regulation The second issue, if plants could simultaneously be subject to sections 111(d) and 112 of the Clean Air Act represented a more traditional clarification of differing texts passed by the US House of Representatives and Senate. In this round, Lin posited that the House version of section 111 did not allow regulation under both sections while the Senate’s version did. Thus, he reasoned that the enforcement should fall to the text passed by the House, as it was the less restrictive of the two. This was met with judges questioning if he was simply picking the interpretation that best fit his views and whether the court needed to look further into this issue to determine the true intent of Congress. Amanda Shafer Berman of the DOJ, arguing on behalf of the EPA, claimed that non-power generation facilities are currently regulated under both sections as one section (111) covers non-hazardous pollutants while the other covers hazardous pollutants. In response to this, one judge cited a decision written by Antonin Scalia wherein he questioned any agency that discovers an existing statute that suddenly is interpreted as having great regulatory power. At present, a final decision is expected from the court in late 2016 or early 2017.

Source : Trevor Sutherland, Trane