Clean Power Plan: What to Expect in 2016

The battle over the Clean Power Plan continues as a coalition of coalition of states, companies and advocacy groups is asking a federal appeals court to reject “speculative” arguments against the carbon rule for power plants.

Since the EPA published the Clean Power Plan in late October, more than 20 energy companies, other businesses and industry organizations, along with 27 states, have filed lawsuits to block the rule, which requires existing coal-burning power plants must cut carbon emissions by 32 percent by 2030, compared to 2005 levels.

On Tuesday, the pro-carbon rule coalition filed four briefs with the Court of Appeals for the District of Columbia Circuit that accuse the states and businesses seeking to kill the rule of misrepresenting what the regulation does, The Hill reports.

“The caricatures in the stay motions bear no similarity to the actual rule,” a team of more than a dozen public health and environmental groups, led by the Environmental Defense Council, told the court. “Far from intruding on state sovereignty or coercing state governments, the rule sets reasonable limits on carbon-dioxide pollution from fossil-fuel power plants — just as previous EPA rules have limited other forms of pollution from these same power plants. These arguments fundamentally mischaracterize the rule.”

The briefs are the latest legal maneuver in the Clean Power Plan, which both the US House and Senate have voted to repeal. Obama — who expects the Clean Power Plan to play a major role in helping the US fulfill its commitments under the COP21 Paris Agreement — has promised to veto the bills undoing the power plant carbon cuts. Meanwhile the court’s ruling won’t come until 2016.

Despite the legal activity, most states are moving forward with a plan for how they will implement the rule. California, Nevada, Texas and North Carolina are well on their way to meeting the Clean Power Plan’s emissions limits, according to an Environmental Defense Fund blog. State’s initial plans or requests for two-year extensions are due by September 2016.

Environment & Energy News reports the big question for 2016 is whether to choose a rate- or mass-based approach. For energy companies that operate across multiple states, this could mean different approaches to the Clean Power Plan.

Xcel Energy, which operates across eight states from Michigan to Colorado, tells E&E News that in states that choose mass-based plans, free allocation of allowances with oversight by state regulators will help reduce the cost impact to consumers. “We are very concerned with the magnitude of the cost for our customers,” Jack Ihle, the company’s director of environmental policy told E&E News.

James W. Rubin, a partner at the international law firm Dorsey & Whitney who previously served 15 years in the Environment and Natural Resources Division of the US Department of Justice, tells Environmental Leader that the court’s decision on the Clean Power Plan is possible in February or March.

“At that point, if the rule is stayed, and depending on what the court orders, many states may suspend or significantly slow their efforts, though some states have indicated they would continue their efforts in any event,” Rubin says. “On the other hand, if the court denies the stay motions, it is full speed ahead, since the merits of the case will not be decided for some time, even if expedited as requested by the petitioners. The states will continue their planning efforts, though it is not expected that many will issue final plans before 2018 to take advantage of the extra time.”

Rubin says the political battle in Congress over the Clean Power Plan is unlikely to affect the rule in 2016. “President Obama will undoubtedly veto any attack on what he considers a legacy rule and key to the Paris agreement,” he says. “In any event, the rule will likely remain a subject of intense interest and debate throughout 2016 and a significant issue for the elections.”

The take away for energy companies? Expect implementation plans in 2016 and get involved in the process. As Rubin says: “Utilities and other stakeholders will need to keep a close eye on the stay proceedings while working closely with their relevant states on implementation plans.”