On October 10, 2017, the U.S. Environmental Protection Agency (EPA) Administrator, Scott Pruitt, signed a draft proposed rule (Proposed Rule) that will repeal the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, commonly referred to as the Clean Power Plan, as promulgated on October 23, 2015.

The Clean Power Plan

The Clean Power Plan (CPP) is a regulatory scheme aimed at regulating new and modified power plants under the authority of federal Clean Air Act § 111(b). It was published as a final rule on October 23, 2015 as part of then President Obama’s climate change agenda and greenhouse gas emissions reduction strategy. The CPP mandates reduction of carbon pollution from power plants, the United States’ largest source of carbon emissions. The power sector must cut carbon pollution by 32 percent below 2005 levels by 2030. The CPP established the first-ever national standards to address carbon pollution from power plants.

Litigation over the CPP began in late 2015, and, on February 9, 2016, the U.S. Supreme Court stayed implementation of the CPP pending judicial review, without reviewing the merits of the rule. On September 27, 2016, an en banc D.C. Circuit heard oral argument on the case, and the court is expected to issue its decision on the merits in 2017. However, the ongoing rulemaking, which aims to repeal the CPP, could mean that this litigation is moot.

On March 28, 2017, President Donald Trump issued an Executive Order on “Promoting Energy Independence and Economic Growth” (Executive Order), which commences the rollback of significant climate policies implemented by President Barack Obama, including the CPP. The EPA’s Proposed Rule was promulgated pursuant to Trump’s Executive Order, along with a report titled the Final Report on Review of Agency Actions that Potentially Burden the Safe, Efficient Development of Domestic Energy Resources Under Executive Order 13783.

The Proposed Rule

In the Proposed Rule, EPA states that the CPP “system of emission reduction” for greenhouse gas (GHG) emissions is inconsistent with § 111(d) of the Clean Air Act. The EPA’s rationale is that only one of the three “building blocks” of the CPP directly applies to fossil fuel-fired power plants themselves, rather than to the owners or operators of plants, who could take action outside the fence line to meet the CPP GHG performance standards. The Obama CPP lists the following three building blocks:

• Improving heat rate at affected coal-fired steam generating units;

• Substituting increased generation from lower-emitting existing natural gas combined cycle units for decreased generation from higher-emitting affected steam generating units; and

• Substituting increased generation from new zero-emitting renewable energy generating capacity for decreased generation from affected fossil fuel-fired generating units

The EPA has found that only build block 1 constitutes measures that could be applied directly to a source.

In the Proposed Rule, the EPA is not proposing or taking comment on a CPP replacement, but is merely considering whether to propose a new rule under § 111(d) to address GHGs from existing fossil fuel-fired power plants. Per the draft proposed rule, EPA intends to solicit information on systems of GHG emission reductions that would be consistent with EPA’s revised interpretation of § 111(d) in a forthcoming Advanced Notice of Proposed Rulemaking. The Proposed Rule includes a Regulatory Impact Analysis that provides a revised accounting of the costs and benefits of the CPP, versus its repeal. The EPA has also proposed to rescind the legal memorandum that detailed the EPA’s previous legal analysis in support of the CPP, during the Obama administration.

Conclusion and Implications

The ongoing saga of the CPP is significant on its own, and significant as an indicator of the Trump Administration’s preview for climate change regulation. President Trump has denounced the CPP both before his election and during his presidency. The unwinding of the regulatory scheme would prove a “win” for his administration while it would create an uncertain future regarding regulation of GHG emissions. Many states have implemented air quality programs on their own, but piecemeal regulation is not an efficient answer to GHG emissions. For the immediate future, it seems clear that the presidential administration will not be taking steps to regulate air quality on the federal level.

The EPA will accept comments for 60 days and then will continue the rulemaking process.

(Shannon Morrissey)