Industries, states argue against EPA appeal of CSAPR ruling

Various power generation and coal production companies argued Nov. 16 that a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled properly when it in August threw out the Cross-State Air Pollution Rule (CSAPR).

The parties filing the arguments against EPA’s appeal of that ruling to the full appeals court, called a hearing en banc, included lead plaintiff EME Homer City Generation LP and other power company plaintiffs like Dairyland Power Cooperative. Also among the parties were coal companies, like subsidiaries of Ohio-based Murray Energy. CSAPR is also referred to as the “Transport Rule.”

In the Transport Rule, EPA imposed emissions limits on individual sources in “upwind” states to address air quality in “downwind” states, the Nov. 16 filing noted. “On review, a panel of this Court held that the Transport Rule exceeded EPA’s statutory authority under the Clean Air Act (‘CAA’),” it added. “EPA and its intervenors now seek en banc review both of the panel’s substantive holding that the emissions reductions EPA ordered exceeded its statutory authority under the CAA’s ‘good Neighbor’ provision, §110(a)(2)(D)(i)(I), and of the panel’s ‘independent’ holding that EPA violated the CAA’s fundamental ‘cooperative federalism’ structure by not providing States the first opportunity to address any emissions reductions required by §110(a)(2)(D)(i)(I). As demonstrated below, and in the Responses filed concurrently by the State Petitioners and intervenor San Miguel, EPA and its intervenors fail to satisfy the demanding requirements for en banc review.”

Section 110 of the CAA requires a state to prohibit amounts of its emissions that “contribute significantly” to attainment problems in other states. “In the Transport Rule, however, EPA took the position that this provision allowed it to impose any emissions reductions that it determined to be ‘reasonable’ and ‘cost-effective,’” the filing said. The panel disagreed, finding that, in ‘at least three independent’ respects, the Transport Rule disregarded ‘the limits imposed by the statutory text. EPA’s rehearing petition ignores central aspects of the panel’s decision. Its primary argument is that petitioners ‘waived’ their argument on one of the multiple grounds on which the Court held EPA exceeded its statutory authority under §110(a)(2)(D)(i)(I). In so arguing, EPA offers no defense on the merits of the ‘fundamental’ error identified by the panel on the ‘significant contribution’ issue EPA claims was waived—and the panel’s reasoning on this point is irrefutable. Nor does EPA even seek to address other separate and independent grounds identified by the panel for its vacatur of the Transport Rule.”

Related to the limited “waiver” argument EPA makes, the “significant contribution” claim was repeatedly raised before—and considered by—the agency, and EPA’s arguments do not remotely call into question the validity of the panel’s “rigorous” analysis holding that the claim was properly before the court, the industry parties argued. “And in all events, application of this Court’s waiver jurisprudence to the specific circumstances of this case is not an issue worthy of en banc review,” they added.

EPA and its intervenors failed to describe the full range of issues presented in this case, the industry parties noted. “Because the Transport Rule was vacated as exceeding EPA’s statutory authority, the panel did not address all of the arguments advanced by petitioners. For example, EPA’s own models predicted that the deep emissions reductions it was mandating would paradoxically produce poorer air quality than [the Clean Air Interstate Rule] CAIR in fact had already achieved. EPA, however, inexplicably failed to compare its modeling result ‘against real outcomes.’ EPA also failed to implement its methodology consistent with the CAA. Likewise, the panel did not address arguments advanced by State Petitioners that would independently support vacatur of the Transport Rule. While the panel’s reasoning was fully sufficient to justify vacatur of the Transport Rule, the Rule could not be upheld without the Court first addressing these issues, whether en banc or through the panel.”

San Miguel Electric, several affected states file their own briefs

San Miguel Electric Cooperative out of Texas, which has coal-fired capacity, filed its own Nov. 16 brief with the appeals court. “The responses of Industry Petitioners and State Petitioners comprehensively refute the arguments for rehearing en banc offered by EPA and intervenor-respondents (collectively, ‘Respondents’). Intervenor-Petitioner San Miguel Electric Cooperative, Inc. (‘San Miguel’) endorses those responses but files this separate response to address Respondents’ contentions that, unless the Transport Rule remains in place, air quality will suffer and downwind States will struggle to attain [National Ambient Air Quality Standards] NAAQS.”

San Miguel added: “[N]either of these contentions is valid. In fact, EPA has found that CAIR, which remains in effect, imposes significant emissions limitations on upwind States and that downwind States in the Eastern United States have already achieved widespread attainment of NAAQS. Thus, the downwind air quality results that EPA asserted to be the goal of the Transport Rule, are already being achieved with CAIR in place. Respondents can argue otherwise only by citing data that assume no emissions controls and do not account for the health benefits achieved by CAIR.”

Various states, including Texas and Michigan, filed their own Nov. 16 brief that focused on the “cooperative federalism” argument. They said they support the three-judge panel’s conclusion that the Transport Rule violated the CAA because EPA issued Federal Implementation Plans (FIPs) before first giving the states in EPA’s new multi-state region a chance to address their newly-defined significant contributions through State Implementation Plans (SIPs). They also responded to an argument by the respondents and their intervenors that this “FIP-before-SIP” issue was not properly before the court in this proceeding.

EPA on Oct. 5 asked the full appeals court to review the Aug. 21 decision that threw out CSAPR. In its Oct. 5 filing, EPA cited a number of areas where it thinks the panel erred in striking down a rule that imposed severe SO2 and NOx emissions restrictions on dozens of coal-fired power plants in the eastern United States. A long list of power generating companies and states had filed appeals of the rule, with the panel tossing the rule out on Aug. 21 and ordering that the older CAIR program remain in place while EPA rewrites or replaces CSAPR.

“The panel’s decision upends the appropriate relationship of the judicial, legislative, and executive branches of government by rewriting clear legislation, ignoring explicit statutory jurisdictional limits, and stepping into the realm of matters reserved by Congress and the courts to the technical expertise of administrative agencies,” EPA said in the Oct. 5 petition. “Especially in light of the enormous public health and regulatory significance of the Transport Rule, these clearly are issues of ‘exceptional importance.’”

EPA noted that it promulgated CSAPR in 2011 as the replacement for CAIR, utilizing an established two-step approach (refined to increase the emphasis on air quality). The rule included FIPs where EPA had previously found that the state failed to submit, or EPA had disapproved, a transport SIP.

In this case, the court vacated the Transport Rule, holding that the two-step approach did not assure a close enough correlation between each state’s degree of contribution and its required emissions controls, and outlining its own ‘proportional’ control regime. The majority also held that EPA erred in promulgating FIPs because states are not required to submit SIPs addressing transported pollution until after EPA first quantifies their obligation.

In holding that EPA lacked authority to promulgate the Transport Rule FIPs, the panel acted contrary to decisions of this appeals court by invalidating EPA actions that were not before the court and for which the statutory review period had previously run, and exceeding the court’s proper role in statutory interpretation by rewriting the plain language of the CAA, EPA argued. The CAA assigns specific roles to EPA and the states and creates an orderly process for them, a process that the panel’s decision completely upends, EPA contended.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.