In a petition filed Sept. 3 at the U.S. 10th Circuit Court of Appeals, Oklahoma Gas and Electric joined Oklahoma Attorney General Scott Pruitt in requesting a rehearing before the full 10-judge panel to determine if the U.S. Environmental Protection Agency acted appropriately in rejecting the state’s regional haze plan.
On July 19, a three-member panel ruled 2-1 that the EPA lawfully exercised its authority to impose a federally mandated plan on the state, the utility noted in a Sept. 3 statement. If upheld, the panel’s ruling is expected to result in large rate increases for Oklahoma electric consumers since it would require expensive emissions retrofits on coal-fired capacity.
“This is among the first decisions in the country to address EPA’s review under the Clean Air Act’s regional haze provisions,” said OG&E spokesman Brian Alford. “The majority opinion gives EPA the ability to replace the State of Oklahoma’s decision with its own. This is especially egregious considering the errors made by the EPA when it conducted its own analysis.”
Alford said the three-member panel opinion failed to require the EPA to show why the state’s rule was unreasonable before the agency could reject the state’s implementation plan. OG&E also believes that EPA’s analysis were frequently based on assumptions unsupported by the record, contrary to basic engineering or economic realities, or based on materials or analysis that EPA did not provide to Oklahoma during the State’s lengthy process for making its best available retrofit technology (BART) determination.
In the past, the Oklahoma governor’s office, state Attorney General, Oklahoma Corporation Commissioners, Oklahoma Department of Environmental Quality and others voiced opposition to the EPA plan saying that the state developed a plan that would be more effective than costly SO2 scrubbers, and cost far less. The case involves two units at OG&E’s Sooner plant and two units at the Muskogee plant.
Instead of scrubbers, the Oklahoma plan called for use of low-sulfur coal and gave affected utilities in the state the flexibility to burn less coal and more natural gas on a timetable that achieves the goals of the Regional Haze rule while limiting the cost to customers.
The Sept. 3 petition for en banc rehearing offers two main points of appeal:
- First, by according EPA the deference that is reserved by the Clean Act Act (CAA) to the state, the panel majority’s decision undermined the state’s exercise of its authority under the CAA. “Repeatedly throughout the course of its review of EPA’s decision, the Court defers to EPA’s preferences as long as EPA’s hired consultant provided some explanation,” the petition said. “But the test should not have been whether EPA’s approach could be justified. It should have been whether EPA had a basis to say that the State’s approach violated some mandatory requirement in the regulations or was itself arbitrary.”
- Second, because the panel majority was “overly deferential” in its review of EPA’s action, it failed to conduct a meaningful examination of the explanations underlying EPA’s cost analysis. “The Court should have required EPA to show why the State’s rule was unreasonable before EPA could reject the Oklahoma [state implementation plan]. If the Court had given EPA’s rejection of the SIP that level of review, it would have found that EPA’s explanations were frequently based on assumptions unsupported by the record, contrary to basic engineering or economic realities, or based on materials or analysis that EPA did not provide to Oklahoma during the State’s lengthy process for making its BART determination.”
OG&E is a subsidiary of OGE Energy (NYSE: OGE), and serves more than 800,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas.