Parties argue Clean Power Plan legality at federal appeals court

The nation’s largest coal producer, Peabody Energy (NYSE: BTU), filed comments on Feb. 27 at a federal appeals court about the constitutional issues posed by the U.S. Environmental Protection Agency’s proposed Clean Power Plan.

Peabody is offering the arguments of noted law professor Laurence Tribe that the Clean Power Plan is an unconstitutional overreach of authority that Congress previously granted to the agency under the Clean Air Act. The underlying lawsuit was filed in August 2014 at the U.S. Court of Appeals for the D.C. Circuit by Murray Energy, a major coal producer based in Ohio.

In part, Peabody in the Feb. 27 filing was responding to arguments raised by the Natural Resources Defense Council (NRDC). Said Peabody: “NRDC asserts that it would be ‘improper’ for this Court to reach the constitutional objections raised by Peabody (including the Fifth Amendment). But the only way this Court can avoid reaching those objections is to construe EPA’s statutory authority narrowly enough so that EPA’s actions do not raise them. That is precisely what Peabody urges: this Court should hold that the Clean Air Act prohibits the Proposed Rule.”

The National Federation of Independent Business (NFIB) and Utility Air Regulatory Group (UARG) filed their own Feb. 26 brief that said: “The Environmental Protection Agency’s (‘EPA’ or ‘Agency’) response underscores the unlawfulness of its Clean Air Act interpretation and pending rulemaking, confirming that the Court should issue an extraordinary writ ‘in aid of’ its exclusive review jurisdiction under 42 U.S.C. § 7607(b). Issuance of a writ would assure States and electricity generators that they need not undertake additional costly steps to further implement EPA’s proposals under a mistaken notion that ‘the usual presumption of validity,’ Chamber of Commerce of the United States v. EPA, 642 F.3d 192, 208 (D.C. Cir. 2011), attaches to these highly unusual, patently unlawful, agency proceedings.”

NFIB and UARG said that states and owners of electric generating units (EGUs) are already expending significant resources undertaking implementation efforts pursuant to EPA’s unlawful rulemaking. And in the absence of an extraordinary writ, they will continue to do so.

EPA’s brief includes never-before-imagined textual arguments for why the agency may regulate existing sources under Clean Air Act Section 111(d) that are already regulated under Section 112, said NFIB/UARG. EPA’s attempts to “manufacture ambiguity” from textual clarity are unavailing, and, as demonstrated by Professor Tribe and others, allowing EPA to give substantive effect to a conforming amendment creates insuperable constitutional difficulties, they added.

Murray Energy: you can’t on a practical basis revive a coal plant that has gone ‘ cold’

Said Murray Energy in a Feb. 26 brief: “The nation’s coal-fired power plants are confronted with an existential challenge. The Administration’s Clean Power Plan is forcing existing coal-fired power plants to decide now whether to invest millions to prepare for an onslaught of future requirements, switch from coal to other fuels, or shut down entirely. This plan will dramatically reduce the use of coal to generate electricity at the nation’s coal-fired power plants, and thus attacks Murray Energy’s customer base.

“Whatever EPA’s authority to wreak this kind of havoc in the abstract, its proposed carbon rule for existing power plants depends on purported authority explicitly prohibited by statute. The issue under review is a single question of EPA’s statutory authority, and judicial review will abate significant and ongoing injury to Murray Energy that cannot be remedied by a later decision of this Court after the nation’s existing coal-fired power plants have gone cold. Judicial review is available and appropriate now.

“Respondents do not raise any credible question over this Court’s authority under the All Writs Act to prohibit the finalization of a rule that would unlawfully subject power plants to double regulation and force many to commit to long-term construction projects or even shut down entirely before EPA publishes its final rule. Moreover, with EPA’s definitive conclusion that Section 111(d) of the Clean Air Act suddenly no longer means what it says and no longer protects sources subject to national emission standards from costly over-regulation, this Court also has authority to vacate EPA’s legal conclusion.

EPA’s claim of authority rests entirely on an improper statutory interpretation that ignores the text of the United States Code and the role of the House Office of the Law Revision Counsel. EPA tries in vain to circumvent the Code, but fails to show that it contains any errors or is otherwise inconsistent or in conflict with the Statutes at Large. EPA further offers nothing in the text, structure, or legislative history of the Act that would permit it to ignore the clear and sensible limitation on its authority embodied in Section 111(d).

“EPA’s reliance on illusory authority is inflicting real and permanent injury on Murray Energy and its numerous supporting intervenors. This Court can and should stop EPA’s ultra vires actions now.”

Calpine Corp. (NYSE: CPN), a major operator of gas-fired power plants that would benefit from the shutdown of coal-fired facilities, said in a Feb. 19 brief in support of EPA: “Petitioner Murray challenges the Proposed Rule on a far-fetched legal theory, claiming that the proposal is ‘unprecedented’ and Murray will suffer ‘irreparable injury’ if this Court does not grant immediate relief. Petitioner’s claims lack support and, therefore, cannot justify the extraordinary relief Petitioner seeks. Additionally, EPA has consistently demonstrated its willingness to revise proposed rules affecting the power sector to provide additional flexibility, undercutting Petitioner’s assertions of irreparable injury resulting from the Proposed Rule.”

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.