Court rejects ’emergency’ pleas for stay of EPA’s Clean Power Plan

Brushing aside arguments that EPA’s Clean Power Plan is causing harm now, ahead of its official publication, a three-judge panel at the U.S. Court for Appeals for the D.C. Circuit on Sept. 9 refused an emergency effort to get the plan halted.

The U.S. Environmental Protection Agency in early August unveiled the final version of the Clean Power Plan, which calls for 32% greenhouse gas reductions from existing power plants by 2030. But EPA has not yet published the final rule in the Federal Register, and the agency says that only then call the rule be challenged in court.

In its brief Sept. 9 ruling, the appeals court panel wrote in a case brought by several states, including lead plaintiff West Virginia: “Upon consideration of the emergency petition for extraordinary writ filed by West Virginia, et al., in No. 15-1277; the emergency renewed petition for extraordinary writ filed by Peabody Energy Corporation in No. 15-1284; the responses thereto; and the replies, it is ORDERED that the petitions be denied because petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”

In a Sept. 4 brief filed with the court, West Virginia said: “In the final Section 111(d) Rule, EPA took an unusual departure from its established rulemaking practice and precedent by ignoring the date of Federal Register publication in setting the effective date for the Rule. Instead, EPA made the States’ obligations due on date-certain deadlines, which remain fixed no matter how long Federal Register publication takes and no matter what EPA says about the Rule’s technical ‘effective date.’

“Put another way, though it could have tied the compliance deadlines to publication, EPA deliberately severed the traditional link between when the Rule’s deadlines accrue and when a petition for review and a stay application can be filed. The purpose of this stratagem is plain: the longer it takes for publication, the greater the benefit to EPA as States work to meet their date-certain deadlines with no ability to seek an ordinary stay of the Rule. With EPA’s response to this Court’s briefing order, it is now clear that the States will suffer months of irreparable harm before they can possibly obtain a stay under the ordinary statutory procedures.

“EPA has been forced to admit that it believes the Rule will not be published until mid-to-late October. As of the time of the submission of its brief, EPA had not even sent the Rule to the Office of Federal Register (‘OFR’). Even after this submission occurs, EPA can only hope that publication of the 3,083 page ‘package’—which includes the Section 111(d) Rule and two other related regulations—will occur sometime in ‘middle-to late October.’

“But EPA admits it lacks control over the process, and publication could be delayed months because of the Rule’s large ‘number of pages to be edited and formatted.’ EPA asserts that there is nothing this Court can do about this situation. Under the agency’s categorical position, this Court can never remedy irreparable harms imposed by final rules until Federal Register publication occurs. This is directly contrary to principles of this Court’s longstanding equitable authority, particularly as exemplified in this Court’s decision in American Public Gas Association v. Federal Power Commission, 543 F.2d 356 (D.C. Cir. 1976). Once EPA’s threshold arguments are properly set aside, its opposition falls apart. On the merits, EPA refuses to address several of the States’ arguments, including that the Rule is contrary to the Supreme Court’s decision in Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014) (‘UARG’). And with regard to irreparable harms, EPA’s argument reduces to the assertion that the sworn statements of multiple State regulators that they are expending substantial taxpayer resources now are an insufficient basis for the limited relief the States seek.”

Peabody says coal plants already on the verge of closing due to this rule

Peabody Energy (NYSE: BTU), the nation’s largest coal producer, wrote in its own Sept. 4 brief: “This Court opined on June 9, 2015, that it ‘will not be very long from now, according to EPA,’ when a final rule will issue and parties can ‘seek a stay of the rule.’ In re Murray Energy Corp., 788 F.3d 330, 335 (D.C. Cir. 2015). Judge Henderson stated that ‘by the time the majority opinion and this concurrence issue – or shortly thereafter – the petitioners will have a final rule that can be challenged as final agency action in this Court.'”

In that case, the court rejected an effort by parties including Ohio-based coal producer Murray Energy to get the Clean Power Plan struck down in its proposal stage, ahead of the early August issuance of the final version of the rule.

“Those assumptions – which were based on EPA’s representations – have not come to pass,” Peabody wrote. “EPA has released its Final Rule but now explains it does not expect the Rule to be published in the Federal Register until late October. Assuming there are no delays in the publication of its 1,560-page Final Rule, EPA says that parties will not be able to file petitions for review or seek a stay until nearly two months from now – and nearly five months after this Court’s June 9 decision. That is too late. Irreparable harm is occurring now, before the Final Rule is published. Utilities are making irreversible decisions today about how to comply with the Final Rule, which cause irreparable injury to Peabody and others.

“EPA’s own projections show the Final Rule will cause a shutdown of more than 30 coal-fueled Electric Generating Units (‘EGUs”’ by 2016, including plants supplied by Peabody. Planning for such closures is happening now. For example, a Minnesota plant supplied by Peabody announced in July 2015 that it was closing in response to the Clean Power Plan. After the Final Rule’s announcement, industry planning decisions will accelerate in the immediate short term and lead to the irreparable loss of coal sales.

“As two expert energy consultants concluded, ‘[t]he coal industry thus will suffer immediate irreparable harm, including irreparable harm between now and the EPA’s planned publication date of the Final Rule.’ EPA asserts there is simply no judicial authority to prevent it from imposing months’ worth of irreparable injury before Petitioners can even raise the question whether the Final Rule is ultra vires. EPA seeks to railroad revolutionary changes in the U.S. energy sector and induce early compliance before any court can provide meaningful review. Unless the Court acts now, the bell will have been rung, and the Court as a practical matter will be powerless to unring it.

“EPA is trying to repeat its strategy under the Mercury and Air Toxics (‘MATS’) rule, where, absent a stay, the agency was able to force utilities to install billions of dollars in abatement equipment ahead of time, despite the subsequent decision in Michigan v. EPA, 135 S. Ct. 2699 (2015). EPA announced the MATS rule in Dec. 2011, with compliance set to begin in Apr. 2015 (or Apr. 2016 with an extension). In the three months that followed that announcement – roughly equivalent to the time between the August 3 Final Rule’s announcement and its anticipated late October publication – utilities announced at least 16 power plant retirements, some of which were complete within eight months. Six of these closure announcements were made between the MATS rule’s Dec. 2011 issuance and its Feb. 2012 Federal Register publication.

“EPA is using the MATS playbook here, with a new wrinkle: it has taken the highly unusual step of setting a fixed Sept. 6, 2016 deadline for submission of state plans, untethered to the date of publication. EPA also seeks to move the goal posts: It argues that some announced plant closures come too early, while other plant closures in 2016 come too late, to warrant a writ now. According to EPA, the timing is never right for judicial review. Surely no agency should be allowed to manipulate ripeness to manufacture mootness. It should not be able to force early compliance to change the facts on the ground and render judicial review ineffective as a practical matter.”

Peabody’s reference to a July announcement about a Minnesota coal plant is apparently to a July 9 announcement from Minnesota Power, a division of ALLETE Inc. (NYSE: ALE), about the next steps in its EnergyForward plan, which will reduce carbon emissions, increase the use of renewable resources and add natural gas to meet customer electric service needs. The next steps in the plan include the economic idling of the company’s Taconite Harbor Energy Center in the fall of 2016 and ceasing coal operations there in 2020.

“Minnesota’s energy landscape continues to evolve, and EnergyForward is helping our region adapt to changing policy in ways that protect affordability and uphold reliability for our customers,” said ALLETE Chairman, President and CEO Alan R. Hodnik. “This is Minnesota Power’s way of answering the nation’s call to reduce carbon and mitigate climate change.”

The company plans to cease coal operations at Taconite Harbor Units 1 and 2 in Schroeder, Minn., by the end of 2020. As part of this transition and taking advantage of trends in lower cost replacement energy supplies from wholesale markets, the company will idle Taconite Harbor in the fall of 2016. If necessary, the idled units can be restarted, the utility said at the time.

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.