Now that the Obama administration has released the full details of its highly anticipated Clean Power Plan today, industry and state opponents are champing at the bit to challenge it in court.
For those handicapping the litigation, however, the government’s odds of success just got a significant boost. A close analysis of the language in the final plan released today suggests that EPA has addressed each of these problems in subtle but significant ways, and the legal battle will now likely be much harder for the challengers.
The final version makes five key changes.
First, and crucially, it places the regulatory burden directly on power plants, not on states. The rule tells coal and gas plants how much carbon pollution they can emit per megawatt-hour of electricity, setting a single national rate for each category. While it might sound minor, this change is important to legal defensibility. It responds to the concern that the Clean Air Act authorizes EPA to set performance standards for sources. (States can still comply with the law by using overall state emissions targets, but only if they choose to.) And by setting one rate for coal units and another for gas units, it brings the rule into line with long-established EPA precedent, which tailors emission rates to different types of technology, and so will be familiar to courts.
Second, the draft version of the plan included elements that led opponents to charge the EPA with “jumping the fence-line,” straying beyond its acknowledged authority to regulate power plants.
One of these potential fence-jumps was the agency’s use of energy efficiency as a basis for setting emission rates. The EPA’s draft rule projected that states could cut energy demand from consumers 1.5 percent per year after 2020, helping to reduce power plant emissions. But doing so exposed EPA to vehement criticism that it was seeking to regulate how consumers use energy, not just whether power sources can produce electricity more cleanly. To neutralize this vulnerability, the new standard drops energy efficiency as a consideration for stringency, and the EPA’s final rule sets rates without assuming any reduction in consumer demand. (However, because it is such a low-cost way to reduce emissions, the EPA does allow sources to use energy efficiency in order to hit their targets.)
Third, revisions to the final rule will make it harder for opponents to argue it intrudes on state sovereignty. This has been one of the highest-profile claims against the draft plan, which asked states to meet individual, state-level emissions targets. But the new structure of the final version lets states meet their obligation simply by applying the EPA’s uniform national rates for coal and gas units to the power plants in their jurisdiction—the most straightforward compliance plan imaginable. The rule will offer states other ways to comply by translating these two rates into a single state emissions target; this allows states to, for example, adopt an emissions cap and create a credit-trading scheme. But no one will force any state to do so.
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