EPA argues Clean Power Plan illegal in new repeal document

Dive Brief:

The Environmental Protection Agency will argue that the Obama administration's Clean Power Plan was illegal in its proposal to repeal the carbon regulatory package, a leaked draft of the plan reveals.
A draft of the repeal notice obtained by Politico reports that the EPA considers the CPP illegal because it directed utilities to pursue emission reductions that could only be achieved "outside the fenceline" of individual power plants, such as by purchasing renewables.
The draft notice stresses that EPA has not yet determined whether it will regulate carbon emissions under the Clean Air Act and asked for industry comments to inform its decision. The agency will issue an advanced notice of a new rulemaking on the matter "in the near future."

Dive Insight:

Finalized in 2015, the Obama administration's Clean Power Plan never went into effect, as implementation was put on hold by the Supreme Court in February 2016 until legal challenges concluded.

Key to those challenges was the so-called "fenceline provision" that CPP critics, including current EPA Administrator Scott Pruitt, used to challenge the rule in court. They argued that the Clean Air Act, the underlying statute for the regulation, only allows EPA to mandate emissions reductions with technologies that can be applied "inside the fenceline" of individual power plants.

The EPA's draft CPP repeal, put online Friday by Politico, picks up on those arguments, saying that the CPP's provisions "raised substantial concerns that the CPP would necessitate changes to a state’s energy policy, such as a grid-wide shift from coal-fired to natural gas-fired generation, and from fossil fuel-fired generation to renewable generation."

The agency proposes to reevaluate the Clean Air Act provision (111(d)) "in a way that is consistent with the Agency’s historical practice of determining a [best system of emission reductions] by considering only measures that can be applied to or at the source."

EPA will take comments on whether that is the correct interpretation, but Pruitt has already hinted at his opinion. In 2014, he drafted an "inside the fence" alternative to CPP as Oklahoma attorney general.

The draft repeal stresses that EPA has not yet decided whether to issue a new rule governing carbon emissions from the power sector. If it does not, liberal states and environmental groups are likely to sue the agency based on its carbon endangerment finding — an agency review ordered by the Supreme Court in 2007.

Completed in 2009, the finding holds that greenhouse gases are a threat to public health, compelling the EPA to regulate them under the Clean Air Act. Pruitt signed on to a legal challenge against the finding in 2012 and conservative interests have pushed him to dismantle it, but the draft repeal makes clear that decision won't come directly from this rulemaking.

"We are not soliciting comment on the EPA’s assessment of the impacts of greenhouse gases with this proposal," EPA wrote.