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©2010 Foley & Lardner LLP
EPRC5
EPI’s 5th Annual Energy Policy Research Conference
Will The Clean Power Plan Make It Through The Courts?
September 11, 2015
©2010 Foley & Lardner LLP
The Clean Power Plan Is Finally Here
Forget what you knew this is a new rule It’s easier to say what’s the same than
what’s different:– Still called the Clean Power Plan– Based on Clean Air Act section 111(d)– Regulates CO2 from existing power plants– Uses building blocks– Gives states flexibility
©2010 Foley & Lardner LLP
Important Dates
Initial SIPs due Sept. 6, 2016– But extension to 2018 available
Start date moved back to 2022– BUT there is a mini-SIP due for pre-2022
period When will it hit the Federal Register?– EPA saying mid- to late Oct.– Triggering date for lawsuits
Race to courthouse Stay decision by early 2016
©2010 Foley & Lardner LLP
The Limits!
One nationwide emission rate for each category:– Fossil fuel EUSGUs: 1,305 lbs of CO2 per
MWh by 2030 – Stationary CTs: 771 lb CO2/MWh by 2030
State-specific rate and mass-based goals– Weighted aggregate of rates for the state’s
EGU’s
©2010 Foley & Lardner LLP
Best System Of Emission Reduction
Still based on same “BSER” interpretation EPA set the BSER for each region Then picked the highest rate (i.e., least
stringent) for each compliance year– EPA says provides “headroom”
Remember the EPA is now trying to set one nationwide uniform rate rather than state-specific rates
©2010 Foley & Lardner LLP
New Building Block 1
Efficiency projects “inside the fence-line”– 4.2% cut in Eastern– 2.1% cut in Western– 2.3% cut in Texas
Why differences?
©2010 Foley & Lardner LLP
New Building Block 2 (FKA BB3)
EPA used a seven step formula In general:– Used past RE capacity installed over last 5 yrs– Figured out the average annual increase and
the maximum annual increase for each type of RE
– Applied annual average increase in 2022 and 2023
– Applied max annual increase from 2024-2030 All new RE capacity is assumed to offset
coal/gas generation
©2010 Foley & Lardner LLP
New Building Block 3 (FKA BB2)
Assumed all of the existing NGCC in each region would increase utilization rate
75% utilization rate (based on summer capacity rating)
Ramp up between 2022 and 2027
Increased NGCC generation offsets REMAINING coal/gas after RE capacity is added
©2010 Foley & Lardner LLP
So Is It Legal? Our Poll.
56%29%
5%
5%5%
Clean Power Plan Poll Demographic
Private AttorneyProfessorUtilityNonprofitGovernment/Other
©2010 Foley & Lardner LLP
Some Of The Results…
Question 1: Do you believe the Clean Power Plan, as currently written, is legal?Response Count
Total-Yes 59Total-No 58Total-Don't Know 13Private Attorneys-Yes 20Private Attorneys-No 45Private Attorneys-DN 8Professors-Yes 30Professors-No 4Professors-DN 4Utility-Yes 1Utility-No 5Nonprofit-Yes 6Nonprofit-No 1Government/Other-Yes 2Government/Other-No 3Government/Other-DN 1
©2010 Foley & Lardner LLP
Some More Results…
Question 2: If you think the Clean Power Plan is legal, please go to question (4). If you think the Clean Power Plan is illegal, please identify which of the following parts you believe are illegal (you may select more than one):
Count
Percent of Respondents
Total Responses 56
(a) The entire Clean Power Plan is illegal because it’s unconstitutional 10 17.9
(b) The entire Clean Power Plan is illegal because the EPA doesn’t have the authority to regulate power plant CO2 emissions under section 111(d) 32 57.1
(c) Building block one (6% reduction at coal plants) is illegal 11 19.6
(d) Building block two (running combined cycle natural gas plants instead of coal plants) is illegal 32 57.1
(e) Building block three (increased renewables and new nuclear) is illegal 42 75.0
(f) Building block four (increased energy efficiency) is illegal 42 75.0
©2010 Foley & Lardner LLP
How EPA Helped Itself
Harvard Law Professor Freeman loves the EPA’s changes!
EPA eliminated BB4– Shouldn’t be required to reduce
consumption Delayed start date to 2022 More flexible SIP submittal deadlines Helped itself on constitutional questions by
focusing more on source compliance
©2010 Foley & Lardner LLP
EPA’s Whiffs and Zingers
Keeping CCS in new plant rule EPA admits MATS rule was in place when it
issued CPP (page 178) Drastic flip-flop on 111(d) v 112 issue Betting entire rule on one totally new
argument (pages 266-270) Essentially admits “outside the fence-line”
isn’t ok Doesn’t make BB1 severable
©2010 Foley & Lardner LLP
Will The CPP Make It Through The Courts Unscathed?
Makeup of the D.C. Circuit panel is critical Same panel strongly favors industry on
merits BUT en banc favors EPA on merits Supreme Court is a wild card – New Chevron standard?– UARG language?– BB2 and BB3 most vulnerable
My guess
