Hearing Shows States May Shift to Renewables Regardless of CPP

Clean Power Plan supporters say they were validated Tuesday when several D.C. Circuit Court judges questioned a key argument against the plan about its guidelines for shifting states away from fossil fuels.

The Clean Air Act calls on the Environmental Protection Agency to regulate pollutants from individual power plants, but opponents say that doesn’t give the agency the authority to demand that states shift from dirty power sources to cleaner ones.

Five judges pushed back on that claim during the oral argument, saying the law calls on the EPA to employ the “best system of emission reduction.” They also said “generation shifting” from fossil fuels to renewables is inarguably the best system for reducing emissions.

As it stands, the Clean Power Plan sets limits for greenhouse gases from power plants based on states’ ability to shift away from fossil fuels. It then asks the states to meet those goals in whatever way they choose.

Opponents of the plan argue the EPA should have based the rule on improvements at individual plants, such as installing carbon-capture technology at coal-fired plants.

But attorneys for the opponents had trouble answering questions about that argument. Their responses undermined the sense that a ruling against the Clean Power Plan, at least on these grounds, would make a significant difference in how greenhouse gas emissions are reduced.

Judge Sri Srinivasan pressed Elbert Lin, counsel for the 27 states opposing the Clean Power Plan, on whether states would engage in the exact “generation shifting” that Lin opposes even if the court bans the EPA from requiring it.

Lin said the opponents were divided over that question. Srinivasan observed that they were “in a bit of a dilemma.”

In total, Judges Thomas Griffith, David Tatel, Srinivasan, Cornelia Pillard and Patricia Millett expressed skepticism at the opponents’ idea that the rule should not go beyond the fence line of an individual power plant. Tatel told Lin that in order to win the case on these grounds, the opponents would have to demonstrate that the Clean Air Act “unambiguously bars generation shifting” as the best system of emission reduction.

This wasn’t the only argument opponents made against the Clean Power Plan. Another key question is over whether the agency was barred from creating the plan under Section 111(d) of the Clean Air Act because the same power plants affected are regulated under Section 112. If the judges rule against the plan on these grounds, it could deal a more forceful blow to the EPA’s ability to set any limits on carbon-dioxide emissions.

The judges’ skepticism about the opponents’ generation-shifting argument also doesn’t necessarily mean they disagree with the opponents, but it does show a legal weakness. Srinivasan said just because generation shifting is the most effective way of cutting greenhouse gas doesn’t mean Congress intended to give the EPA that authority.

Peter Keisler, an attorney representing the opponents in the industry, said if states decide to shift away from fossil fuels, they can do so under their own “organic authority.” States have the primary authority to regulate their own energy systems under the Constitution, he said.

The arguments illustrate the likelihood that states will meet the greenhouse gas emissions standard by shutting down coal-fired power plants, regardless of how the cap is instituted by the EPA.

Supporters of the Clean Power Plan have argued that opponents are making a superficial argument when they say the EPA has assumed too much authority. The real purpose of the argument against generation shifting, supporters say, is to force the EPA to set a higher cap for greenhouse gases because it must use less effective way of cutting emissions to justify that cap.

Eric Hostetler, an attorney for the Justice Department, compared the argument to a golfer setting his handicap by playing a round using only a putter while planning to use a full bag of clubs the next time he plays.

In July, Sean Donahue, an attorney for the Environmental Defense Fund, called the argument against generation shifting “deeply artificial” in an interview with Morning Consult. After Tuesday’s hearing, Vickie Patton, also an attorney for EDF, said she is happy the judges seemed to have paid close attention to a power industry experts’ brief on how the electrical grid works and that they “understood how interconnected grid is.”

Some vocal opponents of the plan haven’t denied that states will ultimately use the same means of cutting emissions that the EPA uses in the rule. On Monday, Texas Attorney General Ken Paxton told Morning Consult that the point of the lawsuit is to show that it’s the state’s prerogative.

“Every state’s going to do it differently,” Paxton said. “Texas is going to do it differently than Kansas. My understanding of the way that this should work is that the states are responsible for dealing with electricity generation, and how to implement and apply this. Even though they may issue some kind of rule, ultimately, it’s our responsibility to apply it in the way that’s most beneficial to our consumers.”