More on EPA’s GHG Rule: I Am NOT Going To Set Odds on Whether the Rule Would Survive Judicial Review

Last week, in posting about EPA’s Clean Power Plan, I noted that some potential plaintiffs might face standing obstacles in seeking to challenge the rule, assuming it is promulgated as proposed. Today, I take a (very) slightly broader look at potential legal challenges.

First, I still think that the most obvious potential plaintiffs, owners of coal-fired power plants, might indeed have standing issues in challenging a rule which maximizes the options for attaining reductions in GHG emissions. After Massachusetts v. EPA, EPA pretty clearly has authority to regulate GHG emissions from power plants. If EPA did that and no more, the EPA rule would stand. If that is so, then how are coal-fired plant owners harmed by a rule – however dubious its legal authority – that only gives the plant owners more options for compliance?

However, that’s not the end of the story. Who might have standing to sue and what might some of the claims be?  Here are two obvious candidates:

• States unhappy with the CO2 rate-based emissions reduction target EPA assigns them. To give one simple comparison utilizing my home state: The proposed rule would require Massachusetts to reduce its CO2 emissions rate from 925 lbs/MWh to 576 lbs/MWh, a 38% reduction, but would only require Montana, with the highest baseline rate, 2,245 lbs/MWh, to reduce emissions to 1,771 lbs/MWh, a 21% reduction. Montana would be left with a CO2 emissions rate approximately 3 times that of Massachusetts.

EPA based the state-applicable rates on what each state could reasonably be expected to accomplish. Even so, it would not be surprising for states to claim that the differences among the states are arbitrary and capricious. The fun part is that Massachusetts could challenge the rule (though I doubt it will) for not sufficiently crediting states that aggressively reduced CO2 emissions in advance of the EPA rule, while Montana could still challenge the rule as not being feasible for coal-reliant states.

• Entities subject to regulation under the rule that are not electric generating units. EPA’s rule may be about the best that it can do – from a policy perspective – with its existing authority. That does not mean that § 111(d) can shoulder the weight this rule gives it. Section 111 applies to “stationary sources”, but state implementation of EPA’s building blocks (other than limits directly imposed on EGUs) seems likely to require regulating non-EGUs. Even if coal-fired EGUs cannot challenge implementation of these building blocks, at least some entities unhappy about such regulation would likely have standing.

This is going to be a long and winding road. Gina McCarthy apparently said recently that she would not be surprised if EPA made significant changes to the rule in response to comments. The basic dilemma is almost certain to remain, however. EPA must regulate. It’s trying to build in as much flexibility as possible. It’s not clear that the existing Clean Air Act actually authorizes that flexibility. Congress still won’t touch legislation that would.

Everything is for the best in this best of all possible worlds.