On June 2, 2014, the Environmental Protection Agency (EPA) released its first-ever proposal to regulate carbon dioxide emissions from existing power plants. The Republican-controlled House of Representatives, Democrat-controlled Senate and President Obama's EPA have taken different approaches to the rule, but all three have spent substantial time focusing on the proposal. Last week was particularly insightful in understanding the roles that these institutions are playing relative to the proposal.
In the House, several committees held hearings looking at the mechanics of the proposal, trying to ascertain how it would function once implemented. The Committee on Energy and Commerce, Subcommittee on Energy and Power, held a hearing with commissioners from the Federal Energy Regulatory Commission, seeking to understand how the proposal would impact the reliability of the electric grid. The House Committee on Science, Space and Technology also held a hearing on the proposal, featuring former high-level officials at the EPA and Department of Energy. And, the House Committee on Small Business held a hearing examining whether major EPA regulatory initiatives like this one are in compliance with the Regulatory Fairness Act. These hearings were focused on oversight and the mechanics of the proposal with House Republicans taking a critical approach to the administration and its regulatory agenda.
In the Senate, two committees held hearings looking at the dangers of climate change. The Senate Committee on Environment and Public Works, Subcommittee on Clean Air and Nuclear Safety, heard from witnesses representing local governments and businesses concerned with the impacts of climate change. The Senate Budget Committee also held a hearing examining the economic costs associated with a changing climate with testimony from current and former federal officials. These hearings served as a counter-point to the House hearings and demonstrated support for the EPA's proposal from the Democrat-controlled Senate.
The EPA held perhaps the most anticipated events of the week on the issue, hearing from hundreds of stakeholders around the country over two full days in Atlanta, Denver, Washington, D.C. and Pittsburgh. Rallies were held by various organizations to coincide with the hearings. In Denver, speakers from all over the Western United States came out to speak on both sides of the issue, and the hearings provided a stage for the candidates in the state's tight senatorial race to rally their supporters. In Pittsburgh, several labor unions hosted a rally opposing the EPA proposal which resulted in the arrest of dozens of union officials. In Washington, D.C., several high-profile elected officials attended the hearing and expressed strong views for and against the proposal. Senate Minority Leader Mitch McConnell (R-KY), perhaps the highest-profile speaker at the Washington, D.C. hearing, called on EPA to do more outreach to communities that will be impacted by the proposal, particularly by holding additional hearings in coal country.
In the coming weeks and months, EPA and the administration will continue to hear from stakeholders on all sides of the issue through the public comment process. Comments on the proposal will be accepted through October 16, 2014. Stakeholders should contact the authors of this update or consult EPA's Clean Power Plan website for more information on how to submit comments.
Another development in the greenhouse gas space last week, while not directly related to the existing unit proposal at issue in the hearings, may speak to the rocky road that EPA's proposed carbon dioxide regulations could face in the courts in the final two years of the Obama administration. In June, in Utility Air Regulatory Group v. EPA, the U.S. Supreme Court ruled that EPA had exceeded its authority under the Clean Air Act when it required greenhouse gas emissions, alone, to trigger permitting requirements under the Prevention of Significant Deterioration and Title V permitting programs. Justice Antonin Scalia, writing for the majority in UARG, was scathing in his critique of what he considered to be EPA overreach under the CAA. Some in the industry interpreted that as a warning to EPA that the Supreme Court would be watching its NSPS regulations very closely in the coming months and years.
In a July 24 memorandum, EPA provided a short-term response to the UARG decision by directing its regional offices to stop requiring permits under those two programs for sources which triggered permitting thresholds only based on greenhouse gas emissions. EPA stated it would no longer apply or enforce federal regulations and resulting state regulations appearing in State Implementation Plans that require these permits. However, EPA noted its view that the UARG opinion did not preclude states from exercising their independent authority to regulate greenhouse gas emissions.