Congressman Ed Whitfield Proposes Means for States to Avoid Compliance with the EPA’s Clean Power Plan

by Akin Gump Strauss Hauer & Feld LLP

On March 23, 2015, Congressman Ed Whitfield (R-KY), Chairman of the Energy and Power Subcommittee of the House Energy & Commerce Committee, released a discussion draft of the Ratepayer Protection Act of 2015 (the Act). According to Rep. Whitfield, the Act “would empower states to protect households and businesses from the harmful effects of” the Environmental Protection Agency’s (EPA) proposed Clean Power Plan. To do so, the Act would provide for “judicial review of any final rule addressing carbon dioxide emissions from existing fossil fuel-fired electric utility generating units before requiring compliance with such rule, and to allow States to protect households and businesses from significant adverse effects on electricity ratepayers or reliability.” The Energy and Power Subcommittee will hold a hearing on the Act on April 14, 2015, the details of, and witness list for, which are yet to be announced.

In effect, the Act would (1) delay the implementation of the Clean Power Plan until all judicial challenges to any aspect of a resulting final rule are resolved; and (2) provide a means for governors, even if all reviewing courts uphold all aspects of the Clean Power Plan, to avoid compliance if, in their judgment, doing so would significantly increase electricity rates or adversely affect reliability.

The Clean Power Plan, which the EPA proposed in June 2014 pursuant to the Clean Air Act, would require the reduction of carbon dioxide emissions from existing power plants to 30 percent of 2005 levels by 2030. The EPA is expected to finalize the rule by mid-summer 2015.  According to Rep. Whitfield, for states that “do not submit a satisfactory [implementation] plan, EPA would impose a Federal Plan, a model of which has not yet been proposed by” the EPA.  This, Rep. Whitfield believes, represents an “unprecedented power grab” and a “damaging overreach” by the EPA.

In support of the Act, Rep. Whitfield cites “broad concerns” raised by governors, regulators and electric reliability authorities about the legality and implementation of the Clean Power Plan; its “impacts . . . on electricity rates, reliability and state and local economies”; and the uncertainty arising from the fact that it “could ultimately be struck down by the courts.”  Despite these concerns, Rep. Whitfield states, “EPA seeks to compel states to move forward with compliance and submit costly implementation plans, or become subject to a federal plan, before the litigation is resolved.”  Thus, the judicial review and “safe harbor” provisions of the Act, according to Rep. Whitfield, seek to prevent ratepayers from incurring costs associated with, and avoid reliability effects resulting from, a state or federal implementation plan.

Like the Clean Power Plan itself, the Act has already drawn strong, mixed responses from interested parties, including support from the National Rural Electric Cooperative Association, which agrees with Rep. Whitfield that the Clean Power Plan “runs roughshod over...states’ authority.” The Act has been opposed by the Natural Resources Defense Council, which describes the Act and recent related actions against the Clean Power Plan as the “most dangerous and brazen bid to carry out the big polluters’ agenda to derail crucial action on climate change.”

If passed, the Act would threaten implementation of the Clean Power Plan in some states—even if any forthcoming final rule were upheld in its entirety—because governors would have virtually unfettered discretion to not comply with a state or federal implementation plan if they determine that doing so would harm ratepayers or reliability.


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Akin Gump Strauss Hauer & Feld LLP

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