Last week, the Clean Power Plan’s (CPP) latest chapter unfolded before an en banc hearing at the D.C. Circuit Court of Appeals. Petitioners argued the Environmental Protection Agency (EPA) overstepped its congressional authority under the Clean Air Act.
A central issue before the court was whether the agency exceeded its authority under Section 111(d) by designing a scheme that regulates “beyond the existing source’s fence line” – outside the four walls of the utility. Section 111(d) requires EPA to establish emission guidelines that reflect the best system of emission reductions (BSER) that have been adequately demonstrated. Petitioners, led by the State of West Virginia, argued the CPP is unlawful because it includes in its BSER “beyond the fence line” regulatory measures like generation-shifting from coal to natural gas and renewable energy (Building Blocks 2 and 3). In addition, according to Petitioners, the rule includes CO2 reductions that are impossible for any individual power plant to meet.
In response, EPA argued that generation-shifting to alternative energy sources is already occurring and has become a mainstay for regulatory compliance in the power industry. To support this assertion, counsel representing power companies supporting the EPA told the court that many utilities prefer generation-shifting as a solution and in fact, requested that the agency construct the rule in this manner. West Virginia’s Attorney General, Patrick Morrisey, however, stated “I think there’s a real distinction between actions that are taking place voluntarily in the marketplace and forced compliance, and that’s effectively what this is…it became pretty clear that with this rule, you cannot achieve the standards that are being set.”