Litigation over the Environmental Protection Agency’s (EPA) recently issued “Clean Power Plan” (CPP) has already begun. On August 13, 2015, 15 States¹ (the “States”) filed an emergency petition in the United States Court of Appeals for the District of Columbia Circuit seeking an immediate stay of the deadlines in the final CPP for states to submit plans to comply with its requirements. The States’ petition describes the significant effort, time and expense they believe will be required immediately to comply with the final CPP and previews some of the legal arguments they are likely to advance in hopes of upending the rule in the courts.

The final CPP, issued on August 3, 2015 (and briefly summarized in earlier Speaking Energy coverage), establishes limits on carbon emissions from existing fossil-fuel electric generating units under Section 111(d) of the Clean Air Act (CAA). Final state compliance plans detailing how they will achieve the rule’s emission limit requirements, or an initial compliance plan with a request for extension, must be submitted to EPA by September 6, 2016. All completed final compliance plans must be submitted by September 6, 2018.

In the August 13 petition, the States argue that they would suffer irreparable harm, including “significant unrecoverable costs and disruption to sovereign priorities,” if these deadlines are not immediately stayed. They assert that developing state plans will require “massive expenditures of time and resources,” forcing them to begin work immediately “if they have any hope of meeting the initial 2016 deadline, and the final 2018 deadline.”  The States also argue that the immediate expenditure of time and money on the compliance effort will redirect the efforts of state environmental regulators, state utility commissions and other state institutions away from their other responsibilities, causing additional harm.

The States contend that extraordinary relief from the court is particularly necessary now because EPA has taken the “highly unusual step” of setting specific dates for the submission of compliance plans, rather than tying the submission of those plans to publication of the final CPP in the Federal Register (e.g., requiring that plans be submitted one year after publication). Publication in the Federal Register, which, under the CAA, is also the first point at which a court can obtain jurisdiction to review the rule, may not occur for several months. The States argue that this delay, coupled with the need for them to begin the process of developing compliance plans immediately to meet the current deadlines, would force them to expend significant unrecoverable taxpayer resources and displace “sovereign priorities” unless the court acts now.

Finally, in arguing that they have a “clear and indisputable” right to an immediate stay, the States offer a preview of some of the legal arguments they can be expected to raise before the D.C. Circuit on merits review of the final CPP. For example, the States argue that the final CPP violates the “Section 112 Exclusion” in the CAA by seeking to regulate, under Section 111(d) of the CAA, a source category (coal-fired power plants) that is already extensively regulated under Section 112 of the CAA. In addition, the States contend that the final CPP exceeds EPA’s authority under Section 111(d) by basing the final emissions performance standards on “far-reaching measures aimed at reducing usage of coal-fired energy by increasing reliance upon competing sources of energy,” rather than basing the standards on design and operational improvements that can be made at the affected power plants. The States also assert that the final CPP violates the Tenth Amendment to the United States Constitution by requiring states to fundamentally alter how they generate and consume energy within their borders, an area traditionally considered to be within the states’ reserved police powers.

The States ask the court to issue a stay by September 8, 2015. While not unexpected, the request for emergency stay adds additional uncertainty as electric industry stakeholders look toward compliance with the carbon emissions limits adopted in the final CPP.

¹ West Virginia (lead Petitioner), Alabama, Arkansas, Florida, Indiana, Kansas, Kentucky, Louisiana, Michigan, Nebraska, Ohio, Oklahoma, South Dakota, Wisconsin and Wyoming.