Better late than never, but on January 4, EPA published its Fall 2022 Unified Regulatory Agenda. The Reg Agenda includes a few new rulemaking initiatives and a number of schedule changes that were largely expected since EPA has been running a few months behind on most of their major rulemakings (e.g., WOTUS, 401 Water Quality Certification, Steam Electric ELG, Lead and Copper Rule Improvements).

One rather unexpected item on the Reg Agenda is a direct-final rule EPA is planning to issue in January 2023 that would retroactively extend a key deadline from the 2020 Steam Electric ELG Reconsideration Rule. Under the 2020 ELG Rule, coal-fired steam electric units were required to provide initial notification to their regulators by October 13, 2021 if they planned to retire on or before December 31, 2028. Units providing this notification were included in the permanent cessation of coal combustion (PCCC) subcategory and would not need to comply with the stringent new discharge limits in the 2020 ELG Rule. The direct-final rule EPA is planning to issue in January 2023 would retroactively extend that October 13, 2021 deadline to 90 days after Federal Register publication of the direct-final rule, which is likely to fall sometime in March or April 2023.

This direct-final rule will come just as EPA will be publishing a new steam electric ELG proposed rule, which is expected to be significantly more stringent and costly than the 2020 ELG Rule. The agency’s strategy could be to allow stakeholders to see just how stringent and costly their new proposed ELG rule will be and then provide coal-fired units another opportunity, through the direct-final rule PCCC notification extension, to choose retirement over compliance. Such a strategy would encourage more coal units to retire and promote the Biden administration’s climate and carbon goals.

Like any direct-final rule, it will automatically become final and effective if, at the end of the public comment period, the agency has not received any adverse public comments. EPA typically doesn’t pursue a direct-final rule approach for issues that would be very controversial; however, in case the agency does receive adverse public comments, the direct-final rule is typically also published as a proposed rule that can be finalized later, after the agency responds to public comments. In the Reg Agenda, EPA explains that this direct-final rule will be incorporated into its forthcoming steam electric ELG proposal and would be finalized at a later date, if not finalized via the direct-final process.