Group of States, Cities, and Organizations Tell Court Enough is Enough in CPP Abeyance

UPDATED 9.27.2018 On September 21, Intervenor-Respondents filed a joint reply to EPA’s September 14 response.

UPDATED 9.20.2018  EPA’s September 14 response is available here.  Petitioners and Petitioner-Intervenors also responded.

A group of intervenors in the litigation over the CPP (Intervenor-Respondents) filed to oppose EPA’s request for further abeyance.  In its August 24 status report, EPA said that it has “now completed developing proposed replacement section 111(d) emission guidelines premised on an alternative regulatory approach to that set forth in the Clean Power Plan” (that is, the new Affordable Clean Energy (ACE) rule).  The agency also claimed that it “is committed to completing final rulemaking action as expeditiously as practicable.”  EPA requested a continued abeyance pending the conclusion of this rulemaking.  A group of state and industry petitioners and intervenors filed in support of EPA’s request, as did petitioner North Dakota.

In their September 4 response, Intervenor-Respondents, including New York, California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and Washington, D.C., as well as several cities and non-governmental organizations, urged the D.C. Circuit to “decide the live controversy before it.”  They argue that “EPA, with Petitioners’ support, has taken undue advantage of the abeyance, prolonging the delay through a series of notices that do not come close to fulfilling EPA’s statutory obligations.”  They catalogue the different (non-finalized) proposals that EPA has promulgated since the change in administration related to the CPP, including the proposed repeal and the advanced notice of proposed rulemaking for a potential replacement.

Intervenor-Respondents acknowledge EPA’s August 31 ACE proposal, but find it flawed.  They specifically assert that the proposal “entirely fails to address emissions from natural gas-fired combined cycle power plants” and “does not require any particular degree of emission reduction by any particular deadline.”  Citing EPA’s Regulatory Impact Analysis for the proposal, they state that the rule “will result in increased hospital admissions due to respiratory illness, increased asthma-related emergency room visits, and exacerbation of asthma, and may result in over 1,000 more premature deaths per year by 2030 relative to the Clean Power Plan.”

Intervenor-Respondents accuse EPA of taking advantage of the abeyances to avoid fulfilling its statutory duty.  They argue that the legal premise of EPA’s new proposal—that the Clean Air Act requires the regulation of greenhouse gas pollution from power plants, but prohibits the best system of emission reduction of the CPP—are the legal questions that have been briefed and argued in this case.  Therefore, they urge the Court to decide the case now.

As a reminder, several D.C. Circuit judges expressed a reluctance to continue in the same holding pattern when the Court extended the abeyance earlier this summer.

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EIA Reports on Renewable Growth Under PURPA, but Changes May Be on the Horizon

The Energy Information Administration (EIA) released data on renewable generation developed under certain provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA).  PURPA established a new category of generators, Qualifying Facilities (QFs), to receive special regulatory treatment.  QFs can be either cogeneration facilities or small renewable resources of 80 MW or fewer.  Electric utilities are required to (1) purchase energy and capacity made available by QFs, (2) sell energy and capacity to QFs, and (3) interconnect with QFs.

In the past ten years, PURPA has been a driver of the growth of renewable capacity in the United States.  EIA data show that from 2008 to 2017, 14 GW of capacity has come online from QFs certified as small renewable resources.  This is approximately 13.5% of all renewable generating capacity, and almost one third of all solar photovoltaic (PV) capacity, added during that time period.

Although PURPA requires electric utilities to purchase energy and capacity made available by QFs, the rates for these purchases are not to exceed the cost the utility would otherwise pay if it had to build new capacity or purchase from a non-QF generator (this is referred to as the utility’s “avoided cost”).  EIA explains that over the past decade, the cost of solar PV installations has dropped below utilities’ avoided costs, and, as a result, QFs have become more cost competitive.  States, the Federal Energy Regulatory Commission (FERC), and Congress, however, are all considering actions that would change how PURPA is implemented.

States.  While PURPA is a federal statute, states and nonregulated electric utilities have the initial responsibility for determining avoided-cost rates, consistent with FERC’s regulations.  In recent years, some states, such as North Carolina, have updated how avoid costs are determined in ways that lower these rates, whereas others, such as Michigan, have new methodologies that increase avoided-cost rates.  States are also considering changes to their requirements for standard contract terms and conditions, such as fixed standard contract lengths for certain QFs.

FERC.  In its May 2018 meeting, Chairman McIntyre announced that FERC was “reenergizing” its PURPA review initiative.  FERC cannot change the fundamental PURPA obligations required by the statute, but it can revisit its regulations governing the implementing PURPA.  These regulations cover issues such as when an electric utility can terminate its obligation to purchase from QFs who have nondiscriminatory access to certain markets and when multiple facilities (e.g., multiple solar panels or wind turbines) are considered a single “facility” for purposes of the 80-MW limit on small renewable QFs.

Congress.  The most significant changes to PURPA would have to come from Congress, which enacted PURPA in the first place.  PURPA reform bills have been introduced in both the House and the Senate.  Along with changes similar to those FERC is considering, both of these bills would allow states and nonregulated utilities to eliminate the obligation for an electric utility to purchase from small renewable QFs if they determine that the utility has no need to purchase such energy or if the utility conducts a competitive resource procurement process open to these QFs.

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EPA Issues “Affordable Clean Energy” Proposal to Replace the Clean Power Plan

UPDATED 09.11.2018 The notice of public hearing was published in the Federal Register on September 10, 2018. The online registration form to speak at the public hearing is available here.

UPDATED 09.07.2018 The proposed rule was published in the Federal Register on August 31, 2018. Comments on the rule are due by October 31, 2018 and can be submitted here.

EPA will be holding a public hearing on the rule on October 1, 2018 in Chicago, Illinois. Registration to speak at the hearing ends September 25, 2018. The prepublication notice is available here.

On Tuesday, EPA issued the prepublication version of the Affordable Clean Energy (ACE) rule, its proposed replacement to the CPP.  The proposed rule establishes a new framework under which states will develop plans to address greenhouse gas emissions from existing coal-fired electric generating units (EGUs).  Compared to a no-CPP scenario, EPA projects that the ACE rule will reduce CO2 emissions in 2020 between 13 and 30 million short tons.  And EPA states that under some scenarios, avoided compliance costs total $6.4 billion compared to the CPP.

The proposed rule has four components.  First, EPA proposes to determine the “Best System of Emissions Reduction” (BSER) for existing EGUs based on measures that can be applied at an individual stationary source.  EPA states that this marks a departure from the CPP, which established the BSER “using measures that applied to the power sector as a whole, rather than measures that apply at . . . the level of[] individual facilities.”

Second, EPA proposes to define the BSER as heat-rate efficiency improvements that lower the CO2 emission rate of affected EGUs.  EPA explains that when an EGU improves its heat rate, it consumes less fuel and emits lower amounts of CO2 per kWh of electricity generated. EPA states that these heat-rate efficiency improvements will be achieved through the use of certain “candidate technologies,” equipment upgrades, and best operating and maintenance practices, which states may consider in establishing standards of performance for their EGUs.  These “candidate technologies” include:

  • Neural Network/Intelligent Sootblowers
  • Boiler Feed Pumps
  • Air Heater and Duct Leakage Control
  • Variable Frequency Drives
  • Blade Path Upgrade (Stem Turbine)
  • Redesign/Replace Economizer
  • Improved Operating and Maintenance Practices

The rule also proposes new implementing regulations under Clean Air Action Section 111(d) to give states more time to develop State Implementation Plans (SIPs).  The new rule provides states three years from the date of the final rule to prepare and submit its SIP.  EPA will then have twelve months to evaluate and determine whether the plan can be approved.  In the event that a state does not submit a plan or its plan is not approved, EPA has two years to develop a federal plan for that state. (The existing implementing regulations provided nine months for states to develop SIPs; four months for EPA to evaluate and act on the plans; and six months for EPA to issue a federal plan.)

Finally, EPA proposes a new preliminary applicability test for determining whether a physical or operational change made to an EGU is a “major modification” triggering EPA’s New Source Review (NSR).  Under the new rules, only projects that increase a plant’s hourly rate of pollutant emissions will undergo a full NSR analysis.  EPA states that this proposal will “give the owners/operators of EGUs more latitude to make the efficiency improvements that are consistent with EPA’s proposed BSER without triggering onerous and costly NSR permit requirements.”

The prepublication version of the proposed rule is available on EPA’s website, along with EPA’s press release and fact sheets.  Comments on the rule will be due 60 days after publication in the Federal Register.

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Impacts of Rising Temperatures on Human Health and Safety

While many in the Northern Hemisphere may be compiling anecdata this time of year about the impacts of high temperatures on productivity, health, and well-being, several recent studies have made broader attempts to quantify the potential public health threat of climate change from different angles.

A study in GeoHealth, a journal of the American Geophysical Union, investigated the effect of changes in temperature on hyperthermia and cardiovascular emergency department visits for patients age 64 and younger.  The researchers found a strong positive relationship for hyperthermia (but not cardiovascular issues).  They predict that hyperthermia visits could increase by 21,000 to 28,000 by 2050, depending on greenhouse gas emission levels, with an associated price tag of between $6 million and $52 million.

A study in the Proceedings of the National Academy of Sciences looked at activity levels of police officers and food safety inspectors during times of extreme temperatures, finding that both police stops and food safety inspections decrease in periods of hot and cold temperatures.  The researchers found that these temperature extremes also correlate with increases in fatal crash risks and food safety violations.  They note that studies of potential political impacts of climate change have to date focused on more extreme consequences (for example, this study on democratic turnover), but climate change may have independent effects on governmental function on a day-to-day basis as well (that could also lead to more extreme political consequences).

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Mayors and Attorneys General Oppose Proposed Automobile Emission Standards

Earlier this month, EPA and the National Highway Traffic Safety Administration (NHTSA) issued a proposed rule regarding automobile emission standards for passenger cars and light trucks for model years 2021–2026.  Under the Obama Administration, EPA and NHTSA had enacted rules imposing increasingly stringent standards for each model year.  In contrast, the current proposed rule would flatten the standards and use the same Corporate Average Fuel Economy and carbon dioxide emission standards for model year 2020 through model year 2026.

In addition, the proposed rule would withdraw a waiver previously granted to California allowing the state set its own rules through its Low Emission Vehicle program and Zero Emission Vehicle program.  EPA and NHTSA’s proposed rule states that California has disproportionally focused on greenhouse gas emissions over the past decades, but the purpose of the relevant section of the Clean Air Act allowing EPA to grant the state a waiver was intended to address smog-related air quality problems.

More than 400 mayors, representing 70 million Americans from 47 states, issued a statement condemning this proposed rule.  They argue that because transportation is the largest and fastest-growing source of U.S. greenhouse gas emissions, automobile fuel economy standards are critical to addressing climate change.

Twenty state attorneys general and the attorney general for the District of Columbia announced their intention to challenge the proposed rule.  This group includes the attorneys general from every jurisdiction that has adopted California’s more stringent standards.  Similar to the coalition of mayors, they argue that “[f]ederal rules to limit tailpipe pollution and improve fuel economy are our best strategy to reduce carbon pollution, improve air quality, and save drivers money on gas.”  According to these attorneys general, the proposed rule would not only have negative environmental impacts, but it would also cost American drivers hundreds of billions of dollars.

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