Man-Bites-Dog Story: Power Companies Support EPA Regulations

Power companies support EPA regulations on carbon pollution from their industry. This is the message – surprising for some observers – of the briefs filed in West Virginia vs. EPAthe coal companies’ and red states’ challenge to the EPA’s air quality authority is currently pending before the Supreme Court.

Nine power companies serving 40 million people nationwide filed a brief in support of the lower court’s decision in American Lung Association vs. EPAsetting aside the Trump EPA’s repeal of the 2015 Clean Energy Plan and the do-nothing replacement called the Affordable Clean Energy Rule released in 2019. The Edison Electric Institute, representing all investor-owned power companies, submitted a friend of the court brief supporting the EPA’s authority. So did 14 former high-ranking power company executives, four national power grid experts, and eight former commissioners of the Federal Energy Regulatory Commission.

It’s worth pointing out: not a single power company has sought Supreme Court review. (Several rural co-ops filed briefs on the coal industry side, but none saw fit to present their own petition.) Strange as it may seem, the electricity industry is overwhelming on the coal industry side. the EPA.

Their opinions could matter a lot when the Supreme Court hears oral arguments on February 28and. Indeed, the Court chose to hear the electricity companies, in addition to the government. (In the recent case about vaccination mandates for health care workers, Judge Kavanaugh noted the “unusual” situation that “regulated people here are not complaining about regulation.”)

So what do the electricity companies, their association and the experts say?

Electric companies

Along with states and environmental and health groups, the nine power companies prevailed in the DC Circuit Court of Appeals, which ruled against the Trump-era argument that the Clean Air Act demands a strictly inside the fence approach to addressing carbon pollution from power plants. standards, with no room for proven regulatory tools such as averaging or trading.

In their brief to the Supreme Court, the power companies say the case does not present a “major issue” because no regulations are currently in effect, the courts cannot review hypothetical future rules, and the EPA is acting fully within its role in regulating pollution from power plants. The lower court considered the repeal of the Clean Power Plan, not the original CPP (whose 2030 emissions reduction targets were already met in 2019 thanks to market forces). In addition to considering that the agency’s interpretation erroneously limit The authority of the EPA, the court did not “endorse any expansive agency authority to make decisions of great economic and political significance.” What the EPA might do in the future might be reviewed then, but not now.

The “best emission reduction system” (BSER), the power companies write, should reflect how the power sector actually works. Electricity companies regularly increase and decrease the output of various power plants to produce minute by minute the amount of electricity needed for the grid in the most economical way. And companies routinely use tools such as emissions averaging and trading to meet environmental limits as efficiently as possible, so that these tools have been “sufficiently demonstrated” and reflect the legal requirement to “take into account costs”. The statutory language, they write, does not confine the EPA to only “measures applied” to and at “an individual plant,” as the Trump administration has asserted, and “does not limit the means that can be taken into account in determining the BSER or which can be used by states and power plants to meet the performance standard set by the states.”

Edison Electrical Institute

Even more telling is the brief from the trade association representing all investor-owned power companies (and joined by the association representing national drinking water agencies). EEI focuses on the Court’s 2011 decision in American Electric Power v. Connecticutwhich concluded that Section 111 of the Clean Air Act “speaks directly” in authorizing the EPA to reduce CO2 emissions from new and existing power plants and asking the agency to determine “if and how” to regulate these emissions. This statutory authority, the court ruled, supersedes the pre-existing federal common law of interstate air pollution, under which states and others had sued the largest power companies. The IEE’s brief warns that eliminating the EPA’s authority would again expose power companies to federal common law suits. “While it may seem counterintuitive that the nation’s investor-owned power companies, in particular, should favor the regulatory authority of the EPA, the alternative could be the chaotic world of regulation. by injunctive decree.” True, EEI suggests that (whether in this case or in the future) the Court could impose limits on EPA rules that are too “transformational”, but the industry association is outright opposed to “the eviscerate”.[ing]EPA Section 111 Authority.

Former power company executives

The memoir by 14 former power company executives – some from companies historically dependent on coal – argues that the “genius” of the Clean Air Act lies in two related design features. First, it directs the EPA to establish performance standards – emission limits based on a prospective assessment of levels achievable at reasonable cost by the best sufficiently demonstrated emission reduction system. Second, it leaves industry the flexibility to innovate and comply “more effectively than if the government had mandated a particular technology approach, based on a thorough assessment of options.” In this way, the law grants the EPA “the authority to impose pollution controls that would induce industry – by seeking the least costly means of compliance – to make transformative changes to its pollution practices. pollution”. Former power company executives clarify that because power plants compete on the basis of least-cost dispatch, any emission reduction standard that affects a plant’s operating costs can change its use. . Preventing the EPA from requiring deep pollution reductions “because, by complying, companies can alter the fuel mixture in their production fleets…takes a key design attribute from the Clean Air Act and the turns into a poison pill”. Reversing the oft-used metaphor, they write:[I]By invoking the major issues doctrine, the applicants seek to push this elephant into a mouse hole.

Network Experts

Four experts from our electric grid provide valuable economic and technical insights into how the electric system works and how the EPA should consider the “distinctive operating characteristics of the electric industry that create both opportunities and challenges for pollution control”. They explain that the power plants are interconnected by three large regional networks that transport their production to customers. Power plants ramp up and down their production and shift production between plants minute by minute as needed to meet customer demand. Grid experts explain the economics that grid operators use to ship from the cheapest power plants considering fuel costs, environmental standards and other factors. Like former power plant executives, they note that by raising the costs of high-emitting plants, “any” air pollution standard for the power sector can have the effect of shifting generation between plants. And further, “industry experts understand that the easiest, cheapest and best way to reduce CO2 emissions from coal-fired power plants is to shift production from these plants to cleaner energy sources.

Former FERC Commissioners

Finally, the brief by eight former FERC commissioners from both sides refutes claims that EPA pollution regulations impinge on the authority of FERC and the states. In the Federal Power Act, Congress gave FERC authority over wholesale electricity rates and left the states responsible for retail rate matters. In the Clean Air Act, the commissioners write, Congress gave the EPA an independent pollution regulatory role that does not interfere with the responsibilities of FERC and the state. They trace numerous past EPA power sector regulations that “influenced state regulators, utilities, and merchant generators in their decisions to operate, retire, or modify the operation” of plants. electrical. They explain that neither the Clean Air Act nor the Federal Power Act prohibits such effects. They note the mechanisms provided in the two laws to resolve issues such as reliability issues, and they explain how the two agencies have cooperated to resolve them. Finally, responding to petitioners’ efforts to blame the never-implemented clean energy plan for the declining fortunes of coal, the former commissioners point out that the electricity sector is already engaged in a “rapid and profound transformation” driven by many market factors, other public policies, and private sector schemes, and has already exceeded CPP emissions reduction targets.

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In the vaccine mandate argument, Judge Kavanaugh asked a second time: “[W]here are the regulated parties complaining about regulation? In this case, they are there, but they are not complaining.

About Marco C. Nichols

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