By Amelia Schlusser, Staff Attorney
The Mount Storm Power Station, a 1,600 MW coal plant in West Virginia |
The Environmental Protection Agency’s (EPA) proposed Clean
Power Plan aims to reduce carbon dioxide emissions from existing power
plants 30% below 2012 levels by 2030. The Agency issued the draft
rule, which implements section 111(d) of the Clean Air Act, in June of
2014, and is expected to issue a final rule in July of 2015. A number of states
are currently considering bills that would limit their regulatory agencies’
abilities to implement EPA’s final rule, and Kentucky and West Virginia have
both adopted legislation to that effect. While these laws represent the states’
opposition to federal greenhouse gas controls, they could ultimately expose
these states to greater federal oversight under the Clean Air Act.
State Clean Power Plan Legislation
Last year, Kentucky passed House Bill 388, which
limits the kinds of emission reduction activities the state can impose on its
coal and natural gas plants. The law mandates that standards of performance for
coal and natural gas plants consist of measures that can be executed at the
generating units, and cannot include switching to or co-firing with other fuels
or limiting operations at affected plants. The law also includes a provision
authorizing state regulators to adopt performance standards that are less
stringent than the federal standards established by EPA, if any generating
unit-specific factors “make application of a less stringent performance
standard or longer compliance schedule more reasonable.”
Greenwire reported that Kentucky
regulators hope to comply with the final 111(d) rule through emission
reductions resulting from planned coal plant retirements. According to Greenwire, Kentucky’s Energy and
Environment Secretary Leonard Peters asserted that the plant closures, which
were already slated to retire over the next 15 years, should enable the state
to comply with the federal rule without violating Kentucky’s legislation. The
state’s two major investor-owned utilities—Louisville Gas & Electric and
Kentucky Utilities Company (both owned by PPL)— approved this
regulatory approach.
West Virginia recently adopted legislation
limiting the state’s Department of Environmental Protection’s (DEP) authority
to create a 111(d) implementation plan and submit such a plan to EPA for
approval. This new law directs the DEP to conduct a study assessing the
“feasibility” of implementing a final 111(d) rule in West Virginia and submit a
report on the Department’s findings to the state legislature. If the DEP
determines implementation is feasible, it must create an implementation plan
and submit it to the legislature. The legislature may then authorize the
department to submit the plan to EPA or direct the DEP to amend the plan and
submit the revised plan to EPA. The law also allows the legislature to revoke
the DEP’s authority to create or implement the Department’s proposed plan. And
like Kentucky’s legislation, West Virginia’s law restricts regulators from
adopting beyond-the-fenceline emission reduction measures.
ALEC’s Influence
These state laws appear to be heavily influenced by a
conservative organization working to protect fossil fuel industry interests. In
December, Climatewire reported that the American
Legislative Exchange Council (ALEC) introduced model legislation that would
require state regulators to obtain legislative approval for proposed 111(d)
implementation plans. Kentucky’s legislation was inspired by ALEC (Greenwire, March 4). According to Climatewire, West Virginia’s law was
also based on ALEC’s model legislation.
ALEC is
a conservative organization that aims to advance libertarian policies at the
state and national levels. According to the group’s website,
ALEC creates and promotes policies that support limited government, free market
ideals, and federalism. The group views EPA’s attempts to regulate greenhouse
gas emissions as a threat to these conservative principles, and challenging the
proposed 111(d) rule is therefore “incredibly
important” to the organization. ALEC’s policy proposals also aim to advance
the interests of its corporate membership, which may help explain the group’s
preference for adversarial rhetoric (for example, ALEC’s carries out its 111(d)
work under the “EPA’s
Regulatory Train Wreck” initiative).
ALEC’s model legislation has received a warm reception in a
number of conservative-run state legislatures. According to Climatewire, legislators in Arizona,
Kansas, Mississippi, Missouri, Oklahoma and Tennessee have introduced bills
based on ALEC’s model policy, and “Arkansas' Senate recently
approved a bill mirroring ALEC's language.”
These state legislatures presumably introduced
ALEC-influenced policies in an attempt to protect their existing energy
industries. However, ALEC’s model legislation will ultimately constrain states’
abilities to implement the final 111(d) rule’s requirements. EPA’s proposed
rule provides states with flexibility to adopt a combination of strategies to
reduce power sector emissions. For example, if a state’s coal plants have
already achieved maximum efficiencies, the state can comply with the rule by
deploying additional renewable resources or adopting energy efficiency
measures. Kentucky’s and West Virginia’s legislation prevent regulators from
adopting flexible compliance approaches by prohibiting beyond-the-fenceline
emission reduction measures. These limitations may make it difficult for the
states to achieve compliance with the rule’s emission targets.
States that adopt ALEC’s model legislation also risk
exposing themselves to heightened federal oversight. ALEC’s model requires
approval from both legislative branches before regulators can submit a state
implementation plan to EPA for approval. This legislative approval will likely
be difficult to obtain from lawmakers who have limited energy-related knowledge
or experience and intense political motivations. If a state fails to submit an
implementation plan to EPA, section 111(d) of the Clean Air Act authorizes the
Agency to issue a federal implementation plan for the state. This federal
implementation plan will presumably include standardized or generic emission
reduction measures that may not account for the state’s specific or unique
circumstances.
Other states should consider these implications before
blindly following ALEC’s advise or following in Kentucky’s or West Virginia’s
footsteps. States ultimately are obligated to comply with federal law, and
states that proactively develop well-designed plans will be better equipped to
implement EPA’s final rule. States that instead prefer to bury their heads in
the sand will suffer the consequences.
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