Texas interests score important appeals court win on EPA haze

coal power plant june 28 elp

The U.S. Court of Appeals for the Fifth District has handed the Texas Commission on Environmental Quality, Oklahoma, Luminant Generation and other parties a key victory against regional haze standards being implemented by the Environmental Protection Agency.

On July 15, the 5th Circuit issued a 48-page ruling on two important motions in the State of Texas’ and industry petitioners’ challenge to EPA’s regional haze rulemaking for Texas and Oklahoma.

The court granted the state and industry petitioners’ motion to stay the rule pending resolution of the petitions for review on the merits. The court also denied EPA’s motion to transfer the case to the U.S. Court of Appeals for the District of Columbia Circuit.

The petitioners in the case included several energy companies, power plants, steel mills, consumer organizations, state regulators, and a labor union in Texas. The group had challenged EPA’s action disapproving Oklahoma’s and Texas’s plans for controlling regional haze and imposing EPA’s own plans instead, according to the 5th Circuit.

Petitioners contend EPA has acted outside its statutory authority and wanted a stay pending review of the rule on the merits. EPA moved to dismiss or transfer the petition because it asserts this court lacks jurisdiction over the petition.

“Because the Clean Air Act gives jurisdiction over petitions for review to the courts of appeal generally and because the Act’s forum selection clause designates the regional circuit as the appropriate venue for this challenge, we DENY EPA’s motion to dismiss or transfer,” the appeals court said.

“Because Petitioners have demonstrated a strong likelihood of success on the merits, because they are likely to suffer irreparable injury in the absence of a stay while EPA has not shown similar injury from the issuance of a stay, and because the public interest weighs in favor of a stay, we GRANT the motion for a stay pending resolution of the petitions for review on the merits,” the 5th Circuit held.

The regional haze rule requires several elements in a state implementation plan or SIP. For each affected wilderness and national park, the plan must identify reasonable progress goals toward improved visibility; calculate baseline visibility; devise a long-term strategy with enforceable emissions limits; develop a monitoring strategy; and list the best available retrofit technology (BART) that emission sources in the state will have to adopt with a schedule to achieve the visibility goals.

Among other things, the petitioners claimed that EPA foot dragging on the state plans left them with little time to comply with the regional haze schedule.

The petitioners argued that EPA’s final haze rule would bring about $2bn in costs on power companies, businesses and consumers.

“Because plant emission controls take several years to install, the regulated companies will have to begin installation almost immediately,” the court said of petitioner arguments. Petitioners argued that the costs of compliance would not only increase rates for consumers but would also “endanger the reliability of power in ERCOT if plant operators close facilities rather than install or upgrade uneconomical emissions controls,” the court said.

“These closures would permanently shut down plants with up to 8,400 MW of generating capacity,” the court said, citing petitioner arguments.

Baker Botts L.L.P., an international law firm, said that it represented three industry petitioners in the case.

Baker Botts Environmental partner, Derek McDonald, who is legal counsel to Coleto Creek Power LP, said he was pleased by the court’s decision to keep the case and grant the stay.

“Since the EPA’s regional haze Federal Implementation Plan (FIP) solely pertains to Texas plants, the Fifth Circuit is absolutely the proper circuit court to consider the merits of our challenge,” McDonald said.

The Fifth Circuit’s decision emphasizes the limited role that EPA plays in the Clean Air Act statutory scheme governing State Implementation Plans, stating in the opinion, “If the Clean Air Act empowered EPA to draft reasonable progress goals on a blank slate, EPA’s action may be permissible, but the Clean Air Act limits EPA to a deferential role. EPA must defer to Texas’s goals so long as the Texas goals comply with the Act,” McDonald said.

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