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Industry Cautions EPA Against Overreach In Existing Power Plant GHG Rule 
 
By: Dawn Reeves 
Published: November 7, 2013 
 
Industry groups are broadly warming EPA not to go too far when it proposes a rule next year to set performance standards to limit greenhouse gases (GHGs) at existing power plants, with some telling agency officials at a Nov. 7 "listening session" in Washington, D.C., to avoid rules that stifle the coal industry.
 
"It is difficult to overstate the economic threat presented by these regulations, which together with other EPA rules could wipe out an entire industry -- something Congress surely never contemplated," Karen Harbert of the U.S. Chamber of Commerce's Institute for 21st Century Energy urged EPA in her testimony. She also called on the agency to delay the deadlines President Obama set when he ordered the agency to craft the rule.
 
Others, like Howard Feldman of the American Petroleum Institute, warned EPA in his testimony that his group believes EPA lacks authority to craft the new source performance standard (NSPS) for existing plants, charging that it would set a precedent for similar unlawful regulations in other sectors, and that it could have immediate unintended spillover effects to cogeneration operations at refineries.
 
However, environmentalists and others speaking at the session urged the agency to set an ambitious regulatory program under section 111(d) of the Clean Air Act that can be expanded to other sectors.
 
For example, Mary Clemmensen of the Chesapeake Climate Action Network said in her testimony that EPA should reject industry's push to delay or set weak standards. This would "only shift the cost of carbon pollution onto the backs of local communities through increased health and climate adaptation costs."
 
The D.C. event is one of 11 listening session EPA is hosting across the country -- including two other Nov. 7 sessions in Seattle and Dallas -- to take input on its under-development NSPS to limit GHGs from the existing power fleet.
An EPA source says 183 people registered to speak at the D.C. event alone.
 
President Obama ordered the agency to craft the rule, setting a June 2014 deadline for the agency to propose the measure with a final rule due one year later. Since the order was issued, agency officials have emphasized that they plan to issue an emissions guideline, after which states craft plans similar to state implementation plans to comply.
 
EPA has said it plans to provide significant flexibility to states, though agency officials have said that any emissions cuts must be traceable back to power plants, raising doubts about how much flexibility they may be able to provide.
 
But EPA faces a host of legal obstacles in finalizing a rule regardless of the type of program the agency ends up backing.
 
Industry Concerns
 
While much of the testimony presented to the listening sessions was largely supportive of EPA's effort to develop the NSPS rules for existing power plants, several powerful industry groups cautioned the agency against overreaching.
 
For example, attorney Scott Segal, representing the Electric Reliability Coordinating Council and the Council of Industrial Boiler Owners, warned in his testimony that section 111(d) "does not give EPA the authority to regulate existing sources" but instead "only authorizes EPA to develop emission guidelines for states to use in establishing" their own standards.
 
Segal said he worries "that EPA promises of flexibility and cooperative federalism elsewhere in recent Clean Air Act programs -- from interstate concerns to haze to the [national ambient air quality standards] and air toxics rules -- have been severely lacking and do not make us confident that EPA will do better this time around," despite agency promises for great state flexibilities.
 
Additionally, the Chamber's Harbert urged EPA in her testimony to slow its time frame on the rule. Instead, Harbert said EPA "should commit to ensuring that its greenhouse gas rulemaking process will allow sufficient time to consider and respond to relevant agency, stakeholder, and public reactions to the forthcoming Supreme Court decision on EPA's GHG regulatory authority, which is also expected in June 2014." She said the "arbitrary" time line Obama set to complete the rules was "extremely troubling."
 
Similarly, Greg Bertelsen of the National Association of Manufacturers said in his testimony that EPA must not seek to expand its rule "beyond what the law allows" and to recognize "there are limits to what is achievable."
 
Toby Short, a top Duke Energy Corp. official, said in his testimony that EPA should first issue an advance notice of proposed rulemaking rather than a proposed rule due to "the importance of this groundbreaking rulemaking" and the need for additional time to get it right. Additionally, he noted any rule should "preserve the billions of dollars our customers have already invested in our coal-fired generation units by not forcing their premature retirement." Duke has invested $7.5 billion in upgrades for air quality controls since 1999 and $9 billion in investments in state-of-the-art facilities, along with the retirement of 6,800 megawatts of older coal units. Duke has already reduced GHG emissions by 21 percent between 2005 and 2012, he noted. Byron Burrows of Tampa Electric Company made a similar plea.
 
Lorraine Gershman of the American Chemistry Council urged EPA in her testimony to "account for energy efficiency gains and how to translate them into [carbon dioxide] reductions" because efficiency gains "are one of the easiest and most cost-effective ways" to cut emissions.
 
But Allison Wood, representing the Utility Air Regulatory Group, said in her testimony that EPA lacks flexibility in setting the NSPS and can only impose limits on individual sources that are "achievable through the use of adequately demonstrated on-site technology by individual power plants and cannot merely reflect the overall performance of the entire 'system' of power plants."
 
The Business Council for Sustainable Energy in a statement laid out guidelines it wants EPA to follow, including providing a set of options for states that support clean energy technologies; recognizing existing clean energy programs; allowing for more states to pursue more stringent standards; using a system-wide approach; and adopting "full fuel-cycle analyses that acknowledge the benefits of direct use of natural gas."
 
Environmentalists Respond
 
However, environmental groups were out in force in support of the EPA rules with the Sierra Club, Moms Clean Air Force, National Wildlife Federation, League of Conservation Voters, Natural Resources Defense Council (NRDC) and others leading a rally to the EPA listening session.
 
Speaking in favor of ambitious EPA carbon rules for existing facilities was Peter Heisler of the Environmental Defense Fund who said in his testimony that it is "unacceptable that there are no national limits on the climate-destabilizing pollution emitted by power plants."
NRDC's David Doniger testified on additional flexibilities contained in the NSPS proposal his group floated last year, including that it could allow states to choose whether to regulate on a rate-based or mass-based standard.
 
Bill Snape of the Center for Biological Diversity warned EPA in his testimony that the agency's September NSPS proposal for new power plants falls short by failing to require natural gas facilities to cut emissions. "The anticipated June 2014 proposal for existing power plants gives the administration a perfect chance to get it right. Bear down on the dirtiest power plants. End the subsidies to fossil fuels that number in the multiple billions of dollars every year."
 
He also noted that his group presented municipal resolutions from 74 cities asking EPA to take ambitious action on its pending rules at the listening session.
 
EPA has drawn criticism from Republican lawmakers and others for not holding the listening sessions in areas whose economies are heavily reliant on coal.
 
Along that vein, Laura Sheehan of the American Coalition for Clean Coal Electricity said in a statement on the eve of the D.C. session, "Members of Congress, state governors, public officials and other stakeholders have tirelessly urged EPA to host listening sessions in their coal-reliant states, but as the listening session tour concludes, it is increasingly clear EPA never wanted to listen in the first place."
 
But NRDC's Peter Altman testified that the agency is holding its sessions in five of the top 11 states for coal-based electricity generation, including Texas, Pennsylvania, Illinois, Georgia and Colorado. -- Dawn Reeves ([email protected]m)