States say EPA CO2 rule is legally flawed

A US Environmental Protection Agency (EPA) proposal to cut power plant CO2 emissions falls well short of what is required by the Clean Air Act, supporters of more aggressive action say, offering a preview of legal arguments that are likely to be raised in litigation.

A group of 18 state attorneys general yesterday urged EPA to withdraw its proposal to replace the Clean Power Plan, saying it would not lead to any "meaningful" reductions of CO2 emissions from coal-fired power plants and may also lead to higher levels of conventional pollutants.

"The proposed rule, if finalized, would be unlawful. EPA should abandon it and instead focus on implementing and strengthening the Clean Power Plan," the attorneys general said in comments on EPA's Affordable Clean Energy rule.

The group, which includes attorneys general from the District of Columbia and the top legal officials in seven cities and counties, says the proposal would "effectively rewrite the Clean Air Act" with how EPA proposes to set emissions limits for existing power plants. In addition, it fails to set a "best system of emission reduction" required by the law by ignoring a number of ways the states have already lowered power plant CO2, including through emissions trading and renewable energy mandates, the letter said.

"EPA's protestations now that it lacks information about the feasibility or mechanics of such approaches are plainly arbitrary and capricious," they said.

The group also cited a number of other flaws with the proposal, including EPA's own projection that it could lead to 1,400 premature deaths each year from higher SO2 and NOx emissions. Their arguments are echoed in separate comments filed by environmental regulators from many of the same states, as well as environmental groups.

The proposal, issued in August, would replace the Clean Power Plan, crafted by the administration of former president Barack Obama, with a less aggressive regulation EPA says will provide states with more flexibility and help keep coal-fired power plants on line. It would rely on on-site heat-rate improvements to cut CO2 emissions from coal units, rather than the broader suite of measures envisioned in the Clean Power Plan. The comment period on the proposal closed yesterday.

EPA's plan is supported by regulators in coal states including Kentucky and West Virginia, as well as industry groups, which say it will provide greater regulatory certainty than its predecessor.

The rule's "approach provides the necessary flexibility to states to set standards based upon what is reasonably achievable at each power plant upon consideration of costs, remaining useful life and other factors," the National Mining Association said in its comments.

EPA says the new rule could cover up to 600 coal-fired units at 300 power plants and would save the industry about $400mn/yr in compliance costs. The agency estimates its proposal will only reduce power plant CO2 emissions by 1.5pc from projected levels if the Clean Power Plan did not exist, leading to an overall reduction of 33-34pc from 2005 levels by 2030.

Power plant emissions last year were 28pc below 2005 levels, the result of an overall shift away from coal to lower cost natural gas and renewables.