Pruitt’s move to repeal CPP sets up prolonged battle over carbon regulations
“Oftentimes in litigation, delays can achieve your goal regardless of the technical outcome of the case,” said Josiah Neeley, director of energy policy at free-market think tank R Street Institute.
The Mercury Air Toxic Standards rule is a prime example, Neeley said. The regulation was allowed to go into effect while it was tied up in legal challenges for years. Despite the later ruling which compelled EPA to justify the costs of the rule, utilities had already largely complied with the rule.
“I think you see the same sort of thing in reverse,” Neeley said. If finalization of a replacement rule takes until the end of Trump’s first term, a potential newcomer in the White House might find that “the original goals and timetables no longer make any sense.”
Ari Peskoe, senior fellow in electricity law with the Harvard Law School, noted the EPA did not issue a new finding contradicting the Clean Power Plan’s analysis on energy options for utilities.
“[There is] nothing in here about renewable energy was too expensive. They are not going back to the record to find new analysis,” Peskoe said.
But the D.C. Circuit Court is the true wild card in this legal debate, sector experts said. Analysts speculated the court is likely to remain silent on its pending Clean Power Plan case until lawsuits over the proposed repeal are resolved, and Pruitt asked the court to keep the case in abayance again yesterday after the propoed repeal.
If the court breaks its silence, any decision would significantly shift the legal calculus.
“Obviously NRDC and others that are supportive would like to see the D.C. Circuit to weigh earlier,” said Thaddeus Lightfoot ,a lawyer with firm Whitney & Dorsey. “If it does, I think that puts a big thumb on the scale for the proposed rule.”
If the D.C. Circuit sides with CPP opponents, it would be a substantial boost to Pruitt’s repeal. But siding with the regulation’s supporters would undermine Pruitt’s rationale behind the repeal and any potential replacement rule.
Despite the repeal, new Rhodium Group report noted the power sector is largely on track to meet CPP’s original targets. But as Larsen noted, the CPP’s repeal would hurt efforts in some to cut carbon emissions.
Hardline targets were set at the state level and allowed power plants to trade compliance credits with power plants in other states. Doing so lowered the total cost of the regulation, Rhodium noted.
And if upheld by the courts and implemented, the plan would have built a “durable” national regulatory framework. EPA would have leeway within that structure to raise emissions targets as technology costs and market projections evolved.
“We don’t have any of that any more after Pruitt’s actions today,” Larsen told Utility Dive. “That original framework is now rescinded and may get completely tossed. EPA is asking fundamental questions on whether to regulate or not or even to decide whether to move on this. If nothing else, a new administration would have to start where this administration would end up.”
Even in a future with cheap renewable energy and natural gas, several states would fail to meet the CPP targets. And utilities, also facing potential tariffs on solar equipment that could ramp up prices and a proposed cost recovery rule from the Energy Department, could dial back renewables investment.
“The flagship position that the administration took in first 10 months has largely created uncertainty in energy markets,” Larsen noted.
R Street’s Neeley said the best option toward cutting power sector emissions hinges on Congressional action, particularly in the form of a carbon tax. But consensus on past proposals has proven elusive.
