By Rich Heidorn Jr.

Now that EPA has reversed its position on the legality of the Clean Power Plan, some supporters of the program say the appellate court that heard oral arguments a year ago should rule on the issue.

In proposing to repeal the CPP, EPA Administrator Scott Pruitt said Tuesday that the Obama administration overreached its legal authority under Section 111(d) of the Clean Air Act by ordering generators to take actions “outside the fence line” of individual generators. (See EPA to Announce Clean Power Plan Repeal.)

That was one of the central issues in the appeal that Pruitt, as Oklahoma attorney general, filed along with more than two dozen other states after the CPP was issued in August 2015. In September 2016, the D.C. Circuit Court of Appeals heard oral arguments on that and other legal challenges to the plan.

In August, however, the D.C. Circuit agreed to hold the case in abeyance after President Trump’s executive order calling on EPA to reconsider the rule.

Judicial Economy

Attorney Tim Profeta, director of Duke University’s Nicholas Institute for Environmental Policy Solutions, said Tuesday that the D.C. Circuit should now rule on the case because of “the logic and judicial economy of the situation.”

“You’ve got the court of jurisdiction having heard en banc the precise legal arguments that are being made in this rule,” he said in an interview. “It’s fully briefed. It’s fully argued.”

If the court doesn’t act on the case before it, he said, “they will probably have the same case before them in new litigation that would have to be briefed and argued all over again. … There’s no reason for the court to waste its time and taxpayers’ money to relitigate the case,” he said.

David Doniger, director of the Natural Resources Defense Council’s Climate & Clean Air program, agreed. The court “could rule before [Pruitt] gets to the finish line on the repeal,” he said during a press conference Tuesday. “At least some of the judges there are looking at their wristwatches.”

Doniger was referring to the concurrence filed by Judges David S. Tatel and Patricia A. Millett on Aug. 8, when the court held the case in abeyance and ordered EPA to file reports monthly detailing the status of its review. The D.C. Circuit’s action followed the Supreme Court’s February 2016 stay preventing EPA from implementing the rule pending the legal challenges.

“As this court has held the case in abeyance, the Supreme Court’s stay now operates to postpone application of the Clean Power Plan indefinitely while the agency reconsiders and perhaps repeals the rule,” the two judges wrote. “That in and of itself might not be a problem but for the fact that, in 2009, EPA promulgated an endangerment finding, which we have sustained. … That finding triggered an affirmative statutory obligation to regulate greenhouse gases. Combined with this court’s abeyance, the stay has the effect of relieving EPA of its obligation to comply with that statutory duty for the indefinite future.”

During the oral arguments, Millett and Tatel had indicated sympathy for the Obama administration’s position that the CPP complied with Section 111(d). The term “best system of emission reduction” is “an awful broad grant” from Congress, Tatel said. “It says best system of emissions reduction,” he repeated twice, emphasizing “system.” (See Analysis: No Knock Out Blow for Clean Power Plan Foes in Court Arguments.)

Status Report

EPA filed a status report late Tuesday informing the court of the proposed repeal and asking it to continue holding the case in abeyance. “EPA will be signing in the near future an Advance Notice of Proposed Rulemaking that will solicit information on systems of emission reduction that are in accord with the legal interpretation that has been proposed by EPA,” said the report, which was signed by Deputy Assistant Attorney General Eric Grant.

Doniger said NRDC, which intervened in the case on behalf of the Obama EPA, has the right to defend the CPP now even if the agency no longer does. “Depending on what [EPA does regarding the delayed ruling], we’ll respond,” he said. “If they don’t do anything, we may do something [to request a ruling.] … We deserve a resolution of the legality of the Obama rule.”

If it chooses not to rule now, the court could set a deadline for final EPA action or grant additional short-term delays “to keep the pressure on,” Doniger said.

An EPA spokeswoman declined to comment on the status of the D.C. Circuit case, referring questions to the Department of Justice, which also declined to comment.

During oral arguments, Justice Department attorney Eric Hostetler told the court it should back the CPP under the Supreme Court’s Chevron decision, which held that courts should defer to agencies’ interpretations of the laws they are charged with enforcing unless the court finds their actions unreasonable. “This is far from the first time EPA has relied on generation-shifting,” Hostetler said. EPA’s rule, he added, is a “proper and sensible” response for the “most urgent threat that our country has ever faced.”

Returning to Prior Interpretation

CPP critic Jeff Holmstead, a partner with Bracewell and former EPA assistant administrator for air and radiation, had a very different view.

“In today’s proposal, EPA is not breaking any new legal ground. It is simply returning to the position that EPA had taken, under all prior administrations except the Obama administration, regarding the way in which industrial facilities can be regulated under a particular provision of the Clean Air Act,” he said in a statement.

“Under the CPP, the Obama EPA claimed that this 45-year-old provision actually gave it the extraordinary power to restructure the entire U.S. power sector — requiring that coal-fired power plants be shut down and replaced by wind and solar facilities favored by the Obama administration. Virtually every major business group joined 27 states in challenging this claim, arguing that the CPP was an example of historic regulatory overreach.”

Single Source

According to a draft of the proposed rulemaking that was leaked last week, EPA said it will interpret the CAA’s “best system of emission reduction” as referring to measures “that can be applied to or at an individual stationary source. That is, such measures must be based on a physical or operational change to a building, structure, facility or installation at that source, rather than measures that the source’s owner or operator can implement on behalf of the source at another location.”

The draft indicated EPA will not seek to reverse the agency’s 2009 finding that GHGs endanger public health.

EPA’s Obligation to Act

Doniger said EPA’s “legal obligation is to have an effective standard and one that reflects how the power system actually works.”

“Pruitt is operating under a fictional view — a 125-year-old view — that each power plant is operating by itself and serving the surrounding community alone. … Pruitt is constructing a legal argument based on a factual fiction — it basically assumes that there is no grid and there is no interconnection. And that’s among the reasons why his legal view will not prevail.”