State lawmakers across the country are expected to take aim at a proposed Environmental Protection Agency rule to limit carbon emissions from power plants, a move that would test the agency’s will to impose sanctions on states that run afoul of the regulation.
Groups such as the American Legislative Exchange Council, which promotes conservative policies, and the industry-backed American Coalition for Clean Coal Electricity have drafted model resolutions and legislation that they are trying to persuade red state lawmakers to introduce in their capitols.
But taking action to handcuff compliance with the EPA rule carries risks. Under the Clean Air Act, the agency could install its own plan for states, withdraw highway funding or make it almost impossible to expand manufacturing, factories and other big polluting facilities by restricting permits.
A showdown is coming either way, said Raymond Gifford, a former Colorado Public Utilities Commission chairman who is now a partner with Denver law firm Wilkinson Barker Knauer LLP.
According to his firm’s analysis, every state will need to pass legislation that designates which agencies are responsible for drafting a compliance plan for the EPA to review. That process likely will incite battles over whether to include restrictions on what the state will do to meet the regulation.
“You’re looking at a federal collision between the EPA and the states. And the question is more a political one than a legal one. Does the EPA have the legal authority and the political will to, in essence, take over the electricity generation in a lot of states?” Gifford said.
Part of the reason for the state-based effort is to drum up enough opposition to force federal courts to quickly review the EPA rule, said Dan Simmons, director of regulatory and state affairs with the conservative American Energy Alliance. Simmons also said the effort is designed to hobble implementation until President Obama leaves office in hopes that his successor wouldn’t be eager to finish the rule.
The proposal is the cornerstone of Obama’s climate agenda and amounts to the largest U.S. effort to slow the effects of manmade climate change. It aims to cut electricity emissions 30 percent below 2005 levels by 2030 through improving efficiency at power plants, expanding renewable energy, using more natural gas and bolstering energy efficiency by consumers.
The ALEC and ACCCE model policies are gaining traction with state lawmakers. Both bills would require state lawmakers to approve whatever implementation plan the state designs.
ACCCE officials have been on the road promoting their legislation. In public comments on the draft rule, 26 states pushed EPA to withdraw it entirely, 27 said the agency lacked authority to carry out the rule, and 28 said EPA could require emissions cuts only at power plants, according to Paul Bailey, ACCCE’s senior vice president for federal affairs and policy.
“There are some states in which we think the ALEC bill will get traction, but there are other ideas out there,” Bailey said. “This will be a pretty political decision by states if they just decide not to submit an implementation plan.”
That’s because of the risks that come with failing to comply.
“One of the consequences of non-implementation is EPA imposing a sanction that in effect would set a moratorium on new growth in an area,” said Bill Becker, executive director of the National Association of Clean Air Agencies, whose members include state and local officials. “And here legislatures are thinking about creating a paradigm with regard to implementation of this particular rule that would cause delay and potential sanctions.”
Some conservative lawmakers and governors are willing to test the EPA.
Some have already decided to handcuff their states’ ability to comply with the EPA proposal. Kentucky, for example, passed legislation that forces the state to achieve its emissions reductions only at power plants. Becker said that will make it impossible for the state to satisfy the EPA’s reduction targets.
“I don’t know if some of these resolutions have been thought through fully,” Becker said.
Of course, the fight hinges on whether the EPA proposal holds up in court. Conservatives aren’t sure it will. They note the section of the Clean Air Act being used to craft the rule has little case law under its belt, and they contend EPA cannot require emissions cuts outside of individual power plants by forcing states to produce more renewable energy to offset plant emissions, for example.
They also plan to challenge whether the EPA has the authority under the Clean Air Act to require the cuts. They’re concerned the proposal will raise electricity rates and constrain the economy.
Other ideas circulating in state capitols include capping the amount electricity rates could rise as a result of complying with the rule, blocking spending on efforts to comply with the rule, and handcuffing implementation if the rule costs too many jobs or causes power shortages.
Environmental groups are planning to prop up the proposed rule in state capitols as well, and will try to beat back any legislation similar to what ACCCE and ALEC have composed. They will lean on West Coast and Northeastern lawmakers and governors to promote the EPA rule.
“We want to push the administration to strengthen its proposal,” said David Goldston, director of government affairs with the Natural Resources Defense Council. “We’re also going to need to work in the states to make sure that the states are moving ahead and make sure that we defeat measures pushed by ALEC and others.”
But Greg Sopkin, also a former Colorado Public Utilities Commission chairman and partner at Wilkinson Barker Knauer LLP, said that with more legislatures and governors’ mansions under Republican control since November’s midterm elections, there is increased willingness to follow the lead of ALEC and other groups opposed to the regulation.
“You do have an interesting political dynamic. With this somewhat tsunami election you have a lot more state legislatures that are fully red, and governors, too,” he said.
