Marten Law on EPA v. EME Homer City Generation: Clean Air Act--Supreme Court Defers To EPA on Cross-State Air Pollution, Putting More Pressure on Aging Coal-Fired Power Plants

By Svend Brandt-Erichsen, Partner, Marten Law PLLC

In this article, Svend Brandt-Erichsen of Marten Law PLLC examines the Supreme Court's decision in EPA v. EME Homer City Generation, [enhanced version available to lexis.com subscribers], upholding EPA's Cross-State Air Pollution Rule (commonly called the Transport Rule), [enhanced version available to lexis.com subscribers]. Along with providing a history of the Transport Rule and prior litigation, the article discusses the majority and dissenting opinions and concludes with implications of the Court's decision.

Excerpt:

Upholding EPA's Cross-State Air Pollution Rule (commonly called the Transport Rule), the Supreme Court has handed a defeat to owners of power plants in 28 Eastern, Southern and Midwestern States.[1]  The rule requires reductions in emissions of nitrogen oxides and sulfur dioxide from power plants in those States to improve air quality in downwind States. The Court's ruling, which reversed a 2012 D.C. Circuit decision,[2] defers to EPA's method for allocating emission reductions among the upwind States and finds it was within EPA's discretion to impose a corrective plan without giving those States a chance to act first.

The Supreme Court's reinstatement of the Transport Rule comes two weeks after the D.C. Circuit upheld EPA's Mercury and Air Toxics Standards (MATS),[3] which requires coal and oil-fired power plants nationwide to reduce emissions of mercury, metals and acid gases.[4]  These decisions translate into higher compliance costs for utilities operating coal-fired power plants, putting added pressure on the older plants that remain in service. Moreover, the Supreme Court's willingness to extend a high degree of deference to EPA's implementation of the Clean Air Act has broad significance for other regulated sources.

I. History of the Transport Rule, Prior Litigation

The Transport Rule is EPA's latest attempt to address a long-standing problem: air pollution emitted in one State that causes harm in States that are downwind. The rule fits within a much broader scheme of air quality standards, and plans for achieving those standards, which provides the central core for the Clean Air Act.

A. Ambient Air Quality and the Clean Air Act's "Good Neighbor" Provisions

EPA is charged by the Act with determining standards for air pollutants in the ambient air that are needed to protect public health.[5]  EPA also must determine whether areas of the country are achieving the ambient standards for individual pollutants and must designate areas as "attainment," "nonattainment," or "unclassifiable" for each ambient standard.[6]

The Act then gives States primary responsibility for implementing ambient standards within their borders, requiring them to develop State Implementation Plans (SIPs) for achieving and maintaining those standards.[7]  But the Act also requires EPA to oversee the development of State SIPs and gives it authority to approve, conditionally approve, or disapprove SIPs, in whole or in part.[8]  If EPA finds that an existing SIP is substantially inadequate to attain or maintain an ambient standard, the agency must notify the State of the deficiency and require that the deficiency be corrected.[9]  EPA may set a "reasonable" deadline for State corrective action, not more than 18 months after the notice of deficiency.[10]  If EPA finds that a State has failed to make a required SIP submittal, finds that a State submittal is incomplete, or disapproves a State's SIP submission, then the Act also directs EPA to develop a Federal Implementation Plan (FIP) to correct the problem in that State's plan "at any time within 2 years" after making that finding.[11]

Among other things, SIPs must tackle the problem of emissions in one State that contribute to air quality problems in downwind States. Through what is referred to as the "good neighbor" provision, the Act requires that SIPs contain provisions adequate to prohibit sources within a State from emitting pollutants in amounts that will contribute significantly to nonattainment, or interfere with maintenance, of an ambient standard in another State.[12]..........


[1] EPA v. EME Homer City Generation, 134 S. Ct. 1584, 188 L. Ed. 2d 775 (2014), [enhanced version available to lexis.com subscribers].

[2] EME Homer City Generation v. EPA, 696 F.3d 7 (D.C. Cir. 2012), [enhanced version available to lexis.com subscribers].

[3] White Stallion Energy Center, LLC v. EPA, 2014 U.S. App. LEXIS 6944 (D.C. Cir. Apr. 15, 2014), [enhanced version available to lexis.com subscribers].

[4] 77 Fed. Reg. 9304 (Feb. 16, 2012), [enhanced version available to lexis.com subscribers].

[5] 42 U.S.C. § 7409, [enhanced version available to lexis.com subscribers].

[6] 42 U.S.C. § 7407(d), [enhanced version available to lexis.com subscribers].

[7] 42 U.S.C. § 7410(a), [enhanced version available to lexis.com subscribers].

[8] 42 U.S.C. § 7410(k), [enhanced version available to lexis.com subscribers].

[9] 42 U.S.C. § 7410(k)(5), [enhanced version available to lexis.com subscribers].

[10] 42 U.S.C. § 7410(k)(5), [enhanced version available to lexis.com subscribers].

[11] 42 U.S.C. § 7410(c), [enhanced version available to lexis.com subscribers].

[12] 42 U.S.C. § 7410(a)(2)(D)(i), [enhanced version available to lexis.com subscribers].


Svend Brandt-Erichsen, a partner at Marten Law PLLC, practices in Alaska and Washington, and has been an environmental lawyer for nearly 20 years. He currently is advising clients on carbon management and other environmental issues associated with energy project development, including coal gasification plants. Svend has spent his career assisting petroleum, coal-based and alternative energy firms with the environmental issues associated with power development and distribution and with oil and gas production, transportation, and refining. He has represented clients in Alaska, Washington, Oregon, Idaho, Montana, and California.

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