Federal Court Panel Hears Cross-State Rule Arguments

A three-judge panel at the U.S. Court of Appeals for the District of Columbia Circuit on Friday heard oral arguments in a case challenging the Environmental Protection Agency’s (EPA’s) Cross-State Air Pollution Rule (CSAPR). A decision in the case—which stayed implementation of the first phase of the rule on Jan. 1—is expected as early as June or July.

The CSAPR, finalized on July 6, 2011, requires 28 states to improve air quality by slashing power plant sulfur dioxide and nitrogen oxide emissions that contribute to ozone or fine particle pollution in other states. The rule replaces the Clean Air Interstate Rule (CAIR), which the EPA promulgated in 2005. The D.C. Circuit had struck down CAIR in July 2008, but later that year the court reinstated CAIR and directed the EPA to issue a new rule to implement Clean Air Act requirements concerning interstate air pollution.

Last December, however, it temporarily blocked the CSAPR, ordering the EPA to continue administering the previously promulgated CAIR until a final decision can be made on the merits of CSAPR.

The rule is being challenged by 16 states and various power companies, including Southern Co. and EME Homer City Generation. Several states and a few power companies have intervened in support of the EPA.

On Friday, Judges Judith Rogers and Thomas Griffith seemed sympathetic to the EPA, while Judge Brett Kavanaugh was more skeptical of the agency on an issue raised by the petitioners that the EPA incorrectly gauged the “significant contribution” of particular states, reported E&E.

The “good neighbor” provision of the Clean Air Act, Section 110(a)(2)(D), requires states to reduce emissions that “contribute significantly” to nonattainment of air quality standards in downwind states. The petitioners have contested the EPA’s methodology for determining a "significant contribution."

According to the Daily Environment Report, however, it became apparent that the petitioners’ "significant contribution" argument may not have been raised during the rule’s public comment period. This posed a "significant problem," the news organization quoted Judge Griffith as saying, because petitioners may only litigate issues they brought to the agency’s attention in comments.

Analysts say that the oral argument also focused on claims that the EPA inappropriately imposed Federal Implementation Plans instead of first allowing affected states to submit State Implementation Plans.

“In addition to challenging CSAPR and its supplemental rule, parties are expected also to challenge the final CSAPR technical revisions rule. Petitions for review of this rule must be filed by April 23, 2012,” said legal group Troutman Sanders in an update last week. “Notably, EPA has yet to act on the more than 60 petitions for reconsideration of CSAPR filed by numerous states and other parties.”

The case is EME Homer City Generation v. EPA.

Sources: POWERnews, EPA, E&E, Daily Environment Report, Troutman Sanders