Federal Court Stays EPA’s Regional Haze Rule

A federal appeals court has stayed a regional haze rule finalized by the Environmental Protection Agency (EPA) earlier this year that had threatened to close up to 8.4 GW of coal-fired power capacity in Texas.

In a unanimous ruling on July 15, the U.S. Court of Appeals for the Fifth Circuit granted a motion for a stay pending review on the merits of the EPA’s January 2016–promulgated rule, which partially approved and partially disapproved regional haze plans developed by Texas and Oklahoma, and replaced those state implementation plans (SIPs) with federal implementation plans (FIPs).

The rule imposes federal reasonable progress goals for wildlife refuges and national parks in Texas and Oklahoma, but it imposes sulfur dioxide emission limits on 15 generating units at eight coal plants located only in Texas.

In their motion to stay the final rule, the petitioners—which include a number of energy companies, consumer organizations, and state regulators from Texas—argued that the EPA’s mandates for “imperceptible” haze reductions targeted coal-fired power plants.

The proposed changes could cost up to $2 billion, rendering them uneconomical, and forcing them to retire, they argued. According to the Electric Reliability Council of Texas (ERCOT), the entity that manages most of Texas’s grid, the rule would have shuttered between 3 GW and 8.4 GW of generating capacity, threatening grid reliability. Meanwhile, the final rule calls for installment deadlines of 2019 and 2021, which will require significant compliance costs; however, it couldn’t possibly produce benefits over the 2009–2018 period that the rule is intended to cover, they claimed.

At the heart of their argument is that the EPA acted outside its statutory authority when it disapproved Texas’s SIP, the petitioners contended.

On Friday, the court agreed. “EPA cannot base disapproval on any requirements other than those listed in the Clean Air Act because EPA has ‘no authority to question the wisdom of a State’s choices of emission limitations if they are part of a plan which satisfies the standards of [U.S. Code Section 7410(a)(2)],'” it said.

It also ruled that the petitioners “demonstrated a strong likelihood of success on the merits, because they are likely to suffer irreparable injury in the absence of a stay while EPA has not shown similar injury from the issuance of a stay.”

In its opinion, the court rebuked the EPA for delays associated with the final rule. The agency only moved to propose a FIP to replace parts of the Texas and Oklahoma SIPs in 2014—five years after it received Texas’s SIP and four years after receiving Oklahoma’s SIP. And it promulgated a final rule partially disapproving the SIPs in 2016, nearly seven years after Texas submitted its SIP, the court noted.

The appeals court also denied a petition by the EPA to dismiss or transfer the petition to the D.C. Circuit because the final rule had nationwide impact, stressing that the Clean Air Act’s forum selection clause generally gives courts of appeal jurisdiction over petitions for review.

The EPA declined to comment beyond telling POWER that it is reviewing the decision.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)