The Environmental Protection Agency’s (EPA’s) proposed New Source Performance Standards (NSPS) for greenhouse gas (GHG) emissions from new power plants violates the Energy Policy Act (EPACT) of 2005, a suit filed in federal court by the state of Nebraska alleges. 

The state alleges, as have a number of Republican lawmakers, that the EPA relied on projects funded by the Department of Energy’s 2002-established Clean Coal Power initiative (CCPI) to justify carbon capture and storage (CCS) technology as being “adequately demonstrated” when it proposed the rule under Section 111 of the Clean Air Act. But that violates Section 402(i) of EPACT 2005, which prohibits any facilities receiving assistance under the act to be considered as “adequately demonstrated” for purposes of Section 111 of the Clean Air Act, Nebraska’s Jan. 15 complaint says.

In 2005, the CCPI was codified as part of EPACT 2005. In the Federal Register, the EPA said it considered the expected performance of the CCS technology at a number of facilities, including the Kemper Country Integrated Gasification Combined Cycle project, the Texas Clean Energy Project (TCEP), and Hydrogen Energy California (HECA) facilities in finding that CCS is “adequately demonstrated.”

TCEP and HECA are two of only three active Round 3 CCPI projects. San Antonio, Texas–based CPS Energy at the end of 2013 allowed a key power purchase agreement with Summit’s TCEP to expire, citing delays and a changing energy landscape. Californian regulators are reviewing the HECA project.

However, Nebraska also argues that the EPA’s proposed NSPS rule “does not attempt to resolve the inconsistency” with EPACT’s prohibition. “Rather, the Proposed Rule seeks to circumvent the Act’s prohibition by arguing that “many types of electricity generation receive government subsidies,” the complaint says. “Indeed the Proposed Rule acknowledges that ‘[i]t is true that each of these projects has received DOE grants to encourage the development of CCS technology, but we do not consider such government subsidies to mean that the costs of CCS would otherwise be unreasonable.’

The state has asked the court for “injunctive relief,” including an order from the court “directing the EPA to cease further action on the NSPS rulemaking and withdraw the Proposed Rule.”

EPA Administrator Gina McCarthy last week noted that the agency had on Jan. 16 submitted a Notice of Data Availability to the Office of Management and Budget “so that the package is very clear about its intersect with EPACT.” The EPA’s interpretation of EPACT has been that the agency cannot “solely” rely on EPACT-funded facilities, and the EPA had been looking at evidence and “a larger, more robust data set,” well-beyond what’s associated with the EPACT-funded projects, she said.

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