Via E&E Publishing:

Jean Chemnick, E&E reporter

Senate Republican Policy Chairman John Barrasso last night became the latest GOP senator to call on states to boycott implementation of U.S. EPA’s Clean Power Plan, arguing in an email memo that doing so would undermine the controversial rule.

The Wyoming Republican echoed the theme of Senate Majority Leader Mitch McConnell’s (R-Ky.) column last week in the Lexington Herald-Leader that refusal by the state to submit implementation plans for the existing power plant rule might lead to a lessening of its restrictions (Greenwire, March 4).

“Forcing the EPA to impose a federal plan may undermine the agency’s ability to implement all of the rule’s provisions,” the Barrasso memo stated.

EPA has pledged to propose a federal implementation plan for the rule this summer when it releases the final Clean Power Plan. The model plan would act as a backstop if states fail to submit approvable state plans by deadlines beginning next year.

But McConnell and Barrasso both assert that EPA needs state consent to force the rule’s full measure of emissions reductions on utilities. The rule uses four emissions-reduction categories — or “building blocks” — to set state targets. Without state plans, the Republicans argue, EPA would be limited to Building Block 1 — or inside-the-fence-line reductions from minor heat-rate improvements on-site at power plants. And the agency must reduce its targets accordingly, they argue.

There would also be a messaging advantage from refusing to comply, the Senate Republican Policy Committee memo said.

“If a state submits an implementation plan, it will be taking part in EPA’s scheme and will be responsible for the consequences,” the memo states. “It will be blamed for higher energy prices and reduced electricity reliability. Families and businesses in the state will feel the real costs, while the EPA will happily point its finger at the state’s ‘poor’ energy choices.”

Barrasso’s missive came ahead of today’s Senate Environment and Public Works Committee hearing in which state officials will sound off about the benefits and downsides of the rule (E&E Daily, March 9). Barrasso, a senior panel member, will introduce Todd Parfitt, director of the Wyoming Department of Environmental Quality, who will discuss his state’s opposition to the draft and the adverse effect it would have on coal.

State officials lay out their concerns

No state has yet said it will subscribe to the “just say no” strategy, though some have hinted they’re considering it. The EPW panel points to 32 states in which a high-level state official signed a letter expressing significant concerns about the proposal, or in which legislation is moving to disapprove or limit its implementation.

Texas Public Utility Commissioner Kenneth Anderson said in an interview with E&E Daily yesterday that he would like to see his state submit a plan, but only if EPA finalizes a rule the state deems to be workable.

To do that, EPA would have to overhaul its draft to get rid of interim state targets that phase in after 2020. That timeline would not allow Texas to plan, site and construct transmission and pipeline infrastructure to support expansions in low-carbon energy, Anderson said.

He also said the federal agency should correct problems Texas sees with the way EPA uses its four building blocks to calculate state responsibilities — a method he said is riddled with internal contradictions that have resulted in Texas’ being assigned a tougher-than-average emissions target. The proposed rule would require the Lone Star State to slash utility-sector emissions 40 percent by 2030, compared with a national average of 30 percent.

“Until we know what the final rule looks like, there’s no way to know whether it’s even possible to do a state implementation plan,” Anderson said.

If Texas chooses to implement, its PUC would contribute to a plan-writing process that would likely be led by the Texas Commission on Environmental Quality. But the state Legislature must also act to give the state agencies authority to write the rule, Anderson said, which was also a complicating factor in Texas’ response to EPA’s greenhouse gas permitting program. Texas’ Legislature only meets every other year. EPA had to take over permitting for a time before Austin passed laws that allowed it to comply.

Anderson also expressed concern that state plans would be federally enforceable, a fact he said could grant EPA more leverage over states than they currently have.

“The problem is that, at least under the Clean Power Plan, most of what EPA would have the states use in order to implement it — the dispatch of gas, the expansion of renewables, increased energy efficiency — those are items that EPA has no authority over now,” he said. “This commissioner is extremely disinclined to give either the EPA or third-party plaintiffs the ability to get involved in the structure and operation of our energy markets, where they have no authority now and couldn’t get authority under a federal plan.”

State lawmakers in a variety of states have also moved legislation aimed at limiting their agencies’ response to the rule.

One of the most recent of these is a bill sponsored by South Carolina state Rep. Joshua Putnam (R) that would prevent the state from submitting its plan until judicial review has concluded on the rule.

In an interview, Putnam said he wanted to make sure the state would not waste resources implementing a rule that would ultimately be overturned.

“The federal government continues to push more regulation on the state,” he said. “At some point, the states are going to have to say, ‘D.C., you’re going to have to figure this out yourself and stop burdening the taxpayers.'”

Putnam said he expects that EPA wouldn’t step in with an FIP, because his bill would allow the state environmental agency to prepare a rule that would go into effect when litigation concluded.

But EPA’s proposal requires states to submit implementation plans by deadlines ranging between 2016 and 2018, depending on if they apply for extensions or participate in regional schemes.

And some experts warn that it is not clear that EPA lacks the authority to write an FIP that delivers the same reduction requirements included in its proposal — though those demands might fall directly on power plants rather than on state governments (Greenwire, March 10).

And EPA has argued that if states do not submit plans, they will forgo the flexibility written in its draft, which would allow the state to safeguard its own interests.

But Barrasso’s memo dismissed that notion.

“Flexibility in this context means little more than an invitation for states to choose the method by which their economic wounding will be performed,” it says.

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