Clean Air Act Issues Congress Could Grapple With in New Session

While the Republican-led U.S. House and Senate in the 115th Congress was mainly focused on reviewing, for modification or repeal, several environmental rules issued under the Clean Air Act (CAA), the new Democrat majority in the House could focus on a slew of different measures, a new report from the Congressional Research Service (CRS) suggests.

The report, released on Jan. 3, outlines a number of measures that could impact the power sector. They include recent actions on the Environmental Protection Agency's (EPA's) greenhouse gas (GHG) regulations, air quality standards, and the Mercury and Air Toxics Standards (MATS).

The report notes that EPA regulatory actions to limit GHGs under existing CAA authority have been a continuing focus in Congress since 2007, when the Supreme Court, in Massachusetts v. EPA,held that GHGs are air pollutants within the CAA's definition of that term. In 2011, the Supreme Court also held in American Electric Power, Inc. v. Connecticut,that corporations cannot be sued for GHG emissions under federal common law, because the CAA delegates management of CO₂ and other GHG emissions to the EPA.

The EPA subsequently finalized GHG standards for power plants in August 2015. It promulgated the Clean Power Plan (CPP), the rule for existing units that set state-specific goals for CO₂ emissions or emission rates from existing coal, gas, and oil power plants, and efficiency improvements based on three building blocks. It also issued the New Source Performance Standards (NSPS) for new and modified power plants, relying on carbon capture and sequestration (CCS) to reduce CO₂ emissions.

While the CPP has been stayed by the Supreme Court since February 2016, pending a completion of judicial review, a legal challenge, West Virginia v. EPA,hasn't been resolved.The D.C. Circuit heard oral arguments in that case in September 2016 but has not issued its decision, and the EPA requested-and the court granted-a pause in that litigation to give the EPA time to conduct a review.

On the regulatory front, progress has been more fluid. In October 2017, the EPA proposed to repeal the CPP, and it proposed to replace it with the Affordable Clean Energy (ACE) rule in August 2018. That rule defines the best system of emission reduction (BSER) as on-site heat rate improvements for existing coal-fired units. As it proposed the ACE rule, the EPA also moved to revise rules to implement CAA Section 111(d), effectively seeking to codify the EPA's current legal interpretation that states should have broad direction to establish emission standards consistent with BSER.

In addition, the EPA also moved to modify an applicability determination for a CAA pre-construction permitting program for new and modified stationary sources, which is known as New Source Review. On Dec. 6, it also proposed to replace the NSPS, determining that BSER for new coal units would be the most efficient demonstrated steam cycle combined with best operating practices-not CCS, which was preferred in the 2015 rule.

The rules are still in the proposal stage, and the CRS noted that following promulgation, the repeal and replacement actions are subject to judicial review. "A large group of stakeholders, including some states, are seen as likely to oppose the changes associated with repealing the CPP and replacing it with ACE," it noted.

However, it also said that the EPA and judicial processes "could be short-circuited by Congress, through legislation overturning, modifying, or affirming the CPP or NSPS." At this time, congressional action is "considered unlikely, however, as the threat of a filibuster, requiring 60 votes to proceed, could prevent Senate action," the CRS said. Oversight hearings may also be likely as the EPA finalizes actions on the ACE and NSPS rules, it added.

The new House majority has evidently expressed a strong interest in addressing climate change. At the end of December, the House restored the "climate crisis" select committee, and House Speaker Nancy Pelosi tapped Florida Democratic Rep. Kathy Castor to chair it. The climate panel was created when Democrats last controlled the House between 2007 and 2011, but it was eliminated when Republicans took the majority. The current committee's agenda is unclear, though Democrats said in a rules package press release on Jan. 1 that the committee would work to "better respond to the urgency of [the climate change] threat while creating the good-paying, green jobs of the future."

The House Committee on Energy and Commerce, chaired by Rep. Frank Pallone, Jr., (D-N.J.), has also announced that one of its first hearings this month will focus on "assessing the environmental and economic impacts of climate change."

In November, meanwhile, leading Democrats from the Energy and Commerce, Natural Resources, and Science, Space and Technology committees said: "Democrats will examine the threats identified in several recent landmark reports from the National Academies, the World Health Organization, and the United Nations' Intergovernmental Panel on Climate Change, which detailed a risk of extreme crisis as early as 2040. The Committees will also explore how other countries and state and local governments are addressing climate change at a time when the Trump administration has pulled out of the Paris Agreement and rolled back the Clean Power Plan."

In tandem, Congress could also undertake oversight as the EPA moves forward with its statutorily mandated reviews of the ozone and particulate matter national ambient air quality standards (NAAQS), which are underway, and "more contentious than usual," the CRS noted.

One reason is that the EPA in October 2018 "made an unprecedented change and eliminated the pollutant-specific scientific review panels, which have historically helped agency staff conduct the five-year reviews," the CRS said. Specifically, the EPA disbanded the Particulate Matter Review Panel, which was appointed in 2015. The EPA also claimed it would not form an Ozone Review Panel. Instead, it tasked the seven-member Clean Air Scientific Advisory Committee (CASAC) with providing advice regarding background pollution and potential adverse effects from NAAQS compliance strategies. "Several members of the current CASAC, however, raised concerns about the lack of a scientific ozone review panel and commented that EPA should form one. Others, including former members of CASAC and previous ozone review panels, stated that the current CASAC lacks the depth and breadth of expertise required for the ozone review," the CRS noted.

The EPA's review of the ozone NAAQS could specifically become a point of controversy. A 2015 ozone rule tightened limits from 0.075 parts per million (ppm) of ozone averaged over eight hours, as set by the Bush administration in March 2008, to 0.070 ppm. The rule, which followed a proposal to revise standards to a range of 0.065 ppm to 0.070 ppm, drew ire from both industry and environmental groups. It was challenged in federal court. The D.C. Circuit heard oral arguments in that case in December 2018. For now, the EPA faces a statutory deadline of October 2020 to complete the ozone NAAQS review-and whether to modify or retain it, without convening a scientific review panel.

Meanwhile, the EPA has also said it intends to complete the particulate matter NAAQS review by December 2020, having wrapped up its most recent review in late 2012, and promulgated revisions to strengthen standards. The 2012 rule pares down the primary standard for PM 2.5 to 12.0 micrograms per cubic meter (I1/4g/m³) from the existing 1997-set annual standard of 15.0 I1/4g/m³, but retains the 2006-issued 24-hour primary fine particle standard of 35 I1/4g/m³. When it was finalized, Congress focused on the regulatory costs associated with implementing more stringent standards, as well as potential impacts on economic growth, employment, and consumers, the CRS said. In October 2018, the EPA released a draft version of its Integrated Science Assessment for Particulate Matter, a summary of scientific literature published since the last NAAQS review, to the CASAC for review and public comment.

Oversight could also extend to recent EPA actions concerning air toxics rules, the CRS noted.

On Dec. 27, 2018, the EPA issued a revised supplemental cost finding for MATS, essentially proposing to reverse the 2016 finding that it is "appropriate and necessary" to regulate air toxics under CAA Section 112. Because the agency did not remove coal- and oil-fired units from the list of affected source categories under Section 112, the 2012 MATS remain effective. However, experts widely noted the proposal could block future administrations from issuing future rules concerning hazardous air pollutant emissions.

-Sonal Patelis a POWER associate editor (@sonalcpatel, @POWERmagazine).

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