Recently in Clean Air Act Category

Regulating Emergency Generators: EPA Denies Rehearing of RICE Rule, Appeals Court is Next Stop

August 20, 2014

On August 15, the U.S. Environmental Protection Agency ("EPA") issued a notice denying petitions for rehearing of its new rules governing air emissions from stationary Reciprocating Internal Combustion Engines ("RICE"). RICE, especially diesel engines, are widely used for emergency backup generation for hospitals, factories, and other facilities requiring an uninterrupted supply of power. They are also an important source of power to stabilize the electric grid in certain types of emergencies. Developments concerning the RICE emissions rule are therefore of great concern to electric utilities and a multitude of end-use electric consumers who rely on diesel back-up generators.

The rehearing petitions stem from EPA's 2010 proposal to extend its regulation of hazardous air pollutants emitted by stationary RICE from the previous 500 horsepower limit down to engines as small as 100 HP. As we reported early last year, in response to concerns related to the mismatch between the proposed RICE rule and NERC reliability standards, EPA modified the proposed rules to allow generators that have not been retrofitted with expensive pollution control equipment to operate for up to 100 hours per year during declared electrical emergencies, and for such generators to operate for up to 50 hours per year to prevent voltage collapse or overloads in local transmission or distribution systems.

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EPA Proposes Limits on Carbon Dioxide From Power Plants: What It Means for the Pacific Northwest

June 6, 2014

The U.S. Environmental Protection Agency this week issued is long-anticipated proposal to limit carbon dioxide from power plants, dubbed the "Clean Power Plan." Predictably, both industry groups and environmental interests attacked the plan, in some cases even before it was released. A careful review of the proposal suggests, however, that the impacts of the rule, if adopted, are likely to be relatively modest in the Pacific Northwest, chiefly by placing additional economic pressure on already beleaguered coal-fired plants in Montana and Wyoming, while adding the pressure of federal law to break the log-jam in Olympia regarding climate-related legislation. The flexibility provided to states to comply with carbon dioxide limitations also lays the groundwork for interstate cooperation to identify least-cost solutions and may create new and lucrative opportunities for companies involved in energy conservation, clean tech, renewable energy and a variety of other industries where carbon dioxide emissions might be reduced at relatively little cost.

The proposed rule has been summarized in greater detail elsewhere. In brief, the proposal at its core would require existing power plants to reduce carbon dioxide emissions by 30 percent over 2005 levels by 2030, with interim limits that would come into force in 2020. The proposal establishes state-specific goals for carbon dioxide emissions, but provides states considerable flexibility to meet these goals using four "building blocks" -- improving power plant heat rates, improving energy conservation, dispatching power from natural gas and other less carbon-intensive resources rather than from coal generation, and encouraging the construction and dispatch of renewable energy resources. The proposal also encourages interstate cooperation and allows for trading of carbon-reduction credits, as already occurs, for example, in the Northeast's RGGI program. The EPA's final rule is due by June 2015, with state implementation plans to be finalized by June 2016. Litigation over the rule is certain to occur, so it is unclear whether these deadlines will be met.

The choice of a 2005 baseline, rather than the 1990 baseline generally used in discussions of greenhouse gas reductions, is important because U.S. GHG emissions peaked in that year and have declined 9% overall since then, while power plant emissions have declined 16%, primarily because the "fracking" boom has created cheap natural gas, which has displaced significant amounts of coal used for electricity generation. Georgetown University's Climate Center has published a useful table, which provides an indication of reductions required from 2012 emissions levels rather than 2005 levels.

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Ninth Circuit Denies Rehearing in Greenhouse Gas Case, Continues to Struggle With Standing in Climate Litigation

February 13, 2014

A recent order of the U.S. Court of Appeals for the Ninth Circuit illustrates the extent to which courts continue to struggle with otherwise routine legal issues when confronting claims related to climate change and greenhouse gas emissions. The order denies rehearing of last year's Ninth Circuit panel decision in Washington Environmental Council v. Bellon, which concluded that a group of environmental plaintiffs seeking to force the Washington Department of Ecology to issue greenhouse gas regulations lacked standing to bring the claim.

The rehearing order was unusual in several respects. Ordinarily, a dissatisfied party to the case seeks rehearing and, in nearly all cases, rehearing is denied in a short order simply noting that an insufficient number of judges supported the request for rehearing. Perhaps the most unusual aspect of the Ninth Circuit's order is that it arose from a Ninth Circuit judge seeking rehearing, rather than from one of the parties. This suggests that at least some of the Ninth Circuit's judges view the October panel opinion as not just incorrect, but so seriously wrong that the Court should re-examine the decision even in the absence of any request to do so by the losing parties. The order is also unusual in that it included two impassioned opinions alternatively defending and attacking the October panel opinion.

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Ninth Circuit Rejects Petition Seeking Regulation of Greenhouse Gases in Washington

October 25, 2013

Two October decisions of the federal courts are likely to have significant implications for regulation of greenhouse gases ("GHG") under the Clean Air Act. Of greatest note for the State of Washington, the Ninth Circuit last week overturned a lower court's order that would have required the Washington Department of Ecology ("Ecology") to set standards limiting GHG emissions from Washington's five oil refineries. The Court of Appeals concluded that the environmental plaintiffs lacked standing to bring their complaint. (Washington Environmental Council v. Bellon, No. 12-35323 (issued Oct. 17, 2013)).

In that case, two environmental groups filed a lawsuit in U.S. District Court under the Clean Air Act's citizen suit provisions arguing that Ecology, which administers the Clean Air Act in Washington under an EPA-approved State Implementation Plan, is obligated to set GHG emissions limits on the five refineries under the Act's "Reasonably Available Control Technology" requirements. The District Court agreed, ordering Ecology to develop GHG emissions limits for the five oil refineries by 2014.

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A Pair of D.C. Circuit Decisions Portend Increased Regulation of Sewage Treatment Plants, Biomass Energy, and Other Stationary Sources of "Biogenic" Carbon

August 23, 2013

A recent decision of the U.S. Court of Appeals for the District of Columbia Circuit (more popularly known as the D.C. Circuit) portends increased regulation of biomass power plants, as well as landfills, sewage treatment plants, and similar facilities that produce greenhouse gases ("GHG") through "biogenic" processes. The decision is critical both to the forest products industry, which frequently burns wood waste and other byproducts to produce energy, and the owners of landfills, sewage treatment plants, wastewater treatment plants, and similar facilities, both public and private. A second recent D.C. Circuit decision, although narrower in scope, similarly upholds stricter regulation of sewage treatment plants under the Clean Air Act.

Considered together, the decisions underscore the importance of "thinking outside the box," to escape treating wastes as a traditional regulatory problem, and exploring ways to, for example, convert waste into valuable commodities. One innovative solution was recently undertaken by Pierce Transit, the public transit agency for Pierce County, Washington, which is now using methane produced from the Cedar Hills landfill to fuel its bus fleet. Another approach is the advanced waste-to-energy technologies now widely adopted in Europe, which simultaneously maximize recover of useful materials, convert the remaining materials to useful energy, and minimize emissions of GHG and other pollutants. Innovative approaches like these can turn expensive and burdensome regulatory and waste treatment problems into economic and environmental assets.

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EPA Strains RICE Through the Reliability Screen: Rules on Pollution from Reciprocating Engines Modified To Reflect Reliability Requirements

January 15, 2013

On January 15, the U.S. Environmental Protection Agency ("EPA") issued new rules governing pollution from Reciprocating Internal Combustion Engines ("RICE") used for emergency electric generation. The new rules have been amended substantially to reflect electric system reliability requirements because RICE are frequently used for emergency and back-up power, helping to prevent blackouts when the grid is strained by outages in primary units, voltage deviations, or other reliability problems. The rules are of particular interest to Northwest entities that may use diesel generators for back-up or reliability purposes. The rules are also of great interest to rural communities in Alaska, which frequently rely on RICE for generating their electric power and for whom the new rule makes some special accommodations.

The new rule amends the limits for hazardous air pollutants ("NESHAP" in EPA-speak) aimed at controlling pollutants such as formaldehyde from stationary RICE, such as diesel-powered generators. Until 2010, stationary engines of 500 HP or less were not regulated under the relevant NESHAP rules. At that time, EPA issued rules that would have extended regulation to stationary engines of this size, but would have allowed limited exemptions for emergency engines operating less than 15 hours per year. Because the 15-hour-per-year limitation did not square with electric industry standards, representatives of the electric industry asked FERC to reconsider this limitation.

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D.C. Circuit Tosses Greenhouse Gas Challenge as Unripe

December 14, 2012

Yesterday, the U.S. Court of Appeals for the District of Columbia Circuit tossed out challenges to the Environmental Protection Agency's proposed new source performance standards for greenhouse gases. The Court concluded in a unpublished order that, because EPA's rules are not yet final, the lawsuits are premature.

The litigation was brought by Las Brisas Energy Center, LLC, which is constructing a 1320-MW generator in Corpus Christi, Texas, that will be fired by petroleum coke. The case was then consolidated with similar challenges brought by a number of other generators. Substantively, the petitions claimed that EPA exceeded its authority under the Clean Air Act by imposing an emissions limit of 1,000 pounds of carbon dioxide per megawatt-hour, regardless of fuel type, without first making the required finding that each generator type makes a "significant contribution" to pollution and without conducting adequate economic analysis.

EPA sought to dismiss the case as premature because the greenhouse gas rules are not yet final. The petitioners argued that the proposed rule had an immediate impact on them because it effectively imposed specific limits on their ability to construct generators going forward, even if not finalized. Yesterday's order rejects this argument. But it is hardly the last word. Similar challenges, and many others, are almost certain to be lodged once EPA issues its final greenhouse gas rules.

If you have any questions about the D.C. Circuit's decision, the regulation of electric generators, or other matters related to the utility industry or environmental law, please contact a member of GTH's Energy, Telecommunications and Utilities practice group or Environment & Natural Resources practice group. Both groups are consistently rated as among the best in the Pacific Northwest.