Transport Rule Doesn't `Over-Control' Upwind States, EPA Tells Appeals Court

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By Patrick Ambrosio

Jan. 16 — The Environmental Protection Agency's cross-state emissions rule for power plants doesn't “over-control” upwind states beyond what is allowed under the Clean Air Act, the agency told a federal appeals court that is considering remaining challenges to the rule.

The agency, in a brief filed Jan. 16, defended itself against allegations by industry groups and state and local government agencies, which are seeking the full or partial vacatur of the regulation, also know as the transport rule. The EPA said that many of the arguments raised by petitioners, including an allegation that the agency didn't have the authority to impose federal implementation plans for states covered by the rule, lack merit and should be denied.

Litigation over the transport rule was remanded to the U.S. Court of Appeals for the District of Columbia Circuit following an April 2014 decision by the U.S. Supreme Court that upheld the structure of the transport rule (EPA v. EME Homer City Generation LP, 134 S. Ct. 1584, 78 ERC 1225, 2014 BL 118432 (U.S. 2014)).

While the Supreme Court upheld the EPA approach to regulating pollution that crosses state lines, the court said that it is possible the applications of the rule might exceed the EPA's authority, providing an avenue for states to make “as-applied” challenges to the emissions budgets in the rule. Petitioners, in briefs filed in December, argued that the transport rule is invalid as applied to at least 18 states.

Oral arguments on the remaining issues and as-applied challenges are scheduled for Feb. 25. An attorney familiar with the litigation described the arguments raised in the December briefs as significant enough to hamper the current version of the cross-state rule, but noted that a victory for the petitioners wouldn't prevent the EPA from going back and redoing the cross-state rule based on the same approach.

EPA: Appropriation Reductions Required

The record supporting the rule shows that the cross-state rule only requires upwind states to reduce power plant emissions by as much as is necessary for downwind states to attain and maintain national ambient air quality standards for ozone and particulate matter, according to the EPA brief.

The agency's brief described the approach that the EPA used to set the emissions budgets, which included a process for identifying emissions that a state could eliminate after the application of ascending cost thresholds of emissions reductions. The agency then used air quality modeling to determine significant cost thresholds where a noticeable change in air quality in downwind areas occurred.

“Thus, EPA established state emission budgets at levels that were both feasible from the upwind states' perspective and closely tailored to the air quality of the downwind areas to which they were linked,” the agency said.

The EPA also defended its model for setting the state emissions budgets, which industry petitioners described as flawed in their brief. The agency said that its model relied on “reasonable assumptions” and that the petitioners have failed to show the court that the assumptions in the model were wrong or that the model produced results that are inconsistent with real-world data.

Meritless Argument on FIPs

The agency also argued that state and local government arguments that the EPA didn't have authority to issue federal implementation plans for the transport rule lacks merit.

State and local government petitioners argued that the entire cross-state rule should be vacated because the EPA didn't have the authority to impose federal implementation plans on states for which the EPA had previously approved state implementation plans under the Clean Air Interstate Rule, a Bush-era regulation that preceded the cross-state rule.

The EPA said those state implementation plans were based on CAIR, a regulation that was found by the D.C. Circuit to be unlawful in 2008 because it failed to ensure that upwind reductions would be sufficient to help downwind states attain air quality standards (North Carolina v. EPA, 531 F.3d 896, 67 ERC 1151, 2008 BL 146717 (D.C. Cir. 2008)).

The agency said the decision to overturn CAIR meant that the state implementation plan approvals were erroneous when issued and that the EPA still had authority to issued a federal implementation plan for each of those states.

“It would make little sense if EPA's authorization of a state to implement a regulatory program that court subsequently finds to be unlawful were to immunize that state from being subject to the consequences of the court's decision,” the EPA said.

The EPA also argued in its brief that the agency properly addressed the “interference with maintenance” prong of the “good-neighbor” provision and met its notice and comment requirements for key elements of the transport rule.

Briefing in litigation over the transport rule will continue, with public health groups intervening on behalf of the EPA scheduled to file a brief no later than Jan. 23.

To contact the reporter on this story: Patrick Ambrosio in Washington at

To contact the editor responsible for this story: Larry Pearl at

The EPA respondent brief in EME Homer City Generation LP v. EPA is available at