Court Stays EPA Haze Rule in Win for Texas Coal Plants

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By Nushin Huq

July 18 — A federal court stayed the implementation of the regional haze rule for Texas and rejected the Environmental Protection Agency’s motion to move the case ( Texas v. EPA, 5th Cir., No. 16-60118, 7/15/16 ).

The U.S. Court of Appeals for the Fifth Circuit stayed the rule because the petitioners, which include the state of Texas, energy companies, power plants and industry, “could suffer irreparable injury in the absence of a stay,” the court said in its July 15 order. The court also rejected the EPA’s motion to move the case to the U.S. Court of Appeals for the District of Columbia Circuit.

To decide whether or not to implement a stay, the court examined if the law could cause irreparable harm to the petitioners and if they have a strong likelihood of success in their case, the court said.

The petitioners included power plants and energy companies who said that the law would require expensive upgrades. The power grid operator in Texas, the Electric Reliability Council of Texas (ERCOT), also expressed reliability concerns over the federal implementation plan. The EPA had argued that not implementing the plan would injure the public and visibility at the parks the rule covers.

The court sided with the petitioners, saying that EPA’s assertion was unconvincing because the agency itself acknowledged that the federal implementation plan would not reduce emissions for at least three years.

The EPA issued its federal plan, which sets sulfur dioxide emissions limits on 15 generating units at eight coal-fired plants in Texas, after rejecting the state's plan as insufficient.

Court: EPA Likely Exceeded Authority

The petitioners also have a strong likelihood of showing that the EPA exceeded its authority by disapproving the Texas and Oklahoma reasonable progress goals, the court said. The agency’s requirement that Texas conduct a source-specific analysis is not supported by the Clean Air Act or the regional haze regulations. The law limits the EPA to a deferential role and the agency must defer to Texas’s goals so long as the state goals comply with the act, the court said.

The court also found that the petitioners have a strong case for proving that the EPA’s finding that consultation between Oklahoma and Texas was inadequate was arbitrary and that the EPA exceeded its statutory authority by imposing emissions controls that go into effect years after the period of time covered by the current round of implementation plans.

Rule Regionally Applicable

In March, the EPA asked the Fifth Circuit to reject a lawsuit brought against the agency's federal regional haze rule or to transfer it to the D.C. Circuit, which would be the proper venue because of the national scope of the rule. Petitioners, including state regulators, Luminant, Southwestern Public Service Co. and NRG Texas Power LLC, said the Fifth Circuit is the proper venue because they are not protesting the entire rule, only the Texas portion.

The Fifth Circuit concluded it is the appropriate venue because the suit challenges a “locally or regionally applicable action, which is not based on a determination that has a nationwide scope or effect,” the decision said. The EPA’s decision not to approve parts of the Texas and Oklahoma state plans was based on particular facts about emissions sources in Texas and how that will affect visibility in two locations in Texas and one in Oklahoma, the court said. The facts were not of national scope.

To contact the reporter on this story: Nushin Huq in Houston at nhuq@bna.com.

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com.

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