States Begin to Comply with Clean Power Plan, Even While Planning to Sue

While opponents wait for the Obama administration’s carbon regulations to become official before suing to block them, state environmental agencies have been busy studying compliance options.

The Clean Power Plan, which requires states to reduce carbon dioxide emissions from power plants 32 percent by 2030, is intended to help slow climate change resulting from the burning of fossil fuels.  The plan has been the target of legal challenges and legislative campaigns since it was proposed in 2014 and finalized in August.

At least 14 states, including many in coal country, are gearing up to pursue litigation once the rule is finally published in the Federal Register, the official record of government regulations, which will likely happen Friday.  Although the administration argues the Clean Power Plan will create economic opportunity—one study by economists predicted it  will create a quarter of a million jobs— and speed up the transition to a clean energy economy, the rule’s opponents have claimed it will kill jobs and hurt local economies.

Once the rule is published in the Federal Register, states and others challenging the rule will have 60 days to file lawsuits.

While the rule’s opponents wait, however, state environmental and utility departments have begun contemplating their options for meeting the policy’s mandates.

"Officials in practically every state have been doing some amount of work," said Kyle Danish, a partner at Van Ness Feldman, a law firm based in Washington.  Danish advises the industry on energy and environmental regulations, including the Clean Power Plan.

Many states have been taking a number of steps to start putting together compliance plans, Danish said.  State environmental regulators have been meeting with stakeholders, hosting public meetings, consulting with utilities, and talking with EPA officials to clarify technical issues, he said.

A dizzying array of small but important decisions await states as they analyze their compliance options: They can choose to shut down coal generating units, switch to natural gas, increase renewable energy production, invest in energy efficiency measures, or some combination of these. States also need to decide whether to join a carbon trading system and choose between one of two accounting mechanisms to track the reduction in emissions.

‘Full Steam Ahead’
In many states, the environmental and utility agencies putting a compliance plan together will also need to navigate local politics.  Coal states, especially those in the Appalachian region, have set up legislative roadblocks to complying with the regulations.  Some states have required that a state plan first be put to a vote in the legislature before being submitted to the EPA.  Others have taken certain compliance options off the table, such as Kentucky, which says state regulators can’t propose a plan that increases the use of renewable energy or shifts power production away from coal.

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