DEP: To stay, or not to stay?

February 29, 2016

On February 9, the Supreme Court of the United States made the historic decision to stay the EPA’s Clean Power Plan. The Commonwealth had just 24 hours to pause and breathe a sigh of relief as the next day’s media coverage rolled in and the Wolf Administration’s statements ranged from moderate to rash.

“Pennsylvania will continue planning and engagement with stakeholders on the Clean Power Plan, pending final decision of this issue by the Supreme Court. We will continue to closely monitor the ongoing legal process,” Jeff Sheridan, spokesman for Gov. Wolf released in a statement.

This was followed by a media correction from PA DEP Sec. Quigley confirming that the Department was moving full steam ahead with developing and submitting a compliance plan by the now-suspended September 2016 deadline. 

However, at a February 25 Senate Appropriations Hearing, noting Sec. Quigley's request for additional resources and staff, Sen. Yaw (R-23) and Sen. Ward (R-39) questioned Sec. Quigley on how he could justify spending resources and man hours on developing a compliance plan for a regulation that has yet to be determined.

 

Once under oath, Sec. Quigley’s response was, “It is highly unlikely we will be in a position to submit a plan while the stay is still pending.”

There may be some confusion all around, as the significance of this stay was also lost on Russell Zerbo from the Clean Air Council who inaccurately classified the stay as “simply a technical reaction to the lawsuits brought against the plan by some states” in a Pennlive editorial. 


This is the first time ever that the Supreme Court has levied a stay on a federal regulation and the decision is based on steep criteria. “Irreparable harm” during the plan development phase must be proven and as such, the stay is intended to alleviate the obligation for states to develop compliance plans, thereby avoiding the associated development costs and economic impacts. Additionally, “a fair prospect” that the Supreme Court will vote to overturn the Plan if it reaches the court must be determined.


The stay suspends all deadlines, implementation and enforcement until the Supreme Court makes a final ruling on its legality (which is not expected until mid-2017 or 2018). If the regulation is overturned in part or full, all efforts by states will be a waste of taxpayer resources.

 

Oral arguments before the D.C. Circuit Court of Appeals begin June 2 and include lawsuits filed from 27 of the 47 states that are subject to the regulation, 24 national trade associations, 27 rural electric cooperatives, 10 major companies and three labor unions.


On February 23, 34 senators and 171 members of Congress demonstrated their support for the lawsuits by submitting an Amicus Brief urging the U.S. Court of Appeals to find the Clean Power Plan unlawful. Immediately following, and citing the enormous economic and social disruptions compliance will have on the business community, 166 individual business organizations, including the PA State Chamber and PA Manufacturer's Association, filed another brief in support of lawsuits.

 

This was not the first or second legal slap on this agency’s wrist. The EPA has recently been the recipient of a number of unfavorable legal decisions; including a June 2015 decision by the U.S. Supreme Court that remanded the Mercury and Air Toxics Standards (MATS) rule back to the D.C. Courts citing EPA’s lack of consideration for the costs to utilities and consumers, and an October 2015 decision by the Sixth Circuit of the U.S. Court of Appeals mandating a stay of the EPA’s Clean Water Rule (WOTUS) pending conclusive determination of the legality of the rule.


These regulations have become less about setting achievable industry goals and more about forcing federal oversight into areas which state primacy has previously presided.

The stay is of vital importance as it took lawsuits against the Mercury Air Toxics Standard three years to wind through the courts before the regulation was finally remanded. Unfortunately, the ruling came too late and the regulation had forced offline 20 percent of Pennsylvania’s coal customer base and shuttered several hundred jobs in the power plant sector alone.


The Supreme Court’s stay on the ‪Clean Power Plan has given Pennsylvania the opportunity to avoid making the same mistake twice. Unfortunately, comments from the Wolf Administration that the rule is still “in effect” demonstrate either an utter lack of understanding of the legal significance of a stay, or a complete disregard for the ruling of United States Supreme Court.


The Clean Energy Incentive Program, which DEP has stated they wish to incorporate into their state plan, and the Federal Implementation Plan have yet to be published by the EPA. Furthermore, given Pennsylvania’s current fiscal status, there are serious concerns regarding the resources that will be wasted attempting to develop a compliance plan, at the expense of the taxpayers, for a rule that may significantly be altered or thrown out entirely by the Federal Courts.


Pennsylvania ranks first and second nationally in energy production and exports. Whether or not DEP has been privy to the EPA and National Governor’s Association’s compliance plan modeling, the industry’s importance to the Commonwealth for sales revenue, jobs and the economy should be reason enough to not be the poster child for rushed compliance with a regulation that inserts Federal oversight into Pennsylvania’s energy economy.  


When questioned, there have been several reasons the Wolf Administration has used to justify their decision to forgo the two-year extension. See the fact check below and click here to download.

To address Mark Szybist’s claim on the Natural Resources Defense Council blog that the Pennsylvania Coal Alliance has misrepresented the generation data in the above fact sheet, it is important to note that this includes Pennsylvania gross generation, not just generation capacity. This is an important distinction as generators do not operate at their full capacity on a 24/7 basis and this is what was actually generated in Pennsylvania. According to the Energy Information Administration, in 2014, wind and solar only generated at 34% and 25% of their capacity, respectively. The wind doesn’t always blow and the sun doesn’t always shine, so while they may have the potential to offer X generation, the capacity that they generated in 2014 was only Y.


The $73 billion extension of the Federal Wind and Solar Tax Credit will continue to supply renewable energy sources with the funds necessary to make them viable within the electric market. And in Pennsylvania, the Alternative Energy Portfolio Standard will continue to require utilities to purchase a portion of renewables, regardless of their price.


And as a result, the market will continue to be tilted in favor of renewables and Pennsylvania’s energy landscape will continue to develop and evolve. But for now, decisions should appropriately be left to the Commonwealth’s state and local officials and not federal agencies using regulations to force policy decisions on the state level.


We urge the Wolf Administration to cease compliance plan development until the final legality of the Clean Power Plan is decided.

 

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