Coal plant generators will keenly eye legal challenges to ACE Report

Inform 28 June 2019

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Report summary

The problems with the Clean Power Plan (CPP) are not present in the Affordable Clean Energy (ACE) rule and it is unlikely to be stayed. However, it will be challenged using multiple approaches. In theory, ACE could provide coal plants some relief from early retirements. But power generators will be influenced more by public opinion, the approach taken by regulators and the risk created by the whipsawing nature of US politics. Operators are unlikely to risk capital pursuing unpopular and hard to permit coal plants. The long-term future of coal plants in the US is unlikely to change with ACE.

Likely complaint
- BSER for CO2 emissions from existing power plantsshould include outside the fence measures
Possible rebuttal
- Outside-the-fence measures for emissions reductions are beyond what EPA may consider
- The ACE rule makes emissions worse because it is legally arbitrary and capricious
- EPA’s ACE rule is legally supportable and not arbitrary and capricious
- Courts may defer to statute language and Congressional intent to determine EPA authority
- The CPP exceeded the statutory authority of the Clean Air Act and had to be repealed
- Severing ACE and CPP could create logically inconsistent outcomes
- The basis for CPP repeal is separate from ACE and legal action is therefore severable
- EPA was wrong to change the baseline in its regulatory impact analysis
- CPP and ACE are separate actions requiring different baselines
What if Democrats win political control in 2020?
How will coal plants be impacted?