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February 13, 2013

D.C. Circuit Denies Rehearing on Cross-State Air Pollution Rule and Greenhouse Gas Rules

By: Ed Roggenkamp — Filed under: Clean Air Act, Climate Change Law — Posted at 9:24 am

The D.C. Circuit Court of Appeals recently denied rehearing en banc in cases involving two major Clean Air Act issues: the Cross-State Air Pollution Rule (“CSAPR” or the “Transport Rule”) and a suite of four rules regulating greenhouse gas (“GHG”) emissions from vehicles and stationary sources.  The denials set the stage for petitions for Supreme Court review in one or both of the cases, with significant implications for federal regulation of GHGs and conventional air pollutants. 

On January 24, 2013, in EME Homer Generation v. EPA, the D.C. Circuit denied EPA’s requests for reconsideration and rehearing en banc of the panel decision striking down CSAPR.  As previously discussed on this blog, EPA issued CSAPR in 2011 as its latest effort to address interstate transport of sulfur dioxide (“SO2”) and nitrogen oxides (“NOx”).  CSAPR was intended as a replacement for the Clean Air Interstate Rule (“CAIR”), EPA’s previous attempt to implement the “good neighbor” provisions of the Clean Air Act, which prohibit upwind states from causing or contributing to noncompliance in downwind states. Both programs established an emissions trading program for covered states.

CAIR was issued in 2004 and struck down by the D.C. Circuit in 2008, but in a twist on the usual course of events, the Court left CAIR in place while directing EPA to promulgate a new rule that complied with the Clean Air Act.  On August 21, 2012, however, the D.C. Circuit vacated CSAPR and the Federal Implementation Plans (“FIPs”) that EPA issued along with it, and directed EPA to continue to enforce CAIR while it promulgates a replacement rule.  As a result, CAIR remains in place despite the 2008 ruling that it, too, does not comply with the Clean Air Act.  It remains to be seen whether EPA will petition for review by the Supreme Court, or craft another regulation on the interstate transport of air pollution.

On December 20, 2012, the D.C. Circuit also denied rehearing en banc of the Court’s June 26, 2012 decision upholding four rules regulating GHGs:  (1) a threshold finding that GHG emissions endanger public health and welfare and are thus subject to regulation under the Clean Air Act (the “Endangerment Finding”); (2) a rule limiting GHG emissions from cars and light trucks (the “Tailpipe Rule”); (3) a rule governing the trigger of GHG emission limits for stationary sources, such as power plants (the “Timing Rule”); and (4) a rule increasing the regulatory threshold for GHGs above the threshold in the Clean Air Act itself, so that only the largest new and significantly modified emitters of would initially be required to seek Clean Air Act permits for their GHG emissions (the “Tailoring Rule”). 

Because the thresholds in the Tailoring Rule depart from the regulatory floor contained in the Clean Air Act itself, it was widely viewed as the most vulnerable to challenge of EPA’s GHG regulations.  In June, the D.C. Circuit sidestepped the issue by ruling that none of the petitioners had standing to challenge the Tailoring Rule, since, by increasing regulatory flexibility and decreasing regulatory burdens, that rule actually mitigated any potential injury stemming from EPA regulation of GHG emissions. 

While the panel opinion upholding the four GHG rules was unanimous, the denial of rehearing en banc drew two separate dissenting opinions – one taking issue with all four rules and another aimed more specifically at the Tailoring Rule – as well as a concurrence supporting the denial from the three judges that initially decided the case.  Counsel for one of the trade associations that challenged the rule confirmed that a petition for Supreme Court review would follow “as surely as the climate has been changing since the Earth had an atmosphere.”

For more information on the Court’s rulings, contact Jeffrey Gracer, Jonathan Kalmuss-Katz or Ed Roggenkamp.

February 8, 2013

Court Rejects SEQRA Challenge to Hudson River Park Trust’s Lease for Natural Gas Pipeline

By: Ed Roggenkamp — Filed under: Environmental Impact Review, New York Environmental Law, Renewable Energy & Energy Development — Posted at 10:01 am

In an order dated January 16, 2013, Judge Eileen Rakower of the New York State Supreme Court dismissed an Article 78 petition challenging the Hudson River Park Trust’s lease of an easement for a portion of a natural gas pipeline entering Manhattan through Hudson River Park.  The lease – along with the pipeline’s route into Manhattan – was challenged by several environmental groups and individuals, who argued that the Trust was required to conduct an environmental review under the State Environmental Quality Review Act (“SEQRA”) of the pipeline and its connection to Con Edison’s pipeline network.  The petitioners also argued that leasing an easement beneath the Park violated the public trust doctrine and provisions of the Hudson River Park Act that restrict the uses to which certain areas of the Park may be put.

Judge Rakower first noted that the Federal Energy Regulatory Commission (“FERC”) had analyzed the environmental impacts of the proposed pipeline under the National Environmental Policy Act and issued an Environmental Impact Statement (“EIS”).  That EIS concluded that the local pipeline connection to Con Edison’s network was outside of FERC’s jurisdiction, but nevertheless gave some consideration to the cumulative impacts of connection to Con Edison’s network.  After issuing the EIS, FERC approved the route of the pipeline through Hudson River Park. The Trust then negotiated the challenged lease with the pipeline developer. 

Judge Rakower concluded that, under the federal Natural Gas Act, FERC had exclusive jurisdiction over the siting of the pipeline, and that any challenges to the siting decision – or the Trust’s lease of the right-of-way through Hudson River Park in accord with that decision – must be brought in federal court.  Judge Rakower also ruled that state-law environmental review of the pipeline under SEQRA was preempted by the Natural Gas Act.  The court therefore dismissed the petition.

For more information on the Court’s decision, contact Elizabeth Knauer.

February 1, 2013

Governor Cuomo’s 2013 State of the State Address Indicates Bright Future for Solar in New York

By: Devin McDougall — Filed under: New York Environmental Law, Renewable Energy & Energy Development — Posted at 6:23 pm

On January 9, Governor Andrew Cuomo delivered his 2013 State of the State Address and outlined several key policy initiatives to facilitate the increased deployment of solar power in New York.  The address announced the governor’s intent to (1) extend the state’s NY-Sun solar program at $150 million annually for the next 10 years, (2) appoint a cabinet-level “energy czar” to coordinate the administration’s energy policy, and (3) create a $1 billion “NY Green Bank” to leverage public monies with private sector funds in order to increase investment in renewable energy projects in New York.

“The economy of tomorrow is the clean tech economy,” the governor observed in his address.  “We all know it, it’s a foot race – whatever state, whatever region gets there first wins the prize, and we want it to be New York.”

The 2013 State of the State Report that accompanied the address provides further details.  To start, the NY-Sun program, originally announced in Cuomo’s 2012 State of the State Address, is designed to increase the state’s solar generation capacity.  To that end, NY-Sun has thus far taken the form of a variety of legislative and administrative policy measures, including tax credits, grants, and permitting reforms. NY-Sun presently is authorized through 2015; Cuomo proposes to extend the program’s present funding levels through 2023.

The governor has recruited Richard Kauffman to join his cabinet as the state’s new “energy czar.” Kauffman, whose formal title will be Chairman for Energy Policy and Finance for New York State, previously worked as senior advisor to U.S. Secretary of Energy Steven Chu, and is a leading expert on private sector investment in renewable energy.

Cuomo’s proposed NY Green Bank would “serve a coordinating role to enhance the collective strength of all State clean energy programs,” which together spend $1.4 billion annually.  According to the report, the Green Bank would seek to move beyond these programs’ present reliance on “one-time subsidies” by using tools like “bonding, loans and various credit enhancements (e.g, loan loss reserves and guarantees)” to “leverag[e] private capital” and “catalyz[e] market activity.”  As the report notes, Connecticut passed legislation creating a similar entity, the Clean Energy Finance and Investment Authority, in 2011.

Individuals and small businesses in New York can take advantage of the NY-Sun Initiative in several ways.  For example, the New York State Energy Research and Development Authority (NYSERDA) administers the NY-Sun Competitive Photovoltaic Program, which provides grants supporting the development of qualifying photovoltaic projects.  In 2013, NYSERDA will accept grant applications in two rounds, with deadlines of March 14th and August 29th.  Additionally, the Long Island Power Authority (LIPA) recently initiated New York’s first feed-in tariff program, the Clean Solar Initiative Feed-In Tariff.  Under this program, LIPA will pay a fixed rate to owners of qualifying photovoltaic generation systems for every solar kilowatt-hour generated over a fixed term.