February 21, 2014
On Monday, the U.S. Supreme Court will hear argument in six consolidated challenges to the Environmental Protection Agency’s (“EPA’s”) decision to regulate emissions of greenhouse gases (“GHGs”) from stationary sources under certain provisions of the Clean Air Act (the “CAA”). The cases come from the D.C. Circuit Court of Appeals, which dismissed the challenges in 2012 on the ground that the petitioners lacked standing.
Monday’s argument presents a narrow question: whether EPA’s existing regulation of GHG emissions from motor vehicles triggered statutory permitting requirements that would apply to stationary sources. The CAA’s Prevention of Significant Deterioration (“PSD”) provisions require any facility that annually emits more than either 100 or 250 tons (depending on the type of facility) of “any air pollutant” to obtain an emissions permit. In its “Timing Rule,” EPA determined that its existing GHGs emissions standards for motor vehicles render such emissions “air pollutants” within the meaning of the statute, thereby triggering the PSD permit requirement. However, in its “Tailoring Rule,” EPA announced that it would initially require PSD permits only for very large sources of GHGs, rather than apply the statute’s low 100/250 ton threshold.
EPA’s interpretation raises two questions. The first is whether, as Judge Kavanaugh of the D.C. Circuit has argued in a dissenting opinion, the CAA requires PSD permits only for facilities that emit those “air pollutants” for which EPA has issued ambient air quality standards—a category that does not include GHGs. The second is whether EPA’s decision to raise the threshold of GHG emissions above which PSD permits are required was a permissible application of the statute.
This is the third time in seven years that the Court has considered the scope of EPA’s authority to regulate GHGs under the Clean Air Act. In its 2007 decision in Massachusetts v. EPA, the Court held that GHGs are unambiguously “air pollutants” potentially subject to regulation under Title II of the Act, which governs emissions standards for mobile sources. Following Massachusetts, EPA issued formal findings that motor vehicle emissions “cause or contribute” to GHG pollution that “endangers” public health and welfare—leading to its promulgation, under Title II, of fleet-wide average fuel efficiency standards for cars and trucks. EPA’s endangerment finding was upheld by the D.C. Circuit, and the Supreme Court declined to grant petitions seeking review of that part of the appellate court’s decision.
In its 2011 decision in American Electric Power Company v. Connecticut, the Court acknowledged EPA’s authority to regulate GHGs from stationary sources as well. There, the Court held that the claim that GHG emissions from fossil-fuel fired power plants constituted a public nuisance under federal common law was “displaced”—that is, rendered legally obsolete—by “the Clean Air Act and the EPA actions it authorizes,” specifically noting, as an example, that EPA was then engaged in “rulemaking to set standards for greenhouse gas emissions from fossil-fuel fired power plants” under the CAA’s New Source Performance Standards provisions.
Given the narrow issue on which the Court granted review, it is unlikely that the outcome of the cases to be argued Monday will disturb EPA’s now well-established authority to regulate GHG emissions in general. It may, however, alter the specific ways in which EPA may exercise that authority with respect to stationary sources.
For more information on the Supreme Court proceedings or greenhouse gas regulation, contact Jeffrey Gracer.
January 17, 2014
Unlike in 2013, in his 2014 State of the State speech Governor Andrew Cuomo did not explicitly mention solar power. However, the 2014 State of the State Report, published in conjunction with the speech, indicates that solar power will remain a policy priority in the coming years.
The report reiterates Governor Cuomo’s goal of “[e]ncouraging New York State to become a national leader in solar energy.” New York’s primary public policy program to promote solar is the NY-SUN program, launched in 2012 and administered by the New York State Energy Research and Development Authority (NYSERDA). SPR attorney Scott Furman recently negotiated the design and installation of one of the largest NY-SUN projects in New York City – a 1.059 MW project on the roof of the Manhattan Beer Distributors facility in the Bronx. The project is slated for completion in 2014.
The report also states that in 2014, the Cuomo Administration will, under the auspices of NY-SUN, launch a new program called “Community Solar NY,” which will seek to expand access to solar power in communities that are currently underserved.
A flagship initiative for Community Solar NY will be the “K-Solar” program, which will provide financial incentives and technical assistance to K-12 school administrators interested in installing solar power systems on school property, such as rooftops. As the report notes, “[o]f the nearly 5,000 public schools in the state, many are prime candidates for solar energy but have not been able to navigate the bureaucratic channels to finance it through potential energy savings.”
In addition, the report notes that the Cuomo administration will aim to use a successful solar project at a school as a jumping-off point to “solarize” the surrounding neighborhood. For example, to incentivize schools to reach out to the communities in which they are located, “NYSERDA [could provide] a financial reward to the school for every surrounding home that installs solar as well.”
Finally, in a recent filing with the Public Service Commission, NYSERDA requested an additional $864 million for solar energy incentives extending through 2023, which would bring total NY-SUN program funding to approximately $1 billion.
For more information on solar in New York, please contact Scott Furman or Devin McDougall.
September 27, 2013
On September 20, 2013, the United States Environmental Protection Agency (“EPA”) proposed carbon dioxide emissions standards for new coal- and gas-fired power plants, the latest in a series of EPA initiatives regulating greenhouse gas (“GHG”) emissions under the Clean Air Act (“CAA”).
The proposal marks EPA’s second attempt to reduce carbon dioxide emissions from new power plants. In March 2012, EPA proposed a rule that would have set a single emissions limit applicable to each new coal and gas-fired power plant. After receiving more than 2.5 million public comments, EPA withdrew that rule and has now replaced it with proposed standards that vary based on fuel source.
The proposed limit of 1,100 lbs of carbon dioxide per megawatt hour (“CO2/MWh”) for new coal-fired power plants, compared to 1,800 lbs CO2/MWh for an average existing plant, is expected to require the installation of carbon capture and sequestration technology at any new coal-fired power plants. However, EPA projects that no conventional coal-fired plants will be built in the U.S. through 2022, even in the absence of the proposed standards, based on the relative price of coal and natural gas.
EPA’s proposed limits of 1,000-1,100 CO2/MWh for new natural gas-fired power plants reflect the emissions levels attained by many modern natural gas facilities.
While EPA’s proposal does not affect any existing power plants, or plants that commenced construction before the rule was proposed, EPA is currently in the process of developing the first federal limits on carbon dioxide emissions from existing power plants. In a recent Presidential Memorandum, President Obama directed EPA to propose such standards by June 1, 2014, and to finalize them by June 1, 2015.
For more information on EPA regulation of greenhouse gas emissions, contact Jeffrey Gracer.
June 28, 2013
In a speech at Georgetown University on June 25, 2013, President Barack Obama unveiled his administration’s climate change agenda for its second term, featuring a series of rules and initiatives that can implemented by the United States Environmental Protection Agency (“EPA”) and other federal agencies without congressional action. While the details of these proposals will be determined through subsequent rulemaking, the plans and timeframes set forth in the speech signal a major expansion of federal climate change mitigation and adaptation efforts, with potentially significant impacts upon electric utilities and other regulated entities as well as units of state and local government most affected by the impacts of global warming.
The centerpiece of President Obama’s speech is a new Presidential Memorandum directing EPA to revise proposed greenhouse gas (“GHG”) emissions standards for new and significantly modified power plants by September 2013, to propose the nation’s first GHG emissions guidelines for existing power plants by June 2014, and to finalize those guidelines by June 2015. States would then have one year to submit plans implementing the guidelines for power plants within their borders, and President Obama directed EPA to work with states, industry, and other stakeholders in developing GHG controls for existing power plants. In the past, EPA has allowed emissions trading as a means of complying with existing source guidelines for non-GHG pollutants, an approach that could provide more flexibility for states and regulated sources than a conventional, technology-based emissions standard.
President Obama also called for increased fuel efficiency standards for heavy-duty vehicles, expanded federal support for energy efficiency savings in commercial and residential buildings, and U.S. leadership on international climate negotiations.
To promote climate change adaptation, President Obama directed federal agencies – such as the Department of Housing and Urban Development and USEPA – to take sea-level rise and other climate impacts into account in issuing grants or making infrastructure-related decisions in coastal areas. He also proposed the creation of a state, local and tribal task force on climate preparedness, and announced that the National Institute of Standards and Technology (“NIST”) will convene a panel to develop guidelines for climate-resilient buildings and infrastructure. As insurance and reinsurance companies have been increasingly affected by extreme climate events, the White House planned a meeting of insurance industry representatives and other stakeholders to “explore best practices for private and public insurers to manage their own processes and investments to account for climate change risks and incentivize policy holders to take steps to reduce their exposure to these risks.”
The ultimate impact of the President’s speech will depend upon his administration’s follow through, potential actions by Congress to constrain these efforts, as well as the results of litigation that are likely to follow the finalization of many of the rules that the Obama Administration has planned. With Congress unlikely to take up comprehensive global warming legislation in the near future, however, EPA and other federal agencies have become the primary drivers of federal climate policy, and, under the President’s new climate plans, will continue to serve that role. For more information about the President’s announcement on climate change issues, contact Jeff Gracer or Jon Kalmuss-Katz.
June 21, 2013
Last week Mayor Bloomberg released a Report titled “A Stronger, More Resilient New York,” providing over 250 specific recommendations to make the City more resilient in the face of the rising sea levels and increased storm activity associated with climate change. The product of a Special Initiative formed in December 2012 in response to Superstorm Sandy, the Report covers a wide variety of measures ranging from beach nourishment and wetlands restoration to increasing the resiliency of the City’s transportation and healthcare systems and responding to insurance concerns.
Adaptation to protect residents and infrastructure from extreme storm activity is a critical issue for the City. With a 520-mile coastline, longer than those of Miami, Boston, Los Angeles, and San Francisco combined, the City’s population includes nearly 400,000 residents living in the newly revised FEMA Preliminary Work Maps Special Flood Hazard Area (SFHA) (the area that will be inundated by a flood event having a 1-percent chance of being equaled or exceeded in any given year, also sometimes called the base flood elevation or 100-year floodplain).
Notable proposals provided throughout the Report include:
- Providing bonus grants to accelerate cleanup of brownfields in the SFHA ;
- Identifying cost-effective measures to safeguard exposed hazardous substances in the SFHA and creating a catalogue of best practices;
- Installing cogeneration equipment at wastewater treatment plants around the City, which will generate backup electricity from the methane produced by the treatment process itself;
- Protecting the city’s 14 wastewater treatment facilities, all of which are located along the waterfront and are at risk in the event of a coastal storm;
- Increasing the capacity of parks to absorb floodwaters and the driving impact of surge-related wave action by restoring beaches and redesigning bulkheads in coastal parks;
- Creating a local storm surge barrier at Newtown Creek and at the mouth of the Gowanus Canal, both Superfund sites; and
- Constructing a multi-purpose levee with raised edge elevations to protect much of the East River shoreline below the Brooklyn Bridge and create a new area for commercial and residential development (called “Seaport City” and based off of Battery Park City along the Hudson River).
The report estimates that, should only the 37 highest priority “Phase 1 initiatives” be implemented, expected losses from a future storm like Sandy could be reduced by up to 25 percent, or $22 billion. These Phase 1 initiatives include such measures as: studying storm surge barriers at Newtown Creek to reduce “back door flooding”; launching a global design competition for integrated flood protection systems; and developing a one-stop website for all City and State waterfront permitting information.
For more information about climate change adaptation, please contact Michael Bogin.
June 18, 2013
The Regional Greenhouse Gas Initiative (“RGGI”) raised a record $124.4 million in its June 5, 2013 carbon emissions auction, with the clearing price of emissions allowances reaching a three-year high of $3.21 per ton of carbon dioxide (“CO2”). The increase reflects expectations that the nine-state, cap-and-trade regime for power plant CO2 emissions will impose more stringent emissions limitations in 2014, as proposed earlier this year.
RGGI is the first market-based regulatory program in the United States aimed at reducing greenhouse gas emissions from power plants, originally established in 2005 by a Memorandum of Understanding between seven states in the Northeast and Mid-Atlantic regions. RGGI held its first carbon auction in September 2008, with emissions allowances selling for $3.07 per ton. Between 2010 and 2012, however, the combination of relatively modest emissions caps, reduced electricity demand due to the economic recession, and an increase in lower-carbon power generation spurred by low natural gas prices depressed the price of RGGI emissions allowances and raised questions about the future of the program.
In response to those trends, in February 2013 RGGI concluded a two-year program review with a series of proposed changes to the trading program, including a 45 percent reduction in the regional CO2 cap from 165 million tons in 2013 to 91 million tons in 2013. RGGI also released an Updated Model Rule implementing those proposed changes, which must be implemented by each RGGI state this year. After 2014, the RGGI cap is expected to decrease 2.5 percent each year from 2015 to 2020, requiring additional emissions reductions from regulated entities.
The next RGGI carbon emission allowance auction is schedule for September 4, 2013. For more information on RGGI and state and federal climate regulation, contact Jeffrey Gracer.
April 11, 2013
Last week, at a conference co-sponsored by SPR, government officials, academics, attorneys, and scientists convened at Hofstra University to discuss the legal and practical consequences of Superstorm Sandy. Expert panels addressed the following questions:
- How can local governments physically modify their transportation, power, and sanitary infrastructure to adapt to the impacts of climate change, and by what legal mechanisms?
- Are massive floodgates feasible and desirable for the protection of the New York metropolitan area? Or do “soft” barriers such as man-made wetlands represent a better alternative?
- What planning and land use concepts can be used to encourage smart real estate development that responds to climate change risks?
- Will claims of “scientific uncertainty” hinder climate change adaptation efforts to the same extent that similar claims have hindered climate change mitigation efforts?
- Where and how should coastal communities be rebuilt? What is the legal framework for government-led “strategic retreat” from the coast?
- How may relief be obtained from FEMA? How may relief be obtained from insurance companies?
- What federal, state, and local government programs are available to homeowners and businesses to aid recovery?
- What resources are available to help individual homeowners who have lost everything in the storm? What has been the experience in New York’s underprivileged communities, and can that be improved?
The conference was chaired by SPR principal Michael Bogin and Hofstra Law Professor Carol Casazza Herman, with critical support from SPR principal Pamela Esterman. SPR principal Steven Barshov participated as a lecturer, focusing on the integration of infrastructure resilience into planning and development.
Sponsors of the conference were the American Bar Association Section of Environment, Energy, and Resources, the New York State Bar Association, and SPR.
For more information on Sandy recovery or climate change adaptation in the context of development, please contact Michael Bogin, Steven Barshov, or David Yudelson.
Conference speakers: (L-R) Professor Katrina Kuh, Maurice A. Deane School of Law at Hofstra University; Associate Dean Jennifer Gundlach, Maurice A. Deane School of Law at Hofstra University; Dean Eric Lane, Maurice A. Deane School of Law at Hofstra University; Nassau County Supervisor Ed Mangano; SPR Principal Michael Bogin; Professor Carol Casazza Herman, Maurice A. Deane School of Law at Hofstra University.
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