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Thursday, December 15, 2011

National Black Chamber Joins Anti Utility Mact Lawsuit

The National Black Chamber of Commerce (NBCC) has joined forces with other organizations in an attempt to stop the Environmental Protection Agency (EPA) from enacting the Utility MACT Rule on utility companies. The NBCC believes this would have a devastating financial impact on suppliers who do business with various utility companies and would also have a very negative impact in terms of job loss.

SECOND RENEWED PETITION BY THE INSTITUTE FOR LIBERTY,
AMERICANS FOR PROSPERITY, THE CENTER FOR
RULE OF LAW, THE FREEDOM THROUGH JUSTICE FOUNDATION,
AND THE NATIONAL BLACK CHAMBER OF COMMERCE
FOR RE-PROPOSAL OR, IN THE ALTERNATIVE,
RECONSIDERATION AND STAY
OF EPA’S PROPOSED UTILITY MACT RULE

Summary

EPA’s fundamental assumption that utilities would be able to implement its Utility MACT Rule’s requirements within three or four years, without impairing electric reliability, is contradicted by a wealth of evidence arising after the close of the comment period in this proceeding. In testimony before FERC on November 29 and 30, 2011, representatives of utilities, regional transmission organizations (“RTOs”), state public utility commissions, and the FERC-designated Electric Reliability Organization (i.e., NERC) presented extensive evidence that the three-year compliance timeline for EPA’s Utility MACT Rule will cause widespread violations of NERC’s reliability standards, jeopardizing electric reliability in communities throughout the nation.

NERC’s 2011 Long-Term Reliability Assessment, released on November 28, 2011, also demonstrates that the unfeasibility of compliance with Utility MACT within a three- or four-year period. NERC identifies EPA rulemaking as “the number one risk to reliability over the next 1 to 5 years.” It also identifies the Utility MACT implementation timeline as the primary cause of this risk. According to NERC’s analysis, “the loss of reliability support functions provided by coal-fired generation [that is forced to retire] may not be easily replaced given the time constraints.”  As a result, “the nation’s power grid will be stressed in ways never before experienced.”

In light of this evidence, EPA may not continue to rely on its assumption that compliance would be feasible and reliability therefore unimpaired. Accordingly, the Agency’s exercise of discretion in reliance on that assumption is arbitrary and capricious and subject to judicial vacatur. In addition, this evidence of impossibility also renders the Utility MACT Rule arbitrary and capricious, as well as contrary to the requirements of the Clean Air Act.

This same evidence also demonstrates that the Utility MACT Rule is incompatible with the requirements of the Federal Power Act (“FPA”) because it will require the shutdown, whether permanently or temporarily, of facilities necessary to meet NERC’s reliability standards, which are enforceable under the FPA.  This conflict undermines EPA’s exercises of discretion within the Utility MACT Rule that cause or contribute to the violation of FPA requirements.

Accordingly, this evidence that utilities cannot implement the requirements of the Utility MACT Rule while maintaining compliance with FPA requirements regarding reliability demonstrates, at the least, that the Utility MACT Rule is arbitrary and capricious and exceeds the Agency’s discretion. If these defects cannot be corrected, that indicates that EPA’s decision to impose MACT requirements exceeded the Agency’s discretion under the Clean Air Act.

For these reasons and those set forth in the Arising After Petition and previous renewed petition, EPA should re-propose Utility MACT and allow for additional public comment or, if the Agency believes that it lacks the discretion to propose MACT standards for EGUs that are not impossible to fulfill and do not impermissibly conflict with FPA requirements, withdraw its proposal and end this rulemaking. (Lawsuit)

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