Thursday, November 7, 2013

Standing to Challenge EPA's Coal-Fired Power Plant Regulations

Dan Farber has a new post on Legal Planet in which he argues that the coal industry and electric utilities will lack standing to challenge EPA’s new source performance standards for coal-fired power plants, which the agency proposed in September.  Dan contends that because low natural gas prices are making new coal-fired power plants uneconomical (as compared with new natural gas-fired power plants), would-be industry challengers to EPA’s regulations will be unable to show that the regulations cause them any injury.  In other words, as long as new coal-fired plants are not being built because they are uneconomical for reasons having nothing to do with the EPA regulations, the regulations cannot be hurting the industry.  The mere possibility that the industry may build new coal-fired power plants in the future if conditions change, Dan argues, does not constitute an injury under standing doctrine.

Dan’s standing argument has some force, although I don’t think it is a slam dunk.  Despite the precedent that Dan cites, the question of how likely a plaintiff’s injury must be to suffice for standing purposes often gets squirrelly.  See, e.g., Natural Res. Def. Council v. Envtl. Prot. Agency, 464 F.3d 1, 6 (D.C. Cir. 2006) (noting differences among courts in deciding when increases in risk can confer standing).

My point, however, is not to agree or disagree with Dan’s argument, but to question whether pushing the argument would be a good strategy for EPA or environmentalists.  It is quite possible that the cost of natural gas relative to coal will change in the future to the point that new coal plants would be economically viable in the absence of the new EPA regulations.  The EIA, whose projections Dan cites (by way of a Washington Post article), has been wrong before about such things, and in fact has been accused of systematically underestimating natural gas prices.  If a utility company lacks standing now to challenge the new regulations for the reasons Dan cites, I would think it would be able to challenge the regulations later if the price of natural gas increases (or the price of coal drops).  Normally such a challenge would be time-barred because the Clean Air Act has a sixty-day statute of limitations for challenges to regulations.  See 42 U.S.C. § 7607(b)(1).  But if a utility was barred from filing suit earlier, the statute of limitations would not bar a later suit.  See 42 U.S.C. § 7607(b)(1) (stating that petitions for review “based solely on grounds arising after” the expiration of the initial sixty–day period are timely if filed within sixty days of the new grounds); Honeywell Int'l, Inc. v. EPA, 705 F.3d 470, 472-73 (D.C. Cir. 2013) (applying this exception).

Thus, it is not clear to me that EPA would be better off with a putatively favorable ruling on standing now that leaves a latent industry challenge to the regulations out there waiting to ripen, rather than a ruling that allows a suit now and bars future suits.

--Todd Aagaard

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