Arkansas halts work on EPA carbon rules plan

Ever since Michigan vs EPA there has been a significant amount of strain between the federal government and the states when it comes to increasingly stringent carbon emissions regulations. The EPA has traditionally had a free hand to run roughshod over private industry, but in the Michigan case the courts determined that there are limits as to how much of an undue financial and logistical burden the agency can place on the states before issuing their extra-legislative mandates. Still, Gina McCarthy hasn’t seemed inclined to let one little setback in the highest court slow her roll and has moved forward aggressively with other demands.

The states, for their part, have taken a wait and see approach. Under the current carbon limits for power plants, the states were supposed to propose plans this year detailing how they would meet the new targets within the time allowed even though the question is still going through the appeals process. In what may be a sign of things to come, Arkansas announced this week that they were not going to go along with the plan and halted work on their own proposal.

On February 9, 2016, the Supreme Court of the United States issued an order staying the EPA’s Clean Power Plan (CPP). As a result, the Arkansas Department of Environmental Quality and Arkansas Public Service Commission (the Agencies) will not hold the CPP Stakeholder meeting previously planned for March 2016. The State is not bound to CPP deadlines during the stay and, as such, is no longer required to make an Initial Submittal by September 6, 2016. Therefore, the March stakeholder meeting is no longer necessary. The Agencies, in consultation with Stakeholders, will continue to evaluate the impacts of potential environmental and energy policies in the State. However, this evaluation will occur on a timeline and in a context that makes sense for Arkansas. The State will not implement a state plan to comply with the CPP during the stay.

The Agencies will continue to follow modeling efforts by the private sector of potential future energy and environmental policy scenarios. Continued assessment and optimization of energy sector modeling is appropriate so that the energy sector will be prepared for all possible outcomes. As such, the Agencies plan to have a technical session on energy sector modeling later this year.

While it may all sound fairly pro forma for an environmental policy paper, it’s actually rather remarkable. Even with the aforementioned stay in place, the EPA was standing by its original mandate and insisting that the process needed to go forward regardless of the outcome of the appeals process. Arkansas has basically just raised the states’ rights flag and told Obama’s EPA to go whistle for their dinner.

This follows a series of less formal revolts which have been unfolding for a few years. In January, 26 states asked the Supreme Court to step in and put the carbon rules on hold while pending cases are considered. There is still no final answer on that score, but the lower court rulings were in favor of the states. In the event that the now evenly divided Supreme Court can’t come to a consensus, a tie would likely leave things as they now stand with the various states holding the upper hand.

But would the Supremes break the question down that way? Let’s not forget that the opponents of overarching EPA regulations are only batting .500 at this point. They won the day in the Michigan case, but more recently, John Roberts backed the EPA unilaterally on the mercury emissions rules. For my money, I wouldn’t bet the ranch on the EPA losing the next round. And if they prevail, the states – including Arkansas – will be back on the hook for submitting a potentially crippling regulatory implementation plan which will result in more power plants going offline and increasing energy prices for consumers with little to show for it in terms of health or environmental quality.

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