On October 10, EPA Administrator Scott Pruitt signed a proposal to repeal the Clean Power Plan (CPP). The CPP was one of the Obama Administration’s signature environmental regulatory initiatives, designed to reduce CO2 emissions from fossil-fueled electric generating stations. The repeal proposal asks for public comments within 60 days from the day it is published in the Federal Register. It is expected that it will be published relatively quickly in the coming weeks.

EPA said it was considering but had not yet decided whether to adopt a rule to replace the CPP. EPA said it would in the near future issue an advanced notice of proposed rulemaking (ANPR) seeking public comment on whether it should adopt a replacement rule and, if so, of what nature. According to the website of the Office of Management and Budget (OMB), the ANPR was sent to OMB for interagency review on the same day the CPP repeal proposal was signed. Because the ANPR is not proposing any specific regulatory action, it is not expected that the OMB process will delay release of the ANPR to the public for very long.

While EPA is not committing to a replacement rule, it is widely anticipated that a replacement ultimately will be forthcoming. EPA is likely to adopt a rule under which states must develop plans for examining whether their fossil-fueled units can be operated more efficiently, thereby lowering their CO2 emissions per unit of electric output. EPA’s likely decision to adopt a replacement rule is presaged to some extent by the legal rationale EPA proferred for repealing the CPP. EPA’s repeal rationale is that it does not have authority under the Clean Air Act to require utilities to shift generation from higher-emitting units to lower or zero-emitting units, as provided for in the CPP, but only to adopt a more limited “inside-the-fence” approach. Under this rationale, EPA would have authority and indeed would be compelled to replace the CPP with the more restricted regulation.

EPA’s repeal proposal also said it was not seeking comment on whether the agency should rescind its so-called “endangerment finding,” under which EPA determined that CO2 emissions could contribute to global warming. Repealing the endangerment finding would be a basis for both rescinding the CPP and not adopting a replacement rule. EPA also did not rely on the argument that it has no authority to regulate power plant CO2 emissions because powerplants are regulated under the Clean Air Act section 112 hazardous air pollution program. That argument also would be a way for EPA to avoid adopting a replacement rule.

EPA also released a draft Regulatory Impact Analysis discussing possible costs and benefits of repealing the CPP. EPA stated that this analysis was tentative and that it is planning in the future to release a different analysis on which it will seek public comment before finalizing the repeal rule.