The U.S. Environmental Protection Agency (EPA) is unlikely to meet its April 13, 2013 deadline for issuance of its highly anticipated final rule limiting greenhouse gas (GHG) emissions from new or modified power plants.  In light of voluminous comments, EPA is reportedly considering whether to change its approach to one that would effectively  allow new construction of coal-fired power plants, which essentially would be banned under the rule as proposed.

On April 13, 2012, EPA proposed a New Source Performance Standard (NSPS) that combined coal-fired and natural gas-fired power plants into one source category (TTTT) with a uniform pollution standard of 1,000 pounds of carbon dioxide per megawatt-hour of electrical output (77 Fed. Reg. 22,392). This standard currently can only be achieved by natural gas combined cycle power plants; coal-fired plants could only achieve that standard through the use of carbon capture and sequestration, technology that is not yet commercially available. Thus, the rule would amount to an effective ban on new coal-fired power plants, as well as imposing severe restrictions on modification of existing plants.

Industry groups, as well as politicians from both parties, have urged EPA to reconsider its proposed rule. For example, on March 18, 2013, Democratic Senators Joe Manchin (W.Va.), Heidi Heitkamp (N.D.), Joe Donnelly (Ind.), and Mary Landrieu (La.) wrote a letter to President Obama urging an alternative that would consider coal-fired and gas-fired power plants as separate categories with different standards that could allow the construction of some supercritical (higher temperature and pressure) coal generation. Millions of comments (including bulk submissions as well as at least dozens of more substantive analyses) have been filed, both for and against the approach taken in the 2012 proposal.

EPA is required under the Clean Air Act to finalize the rule within 1 year of proposal, or by April 13, 2013 (42 U.S.C. §7607(d)(10)). However, EPA has not yet sent the final rule to the White House Office of Management and Budget (OMB) for the required regulatory review, which can take weeks or months, especially for a rule as controversial as this. Timing of the rule may also be influenced by the competing timeframe of the confirmation process for air chief Gina McCarthy’s nomination to be EPA Administrator. It is possible that EPA may re-propose the rule, with revisions, for a new round of comment.

Regardless of when the final rule is published and whether it retains the combined source category approach from the proposal, the final rule is almost certain to be challenged in court and to receive substantial Congressional attention. Moreover, under Clean Air Act section 111(d), EPA must promulgate emissions guidelines, which must be implemented by states, for existing sources after the NSPS rules are in place.