Amicus Curiae Brief — West Virginia, et al., Petitioners v. Environmental Protection Agency, et al.

Supreme Court briefJan 25, 2022

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Nos. 20-1530, 20-1531, 20-1778, 20-1780

IN THE

Supreme Court of the United States

_________

STATE OF WEST VIRGINIA, ET AL.,

Petitioners,

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY, ET AL.,

Respondents.

________

On Writs of Certiorari

to the United States Court of Appeals

for the District of Columbia Circuit

________

BRIEF OF AMICI CURIAE FORMER POWER

INDUSTRY EXECUTIVES IN SUPPORT OF

RESPONDENTS

________

SOPHIA/. CAI

JENNER & BLOCK LLP

455 Market St. Suite 2100

San Francisco, CA 94105

ALLISON TORRENCE

JENNER & BLOCK LLP

353 N. Clark St.

Chicago, IL 60654

MATTHEW(PRICE

Counsel of Record

JENNER & BLOCK LLP

1099 New York Ave., NW

Suite 900

Washington, DC 20001

(202) 639-6000

Mprice@jenner.com

Caption Continued on Inside Cover

THE NORTH AMERICAN COAL CORPORATION,

Petitioner,

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

Respondents.

_________

WESTMORELAND MINING HOLDINGS LLC,

Petitioner,

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

Respondents.

_________

STATE OF NORTH DAKOTA,

Petitioner,

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

Respondents.

TABLE OF CONTENTS

TABLE OF AUTHORITIES ......................................... iii

INTERESTS OF AMICI CURIAE ............................... 1

INTRODUCTION ............................................................. 2

ARGUMENT ...................................................................... 6

II.

The Major Questions Doctrine Does Not

Limit EPA’s Identification of the Best

System of Emissions Reduction for Power

Sector ....................................................................... 6

Congress Intended the Clean Air

Act and Clean Water Act to Be

Technology-Forcing. .................................. 6

EPA’s Consideration of Costs Is

Controlled by the Standards of

Reasoned Decision-Making, Not

the Separation of Powers. ......................... 9

EPA Cannot Shirk Its Duty to

Impose Appropriately Stringent

Performance Standards for Carbon

Emissions Simply Because Those

Regulations May Carry High

Costs. .......................................................... 13

The Court Should Not Disturb Regulated

Parties’ Compliance Flexibility, or Use

That Flexibility as a Reason to Invalidate

an Emissions Standard. ....................................... 15

Compliance Flexibility Allows

Parties to Find the Most CostEffective Means of Compliance. ............. 19

Actual Compliance Costs Are Often

Far Lower Than Projections, as a

Result of Compliance Flexibility. .......... 23

CONCLUSION ................................................................ 26

APPENDIX - LIST OF AMICI CURIAE.................. 1a

iii

TABLE OF AUTHORITIES

CASES

American Electric Power Co. v. Connecticut,

564 U.S. 410 (2011) .................................................... 9

EPA v. EME Homer City Generation, L.P.,

572 U.S. 489 (2014) ............................................ 20, 21

Entergy Corp. v. Riverkeeper, Inc., 556 U.S.

208 (2009) .................................................................. 11

Massachusetts v. EPA, 549 U.S. 497 (2007) ............ 14

Michigan v. EPA, 576 U.S. 743 (2015) ..................... 10

National Federation of Independent Business

v. Department of Labor, Occupational

Safety and Health Administration, No.

21A244, 2022 WL 120952 (U.S. Jan. 13, 2022)

(per curiam) ........................................................... 8, 9

Natural Resources Defense Council, Inc. v.

United States EPA, 822 F.2d 104 (D.C. Cir.

1987) ............................................................................ 7

Southwestern Electric Power Co. v. United

States EPA, 920 F.3d 999 (5th Cir. 2019) ............ 22

Union Electric Co. v. EPA, 427 U.S. 246

(1976) ................................................................... 5, 7, 8

Utility Air Regulatory Group v. EPA, 573

U.S. 302 (2014) ......................................................... 14

Whitman v. American Trucking Ass’n, 531

U.S. 457 (2001) .................................. 5-6, 8, 10, 12, 17

STATUTES

33 U.S.C. § 1311(b)(2)(A) ............................................ 11

33 U.S.C. § 1314(b)(1)(A) ............................................ 21

42 U.S.C. § 7409(b)....................................................... 19

42 U.S.C. § 7410(a)(2)(D)(i) ......................................... 19

42 U.S.C. § 7411 ............................................................. 9

42 U.S.C. § 7411(a)(1) .................................... 7, 8, 14, 18

42 U.S.C. § 7411(b)......................................................... 7

42 U.S.C. § 7411(d)....................................................... 18

42 U.S.C. § 7411(d)(1) .................................................... 7

42 U.S.C. § 7412(n)(1)(A) ............................................ 10

OTHER AUTHORITIES

2021 in Review: Planning Efforts Focus on

Future Grid, PJM Inside Line (Dec. 20,

2021), https://bit.ly/3Ks8c7z ................................... 16

Brief of Respondents Calpine Corp. and

Exelon Corp. in Support of Petitioners, U.S.

EPA v. American Lung Ass’n, No. 12-1182

(U.S. Sept. 4, 2013), 2013 WL 4769416 ................. 21

Comments of Edison Electric Institute,

National

Emission

Standards

for

Hazardous Air Pollutants: Coal- and OilFired Electric Utility Steam Generating

Units—Reconsideration of Supplemental

Finding

and

Residual

Risk

and

Technology Review, Docket ID No. EPAHQ-OAR-2018-0794 (Apr. 17, 2019) ..................... 25

Declaration of J. Staudt, Exhibit A to Motion

of Industry Respondent Intervenors to

Govern Future Proceedings, White Stallion

Energy Center, LLC v. EPA, No. 12-1100

(D.C. Cir. Sept. 24, 2015) .................................. 24, 25

Endangerment and Cause or Contribute

Findings for Greenhouse Gases Under

Section 202(a) of the Clean Air Act, 74 Fed.

Reg. 66,496 (Dec. 15, 2009) .................................... 14

Federal Implementation Plans: Interstate

Transport of Fine Particulate Matter and

Ozone and Correction of SIP Approvals, 76

Fed. Reg. 48,208 (Aug. 8, 2011) ............................. 20

Learn about Effluent Guidelines: Level of

Controls, EPA, https://bit.ly/3FQxqsK (last

visited Jan. 18, 2022) ......................................... 21, 22

National Emission Standards for Hazardous

Air Pollutants From Coal- and Oil-Fired

Electric Utility Steam Generating Units

and Standards of Performance for FossilFuel-Fired Electric Utility, IndustrialCommercial-Institutional,

and

Small

Industrial-Commercial-Institutional Steam

Generating Units, 77 Fed. Reg. 9304 (Feb.

16, 2012) .................................................................... 23

PJM Emission Data Sparks Innovative

Approach to Reduce Carbon Footprint,

PJM Inside Lines (Oct. 12, 2021),

https://bit.ly/3GI88hP ............................................. 16

Reconsideration

Interpretation

Regulations That Determine Pollutants

Covered by Clean Air Act Permitting

Programs, 75 Fed. Reg. 17,004 (Apr. 2,

2010) .......................................................................... 14

Regulatory Impact Analysis for the Federal

Implementation Plans to Reduce Interstate

Transport of Fine Particulate Matter and

Ozone in 27 States; Correction of SIP

Approvals for 22 States, Docket ID No.

EPA-HQ-OAR-2009-0491 (June 2011),

https://bit.ly/3FGqrmg ........................................... 20

Regulatory Impact Analysis for the Final

Mercury and Air Toxics Standards, US

EPA (Dec. 2011), https://bit.ly/3ruzj9i ............ 23-24

Southern Co. et al., Quarterly Report (Form

10-Q) (Nov. 3, 2021), KWWSVELWO\T-

$N/0 ........................................................................ 22

Supplemental Finding That It Is Appropriate

and Necessary To Regulate Hazardous Air

Pollutants From Coal- and Oil-Fired

Electric Utility Steam Generating Units, 81

Fed. Reg. 24,419 (Apr. 25, 2016) ........................... 25

Table 2.6. Revenue from Sales of Electricity to

Ultimate Customers: Total by End-Use

Sector, 2010 - December 2020 (Million

Dollars), https://bit.ly/32jcey3 (last visited

Jan. 18, 2022) ............................................................ 13

vii

U.S. Energy Information Administration, 68%

of U.S. Coal Fleet Retirements Since 2011

Were Plants Fueled by Bituminous Coal

(Aug. 27, 2021), https://bit.ly/3IsgkDt.................. 16

INTERESTS OF AMICI CURIAE1

Amici curiae are former executives from a range

of companies that own and operate power plants or from

independent system operators responsible for operating

the electric grid.2 Companies in the power sector have,

for decades, provided reliable and affordable energy

across the United States.

For these companies,

environmental compliance is a routine planning and

operational consideration. They structure their shortand long-term strategic plans to anticipate, account for,

and adapt to technology-forcing emissions standards

promulgated by the U.S. Environmental Protection

Agency (“EPA”).

Operationally, many power

generation companies own multiple power plants.

Amici, for example, worked at companies that owned

large and diverse fleets, including coal, gas, nuclear,

hydro, and renewables. These companies make strategic

decisions regarding how to comply with environmental

standards in light of their fleet as a whole and the

business enterprise as a whole. For example, they may

No counsel for a party authored this amicus curiae brief in whole

or in part and no such counsel or a party made a monetary

contribution intended to fund the preparation or submission of the

brief. No person other than amici curiae or its counsel made such

a monetary contribution. Pursuant to Supreme Court Rule 37.2(a),

amici have obtained the consent of all parties. On January 23, 2022,

the Power Company Respondents gave consent via email sent by

counsel of record. On January 24, 2022, the Commonwealth of

Virginia gave consent via email sent by counsel of record. All other

parties have filed blanket consents to the filing of amicus briefs in

these consolidated cases, as shown on the docket of the lead case,

No. 20-1530.

A list of amici curiae is set forth in an Appendix to this brief.

shift output from one plant to another depending on

market conditions that change minute to minute over

the course of a day. Moreover, environmental

compliance is just one variable relevant to these

operational decisions, along with considerations such as

fuel costs, weather, transmission availability, and many

other considerations.

They also make long-range

planning decisions, deciding whether to retire certain

plants or invest in others, based on long-range

expectations concerning market conditions, fuel costs,

and other factors, including the anticipated arc of

environmental regulations.

Amici submit this brief to provide the Court with

the benefit of their experience making these types of

planning and operational decisions for parties subject to

EPA regulation.

INTRODUCTION

The major questions doctrine is intended to

prevent agencies from finding elephants in

mouseholes—from converting what Congress intended

to be interstitial gap-filling authority into the basis for

sweeping, transformational regulation. That doctrine,

however, does not fit this case, because Congress

designed both the Clean Air Act and the Clean Water

Act to be transformative laws. Rather than allowing

industry to emit into the air and discharge into the

Nation’s waters unlimited amounts of pollution,

Congress intended for EPA to strictly regulate such

emissions and discharges to safeguard public health and

welfare, knowing that such regulations could impose

significant costs and affect the makeup of power

companies’ generation fleets.

In so regulating, Congress directed EPA—using

various statutory formulations—to set emissions limits

based on forward-looking assessments of control

technology (not only what was in widespread use at the

time of the rule being developed), and then left states

and regulated parties free to achieve those limits using

whatever methods they chose. Thus, in general, neither

the Clean Air Act nor the Clean Water Act mandated

that regulated facilities or industry use a specific,

existing technology to limit air or water pollution to a

certain amount. Instead, Congress required EPA to

determine

what

“available,”

“achievable,”

“demonstrated” technology might be “best,” and to base

more demanding emission or effluent limitations on

EPA’s assessments of technological potential. In some

contexts, Congress directed EPA to consider costs in

setting emission or effluent limitations; in other

contexts, Congress directed EPA not to consider costs.

The genius of these statutes is that Congress then

left regulated parties to decide for themselves how to

achieve the level of emission or effluent control that

EPA determined its identified technology could achieve.

Congress designed these laws with the assumption that

industry would innovate and could find ways to achieve

the required level of emission or effluent limitations set

by EPA more efficiently than if the government had

mandated a particular technological approach, based on

an inside-the-fence assessment of options. That is just

as much the case for the regulation of greenhouse gas

emissions—which this Court has held EPA must

regulate under the Clean Air Act—as for any of the

other pollutants EPA has regulated over the past five

decades.

Congress’s vision has been borne out through

EPA’s implementation of the Clean Air Act and Clean

Water Act. Both have driven air and water pollution to

far lower levels than in the 1970s, while the economy has

grown exponentially. Congress has not needed to

intervene with new prescriptive rules each time new

information or products have emerged. Instead, EPA

has been able to adapt its emissions and effluent

limitations, and industry has been able to adapt its

practices to meet those limitations.

Because of

regulated parties’ incentive to comply with those

limitations through the most efficient means they can

identify, combined with the costs of control technology

declining as deployment increases, the power sector has

consistently discovered ever less expensive methods for

meeting national pollution control requirements.

For example, power companies have complied by

shifting generation to other plants in their fleet, retiring

certain assets, installing different control technologies

than the ones EPA used to set the performance

standard, repowering with a different fuel source, and

entering into emissions trading programs with other

regulated parties that allow the industry to meet

aggregate limits rather than limits imposed on

individual facilities. That flexibility, harnessing the

power of the market, has facilitated compliance at far

lower costs than were initially projected.

All of this is why Petitioners’ invocation of the

major questions doctrine is so misconceived. The Clean

Air Act and Clean Water Act were both intended to

address major questions, and to sharply reduce national

air and water pollution by granting EPA the authority

to impose pollution controls that would spur industry—

in seeking the least costly way to comply—to make

transformative changes to its pollution practices. As

this Court has described it, the Clean Air Act was a “a

drastic remedy to what was perceived as a serious and

otherwise uncheckable problem of air pollution.” Union

Elec. Co. v. EPA, 427 U.S. 246, 256 (1976). Congress’s

intent in this regard was in no way ambiguous; it is the

raison d’etre of the statutes. Section 111 of the Clean

Air Act plays its part to fulfill that overarching purpose:

it authorizes EPA to set air pollutant emissions

standards for fossil fuel-fired power plants. Yet in

invoking the major questions doctrine, Petitioners seek

to shove this elephant into a mousehole.

The guidance Congress gave EPA in exercising

its authority to promulgate technology-based pollution

control standards under either law does not remotely

raise a nondelegation doctrine issue, notwithstanding

the sweep of the Acts. These Acts set forth the factors

EPA is allowed to consider in setting standards and

therefore easily meet the Court’s longstanding

requirement of an “intelligible principle” to satisfy

nondelegation concerns. That is why this Court, in a 2001

unanimous opinion in Whitman v. American Trucking,

easily rejected a similar claim that the Clean Air Act

raised serious nondelegation doctrine concerns.

Whitman v. Am. Trucking Ass’n, 531 U.S. 457, 462

(2001) (rejecting nondelegation arguments for

particulate matter and ozone National Ambient Air

Quality Standards (“NAAQS”)).

To be sure, complying with technology-forcing

standards can sometimes lead companies to adopt

compliance strategies that significantly change the

makeup of their generation fleets. Companies may

choose to retire aging power plants or reduce reliance on

particular sources of fuel, like coal. Indeed, many

companies have already taken significant steps in that

direction. But these implications, which arise from

companies’ business decisions about how best to comply

with a technology-forcing performance standard, do not

somehow transform EPA’s statutory authority to set

emissions standards into a “major question” outside the

agency’s authority. EPA has set technology-forcing

standards time and time again, and the power sector has

successfully adapted to meet new requirements to

reduce pollution while still providing affordable and

reliable power.

ARGUMENT

The Major Questions Doctrine Does Not Limit

EPA’s Identification of the Best System of

Emissions Reduction for the Power Sector.

Congress Intended the Clean Air Act

and Clean Water Act to Be TechnologyForcing.

Courts have repeatedly recognized that Congress

intended for the Clean Air Act and Clean Water Act to

authorize EPA to implement technology-forcing

standards—that is, performance standards that exceed

the industry’s status quo. See Union Elec. Co., 427 U.S.

at 256-57; id. at 257 (recognizing the “‘technology-forcing

character’” of Clean Air Act pollution control

requirements that are “designed to force regulated

sources to develop pollution control devices that might

at the time appear to be economically or technologically

infeasible.” (quoting Train v. Nat. Res. Def. Council,

Inc., 421 U.S. 60, 90 (1975))); Nat. Res. Def. Council, Inc.

v. EPA, 822 F.2d 104, 122 (D.C. Cir. 1987) (noting the

“technology-forcing framework of the [Clean Water]

Act”).

Congress wanted EPA to reach beyond

technology already in wide use, and set emissions

standards based on a forward-looking view of what was

technologically possible—thereby spurring the creation

for new markets to satisfy demand for new, improved

technologies, all while driving down costs.

Section 111 of the Clean Air Act exemplifies this

technology-forcing and market-building policy. For new

sources, the statute directs EPA to set a standard for

emissions of air pollutants that “reflects the degree of

emission limitation achievable through the application of

the best system of emission reduction.” 42 U.S.C.

§ 7411(a)(1), (b). For existing sources, states submit

plans establishing standards of performance that reflect

the emissions limitations that can be achieved by

applying the “best system” identified by EPA.

However, states are not required to adopt that system;

instead, they remain free to choose their own approach,

so long as it achieves the required emissions limitations.

Id. § 7411(d)(1).

Of course, Section 111 does not direct EPA to

determine the “best system of emissions reduction” at

all costs, or without regard to the indirect consequences

of regulation. Instead, Section 111 instructs that, in

determining the best system of emission reduction, EPA

must “tak[e] into account the cost of achieving such

reduction and any nonair quality health and

environmental impact and energy requirements.” Id.

§ 7411(a)(1).

Congress thus identified an intelligible principle

to guide EPA’s regulation and delegated to EPA the

authority to adopt ambitious but achievable emissions

limitations—knowing that in doing so, EPA would

potentially foster transformative changes in industry

practices. Indeed, that was the point. See, e.g., Union

Elec. Co. 427 U.S. at 256 (describing Clean Air Act

Amendments as “a drastic remedy”); Am. Trucking, 531

U.S. at 466 (“In particular, the economic cost of

implementing a very stringent standard might produce

health losses sufficient to offset the health gains

achieved in cleaning the air—for example, by closing

down whole industries and thereby impoverishing the

workers and consumers dependent upon those

industries. That is unquestionably true, and Congress

was unquestionably aware of it.”). To say, as Petitioners

do, that the very regulation Congress tasked EPA to

undertake is a “major question” that it should be

presumed not to have authorized would frustrate

Congress’ intent, rather than protect its prerogatives.3

This case thus could not be more different than the recent case

concerning a vaccine mandate. See Nat’l Fed’n of Indep. Bus. v.

EPA’s Consideration of Costs Is

Controlled by the Standards of Reasoned

Decision-Making, Not the Separation of

Powers.

Congress understood that environmental

regulations implemented to protect human health and

the environment will sometimes impose high costs of

compliance on the regulated industries. Thus, as noted

above, Section 111 specifically directs EPA to consider

costs when determining the best system of emissions

reduction. In other Clean Air Act and Clean Water Act

provisions, Congress authorized EPA to consider costs

in different ways.

For example, EPA may not consider costs at all

when setting ambient air quality standards, see

Dep’t Of Labor, Occupational Safety and Health Admin., No.

21A244, 2022 WL 120952 (U.S. Jan. 13, 2022) (per curiam)

(“OSHA”). There, the Court held that OSHA is limited to

regulating “workplace safety standards,” and “no provision of the

Act addresses public health more generally, which falls outside of

OSHA’s sphere of expertise.” Id. at *3. Here, by contrast, setting

a “standard for emissions of air pollutants which reflects the degree

of emission limitation achievable through the application of the best

system of emission reduction,” 42 U.S.C. § 7411, falls squarely

within EPA’s sphere of expertise and the scope of its delegated

power. See Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 428

(2011) (“It is altogether fitting that Congress designated an expert

agency, here, EPA, as best suited to serve as primary regulator of

greenhouse gas emissions.”). In the five decades since the Clean Air

Act amendments were enacted, EPA has issued countless emissions

regulations to address a threat—air pollution—that is directly tied

to the agency’s legislatively delegated authority. Cf. OSHA, 2022

WL 120952, at *4.

Whitman v. Am. Trucking Associations, 531 U.S. 457,

465 (2001). And when deciding whether to regulate

power plants under Section 112 of the Clean Air Act,

governing hazardous air pollutants, EPA must consider

cost in determining whether such regulation is

“appropriate and necessary,” 42 U.S.C. § 7412(n)(1)(A).

Thus, for example, in Michigan v. EPA, which dealt with

the 2012 Mercury and Air Toxics Standards, this Court

held that it was error for EPA to regard cost as

“irrelevant” when determining whether regulation was

“appropriate and necessary.” See 576 U.S. 743, 759

(2015). But the Court made clear that EPA enjoyed

discretion to determine how to consider cost, including

how to balance cost against other considerations. Thus,

this Court did not require EPA to “conduct a formal

cost-benefit analysis,” id., but rather noted that “[i]t will

be up to the Agency to decide (as always, within the

limits of reasonable interpretation) how to account for

cost.” Id.4

In still other cases, cost informs whether a

regulation is sufficiently stringent. For example, the

Fifth Circuit rejected EPA’s “best technology

available”-based 2015 Effluent Limitation Guidelines as

inconsistent with the Clean Water Act requirement that

EPA identify “the best available technology

On remand, the D.C. Circuit sent MATS back to EPA to determine

whether the standards were “appropriate and necessary” when

taking costs into account. In 2016, EPA published its Supplemental

Finding that the public health benefits of MATS justified the costs

to the regulated industry. EPA then issued a Revised Supplemental

Finding reversing the 2016 decision, which is currently undergoing

reconsideration by the agency.

economically achievable for such category or class,

which will result in reasonable further progress toward

the national goal of eliminating the discharge of all

pollutants.” 33 U.S.C. § 1311(b)(2)(A) (emphasis added).

And in other cases, EPA can compare costs to benefits

in deciding how to regulate. See, e.g., Entergy Corp. v.

Riverkeeper, Inc., 556 U.S. 208, 226 (2009) (concluding

that “EPA permissibly relied on cost-benefit analysis in

setting the national performance standards and in

providing for cost-benefit variances from those

standards” as part of its regulation of power plants

under the Clean Water Act).

These different approaches demonstrate that

Congress knows how to specify when it wants EPA to

consider costs and how to guide EPA’s consideration of

costs. In Section 111, Congress left to the agency’s

expertise—subject to the constraints of reasoned

decisionmaking—to decide how costs, among other

variables, should factor into the setting of technologybased performance standards. If EPA’s regulation is

challenged, a court can review the agency’s work to

ensure that the agency’s choices are reasoned and

supported by evidence, using the familiar reasoneddecisionmaking standards of administrative review.

Petitioners, however, seek to convert what

should be a garden variety administrative law

question—did EPA engage in reasoned decisionmaking

when it adopted a performance standard, including by

considering costs?—into a nondelegation question that is

inherently subjective and unpredictable. They argue

that EPA can promulgate greenhouse gas emission

standards—but only ones that do not impose high costs

or lead parties to make too many changes to their fleets.

They insist that standards with expected compliance

costs that are in their view too high must implicate a

major question that triggers separation of powers

concerns. E.g., W.V. Pet. Br. at 20 (“First, take the

money involved.”). But, under this theory, how high is

too high? And too high for whom—for regulated parties,

or for others (like coal producers) who may be indirectly

affected? Is a question “major” based just on the

number of zeroes in the estimated costs? Or are costs to

be compared to the benefits of the regulation?

The Court need not and should not invoke a

“major questions” doctrine that invites these

uncertainties because Congress delegated broad

authority to EPA. Congress did not place a cost

threshold in the statute. Instead, it instructed EPA to

consider costs when promulgating regulations. This

instruction provides EPA with an intelligible principle

with which to regulate, while also vesting it with

authority broad enough to address the significant

environmental issues that Congress sought to confront.

Cf. Am. Trucking, 531 U.S. at 467 (citing to Section

111(b)(1)(B) as an example of where Congress “explicitly

permitted or required economic costs to be taken into

account in implementing the air quality standards”).

Transforming

ordinary

reasoneddecisionmaking question into a separation-of-powers

question would, ironically, hamstring EPA from

exercising the authority that Congress explicitly sought

to vest in the agency. Because there is no cost threshold

in the statute, EPA could not know whether a proposed

regulation, the benefits of which outweigh the costs,

nevertheless costs “too much.” This would either chill

regulation in a way that Congress did not intend, or

would create significant regulatory uncertainty in an

industry that, above all, needs regulatory certainty to

guide large capital investment decisions and to inform

resource planning that unfolds on a time horizon of

decades, not months.

EPA Cannot Shirk Its Duty to Impose

Appropriately Stringent Performance

Standards for Carbon Emissions Simply

Because Those Regulations May Carry

High Costs.

Petitioners’ focus on the absolute dollars that may

be involved in compliance is misplaced for another

reason as well.

Power generation is a massive

industry—with total annual revenues of approximately

$400 billion5—that supplies the U.S. electric grid with

affordable, reliable energy every minute of every day.

Regulations that impose performance standards on such

a large industry will naturally be costly in absolute

terms—often in the billions of dollars. But to hold that

imposing such performance standards is a “major

question” that Congress has not authorized would turn

the Clean Air Act on its head.

Table 2.6, Revenue from Sales of Electricity to Ultimate

Customers: Total by End-Use Sector, 2010 - December 2020 (Million

Dollars), https://bit.ly/32jcey3 (last visited Jan. 18, 2022).

After all, as this Court has already explained,

EPA must address greenhouse gas emissions, including

carbon dioxide. See Massachusetts v. EPA., 549 U.S. 497

(2007); see also Util. Air Regul. Grp. v. EPA, 573 U.S.

302 (2014); Endangerment and Cause or Contribute

Findings for Greenhouse Gases Under Section 202(a) of

the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009);

Reconsideration of Interpretation of Regulations That

Determine Pollutants Covered by Clean Air Act

Permitting Programs (“Timing Rule”), 75 Fed. Reg.

17,004 (Apr. 2, 2010). Congress intended it do so, and to

identify the best system of emission reduction while

taking into account “the cost of achieving such reduction

and any nonair quality health and environmental impact

and energy requirements.” 42 U.S.C. § 7411(a)(1).

Petitioners in effect tell this Court that although

Congress directed EPA to regulate greenhouse gas

emissions, it did not give EPA the tools to do so

effectively because any effective regulation will, by its

very nature and the size of the industry, be costly. Their

position would eviscerate EPA’s ability to regulate

effectively the very pollutants that Congress wanted

EPA to regulate, from the very sources EPA has

historically regulated under Congress’s express

direction. Petitioners’ argument would undermine,

rather than protect, Congress’s power.

II.

The Court Should Not Disturb Regulated

Parties’ Compliance Flexibility, or Use That

Flexibility as a Reason to Invalidate an

Emissions Standard.

The power sector thinks about environmental

regulations much in the same way as any other business

obligation—i.e., by seeking the most cost-effective way

to comply. Power companies differ with respect to the

fuel mix and size of their fleets, but in general, a power

company’s environmental compliance department will

work with its generation-operation and resourceplanning departments to determine how to maximize

economic return on prior and anticipated future

investments across its power plant fleet, taking into

consideration factors including the competition in the

markets its plants serve; fluctuating variables such as

fuel costs, weather, and customer demand; available

technology; and transmission constraints—as well as

emissions requirements and the costs of emission control

technologies.

Planning decisions in this capital-intensive

industry reflect not only the regulations of the moment,

but also expectations about what the future will hold.

Companies try to anticipate changes—including

tightening

environmental

standards

and

the

development of new technologies, as well as anticipated

fuel prices—when they decide where and how to invest.

Even though EPA’s greenhouse gas regulations have

yet to come into force, the industry has anticipated such

regulation for years, and it has engaged in planning and

investment decisions with that expectation.

For

example, in the country’s largest regional grid, PJM

Interconnection, L.L.C., which stretches from Illinois to

the Atlantic coast, and from New Jersey to parts of

North Carolina, “95% of the more than 225,000 MW in

[the] new services queue come from proposed solar,

wind, storage or hybrid renewable/battery resources.”6

Meanwhile, the industry has retired about one-third of

its coal-fired capacity since 2010,7 and the last time a new

coal plant came online was in 2013.

So when EPA promulgates or amends emissions

standards, generation owners are not caught off guard.

The possibility that EPA might enact far-reaching new

greenhouse gas emission regulations will surprise no

one.

Rather, the industry has planned for this

contingency and is prepared to make business decisions

about how best to comply on a fleet-wide basis.8 That is

so even when EPA regulations reflect the emissionsreduction capabilities of a plant-specific technology—for

example, a particular type of smokestack scrubber. A

company might compare the costs and benefits of

installing that scrubber at its high-emitting plants to the

costs and benefits of other potential approaches to

compliance. These may include, for example, installing

other control technologies that might be as effective or

2021 in Review: Planning Efforts Focus on Future Grid, PJM

Inside Line (Dec. 20, 2021), https://bit.ly/3Ks8c7z.

U.S. Energy Information Administration, 68% of U.S. Coal Fleet

Retirements Since 2011 Were Plants Fueled by Bituminous Coal

(Aug. 27, 2021), https://bit.ly/3IsgkDt.

See, e.g., PJM Emission Data Sparks Innovative Approach to

Reduce Carbon Footprint, PJM Inside Lines (Oct. 12, 2021),

https://bit.ly/3GI88hP.

even more effective; repowering a coal plant so that it

can run on gas, which may provide the company with

greater flexibility; retiring a plant and shifting output to

other lower-emitting plants; or participating in an

emissions trading system.

Each company has the incentive to comply in the

most efficient way, and companies that implement the

most cost-effective solutions gain a competitive

advantage.

Moreover, companies rely on the

technology-forcing aspects of the rules to drive supplier

innovation, which can sometimes lead to greater

efficiencies and reduced cost (for example, more efficient

gas turbines) as well as reduced pollution. The methods

that industry chooses to adopt can result in significant

changes to the makeup of the generation fleet. But if

that occurs, it is because the industry found that to be

the most efficient means of compliance.

Petitioners appear to seek to frustrate this

scheme by arguing that, if parties’ compliance will have

wide-ranging impact on the makeup of the generation

fleet, then the performance standard must be a “major

question” that Congress did not intend to empower EPA

to set. This position confuses the standard with the

means of compliance. Indeed, even where Congress has

not allowed EPA to consider costs, it has done so

precisely because it understands that parties will be able

to consider costs when deciding how to best comply with

EPA’s regulations. See Am. Trucking, 531 U.S. at 47071 (distinguishing between EPA’s role in setting

NAAQS without considering costs from a state’s role in

developing implementation plans by considering which

technologies are most efficient and economically

feasible). The validity of EPA’s identification of the best

system of emissions reduction should be adjudicated

based on its compliance with the factors identified in

Section 111(a): Is it the best system for reducing

emissions, taking into account the cost of achieving such

reduction and any nonair quality health and

environmental impact and energy requirements? See 42

U.S.C. § 7411(a)(1). If so, then it is within EPA’s

authority to set emissions limitations based on that

system, and states must adopt performance standards

for existing sources based on the emissions limitations

that system could achieve, id. § 7411(d)—even as

regulated parties might employ entirely different

strategies in meeting the performance standards.

Indeed, that is the genius of the Clean Air Act. It

is not a traditional command-and-control statute.

Instead, it provides criteria for EPA to use to set

emissions limits and then relies on competitive forces to

encourage regulated parties to implement the most

efficient ways to achieve those emissions limits. And

frequently, parties will be able to achieve targets at far

lower cost than EPA initially projected, precisely

because it is in their business interests to find

efficiencies EPA could not have anticipated. Accepting

Petitioners’ argument—that EPA’s best system of

emissions reduction can trigger the major questions

doctrine because, in complying, companies may change

the fuel mix in their generation fleets—takes a key

design attribute of the Clean Air Act and turns it into a

poison pill. For example, the fact that the power sector

may decide that replacing an old power plant is a more

efficient approach than retrofitting it with the particular

control technology used to set an emissions standard

does not somehow invalidate the standard. Congress

intended to allow compliance flexibility in order to

achieve the Nation’s environmental goals in the most

efficient way possible, and to harness competitive forces

by allowing plant owners to drive innovation, improve

performance, and lower costs.

This intention has been borne out in practice. As

several examples below illustrate, the ability of

regulated parties to identify the best compliance

strategy for their fleets has stimulated innovation and

achieved pollution reduction at far less cost than was

initially projected.

Compliance Flexibility Allows Parties to

Find the Most Cost-Effective Means of

Compliance.

EPA’s implementation of the programs related to

NAAQS provides an example of how the power sector

innovates to achieve cost-effective compliance. The

Clean Air Act obligates EPA to establish NAAQS for air

quality across the Nation. 42 U.S.C. § 7409(b). The

“Good Neighbor Provision” requires states to limit the

contribution of air pollution from instate sources to

downwind states. See 42 U.S.C. § 7410(a)(2)(D)(i).

In response to certain states struggling to meet

or maintain their air quality requirements because of

pollution from upwind sources, EPA promulgated

several programs including the Cross-State Air

Pollution Rule (“CSAPR”), which allocates emissions

budgets for sulfur dioxide (“SO2”) and nitrogen oxides

(“NOx”) to each of 27 upwind states, and then allows

EPA to craft federal implementation plans to achieve

those emission reductions. Federal Implementation

Plans: Interstate Transport of Fine Particulate Matter

and Ozone and Correction of SIP Approvals, 76 Fed.

Reg. 48,208 (Aug. 8, 2011); see EPA v. EME Homer City

Generation, L.P., 572 U.S. 489 (2014) (upholding CSAPR

and overturning D.C. Circuit’s rejection of the use of

federal implementation plans).

EPA’s federal implementation plans set

emissions budgets for each upwind state, but grant

companies and states significant flexibility in how to

comply with these emissions budgets by allowing for

“interstate emissions trading” of SO2 and NOx.9 Upwind

sources can comply by reducing their SO2 and NOx

emissions to permissible levels; they can “over comply”

and sell the resulting emission credits; they can purchase

emission credits if economically attractive to do so; or

they can do some combination of these things.

Companies can determine which compliance strategy or

suite of compliance strategies is most cost-effective for

any given plant at any given time—including choosing

among installing plant-specific controls, operating less,

Regulatory Impact Analysis for the Federal Implementation

Plans to Reduce Interstate Transport of Fine Particulate Matter

and Ozone in 27 States; Correction of SIP Approvals for 22 States,

at 1, Docket ID No. EPA-HQ-OAR-2009-0491 (June 2011),

https://bit.ly/3FGqrmg; see also id. at 25 (outlining “how reductions

will be achieved, and different options to do so” (capitalization

altered)).

retiring aging plants, or purchasing credits from other

regulated entities.

In upholding CSAPR, this Court concluded that

the “EPA’s cost-effective allocation of emission

reductions among upwind States … is a permissible,

workable, and equitable interpretation of the Good

Neighbor Provision.” EME Homer City Generation,

L.P., 572 U.S. at 524. As part of that case, power plant

owners Calpine Corporation and Exelon Corporation

filed a brief explaining that although pollution control

requirements can impose significant costs, EPA’s

market-based compliance plan provided a cost-effective

solution. Br. of Resp’ts Calpine Corp. and Exelon Corp.

in Support of Pet’rs at 8-9, U.S. EPA v. American Lung

Ass’n, No. 12-1182 (U.S. Sept. 4, 2013), 2013 WL

4769416; see also EME Homer, 572 U.S. at 522 n.22

(citing an example from that brief).

The Clean Water Act presents another example

of how compliance flexibility can drive efficiencies.

Section 304(b) of the Clean Water Act requires EPA to

set limitations on effluents—wastewater discharges—

that are “attainable through the application of the best

practicable control technology.”

33 U.S.C.

§ 1314(b)(1)(A).

EPA sets Effluent Limitation

Guidelines (“ELGs”) based on the best available

technology (“BAT”) it has identified for particular types

of discharges that is economically achievable on an

industry-by-industry basis. See Learn about Effluent

Guidelines:

Level

Controls,

EPA,

https://bit.ly/3FQxqsK (last visited Jan. 18, 2022).

Depending on the pollutant, type of discharge, and

operation being regulated, EPA will set standards based

on the best practicable control technology currently

available (“BPT”), BAT, or the best conventional

pollutant control technology (“BCT”), among others. Id.

These standards are meant to be strict—the Fifth

Circuit rejected an earlier version of the ELGs for being

arbitrary and capricious because the standards were not

tough enough, noting that “BAT is supposed to be ‘the

[Clean Water Act]’s most stringent standard’ for setting

discharge limits.” Sw. Elec. Power Co. v. U.S. EPA, 920

F.3d 999, 1016 (5th Cir. 2019).

Crucially, neither the statute nor EPA

regulations require regulated entities to comply with

these ELGs by installing the “best” technology used to

set the standard; the government does not “control” this

aspect of a company’s compliance. See Learn about

Effluent Guidelines: Level of Controls, EPA,

https://bit.ly/3FQxqsK (last visited Jan. 18, 2022)

(“Effluent limitations are based on performance of

specific technologies, but the regulations do not require

use of a specific control technology.”). Instead of

installing the standard-setting technology, companies

can opt to develop new technologies, change sources of

fuel, or even retire aging plants to achieve the same

pollution-control requirements. In fact, the 2020 Stream

Reconsideration Rule created a subcategory in which

power plants that cease use of coal as a fuel source by

2028 will be found to comply with BAT. In response,

Southern Company announced that it plans to retire

several units by 2028 to comply with BAT. The

Southern Co. et al., Quarterly Report (Form 10-Q) 145

(Nov. 3, 2021), https://bit.ly/3qJAkLM. That business

decision in response to an environmental standard is an

example of how companies may decide to comply with a

technology-based standard by changing the mix of their

generation fleet. Such a decision—even if widespread

among regulated parties—does not somehow convert

the standard-setting process into a “major question.”

Actual Compliance Costs Are Often Far

Lower Than Projections, as a Result of

Compliance Flexibility.

One consequence of the compliance flexibility just

described is that regulated industry is often able to

achieve compliance with emissions standards at a far

lower cost than EPA initially estimated. This makes

projected cost a particularly inappropriate basis for

measuring whether a regulation implicates a “major

question” outside the agency’s delegated authority.

EPA’s 2012 Mercury Air Toxics Standards

(“MATS”) offers a prime example. MATS set out

ambitious mercury emissions standards that coal- and

oil-fired power plants were to achieve by Spring 2016.

See National Emission Standards for Hazardous Air

Pollutants From Coal- and Oil-Fired Electric Utility

Steam Generating Units and Standards of Performance

for Fossil-Fuel-Fired Electric Utility, IndustrialCommercial-Institutional, and Small IndustrialCommercial-Institutional Steam Generating Units, 77

Fed. Reg. 9304 (Feb. 16, 2012). EPA projected that

MATS compliance would impose costs on coal generation

amounting to $9.6 billion in the first year alone.

Regulatory Impact Analysis for the Final Mercury and

Air Toxics Standards at ES-1, ES-2, EPA (Dec. 2011),

https://bit.ly/3ruzj9i.

In assessing costs, EPA

anticipated that power plants would meet the MATS

requirements primarily by installing pollution controls

on site, such as filters and scrubbers, and, to a lesser

extent, by changing fuel sources. Id. at 3-14.

Industry managed to comply at a fraction of the

projected cost. According to one accounting, “the true

cost of complying with the Rule is approximately $7

billion per year less than estimated by EPA . . . or less

than one-quarter of what EPA originally estimated.”

Decl. of J. Staudt ¶ 5, Exhibit A to Mot. of Industry

Resp’t Intervenors to Govern Future Proceedings,

White Stallion Energy Center, LLC v. EPA, No. 12-1100

(D.C. Cir. Sept. 24, 2015) (“Staudt Decl.”) (emphasis

added). The lower-than-expected costs to comply with

MATS were due in part to decisions by companies to

shift generation from coal plants to gas plants, as well as

to use different control technologies to comply (such as

dry scrubbers and baghouses) than the technology EPA

had anticipated (wet scrubbers). The alternative control

technologies selected by industry turned out to be “less

expensive and more effective than originally assumed in

EPA’s analysis.” Id. Some plants also found it was

possible to meet the mercury standard by making small

changes to existing NOx and SO2 control systems, which

EPA had not anticipated.

Still, the rule had sweeping implications for

generation fleets. As noted, many companies chose to

comply by retiring aging coal plants that were

uneconomic and polluted heavily, and invested instead in

new, more efficient, and cleaner generation technology.

As a result, Edison Electric Institute (“EEI”) noted that

“the retirement of older coal generation—whether

because of MATS requirements, gas and renewable

generation prices, ongoing maintenance costs, power

prices, state policies, or some combination of them—

significantly lowered annual compliance costs for

MATS.” Comments of EEI at 11 n.12, National

Emission Standards for Hazardous Air Pollutants:

Coal- and Oil-Fired Electric Utility Steam Generating

Units—Reconsideration of Supplemental Finding and

Residual Risk and Technology Review, Docket ID No.

EPA-HQ-OAR-2018-0794 (Apr. 17, 2019) (EEI comment

to Final Rule withdrawing appropriate and necessary

finding, 85 Fed. Reg. 31,286 (May 22, 2020)).

Industry often finds a way to lower compliance

costs, if given the flexibility to do so. Indeed, in almost

all cases involving environmental regulations, “the

actual costs are significantly lower than the costs

originally estimated both by EPA and by industry,

sometimes by an order of magnitude.” Staudt Decl.

¶ 14.10

So long as the emissions standard is set in a

manner that is consistent with the statute, regulated

parties should remain free to comply in whatever

In 2016, on remand from this Court, EPA published its

Supplemental Finding, determining that the public health benefits

of MATS justified the costs to the regulated industry.

Supplemental Finding That It Is Appropriate and Necessary To

Regulate Hazardous Air Pollutants From Coal- and Oil-Fired

Electric Utility Steam Generating Units, 81 Fed. Reg. 24,419 (Apr.

25, 2016).

manner they wish. A challenger’s expectation that

parties may seek to comply by retiring certain types of

plants in favor of others, rather than by installing the

control technology used by EPA to set the standard, is

no reason to invalidate the standard. Instead, that is

how Congress intended the Clean Air Act to work.

CONCLUSION

The decision below should be affirmed.

Respectfully submitted,

SOPHIA/ CAI

JENNER & BLOCK LLP

455 Market St. Suite 2100

San Francisco, CA 94105

ALLISON TORRENCE

JENNER & BLOCK LLP

353 N. Clark St.

Chicago, IL 60654

MATTHEW(PRICE

Counsel of Record

JENNER & BLOCK LLP

1099 New York Ave., NW

Suite 900

Washington, DC 20001

(202) 639-6000

MPrice@jenner.com

APPENDIX

LIST OF AMICI CURIAE*

Paul J. Allen, former Senior Vice President Corporate

Affairs and Chief Environmental Officer, Constellation

Energy

Paul J. Feldman, former Chairman of the Midcontinent

Independent System Operator.

J. Derek Furstenwerth, former Senior Director,

Environmental Services, Calpine Corporation.

Joseph T. Kelliher, former Executive Vice PresidentFederal Regulatory Affairs for NextEra Energy, and

former Chairman and Commissioner of the U.S. Federal

Energy Regulatory Commission.

Kevin Leahy, former Managing Director, Energy and

Environmental Policy, Duke Energy.

Randolph Price, former Vice President, Environment,

Health & Safety, ConEdison.

Daniel D. Richard, Jr., former Senior Vice President for

Public Policy, PG&E Corporation.

John Rowe, former Chief Executive Officer, Exelon

Corporation.

Past affiliations listed for identification purposes only.

Jeff Sterba, former President, Chairman, and Chief

Executive Officer, PNM Resources, Inc.

Eric B. Svenson, Jr., former Vice President,

Environmental, Health and Safety, Public Service

Enterprise Group.

Roy Thilly, former CEO, WPPI Energy.

William Tyndall, former Vice President of Corporate

Development and Strategy, Cinergy Corp.

Stephen Whitley, former President/CEO, New York

Independent System Operator.

Jeffrey L. Williams, former

Consulting, Entergy Corporation.

Director-Climate

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.