Response to application from Power Company Respondents — Nacco Natural Resources Corporation, Applicant v. Environmental Protection Agency, et al.

Nos. 24A95, 24A96, 24A97, 24A98, 24A105, 24A106, 24A116 and 24A117

In the Supreme Court of the United States

WEST VIRGINIA, et al.,

Applicants,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

NATIONAL RURAL ELECTRIC COOPERATIVE,

Applicant,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

Directed to the Honorable John G. Roberts, Jr., Chief Justice of the United States

and Circuit Justice for the United States Court of Appeals

for the District of Columbia Circuit

POWER COMPANY RESPONDENTS’ OPPOSITION TO

APPLICATIONS FOR STAY OF FINAL AGENCY ACTION

PENDING APPELLATE REVIEW

Kevin Poloncarz

Counsel of Record

Timothy Duncheon

Julia Barrero

COVINGTON & BURLING LLP

415 Mission Street, 54th Floor

San Francisco, CA 94105

(415) 591-7070

kpoloncarz@cov.com

August 19, 2024

Counsel for Power Company Respondents

Pacific Gas and Electric Company,

Consolidated Edison, Inc., New York

Power Authority, Sacramento Municipal

Utility District and Power Companies

Climate Coalition

[Additional Captions Listed on Following Page]

NATIONAL MINING ASSOCIATION AND AMERICA’S POWER,

Applicant,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

NACCO NATURAL RESOURCES CORPORATION,

Applicant,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

MIDWEST OZONE GROUP,

Applicant,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

ELECTRIC GENERATORS FOR A SENSIBLE TRANSITION,

Applicant,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

EDISON ELECTRIC INSTITUTE, et al.,

Applicants,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

OHIO, et al.,

v.

Applicants,

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29.6, Power Company Respondents provide

the following disclosure statements.

Pacific Gas and Electric Company states that it is a public utility

incorporated in the state of California and a wholly owned subsidiary of PG&E

Corporation. No publicly held corporation directly owns more than 10 percent of

PG&E Corporation’s shares.

Consolidated Edison, Inc. (“Con Edison”) states that it is a holding

company that owns several subsidiaries, including Consolidated Edison Company of

New York, Inc., which delivers electricity, natural gas and steam to customers in New

York City and electricity and natural gas to customers in Westchester County, New

York; Orange & Rockland Utilities, Inc., which together with its subsidiary, Rockland

Electric Company, delivers electricity and natural gas to customers primarily located

in southeastern New York State and Northern New Jersey; and Con Edison

Transmission, which through its subsidiaries invests in electric transmission projects

supporting Con Edison’s effort to transition to clean, renewable energy and through

joint ventures manages both electric and gas assets while seeking to develop electric

transmission projects. Con Edison has outstanding shares and debt held by the

public and may issue additional securities to the public. Con Edison has no parent

corporation and no publicly held company has a ten percent or greater ownership

interest in it.

New York Power Authority (“NYPA”) states that it is a New York State

public-benefit corporation. It is the largest state public power utility in the United

i

States, with 16 generating facilities and more than 1,400 circuit-miles of

transmission lines. NYPA sells electricity to more than 1,000 customers, including

local and state government entities, municipal and rural cooperative electric systems,

industry, large and small businesses and non-profit organizations. NYPA has no

parent corporation and no publicly held company owns greater than 10 percent

ownership interest in it.

Sacramento Municipal Utility District (“SMUD”) states that it is the

nation’s sixth largest community-owned utility, with a service population of

approximately 1.5 million located in Sacramento County, California, and small

portions of Placer and Yolo counties. SMUD has no parent corporation and no

publicly held company owns 10 percent or more of its stock.

Power Companies Climate Coalition states that it is an unincorporated

association of companies engaged in the generation and distribution of electricity and

natural gas, organized to advocate for responsible solutions to address climate change

and reduce emissions of greenhouse gases and other pollutants, including through

participation in litigation concerning federal regulation. Its members include each of

the foregoing entities and the Los Angeles Department of Water and Power

(“LADWP”).

LADWP states that it is a vertically integrated publicly-owned electric utility

of the City of Los Angeles, serving a population of over 4 million people within a 465

square mile service territory covering the City of Los Angeles and portions of the

Owens Valley. LADWP is the third largest electric utility in the state, one of five

ii

California balancing authorities, and the nation’s largest municipal utility. LADWP

owns and operates a diverse portfolio of generation, transmission, and distribution

assets across several states. LADWP’s diverse portfolio includes electricity produced

from natural gas, hydropower, coal, nuclear, wind, biomass, geothermal, and solar

energy resources. LADWP owns and/or operates the majority of its conventional

generating resources, with a net dependable generating capacity of 7,967 megawatts.

Its transmission system, which includes more than 3,700 circuit-miles of

transmission lines, transports power from the Pacific Northwest, Utah, Wyoming,

Arizona, Nevada, and elsewhere within California to the City of Los Angeles.

LADWP’s mission is to provide clean, reliable water and power in a safe,

environmentally responsible, and cost-effective manner.

iii

TABLE OF CONTENTS

Page

CORPORATE DISCLOSURE STATEMENT ................................................................ i

TABLE OF AUTHORITIES .......................................................................................... v

INTRODUCTION .......................................................................................................... 1

ARGUMENT .................................................................................................................. 5

I.

Applicants Cannot Demonstrate Success on the Merits Because They

Mistakenly Assert That the Rule Oversteps EPA’s Delegated Authority

Under the Major Questions Doctrine. ................................................................ 5

II.

Applicants’ Fact-Bound Arbitrary and Capricious Challenge Does Not

Warrant the Extraordinary Remedy of a Stay through this Court’s

Emergency Docket. ........................................................................................... 10

CONCLUSION............................................................................................................. 15

iv

TABLE OF AUTHORITIES

Page(s)

Cases

Am. Lung Ass’n v. EPA,

985 F.3d 914 (D.C. Cir. 2021) .................................................................................. 2

Citizens to Pres. Overton Park, Inc. v. Volpe,

401 U.S. 402 (1971) .................................................................................................. 9

Dep’t of Com. v. New York,

588 U.S. 752 (2019) .................................................................................................. 9

Essex Chem. Corp. v. Ruckelshaus,

486 F.2d 427 (D.C. Cir. 1973) ................................................................................ 14

Labrador v. Poe,

144 S. Ct. 921 (2024) .............................................................................................. 14

Lignite Energy Council v. EPA,

198 F.3d 930 (D.C. Cir. 1999) ................................................................................ 14

Loper Bright Enters. v. Raimondo,

144 S. Ct. 2244 (2024) ...................................................................................... 10, 11

Michigan v. EPA,

576 U.S. 743 (2015) ................................................................................................ 11

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins.

Co.,

463 U.S. 29 (1983) .................................................................................................. 11

Moyle v. United States,

144 S. Ct. 2015 (2024) ............................................................................................ 14

Nken v. Holder,

556 U.S. 418 (2009) .................................................................................................. 5

Ohio v. EPA,

144 S. Ct. 2040 (2024) .......................................................................... 10, 12, 13, 15

Portland Cement Ass’n v. EPA,

513 F.2d 506 (D.C. Cir. 1975) ................................................................................ 14

Sierra Club v. Costle,

657 F.2d 298 (D.C. Cir. 1981) ................................................................................ 14

v

Teva Pharms. USA, Inc. v. Sandoz, Inc.,

572 U.S. 1301 (2014) .............................................................................................. 14

Util. Air Regul. Grp. v. EPA,

573 U.S. 302 (2014) .............................................................................................. 2, 7

Virginian Ry. Co. v. United States,

272 U.S. 658 (1926) .................................................................................................. 5

West Virginia v. EPA,

597 U.S. 697 (2022) .................................................................... 2, 3, 5, 6, 7, 8, 9, 11

Whitman v. Am. Trucking Ass’ns,

531 U.S. 457 (2001) ................................................................................................ 10

Statutes

26 U.S.C. § 45Q .............................................................................................................. 3

33 U.S.C. § 1312(a) ...................................................................................................... 11

42 U.S.C.

§ 7411(a) .................................................................................................................. 11

§ 7411(a)(1) ............................................................................................................... 6

§ 7411(b)(1)(A) .......................................................................................................... 6

§ 7411(b)(1)(B) .......................................................................................................... 6

§ 7411(d)(1) ............................................................................................................... 6

§ 7435(a)(5) ............................................................................................................... 3

§ 7435(a)(6) ............................................................................................................... 3

§ 7607(b)(1) ............................................................................................................. 13

§ 7607(d)(7)(A) ........................................................................................................ 10

§ 7607(d)(9) ............................................................................................................. 10

Pub. L. No. 117-169, 136 Stat. 1818 (2022) .................................................................. 3

§ 13104, 136 Stat. 1924 ............................................................................................ 3

§ 60107, 136 Stat. 2069 ........................................................................................ 3, 6

Regulations

New Source Performance Standards for Greenhouse Gas Emissions

from New, Modified, and Reconstructed Fossil Fuel-Fired Electric

Generating Units; Emission Guidelines for Greenhouse Gas

Emissions From Existing Fossil Fuel-Fired Electric Generating

Units; and Repeal of the Affordable Clean Energy Rule,

88 Fed. Reg. 33,240 (May 23, 2023) ....................................................................... 12

vi

New Source Performance Standards for Greenhouse Gas Emissions

from New, Modified, and Reconstructed Fossil Fuel-Fired Electric

Generating Units; Emission Guidelines for Greenhouse Gas

Emissions from Existing Fossil Fuel-Fired Electric Generating

Units; and Repeal of the Affordable Clean Energy Rule,

88 Fed. Reg. 80,682 (Nov. 20, 2023)...................................................................... 12

New Source Performance Standards for Greenhouse Gas Emissions

from New, Modified, and Reconstructed Fossil Fuel-Fired Electric

Generating Units; Emission Guidelines for Greenhouse Gas

Emissions from Existing Fossil Fuel-Fired Electric Generating

Units; and Repeal of the Affordable Clean Energy Rule,

89 Fed. Reg. 39,798 (May 9, 2024) ......................................................... 1, 3, 4, 7, 13

Other Authorities

168 Cong. Rec. E868 (Aug. 23, 2022) ............................................................................ 3

Brief for Power Company Respondents, West Virginia v. EPA, 597 U.S.

697 (2022) (No. 20-1530), 2022 WL 209768............................................................. 8

Comment submitted by Clean Energy Group (CEG), Docket ID No.

EPA-HQ-OAR-2023-0072-0496 (Aug. 7, 2023) ...................................................... 13

Comment submitted by Clean Energy Group (CEG), Docket ID No.

EPA-HQ-OAR-2023-0072-8166 (Dec. 19, 2023) .................................................... 13

Comment submitted by Energy Strategy Coalition, Docket ID No.

EPA-HQ-OAR-2023-0072-0672 (Aug. 7, 2023) ...................................................... 13

Comment submitted by Energy Strategy Coalition, Docket ID No.

EPA-HQ-OAR-2023-0072-8192 (Dec. 19, 2023) .................................................... 13

EPA, Reducing Greenhouse Gas Emissions from New and Existing

Fossil Fuel-Fired Electric Generating Units, Docket ID No. EPAHQ-OAR-2022-0723 (Sept. 8, 2022) ....................................................................... 12

John G. Roberts, Jr., What Makes the D.C. Circuit Different? A

Historical View, 92 Va. L. Rev. 375 (2006) ............................................................ 13

vii

INTRODUCTION

Power Company Respondents are some of the nation’s largest electric utilities

and owners of electricity generating units (“EGUs”). Together, they own and operate

over 25,000 megawatts of total generating capacity and serve over 30 million people

across the country. First and foremost, Power Company Respondents are in the

business of delivering affordable, reliable power to their customers. At the same time,

they are significantly reducing greenhouse gas (“GHG”) emissions across their

generation resources and from the electricity they deliver to their customers.

Well-designed and durable emission standards and guidelines promulgated

pursuant to Section 111 can help reduce GHG emissions from electricity generators

and mitigate their contribution to climate change. Such emission standards and

guidelines can also provide Power Company Respondents with regulatory

predictability to help them make informed decisions regarding investments in the

technologies and resources needed to deliver a clean, affordable and reliable supply

of electricity to their customers. For that reason, Power Company Respondents have

participated in EPA’s Section 111 rulemakings for the power sector over the last

decade.

Prior to the current Rule,1 EPA made two attempts to establish Section 111

emission guidelines for GHG emissions from existing EGUs. Courts (including this

1 See New Source Performance Standards for Greenhouse Gas Emissions from New,

Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission

Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel-Fired Electric

Generating Units; and Repeal of the Affordable Clean Energy Rule, 89 Fed. Reg.

39,798 (May 9, 2024) (“the Rule”).

1

one) held that these earlier efforts reflected mistaken interpretations of EPA’s

statutory authority. First, consistent with Power Company Respondents’ arguments,

the D.C. Circuit held that EPA’s 2019 Affordable Clean Energy (“ACE”) Rule had

“rest[ed] squarely on the erroneous legal premise that the statutory text expressly

foreclosed consideration of measures other than those that apply at and to the

individual source.” Am. Lung Ass’n v. EPA, 985 F.3d 914, 995 (D.C. Cir. 2021)

(emphasis added). For example, the ACE Rule had improperly ruled out compliance

mechanisms like averaging and trading, which often result in more efficient emission

outcomes.

Second, in 2022, this Court determined that EPA’s 2015 Clean Power Plan

(“CPP”) violated the major questions doctrine. West Virginia v. EPA, 597 U.S. 697

(2022). In devising the CPP, EPA had based the “best system of emission reduction”

(“BSER”) for existing sources on the Agency’s preferred approach of “generation

shifting” from higher-emitting sources to lower-emitting sources. This Court held

that, in doing so, the Agency had “‘claim[ed] to discover in a long-extant statute an

unheralded power’ representing a ‘transformative expansion in [its] regulatory

authority.’” Id. at 724 (quoting Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 324 (2014))

(alteration in original). But West Virginia also made clear that EPA could—as it has

for five decades—promulgate a BSER based on “the application of measures that

would reduce pollution by causing the regulated source to operate more cleanly.” Id.

at 725. In that case and at oral argument, Power Company Respondents again

2

argued against an overly constrained interpretation of EPA’s authority under Section

111 that would preclude established, cost-effective mechanisms like trading.

Following this Court’s decision in West Virginia, Congress passed the Inflation

Reduction Act (“IRA”). Pub. L. No. 117-169, 136 Stat. 1818 (2022). The IRA extended

and substantially expanded the tax credit for carbon capture and sequestration

(“CCS”) to facilitate its deployment on sources such as power plants and industrial

facilities. Id. § 13104, 136 Stat. at 1924–29 (codified as amended at 26 U.S.C. § 45Q).

Congress also amended the Clean Air Act, directing EPA to “ensure that reductions

in greenhouse gas emissions are achieved through use of the existing authorities of

[the Clean Air Act]”—including Section 111. Id. § 60107, 136 Stat. 2069–70 (codified

at 42 U.S.C. § 7435(a)(5)–(6)); see also 168 Cong. Rec. E868 (Aug. 23, 2022) (Rep.

Pallone noting “[t]hese ‘existing authorities’ include [Clean Air Act] Section 111”).

In May 2024, EPA finalized its Rule to regulate emissions of carbon dioxide

from existing fossil fuel-fired steam generating units and new stationary combustion

turbines. This Rule is categorically different from the CPP. In keeping with half a

century of regulatory precedent under the Clean Air Act, EPA analyzed potential atthe-source technology-based systems to reduce pollution and then selected its BSER.

See West Virginia, 597 U.S. at 726. EPA determined that CCS with a 90 percent

capture rate was the best system of emission reduction for new baseload stationary

combustion turbines and existing coal-fired plants operating past January 1, 2039.

See 89 Fed. Reg. at 39,903 (new baseload gas plants); id. at 39,841 (existing coal

plants). EPA preserved a role for flexible compliance measures such as averaging

3

and trading.

Id. at 39,978–79.

Also, the Agency designed additional types of

compliance flexibility, including one-year extensions for sources that are unable to

comply due to challenges outside of their control or when needed by a grid operator

for reliability. See id. at 39,960 (existing coal plants); id. at 39,952 (new baseload gas

plants).

Petitioners challenged the Rule in the D.C. Circuit, and eight of them moved

for an emergency stay while litigation proceeds.

As they do before this Court,

Applicants generally characterized EPA’s Rule as an attempt to flout West Virginia,

remake the electricity grid, and “require generation-shifting” to cleaner sources.

On July 19, 2024, a unanimous panel of the D.C. Circuit—composed of Judges

Millett, Pillard, and Rao—denied the emergency stay. C.A. 24-1120 Doc. 206543,

Order Denying the Motions to Stay (D.C. Cir. July 19, 2024) (“Stay Order”). In a

reasoned order, the court held that the Applicants had neither shown a likelihood of

success on their arbitrary and capricious claim nor on their claim that the Rule

implicates the major questions doctrine. Stay Order 2. On irreparable harm, the

panel underscored that the Rule’s “actual compliance deadlines do not commence

until 2030 or 2032—years after this case will be resolved.” Id. The panel also

requested expedited briefing “to ensure this case can be argued and considered as

early as possible in the court’s 2024 term.” Id. A decision will likely issue early in

2025.

Applicants have now moved for an emergency stay from this Court, but there

remains no basis to grant it. “A stay is not a matter of right,” but is rather “an exercise

4

of judicial discretion.”

Nken v. Holder, 556 U.S. 418, 433–34 (2009) (quoting

Virginian Ry. Co. v. United States, 272 U.S. 658, 627 (1926)). Despite Applicants’

claims to the contrary, this case does not implicate the major questions doctrine and

raises no meaningful dispute about the boundaries of EPA’s delegated authority.

Rather, the case turns largely on a fact-intensive review of whether EPA acted

reasonably when it reviewed thousands of comments and technical documents and

“determine[d]” that CCS “has been adequately demonstrated” with respect to certain

classes of large power plants, with compliance deadlines starting in 2032. The D.C.

Circuit will act expeditiously in assessing the merits of this record-based claim and

will do so many years before the relevant compliance deadlines. Especially in the

absence of imminent compliance deadlines, the Court should decline to grant the

extraordinary relief of a stay pursuant to its emergency docket.

ARGUMENT

I.

Applicants Cannot Demonstrate Success on the Merits Because They

Mistakenly Assert That the Rule Oversteps EPA’s Delegated Authority

Under the Major Questions Doctrine.

Many Applicants insist that EPA acted beyond the boundaries of its delegated

authority because the Rule implicates a major question that required clearer

congressional authorization. See, e.g., Stay Application of Electric Generators for a

Sensible Transition (“EGST Stay Appl.”) 12 (“Just like West Virginia, this case ‘is a

major questions case.’” (quoting West Virginia, 597 U.S. at 724)); Stay Application of

West Virginia et al. (“W. Va. Stay Appl.”) 21 (“West Virginia v. EPA confirms the Rule

is unlawful.”); Stay Application of National Mining Association & America’s Power

(“NMAP Stay Appl.”) 11–12 (arguing that the rule is “in direct contravention of this

5

Court’s explicit holding in West Virginia”); Stay Application of National Rural Electric

Cooperative Association (“NRECA Stay Appl.”) 30 (“[T]his is no ordinary case,

because the major-questions doctrine applies.”). This is incorrect. As required by

West Virginia, EPA based each BSER on “the application of measures that would

reduce pollution by causing the regulated source to operate more cleanly.” 597 U.S.

at 725. Applicants cannot now use West Virginia to shoehorn their fact-intensive

argument going to the reasonableness of EPA’s determinations into a claim that EPA

overstepped its delegated authority.

Section 111 requires EPA to promulgate standards and emission guidelines for

categories of stationary sources that cause or contribute significantly to air pollution

that may endanger public health or welfare. 42 U.S.C. § 7411(b)(1)(A), (b)(1)(B),

(d)(1); see also West Virginia, 597 U.S. at 709. For new and modified sources, Section

111(b) directs EPA to establish standards of performance that reflect the degree of

limitation achievable through application of the best system of emissions reduction

that the Administrator determines has been “adequately demonstrated,” taking into

account cost and “any nonair quality health and environmental impact and energy

requirements.” Id. § 7411(a)(1), (b)(1)(B).

For existing sources, Section 111(d)

requires EPA to prescribe emission guidelines under which states submit plans

establishing standards of performance that reflect the degree of limitation achievable

through application of the best system of emission reduction. Id. § 7411(d)(1). As

noted, the IRA expressly directed EPA to ensure achievement of GHG emission

reductions through its existing Clean Air Act authorities. Id. § 7435(a)(5)–(6).

6

In the Rule, EPA considered the statutory factors and chose BSERs from

among technological systems that can be applied at the source. See 89 Fed. Reg. at

39,829. For new baseload combustion turbines and existing coal-fired power plants

that plan to operate past January 1, 2039, EPA selected a BSER based on deployment

of CCS with a 90 percent capture rate. Id. at 39,903, 39,841. For other subcategories

of units, EPA similarly selected BSERs based on technological systems that can be

applied at the source. E.g., id. at 39,841 tbl. 1 (summarizing the BSERs for existing

EGUs).

In

attempting

to

invoke

the

major

questions

misunderstand both West Virginia and this Rule.

doctrine,

Applicants

In West Virginia, this Court

emphasized that, for most of Section 111’s history, EPA had generally selected “best

system[s] of emission reduction” that were technology-based systems involving “the

application of measures that would reduce pollution by causing the regulated source

to operate more cleanly.” 597 U.S. at 725. In the CPP, according to the Court, EPA

had “‘claim[ed] to discover in a long-extant statute an unheralded power’ representing

a ‘transformative expansion in [its] regulatory authority’” by basing the best system

for existing sources on EPA’s preferred approach of “generation shifting” from higheremitting sources to lower-emitting sources. Id. at 724, 728–29 (quoting Util. Air

Regul. Grp., 573 U.S. at 324) (alteration in original).

But West Virginia also made clear that the trigger for the major questions

doctrine was not that EPA’s “best system of emission reduction” would result in a

shift in generation to lower-emitting units.

7

As Power Company Respondents

explained to this Court, changes in market share are an inevitable consequence of

any rule limiting power-sector emissions. In an interconnected electricity grid, “[a]ny

measure that increases the variable costs for one facility to produce power will make

that facility less competitive as compared to other facilities, rendering it less

attractive to utilities and grid operators.” Brief for Power Company Respondents at

37, West Virginia, 597 U.S. 697 (No. 20-1530), 2022 WL 209768, at *37. Recognizing

this, this Court emphasized the “obvious difference between (1) issuing a rule that

may end up causing an incidental loss of coal’s market share, and (2) simply

announcing what the market share of coal, natural gas, wind, and solar must be, and

then requiring plants to reduce operations or subsidize their competitors to get there.”

West Virginia, 597 U.S. at 731 n.4.

Some Applicants nonetheless insist that, because this Rule may result in less

coal-fired generation, it triggers the same major question that the Supreme Court

identified in the CPP. See, e.g., NMAP Stay Appl. 11; EGST Stay Appl. 12; W. Va.

Stay Appl. 21. Not so. Due to the dynamics governing how the electricity grid is

operated, any system of emission reduction that changes generators’ relative costs

will result in higher-emitting units operating less. Indeed, if Applicants were correct

that the Rule amounts to impermissible generating shifting simply because it will

reduce the operation of coal-fired power plants, then any rule requiring coal plants to

control their emissions would implicate the major questions doctrine. Applicants’

arguments that such changes amount to impermissible generation shifting ignore the

critical distinction the Court made between regulations that cause an incidental loss

8

of market share of one type of resource and regulations that “announce” the Agency’s

preferred market shares of different resources. See West Virginia, 597 U.S. at 731

n.4.2

Lacking record evidence that EPA’s rule is based on generation shifting,

Applicants turn to speculation and suspicion. They accuse EPA of “once again trying

to transform the power sector by forcing a shift in electricity generation to its favored

sources” while “t[aking] care not to say the quiet part too loudly this time.” NRECA

Stay Appl. 1; W. Va. Stay Appl. 24. EGST alleges that EPA is “attempt[ing] to frame

its generation-shifting mandate as a garden-variety technology-based emission

reduction program” and “pretending” in order to achieve “broad policy goals this

Court has already held lie beyond EPA’s current authority.” EGST Stay Appl. 11.

West Virginia charges that the standards are “really a backdoor avenue to forcing

coal plants out of existence.” W. Va. Stay Appl. 9; see also NMAP Stay Appl. 11

(similar). But judicial review of agency rules turns on the record, not speculative

motives. Courts review “the agency’s contemporaneous explanation in light of the

existing administrative record,” Dep’t of Com. v. New York, 588 U.S. 752, 780–81

(2019), and apply a “presumption of regularity” to agency action, Citizens to Pres.

Overton Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971). Applicants’ “accusations of

pretext, deceit, and illicit motives” are therefore simply not germane. Dep’t of Com.,

2 Some Applicants state that the resulting loss of coal’s market share from this Rule

is more than “incidental.” E.g., W. Va. Stay Appl. 22 (“This case doesn’t involve

‘incidental’ effects.” (quoting West Virginia, 597 U.S. at 731 n.4)). These conclusory

statements do not meet Applicants’ burden to show a likelihood of success in their

argument that the Rule implicates a major question.

9

588 U.S. at 786–87 (Thomas, J., dissenting); they only underscore that Applicants

cannot meet their burden to show that the Rule lies outside the boundaries of EPA’s

delegated authority and implicates a major question.

II.

Applicants’ Fact-Bound Arbitrary and Capricious Challenge Does Not

Warrant the Extraordinary Remedy of a Stay through this Court’s

Emergency Docket.

While framed in many different ways, the core of Applicants’ arguments boils

down to an ordinary arbitrary-and-capricious argument under the Clean Air Act—

i.e., that the Rule is unreasonable or unsupported by the record. See 42 U.S.C.

§ 7607(d)(7)(A), (d)(9); Ohio v. EPA, 144 S. Ct. 2040, 2053 (2024). Because analyzing

the merits of this claim would involve careful review of an administrative record of

tens of thousands of pages, it is a poor fit for emergency relief at this time.

This Court’s recent decision in Loper Bright confirms that Applicants’ claims

sound in arbitrary and capricious review. As this Court explained, “Congress has

often enacted [ ] statutes” that “empower an agency to . . . regulate subject to the

limits imposed by a term or phrase.” Loper Bright Enters. v. Raimondo, 144 S. Ct.

2244, 2263 (2024). Terms such as “appropriate” or “reasonable” “leave[] agencies with

flexibility” when exercising the discretion granted by statute. Id.; see also Whitman

v. Am. Trucking Ass’ns, 531 U.S. 457, 475 (2001) (noting that “the degree of agency

discretion that is acceptable varies according to the scope of the power congressionally

conferred”). As an example, the Court pointed to the Clean Water Act’s grant of

discretion to the EPA Administrator to use his “judgment” to determine when

“discharges of pollutants from a point source or group of point sources . . . would

interfere with the attainment or maintenance of that water quality . . . which shall

10

assure” multiple outcomes. See Loper Bright, 144 S. Ct. at 2263 n.6 (citing 33 U.S.C.

§ 1312(a)).

Applicants do not—and could not—seriously dispute that the Clean Air Act

delegates to the Administrator the task of determining the best system of emission

reduction that has been adequately demonstrated, taking into account several

criteria. See 42 U.S.C. § 7411(a).3 Therefore, under the Loper Bright framework,

Applicants’ arguments about CCS are best understood as disputing not the

“boundaries of [EPA’s] delegated authority,” but that “the agency has engaged in

‘reasoned decisionmaking’ within those boundaries” when establishing the BSER.

144 S. Ct. at 2263 (quoting Michigan v. EPA, 576 U.S. 743, 750 (2015)).

Applicants make a series of factual assertions regarding whether CCS is

adequately demonstrated. Certainly, a reviewing court must ensure that the agency

has offered “a satisfactory explanation for its action[,] including a rational connection

between the facts found and the choice made” and cannot ignore “an important aspect

of the problem.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43 (1983).

But an assessment of whether Applicants’ factual

assertions demonstrate that EPA’s ultimate conclusions are arbitrary and capricious

See also West Virginia, 597 U.S. at 709–10 (“[T]he statute directs EPA to (1)

‘determine,’ taking into account various factors, the ‘best system of emission

reduction which has been adequately demonstrated,’ (2) ascertain the ‘degree of

emission limitation achievable through the application’ of that system, and (3) impose

an emissions limit on new stationary sources that ‘reflects” that amount. . . .The

Agency, not the States, decides the amount of pollution reduction that must

ultimately be achieved. It does by again determining, as when setting the new source

rules, ‘the best system of emission reduction that has been adequately demonstrated

for existing covered facilities.’” (cleaned up)).

3

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is highly record- and fact-intensive. Cf. Ohio, 144 S. Ct. at 2049–52 (describing the

myriad complexities of EPA’s federal implementation plan under the Clean Air Act’s

Good Neighbor Provision).

The record in this case is voluminous and the product of an extensive

rulemaking effort. EPA opened a preproposal in September 2022 to collect initial

input on at-the-source methods to reduce emissions. See Reducing Greenhouse Gas

Emissions from New and Existing Fossil Fuel-Fired Electric Generating Units,

Docket ID No. EPA-HQ-OAR-2022-0723 (Sept. 8, 2022). On May 23, 2023, it released

a proposed rule of 181 pages. See New Source Performance Standards for Greenhouse

Gas Emissions from New, Modified, and Reconstructed Fossil Fuel-Fired Electric

Generating Units; Emission Guidelines for Greenhouse Gas Emissions from Existing

Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean

Energy Rule, 88 Fed. Reg. 33,240 (May 23, 2023). It provided an extended 75-day

comment period as well as a supplemental comment period. 88 Fed. Reg. at 39,390;

New Source Performance Standards for Greenhouse Gas Emissions from New,

Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission

Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel-Fired Electric

Generating Units; and Repeal of the Affordable Clean Energy Rule, 88 Fed. Reg.

80,682, 80,682 (Nov. 20, 2023).

It then reviewed and responded to the 8,188

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comments on the docket, including comments by some Power Company Respondents.4

In addition to the Rule, which fills 267 pages of the Federal Register (see 89 Fed. Reg.

at 39,798–40,064), the docket contains 968 supporting and related documents,

amounting to thousands of pages of technical support documents, studies and other

materials. Resolving the question of whether EPA’s determinations are arbitrary and

capricious based upon the information before the Agency will necessarily entail a

“fact-intensive and highly technical” inquiry into a “voluminous record.” Ohio, 144 S.

Ct. at 2058 (Barrett, J., dissenting).

The D.C. Circuit is poised to address the complex factual merits at issue in this

case as expeditiously as it can. See Stay Order at 2 (ordering prompt submission of

briefing schedules to “ensure this case can be argued and considered as early as

possible in the court’s 2024 term”). In the Clean Air Act, Congress entrusted the D.C.

Circuit to review nationally applicable rules, in light of that court’s expertise in

administrative law. 42 U.S.C. § 7607(b)(1). The D.C. Circuit routinely handles such

challenges. See John G. Roberts, Jr., What Makes the D.C. Circuit Different? A

Historical View, 92 Va. L. Rev. 375, 389 (2006) (highlighting the “extensive body of

administrative law developed” in the D.C. Circuit). Ample precedent and expertise

will guide the D.C. Circuit’s assessment of whether, based on the factual record before

the agency, EPA reasonably determined that its selected BSERs have been

4 See Comment submitted by Energy Strategy Coalition, Docket ID No. EPA-HQ-

OAR-2023-0072-0672 (Aug. 7, 2023); Comment submitted by Clean Energy Group

(CEG), Docket ID No. EPA-HQ-OAR-2023-0072-0496 (Aug. 7, 2023); Comment

submitted by Energy Strategy Coalition, Docket ID No. EPA-HQ-OAR-2023-00728192 (Dec. 19, 2023); Comment submitted by Clean Energy Group (CEG), Docket ID

No. EPA-HQ-OAR-2023-0072-8166 (Dec. 19, 2023).

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adequately demonstrated. See Essex Chem. Corp. v. Ruckelshaus, 486 F.2d 427, 433

(D.C. Cir. 1973); Portland Cement Ass’n v. EPA, 513 F.2d 506, 508 (D.C. Cir. 1975);

Sierra Club v. Costle, 657 F.2d 298, 343 (D.C. Cir. 1981); Lignite Energy Council v.

EPA, 198 F.3d 930, 933 (D.C. Cir. 1999).

As the D.C. Circuit held, this case is likely to be resolved years before the actual

compliance deadlines of 2030 or 2032 (only the latter of which applies to CCS). Stay

Order at 2.

Because of this timing, sources will not need to “restructure their

operations” during the period that “the legality of the regulations is being challenged

in court.” Labrador v. Poe, 144 S. Ct. 921, 929 (2024) (Kavanaugh, J., concurring in

the grant of stay).

To be sure, if four or more justices later determine that the D.C. Circuit

appears to have committed a significant error in its fact-intensive assessment of the

merits, this Court can grant certiorari. But briefing, oral argument, and a reasoned

decision before the D.C. Circuit on the merits will likely “shed more light on this case

than in the nature of things [is] afforded” at the emergency stay stage. Moyle v.

United States, 144 S. Ct. 2015, 2020 (2024) (Barrett, J., concurring) (citation omitted).

Applicants will also have the opportunity to make a showing to this Court that they

satisfy the stay factors then. But no precedent supports the grant of an emergency

stay now. See Teva Pharms. USA, Inc. v. Sandoz, Inc., 572 U.S. 1301, 1301 (2014)

(Roberts, C.J., in chambers) (denying the “extraordinary relief” of a stay). Indeed, “in

cases like this one with voluminous, technical records and thorny legal questions,”

the Court “should proceed all the more cautiously,” before “evaluat[ing] the merits of

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applications without the benefit of full briefing and reasoned lower court opinions.”

Ohio, 144 S. Ct. at 2070 (Barrett, J., dissenting).

CONCLUSION

The applications for a stay of the Rule should be denied.

Respectfully submitted,

________________________________

Kevin Poloncarz

Counsel of Record

Timothy Duncheon

Julia Barrero

COVINGTON & BURLING LLP

415 Mission Street, 54th Floor

San Francisco, CA 94105

(415) 591-7070

kpoloncarz@cov.com

August 19, 2024

Counsel for Power Company Respondents

Pacific Gas and Electric Company,

Consolidated Edison, Inc., New York

Power Authority, Sacramento Municipal

Utility District and Power Companies

Climate Coalition

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