U.S. appeals court hears arguments in Clean Power Plan case

Lawyers for a coalition of states and businesses reliant on fossil fuels, including Indiana, made their case Tuesday to a federal appeals court that President Barack Obama's plan to curtail greenhouse gases is an unlawful power grab.

The Clean Power Plan, which aims to ratchet down down carbon emissions from coal-burning power plants, has been challenged by more than two dozen mostly Republican-led states led by West Virginia and Texas, as well as allied industry groups that profit from extracting and burning coal and oil.

The opponents contend the carbon-cutting plan unveiled by the Environmental Protection Agency will kill coal-mining jobs and drive up electricity costs. The Obama administration, Democratic-led states and environmental groups counter it will spur hundreds of thousands of new clean-energy jobs installing emissions-free wind turbines and solar panels.

The Supreme Court has delayed implementation until the legal challenges are resolved.

Implementation of the rules is considered essential to the United States meeting emissions-reduction targets in a global climate agreement signed in Paris last year. The plan aims to help stave off the worst predicted impacts of climate change by reducing carbon dioxide emissions at existing power plants by about one-third by 2030.

Regardless of which side prevails at the appeals level, the issue is considered likely to end up being decided by the Supreme Court.

Appearing Tuesday before a 10-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, West Virginia Solicitor General Elbert Lin argued that the EPA had overstepped the authority provided it by Congress to impose emissions standards under the Clean Air Act.

By limiting carbon emissions as it does other pollutants such as mercury and sulfur dioxide, Lin said the EPA was in effect requiring states to transform their electricity generation systems by favoring one source of energy over another. West Virginia's economy is reliant on coal mining and gets 96 percent of its electricity from coal-fired plants.

"This rule is not about improving the performance of existing power plants," Lin told the judges. "It's about shutting them down."

Much of the legal debate focused on the EPA's existing rule-making authority under the Clean Air Act to implement the "best system of emissions reduction," and whether Congress meant the word "system" to apply only to the machinery inside power plants or more broadly to the various ways that electricity can be generated and transmitted to customers.

Justice Department lawyer Eric Hostetler said EPA was simply requiring what the free market is already doing. The nationwide demand for coal has plummeted as utilities shift to cleaner-burning natural gas made available through hydraulic fracturing and the cost of installing new wind and solar facilities increases. In many parts of the United States, generating a kilowatt of emissions-free electricity is now the cheaper than that produced by carbon-spewing coal boilers.

"This rule addresses the key environmental challenge of our time, and does so cost effectively," Hostetler said.

The judges repeatedly interrupted the lawyers for both sides to ask pointed questions about the legal underpinnings of their positions.

Under the Clean Air Act, certain challenges to new EPA rules skip the federal district court and go directly to the appeals court. A three-judge panel had been scheduled to hear the case in June, but for issues involving "a question of exceptional importance" procedural rules allow for the case to proceed directly to a hearing before the full appeals court, known as an "en banc" review.

By using its discretion to skip a step, the appeals judges are potentially shaving months off the time before the case could be heard by the high court.

Six of the 10 appeals judges on the D.C. Circuit were appointed by Democratic presidents. Chief Judge Merrick Garland, who was nominated by Obama to fill a vacant Supreme Court seat, recused himself from the case.