By: Lesley Foxhall Pietras

On August 8, 2011, the Environmental Protection Agency (EPA) published a far-reaching Clean Air Act rule intended to address the interstate transport of sulfur dioxide (SO2) and nitrogen oxides (NOx) from upwind to downwind states. See 76 Fed. Reg. 48208 (Aug. 8, 2011). Specifically, the Cross-State Air Pollution Rule (CSAPR) requires 27 states, including Louisiana and Texas, to make dramatic cuts in power plant emissions. Emissions reductions will take effect quickly, starting January 1, 2012 for SO2 and annual NOx reductions, and May 1, 2012 for ozone season (May-September) NOx reductions. Texas power plants must meet the January 1, 2012 deadline for SO2 and annual NOx emissions, and the May 1 deadline for ozone season NOx emissions. Louisiana power plants must meet the May 1 deadline to reduce ozone season NOx emissions.

As promulgated, CSAPR will have dramatic impacts on Texas and Louisiana. According to the Texas Commission on Environmental Quality, CSAPR requires Texas power plants to lower SO2 emissions by 46 percent and NOx emissions by 7 percent compared with 2009 levels. See Kate Galbraith and Ari Auber, Controversial Pollution Rule Still on Track for Texas, The Tex. Tribune, Sept. 5, 2011. As for Louisiana, the Louisiana Public Service Commission’s consultant notes that CSAPR requires Louisiana power plants to reduce NOx emissions by 42 percent compared to 2010 levels. See David E. Dismukes, Acadian Consulting Group, Commissioner Briefing & Proposed Staff Recommendation: EPA’s Recently-Proposed Cross State Air Pollution Rule, Louisiana Public Service Commission Business & Executive Meeting (Sept. 7, 2011). Making these cuts by the highly compressed deadline could jeopardize the ability of the Texas and Louisiana electric grids to supply sufficient power to businesses and consumers. The reductions could even lead to rolling blackouts. For example, the Electric Reliability Council of Texas (ERCOT), the independent power system operator for the state, estimates that implementing CSAPR could result in a power generation capacity reduction of as much as 1,400 MW during the summer peak months. A reduction of that magnitude would have resulted in rotating outages during some days in August 2011. See ERCOT, Impacts of the Cross-State Air Pollution Rule on the ERCOT System at 5 (Sept. 1, 2011). Additionally, Luminant, the largest power generator in Texas, recently announced that it will need to close certain facilities to comply with CSAPR, which will cause the loss of approximately 500 jobs. See Luminant News Release, Luminant Announces Facility Closures, Job Reductions in Response to EPA Rule (Sept. 12, 2011). Moreover, in light of the substantial capital that power plants will need to spend on pollution control technology to comply with CSAPR, the rule will significantly increase the cost of electricity for all consumers, including businesses and individuals.

Numerous parties are considering challenges to CSAPR. Under the Clean Air Act, the deadline to file petitions for review of the rule is October 7, 2011. Petitions for reconsideration also must be filed by that same date.