APPA: EPA CO2 Rule Inadequately Considers Potential Impacts on Small Business

May 29, 2015

Press Release

Arlington, Va., May 29, 2015—The American Public Power Association (APPA) yesterday submitted comments to the Environmental Protection Agency (EPA) regarding Small Business Advocacy Review (SBAR) of the agency’s Federal Plan for Regulating Greenhouse Gas Emissions from Electric Generating Units (EGU). While APPA has previously articulated its concerns with EPA’s proposed rule under section 111(d) of the Clean Air Act (CAA) to reduce emissions of carbon dioxide (CO2) from fossil fuel-fired EGUs, today’s comments highlight regulatory flexibility alternatives it believes EPA should consider as the agency drafts the Federal Plan for Regulating Greenhouse Gas Emissions from EGUs.

“EPA is required by law to consider the impacts a rule of this magnitude will have on small businesses,” said APPA Senior Vice President of Regulatory Affairs and Communications Joe Nipper. “In our view, it has fallen woefully short on this requirement, and many of our member-utilities stand to face grave consequences.”

More than 90 percent of public power utilities qualify as small businesses under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). Many of these small utilities rely on a single generation resource that produces less than 100 MW. The lack of compliance options for these utilities will likely result in substantial cost increases for their customers.

The EPA is legally compelled to both carefully consider the impact its proposed Federal Plan will have on small entities and to lessen the burden of the rule on those small entities. EPA failed to provide SBAR panel members with information on the potential impacts of this rule and has not provided Small Entity Representatives with the necessary information with which to discuss alternatives and provide recommendations to EPA, as required by the Regulatory Flexibility Act as amended by SBREFA.

APPA recommends that EPA’s Federal Plan include multiyear averaging for compliance over at least a five year period, a provision ensuring small entities have a broad access to emission reductions outside the “fence-line” and full credit for early actions, a mechanism to account for the remaining useful life of a generating unit owned by a small entity, a reduction in reporting requirements for small EGUs, and a compliance option that would prevent stranded costs.