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Supreme Court Granting of CSAPR Appeal May Impact Compliance Dates

June 25, 2013

The Supreme Court's decision to hear EPA's appeal of the Cross-State Air Pollution Rule (CSAPR) case (EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012) could have a broad array of potential impacts on the power generation industry. Among those impacts is the potential for immediate and rapid enforcement of CSAPR if the Supreme Court overrules the D.C. Circuit and re-instates the Clean Air Act program.
If the government is successful in its appeal, EPA could require compliance from affected sources on a very tight timeframe. As seen in the final CSAPR compliance dates, it would not be the first time EPA sets unreasonable compliance dates. For example, EPA could require sources to submit CSAPR credits for calendar year 2014 or earlier and could levy heavy penalties if sources do not have adequate credits. Because the CSAPR allowance market is active and allowances are currently available for trade, there is little administrative process that could slow down EPA enforcement. Industry and states should not rely on EPA to be reasonable when it comes to CSAPR compliance. The likely timing for a Supreme Court decision is late spring or early summer of 2014. 
Even though a final decision on CSAPR is several months away, industry should take steps now to prepare for the potential return of CSAPR. We believe the D.C. Circuit opinion vacating CSAPR is sound and will likely not be overturned by the Supreme Court, but companies should think through contingency plans given the aggressiveness of EPA's enforcement program. Bracewell & Giuliani can help you carefully evaluate the potential compliance obligations and solutions in the event that CSAPR is re-instated in 2014.