STATEMENT OF JACKSON MORRIS, PACE ENERGY & CLIMATE CENTER

PA DEP listening Session December 9, 2013

• My name is Jackson Morris. I am Director of Strategic Engagement with the Pace Energy and Climate 

Center based at Pace Law School. 

• EPA has proposed to regulate carbon from exiting power plants, with a rule to be issued in June of 2014. 

Based on extensive legal analyses by a number of leading Clean Air Act experts, Section 111(d) of the 

Act is clearly the appropriate section under which to regulate greenhouse gases from existing power 

plants. 

• Section 111(b) directs EPA to list categories of stationary sources that significantly contribute to 

dangerous air pollution, and establish new source emission standards for air pollutants from such 

stationary sources. Power plants have been listed under 111(b) since 1971. Existing power plants 

represent over 40% of the nation’s greenhouse gas emissions, the nation’s largest single source of 

carbon pollution.

• Section 111(d) directs the development of emissions standards for existing sources in the 111(b) 

categories for any pollutants that are not separately addressed in the Act as hazardous or criteria 

pollutants.

• Section 111(a) provides clarity on how these emissions standards are determined. §111(a) directs the 

EPA Administrator to identify the most effective (“best”) system of emission reduction that has been 

“adequately demonstrated,” considering cost, effects on energy, and other environmental effects.

The terms of this definition are explicitly incorporated into the whole of §111. §111(d) therefore

incorporates this assessment in directing the Administrator to review state plans to determine 

whether or not the plans are “satisfactory.” Therefore, §111 as a whole directs a federal-state 

collaboration in which EPA sets a federal floor, and states are invited to submit compliant plans. 

• §111(d) authorizes binding federal guidelines: Since 1975, EPA has held that Section 111(d) 

authorizes it to set environmental performance standards and ensure that state plans meet them. Over 

the last 40 years, the Agency has used Section 111(d) for a number of major sources of harmful air 

pollution including municipal solid waste landfills, municipal waste combustors, and sulfuric acid 

plants. The SCOTUS has held that States issue Section 111(d) standards “in compliance with [EPA] 

guidelines and subject to federal oversight.” Am. Elec. Power Co. v. Connecticut, 131 S. Ct. 2527, 

2537 (2011).

• §111(d) can be used to foster technological innovation: Opponents assert that carbon capture and 

storage (CCS) is not yet widely deployed and that it therefore cannot be the “best system of emission 

reduction” for new coal-fired power plants. However, Senate committee notes state that Section 111 

was designed to promote emerging technology that need not “be in actual routine use somewhere,”

just as flue gas scrubbers were promoted by §111(d) in the 1970s before they had been widely 

adopted.

• §112 is not the appropriate place to regulate carbon pollution: Opponents claim that EPA may 

not regulate carbon from any industrial source, such as power plants, if the Agency has 

regulated hazardous air pollutants from that source under a different section of the Act (Section 

112). This argument is born out of subtly conflicting House and Senate version of the 1990 CAA

amendments, the unsupported presumption that the House meant to radically reshape §111(d) 

authority, and the further incorrect assumption that this reading must control. In such a case, 

SCOTUS’ Chevron doctrine holds that EPA’s interpretation of the Act controls unless it is wholly 
unreasonable and impermissible. §111(d) is therefore the appropriate section under which to regulate 

carbon pollution.

• Based on both materials released to date by EPA and numerous statements by various EPA staff and 

Administrator Gina McCarthy, it appears the federal regulations will seek to maximize the flexibility for 

states comply as they work to submit their state plans by June of 2016. We believe maximum flexibility 

should be contingent upon a standard being sufficiently stringent to drive meaningful reductions in 

greenhouse gases from the power sector. Pace sees three general compliance pathways available, 

depending on the regulatory and market characteristics of any given state, all of which (if appropriately 

designed) should meet the EPA definition of “Best System(s) of Emissions Reduction” under the Act.

• Option 1: An Integrated Resource Plan (IRP) approach in which vertically integrated utilities under PUC 

jurisdiction submit plans by which to reduce their fleet’s emissions over a certain time period. As 

Pennsylvania has been de-regulated, this option is likely not appropriate to pursue. 

• Option 2: The creation of State-wide emissions rates. Under this approach, championed by NRDC, EPA 

would create state-by-state emissions rate baselines based on the share of electricity generated by coal 

and gas-fired plants in each state over a baseline period, then set target emission rates for each state

between now and 2020. Covered power plant’s emissions would be averaged. Covered plants could 

trade credits generated through state-regulated energy efficiency programs, or by utilizing low- or zeroemitting sources, such as wind and solar.

• Option 3: Adopting a market based system such as the Regional Greenhouse Gas Initiative Model. 

RGGI states have convened a collaborative in support of this approach, which includes many electric 

generators who will be subject to forthcoming 111(d) standards. This Collaborative has recently 

submitted principles to EPA in support of strong federal 111(d) action that promotes the RGGI model. 

Participants met with EPA to deliver these principles last week. The following organizations are part of 

the Collaborative and include utilities, electric generators, environmental groups, business coalitions and 

state officers throughout the Northeast and Mid-Atlantic Region: 

Calpine Corporation

Chesapeake Climate Action Network

Consolidated Edison

Environmental Defense Fund

Environment Northeast

Exelon Corporation

National Grid

Natural Resources Defense Council

New England Clean Energy Council, and

NextEra Energy

• These groups believe that (1) RGGI should qualify as a compliance mechanism framework under 

forthcoming EPA rules under Section 111(d) of the Clean Air Act, and that additional states should be 

allowed to use the RGGI mechanism; (2) Federal guidelines should give states, including those 

participating in RGGI, appropriate credit for the emissions reductions achieved due to efforts taken prior 

to the effective date of the federal requirements; (3) In setting a “best system of emission reduction,”

EPA should evaluate the RGGI cap-and-trade mechanism as an applicable model for other interested 

states; and (4) EPA should support interested states with assistance to facilitate the use of the RGGI 

mechanism to achieve reductions.