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Perspective of 18 States on Greenhouse Gas Emission Performance Standards

for Existing Sources under § 111(d) of the Clean Air Act.

Introduction

As State Attorneys General, we believe it is critical to bring public awareness to another 

example of what has unfortunately become routine: the United States Environmental Protection 

Agency (“EPA” or “Agency”) is poised to yet again propose new regulations that venture well 

beyond the limits of the agency’s authority. The President has called upon EPA to propose 

greenhouse gas (GHG) emission standards, regulations, or guidelines for existing power plants 

by June 1, 2014, and to finalize those rules by June 1, 2015. As this paper will show, EPA’s 

authority under the Clean Air Act is limited to developing a procedure for states to establish 

emissions standards for existing sources. EPA, if unchecked, will continue to implement 

regulations which far exceed its statutory authority to the detriment of the States, in whom 

Congress has vested authority under the Clean Air Act, and whose citizenry and industries will 

ultimately pay the price of these costly and ineffective regulations. 

Last year, EPA published a proposed rule regulating carbon dioxide (“CO2”) emissions 

from new electric utility generating units (“EGUs”). 77 Fed. Reg. 22,392 (April 13, 2012) 

(“EGU NSPS”). In light of recent comments from industry, EPA is considering the need to repropose this standard due to its failure to finalize the action within the CAA’s 1-year timeframe. 

In addition, on April 15 and 17, 2013, some states and environmental groups filed 60- and 180-

day Notices of Intent to sue EPA under section 304(a) of the Clean Air Act (“CAA”) for failure 

to perform the allegedly non-discretionary duty of and/or unreasonably delaying finalizing the 
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EGU NSPS and proposing standards for existing EGUs.1 In response to these Notices, a 

coalition of Attorneys General has requested to be involved in any settlement discussions with 

advocates of broad federal GHG regulations. 

EPA states that once it has issued regulations for an air pollutant from new sources in a 

particular source category under the CAA § 111(b), it has legal authority to regulate emissions 

from existing sources of that air pollutant within the same source category.2 The final version of 

the new source performance standards for new EGUs will likely face legal challenge. However, 

the following analysis assumes the final EGU NSPS for GHG emissions is upheld and EPA 

moves forward with rulemaking for existing sources. 

The purpose of this paper is to identify a timely example of a serious, ongoing problem in 

environmental regulation: the tendency of EPA to seek to expand the scope of its jurisdiction at 

the cost of relegating the role of the States to merely implementing whatever Washington 

prescribes, regardless of its wisdom, cost, or efficiency in light of local circumstances. The issue 

is not new. The States and EPA have been at odds over the scope of their respective 

responsibilities under the federal environmental statutes since the statutes’ inception. The recent 

increase in the level of federal regulatory activity under the Clean Air Act has generated a 

 

1 A settlement agreement entered into by a number of states and environmental groups in December 2010 set forth 

deadlines for EPA to issue regulations with respect to GHG emissions from existing EGUs. See, 75 Fed. Reg. 

82,392 (Dec. 20, 2010). The deadlines have passed. 

2 The authority of EPA to promulgate GHG NSPS for existing EGUs, even if it finalizes its proposed GHG NSPS 

rule for new EGUs, has been questioned. See William J. Hann, The Clean Air Act as an Obstacle to the 

Environmental Protection Agency’s Anticipated Attempt to Regulate Greenhouse Gas Emissions from Existing 

Power Plants, THE FEDERALIST SOCIETY (Mar. 2013), available at http://www.fed-soc.org/publications/detail/theclean-air-act-as-an-obstacle-to-the-environmental-protection-agencys-anticipated-attempt-to-regulate-greenhousegas-emissions-from-existing-power-plants. Without conceding that EPA does have authority to promulgate a GHG 

NSPS for existing EGUs, we assume for purposes of discussion here that EPA does have that authority and will 

exercise it. 
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corresponding increase in concerns among the States regarding the preservation of their role in 

environmental protection. 

The way in which EPA has “pushed the envelope” in interpreting its legal authority under 

the CAA to promulgate a New Source Performance Standard for new EGUs portends a similarly 

aggressive and unlawful approach to the regulation of existing EGUs. EPA’s clear policy goal in 

establishing its new source standards is to prevent the construction of new coal plants. EPA’s 

proposed EGU NSPS would foreclose the construction of new coal-based electric generation 

absent carbon capture and storage (“CCS”), yet CCS is likely to remain commercially infeasible 

for a decade or more. The elimination of coal as a fuel for new electric generation would have 

highly concerning implications for electricity prices and for the economy and job-creation in 

general, as well as the competitiveness of American manufacturing. 

In order to justify its proposed standard that would not allow new coal-based EGUs 

absent CCS, EPA has taken unprecedented steps. The Agency proposed to combine coal and 

combined-cycle natural-gas units into a single regulatory category, something it has never done 

before for coal and gas EGUs. Indeed, it did not even go so far as recently as last year when it 

proposed NSPS for traditional pollutants emitted by EGUs. EPA’s aggressive posture in its 

proposed new-source NSPS, both as to foreclosing new coal plants and in pushing the scope of 

its claimed legal authority, raises serious questions as to the approach EPA will eventually take 

when it promulgates existing-source NSPS. 

If EPA proceeds against existing coal plants with the same hostility, it is likely to be 

reversed in court. As this paper shows, EPA does not have authority to promulgate prescriptive 

limitations for existing coal-fueled EGUs. Under section 111(d) of the CAA, EPA must 

recognize that States have broad discretion to determine the nature of NSPS requirements for 
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existing EGUs. EPA may require States to adopt standards, and EPA may guide how States do 

so procedurally, but the States are vested with the legal authority to decide the ultimate 

standards.

The Statutory and Regulatory Framework For Developing Performance Standards For 

Existing Sources

The focus of the following analysis is the limitations Congress placed on EPA’s authority 

under Section 111(d) of the CAA. Section 111(d) provides EPA with the authority to develop 

standards of performance for existing sources and directs the Agency to:

prescribe regulations which shall establish a procedure similar to 

that provided by section 7410 of this title under which each State 

shall submit to the Administrator a plan which establishes 

standards of performance for any existing source for any air 

pollutant...to which a standard of performance under this section 

would apply if such existing source were a new source. 

Section 111(d) requires the existence of a performance standard for new sources as a 

condition precedent to the development of such standards for existing sources. Thus, the legality 

of the final version of EPA’s EGU NSPS rule has significant implications for EPA’s ability to 

require regulation of existing EGUs. 

Most importantly, section 111(d) invokes the principle of cooperative federalism – with 

roles clearly delineated for both EPA and the States. The reference to § 110 refers to the general 

process by which States submit their State Implementation Plans (“SIPs”) for EPA review. 

Accordingly, EPA’s authority under § 111(d) is limited to establishing, in the statute’s term, a 

“procedure” by which the States submit plans for regulating existing sources. EPA cannot 

promulgate rules establishing the substantive standards to be imposed on existing sources. 

The cooperative federalism is illustrated by EPA’s general procedural regulations relating 

to the States’ adoption and submittal of plans establishing standards of performance for existing 
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sources. Those regulations require EPA to issue a “guideline document” concurrently with, or 

after, the “proposal of standards of performance for the control of a designated pollutant from 

affected facilities.” 40 C.F.R. § 60.22(a). The content of the guideline document is of great 

importance to the preservation of the States’ role in the development of performance standards 

for existing sources. 

Under EPA’s regulations, the guideline document is to “provide information for the 

development of State plans” including a “description of systems of emissions reduction which, in 

the judgment of the Administrator, have been adequately demonstrated.” Id at (b)(2). The 

guideline document also shall contain an “emission guideline” providing “criteria for judging the 

adequacy” of § 111(d) plans. 40 C.F.R. § 60.22(b)(5); see, 40 Fed. Reg. 53,341 (Nov. 17, 1975). 

The emission guideline “reflects the application of the best system of emission reduction 

(considering the cost of such reduction) that has been adequately demonstrated.” 40 C.F.R. § 

60.22(b)(5). The emission guideline must also allow sub-categorization “when costs of control, 

physical limitations, geographical location, or similar factors make [it] appropriate.” Id. 

Also under EPA’s regulations, the States have nine months to submit a “plan for the 

control of the designated pollutant to which the guideline document applies.” 40 C.F.R. § 

60.23(a)(1). The plan “shall include emission standards” that “shall prescribe allowable rates of 

emissions except when it is clearly impracticable.” 40 C.F.R. § 60.24(a), (b)(1). The States have 

significant discretion in formulating these plans. Although the “emission standards” are to be 

“no less stringent than the corresponding emission guideline(s), the States may make a case-bycase determination that a specific facility or class of facilities should be subject to a less-stringent 

standard or longer compliance schedule due to 1) cost of control; 2) physical limitation of 

installing necessary control equipment; and 3) other factors making the less-stringent standard 
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more reasonable. See, 40 C.F.R. § 60.24(c), (f). EPA then has four months to determine 

whether the plan meets the requirements discussed above. If EPA disapproves the plan, the State 

may correct the deficiencies or, under EPA’s construction, the Agency may issue its own plan 

within 6 months of the original submission deadline. See, 40 C.F.R. § 60.27(c), (d). 

Although these regulations have never been tested in court, EPA undoubtedly has power 

to adopt procedural regulations governing State adoption of plans setting forth performance 

standards. But, importantly, and consistent with the statute, the determination of the actual 

substantive standards is left to the states. 

Existing Source Performance Standards for CO2 Emissions from EGUs

In contemplating regulation of existing EGUs, however, EPA appears poised to go 

beyond the establishment of procedures and usurp the states’ authority by setting minimum 

substantive requirements for state performance standards. Having reviewed the statutory and 

regulatory requirements for developing standards of performance for existing sources in a 

general sense, we now apply that legal framework to CO2 emissions from EGUs. Although EPA 

has not yet issued a proposed guideline document for CO2 emissions from existing EGUs, we 

offer general observations about potential issues that have already presented themselves. 

Fundamentally, § 111(d), as well as EPA’s own regulations, require that emission 

reductions be made through adequately demonstrated systems of emission reduction technology. 

Under § 111(d), EPA establishes procedures for States to submit plans containing “performance 

standards.” “Performance standards” is defined in § 111(a): “The term ‘standard of 

performance’ means a standard for emissions of air pollutants which reflects the degree of 

emission limitation achievable through the application of the best system of emission reduction 

which (taking into account the cost of achieving such reduction and any nonair quality health and 
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environmental impact and energy requirements) the Administrator determines has been 

adequately demonstrated.” (Emphasis supplied). And EPA’s guideline document and the 

emission guideline contained therein are to “reflect[] the application of the best system of 

emission reduction (considering the cost of such reduction) that has been adequately 

demonstrated.” 40 C.F.R. § 60.22(b)(5); see also, 42 U.S.C. § 7411(1) (definition of “standard 

of performance”). The crux of this requirement thus is that the system be, in fact, adequately 

demonstrated. 

It seems incontrovertible that no post-combustion reduction system has been “adequately 

demonstrated” for CO2 emissions from EGUs on a broad, commercial scale. A system of carbon 

capture and storage is perhaps a decade away from being technologically and economically 

feasible. A permitting system for storing CO2 emissions underground and a set of legal rules 

governing liability for CO2 storage has not been put in place in most states. Without an 

adequately demonstrated post-combustion control technology, EPA must look to standards based 

on cost-effective efficiency improvements at electric generating units, because more efficient 

units will produce lower CO2 emissions per unit of heat input or electricity output. 

EPA and others may believe that efficiency measures will not ensure the amount of CO2 

emission reductions they desire. As a result, some groups have proposed EPA be given 

flexibility to develop emission guidelines based on trading programs with statewide emissions 

caps, increased reliance on lower CO2 emitting facilities, or demand-side and non-regulated 

source reductions. In short, EPA may attempt to force coal-fueled EGUs to decrease operation 

time or retire early, or force utilities to rely more heavily on natural gas and other resources in an 

effort to ensure greater CO2 emission reductions. Such proposals, often offered as ways of 

providing “flexibility,” do not conform to the limitations Congress has placed on EPA in the 
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Clean Air Act, nor do they properly preserve the primary role of States in the development of 

standards of performance for existing sources. Under § 111(d), it is the States, not EPA, that are 

authorized to adopt performance standards; therefore it is the States, not EPA, that weigh the § 

111(a)(1) factors to determine what technology is adequately demonstrated. Simply put, EPA 

lacks statutory authority (and is limited by its own regulations) to issue emission guidelines 

seeking reductions of CO2 emissions from coal-based EGUs in a manner based on something 

other than an adequately demonstrated reduction system for such EGUs. 

To the extent § 111(d) provides authority for flexible approaches to establishing 

performance standards to seek reductions in CO2 emissions, that authority is vested in States, not 

EPA. And of course, under § 116, States retain authority to adopt more stringent CO2 controls 

than EPA has the authority to mandate. 

As noted, § 111(d) specifies that EPA’s regulatory authority is limited to developing a 

procedure for the submission of state plans. EPA’s general regulations authorizing the issuance 

of emission guidelines that establish minimum requirements, depending on how EPA 

implements this guideline authority in a particular case, bear on substantive standard-setting. 

But EPA does not have the authority to establish minimum substantive requirements. 

EPA cannot dictate substantive outcomes. The agency can require that States actually 

adopt performance standards based on application of the § 111(a)(1) factors. 

States are additionally afforded the discretion to consider “among other factors, the 

remaining useful life of the existing source to which such standard applies” when developing 

performance standards for existing units. Beyond this, § 111(d) does not provide authority for 

EPA to reject a State plan if it does not contain a standard of performance as that term is defined, 

and based on the factors set forth, in § 111(a)(1). 
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In sum, the CAA imposes responsibility for air pollution control at the State and local 

levels because of the proximity to existing sources and familiarity with local operating 

conditions. State implementation plans are thus the primary architecture of emission controls. 

See §§ 107(a); 110(a); 111(d). The “structure of the CAA militates against reading an extrastatutory requirement into the Act's limitations on state discretion. Because the states enjoy 

‘wide discretion’ in implementing the Act, the imposition of newfound restrictions upsets the 

Act's careful balance between state and federal authority. Union Elec. Co., 427 U.S. at 250; see 

also Fla. Power & Light Co., 650 F.2d at 587 (’The great flexibility accorded the states under the 

Clean Air Act is . . . illustrated by the sharply contrasting, narrow role to be played by EPA.’).”

Luminant Generation Co. v. EPA, 675 F.3d 917, 929 (5th Cir. 2012). EPA’s role for existing 

sources is therefore “confine[d]...to the ministerial function of reviewing SIPs for consistency 

with the Act’s requirements.” Luminant Generation Co. v. EPA, 675 F.3d 917, 921 (5th Cir. 

2012). 

Conclusion

The prospect for EPA adoption of GHG performance standards for new or existing coalbased EGUs raises serious concerns. EPA’s aggressive standards for new coal-based EGUs 

indicate a similarly aggressive approach to existing coal-based EGUs. While EPA is authorized 

to require States to submit plans containing performance standards, EPA may not dictate what 

those performance standards shall be. Nor may EPA require States to adopt GHG performance 

standards that are not based on adequately demonstrated technology or that mandate, in the guise 

of “flexible approaches,” the retirement or reduced operation of still-viable coal-based EGUs. 

These concerns are serious. EPA regulations may harm the nascent economic recovery. 

Moreover, our federalist system of government, as implicated in the CAA, requires that EPA 
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recognize the rights and prerogatives of States. The extent and form of greenhouse gas 

regulation is important to the States; it is critical that States be allowed to play their proper roles 

in making the significant policy judgments that are required in adopting any such regulation. 

Jon Bruning Bill Schuette

Nebraska Attorney General Michigan Attorney General 

Scott Pruitt Luther Strange

Oklahoma Attorney General Alabama Attorney General

Mike Geraghty Tom Horne

Alaska Attorney General Arizona Attorney General

Pam Bondi Sam Olens

Florida Attorney General Georgia Attorney General

Derek Schmidt Jack Conway

Kansas Attorney General Kentucky Attorney General

Tim Fox Wayne Stenehjem

Montana Attorney General North Dakota Attorney General
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Mike DeWine Alan Wilson

Ohio Attorney General South Carolina Attorney General

Marty Jackley Patrick Morrisey

South Dakota Attorney General West Virginia Attorney General

J.B. Van Hollen Tom Easterly

Wisconsin Attorney General Commissioner, Indiana Department 

of Environmental Management of Environmental Management