Federal Court Strikes Down EPA CSAPR Rule, Which Had Lowered Texas Resource Adequacy

A federal court today struck down the federal Environmental Protection Agency's Cross-State Air Pollution Rule (CSAPR), finding that the EPA exceeded its statutory authority.

Although Matters does not cover federal environmental policy, and will not delve into the specifics here, the ruling is notable because CSAPR has been one of the primary drivers for the current resource adequacy situation in Texas, which has prompted several ERCOT market changes and may ultimately lead to more.

Specifically, the U.S. Court of Appeals for the District of Columbia Circuit, in a 2-1 ruling, said that the EPA's rule must be vacated because the rule "violates federal law" for two independent reasons. The rule addresses emissions of sulfur dioxide and nitrogen oxide.

The court remanded the proceeding to the EPA, and said that EPA must continue administering the Clean Air Interstate Rule pending the promulgation of a valid replacement.

ERCOT released the following statement from ERCOT CEO H.B. "Trip" Doggett in response to the ruling:

"As the independent system operator responsible for the reliability of the electric grid that serves most of Texas, the Electric Reliability Council of Texas (ERCOT) has been monitoring this issue carefully since CSAPR was announced in 2011. The rule, as originally proposed, had potentially far-reaching reliability impacts for a grid in which electric use is growing far more rapidly than new generation resources are being built to serve that need.

"As the U.S. Environmental Protection Agency (EPA) revisits these cross-state air quality rules, ERCOT hopes to serve as a resource to help ensure that the long-term solution considers the electric reliability issues that affect this electric grid and our region.

"We will continue to work with the EPA, the PUC, the Texas Commission on Environmental Quality and other policymakers to help ensure ERCOT is able to continue fulfilling its mission to provide reliable power for 23 million electric consumers in Texas.