Senate seeks to stall new EPA rules

The version of House Bill 571 passed by the House in April directed DENR to assemble a stakeholder advisory panel and begin work on a state implementation plan for the EPA's new Clean Power Plan, a set of regulations limiting pollution from stationary sources such as power plants. Those rules aren't yet finalized but are expected to be finished in August.

House sponsors, including Reps. Chuck McGrady, R-Henderson, and Mike Hager, R-Rutherford, argued that it's in the state's best interest to design its own plan to meet the new requirements because, if it does not, federal regulators can simply impose a plan on the state that may not take the state's best interests and current renewable portfolio into account.

The version rolled out in the Senate Agriculture and Environment Committee on Wednesday by Sen. Trudy Wade, R-Guilford, does precisely the opposite. It forbids any state agency, board or commission from adopting any rules, spending any money or taking any other action to develop a state implementation plan until all legal challenges to the CPP are completed or July 1, 2016, "whichever is later."

"Basically, it’s a wait and see what’s going to happen with the EPA Clean Power Plan," Wade told the committee. "We know there’s going to be litigation over this, and before we spend a lot of time and money implementing it, let’s see what’s going to happen."

Asked for comment, DENR Secretary Donald Van de Vaart advised the committee not to approve the bill.

Van de Vaart said he doesn't agree with the CPP and intends to take it to court, but the moratorium in the bill "will eventually tie our hands in our efforts to successfully litigate this."

The state needs to submit at least an implementation plan for part one of the new rules, he said.

"We need to have that prepared, and then, if the EPA rejects it, we’ll have another chance to challenge the rule," he said.

"North Carolina's going to meet the 30 percent reduction" in carbon pollution required by the CPP, van de Vaart said, "without any federal help. But it is consequential in that, if we cannot put forth any plan at all, we’ll be letting the EPA take over the world’s greatest electricity generating system."

Wade argued that the state will likely have several years to develop a plan as litigation against the CPP unfolds.

But retired EPA regulator and North Carolina Sierra Club Vice President Harvey Richmond agreed with van de Vaart.

Richmond said federal courts don't generally issue injunctions to stay federal rules while court challenges are underway. The deadline is one year from the implementation of the rules, he said, and states that don't have plans ready to submit risk the imposition of a federal implementation plan instead, which he referred to as being "FIPped."

Richmond told the committee that other Southeastern states, including Georgia and South Carolina, already have stakeholder groups working on state implementation plans.

The only speaker in favor of Wade's bill was Donald Bryson with Americans for Prosperity, a conservative group that's strongly opposed to any energy regulation requiring renewable energy or limiting carbon emissions.

Bryson derided the call for stakeholder involvement in a state plan.

"The most important stakeholders in North Carolina’s energy grid are the taxpayers," he told the committee. "Forget everyone else. You need to talk about the people who end up paying the bills at the end of the day."

Bryson testified that the CPP will cause "a 14 percent spike in electric rates" in North Carolina.

Southern Environmental Law Center attorney Brooks Rainey Pearson called that claim "false information," saying CPP will not increase power costs in the state.

"North Carolina can already achieve beyond its clean power plan for 2030" through reductions already planned by utilities, Pearson said. "No new commitments are even needed to comply."

The contradictory testimony left committee members scratching their heads.

Sen. Erica Smith-Ingram, D-Northampton, suggested the moratorium would be "penny wise and pound foolish" and recommended Wade consider an amendment to the bill to allow van de Vaart to prepare at least one plan “to put him in the best position to protect us from federal regulations that we would not want to be subject to."

Wade demurred.

"After hearing from the secretary that we’ve already met our goals, I can’t see how [the moratorium] is a problem at this point," she said. "Before it goes to the floor, I would like some of our attorneys to get together with the secretary. I think there’s some discrepancies there.”

"I am so totally confused in this situation right now, it’s ridiculous," protested Sen. Fletcher Hartsell, R-Cabarrus. "I don't know why we need to do anything either way, but if we do, I’m not sure what either one does is what we wanted to accomplish."

"I think we can have those conversations," Wade replied, "if we can just pass this out of committee today."

The measure passed the committee on a voice vote and is scheduled for debate on the Senate floor Thursday.