By Katherine King, Randy Young, Carrie Tournillon, and Mallory McKnight Fuller

This report was last updated on February 22, 2019

The following is prepared by the Kean Miller LLP Utilities Regulation team on important topics affecting consumers of electrical power in Louisiana.  For more information, please contact us at client_services@keanmiller.com

(LPSC Rulemaking) New Generation Deactivation Transparency Rule:  In March 2017, the Louisiana Public Service Commission (“LPSC”) initiated a proceeding to consider (1) whether the LPSC should exercise its authority over future utility generation deactivation and retirement decisions and (2) the rules and procedures that could apply to the LPSC’s exercise of such authority.  In October 2018, the LPSC issued its final rule, which requires electric utilities to report generation unit deactivations and retirements 120 days prior to implementation, including support for the decisions and continuing reports on units that are placed in deactivation status for possible return in the future.  The final rule creates more transparency and accountability on the part of utilities.

Entergy Formula Rate Plan Extension:  In August 2017, Entergy Louisiana, LLC (“Entergy”) filed a request for an extension and modification of its Formula Rate Plan (“FRP”) for test years 2018, 2019, and 2020.  In May 2018, the LPSC approved an extension and modification of Entergy’s FRP subject to the settlement terms reached by Entergy, LPSC Staff, and intervenors.  The settlement terms included, among other things, the flow back to customers of all tax benefits created by the Tax Cuts and Jobs Act of 2017 (“TCJA”).

Entergy Integrated Resource Plan:  In October 2017, Entergy initiated proceedings at the LPSC to begin work on its Integrated Resource Plan (“IRP”) for the years 2018 through 2038.  The objective of the IRP process is generally to evaluate a set of potential resource options that offer the most economical and reliable approach to satisfy future load requirements of the utility.  Entergy’s draft IRP was filed at the LPSC in October 2018.  The final IRP is due in May 2019.  The IRP process does not result in the LPSC’s approval of a proposed resource plan or approval of construction or acquisition of any particular resources.

Louisiana Electric Rates, Industrial Customer Market Access / New Tariff Options:  In April 2017, the LPSC initiated a technical conference series entitled “Status of Electric Rates in Louisiana: Where Are We and Where Are We Going?”  Through this series, the LPSC hoped to achieve its goal of ensuring reliable electric service at the lowest reasonable cost.  The technical conference series invited stakeholders to provide input on the status of electric rates in Louisiana and recommendations of policies or other options the LPSC should consider for the future.  The technical conferences were held in 2017.  In December 2018, LPSC Staff issued a report and request for comments.  A final report from LPSC Staff is expected in early 2019, which will be presented to the Commissioners for a determination regarding steps forward.

(LPSC Rulemaking) MISO Demand Response/ Aggregators of Retail Customers:  In July 2018, the LPSC opened a rulemaking to study the implications of participation of Aggregators of Retail Customers (“ARC”) in the wholesale markets and to determine whether, and under what conditions, such activity should be allowed in the LPSC’s jurisdiction.  ARCs enter into agreements with, and combine the abilities of, multiple retail electric customers to participate in wholesale markets as a Demand Response or Load Modifying Resource.  In September 2018, Commissioner Skrmetta issued a directive that third-party ARCs are not allowed to register LPSC-jurisdictional customers or participate in wholesale markets with their loads pending the outcome of the rulemaking.  In November 2018, LPSC Staff issued a proposed rule and request for comments from stakeholders, the deadline for which was December 2018.  No final rule has been issued as yet.

Entergy Proposed Solar PPA and Experimental Renewal Option (“ERO”) Tariff:  In May 2018, Entergy filed an application with the LPSC seeking approval to enter into a Purchase Power Agreement (“PPA”) for 50 megawatts (“MW”) of unit-contingent, as-available capacity and energy from a solar facility to be constructed in Port Allen, Louisiana.  The PPA arises out of Entergy’s 2016 Request for Proposals (“RFP”) for 200 MW of renewable resources.  A settlement has been reached by participants in the proceeding and will be presented to the LPSC for approval.  In October 2018, in connection with the PPA, Entergy filed a related application with the LPSC seeking authorization to make available a new Experimental Renewable Option and Rate Schedule ERO (“Schedule ERO”).  Schedule ERO would allow Industrial and Commercial customers the opportunity to schedule a portion of the Solar PPA.  Entergy’s Schedule ERO application is currently pending at the LPSC.

Entergy Generation Construction Projects:  In the past two years, the LPSC has approved Entergy proposals for large generation construction projects worth a combined estimated total greater than $2 billion.

Entergy 980 MW Power Plant in St. Charles Parish:  In November 2016, the LPSC approved Entergy’s proposal to construct a 980 MW CCGT unit located in Montz, Louisiana (near New Orleans), at a site adjacent to the existing Little Gypsy generation units.  The project was selected from among bidders in Entergy’s 2014 Request for Proposal (“RFP”) for resources in Amite South (southeast Louisiana area).  The project is estimated to cost $869 million and has a projected in-service date of June 2019.

Entergy 994 MW Power Station in Lake Charles, Louisiana:  In June 2017, the LPSC approved Entergy’s proposal to construct a 994 MW CCGT unit located in Westlake, Louisiana.  The project was selected from among bidders in Entergy’s 2015 RFP for Long-Term Development and Existing Capacity and Energy Resources.  The project is estimated to cost $872 million and has a projected substantial completion date of May 2020.

Entergy 361 MW Combustion Turbine in Washington Parish:  In May 2018, the LPSC approved Entergy’s acquisition of the Washington Parish Energy Center, a new 361 MW simple cycle combustion turbine (“CT”) to be constructed in Bogalusa, Louisiana by a subsidiary of Calpine Corporation (“Calpine”) for a purchase price of approximately $222 million.  Calpine had submitted an unsolicited offer to Entergy to construct the CT and sell it to Entergy for a turn-key price.  The acquisition and related assets is estimated to cost $261 million and has an estimated “turnover” date of April 2021 for delivery of a fully-permitted, fully operational facility.

Entergy Transmission Construction Projects:  The LPSC has also approved Entergy transmission construction projects worth an estimated combined total of more than $192 million, and Entergy recently submitted a new application for certification of an estimated $92 million transmission project.

Entergy Economic Transmission Project in Southeast Louisiana:  In December 2015, the LPSC approved Entergy’s proposal to build a portfolio of transmission projects in southeast Louisiana termed the Louisiana Economic Transmission Project (“LTEP”), which was identified in the MISO Transmission Expansion Plan (“MTEP”) 2015 as addressing congestion in southeast Louisiana at a cost below its estimated benefits.  Pursuant to Entergy’s January 2019 bi-annual report, the revised estimate for the total project cost is approximately $75 million.  The project is 100% complete and in-service.

Entergy Reliability Transmission Project in Lake Charles, Louisiana:  In December 2015, the LPSC approved Entergy’s proposal to build a portfolio of transmission projects termed the Lake Charles Transmission Project (“LCTP”) to meet reliability needs in the Lake Charles, Louisiana area.  The LCTP was submitted as an “out-of-cycle” project for the MTEP 2015 process and was approved by the MISO Board of Directors as a Baseline Reliability Project.  Pursuant to Entergy’s January 2019 bi-annual report, the revised estimate for the total project cost is greater than $187 million, and the estimated in-service date for the entire project is February 2019.

Entergy Economic Transmission Project in Downstream of Gypsy Area:  In November 2018, Entergy submitted an application to the LPSC for certification of a new transmission construction project located in the Downstream of Gypsy (“DSG”) area of southeast Louisiana.  As part of MTEP 2015, MISO identified the project as addressing congestion in southeast Louisiana at a cost below its estimated benefits.  The project is estimated to cost $92.3 million and has a projected in-service date of second quarter 2022.  The proceeding is in its early stages.

Cleco Power Application for Implementation of TCJA:  At the end of January 2019, in an ongoing proceeding, Cleco Power LLC (“Cleco Power”) filed an application with the LPSC seeking authorization to (1) implement rate reductions resulting from the TCJA, (2) modify certain tariffs in connection with the rate reductions, and (3) implement residential base revenue decoupling.  Cleco Power also requested expedited treatment so that its rate reductions can be implemented effective July 1, 2019.  The application is currently pending at the LPSC.

Cleco Cajun Acquisition of NRG South Central:  In April 2018, Cleco Power and its parent company, Cleco Corporate Holdings, LLC (“Cleco Corp”), filed an application at the LPSC requesting approval for Cleco Cajun, a wholesale subsidiary of Cleco Corp, to acquire NRG South Central Generating LLC, along with related generating units and wholesale sale contracts.  In January 2019, the LPSC approved the acquisition with the adoption of 59 Regulatory Commitments.

Cleco Natural Gas Hedging Proposals:  In August 2017, Cleco Power filed applications for natural gas hedging programs with the LPSC (a Long Term Derivative Hedging Program and a Physical Bilateral Hedging Program) pursuant to the LPSC’s General Order requiring each investor owned utility to bring forth three natural gas hedging programs for LPSC consideration.  In January 2019, Cleco Power filed a supplemental filing requesting that a hybrid of its two natural gas hedging programs be recognized as its third program under the LPSC General Order and that certain larger customers be allowed to opt-in to the long term hedging programs.  The supplemental filing is currently pending at the LPSC.

By Lauren J. Rucinski

On Tuesday, December 11, 2018, the Environmental Protection Agency (“EPA”) and U.S. Army Corp. of Engineers (“ACE”) proposed a rule revising the definition of “waters of the United States.” The so-called WOTUS rule defines the scope of Clean Water Act (“CWA”) jurisdiction and the permitting requirements thereunder, and has been in the hot seat for the past two years under both the Trump Administration and a bevy of litigation.

The Obama Administration promulgated the WOTUS rule in 2015, which defined the term “waters of the United States” broadly to cover any lake, stream, wetland, etc. with a “significant nexus” to a navigable water.[1] The regulation was challenged in a number of federal district courts and courts of appeal.[2] Following his election, President Trump issued a February 2017 Presidential Executive Order entitled “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule,” requesting that the EPA and ACE repeal and replace the 2015 rule. In response, the agencies repealed the 2015 WOTUS Rule, which is the first step in the process.[3] This rule proposal is the “second step” in the process.

The proposed definition of WOTUS set forth in the proposed rule would replace the 2015 WOTUS rule.[4] Under the proposed rule, the following six “clear” categories of waters would be considered “waters of the United States”:

  1. Traditional navigable waters;
  2. Tributaries;
  3. Certain ditches;
  4. Certain lakes and ponds;
  5. Impoundments; and
  6. Adjacent wetlands.[5]

Each category is supplemented by examples and definitions. Of particular note to Louisiana industry is the sixth category: adjacent wetlands. According to the proposed rule, wetlands would need to “physically touch” or be connected by inundation or perennial flow (including over a levee or berm if applicable) to navigable waters in order to bring the area under CWA rules.

Although the question still remains whether these definitions provide any more clarity than the previous “significant nexus test” under the 2015 WOTUS rule, both the EPA and ACE are optimistic. EPA Acting Administrator Andrew Wheeler stated: “For the first time, we are clearly defining the difference between federally protected waterways and state protected waterways. Our simpler and clearer definition would help landowners understand whether a project on their property will require a federal permit or not, without spending thousands of dollars on engineering and legal professionals.”[6]

It is important to note that the State of Louisiana through the Louisiana Department of Environmental Quality (“LDEQ”) defines its own rule for “waters of the state.” The LDEQ rule is much broader and includes “both the surface and underground waters within the state of Louisiana including all rivers, streams, lakes, groundwaters, and all other water courses and waters within the confines of the state, and all bordering waters and the Gulf of Mexico.”[7]

The proposed rule can be found here and the public comment period will be open for the sixty days following the proposed rule’s publication in the Federal Register.

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[1] 80 Fed. Reg. 32054, June 29, 2015.

[2] See “A Plethora of Cases Could Affect WOTUS Rulemaking” (June 1, 2017) available at https://www.louisianalawblog.com/environmental-litigation-and-regulation/plethora-cases-affect-wotus-rulemaking/#_ftn1 (citing and discussing e.g., United States v. Robertson, No. CR 15-07-H-DWM, 2015 WL 7720480 (D. Mont. Nov. 30, 2015); Duarte Nursery Inc. v. Army Corps of Engineers, et al., 17 F. Supp. 3d 1013 (E.D.Cal. 2014); Nat’l Ass’n of Mfrs. v. Dep’t of Def., 138 S. Ct. 617, 199 L. Ed. 2d 501 (2018))  

[3] 83 Fed. Reg. 32227, July 12, 2018.

[4] https://www.epa.gov/wotus-rule/step-two-revise.

[5]https://www.epa.gov/sites/production/files/2018-12/documents/factsheet_-_wotus_revision_overview_12.10_1.pdf;

[6] https://www.epa.gov/newsreleases/epa-and-army-propose-new-waters-united-states-definition.

[7] LAC 33:IX.107.

By R. Lee Vail, P.E., Ph.D.

On December 3, 2018, the EPA published a final rule in the Federal Register (83 FR 62268) making the 2017 amendments effected as of that day.  In doing so, the EPA noted that it had no discretion in the matter as the U.S. Court of Appeals for the District of Columbia Circuit Court issued its decision vacating the 2017 Delay Rule and later issued its mandate which made the RMP Amendments now effective.  EPA further saw no good cause to open rulemaking to accept comments or delay effectiveness for another 30 days.

Many of the requirements in the amended rule contained future compliance dates (beyond 2018) and therefore this action has no effect on them.  However several requirements are now effective including:

  • Tri-annual audits cover each process units;
  • Supervisor training requirements;
  • Emergency response coordination requirements;
  • Incident investigation report and scope (i.e., near miss) revisions other than “root cause analysis provisions in §§68.60(d)(7) and 68.81(d)(7) which go into effect in 2021; and
  • Emergency Response Plan updates where appropriate.

Whereas the proposed Reconsideration Rule could roll all this back, these provisions are now in effect.

By R. Lee Vail, P.E, Ph.D.

On May 30, 2018, the Environmental Protection Agency (EPA) published proposed revisions to the Risk Management Program (RMP) rules that would largely undo changes to the (stayed) final rule published on January 13, 2017.  See 83 Fed. Reg. 24850 (May 30, 2018).  Although not a complete one hundred eighty degree U-turn, the revised proposed rule pretty much guts most of the 2017 changes.  Rather than spending time parsing out what stayed from what was removed, I thought it would be more useful to consider the underlying message.

  • EPA has no ongoing obligation to modify RMP. EPA notes that section 112(r) of the Clean Air Act (CAA) contains four provisions that require EPA to promulgate regulations.  EPA believes that they have “met all of its regulatory obligations under section 112(r) prior to promulgating the RMP Amendments rule.”  83 Fed. Reg. at 24856 – 57.  EPA further explains that changes to the rule are allowed, but such changes are discretionary.
  • Discretionary changes to RMP should be coordinated with OSHA and reflect costs. The RMP prevention program requirements, from its initial promulgation in 1966 until the 2017 (stayed) rulemaking, were effectively identical to the Occupational Health and Safety Administration’s (OHSA) Process Safety Management (PSM) program rules.  This is not surprising as EPA is obligated to coordinate with OSHA pursuant to CAA section 112(r)(7)(D).  “While EPA has amended the Risk Management Program several times after 1996 without corresponding OSHA amendments to its PSM standard, these changes did not involve the prevention program provisions, thus precluding any need for coordination with OSHA.”  83 Fed. Reg. at 24864.  Although the EPA recognizes that “at times divergence between the RMP rule and the PSM standard may make sense given the agencies’ different missions,” the 2017 amendment “constitute a divergence from that longstanding practice.”   Further, most of the anticipated costs associated with the new rule are aligned with OSHA preventive program requirements.  Given the cost, coupled with the understanding that changes to the RMP program are discretionary, EPA action is a policy choice.  Id.
  • An enforcement-led approach is preferred to over-regulation. EPA notes that only 8% of RMP covered facilities had reportable accidents and that 2% of the facilities reported 48% of such incidents.  See 83 Fed. Reg at 24872.  Accordingly, instead of burdening all facilities with new rules, EPA believes that it would be more efficient to fulfill the goal of RMP through an enforcement-led approach.  Accordingly, “the RMP Amendments missed the opportunity to better target the burdens of STAA [Safer Technology and Alternatives Analysis] to the specific facilities that are responsible for nearly half of the accidents associated with regulated substances at stationary sources subject to the RMP rule.” 83 Fed. Reg. at 24872.
  • Reporters of RMP incidents beware. See above.
  • Process safety information (PSI) may have no regulatory purpose other than information required to conduct a Process Hazard Analysis (PHA). The 2017 Amendment added a requirement that process safety information be kept up to date.  This requirement was removed without any explanatory discussion.  Arguably, by adding and removing this requirement, the only obligation is to have up-to-date PSI at the beginning of a PHA.  If so, any violation should be a one-time, single-day, violation.
  • Information release should be limited to that which is necessary for developing and implementing emergency response plans. Perhaps just semantics, but EPA modified the requirement to share information with local emergency planning and response organizations from relevant information to information necessary to develop and implement (fearing that the original language was too open-ended).    See 83 Fed. Reg. at 24853.  Arguably, the only true “relevant” reason to request such information would be as needed to develop and implement response plans.  The revised proposed language will accomplish the goal and is less ambiguous.
  • EPA should not require information “synthesis” that connect-the-dots for intended bad actors. Whereas information may be accessible to the public through multiple sources, added hazard may occur through compiling the information in a single source.  See 83 Fed. Reg. at 24867.

A public hearing on the proposed revisions to the RMP rules is planned for June 14, 2018 and comments must be submitted on or before July 30, 2018.

By M. Dwayne Johnson

On May 30, 2018, EPA finally promulgated modifications to its 2015 definition of solid waste rule (2018 DSW Rule).[1] EPA promulgated the 2018 DSW Rule in response to the D.C. Circuit’s decision on EPA’s 2015 definition of solid waste rule.[2]

EPA’s revisions to the definition of solid waste rule essentially implement the vacaturs ordered by the D.C. Circuit, as discussed in my prior blog on this issue.[3] That is, EPA deleted the verified recycler exclusion (VRE) and reinstated the transfer based exclusion (TBE); retained the emergency preparedness and response requirements and expanded containment requirements and applied these to the TBE; and removed the mandatory 2015 version of Legitimacy Factor 4[4] and replaced it with the 2008 version of Legitimacy Factor 4, which must be considered but is not mandatory. EPA also removed the prohibition that had made certain spent petroleum catalysts (K171 and K172) ineligible for the TBE.

In addition, EPA provided some clarity on the applicability of rules in states such as Louisiana that have been authorized to administer and enforce the state hazardous waste program in lieu of the federal program and that adopted rules similar to the VRE and the 2015 definition of legitimate recycling but have not yet been authorized for them. According to EPA, the authorization status established prior to the adoption of the state counterpart rules remains in effect and the vacaturs and subsequent reinstatement of various provisions of the prior rules “will result in state provisions that are broader in scope than the federal program as it pertains to the specific vacated provisions.”[5]

Bottom line:  Louisiana’s VRE and mandatory 2015 version of Legitimacy Factor 4 may apply and be enforced by the Louisiana Department of Environmental Quality – but not EPA – within Louisiana.

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[1] 83 Fed. Reg. 24664 (May 30, 2018).

[2] American Petroleum Institute v. EPA, 862 F.3d 50 (D.C. Circuit 2017), as clarified on rehearing, 883 F.3d 918.

[3] See,  https://www.louisianalawblog.com/environmental-litigation-and-regulation/impact-louisiana-d-c-circuits-decision-definition-solid-waste-rule/

[4] The product of the recycling process must be comparable to a legitimate product or intermediate.

[5] 83 Fed. Reg. 24664, 24666. Because the state program provisions are broader in scope than the federal program, they are not part of the federally authorized program and are not federally enforceable. 40 CFR 271.1(i)(2) and RCRA Online Document 14848.

By R. Lee Vail, P.E., Ph.D.

On May 17, 2018, the Environmental Protection Agency (“EPA”) released a proposed revision to the Risk Management Program (“RMP”) rule following its reconsideration of the Obama era revisions.  The proposal strips out much of those additions.  According to the Rule Fact Sheet, the reconsidered rule will maintain consistency with the Occupational Safety and Health Administrations’ (“OSHA”) Process Safety Management (“PSM”) regulation, address safety concerns raised in petitions, will reduce compliance cost, and revise compliance dates.  Specifically, the proposed rule will rescind many prior changes including:

  • Requirements for third-party audits;
  • Safer technology and alternatives analysis;
  • Incident investigation root cause analysis; and most other minor changes to keep RMP consistent with PSM;
  • Most of the added requirements related to public information availability; and
  • Supervisor training requirements.

A public hearing is planned for June 14, 2018 and the rule will have a 60 day comment period.  For more information, click here.

Stay tuned as more analysis will follow in the coming weeks.

By Tokesha Collins-Wright

On December 7, 2017, the Environmental Protection Agency (“EPA”) released a memorandum entitled, “New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability.”[1] In the NSR memo, EPA announced its intention to drop its long-standing position that the Agency can use its own projections of a facility’s potential future emissions in order to determine whether a major source’s proposed modification triggers Clean Air Act (“CAA”) New Source Review (“NSR”) requirements. Instead, EPA states that now “when a source owner or operator performs a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations, and follows the applicable recordkeeping and notification requirements in the regulations, [then] that owner or operator has met the pre-project source obligations of the regulations, unless there is clear error (e.g. the source applies the wrong significance threshold).”[2] EPA continues on by stating that the Agency “does not intend to substitute its judgement [sic] for that of the owner or operator by ‘second guessing’ the owner or operator’s emissions projections.”[3] In other words, EPA will now defer to owners and operators’ pre-project NSR applicability analysis as to whether NSR applies to their proposed modification projects. EPA will step in only if there is “clear error” in this analysis.

The NSR memo further indicates that, in cases where a source projects that emissions increases will be less than the NSR thresholds, EPA will focus only on the source’s post-project actual emissions in determining whether to pursue an enforcement action.[4] This means that, even though pertinent case law has confirmed EPA’s authority to pursue NSR enforcement actions based upon a source’s failure either to perform a required pre-project applicability analysis or to correctly follow the calculation requirements of the NSR regulations,[5] EPA now does not intend to pursue new enforcement cases in the absence of actual post-project emission increases that would have triggered NSR requirements.

EPA states that this memo is intended to resolve any “uncertainty” caused by recent appellate court decisions in NSR enforcement proceedings.[6] In fact, this memo is evidence that EPA has changed its stance from the one it previously took in the aforementioned NSR enforcement proceedings. In U.S. v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) and U.S. v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017), Detroit Edison (“DTE”) began modification of a unit, after determining that the project would not trigger NSR requirements. After investigating DTE’s projections, EPA filed an enforcement action, challenging DTE’s NSR calculations and insisting that DTE should have secured a preconstruction permit. After much litigation and back-and-forth, the Sixth Circuit ultimately held that DTE was subject to enforcement for failure to comply with NSR pre-construction requirements, regardless of what actual post-construction emissions data later showed.[7] The Court found that:

…actual post-construction emissions have no bearing on the question of whether DTE’s preconstruction projections complied with the regulations.… [T]he applicability of NSR must be determined before construction commences and [] liability can attach if an operator proceeds to construction without complying with the preconstruction requirements in the regulations. Post-construction emissions data cannot prevent the EPA from challenging DTE’s failure to comply with NSR’s preconstruction requirements.[8]

On July 31, 2017, DTE filed a petition for writ of certiorari with the Supreme Court, challenging the Sixth Circuit’s ruling. On December 11, 2017, the Supreme Court denied the writ, which upholds the Sixth Circuit’s ruling (and the older EPA position) that actual post-construction emissions data does not prevent EPA from challenging a source’s failure to comply with NSR’s preconstruction requirements.

In the NSR memo, EPA states that the guidance document is not legally binding and is not legally enforceable. EPA also notes that, in the CAA scheme of cooperative federalism, state NSR programs may be more stringent than the federal program and states have primacy over the program once approved by EPA. Environmental groups have denounced EPA’s new stance on NSR permitting requirements, announcing that they may consider challenging EPA’s action in issuing the memo in court.[9]

For any owner or operator that intends to rely on the NSR memo to guide future NSR permitting decisions, please keep in mind that, regardless of the memo, citizens could still bring citizen suits for perceived NSR violations if EPA declines to do so. As such, any pre-project NSR applicability analysis should be well-documented and supported and owner/operators should follow the applicable recordkeeping and notification requirements set forth in the CAA regulations.

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[1] A copy of the memorandum is available at https://www.epa.gov/sites/production/files/2017-12/documents/nsr_policy_memo.12.7.17.pdf.

[2] Id. at p. 8.

[3] Id.

[4] See id.

[5] See U.S. v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) (“DTE I”); U.S. v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017), cert. denied, No. 17-170, 2017 WL 3324982 (U.S. Dec. 11, 2017) (”DTE II”).

[6] NSR Memo, at p. 1.

[7] DTE II, 845 F.3d at 741.

[8] DTE II, 845 F.3d at 741 (internal citations omitted).

[9] See, e.g., https://www.nrdc.org/experts/john-walke/trump-epa-abdicates-law-enforcement-gives-polluters-amnesty.

By R. Lee Vail, P.E., Ph.D. and Lauren J. Rucinski

On August 30, 2017 the D.C. Circuit denied environmental and labor groups’ request to stay the Tump EPA’s final rule delaying the Obama-era amendments to the EPA’s Risk Management Program (“RMP”) rule. The RMP rule implements Section 112(r) of the Clean Air Act and requires facilities that use extremely hazardous substances to develop and update a Risk Management Plan.

In June, the EPA Administrator Scott Pruitt signed a final rule to further delay the effective date of the RMP rule amendments until February 19, 2019 (“the Delay Rule”).  The delay allows EPA to conduct a reconsideration proceeding to review objections raised by petitioners to the final RMP amendments rule.[1]

Environmental and labor groups challenged the Delay Rule in the D.C. Circuit and then moved to stay the Delay Rule until the court takes full review of it. The groups’ motion requests a stay of the stay of the RMP rule until the court can review the merits of the Delay Rule—which stays the RMP rule. Try to say that five time fast. In any event, the D.C Circuit denied the groups’ motion to stay the Delay Rule. In denying the request for a stay, the D.C. circuit held that the environmental and labor groups had not “satisfied the stringent standards for a stay pending court review.”[2] Thus the Delay Rule will remain in effect while the D.C. Circuit reviews the merits of the groups’ challenge.

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[1] 82 Fed. Reg. 27133 (June 14, 2017).

[2] The Court also denied EPA’s motion for additional briefing time on the merits of the groups’ challenge.

By Lauren J. Rucinski

On August 28, 2017, the Environmental Protection Agency (“EPA”) approved an emergency fuel waiver for areas for Louisiana affected by Hurricane Harvey. The waiver is an effort to minimize or prevent problems with the supply of gasoline. Sixteen parishes in the state are required to sell low Reid vapor pressure (“RVP”) gasoline,[i] having a maximum RVP of 7.8 pounds per square inch (“psi”), during the summer ozone season. The waiver temporarily lifts this requirement and allows higher RVP gasoline of 9.0 psi to be sold in these parishes through September 15, 2017. The sixteen parishes impacted by the emergency waiver are Ascension, East Baton Rouge, Iberville, Livingston, West Baton Rouge, Beauregard, Calcasieu, Jefferson, Lafayette, Lafourche, Orleans, Point Coupee, St. Bernard, St. Charles, St. James, and St. Mary.

EPA has also waived the requirement of 40 C.F.R. §80.27(d) for gasoline sold in these parishes. Under the waiver, gasoline with less than 9% ethanol by volume will qualify for the “special provisions for alcohol blends” requirement and the provisions that prohibit any person from blending gasoline unless certain conditions are met are temporarily lifted.

Authority for the waiver was exercised under the Section 211(c)(4)(C)(ii) of the Clean Air Act (“CAA”), 42 U.S.C. § 7545(c)(4)(C)(ii). EPA Administrator, Scott Pruitt, determined Hurricane Harvey to be an unforeseen “extreme and unusual fuel [ ] supply circumstance” that will prevent the distribution of an adequate supply of gasoline to consumers in the designated parishes. Administrator Pruitt further determined that the waiver is in the public interest.

As required by law, the EPA and the Department of Energy (“DOE”) are continuing to actively monitor the fuel supply situation in the midst of Hurricane Harvey. The EPA and DOE have the authority to act expeditiously if extreme and unusual circumstances exist in other areas of the state.

For more information, click here.

If you need more information, please contact a member of our Environmental Team:  Tokesha Collins-Wright, Maureen N. Harbourt, Dwayne Johnson, and Lauren J. Rucinski

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[i] Reid Vapor Pressure (“RVP”) is a measure of gas volatility. EPA regulates the vapor pressure of gasoline sold at retail stations during the summer ozone season (June 1 to September 15) to reduce evaporative emissions from gasoline that contribute to ground-level ozone and diminish the effects of ozone-related health problems. Note that, on August 9, 2017, EPA proposed to relax the low RVP requirements for 11 of the 16 parishes covered under this emergency waiver. See 82 Fed. Reg. 37,184. However, this is just a proposal, not a final rule. Further, only 11 of the 16 parishes covered in the emergency waiver are covered under the August 9, 2017, proposal. As such, the emergency waiver is still needed.

By M. Dwayne Johnson

The D.C. Circuit’s July 7, 2017 decision on EPA’s 2015 definition of solid waste rule (DSW Rule)[1] may change the regulation of hazardous waste in Louisiana. First, some background.

In 2008, EPA promulgated a definition of solid waste rule that was intended to foster waste recycling (2008 Rule).[2] Therein, among other things, EPA provided two exclusions from the definition of solid waste:[3] (a) the generator control exclusion (GCE) for material reclaimed under the control of the generator, and (b) the transfer based exclusion (TBE) where the material is reclaimed by a third party reclaimer that has a RCRA permit or, if the reclaimer has no permit, the generator has made reasonable efforts to ensure that the reclaimer legitimately reclaims the material. The 2008 Rule was not mandatory.[4]

In 2015, EPA promulgated the DSW Rule that likewise was intended to foster waste recycling.[5] Therein, among other thing, EPA revised the GCE and replaced the TBE with the verified recycler exclusion (VRE). Under the VRE, material is excluded from the definition of solid waste if it is reclaimed by a third party reclaimer that has a RCRA permit or that has been approved (via variance) by EPA or a qualified state. EPA also provided 4 factors (Legitimacy Factors) to determine whether material is legitimately recycled and thus not discarded material (ergo solid waste): (1) the material must provide a useful contribution to the recycling process or to a product or intermediate of the recycling process; (2) the recycling process must produce a valuable product or intermediate; (3) the generator and the recycler must manage the material as a valuable commodity when it is under their control; and (4) the product of the recycling process must be comparable to a legitimate product or intermediate[6]. The DSW Rule contained both mandatory provisions (legitimate recycling) and non-mandatory provisions (the GCE and VRE).

Last month, LDEQ revised its hazardous waste regulations to adopt the DSW Rule and those portions of the 2008 Rule that remained in place.[7]

But in its decision, the DC Circuit:  (1) vacated the VRE, except for its emergency preparedness and response requirements and its expanded containment requirements; (2) reinstated the TBE (including its bar on spent catalysts); and (3) generally vacated Legitimacy Factor 4.[8]

The DC Circuit may reconsider its decision, and the Supreme Court may revise the decision on appeal. In the meantime, the decision’s effect is unclear and the Louisiana regulated community needs guidance from EPA and LDEQ.

Until then, it appears the DC Circuit’s decision will have the following effect in Louisiana:

  • The VRE is no longer available.
  • The TBE is not currently available (because it was never adopted in Louisiana).
  • If LDEQ amends its rules to adopt the TBE, spent catalysts will be barred, the generator will need to comply with the VRE emergency preparedness and response provisions, and the VRE expanded containment requirements will apply.
  • Because LDEQ’s hazardous program can be more stringent than EPA’s, until LDEQ amends its rules or otherwise stays enforcement, Legitimacy Factor 4 may remain in place for all recycling (not just under the GCE).

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[1] American Petroleum Institute v. EPA, No 09-1038 (D.C. Circuit 2017).

[2] 73 Fed. Reg. 64668 (October 30, 2008).

[3] Fundamentally, for a material to be a hazardous waste, it must first be a solid waste. Or stated differently, if a material is not a solid waste, it cannot be a hazardous waste. Thus, material excluded from the definition of solid waste will not be regulated as a hazardous waste.

[4] That is, qualified states — like Louisiana — that have been authorized by EPA to administer and enforce the state hazardous waste program in lieu of the federal program were not required by EPA to adopt the 2008 Rule in order to maintain their qualification (or delegation).

[5] 80 Fed. Reg. 1694 (January 13, 2015).

[6] Under the DSW Rule, for recycling to be legitimate, all four Legitimacy Factors have to be met.

[7] 43 La. Reg. 1151 (June 20, 2017).

[8] Because the GCE specifically requires compliance with the rule containing all four Legitimacy Factors (40 CFR 260.43(a)), Legitimacy Factor 4 apparently still will have to be met to establish legitimate recycling under the GCE.