On August 9, 2019, the EPA plans to publish a proposed rule to codify the current interpretation of New Source Review (NSR) Project Emissions Accounting. The rule would explicitly allow consideration of emissions decreases from a project, alongside any emissions increases, when determining whether the project causes a significant emissions increase from the source. Historically, many state regulators, and even certain EPA applicability determinations, have suggested that only emissions increases (and not decreases) should be considered. Considering emissions decreases in this analysis allows more projects to avoid triggering NSR.

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Regulated companies need to understand what material courts can consider when they review administrative decisions. The Administrative Procedure Act generally allows courts to consider only the existing administrative record when reviewing agency decision-making to determine whether agency decisions are arbitrary and capricious. But the Supreme Court recently reminded us that this rule is not absolute by looking beyond the record in Dep’t of Commerce v. New York to block an agency decision that it found to be based on a “contrived,” pretextual rationale.

Regulated companies may be able to ask courts to consider information beyond the administrative record if they can show that the agency acted in bad faith or exhibited improper behavior. A company’s ability to present the court with information beyond a record carefully constructed by an agency can be a powerful tool.
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New York Governor Andrew Cuomo just signed into law an ambitious statewide climate change agenda – the Climate Leadership and Community Protection Act (CLCPA). The CLCPA focuses on greenhouse gas (GHG) reduction through adoption of renewable energy and energy sector mandates for GHG reductions, although the legislation leaves open the exploration of other means of GHG reduction and the expansion to economy-wide regulation. The legislation also focuses on adaptation mechanisms, including hardening infrastructure to withstand disasters. Commercially, the CLCPA goals present massive investment opportunities to help fund and develop this transformation. But investors are looking for incentives, and it remains unclear how future regulations will encourage future investments, rather than mandate them.
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A key building block of U.S. government is how administrative agencies interpret their own regulations. Because this question is so fundamental to the entire regulated community, we have blogged about administrative deference generally and the Kisor case specifically. The Supreme Court affirmed the long-standing judicial tenet of administrative deference to agencies’ interpretation of their own regulations this week. In doing so, however, the majority cautioned against a laissez faire application of deference, emphasizing that courts must carefully and explicitly consider the specific criteria established under Auer v. Robbins before deferring to an agency’s interpretation of its own regulation.
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Everyone knows that environmental cleanups are complicated. Sites can be geographically vast and varied, involve operations that have released chemicals over decades, and goal posts for how and what should be investigated, characterized, and – if necessary – remediated can change over time. The U.S. Supreme Court recently granted certiorari in a case that could potentially throw remediation efforts at Superfund sites around the country – as Atlantic Richfield (the petitioner) put it – into “chaos.”
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The EPA announced its final rule for power plant greenhouse gas (GHG) emissions, culminating often rancorous discussion and litigation over the EPA’s authority to regulate GHG emissions from existing coal-fired electricity generating sources. Under the new Affordable Clean Energy (ACE) rule, the states, not the federal government, are now responsible for driving down GHG emissions from power plants. Specifically, the EPA now requires unit-specific standards of performance to be developed by the states using its new emission guideline that details the “best system of emission reduction.”
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As investors become more interested in incorporating sustainability into investment portfolios, many project proponents find that incorporating ESG into infrastructure planning provides a “leg up” in securing investors and financing. An ESG disclosure, or an “environment,” “social,” and “governance” framework designed to disclose risk, makes it easier for investors to match projects with their own sustainability goals.
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Integrating green remediation and sustainable practices can accelerate site cleanups, reduce costs, lower emissions of greenhouse gases, and contribute to meeting state and local renewable energy standards. Commonly used technologies like pump and treat systems may be effective but are energy intensive and expensive to maintain.
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In separate decisions, a federal district court in Alaska recently struck down two Trump Administration efforts to roll back President Obama’s environmental initiatives. Taken together, these decisions signal that citizen suits can, in some sense, limit the ability of the administration to “deregulate.” To the regulated community, these decisions should serve as a warning that we continue to be in an ever-shifting legal landscape where individual decisions can buck the current deregulatory climate.
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