Power Plant Startup, Shutdown, and Malfunction Rule

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Quick Take

At the Biden administration’s direction, the EPA reviewed and revoked the Trump administration’s 2020 guidance permitting waivers for excess emissions during power plant startup, shutdown, and malfunction (SSM) and reinstated the Obama administration’s 2015 policy. On January 3, 2022, states and industry groups asked the D.C. Circuit to vacate the 2015 memo arguing that it relies on a misinterpretation of the term “emission limitation.” While that case is pending, EPA is taking action on states’ state implementation plans (SIPs) to ensure they comply with the 2015 guidance around SSM requirements.

Why it Matters

Power plants and other industrial sources emit more pollution as they start up, shut down, or when they malfunction than during normal operations. These periods of higher pollution have negative effects on air quality and human health. EPA regulates this excess pollution through SIPs under the Clean Air Act (CAA). During the Obama administration, EPA issued new guidance on excess startup, shutdown, and malfunction emissions and found that 36 states would need to revise their SIPs as a result. In October 2020, the Trump administration revised the guidance, rolling back the Obama administration’s changes to allow for exemption and affirmative defense provisions in SIPs under certain circumstances.

Current Status

President Biden’s Jan. 20, 2021 Executive Order 13990 directed all agencies to review and consider revising rules issued and other agency actions taken during the Trump administration. The 2020 guidance memorandum was included in the White House’s “List of Agency Actions for Review.”

Environmental organizations filed a petition of reconsideration and rulemaking with EPA on April 12, 2021 asking it to reconsider its withdrawal of SIP calls to Texas, North Carolina, and Iowa and to withdraw its 2020 guidance memorandum. On Sep. 30, 2021 Deputy EPA Administrator Janet McCabe withdrew the 2020 guidance memorandum, reinstating the 2015 policy, and announced EPA would revisit the 2020 SSM SIP call withdrawals for North Carolina, Texas, and Iowa. On Jan. 12, 2022, EPA found that twelve states failed to submit revisions as required by the 2015 SIP Call. These states must submit a plan within two years, or they will become subject to a Federal Implementation Plan (FIP) and may face sanctions.

Timeline of Events

obama administration

June 12, 2015 EPA publishes a final action clarifying and revising its guidance on excess startup, shutdown and malfunction emissions. EPA finds that thirty-six states must revise their SIPs under the CAA to incorporate the new requirements by Nov. 22, 2016. This action was a response to a 2011 petition by Sierra Club. The same day, industry sues EPA over the final action. Walter Coke v. EPA, No. 15-1166 (D.C. Cir.).

Trump administration

March 15, 2017 TCEQ petitions EPA to reconsider the SIP call issued to Texas in the 2015 SSM SIP Action.

April 18, 2017 EPA asks the court to delay oral arguments, set for May 8, 2017, while the agency reviews the action.

April 24, 2017 The D.C. Circuit grants EPA’s motion, canceling oral argument and suspending the case indefinitely while EPA reviews the action. The Court orders EPA to file status reports every 90 days beginning July 24, 2017.

June 21, 2017 The D.C. Circuit dismisses Cases 15-1166 and 15-1216 and consolidates remaining cases under Envtl Comm of Florida Elec. Power Coordinating Group v. EPA, Case No. 15-1239 (D.C. Cir.).

April 29, 2019 EPA proposes changes to how it interprets provisions that govern excess emissions that occur during certain upset events, unplanned maintenance, startup, or shutdown activities that apply only to Texas. These changes signal a potential policy change that could apply beyond Texas.

June 5, 2019 EPA proposes approving North Carolina’s SIP that departs from the 2015 policy and no longer requires the state to make the revisions required in the 2015 action.

Feb. 7, 2020 EPA finalizes its April 29, 2019 proposal to withdraw its finding of significant inadequacy for the Texas SIP. The decision departs from EPA’s 2015 SIP action by allowing Texas to incorporate certain affirmative defenses into their plan that facilities can use to avoid penalties for emissions during certain malfunction events. EPA Region 6 notes in its final action that the decision applies only to Texas and that it “will determine whether to adopt a similar or other alternative interpretation for other Region 6 states if and when the need for such a determination arises in the future.”

April 3, 2020 EPA files its most recent 90-day status report with the Court of Appeals for the District of Columbia in industry’s case challenging the 2015 SSM action. EPA notes its actions regarding the Texas and North Carolina SIPS but says it is continuing to review the 2015 SSM action. Envtl Comm of Florida Elec. Power Coordinating Group v. EPA, Case No. 15-1239 (D.C. Cir.).

April 7, 2020 Environmental groups challenge EPA’s Feb. 7, 2020 decision to withdraw its finding of significant inadequacy for Texas’s SIP revision. Sierra Club, et al v. EPA, et al, Docket No. 20-01115 (D.C. Cir.).

April 28, 2020 EPA Region 4 finalizes its June 5, 2019 proposal to approve North Carolina’s SIP, withdrawing its SIP call.

June 29, 2020 Environmental groups challenge EPA’s approval of North Carolina’s SIP. Sierra Club v. EPA, Case No. 20-1229 (D.C. Cir.).

Oct. 9, 2020 EPA publishes a guidance memorandum stating that exemption and affirmative defense provisions may be permitted in SIPs under certain circumstances. This memo supersedes the 2015 guidance, completing this administration’s rollback of that policy.

Jan. 15, 2021 Environmental groups challenge EPA’s Nov. 17, 2020 approval of revisions to Iowa’s SIP. Sierra Club v. EPA, No. 21-01022 (D.C. Cir.).

Biden Administration

Jan. 20, 2021 President Biden signs EO 13990 that directs all agencies to review and consider revising rules issued and agency actions taken during the Trump administration. The 2020 guidance memorandum was included in the White House’s “List of Agency Actions for Review.”

April 12, 2021 The Sierra Club and other environmental organizations file a petition of reconsideration and rulemaking with EPA asking it to reconsider its withdrawal of SIP calls to Texas, North Carolina, and Iowa and to withdraw its 2020 guidance memorandum.

Sept. 8, 2021 Three environmental groups file a lawsuit seeking to compel EPA to make determinations on SIPs, including determinations that certain states “failed to submit” SIPs in accordance with EPA’s 2015 action. Sierra Club v. Regan, No. 4:21-cv-06956 (N.D. Cal.).

Sep. 30, 2021 Deputy EPA Administrator Janet McCabe issues a memorandum to EPA’s regional administrators withdrawing the Oct. 9, 2020 guidance memo on startup, shutdown, and malfunction exemptions in SIPs and reinstating the 2015 SSM SIP Action policy. The memo notes that EPA will also revisit the 2020 North Carolina, Texas, and Iowa SSM SIP call withdrawals.

Jan. 3, 2022 Sixteen states and industry groups ask the D.C. Circuit to vacate EPA’s reinstatement of the 2015 guidance memo and SIP calls. The states argue that the memo relies on a misinterpretation of the term “emission limitation” as used in the CAA and that EPA misreads and improperly relies on two D.C. Circuit cases. Environmental Committee of the Florida Electric Power Coordinating Group v. EPA, Docket No. 15-1239 (D.C. Cir. Jan. 3, 2022).

Jan. 12, 2022 EPA finds that twelve states failed to submit revisions as required by the 2015 SIP Call. These states must submit a plan within two years or they will become subject to a FIP and may face sanctions.

Feb. 2, 2022 EPA files a supplemental brief arguing that judicial review needs to be based on the 2015 memorandum that is now in place and that the CAA does not allow affirmative defense SIP provisions . Environmental Committee of the Florida Electric Power Coordinating Group, inc., v EPA, et al., No. 15-1239 (D.C. Cir. Jan. 3, 2022).

Mar. 25, 2022 The D.C. Circuit hears oral arguments on EPA’s SIP Call that requires states to remove waivers that allow increased emissions during SSM events. Environmental Committee of the Florida Electric Power Coordinating Group, Inc., v EPA, et al., No. 15-1239 (D.C. Cir. Jan. 3, 2022). Listen to oral arguments here.

Apr. 1, 2022 EPA publishes a notice of intent to remove emergency affirmative defense provisions from Title V state operating permit programs as inconsistent with the CAA and D.C. District Court opinions. Though this notice does not apply to SIPs, EPA states that this notice is intended to align with its SSM policy for SIPs.

Apr. 11, 2022 EPA issues a notice of proposed consent decree with environmental groups in Sierra Club et al. v. EPA, No. 4:21-cv-6956 (N.D. Cal.). The proposed consent decree would set deadlines for final EPA action on SIPs for multiple states stretching into late 2023 and likely 2024. The Biden administration is taking this action under EPA’s 2015 “SIP Call” rule, the legality of which is currently pending before the D.C. Circuit Court of Appeals.

May 5, 2022 EPA publishes a proposed rule to approve SIP revision requests from Indiana, Michigan, and Minnesota that remove SSM exemptions.

June 27, 2022 The US District Court for the Northern District of California approves a final consent decree between EPA and environmental NGOs requiring EPA to take final action on 23 states’ SIPs under the 2015 “SIP Call,” mandating removal of SSM waivers, through 2023. Sierra Club v. EPA, No. 4:21-cv-6956 (N.D. Cal.).

Sept. 13, 2022 Environmental groups file a petition, urging EPA to bar SSM waivers.

Oct. 10, 2022 Environmental Integrity Project and Sierra Club file a complaint in the DC District Court, seeking to compel EPA to make a compliance determination on Texas’s proposed SIP revision. Texas submitted the SIP on August 20, 2020, and EPA was required to approve or disapprove it in February. The complaint alleges that until EPA acts, the plants will emit dangerous levels of PM during startup, shutdown, and maintenance periods.

Feb. 24, 2023 EPA publishes a proposed rule, which would remove SSM exceptions from the Texas, North Carolina, and Iowa 2015 SIPs. In the rule, EPA also proposes to issue new findings of substantial inadequacy and SIP calls for deficient SSM provisions for Connecticut; Maine; Shelby County, Tennessee; North Carolina; Buncombe County, NC; Mecklenburg County, NC; Wisconsin; and Louisiana. Comment here by Apr. 25, 2023.

July 21, 2023 EPA issues a final rule removing the “emergency affirmative defense” provisions from EPA’s title V operating permit program regulations, which were implemented by the Trump administration.

Sept. 19, 2023 An industry coalition (“SSM Litigation Group”) sued EPA in the DC Circuit, challenging EPA’s final action removing the Title V emergency affirmative defense provisions. SSM Litigation Group v. EPA, No. 23-1267 (D.C. Sept. 19, 2023).

Nov. 1, 2023 The D.C. Circuit granted the SSM Litigation Group’s request to hold the case in abeyance pending disposition of Environmental Committee of the Florida Electric Power Coordinating Group, Inc., v. EPA, et al., No. 15-1239 (D.C. Cir. Jan. 3, 2022). SSM Litigation Group v. EPA, No. 23-1267 (D.C. Sept. 19, 2023).