Regulatory Flexibility

I know, that sounds like oxymoron, but this is an election year and not even the US EPA wants to have too many targets on its back.  So US EPA spews out new rules at a feverish pace fearing that time is running out to do so even while it issues press releases professing new found flexibility to balance legitimate economic, business and environmental concerns.

BALANCE!  What a concept!

Quit laughing and listen up!  US EPA proposed amendments to the national emission standards for hazardous air pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE) under section 112 of the Clean Air Act (CAA). In response to protests by stakeholders in lawsuits or petitions for reconsideration of the 2010 RICE NESHAP amendments and other comments US EPA said it could be ‘flexible’ in some areas without undermining the intent in section 112 of the CAA which requires the EPA to set NESHAP rules to control hazardous air pollutants (HAP) from both new and existing sources in regulated source categories.

Many of the complaints about the proposed rules came from business that had invested in back up generation to assure power reliability for their manufacturing, facilities and operations.  Now having spent that capital US EPA was set to limit how they could use it when they needed it most.  Because the rules on emissions limitations are complicated, localized and contentious it is often very easy for business to find itself between that rock and hard place or being able to run the back-up generation to protect business continuity BUT risking crossing the line in hours of allowed operation if weather and other circumstances don’t cooperate.  The monetary penalties for violating these rules can be onerous and the black-eye a business gets from the ‘perp walk’ of the public shaming is worse.

So US EPA, in its new found spirit of flexibility, said in revisions to the proposed rules that backup generators could run up to 100 hours without rules limiting emissions for the purposes of monitoring or testing the equipment; demand response or voltage changes greater than 5% by the utility.  And, to sweeten the flexibility further, US EPA said that through the end of 2017 back-up generators could operate unrestricted for up to 50 hours of that 100-hour exception.  The rationale for this flexibility was to accommodate peak shaving and non-emergency demand response in order to avoid reliability problems while regional power plants are transitioning for compliance with the” utility MACT rule.

WOW!  Holy Revision!

In one weak moment of reasonableness and balance, the US EPA has done the following:

  1. Admitted that it makes no sense to restrict the operation of emergency back-up generation so severely that business may hesitate to actually use it when it is needed most for grid reliability for fear of penalties and public criticism.
  2. Admitted that it REALLY does not know the full potential impact on grid reliability from the sum of its recently issued or proposed rules, but that it does not want to be blamed for the lights going out especially in an election year.
  3. Admitted that achieving the policy goal of demand response is going to be tougher than expected and allowing a ‘reasonable accommodation’ for counting backup generation in the demand response calculus will make the numbers look better through 2017 (the watch of the current administration if re-elected).

I come not to criticize US EPA but to praise it!

Balance, flexibility and reasonableness are wonderful things in life and in Federal Regulations.  We see too little of it.  Our regulatory process is fatally flawed because Congress, in its wisdom and under pressure from environmental interests, wrote the laws to be one sided.  Now an entire industry has grown up around NIMBY, regulatory intervention and environmental lawsuits where the parties bring the cause of action having no financial consequence or obligation at stake themselves yet demanding the one-sided enforcement of increasingly onerous rules without any obligation on US EPA to balance the impacts of those rules and actions equitably or in the public interest.  The result is NO ONE represents that true balancing of private interests, environmental interests and the broad public interest at the table or the bar of justice.  It has become a game of coercion, extortion, hostage taking and revenge  that rivals the best practices of Somali pirates.

US EPA did not create this one-sided system of environmental rough justice, but the agency and its rulemaking process lacking the legislatively imposed and judicially enforceable duty to balance the competing interests to define the broader public interest has been dominated by special interests for years across many administrations and used as a blunt instrument to achieve policy goals and business practices they could rarely win Congressional approval for or equitable relief to achieve on their merits.