DENVER — An appeals court heard conflicting claims Wednesday on whether the federal government illegally imposed a plan for controlling the amount of pollutants emitted by two Oklahoma power plants.
The case pits Attorney General Scott Pruitt, Oklahoma Gas & Electric and industries that are big users of electricity against the U.S. Environmental Protection Agency and environmental group Sierra Club.
The coal-burning plants near Pawnee and Muskogee emit large amounts of pollutants that cause haze and damage air quality in a multistate region. The emissions are subject to EPA regulations for haze and other types of pollution under the federal Clean Air Act.
Judges of the 10th U.S. Circuit Court of Appeals peppered Pruitt and attorneys for the other litigants with questions about their positions during arguments at the Denver-based court.
The EPA in 2011 rejected a state plan to control sulfur dioxide emissions from burned coal at those two plants operated by OG&E, the state's largest utility.
Rather than joining OG&E in battling the EPA requirement, Public Service Co. of Oklahoma, plans within 15 years to convert its Oologah plant to burn natural gas instead of coal to produce electricity.
About the dispute
Pruitt, OG&E and the big industries claim the EPA usurped state authority by imposing an alternate plan. That plan would cost the utility, and ultimately its customers, much more than the state plan.
The EPA contends it had a duty to impose its plan because the state plan did not meet federal standards to adequately control emissions.
In addition to whether EPA legally imposed its own plan, a key dispute is over whether the state plan or the federal plan is more cost-effective, a factor legally required to be considered.
OG&E claims the cost of meeting the EPA's level of reduction would be more than $1.2 billion, for installing four “scrubbers” by 2017. EPA claims the figure is grossly exaggerated.
EPA argued the state “stacked the deck” in favor of finding scrubbers were not cost effective. EPA contends that state regulators relied on inflated cost figures, and underestimated emission reduction and visibility improvement in determining cost-effectiveness.
The judges typically issue decisions several months after hearing arguments.
Although attorneys general typically have their assistants argue cases, Pruitt personally presented the arguments for his office because the case “goes to the heart of the state's authority.” The case is the first he has argued at the court.
He said Congress intended for the states, rather than the EPA, “to have primary authority” to decide which plan OG&E will have to abide by. He agreed, however, state plans are subject to EPA regulations and oversight.
Pruitt contends the federal agency was arbitrary and capricious in not accepting the state's basis for its plan, a contention the EPA disputes.
An attorney representing the EPA told the judges the state can submit another plan, but hasn't.
In a statement after the court session, Pruitt said utility officials estimated the federal plan would increase Oklahomans' utility rates by 13 percent to 20 percent over three years.
“I hope the court's decision will reaffirm the right of Oklahoma stakeholders to make this decision for Oklahomans, and not allow a federal agency to overstep its authority,” he said.
Pruitt said Oklahoma's industry leaders, elected officials, utility companies, consumer protection advocates and energy producers spent months in multiple sites creating the state plan to address the federal haze requirements. He said the plan reduced the effect on utility consumers.
Whitney Pearson, with the Sierra Club's Beyond Coal campaign, said OG&E is trying to “keep Oklahoma tied to the past with 1970's-era coal plants.”
“While other utilities take real leadership, OG&E is working hard to get a free pass to pollute when we have cleaner, cheaper options to meet Oklahoma's energy needs,” Pearson said.
CONTRIBUTING: Paul Monies, Business Writer