[BETA] Fortnightly

The D.C. Circuit’s CSAPR ruling reinforces the benefits of planning ahead and keeping options open. A diverse portfolio strategy reduces risks and costs.

When Revolutionary War veteran Daniel Shays led an attack on the federal Springfield Armory in January 1787—the spark that ignited the federalist movement—he scarcely could’ve guessed that now, 225 years later, his spiritual descendants would still be fighting that very same battle.

The Republican nominee’s energy plan doesn’t say much about electricity or natural gas. But what it does say should sound familiar to anyone who’s followed energy policy for more than four years.

New environmental requirements under the Clean Water Act (CWA) will add to the already complex burden of compliance for power plants. As the Environmental Protection Agency moves forward with cooling water and effluent standards, utilities and generators will have to deal with overlapping rules and conflicting policy goals.

As new EPA regulations drive companies to decommission older power plants, utilities face issues involving plant retirement and demolition. Some sites can host new power plants, but many can be better used for other commercial purposes. Thoughtful planning and decommissioning strategies can bring the greatest value from underutilized assets.

The U.S. Treasury cash grants for new renewable power projects expired at the end of 2011. These incentives, which were implemented under Section 1603 of the American Recovery and Reinvestment Act of 2009, helped to support continued capacity additions throughout the recession. The impending expiration of these grants caused a wave of merger and acquisition (M&A) activity during 2011 as developers and financiers rushed to get deals done and to begin construction in order to meet the Section 1603, 5-percent safe harbor threshold by the Dec. 31, 2011 deadline.

The Environmental Protection Agency regulates emissions of particulate matter based on the mass of those emissions—not on the toxicity of the particular components. A growing body of evidence shows that different kinds of particulates affect health differently. Research by the Electric Power Research Institute suggests that in order to most effectively protect public health, the EPA’s next round of air quality standards should differentiate between relatively benign sulfate or nitrate compounds, and more harmful trace metals in particulate emissions.

From the Fukushima disaster and its repercussions, to the raging battle over new EPA regulations, 2011 was one of the most volatile years on record for the electric power business. Will 2012 be better or worse than 2011? Cost factors make this a great time to invest, but overhanging uncertainties might bring another year of fear.

With a flurry of major new environmental regulations, the Environmental Protection Agency (EPA) is altering the power generation landscape. But will the new federal rules survive court challenges—to say nothing of next year’s national elections? Fortnightly's Michael T. Burr considers the controversy over new environmental standards. PLUS: Top Utility Lawyers of 2011.

The Supreme Court’s decision in American Electric Power v. Connecticut strongly limits private nuisance actions against greenhouse gas (GHG) emitters by keeping these cases out of federal court. But the AEP decision won’t stop lawmakers from enacting new GHG regulations, and it won’t prevent plaintiffs from suing emitters in state courts.