In a stunning last-minute decision December 30,2011, a Federal Court of Appeals blocked immediate implementation of EPA's new Cross-State Air Pollution Rule (CSAPR) pending further judicial review; less than 48 hours before CSAPR was scheduled to go into effect.

The Court's ruling creates huge uncertainty regarding electricity and natural gas prices and the environmental restrictions applicable to coal-fired generating units in the 28 covered states.

In a December Blog we reported that the American Public Power Association (APPA) filed comments to FERC urging them to work with the EPA to provide the electric power industry with sufficient time to comply with the rules set out in CSAPR. This filing was a follow-up to a November 30th FERC reliability technical conference on the impacts of various EPA regulations on coal-fired capacity in the United States. The APPA believed the EPA should grant the electric power sector, particularly public power utilities, additional compliance time beyond the standard three years provided under the Clean Air Act.

It's not dead - just delayed, so the concern still revolves around what happens to our energy reliability when a number of coal-fired power plants go out of service for extended periods of time?  What affect will an increase in power sector demand do to natural gas?  What impact might this have on shale production and drilling rig counts that ultimately drive natural gas and electricity pricing.  We will continue to watch this situation and report any developments in this blog that we believe are important.