After months of debate and public comments, President Obama’s controversial Clean Power Plan (CPP) was issued in August 2015 and published in the Federal Register on October 23, 2015. But that is hardly the end of the story. Instead the saga is just beginning—with the ending to be written sometime in 2017 and the outcome highly dependent on who resides in the White House.
The CPP is the newest set of Environmental Protection Agency (EPA) regulations that the Atlantic states “anchors the Obama administration’s climate-change policy. It seeks to guide local utilities away from coal-fired electricity generation, and toward renewable energy and natural gas”—with a goal of reducing CO2 emissions from existing power plants by 32% from 2005 levels by 2030. States are required to submit implementations plans by September 6, 2016, with emission reductions scheduled to begin on January 1, 2022.
Immediately following the rule’s publication, a coalition of 24 states and a coal mining company, led by West Virginia Attorney General Patrick Morrisey (R), filed a lawsuit to challenge the CPP. Morrisey called it “flatly illegal and one of the most aggressive executive branch power grabs we’ve seen in a long time.”
The Hill reports: “They are asking the Court of Appeals for the District of Columbia Circuit to overturn the rule. They also want the court to immediately stop its implementation while it works its way through the courts.” Differing from the Cincinnati-based Court of Appeals for the Sixth Circuit that in October issued a stay for the Waters of the U.S. rule, on January 21, 2016, the federal court refused to put a hold on the CPP while the litigation proceeds. It did, however, agree to expedite the case with oral arguments beginning on June 2.
(Nevada is the latest to oppose the CPP, to protect “Nevada’s vital tourism industry.” On February 24, Attorney General Adam Paul Laxalt filed a brief to highlight the federal agency’s overreach and disregard for the rule of law associated with CPP.)
Days later, January 26, in an unusual move, the petitioners—which now include 29 states and a large group of utility companies and energy industry trade groups—turned to the Supreme Court (SCOTUS). Morrisey acknowledged: “While we know a stay request to the Supreme Court isn’t typical at this stage of the proceedings, we must pursue this option to mitigate further damage from this rule.” Knowing that SCOTUS has never before engaged in a case before a federal court even heard the initial arguments, CPP supporters, like Sierra Club Chief Climate Counsel Joanne Spalding, apparently felt confident, calling the appeal: “another ‘Hail Mary’ challenge to the Clean Power Plan.”
Citing SCOTUS’ 2015 ruling that reversed the Mercury Air Toxics Standards (MATS) rule, petitioners argued that the damage from MATS had already been done by the time the decision came down. In a Client Alert, international law firm Milbank—which works in the energy space—said: “The EPA itself acknowledged that the ruling had virtually no impact, as states had already largely complied with the regulation by the time the Court’s order was issued.”
Despite the historic nature of the request, on February 9, in a 5 to 4 majority, SCOTUS granted an emergency stay of CPP. Milbank states: “The issuance of stay signaled that five of the Supreme Court justices had significant reservations about the EPA’s attempt to regulate emissions from power plants in the way the CPP is currently designed. To grant the stay, the Supreme Court must have found that there was a ‘fair prospect’ that a majority of the Court would vote to reverse a judgment if the D.C. Circuit were to uphold the CPP.”
Morrisey agrees: “The decision reinforces confidence in the broader challenge as the Supreme Court found the coalition’s arguments strong enough to stop the EPA even before the lawsuit concludes.” The victory means the EPA is prohibited from implementing or enforcing the CPP until the D.C. Circuit issues a decision on the challenge—which is expected as early as this fall. FuelFix reports: “The conventional wisdom is the three-member court panel will rule favorably for the White House.”
As 18 states opposed the application for the stay, whatever decision the lower court reaches, most experts agree SCOTUS will eventually hear the case—likely in 2017.
CPP opponents saw the stay as a sign SCOTUS might strike down the rule. Seth Jaffe, a former president of the American College of Environmental Lawyers, according to the Atlantic, sees it as an “ominous sign for the regulations.” Jaffe said: “One has to conclude that five justices have decided that the rule must go.”
Confidence ebbed, however, with the death of Justice Antonin Scalia—just four days after the court’s unprecedented stay order. As a conservative voice on the court, Scalia had a history of limiting government regulation and was a scathing critic of EPA’s regulation of greenhouse gas emissions. Depending on who fills the empty seat, and when, the court’s decision could go one way or the other.
Regardless, the EPA is continuing to move forward and is encouraging states to take voluntary steps toward compliance and is supporting those who do.
States have reacted differently to the stay. Many states, such as Massachusetts, Arizona, and Virginia, are moving ahead with their plans. Some are already well into their CPP compliance plans, with California expected to submit its plan ahead of schedule. Ohio Public Utility Commissioner Asim Haque reports that they were “already close to completion,” but the commission has put analysis on hold for now.
Texas, whose Attorney General Ken Paxton (R) shared the lead with Morrisey on requesting the stay, is in a holding pattern. Toby Baker, a commissioner on the Texas Commission on Environmental Quality, according to FuelFix, said: “I’ve watched states get in front of their skis on federal regulations, and then the regulations come out and they don’t match. I do feel like the [clean power plan] will change from what it is right now.”
Following the SCOTUS decision, Wisconsin Governor Scott Walker (R) issued an executive order prohibiting state agencies from doing any work to prepare for the CPP until the stay expires. Citing “undue burden” on state ratepayers and manufacturers, he argued that the rule could have a “devastating impact.”
Because the SCOTUS stay halts enforcement of the CPP until the court challenge concludes, and delays the EPA’s deadlines, Morrisey and Paxton, in a February 12 letter to the National Association of Regulatory Utility Commissioners and the National Association of Clean Air Agencies, encouraged them to “put their pencils down.” They point out: states “have no legal obligation to continue with spending taxpayer funds on compliance efforts for a suspended and likely unlawful Power Plan. …Any taxpayer dollars spent during the judicial review process are unnecessary and likely to be entirely wasted.”
Pennsylvania Coal Alliance CEO John Pippy, a leading advocate for the coal industry in his state, argues that there are “serious concerns regarding the resources that will be wasted attempting to develop a compliance plan, at the expense of the taxpayers, for a rule that may be significantly altered or thrown out by the Federal Courts.”
With the court challenge coming up in a few months, last week, February 23, led by Senate Majority Leader Mitch McConnell (R-KY) and Senate EPW Committee Chairman James Inhofe (R-OK), 34 Senators and 171 Representatives filed an amicus brief urging the Circuit Court to “block the EPA’s attempts to transform the nation’s electricity sector.” As the press release states, the lawmakers believe the rule “goes well beyond the clear statutory directive.” It points out: “States will face unprecedented new regulatory burdens, electricity ratepayers will be subject to billions of dollars in compliance costs, and American workers and their families will experience the hardship of job losses due to power plant shutdowns, higher electricity prices, and overall diminishment of the nation’s global economic competitiveness.”
Congressman Kevin Cramer (R-ND) says he joined his colleagues in filing the brief because “the EPA’s actions are clearly illegal and violate the expressed intent of Congress.” He sees that his state has been singled out. The initial proposed rule required South Dakota to reduce emissions by 11%, but the final rule required a “detrimental 45%.” Cramer concludes: “North Dakota’s electricity producers provide some of the most affordable electricity and maintain some of the cleanest air, but this Administration’s focus on implementing a radical environmental agenda threatens our economic future.”
Now, we wait for the CPP to make its way through the courts—first the D.C. Circuit Court and then, in 2017, the Supreme Court. But, since the CPP is on hold until at least 2017, its future will really be decided by the next President. Milbank states: “The next administration could seek to alter, cease, or continue efforts to implement the existing CPP. Should a Republican reach the Oval Office, this could result in a permanent halt of the EPA’s implementation of the plan altogether, or a significant departure from current emission reduction targets. Yet, should a Democrat be elected, the new administration could push forward with the CPP while exploring additional provisions of the Clean Air Act.”
Of course, as things stand now, the next President will be appointing Justice Scalia’s replacement. “If a Republican wins the White House, the Atlantic observes, “their nominee would almost certainly join the Supreme Court’s conservative wing. That justice would be unlikely to vote to support the Clean Power Plan—but it wouldn’t matter, because no remaining Republican supports Obama’s climate policies, anyway, so they’d likely be reversed administratively.”
With a Republican president, there’ll be other changes that could impact the CPP. The EPA, should it not be eliminated, will have a new Administrator. Gina McCarthy will no longer be in charge and influencing policy. If the CPP were actually argued before the court, it would be under the guidance of new leadership and could be presented in a very different way.
Since the CPP will not be argued in the Supreme Court until 2017, when the next President will be in office, it really is the winner on November 8, 2016, who determines the legal battle of the CPP—which will either embrace or eradicate Obama’s climate change policies and the Paris Agreement. Considering the CPP will, as Morrisey pleads, cause “even more destruction of untold number of jobs, skyrocketing electricity bills, and the weakening of the nation’s electric grid,” the stakes couldn’t be higher.