In late June, the US Supreme Court overturned the D.C. Circuit Court of Appeals’ decision that had invalidated the 2019 Affordable Clean Energy (ACE) rule and reinstated the 2015 Clean Power Plan (CPP). The Supreme Court ruled that USEPA overstepped its authority, granted by Congress when it enacted the ACE and attempted to regulate not only the amount of emissions emanating from individual coal and natural gas power plants using Section 111(d) of the Clean Air Act (CAA), but also whether coal and natural gas power plants should continue to operate at all. The Court found USEPA’s admitted attempt to shift the way power is generated in the U.S. from coal, oil, and natural gas to “renewables” to be a decision of economic policy and public health that is outside USEPA authority, which is to limit emissions. Only Congress can regulate or delegate to others such matters. The Supreme Court went further finding that the CAA does not contain an explicit delegation of regulatory power to USEPA. While this ruling is a setback for regulating greenhouse gases (GHGs) in the short-term, this ruling may result in new claims against the USEPA and other federal agencies that they are without power to regulate other major questions, affecting many areas of American life, from drug safety to banking.
Delegating rules to specialized agencies is the way many federal government functions have occurred for nearly 100 years. When the country was born, life was much simpler. America was an agrarian country with regulations also needed for business and transportation, as well. This was something that the Founding Fathers thought was sufficient being done through Congress and the President. However, as new issues and technologies sprung up, it became apparent that technical matters beyond the understanding of Congress necessitated agencies run by specialists in needed fields to create and enforce specific rules that would take Congress a long time to promulgate. Thus, agencies such as the SEC and FDA and others were formed to specifically regulate the stock market, food and drug safety, etc. Items that were not impacting the US in its early days. Congress would provide guidance to the agencies on how to proceed and develop and enforce rules, but Congress would not be concerned with day-to-day matters. However, this ruling, while focused on how the USEPA regulates GHGs also calls into question the whole authority of agencies over many other matters.
Getting back to the ruling, the USEPA believed it has two ways of regulating GHG emissions through the CAA, one is to require a certain level of control technology to require the power plant to reduce its GHG emission rate. The other approach is to select an allowable GHG emission rate so onerous that certain types of power plants (coal-fired, oil-fired) would be unable to meet that emission rate limit and thus have to shift to another source, such as renewables. This is what the Supreme Court ruled was beyond the authority of the USEPA as an environmental agency, being an agency that enacts economic-altering decisions.
Congress passed the CAA with guidance on how the USEPA were to pass air pollution laws in the CAA. Sections 111(b) and 111(d) of the CAA direct USEPA to establish standards of performance taking into account factors, such as technologies for emission reduction which have been demonstrated and develop emission limits that reflect that.
According to the Supreme Court, the emissions limit established in the ACE for existing power plants was stricter than the cap imposed on new power plants. USEPA’s own modeling concluded that the ACE would result in billions of dollars in compliance costs, including higher energy prices, require the closing of dozens of coal-fired power plants, and elimination of many jobs. A regulation that would have such monumental effects beyond just reducing emissions is beyond what an agency should be responsible for without specific authority from Congress. The USEPA can regulate GHG emissions, but not in such a way to change the economic system of an industry.
The immediate impact of the decision is that the Trump era CPP would be the standard for GHG emission regulation, bringing relief from certain requirements in the ACE. As this is written, it is unclear how the USEPA will respond, but certain new GHG regulations conforming to the CAA will likely be crafted, focusing specifically on reducing GHG emissions and not centered on power plant operations.
As noted earlier, this precedent may be used to vacate decisions made by other agencies, such as OSHA vaccination requirements without authority from Congress.
Please note that this evaluation of a court decision is written by a non-attorney. Please do not act on anything written here. Please retain experienced legal counsel to decide on actions related to this ruling and how it potentially affects your company.
CCES has the technical experts to help you evaluate your GHG emissions and help you establish a beneficial program to reduce GHG and save energy costs. Contact us today at 914-584-6720 or at karell@CCESworld.com.