The US Supreme Court began hearing arguments on 28 February related to a pair of US Environmental Protection Agency (EPA) rules intended to limit carbon emissions from domestic power plants to combat climate change and ultimately challenge the agency’s power to do so. Attorneys representing coal states, including West Virginia, and a pair of coal producers want the court to restore a Trump-era carbon rule that called for potential life-extension upgrades for older plants, while lawyers for the EPA and a coalition of electricity suppliers contend that doing so would complicate compliance with Clean Air Act rules.
In 2015, the Obama administration issued the Clean Power Plan (CPP) focused on controlling carbon emissions by shifting coal-fired plants to natural gas and encouraging renewables development, or things considered "outside the fence lines" of the facility itself. The Supreme Court stayed the implementation of the rule in early 2016.
Three years later, the Trump administration’s EPA repealed the CPP and replaced it with the Affordable Clean Energy, or ACE, rule. The ACE rule focused more on existing coal plants themselves and what they could do to improve efficiencies—a more "inside the fence lines" focus.
The US Court of Appeals for the District of Columbia Circuit in January 2021 vacated both the EPA’s repeal of the CPP and the ACE rule after determining those actions were taken on an impermissibly narrow reading of the statute.
The plaintiffs are asking the high court to rule on whether Congress, by passing the Clean Air Act, gave the EPA authority to issue rules “capable of reshaping the nation's electricity grids” or to decide “matters of vast economic and political significance.”
“The D.C. Circuit gave EPA much broader power, power to reshape the nation's energy sector, or most any other industry for that matter, by choosing which sources should exist at all and setting standards to make it happen,” argued plaintiffs’ counsel Lindsay See. “No tools of statutory construction support that result. First, electricity generation is a pervasive and essential aspect of modern life and squarely within the states’ traditional zone. Yet, EPA can now regulate in ways that cost billions of dollars, affect thousands of businesses, and are designed to address an issue with worldwide effect. This is major policymaking power under any definition. And though respondents argue EPA can resolve these questions unless clearly forbidden, this court’s precedents are clear that’s backward.”
US Solicitor General Elizabeth Prelogar argued that the D.C. Circuit’s decision left the EPA without an effective carbon rule for existing fossil-fuel-fired generators and that the plaintiffs have failed to demonstrate injury in the absence of regulation.
"Now the choice is, will there be no federal regulation while the rulemaking is completed, or is ACE going to take effect?" said Prelogar, adding that nothing currently prevents the state plaintiffs from regulating their power sectors as they see fit.
“If West Virginia, today, wants to start regulating consistent with what ACE contemplated, it can take whatever actions it wants to take with respect to the sources in its state.”
Prelogar said the EPA expects to complete its replacement for the ACE rule before the end of the year.
A ruling against the EPA could greatly hamper its ability to regulate the energy sector, limiting it to measures such as emission controls at individual power plants and ruling out more ambitious approaches such as a cap-and-trade system, absent legislation. It would also be a blow to the Biden administration’s efforts to address climate change.
