UPDATE: US Supreme Court to review lower court’s dismissal of Trump-era power plant GHG rule

The US Supreme Court agreed on 29 October to review a lower court ruling earlier in 2021 that rejected a signature Trump administration regulation that curbed power plant releases of GHGs.

The review was initially sought in April by a 19-state coalition led by West Virginia. North American Coal Corp. filed its own petition in May, and Colorado-based Westmoreland Mining Holdings and North Dakota filed separate petitions in June.

In each instance, petitioners challenged the US Court of Appeals for the District of Columbia Circuit's 2-1 decision in January to vacate and remand the 2019 Affordable Clean Energy Rule (ACE) for a rewrite.

The appeals court said the US Environmental Protection Agency (EPA) under President Donald Trump misconstrued a provision of the Clean Air Act, the nation's key air pollution law, thereby illegally restricting the measures that could be imposed to curb power plant GHGs.

However, it stopped short of reinstating the Obama-era Clean Power Plan, which ACE replaced.

A review of the lower court ruling means the EPA will have to wait to rewrite the GHG regulation for power plants until the Supreme Court has resolved the question of agency's Clean Air Act authority. It also means the power plants will remain unregulated for the foreseeable future.

The petitioners asked the Supreme Court to resolve whether EPA has the broad authority to impose standards based on technology and approaches that go beyond the fenceline of individual coal-fired power units to include cap-and-trade regimes and averaging across plants.

Unbridled power

In their 29 April petition, the states argued the circuit court, through its ruling, gave EPA, the federal agency charged with regulating GHGs and other air pollutants, "unbridled power" to decarbonize any sector of the economy including factories and power plants, as well as the millions of homes and small businesses that use natural gas for heating.

In petitioning the highest court in the land, West Virginia Attorney General Patrick Morrissey contended that the lower court "inappropriately" interpreted Section 111 of the Clean Air Act as "authorizing EPA to sidestep Congress to exercise broad regulatory power that would radically transform the nation's energy grid and force states to fundamentally shift their energy portfolios away from coal-fired generation."

Westmoreland Coal asked the court whether the Clean Air Act "authorizes EPA to decide such matters of vast economic and political significance as whether and how to restructure the nation's energy system," while North Dakota was interested in knowing whether the EPA can set regulations beyond the individual plants that it said can deprive states of their authority to write their pollution reduction plans.

Morrissey said the Supreme Court's decision to accept the case marks the "most consequential victory" since he was able to persuade the court to stay the Obama-era Clean Power Plan in February 2016 before it even took effect.

Court has upheld GHG regulation in past

EPA has yet to rewrite ACE since it was remanded to the agency. EPA Administrator Michael Regan has stated publicly that the court ruling allowed the agency to take a fresh look at the regulation.

Following the Supreme Court's action, Regan tweeted out that power plant carbon pollution hurts families and communities, and threatens businesses and workers, while noting that "the courts have repeatedly upheld EPA's authority to regulate dangerous power plant carbon pollution."

The nonprofit Environmental Defense Fund (EDF), which pledged 29 October to defend the DC Circuit ruling, said the Supreme Court has repeatedly upheld EPA's authority to limit climate pollution under the Clean Air Act. EDF referenced the Supreme Court's 2007 Massachusetts v. EPA ruling that climate pollution qualified as air pollution that is subject to regulation under the Clean Air Act, concluding that "without a doubt … The statute is unambiguous."

And again, in the 2011 case of American Electric Power v. Connecticut (2011), the court held that the Clean Air Act "speaks directly to emissions of carbon dioxide from" existing power plants. The EDF said the court pointed specifically to section 111(d) of the statute, which is the same section that authorized the Clean Power Plan that "the Trump administration later attempted to severely constrain."

Released in 2019, ACE replaced the Obama administration's more stringent 2015 Clean Power Plan—which set the first CO2 limits for existing coal-fired power plants—with standards based on a list of technologies that EPA identified for upgrading plant equipment and improving operations. The ACE rule did not set a numerical standard for power plants.

In contrast, the Clean Power Plan imposed a numerical limit on carbon emissions for coal-fired plants, while offering flexibility to meet this limit through energy efficiency improvements as well as by trading carbon offsets and fuel switching.

EPA authority in question

New York University School of Law Professor Richard Revesz, who directs the Institute for Policy Integrity, said the West Virginia-led petition lacks merit because it claims the EPA lacks authority to employ emissions trading when regulating power plant carbon pollution under the Clean Air Act.

"That argument is at odds with decades of regulatory practice under administrations of both parties," Revesz said in a statement. "EPA has repeatedly employed flexible techniques like emissions trading in Clean Air Act rules and should be able to continue to do so as it works to decarbonize the power sector."

However, Jonathan Adler, director of the Coleman Burke Center for Environmental Law at the Case Western Reserve University School of Law in Ohio, described the Supreme Court's move action as "bad news" for the Biden administration in a 29 October blog with online Reason magazine.

Adler said the EPA won't know the scope of its regulatory authority until the spring, and whatever authority remains after the case is resolved will "almost undoubtedly be less than what the EPA would like."

"It is unlikely the Court would have granted certiorari unless at least four justices were sufficiently concerned with the D.C. Circuit's expansive interpretation of the EPA's regulatory authority that they saw the need to intervene now," he added.

The West Virginia petition was backed by the National Mining Association and a trade group by the name of America Power that represents plants generating electricity from coal. The EPA as well as the cities of Boulder, Chicago, Denver, New York, South Miami, Philadelphia, and the District of Columbia joined a 22-state coalition led by New York state that opposed the petition. Environmental groups including the EDF and clean energy trade associations including the American Clean Power Association also opposed it as did power companies involved in generation and transmission including Exelon, Consolidated Edison, New York Power Authority and National Grid USA.

Posted 29 October 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst