In one of his last official acts before his untimely death in February, Justice Scalia joined the Supreme Court’s other four conservative justices in issuing a virtually unprecedented stay of the Obama Administration’s so-called “Clean Power Plan.” The stay effectively puts the Environmental Protection Agency’s (EPA) implementation of the burdensome set of regulations on hold until the litigation is resolved.
Along with 26 other states, including neighboring Utah, Arizona has sued to stop implementation of the rule. Because of the Supreme Court’s decision, Arizona’s regulators at the Department of Environmental Quality and other stakeholders should halt further work on the Clean Power Plan until the courts can address the case on the merits. The D.C. Circuit Court of Appeals is set to hear oral arguments on the merits of the case on June 2, and whatever the outcome in the lower court, it is highly likely the case will end up before the Supreme Court.
If the Clean Power Plan went into effect, each state would need to meet a carbon emission target as determined by the EPA by 2030 with an aggregate nationwide reduction in emissions of 32 percent below 2005 levels. This level of reduction would likely lead to a significant increase in energy costs, which is especially troubling considering how many people are moving to Arizona for retirement and job opportunities. The rule envisions implementation beginning January 1, 2022. Though this is more than five years away, utility companies must begin planning to comply now, given the intensive investments in time and money necessary to adhere to the rule.
Though the EPA sets a specific cap on emissions, the rule allows states to create their own plans for meeting the reduction targets. The EPA argues this allows states flexibility in tailoring how best to comply with the rule. If a certain state refuses to design its own plan, the EPA would step in and implement a federal plan. The threat of federal intervention to induce state action is eerily similar to Obamacare’s interplay between state and federal health insurance exchanges.
The EPA issued the Clean Power Plan rule pursuant to authority it claimed it has under the Clean Air Act. This is a dubious assertion. For starters, many legal scholars, including prominent liberals like Harvard law professor Laurence Tribe, argue that the EPA’s Clean Power Plan exceeds the statutory authority granted to the agency by Congress under the Clean Air Act—in violation of the fundamental premise of separation of powers. In other words, critics charge that the EPA cannot effectively rewrite the Clean Air Act, as it is attempting to do.
Likewise, the Supreme Court’s decision to temporarily put the brakes on the Clean Power Plan is a strong indication that the high court has serious reservations about the EPA’s claim of authority under the Clean Air Act. Temporarily blocking implementation of federal regulations is highly unusual for the Supreme Court, especially given that the D.C. Circuit had rejected the request for a stay.
Aside from the statutory and constitutional concerns with the rule, what else could have driven the Supreme Court to take such an unusual step? Perhaps the Court was chastened by the practical effect of their 2015 decision in Michigan v. EPA. In that case, the Supreme Court struck down an EPA regulation issued pursuant to the Clean Air Act, but the regulation in question was not halted as the case was litigated. As a result, most power plants incurred enormous expenses to come into compliance with the rule, even though the Supreme Court eventually invalidated it. For the EPA, losing the case was trivial—they achieved their desired outcome simply because the rule was not stayed during the litigation. As their statement said after the Court announced its decision, “EPA is disappointed the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance.” For all intents and purposes, the EPA was able to circumvent judicial review of the rule in question. This was certainly not the outcome the Supreme Court intended when it ruled against the EPA in the case.
In light of the serious legal challenge to the Clean Power Plan, coupled with EPA’s recent history of brazenly skirting judicial review, Arizona’s regulators and the regulated community should not take any additional compliance measures until the litigation is finalized. This is the prudent thing to do before embarking on expensive changes that would be passed along to ratepayers.
See the article here.
- On April 20, 2016