The Supreme Court of the United States gave West Virginia, and the numerous states supporting it, a victory Thursday, striking down the Obama-era Clean Power Plan (CPP) that would have radically restructured the generation of electricity in the United States. The Court ruled that EPA was not authorized by Congress to expand its pollution control authority to force a change from fossil fuels to renewable energy sources.
The case involved an interpretation of Section 111(d) of the Clean Air Act, which allows EPA to set limits for certain pollutants based on the "best system of emission reduction" or BSER. During the Obama administration, EPA had proposed regulation of electricity generators under a novel approach to Section 111 that would have forced generators to move from coal-fired generation to wind and solar, or else purchase credits through a cap-and-trade system. The CPP was stayed by the Supreme Court before it could be implemented, and was later replaced by the Trump administration with the American Clean Energy (ACE) rule. Litigation ensued, followed by the Biden administration's announced intention to withdraw the ACE and re-instate the CPP, leading to a challenge by West Virginia and other plaintiffs.
After determining that West Virginia had Article 3 standing to challenge a rule that was not yet in effect, the Court considered the merits of EPA's actions. It concluded that EPA had misinterpreted the Clean Air Act in setting BSER to force a move away from coal generation and toward renewables. Congress had not given EPA the clear authority to restructure the entire electricity-generating structure in the U.S. in a manner that, as calculated by EPA, would "entail billions of dollars in compliance costs (to be paid in the form of higher energy prices), require the retirement of dozens of coal-fired plants, and eliminate tens of thousands of jobs across various sectors." The net effect would have been a reduction in GDP by 2040 of over a trillion dollars.
The Court noted that EPA's interpretation of Section 111 was unlike any it had advanced before proposing the CPP and was inconsistent with EPA's admission that it had no particular institutional expertise in the area of electricity transmission, distribution and storage. Unlike the Mercury Rule, where limits on mercury were set at levels that could have been achieved through controls, there were no controls that could have achieved the limits established by the CPP for coal-powered plants. EPA was undertaking a "fundamental revision of the statute."
Given the breadth of the power that EPA was assuming for itself, the Court was compelled to look for clear Congressional direction to regulate in such a manner. It could find no support for EPA's claim of authority to determine "how much of a switch from coal to natural gas is practically feasible . . . before the grid collapses, and how high energy prices can go as a result before they become 'unreasonably exorbitant.'" Nor could the Court ignore the fact that EPA assumed a power to establish a cap-and-trade system that Congress itself had considered and rejected several times.
The Court considered other possible justifications for EPA's actions, and found none availing. It concluded that a nationwide rejection of coal as a power source was a decision "of such magnitude and consequence [that it] rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body."
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