Plaintiff state governments argued Feb. 28 before the US Supreme Court that the Environmental Protection Agency (EPA) lacks the authority to eliminate whole categories of electric power generation by setting standards too strict for generators that burn natural gas or coal.
The EPA’s 2015 Clean Power Plan was repealed replaced by the 2019 Affordable Clean Energy rule, but the US Court of Appeals for the District of Columbia Circuit vacated the Trump EPA’s rule. That ruling, in 2021, undid the repeal of the earlier plan, leaving the Obama EPA plan potentially available for use, though it has never yet been implemented.
The Clean Power Plan should have been limited under the Clean Air Act only to setting “performance standards” that are “achievable” by existing generators, argued Lindsay See, solicitor general of West Virginia, using the specific wording of the law.
Instead, EPA wrote a rule it knew would force many gas-fired and coal-fired generators to either shut down or subsidize competition using other sources of energy, because the standards were not achievable through the performance of their existing generators, See argued. Congress gave EPA no such transformative power, and the DC Circuit’s ruling should be overturned, she said.
The case is West Virginia v. EPA, pitting 19 states and many industrial groups against the federal agency. EPA’s position is supported by 23 other states, several localities, several power suppliers, and environmental activists.
Questions from most of the justices did not give away what direction they were leaning for a ruling, but Justices Sonia Sotomayor and Elena Kagan sounded sharply skeptical of the arguments of the plaintiff states.
Major questions, clear statements
Much of the case focused on two court doctrines. The Supreme Court has said major questions of law should be determined by Congress, not determined by agencies who use novel interpretations of law to expand the reach of their regulations.
But what constitutes a “major question” is not a simple matter. Justice Stephen Breyer zeroed in on that problem, noting that technical changes can seem small for the individual power plant and well within a regulator’s authority but cumulatively may make great differences.
Such technical changes do indeed have significant effects, conceded Yaakov Roth, a Jones Day attorney representing the North American Coal Corp. Nevertheless, the DC Circuit’s ruling took the phrase “best system of emission reduction” from the law and made it a grant of unlimited authority, contrary to the intent of Congress, Roth said.
Similarly, See argued there is no clear statement in the Clean Air Act granting EPA the power to write such a rule as transformative as the Clean Power Plan.
To the plaintiff states, the Clean Power Plan provides a good example of a major question, with potentially disruptive impacts on the power industry nationwide and the added potential to be extended to other industrial and commercial areas and even to home heating with gas.
The fact that the EPA is not currently proposing to extend the rule beyond power plants does not mean it will not try to do so in the future, the plaintiffs said. So the Supreme Court should overrule the D.C. Circuit because the appellate court issued a ruling that has no “limiting principle” and is wrong as a matter of law, the plaintiffs said.
New rule coming
US Solicitor General Elizabeth Prelogar told the Supreme Court it should dismiss the case because EPA is not threatening to implement the 2015 Clean Power Plan. EPA is writing a new rule, which will be tailored to changes since 2015 in the power industry, she said.
And in any case, the Clean Power Plan was well within the authority of EPA, she argued.
Asked about the status of EPA’s work on a new rule, Prelogar said a notice of proposed rulemaking was expected by the end of the year, and a final rule typically might follow about one year after a notice.
Plaintiffs said the agency’s work on a revised version of the Clean Power Plan is already a problem for generators and state governments. Plans for power systems must be made years in advance but cannot be determined if no one knows what EPA will do, the plaintiffs have told the court.
The court should not think of the DC Circuit ruling as an expansion of EPA power, argued Covington & Burling attorney Beth Brinkmann on behalf of a coalition of power companies in support of EPA’s position.
She argued that regulators and power generators have for years been restraining emissions with a variety of adaptive strategies, such as emission trading, not purely technological upgrades for performance standards.