The CPP Meets SCOTUS

The Supreme Court recently issued a stay of the Clean Power Plan, the Obama Administration’s signature regulation addressing greenhouse gas (GHG) emissions from existing power plants.

The Clean Power Plan (CPP) imposed the first-ever national standards to limit carbon dioxide (CO2) emissions from existing power plants. The CPP relies on Clean Air Act (CAA) Section 111(d) and established interim and final CO2 emission performance rates for fossil fuel-fired (mainly coal or oil) electric generating units. States are required to develop and implement plans to ensure that power plants achieve the interim CO2 emissions performance rates over the period of 2022 to 2029 and the final CO2 emission performance rates by 2030. The initial state plan was due on September 6, 2016 with final, complete state plans submitted no later than September 6, 2018.

After its publication in the Federal Register on October 23, 2015, opponents immediately filed petitions for judicial review and requests to stay the rule. However, the D.C. Circuit, the court designated in the CAA for review of rules of national scope, denied the stay request on January 21, 2016. Undaunted, the opponents took the unusual move of requesting a stay directly from the Supreme Court. On February 9, 2016, the Supreme Court voted 5-4 to grant the stay until the D.C. Circuit decided the merits of the case and any request for appeal of the D.C. Circuit’s decision is decided by the Supreme Court. As a result, the implementation of the CPP is on hold, meaning that states are not required to develop, submit, or implement plans until the stay is lifted.

The opponents of the CPP included twenty-nine states and state agencies. They advanced two main arguments to the Supreme Court to obtain the stay.

First, they argued that the states would suffer irreparable harm without a stay, citing the extensive efforts necessary to submit initial plans by September, 2016 and final plans by September, 2018. Among other things, states would be required to essentially change the method by which electricity is generated in their states in order to comply with the CPP. The opponents provided the recent example of the Utility MATS Rule, which was not stayed. Even though the Supreme Court ruled against EPA last year in Michigan v. EPA, the requirements of the rule had been in effect for years and EPA bragged that most power plants had already fully complied. Thus, EPA had extracted over $10 billion in compliance costs for a rule that was later found to be improperly promulgated.

Second, in the 45 years since the CAA was enacted, Section 111(d) had not been interpreted or used in this manner. Indeed, such an expansion could not be supported under the United Air Regulatory Group decision, in which the Supreme Court required a clear congressional expression when EPA discovers in an “long extant statute an unheralded power to regulate a significant portion of the American economy.”

At this point, it is unclear how the D.C. Circuit will rule on the merits of the CPP. Either way, the losing party will appeal that decision to the Supreme Court. Based on the 5-4 vote to grant the stay, it was within the realm of the possible that the Supreme Court would vote to overturn the CPP. However, Justice Scalia’s passing in February creates a great deal of doubt. A justice appointed by President Obama would likely vote to uphold the CPP. If a justice is not appointed by the time a D.C. Circuit decision is before the Supreme Court, a vote of 4-4 is a vote to sustain the underlying decision under Supreme Court rules.

Regardless of the ultimate outcome, though, the stay negates EPA’s attempt to ‘front-load’ compliance by requiring that plans be submitted, perhaps even final, before a decision is made on the legality of the underlying rule. Now, at least, compliance will occur after the rule has been reviewed by the courts.

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