Supreme Court Issues Stay on Clean Power Plan

February 17, 2016

pic-energy-powerOn Feb. 9, the U.S. Supreme Court issued a stay on the implementation and enforcement on the Clean Power Plan rules to cut carbon emissions from the power sector. The 5-4 decision, allows states to place a hold on the plans they have been creating to comply with the Clean Power Plan. The stay will remain in place until either the Supreme Court rules on the case or the Supreme Court declines to hear the case after it is decided in the D.C. Circuit Court of Appeals. All five of the conservative justices on the Court supported the stay, including the late Justice Antonin Scalia.

The Clean Power Plan is the highly controversial Environmental Protection Agency (EPA) regulation finalized last year which requires states to meet carbon emission targets for the power sector. For many states, in order to meet the targets assigned, they will likely need to shift away most, if not all, of their power generation from coal-fired plants to cleaner-burning natural gas or renewables. The rules will require a 32 percent reduction in the power sector’s carbon emissions by 2030 based on 2005 levels of emissions from power plants.

The stay of enforcement comes after 27 states and numerous industry associations brought a lawsuit against the EPA alleging that it exceeded its statutory authority in creating the regulations. The nationwide stay on the implementation of the Clean Power Plan means that states will not need to turn in the implementation plans which were originally due in September 2016. The targets assigned by EPA were open-ended in that they did not specify the exact way that the state must meet the targets. The implementation plans that states were developing explain how each state is planning on hitting its target. While it is likely that most states will not continue working on their implementation plans, so far nine have indicated that they will proceed in spite of the stay: California, Colorado, Minnesota, New York, Oregon, Pennsylvania, Virginia, Washington, and Wyoming.

The stay will resolve, at least temporarily, the uncertainty for the power sector. However, with the passing of Justice Antonin Scalia, succeeding on the merits of the lawsuit will be more difficult. If the vote on the case had come down as expected, it would have been a 5-4 decision against EPA. The loss of a conservative vote on the court splits the Court evenly, with the likely result on this case being a deadlock if it were heard without a new justice. However, it is expected that the earliest the case would make it to the Supreme Court would be February 2017, and even if the Republican majority refuses to consider a nominee until after the election, the slot could feasibly be filled by that time.

NSBA supports the Supreme Court decision to stay implementation and enforcement of the Clean Power Plan regulations pending the outcome of the litigation surrounding the rules. The Clean Power Plan rules have the potential to greatly impact energy prices and reliability across the country as established power plants are shuttered or converted to new energy sources to meet Clean Power Plan targets. Because small businesses are particularly vulnerable to changes in energy prices and reliability issues, NSBA supports a more all-encompassing approach to energy policy; one which allows a slower transition to emerging energy forms and technologies.