Expect a long, slow slog on EPA Clean Power Plan

Now that the dust has settled on the U.S. Supreme Court order to temporarily block implementation of the EPA Clean Power Plan, and the subsequent death of Supreme Court Justice Antonin Scalia, it appears that the federal rule to cut carbon dioxide (CO2) faces a legal battle that will drag out a long time.

The nation’s highest court on Feb. 9 agreed to grant West Virginia and other plaintiffs a stay of the Environmental Protection Agency rule to have states draft plans to cut power sector CO2 32% by 2030. The court’s four liberal justices objected to issuance of the “stay.”

The 79-year-old Scalia, among the five conservatives who voted to grant the stay, died four days later. Since then, the national media has been buzzing with speculation over whether the GOP-controlled Senate will vote on any Supreme Court nomination put forward in the final year of the Obama administration.

The U.S. Court of Appeals for the D.C. Circuit is scheduled to hear arguments on the merits of the Clean Power Plan on June 2. The litigation is ultimately expected to land before the Supreme Court and, in the short-term at least, the high court is not as conservative as it was with Scalia.

Bracewell & Giuliani Partner Scott Segal, a vocal critic of EPA coal plant regulation, believes the carbon rule still faces long odds even with the passing of the conservative legal icon.

“The truth is that there are significant legal problems with the Clean Power Plan that would raise questions with any composition of the Supreme Court,” Segal said.

“Liberal legal scholars like Harvard’s Laurence Tribe have pointed to statutory and constitutional shortcomings that will need to be resolved. For its part, the panel assigned to the case at the D.C. Circuit may not have entered a stay, but they did adopt an unusually expedited schedule for the case which may reflect misgivings with the rule, and a desire to resolve them before compliance became a foregone conclusion,” Segal said.

“And of course, the Supreme Court stay remains in place likely until an eventual Supreme Court judgment after the end of the Obama Administration.  While Justice Scalia’s untimely passing creates more uncertainty, the Clean Power Plan is still predicated on an extraordinarily shaky legal foundation,” Segal said.

ScottMadden partner thinks legal fight could stretch into 2018

The litigation is going to take a long time to play out, Todd Williams, a partner with ScottMadden Management Consultants, told GenerationHub.

A decision by the D.C. Circuit could come in late summer or early fall of this year, Williams said. “Many think that the D.C. Circuit will uphold the CPP, because of the composition of the appeals court panel and the general deference the circuit gives to federal regulatory action,” Williams added.

“The losing side can seek rehearing by the district court and review by the Supreme Court, but this is not likely to come onto the Supreme Court’s docket until 2017 or early 2018,” Williams said.

“Depending on what happens in the political appointment process, there is still time for a new justice to be appointed prior to the next Supreme Court hearing,” Williams said. “If a new justice has not been appointed by the time the case comes back to be reviewed on merit, there is a strong chance of a 4-4 split. From there, the case can either stand on the lower court’s decision or be ordered to be re-argued once a new justice is confirmed. There is strong precedent for the later.”

“ScottMadden believes that the ultimate result of the death of Justice Scalia is that the CPP’s course through the judiciary will be delayed. The ultimate decision is likely to be heard by a full court, the balance of which is to be determined by the result of the appointment process. That outcome is anyone’s guess,” Williams said.

Also the fact that the EPA Mercury and Air Toxics Standard (MATS) was ultimately decided in the courts after much infrastructure was retired, hurts EPA going into the Clean Power Plan case.

“After MATS was remanded, EPA said, in effect, that it really didn’t matter as compliance actions had been taken,” Williams said. What was perceived by many as an EPA “victory dance” may have influenced the Supreme Court justices who issued the CPP stay, Williams said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.