What's Next for the Clean Power Plan?

On Tuesday, February 9th, a 5-4 majority of the Supreme Court unexpectedly issued a "stay" blocking the Clean Power Plan - the centerpiece of U.S. action on climate change - until litigation over its legality is finished. The U.S. Court of Appeals for the District of Columbia Circuit will hear the case in June, and decide the merits most likely in late summer or the fall. Appeals to the Supreme Court will surely follow. What does the stay order tell us about the Clean Power Plan's prospects?

Some observers immediately suggested that the stay vote portends the Plan's eventual defeat if it returns to the Supreme Court on the merits. That conclusion is unwarranted, in my view. Actually, based on recent Supreme Court decisions, it's reasonable to believe that a majority of justices will vote to uphold Clean Power Plan. I laid out the basis for this view in an interview on Thursday, before the sudden death of Justice Antonin Scalia. My assessment does not depend on the vacancy his passing creates, or on who replaces him.

How did the Clean Power Plan get to the Supreme Court, and what does the stay ruling mean?

When EPA formally published the Clean Power Plan in October 2015, 27 states, coal companies, the coal wing of the power industry, and numerous business and ideological groups filed suit in the D.C. Circuit Court of Appeals, the court designated by the Clean Air Act to hear challenges to national pollution standards. The challengers asked the D.C. Circuit to stay the rule. NRDC joined 18 states, a dozen power companies and clean energy associations, and a dozen other environmental organizations to oppose the stay.

In late January, after considering hundreds of pages of briefs and thousands of pages of expert testimony for nearly a month, a three-judge panel of the D.C. Circuit unanimously denied the stay motions, finding that the petitioners had not "satisfied the stringent requirements for a stay."

The Clean Power Plan's foes then sought a stay from the Supreme Court. Nearly everyone - supporters, opponents, and independent legal experts alike - thought the High Court's intervention at this stage was an extraordinary long shot. Never before had the Court stepped in to halt a federal regulation before any lower court had ruled on the legal merits. And while stays are more frequent for genuinely urgent matters - think "stay of execution" - the Clean Power Plan provides a long phase-in period. Final state plans are due not until 2018 and power plants are not required to comply before 2022.

But in a surprise ruling late on Tuesday, just three working days after receiving responses from the Justice Department and the allied intervenors, the Court granted the stay. The five-member majority included Chief Justice Roberts and Justices Scalia, Kennedy, Thomas, and Alito. Justices Ginsburg, Breyer, Sotomayor, and Kagan opposed the stay.

What happens next?

The Court's order states that the stay will remain in place while the D.C. Circuit resolves the merits, and until the Supreme Court resolves any appeals. The D.C. Circuit has already ordered expedited review; the first briefs are due this Friday. Briefing will be finished in April, and oral argument will be heard on June 2nd and possibly June 3rd. The D.C. Circuit's merits decision could come as early as late summer or early fall.

The losing side will then have the opportunity to seek rehearing in the appeals court and review by the Supreme Court. Depending on how long each litigation step takes, the Supreme Court could hear a merits appeal sometime in 2017 or even early 2018.

What does the stay tell us about whether the Clean Power Plan will be upheld?

The Supreme Court's short order provided no explanation for the decision. The victors immediately claimed that the stay foretells a decision against the Clean Power Plan if and when the case returns to the High Court on the merits. But I think that prediction is shaky at best. My assessment, made before Justice Scalia's passing, is that there are strong reasons to think that a majority of five or six of the current justices will uphold the Plan. In my view, this assessment holds whether or not Justice Scalia's seat is filled before the case returns to the Court.

First, given the extraordinarily short time the Court spent reviewing the stay papers, it is unlikely that the justices thoroughly reviewed and reached firm judgments on the complex legal arguments raised. More likely the decision turned on the claims of imminent harm. The Clean Power Plan's challengers claimed a stay was needed to prevent immediate changes for states and the power sector that could not later be reversed, while the Plan's defenders argued that no serious compliance measures were required by states or companies for years. Given the speed of the Court's ruling, it's possible that the dominant consideration for at least some members of the majority was simply to hold things in place while the lower court sorts out the parties' merits claims.

As we look to the merits, it is useful to look at the justices' votes in recent cases involving climate change or the power sector. From these cases, there are reasonable grounds to think that Justice Kennedy and Chief Justice Roberts may well join a majority to uphold the Clean Power Plan.

  • Five justices, including Justice Kennedy, held in 2007 in Massachusetts v. EPA that EPA has the authority and responsibility to curb climate-changing greenhouse gas pollution under the Clean Air Act if, as the agency has determined, that pollution endangers public health and welfare.
  • In 2011 the Court unanimously decided, in American Electric Power v. Connecticut, that EPA can curb carbon pollution from existing power plants under Section 111(d) of the Clean Air Act, the very provision the agency has used to establish the Clean Power Plan.
  • In a third climate change case in 2014, Utility Air Regulatory Group v. EPA, Justice Kennedy and Chief Justice Roberts voted to uphold the most important portions of EPA's permitting regulations for large new sources of carbon pollution.
  • Kennedy and Roberts joined Justice Ginsburg's 6-2 decision in EPA v. EME Homer City in 2014 upholding regulations to control cross-state sulfur and nitrogen air pollution, using a flexible, state-by-state, market-based structure much like the Clean Power Plan.
  • Justice Kennedy joined a 5-4 majority against EPA's standards for mercury pollution, in Michigan v. EPA, last year. But Kennedy may be responsible for tempering the opinion (written by Justice Scalia), which sets out a pathway for EPA to cure the error the Court found and preserve the mercury standards.
  • Just last month, in FERC v. EPSA, Kennedy and Roberts joined the majority opinion written by Justice Kagan in another power sector case, upholding the Federal Energy Regulatory Commission's demand-response regulations, which are premised, like the Clean Power Plan, on the fact that the electric system is "an interconnected 'grid' of near-nationwide scope."

Of course, even if EPA's authority to regulate power plant carbon pollution under Section 111(d) is considered settled, the Court can still consider how EPA used that authority. So these prior decisions don't foretell the outcome or foreclose the possibility of some setbacks for the Clean Power Plan. But they do indicate that, if the case reaches the Supreme Court after the D.C. Circuit's review, there is a strong potential for a majority of the current members justices to uphold the Clean Power Plan.

What should state and industry leaders do now?

Everyone involved - state officials, industry managers, and concerned citizens alike - now must recalibrate what to do while the litigation proceeds. Reacting to the stay before Justice Scalia's sudden passing, many power companies now transitioning from high-carbon fuels to cleaner generation and energy efficiency saw little reason to change course. As Edison Electric Institute vice president Quin Shea explained, the stay "doesn't really change anything." He added: "You can't simply put the genie back in the bottle when it comes to major strategic investments that the captains of industry are making." Many power companies have reaffirmed their plans to continue transitioning to clean energy.

And although the attorneys general of Texas and West Virginia called on Friday for states to "put your pens down," more than a dozen states have announced their intention to continue their planning and stakeholder engagement processes, even though the stay puts off the Clean Power Plan's September 2016 deadline for initial submissions to EPA.

A strong additional push for near-term action is coming from the five-year extension of the Production Tax Credit for wind energy and the Investment Tax Credit for solar energy, enacted in December. These incentives undergird the vigorous pace of clean energy investments that will position states and utilities well for eventual compliance with the Clean Power Plan.

Time to press ahead

We believe prudent states and power companies will continue planning and implementing cleaner energy policies despite the stay.

The power sector has embarked on an unstoppable shift from its high-polluting past to a safer, cleaner future. The stay cannot reverse the underlying economic forces that are moving power companies away from coal and toward wind and solar power and energy efficiency. Nor can the temporary halt dampen the overwhelming public support for the Clean Power Plan and for action on climate change and clean energy.

Prudent state officials and industry leaders will not count the Clean Power Plan out. NRDC will continue to defend the Plan in the courts, and we will continue to push toward a clean energy future.

About the Authors

David Doniger

Director, Climate & Clean Air program

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