Two court decisions coming down in the next few days could have tremendous bearing on the future of President Obama's climate change agenda and his desire to secure a legacy for himself as a champion against global warming.The decisions could come at the same time, or within days of each other, from the Supreme Court and the D.C. Circuit Court of Appeals, the highest court for challenging federal regulations. The Court of Appeals will be handing down its decision any day on whether to stay the Environmental Protection Agency's Clean Power Plan. The plan is the centerpiece of Obama's climate agenda and is being challenged in the court by more than two dozen states and a growing number of trade groups, unions and fossil fuel companies.
The states and industry argue that the EPA plan goes beyond the limits of its authority under the law and is unconstitutional.
They have asked the court the stay the regulations, which were made law in August, to give the judges time to rule on the merits of the lawsuits. Staying the Clean Power Plan, effectively putting it on ice, would jeopardize the regulations from taking effect in the timeframe envisioned by the agency and the White House.
The administration has put on an optimistic face when asked about the lawsuit. EPA Administrator Gina McCarthy recently told a gathering at the Council on Foreign Relations that "there's no reason" and "no damage" from implementing the rule "that would warrant a stay that any of us can identify. So we're really hopeful on it."
The 27 states suing argue that several studies show that the rules will increase electricity rates significantly and will pose a significant threat to grid reliability, increasing the likelihood of blackouts. The coal industry says the plan's impact on fossil power plants will put added financial pressure on communities that rely on the industry for their livelihoods.
A stay of the plan could send a signal to the international community that the U.S. is not serious about meeting its obligations under an agreement the president signed onto last month in Paris to reduce greenhouse gas emissions. The emissions are blamed by many scientists for driving manmade climate change and causing the temperature of the Earth to rise, resulting in more severe weather.
McCarthy says the plan was central to reaching a deal among 196 countries on taking significant action over the next decade. So, the stakes could be high for holding countries to the agreement. "The Clean Power Plan was one of the foundational issues that was brought up that allowed that success to happen," she said. "I am not saying that just because I want to give kudos to EPA, although we did a great job."
The second court decision will be coming from the Supreme Court as soon as Tuesday. The case deals with another landmark regulation that environmentalists support as key to helping states comply with the Clean Power Plan, while making sure electricity costs remain low.The Federal Energy Regulatory Commission regulation that the high court is reviewing compensates electricity consumers for dialing back their energy use at key times when demand is too high and the grid is stressed.
Many states say the program has helped them keep rates low, while making sure the lights stay on. Environmentalists like the rule because it reduces the need for building new fossil fuel power plants by keeping electricity demand level.
"The decision in this case will help shape the future of energy management in the United States," said Katherine Hamilton, executive director of the Advanced Energy Management Alliance, representing demand response technology firms and proponents. "We want to make sure all of the facts are known and understood in what is admittedly a challenging proceeding."
The utility industry, on the other hand, is strongly opposed to FERC's "demand response" rule because it distorts the electricity markets that they say were created to incentivize power plant development in favor of resources that do not provide electricity. It also says FERC is overstepping its authority by interfering with state markets.
Under normal circumstances, the deregulated grid that the commission oversees provides payments to power plants for ensuring enough generation is available to maintain reliability. Under the demand response rule, however, those incentives shift to pump up resources that provide no added electric capacity, the utilities argue.
D.C. Circuit Court judges agreed with the utilities and vacated the FERC order on the basis that it oversteps the commission's jurisdiction by influencing retail rates under the jurisdiction of states. They did not get to the merits of the utilities' arguments, but warned FERC if they did, the commission would not like the results. The judges denied a rehearing, forcing FERC to go to the Supreme Court to get an answer on whether the regulation lives or dies.Lawyers tracking the FERC suit say it is expected to come down Tuesday. Others tracking the Clean Power Plan suit in the D.C. Circuit say the decision to stay the regulation could come the same week.
Hamilton says there was "a lot of buzz" that the Supreme Court decision could come out last week. But because of that buzz many expect it could come out any day this month. On the D.C. Circuit decision, groups involved in the case say it was also anticipated to come out last week. Many say they expect it by the end of the month. McCarthy said Jan. 7 that it would come out in a couple of weeks.