The energy industry is bracing for key court decisions on major Environmental Protection Agency rules for power plants, which are expected this summer.
The legal industry in Washington began ginning up scuttlebutt soon after the Memorial Day holiday on the potential for two major decisions, one from the Supreme Court and another from the D.C. Circuit Court of Appeals, being issued as soon as this week.
However, the decisions could take longer. Lawyers seem confident that the case before the high court about pollutants such as mercury will be decided before the D.C. Circuit makes its decision. The D.C. Circuit is reviewing cases on EPA’s emission rules for existing power plants, known as the Clean Power Plan.
The Clean Power Plan sets emission limits for each state in the nation to lower greenhouse gases, which many scientists say are the cause of manmade climate change. The rules are considered the centerpiece of the president’s agenda to combat the threat of global warming.
The EPA plan is being opposed in the D.C. Circuit court by 14 states and the coal industry, which argue the agency does not have the authority to proceed with the regulation. The Clean Power Plan also faces strident opposition by the GOP and some Democrats who are supporting legislation to delay implementation of the emission rules.
Nevertheless, depending on how the Supreme Court rules in a separate case, observers say it could help or hinder how EPA moves forward with the Clean Power Plan. For example, if the high court decides to abolish the power plant regulations it is reviewing, it could take away some of the legal arguments from opponents of the Clean Power Plan that say it is a form of double regulation.
The Supreme Court case involves a separate set of EPA rules for controlling hazardous air pollutants and mercury from power plants, known as the MATS regulations. The issue in the case centers on arguments that EPA did not weigh the cost of complying with the rule, which utility firms argue costs them billions. The rule went into effect in April, with many coal-fired power plants slated to retire because of the rules over the next seven years.
“On the Supreme Court MATS case, the schedule is pretty straightforward,” said Jeff Holmstead, former assistant administrator for EPA and partner at the law firm Bracewell & Giuliani. “It’s almost certain [we’ll] get a decision by the end of June. The Supreme Court’s online calendar shows that the court will be releasing opinions and orders every Monday in June.”
“If we don’t get a decision on Monday morning, we can be pretty sure that it won’t be released until the following Monday at the earliest.”
Charles Wehland, a partner with the global consulting firm Jones Day, said the court usually acts on pending cases by the end of its term, and “that’s right around the corner.” The high court held the oral arguments in the case, Michigan v. EPA, in late March.
Wehland, who is tracking both court cases, says he and others are watching what the Supreme Court does in the MATS case because it could affect the emission rules for existing power plants.
“If the Supreme Court overturns the MATS rulemaking, the D.C. Circuit could find that the Clean Power Plan no longer poses any threat of serving as a double regulation on existing coal-fired power plants,” making some of the arguments against the rules less relevant for the court to address, the Jones Day spring climate report states.
Wehland says “no one knows” what the Supreme Court will do and that predicting what the justices will ultimately decide is a fools errand. They could affirm MATS, or remand it back to EPA for changes, whereby the rule stays in place in both cases.
Opponents of the emission rules argue that because MATS has already been implemented, the law precludes EPA from moving forward with separate emission rules governing the same power plants. EPA argues that the law is not completely clear on the matter and it has discretion on how to proceed.
The D.C. Circuit is not expected to decide on the Clean Power Plan until late in the summer, according to Wehland and others following the case.
Holmstead says the EPA may finalize its rules for the Clean Power Plan before the case is even settled. The agency is expected to finish the rules before the end of the summer.
“There’s no way to know when the decision will come out,” Holmstead said. “It’s even possible that the final rule will come out before we get a decision. If this happens, then the court may decide that the case is moot and not issue a decision at all.”
