Electric Power Plant
ComplianceJuly 18, 2022

United States Supreme Court curtails EPA's authority

The U.S. Supreme Court issued a decision on June 30 to limit the Environmental Protection Agency’s (EPA) authority to regulate greenhouse gas emissions.

In short, the court ruled that the EPA had no authority to create wide-sweeping new standards without a Congress-led directive.

Which means, that before the Agency can establish a greenhouse or carbon emission cap and trade program, for example, or require companies to move from coal and gas to renewable or zero-polluting technologies such as solar, wind, or hydro, Congress must give its blessing.

Exceeding its authority

Since 1970, when the Clean Air Act (CAA) was initially passed, EPA has led the nation’s push towards cleaner air by establishing emission limits and regulating industry discharges by enforcing the implementation of cleaner, greener air technology.

However, in 2015, EPA issued a new rule stating that the Best System of Emission Reduction (BSER) for existing coal-fired power plants included a requirement that such facilities reduce their own production of electricity, or subsidize increased generation by natural gas, wind, or solar sources.

EPA felt that it had the right to issue such a statement under the New Source Performance Standards (NSPS) program of Section 111 of the Clean Air Act. As such, the Agency projected that it would be feasible to have coal provide 27% of national electricity generation by 2030, down from 38% in 2014. From these changes, EPA determined new emissions performance rates.

Immediately, many states took this as a national directive that would cause undue costs and burden.

In 2016, the Court declared that these rates “…were so strict that no existing coal plant would have been able to achieve them without engaging in one of the three means of generation shifting” — replacing coal with natural gas, wind, or solar power — in effect, shutting down the coal plant.

This requirement never went into effect.

However, in 2021 the EPA decided to try again using a different aspect of the New Source Performance Standard: Section 111(d). This requires states to submit plans establishing performance standards for existing sources that would be subject to NSPS if they were new.

So the question brought before the Supreme Court was if EPA had the right to act independently and require such an implementation, or if the Agency exceeded its authority under the Clean Air Act.

Their verdict: EPA went too far.

In the syllabus of the Supreme Court of the United States, West Virginia Et. Al. vs. Environmental Protection Agency Et. Al., the decision states: “On EPA’s view of Section 111(d), Congress implicitly tasked it, and it alone, with balancing the many vital considerations of national policy implicated in the basic regulation of how Americans get their energy. There is little reason to think Congress did so. EPA has admitted that issues of electricity transmission, distribution, and storage are not within its traditional expertise. And this Court doubts that ‘Congress…intended to delegate…decision[s] of such economic and political significance,’ i.e., how much coal-based generation there should be over the coming decades, to any administrative agency.”

The Court continued, writing that only Congress had such authority.

What does it mean?

The rule calls into question not only the EPA’s actions since its inception, but also some other proposals such as the Securities and Exchange Commission (SEC) rule that would require companies to disclose climate-related risks. The same applies to an assessment by the Federal Energy Regulatory Commission aimed at treating greenhouse gas emissions and their contribution to climate change the same as all other environmental impacts.

Not everyone sees this as entirely bad news. “[The ruling] only addresses the EPA’s authority under one provision of the Clean Air Act and only with respect to one industry—and that industry is moving in the right direction for the most part anyway,” a former attorney for the EPA, Jonathan Skinner-Thompson, told Kelsey Simpkins, in a recent CU Boulder Today interview.

The associate professor at Colorado Law and director of the Getches-Green Natural Resources, Energy & Environmental Law Clinic, continued: “We’re seeing significant emission reduction goals and targets put out by companies, and the utility sector is transitioning away from those older and dirtier sources of pollution. And so while it is disappointing, and certainly will have an impact, it doesn't preclude either federal government or state or local government action on climate change.”

Next actions

In a statement following the ruling, President Biden said, “I have directed my legal team to work with the Department of Justice and affected agencies to review this decision carefully and find ways that we can, under federal law, continue protecting Americans from harmful pollution, including pollution that causes climate change.”

It looks like, for now anyway, major U.S. environmental reforms and climate change directives will fall upon Congress, business, state, and local governments, to deliver something meaningful that will meet the clean energy economy the world needs.

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