The Supreme Court’s decision limiting the Environmental Protection Agency’s power to regulate greenhouse gas emissions from power plants could have far-reaching consequences for the energy sector – and make it more difficult for the Biden administration to achieve its goal of running the U.S. electric grid on clean energy. energy by 2035.
The country has gradually switched from coal to cleaner sources of electricity such as natural gas, solar power and wind power, often because they are cheaper. Most experts don’t think the West Virginia Supreme Court’s decision against the EPA will immediately reverse that trajectory.
But the ruling could slow the transition to clean energy in the future because it places constraints on what the EPA can do without overstepping its legal authority. It’s a frightening prospect, with climate experts warning of the dire consequences of steadily rising global temperatures and extreme weather.
Depending on how Congress or the courts interpret the court’s decision in the future, it could also change how other agencies can regulate the electricity industry.
The decision will also set the tone in policymaking chambers, making it harder to persuade state lawmakers to craft laws to boost renewable energy, said Sachu Constantine, executive director of Vote Solar, which advocates. for solar-friendly laws in state legislatures.
“Without the threat of EPA or federal climate regulation, without the recognition that carbon pollution is really, really bad, it becomes harder to make that argument,” Constantine said. “It makes it less likely that the risk or cost of carbon will be directly felt by utilities or other agencies that control how much solar we can deploy. And that loss of regulatory risk means they could be less likely to choose solar.
The case the Supreme Court took, West Virginia v. EPA, was filed in response to former President Barack Obama’s Clean Power Plan. The Obama plan would have required states to reduce emissions from electricity generation, primarily by shifting away from coal-fired power plants. This prospect has upset several industries, including coal, and some state attorneys general. They disputed how far the EPA could go to influence the coal industry’s transition to cleaner sources.
“It was kind of a scary prospect that the EPA had the power to shut down power plants and build new ones,” said Jeff Holmstead, partner at Bracewell LLP, who served as deputy director of the EPA in the George W. Bush administration. “All the major industry groups opposed this approach because of what they saw as over-regulation. Power companies may still feel the same way, but in the meantime they have invested a lot of resources to trying to decarbonize.
When Congress writes laws, it often leaves the implementation details to regulators such as the EPA. In this case, energy industry officials argued that the EPA had gone too far and overruled the intentions of Congress. The challenge in the West Virginia case was intended to diminish that authority. It succeeded.
Thursday’s decision means the EPA cannot force states to switch from coal to cleaner sources such as natural gas or renewables and force coal plants to shut down. One option that is no longer on the table as a result of the ruling is for the EPA to create a national cap-and-trade system, said Richard Revesz, a law professor at New York University. Under this system, a limit is set on the amount of carbon dioxide that can be emitted, and companies can trade with each other to meet these targets.
“What the court is ruling out are the most efficient and cheapest ways to regulate the electricity sector,” Revesz said.
Nothing in the ruling would prevent Congress from creating a cap-and-trade system, but “in the current impasse and given the filibuster rules in the Senate, that’s not going to happen,” he said. he declares.
Still, Revesz said, the EPA has the authority to regulate power plant emissions in other ways.
And although the Clean Power Plan never took effect, the country switched from coal to cleaner sources such as renewables anyway, often for economic reasons. Many states and large corporations have pledged to use clean energy in the near future.
“These commitments are driven by shareholders, by the economics of carbon reduction options,” said Sue Tierney, senior adviser at Analysis Group and an expert in power markets. “Several states have carbon reduction commitments, and large electricity users like very large corporations are saying we want a 100% clean way by 2050 … so there are a lot of other forces at play. plus EPA regulations right now that push things in a certain direction.
Most major electric utilities have aggressive net zero goals and commitments to phase out coal plants.
“These aren’t fast enough for some defenders, but it’s not clear how much faster you can go unless you build the infrastructure to replace them,” Holmstead said.
The National Rural Electric Cooperative Association, a trade association of local electric cooperatives, applauded Thursday’s decision.
“Coal, natural gas and nuclear plants – these are all dispatchable and always available resources and at the same time we are taking them offline,” said the association’s CEO, Jim Matheson. “In terms of overall production capacity in this country, I think that creates a greater risk to reliability.”
This does not mean that power companies will reopen closed coal plants. That would be a lot more complicated than flipping a switch and turning the power back on.
Achieving aggressive carbon reduction targets in the electricity sector will require the work of agencies such as the Federal Energy Regulatory Commission, which plays a key role in approving the infrastructure needed to transition to a electricity sector with fewer emissions. The Supreme Court’s decision could affect FERC’s degree of authority to, for example, regulate pipeline emissions or approve the locations of transmission lines or facilities, experts said.
“It’s less about what’s going to happen for power plants and more about what’s going to happen for regulation more broadly,” Tierney said.
Associated Press writers Mark Sherman and Matthew Daly in Washington contributed to this report.