Obama’s Clean-Power Plan Put on Hold by U.S. Supreme Court

(Bloomberg) — A divided U.S. Supreme Court blocked

President Barack Obama’s sweeping plan to cut emissions from

power plants, putting on hold his most ambitious effort to

combat climate change.

The 5-4 order Tuesday halts the Environmental Protection

Agency’s Clean Power Plan until at least the final months of

Obama’s presidency — and casts doubt on its ultimate fate

before the nation’s highest court by suggesting concern among a

majority of the justices.

Utilities, coal miners and more than two dozen states say

the agency had overstepped its authority and intruded on states’

rights.

The court action blocking implementation until an appeals

court can rule “confirms that the legal justification for the

Clean Power Plan should be examined by the courts before scarce

state and private resources are used to develop state plans,”

said Melissa McHenry, a spokeswoman for American Electric Power

Co., one of the biggest coal users among U.S. utilities.

The delay is a blow to Obama’s environmental agenda,

highlighting the prospect that his signature program for

combating climate change could be in legal jeopardy. It also

risks undermining the U.S. commitment to pare greenhouse gas

emissions as part of an international accord reached in Paris

last December.

Legal Foundation

The White House said it disagreed with the court’s action

and expressed confidence it would prevail in the long run.

“The Clean Power Plan is based on a strong legal and

technical foundation,” Obama press secretary Josh Earnest said

in an e-mailed statement.

The plan will now be on hold until the Supreme Court either

rules or refuses to get involved. The EPA won’t be able to

enforce a Sept. 6 deadline for states to either submit their

emission reduction plans or request a two-year extension.

A federal appeals court is hearing challenges to the rule

on an expedited basis, with arguments set for June 2. If the

court rules quickly enough, the Supreme Court could consider the

case in the nine-month term that starts in October.

Obama Successor

A final ruling in 2017 would leave it up to Obama’s

successor — potentially one of the Republicans who have

criticized the Clean Power Plan on the campaign trail — to

decide how to respond.

“We’re disappointed the rule has been stayed,” said Melissa

J. Harrison, press secretary for the EPA. “But you can’t stay

climate change and you can’t stay climate action.”

Senior administration officials, who acknowledged that the

order took them by surprise, stressed that the final state

implementation plans weren’t required until 2018, despite

initial blueprints due in September. The plan’s timeline was

created to absorb delays.

That gives states ample time and flexibility to develop

plans that meet their targets, one official said, speaking on

the condition of anonymity.

The EPA rule requires states and utilities to use less coal

and more wind power, solar power or natural gas. It is designed

to bring about cuts in carbon emissions from power plants of 32

percent below 2005 levels by 2030.

Unique Structure

The rule runs more than 1,500 pages and takes a unique

approach, setting targets that each state must meet in cutting

the amount of carbon pollution from power plants. It is designed

to accelerate a shift away from coal as the chief source of

electricity generation, toward natural gas, wind and solar

power.

But its broad structure — demanding that states meet

targets, going beyond power plants if necessary, including by

adding new renewable power generation or and boosting efficiency

— drew objections. The agency said that showed flexibility, but

opponents weren’t persuaded.

It’s “the most far-reaching and burdensome rule EPA has

ever forced onto the states,” 26 states led by West Virginia and

Texas argued in court papers.

The Supreme Court had never before granted a request to

halt a regulation before review by a federal appeals court, the

administration said.

‘Countless Dollars’

In a statement, West Virginia Attorney General Patrick

Morrisey said he was “thrilled that the Supreme Court realized

the rule’s immediate impact and froze its implementation,

protecting workers and saving countless dollars as our fight

against its legality continues.”

David Doniger, director of the climate and clean air

program at the Natural Resources Defense Council that supports

the plan, said that states, financial leaders and other

interests will continue pushing to clean up the power sector

“and will keep moving to incorporate strategies and public

policies leading toward a clean energy economy.”

But Jeff Holmstead, a former EPA assistant administrator,

said in a phone interview that the delay is sure to chill action

by states to comply with the plan.

“The states that have frantically been trying to figure out

how to comply certainly put their pens down tonight,” said

Holmstead, now a partner at Bracewell LLP.

The court gave no explanation for its order. Voting to

grant the delay were Chief Justice John Roberts and Justices

Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel

Alito. Dissenting were the four Democratic appointees: Justices

Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena

Kagan.

Winning Streak

Prior to Tuesday’s order, the EPA had been largely on a

winning streak before the federal judiciary.

The Supreme Court gave the EPA victories in 2013 and 2014,

upholding its greenhouse-gas permitting rules and regulation of

pollution that crosses state lines. It also rejected a plea to

reconsider its 2007 decision letting the agency regulate

greenhouse gases.

But last year the court sent EPA’s far-reaching rule on

mercury emissions back to the agency for further analysis, a

decision that has had no practical impact so far but was raised

as a reason the court should grant this delay.

‘Serious Concerns’

“The stay is a signal the Supreme Court has serious

concerns with the power plan,” said Mike Duncan, president of

the American Coalition for Clean Coal Electricity, which

includes coal-burning utilities, producers and rail operators.

“We’re optimistic the power plan will ultimately be rejected.”

An attorney for the Sierra Club said the decision is only a

temporary reprieve for coal.

“The coal industry is on life support already; it was

without the Clean Power Plan, and this should not give them a

glimmer of hope,” said Sierra Club Managing Attorney Joanne

Spalding. “The transition we’re experiencing in the electric

sector away from coal and other fossil fuels to clean energy has

been going on for years and will continue. EPA is following the

trends that are already occurring in the electric sector — not

creating new trends.”

A three-judge appellate panel rejected a bid for a delay on

Jan. 21, prompting foes to turn to the Supreme Court.

The Obama administration said power plants wouldn’t face

any deadlines to begin cutting emissions until 2022 at the

earliest, and wouldn’t have to be in full compliance until 2030.

Administration lawyers accused states and businesses of seeking

an “extraordinary and unprecedented” delay of the entire

regulation before any judge had ruled on it.

“A stay that delays all of the rule’s deadlines would

postpone reductions in greenhouse gas emissions and thus

contribute to the problem of global climate change even if the

rule is ultimately sustained,” U.S. Solicitor General Donald

Verrilli argued.

Southern, Peabody

The challengers, including Southern Co., Peabody Energy

Corp., the largest U.S. coal-miner, and the U.S. Chamber of

Commerce, said companies and states alike already were having to

prepare for the rule to take effect.

Southern and other utilities told the justices that,

without Supreme Court intervention, companies would have to

“begin the complex and lengthy process of shutting down or

curtailing generation from existing plants and shifting that

generation to new sources.”

To contact the reporters on this story:

Greg Stohr in Washington at gstohr@bloomberg.net;

Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net

To contact the editors responsible for this story:

Craig Gordon at cgordon39@bloomberg.net;

Jon Morgan at jmorgan97@bloomberg.net

Laurie Asseo

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