The death of Supreme Court Justice Antonin Scalia has jolted state leaders mulling the future of U.S. EPA’s Clean Power Plan.
Already knocked off balance by last week’s surprise Supreme Court decision to freeze the federal climate change regulations, officials yesterday said Scalia’s death — and the questions his absence from the bench raises for the regulation — has left them reeling and uncertain about the plan’s future.
"I think it’s taken everybody by surprise," said Washington Utilities and Transportation Commissioner Phil Jones. "It’s like a one-two punch to the gut."
The Obama administration’s crackdown on power-sector carbon emissions was already a political minefield for states, most of which were nonetheless strategizing ways to comply with the regulation. But for state energy and environment regulators, the topsy-turvy week has raised a host of new uncertainties.
Opponents of the Clean Power Plan saw last Tuesday’s stay decision as a sign the Supreme Court might strike down the rule. Scalia was among the five justices who voted to put the regulation on hold, and he also was expected to vote against its legality.
Now the regulations’ success could depend on his replacement. All eyes are on a brewing battle between the Obama administration and Senate Republicans who have said they will refuse to approve a nominee to take Scalia’s spot until after the presidential election (EnergyWire, Feb. 16).
"Much more than ever before, [the Clean Power Plan’s fate] entirely depends on the presidential election," said Travis Kavulla, president of the National Association of Regulatory Utility Commissioners, which is meeting this week in Washington, D.C. "It seems less likely with Justice Scalia’s passing that the rule is somehow vacated."
Kavulla added, "One way or another, clearly there’s a lot more uncertainty associated with the Clean Power Plan than there was before."
‘Pencils down,’ for now
Scalia’s death has complicated states’ political calculus on whether to keep up Clean Power Plan discussions.
Some state leaders have already put their planning efforts on hold. But EPA’s supporters warn that they risk falling behind if the rule is upheld.
Bill Becker, executive director of the National Association of Clean Air Agencies, argued to an audience of state environment, air and electricity regulators last week in Washington, D.C., that carbon limits are inevitable, whether or not they are ultimately manifested by the Clean Power Plan.
"If you think the Clean Power Plan is the last step, it’s not," Becker said.
Others say such efforts are a waste.
Wisconsin Gov. Scott Walker (R) issued an executive order yesterday prohibiting state agencies from doing any work to prepare for the Clean Power Plan until the stay expires. Citing "undue burden" on state ratepayers and manufacturers, he argued that the rule could have a "devastating impact."
West Virginia Attorney General Patrick Morrisey (R) on Friday sent a letter to leaders of the National Association of Regulatory Utility Commissioners and the National Association of Clean Air Agencies urging them to call state regulators to "put their pencils down."
"We want to ensure that States understand that there is no legal obligation to continue to spend taxpayer funds on compliance efforts and that, in the unlikely event the Power Plan is ultimately upheld by the courts more than a year from now, there will be ample time then to restart those efforts," the letter said.
For some states, full speed ahead
Meanwhile, the Supreme Court opening means certain energy interests are likely to increase pressure on states to stop Clean Power Plan compliance talks.
Paul Bailey, vice president of federal affairs for the American Coalition for Clean Coal Electricity, said when he first heard of Scalia’s passing, he "frankly thought it was a joke."
After the court stayed the rule, Bailey said he was "very optimistic" it would not survive judicial review. Now he is slightly less sure but said he still believes states should halt their planning processes.
State-level conflicts about whether or not to continue preparing for carbon cuts have already cropped up. In Pennsylvania, Department of Environmental Protection Secretary John Quigley confirmed Friday that his office will continue to develop a compliance plan even though EPA can no longer require states to do so.
"We have decided not to change our pace or our trajectory," Quigley said.
He added, "Whether or not we have a Clean Power Plan, we are going to see retirements of coal plants and continued strength and growth in the gas sector, continued growth in the renewable energy sector, so continuing to plan for this new energy future just makes sense."
But Pennsylvania Coal Alliance CEO John Pippy, a leading advocate for the coal industry there, argued that there are "serious concerns regarding the resources that will be wasted attempting to develop a compliance plan, at the expense of the taxpayers, for a rule that may be significantly altered or thrown out by the Federal Courts."
On Friday in Richmond, Va., a Clean Power Plan group of industry and advocacy interests forged ahead with a scheduled planning meeting.
"The only thing that really makes sense to us is to continue on the path that we’re on, to evaluate the different options," said David Paylor, director of Virginia’s Department of Environmental Quality.
Multiple attendees suggested that the process should slow down or focus more broadly on carbon reduction options. Paylor said it was too early to say whether planning timelines might change.
Some say plan … for something
Most state leaders are still consulting lawyers and trying to figure out what the stay and Scalia’s death mean.
"A lot of heads are still spinning," said NARUC President Kavulla.
Kavulla, a Montana electric regulator and a critic of the rule, was a strong advocate for states to plan to meet EPA’s requirements, regardless of legal uncertainty.
But following the stay, Kavulla said states should focus on more general carbon reduction strategies instead.
"I don’t think it makes much sense to comply with the mundane mechanics of a regulation that’s stayed," he said. "But it does make a lot of sense, as it always has, to plan for carbon price risks and to talk about low-carbon technologies."
Asim Haque, an Ohio electric regulator, said his state’s leaders haven’t decided whether to continue Clean Power Plan compliance discussions. But Haque agreed with Kavulla that the work should continue in some form.
"I am a lawyer, and I know that until a regulation has been fully struck [down], you’ve got to really continue to look at what your potential compliance would look like," Haque said. "There is certainly momentum for cleaner energy, so whether it’s the CPP or something else, you have to believe that the concept of CO2 emission reductions will come up in another context."
Utilities between a rock and a hard place
As states diverge, electric utilities could be stuck in the middle.
"We’re split now because we have the Rocky Mountain states in the West saying, ‘Don’t do any more activities,’ and you have the West Coast states saying, ‘Go forth, don’t slow down,’" said Washington commissioner Jones. "That makes it a little bit complicated for a utility like Pacific Power. It operates in three Rocky Mountain states and three West Coast states."
Jones said the way around this conundrum is to "focus on nonpartisan non-CPP issues and just say, ‘It’s not CPP compliance, but here’s what we’re going to do.’"
If some states drop off from regional Clean Power Plan discussions, others may be left trying to figure out who could be potential carbon trading partners should the rule survive.
"This might be a short-term problem because the stay’s only just happened," said Richard Sedano, director of U.S. programs for the Regulatory Assistance Project. "People are still figuring out who’s who. Once the states sort of self-identify with each other, they’ll find each other. And they might do it publicly and they might do it privately."
Sedano said because the rule may prevail, it’s a risk for states to remove themselves from compliance conversations.
"It may disadvantage the state if new trading systems become hard to break into once they’re created, but on the other hand, states could create them with the idea of adding new members," Sedano said.
Reporter Peter Behr contributed.