Eighteen states challenging the legality of U.S. EPA's Clean Power Plan have halted planning discussions following the Supreme Court decision to stay the regulation, according to a review by E&E staff.
Of the 47 states affected by the rule, nine are weighing whether to stop preparing or perhaps slow down now that they may have an extra year and a half to work out plans. The other 20 states -- mostly supporters of the climate action -- will press on with discussions about how to meet the carbon emissions limits for power plants, even though EPA can no longer legally require them to do so.
"We have obviously a big issue in Pennsylvania," said Gov. Tom Wolf (D), whose state intends to keep planning. "The coal industry is huge, with a lot of jobs. Also, because of our location we generate a lot of power."
That's why it's important for Pennsylvania to get its plan right, Wolf said. "I want Pennsylvania to be a leader in clean power," Wolf told E&E in a brief interview.
The Supreme Court ruling earlier this month to stay the Obama administration's signature climate change regulation has thrown states into disarray. Before the legal bomb dropped, the vast majority of states -- even ones suing to stop the rule -- had begun negotiating how to make carbon cuts. Over the past two weeks, a significant number of key players have left the table.
The review, developed from dozens of interviews with officials across the country, is the first comprehensive look at where states stand in a rapidly shifting political landscape.
Many state leaders ideologically opposed to the rule announced they would suspend planning. But some veered from their expected political course, arguing they must keep strategizing carbon-cutting options because the rule is on hold, not struck down.
Wyoming Gov. Matt Mead (R), governor of one of the nation's most coal-heavy states, told E&E that although he is "thrilled" EPA's climate rule was stayed, his state would continue to plan.
The stay "provides the states, utilities, coal companies time to figure out how to go about this if, in fact, it does become law," Mead said.
"Frankly, it allows us time to have a new administration take a look at this and see if this is the way to go or if there's a better way to go," the governor added.
Wyoming's Legislature has other ideas. The state Senate on Wednesday passed a measure that would bar the Department of Environmental Quality from devoting funds to planning for the rule. The Wyoming House will consider the proposal this week.
Growing pressure from all sides
Beyond Wyoming, the act of planning for the Clean Power Plan has become even more politically toxic.
In Virginia, where Democratic Gov. Terry McAuliffe supports the regulation, a Senate panel of the Republican-controlled General Assembly last week advanced a bill written in the fall to require legislative approval of any compliance plan.
The bill -- which will go to the Senate and House floors shortly and is likely to pass along party lines -- would "basically tie [the Department of Environmental Quality's] and the governor's hands," said Michael Dowd, director of DEQ's air division. The bill would also require an extensive report on the possible impacts of the plan.
States will feel pressure from all sides, as environmental advocates encourage them to keep planning and critics of the rule tell them to stop.
"Everyone involved -- state officials, industry managers and concerned citizens alike -- now must recalibrate what to do while the litigation proceeds," Natural Resources Defense Council attorney David Doniger said in a blog post last week. "We believe prudent states and power companies will continue planning and implementing cleaner energy policies despite the stay."
The conservative American Energy Alliance, though, is encouraging states to halt planning and expects more bills like the one in Wyoming to surface, according to Dan Simmons, vice president of policy.
Simmons argues states shouldn't be "spending time and resources complying with the regulation that we believe is not only illegal but also damaging for ratepayers."
However, he recognizes that if the Clean Power Plan survives, it "definitely makes sense" for states to start planning in the hopes of keeping implementation costs down, Simmons said.
'We don't want to be caught flat-footed'
Last year when Senate Majority Leader Mitch McConnell (R-Ky.) urged states to "just say no" and refuse to comply with the rule, multiple state legislatures considered bills to that effect. Some of them were modeled on language from an outside political group, the American Legislative Exchange Council.
But many dialed back their efforts when industry interests and officials raised concerns that the legislation could result in the federal government imposing its own plan on the state. Simmons said he couldn't say whether lawmakers might fall into that pattern again.
The high court stay could also further divide state officials who disagree about whether taxpayer dollars should be spent on planning for the rule.
Louisiana, whose attorney general is challenging the Clean Power Plan, will continue examining a possible state plan.
"We plan to hold at least one outreach meeting" in mid-March, said Chuck Carr Brown, secretary of the Louisiana Department of Environmental Quality. Brown was named to his post this year by Gov. John Bel Edwards (D), who replaced Bobby Jindal (R). Still, Ruth Wisher, press secretary for Louisiana Attorney General Jeff Landry (R), said that "Louisiana needs to take no action to come into compliance" given the stay.
Regardless of political conflicts, many states halting official Clean Power Plan work appear poised to quietly continue to look at potential power-sector carbon cuts.
Glade Sowards, the Utah Division of Air Quality's Clean Power Plan coordinator, said that although his office is suspending its formal planning process, "we will continue to stay engaged in regional activities or other kind of outreach, in terms of the 'what if' scenarios."
"The stay is just that -- it's a stay -- so we need to be mindful that a potential outcome could be that the courts uphold it," Sowards said. "We don't want to be caught flat-footed."
Several states in limbo
In Oklahoma, where the governor last year prohibited the state from drafting a compliance plan for the EPA rule, Energy and Environment Secretary Michael Teague said Oklahoma continues to engage with the Southwest Power Pool and key players on the plan's effects.
"Oklahoma no longer faces a September compliance date and can focus on assisting the attorney general on overturning this rule," he said in a statement.
In some states where leaders strongly oppose the regulation -- including Arizona, Ohio and South Carolina -- officials said they were still debating what to do next.
"[Arizona's Department of Environmental Quality] is continuing to assess its options while completing its outreach and soliciting feedback from its stakeholders, partners and elected officials," said a statement from Eric Massey, Air Quality Division director.
"A long-term decision will be made based on the feedback we continue to receive," he said.
Meanwhile, in Nevada -- one of just a handful of states not supporting or opposing the rule in court -- "planning efforts are postponed while we consider the matter of the Supreme Court decision," according to Scott Kelley, a spokesman for the governor's Office of Energy.
Some states' responses on whether to plan were still evolving as of late last week.
Mississippi, one of several states that once planned to adopt a "just say no" strategy, initially planned to hold a public meeting tomorrow and discuss what the stay means, environmental agency officials confirmed. But the Department of Environmental Quality in an email Friday canceled that meeting, bringing the total count of states suspending work to 18.
"The stay, so long as it is in place, stops any of the requirements of the Clean Power Plan from becoming effective; therefore, MDEQ is suspending its efforts to develop a state implementation plan until there is a final court ruling," which likely will not come until late 2017 or early 2018, said Chad LaFontaine, chief of the energy and greenhouse gases branch of DEQ's Air Division.
Utilities 'putting everything on ice'
While some states shift their Clean Power Plan considerations behind the scenes, the energy industry is more interested than ever in how it might choose to comply with the regulation, should it survive judicial review.
Advanced Energy Economy, a business group of green energy and technology companies, is closely tracking how states are responding to the stay.
"The Clean Power Plan has the potential to be a market driver for our member companies, and decisions about how the rule will be implemented are going to be made state by state," said Maria Duaime Robinson, senior manager of energy policy and analysis at AEE. "We don't want to miss an opportunity to help states make use of advanced energy technologies to modernize their electric power systems in the course of meeting EPA standards."
Investor-owned utilities could also drive continued conversations surrounding the Clean Power Plan. Many have said the stay doesn't change much for them and they will continue with business plans focused on cutting greenhouse gas emissions.
More than two-thirds of about 500 utility executives surveyed before the stay for a Utility Dive report released this month said they support carbon standards as strict as the Clean Power Plan or stronger.
Before the stay, North Carolina-based Duke Energy Corp. encouraged the state to collaborate on planning. Duke says it will move toward a low-carbon future regardless of where the rule stands.
But North Carolina's Environmental Management Commission has canceled discussions on the Clean Power Plan.
"They are putting everything on ice, right now," said Myra Blake, an attorney with the Southern Environmental Law Center in Chapel Hill, N.C., and a Clean Power Plan supporter.
"We have been and will continue to work constructively with each of our states as they determine their path forward," Duke spokesman Sean Walsh said last week.
Doniger noted in his blog post that the power sector has embarked on an "unstoppable shift," and the stay "cannot reverse the underlying economic forces that are moving power companies away from coal."
Reporters Evan Lehmann, Edward Klump, Pete Behr, Kristi Swartz, Jeffrey Tomich, Rod Kuckro, Debra Kahn and Daniel Cusick contributed.
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