by Michael C. Ford

In 2015, EPA published a rule under the Clean Air Act (“CAA”) targeting coal-fired electricity generators designed to force their shift from coal generation to gas, solar and wind production.  The “Clean Power Plan” (“CPP”) rule was projected to reduce the reliance on coal for electricity generation from 38% (2014) to 27% by 2030.  By EPA’s own admission, the CPP’s compliance costs would be in the billions, energy prices would rise, dozens of coal-fired plants would be forced out of business, tens of thousands of jobs across various sectors would be lost, and GDP would be reduced by at least a trillion dollars by 2040.   The CPP never went into effect, having been subject to numerous judicial challenges and repealed by the Trump administration.  The Supreme Court of the United States (“SCOTUS”), in a punctuation mark to one of the most significant SCOTUS terms in the last 80 years, finally dealt the CPP a death blow last week, finding EPA exceeded its authority.  West Virginia et al. v. Environmental Protection Agency  (Slip op. June 30, 2022).  Chief Justice Roberts authored the Court’s decision joined by the 5 other conservative Justices.

EPA had relied on the “previously little-used backwater of Section 111(d)”[1] for its authority to promulgate the CPP, which allows EPA to set performance standards for new and existing categories of emissions sources reflecting the “best system of emission reduction” (“BSER”) that the Agency has determined to be “adequately demonstrated.” CAA §§7411(a)(1), (b)(1), (d).  

For existing coal-fired power plants, EPA, fixated on reducing the emissions of CO2, which it classified as a pollutant, set the BSER as including the plants shifting their fuel source from coal to natural-gas-fired plants, or shifting from coal- or gas-fired plants to low- or zero-carbon generating sources, mainly wind and solar.  This scheme was a far cry from EPA’s typical emissions regulations under the CAA, which set standards for the existing source based on the emissions limits that are achievable with pollution control technologies, as opposed to forcing the source to cut it production or fundamentally change its operations, or become some other type of source. 

SCOTUS, relying on the “major questions doctrine” found the CAA simply did not authorize EPA to set such a radical and unprecedented standard; rather, any such dictate must come from Congress, not an administrative agency.[2]

Under our precedents, this is a major questions case. In arguing that Section 111(d) empowers it to substantially restructure the American energy market, EPA “claim[ed] to discover in a long-extant statute an unheralded power” representing a “transformative expansion in [its] regulatory authority.”  It located that newfound power in the vague language of an “ancillary provision[]” of the Act, one that was designed to function as a gap filler and had rarely been used in the preceding decades. And the Agency’s discovery allowed it to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself. Given these circumstances, there is every reason to “hesitate before concluding that Congress” meant to confer on EPA the authority it claims under Section 111(d).

The Court concluded:

Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible “solution to the crisis of the day.”  But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d).  A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.[3]

In his concurring opinion, Justice Gorsuch emphasized:

And while we all agree that administrative agencies have important roles to play in a modern nation, surely none of us wishes to abandon our Republic’s promise that the people and their representatives should have a meaningful say in the laws that govern them.[4] 

Finally, Justice Gorsuch reminded us of the basic principle of constitutional law that “[] the Constitution does not authorize agencies to use pen-and-phone regulations as substitutes for laws passed by the people’s representatives.” In our Republic, “[i]t is the peculiar province of the legislature to prescribe general rules for the government of society.”[5]

It is up to Congress, if it is so inclined, to pass legislation specifically authorizing EPA to force such a radical transformation of our national power generation system.  Such prospects appear dim to nonexistent in the current Congress.  

[1] Id. at 32.

[2] Id. at 26 (citations omitted).

[3] Id. at 37 (citations omitted).

[4] Id. at 54.

[5] Id. at 56.