By Skipp Kropp, attorney at Steptoe & Johnson PLLC and a member of the Indiana Chamber’s Energy Committee
In an unprecedented action involving environmental regulation, the U.S. Supreme Court, in a 5-4 decision on February 9, issued a stay of the Obama EPA Clean Power Plan for existing power plants.
The EPA rule, finalized October 23, 2015, would have required CO2 reductions of such magnitude – beginning in 2022 and with final reductions by 2030 – that the majority of existing coal-fired plants nationwide would likely have to be retired. These facilities have long been the base source for the U.S. power grid.
The effect of such retirements on Indiana would be rate increases for consumers as low-cost coal-fired plants are replaced with higher cost facilities.
The October 23 regulation was appealed to the U.S. Court of Appeals for the D.C. Circuit by more than 150 petitioners, with 27 states (including Indiana), utilities, labor unions, coal companies and business groups opposing the rule. Some 18 states, several environmental groups, renewable energy associations and a few utilities petitioned in support of the rule. Following the appeals, nine stay motions were filed in the D.C. Circuit, which denied a stay on January 21. Petitioners then appealed the stay denial to the U.S. Supreme Court, which granted the stay this week. The D.C. Circuit will hear oral arguments on June 2 on the merits of the underlying case, with a decision expected before the end of 2016.
The immediate impact of the stay on Indiana utilities is unclear given the long lead time for final compliance, but the implications of the stay on the merits of the underlying appeal are significant because the stay would not have been granted unless a majority of Supreme Court justices believed that the petitioners have a high likelihood of prevailing. In short, it means that the Obama administration faces an uphill battle in court for its Clean Power Plan to be upheld.