United States: EPA's Clean Power Plan Takes Effect … Much Hijinks Ensue

Last Updated: November 10 2015
Article by John A. Rego

On October 23, 2015, the Clean Power Plan, EPA's regulatory effort to reduce greenhouse gas emissions from the U.S. power industry by 32 percent from 2005 levels, was officially published in the Federal Register. As expected, this triggered a deluge of judicial challenges from business and governmental foes, along with pledges of support for the plan from environmental groups, alternative energy providers, and like-minded state governments. Four of the challenges included requests that the U.S. Court of Appeals for the D.C. Circuit stay implementation of the new rule until judicial review is complete. In Congress, resolutions seeking to invalidate the plan under the Congressional Review Act were introduced in both the Senate and the House.

On the first day of the 60-day period in which petitions for judicial review of the Clean Power Plan were permitted, 19 separate petitions—encompassing 26 states and dozens of business groups—were filed with the D.C. Circuit. The State of West Virginia, whose coal industry would be negatively affected by the plan, filed a petition on behalf of itself and 23 other states, while Oklahoma and North Dakota filed their own petitions. Mississippi became the 27th state to challenge the rule on November 5, 2015. Trade associations for power utilities and fossil fuel producers, along with an individual coal company, also filed petitions on the day the plan was published.

Other business petitioners ranged from broad-based organizations, including the U.S. Chamber of Commerce, National Federation of Independent Business, and National Association of Manufacturers, to more specialized groups, such as the American Iron and Steel Institute, the Brick Industry Association, and even the National Oilseed Processors Association. The D.C. Circuit has consolidated all petitions for review of the Clean Power Plan with West Virginia's challenge, and a single three-judge panel will decide them together.

On the other side of the dispute, motions to intervene in support of the Clean Power Plan were promptly filed by a group of nine environmental organizations, ranging from the Sierra Club to the American Lung Association, as well as by two clean energy trade associations. Eighteen states, along with a handful of municipalities, have moved to intervene in the D.C. Circuit litigation in support of EPA, meaning that 45 of 50 states are now actively choosing sides in the dispute.

In the near term, the D.C. Circuit must address multiple motions seeking an emergency stay of the Clean Power Plan's requirements until judicial review—a process that will likely extend to mid-2018 if the U.S. Supreme Court hears the case—is complete. Although the new rule's emission reduction obligations do not apply until 2022, states are required to submit initial plans for implementing the rule in early September 2016. States that fail to either submit a plan or demonstrate enough progress to EPA to warrant an extension of the deadline face the imposition of EPA's own federal implementation plan. Further complicating states' evaluations is the fact that EPA has issued only a proposed federal plan thus far.

On October 29, 2015, the D.C. Circuit adopted a schedule for the consolidated challenges that requires any further motions for stay to be filed by November 5, 2015, with all briefing on the motions to be completed by December 23, 2015. However, since the Clean Air Act allows additional petitions for review of the Clean Power Plan (and therefore additional motions for stay) to be filed until December 22, 2015, one challenger has already asked the court to defer any action regarding motions for stay until the deadline for filing challenges has passed.

In any event, it's clear that no judicial stay will be imposed before early 2016, if ever. This timing is important to the Obama administration because it means that the Clean Power Plan will be in full force when the President travels to Paris in early December 2015 for a United Nations conference seeking to finalize a global climate change agreement to replace the Kyoto Protocol. Combined with prior EPA regulations regulating greenhouse gas emissions from vehicles and from certain major industrial projects, the Clean Power Plan represents the core of the United States' pledge to the U.N. to cut such emissions 26 to 28 percent below 2005 levels by 2025.

While judicial action is not expected before the Paris conference, it is possible that Congress will take action in November demonstrates the absence of broad-based political support for the President's climate change agenda. Both the Senate and House of Representatives are considering "resolutions of disapproval" under the Congressional Review Act, a statute that authorizes Congress to invalidate a regulation like the Clean Power Plan based on simple majority votes in each chamber. The Act contains provisions to ensure that such resolutions are actually brought to the floor for a vote, including a provision that prevents filibustering in the Senate. In light of these provisions, it is likely that both the Senate and the House will hold disapproval votes before the end of November 2015.

Majority support for a resolution of disapproval appears certain in the House and, at most, a vote or two away in the Senate. Even if successful, however, the effect of disapproval under the Congressional Review Act would likely be limited to political messaging, since President Obama could exercise his constitutional right to veto any such resolution, with very little chance that two-thirds of each chamber would vote to override his veto. However, knowing that President Obama will no longer be in office after 2016 to ensure implementation of either the Clean Power Plan or the United States' broader emission pledges in Paris, other major greenhouse gas emitters might view a resolution of disapproval that received majority support from both chambers of the U.S. Congress as a signal to temper their own pledges of future reductions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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