What, Me Worry? Comforting Thoughts on the Clean Power Plan, Part I

Electricity - EisenThis summer, the Environmental Protection Agency (“EPA”) is expected to promulgate the final version of its Clean Power Plan, a set of regulations aimed at decreasing the carbon dioxide (“CO2”) emissions of U.S. power plants to 30% below 2005 levels over the next 15 years. Critics have argued that the plan oversteps the bounds of EPA’s power to regulate air pollution. In this two-part post, David Baake ’14, a former editor and writer for ELR, argues that the Clean Power Plan is well within EPA’s regulatory authority. This part addresses the impact of some worrying dicta in the recently decided Utility Air Regulatory Group v. EPA.

Opponents of the Clean Power Plan have seized upon a passage from the Supreme Court’s opinion in Utility Air Regulatory Group v. EPA (“UARG”) to support their contention that the Clean Power Plan exceeds EPA’s authority under the Clean Air Act. The relevant passage states:

When an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance (134 S.Ct 2427, 2444).

According to one commentator, this statement “appears to speak directly to EPA’s proposal to regulate demand-side energy efficiency” under the Clean Power Plan, given that the Clean Power Plan is “exponentially broader in reach” than the Prevention of Significant Deterioration (“PSD”) program at issue in UARG.

The assertion that UARG raises questions about the legality of the Clean Power Plan rests on a misunderstanding of what the Clean Power Plan actually proposes to do. The Clean Power Plan does not propose to regulate demand-side energy efficiency or renewable energy; it proposes to regulate power plants. To be sure, the Plan’s emission targets are based in part on the assumption that power plants will be able to contract with third parties to implement renewable energy and energy efficiency activities. But the Plan does not regulate these third parties, any more than an emission guideline based on the availability of a particular pollution control technology could be said to regulate the manufacturer of the technology. The Clean Power Plan gives third parties the opportunity, but not the obligation, to contract with regulated entities to help reduce their pollution. In that respect, the Plan is no different from any other emission standard, such as that in Sierra Club v. Costle, where the D.C. Circuit allowed an EPA regulation which assumed that utilities would contract with coal suppliers to ensure compliance.

Properly understood, then, the Clean Power Plan does not implicate any of the questions that were at issue in UARG. In UARG, the Court concluded that EPA’s interpretation of the PSD statute represented an unreasonable assertion of authority “to regulate a significant portion of the American economy” because this interpretation would impose pollution control requirements on “millions of small sources” never before regulated under the Clean Air Act (134 S.Ct. at 2446). By contrast, the Clean Power Plan regulates a “relative handful” (2443) of sources belonging to a source category that has been regulated more extensively than any other under the Clean Air Act. Even assuming that “Congress must speak clearly if it wishes to assign to an agency decisions of vast economic and political significance” and that the regulation of power plants’ carbon dioxide emissions implicates a question of “vast economic and political significance” (2444), it is beyond dispute that Congress has “clearly” granted EPA authority to regulate existing power-plant CO2 emissions: the Supreme Court held precisely that in its 2011 decision in American Electric Power v. Connecticut, and even pointed out that 111(d) was “most relevant” to the question of regulating CO2 in power plants (131 S. Ct. 2526, 2530). Ultimately, then, the contention that UARG casts doubt upon EPA’s authority to promulgate the Clean Power Plan is unpersuasive.

Did this post pique your interest in the Clean Power Plan? Come back to our blog next week for the second part, which will address the (in)famous “elephant in a mousehole” argument. In the meantime, check out the Symposium in our latest issue for more analysis of UARG and what it means for EPA’s  111(d) authority.