Sorry Obama, green power’s on hold

A divided US Supreme Court blocks President Barack Obama’s sweeping plan to cut emissions from power plants.

Washington - A divided US Supreme Court blocked President Barack Obama’s sweeping plan to cut emissions from power plants, putting on hold his most ambitious effort to combat climate change.

The 5-4 order Tuesday halts the Environmental Protection Agency’s Clean Power Plan until at least the final months of Obama’s presidency - and casts doubt on its ultimate fate before the nation’s highest court by suggesting concern among a majority of the justices.

Utilities, coal miners and more than two dozen states say the agency had overstepped its authority and intruded on states’ rights.

The court action blocking implementation until an appeals court can rule “confirms that the legal justification for the Clean Power Plan should be examined by the courts before scarce state and private resources are used to develop state plans,” said Melissa McHenry, a spokeswoman for American Electric Power Co., one of the biggest coal users among US utilities.

The delay is a blow to Obama’s environmental agenda, highlighting the prospect that his signature program for combating climate change could be in legal jeopardy. It also risks undermining the US commitment to pare greenhouse gas emissions as part of an international accord reached in Paris last December.

Legal foundation

The White House said it disagreed with the court’s action and expressed confidence it would prevail in the long run.

“The Clean Power Plan is based on a strong legal and technical foundation,” Obama press secretary Josh Earnest said in an e-mailed statement.

The plan will now be on hold until the Supreme Court either rules or refuses to get involved. The EPA won’t be able to enforce a September 6 deadline for states to either submit their emission reduction plans or request a two-year extension.

A federal appeals court is hearing challenges to the rule on an expedited basis, with arguments set for June 2. If the court rules quickly enough, the Supreme Court could consider the case in the nine-month term that starts in October.

Obama successor

A final ruling in 2017 would leave it up to Obama’s successor - potentially one of the Republicans who have criticised the Clean Power Plan on the campaign trail - to decide how to respond.

“We’re disappointed the rule has been stayed,” said Melissa J. Harrison, press secretary for the EPA. “But you can’t stay climate change and you can’t stay climate action.”

Senior administration officials, who acknowledged that the order took them by surprise, stressed that the final state implementation plans weren’t required until 2018, despite initial blueprints due in September. The plan’s timeline was created to absorb delays.

That gives states ample time and flexibility to develop plans that meet their targets, one official said, speaking on the condition of anonymity.

The EPA rule requires states and utilities to use less coal and more wind power, solar power or natural gas. It is designed to bring about cuts in carbon emissions from power plants of 32 percent below 2005 levels by 2030.

Unique structure

The rule runs more than 1 500 pages and takes a unique approach, setting targets that each state must meet in cutting the amount of carbon pollution from power plants. It is designed to accelerate a shift away from coal as the chief source of electricity generation, toward natural gas, wind and solar power.

But its broad structure - demanding that states meet targets, going beyond power plants if necessary, including by adding new renewable power generation or and boosting efficiency - drew objections. The agency said that showed flexibility, but opponents weren’t persuaded.

It’s “the most far-reaching and burdensome rule EPA has ever forced onto the states,” 26 states led by West Virginia and Texas argued in court papers.

The Supreme Court had never before granted a request to halt a regulation before review by a federal appeals court, the administration said.

‘Countless dollars’

In a statement, West Virginia Attorney General Patrick Morrisey said he was “thrilled that the Supreme Court realised the rule’s immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues.”

David Doniger, director of the climate and clean air program at the Natural Resources Defense Council that supports the plan, said that states, financial leaders and other interests will continue pushing to clean up the power sector “and will keep moving to incorporate strategies and public policies leading toward a clean energy economy.”

But Jeff Holmstead, a former EPA assistant administrator, said in a phone interview that the delay is sure to chill action by states to comply with the plan.

“The states that have frantically been trying to figure out how to comply certainly put their pens down tonight,” said Holmstead, now a partner at Bracewell.

The court gave no explanation for its order. Voting to grant the delay were Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito. Dissenting were the four Democratic appointees: Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

Winning streak

Prior to Tuesday’s order, the EPA had been largely on a winning streak before the federal judiciary.

The Supreme Court gave the EPA victories in 2013 and 2014, upholding its greenhouse-gas permitting rules and regulation of pollution that crosses state lines. It also rejected a plea to reconsider its 2007 decision letting the agency regulate greenhouse gases.

But last year the court sent EPA’s far-reaching rule on mercury emissions back to the agency for further analysis, a decision that has had no practical impact so far but was raised as a reason the court should grant this delay.

‘Serious concerns’

“The stay is a signal the Supreme Court has serious concerns with the power plan,” said Mike Duncan, president of the American Coalition for Clean Coal Electricity, which includes coal-burning utilities, producers and rail operators. “We’re optimistic the power plan will ultimately be rejected.”

An attorney for the Sierra Club said the decision is only a temporary reprieve for coal.

“The coal industry is on life support already; it was without the Clean Power Plan, and this should not give them a glimmer of hope,” said Sierra Club Managing Attorney Joanne Spalding. “The transition we’re experiencing in the electric sector away from coal and other fossil fuels to clean energy has been going on for years and will continue. EPA is following the trends that are already occurring in the electric sector - not creating new trends.”

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A three-judge appellate panel rejected a bid for a delay on January 21, prompting foes to turn to the Supreme Court.

The Obama administration said power plants wouldn’t face any deadlines to begin cutting emissions until 2022 at the earliest, and wouldn’t have to be in full compliance until 2030. Administration lawyers accused states and businesses of seeking an “extraordinary and unprecedented” delay of the entire regulation before any judge had ruled on it.

“A stay that delays all of the rule’s deadlines would postpone reductions in greenhouse gas emissions and thus contribute to the problem of global climate change even if the rule is ultimately sustained,” US Solicitor General Donald Verrilli argued.

Southern, Peabody

The challengers, including Southern, Peabody Energy, the largest US coal-miner, and the US Chamber of Commerce, said companies and states alike already were having to prepare for the rule to take effect.

Southern and other utilities told the justices that, without Supreme Court intervention, companies would have to “begin the complex and lengthy process of shutting down or curtailing generation from existing plants and shifting that generation to new sources.”

-With assistance from Mark Chediak and Mark Drajem.

BLOOMBERG