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Clean Power Plan

Clean Power Plan’s day in the DC court

We’ll see how it goes.

Dozens of lawyers from the government, industry and public interest groups packed the US Court of Appeals for the DC Circuit, to hear the divisive case that comes just weeks before a heated presidential election and illustrates how a President’s picks for the lower court might impact his own agenda.

The plan is currently frozen because last February, the Supreme Court voted to delay implementation until the appeals process could play out.

Opponents to the plan claim that the EPA went too far under the law to push the rule.

Judge Brett M. Kavanaugh at one point questioned EPA’s authority.

“This is a huge case,” he said and noted that it could “fundamentally” transform the industry. Kavanaugh said the administration’s policy is “laudable” but questioned under the separation of powers whether Congress, and not the EPA, had to speak clearly on the issue.

Judge Thomas B. Griffith chimed in asking, “why isn’t this debate going on in the floor of the Senate?” rather than before a panel of judges. But Judge Patricia A. Millet reiterated at one point that the Supreme Court “has already said” that the EPA has the authority to regulate in the area.

Other judges questioned whether by 2030, the rule would be any more transformative to the coal industry, for example, than market forces would be.

Judge David S. Tatel asked whether the agency was simply “invoking existing authority.”

While the morning session in court was dedicated to statutory arguments, in the afternoon the court heard arguments concerning whether it was unconstitutional. The challengers’ constitutional arguments did not appear to to get much traction with the judges.

[…]

During complex arguments before a multi-member court is dangerous to try to determine — based on questions posed at oral arguments — how a judge will ultimately rule. It’s worth noting however, that Tuesday’s case comes before an appellate court that has been transformed during the Obama administration.

Before Obama took office the appeals court tilted toward conservative appointees with six judges nominated by a Republican president and three nominated by a Democratic president. There were also two vacancies.

Currently, the active judges on the court consist of four GOP appointees and seven Democratic appointees. In 2013, Obama placed four judges on the court, three of them immediately after the Senate changed its filibuster rules. Tuesday’s case was heard by all the active members of the court except for Chief Judge Merrick Garland who has recused himself from hearing cases because he has been nominated to the Supreme Court.

“The party of an appointing president surely makes a difference in some types of cases — environmental for example — more than others,” said Russell Wheeler, a visiting fellow at the Brookings Institute. “When the full court meets is when the party of appointing president is likely to matter most because the great majority of decisions are made by three-judge panels, randomly drawn and not necessarily reflective of the overall composition of the court.”

See here for the background. ThinkProgress agrees with the basic vote counting, with the possibility of a GOP judge siding with the Dems. The long and short of it is that we’ve seen this basic fight play out multiple times before – the Obama administration proposes a regulatory enforcement plan for the EPA, various Republican states led by Texas freak out and file suit, and the courts sort it out, usually with the feds winning. But do keep in mind that all of this is happening because 1) a Democratic President who cares about fighting climate change proposed this regulatory scheme, among others, and 2) an appeals court that has more Democratic appointees than Republican ones will make the decision that is likely to stand thanks to the current makeup of the Supreme Court. The fastest way to undo this is to not have a Democratic President in place after November. I’m just saying.

Back to court for the Clean Power Plan

Here we go.

One of the late Justice Antonin Scalia’s final acts on Earth may have been to doom it.

Last February, on the final Tuesday of Scalia’s life, the Supreme Court handed down a 5–4 decision suspending the Obama administration’s Clean Power Plan. It was a surprising development — a lower court panel that included a conservative Republican judge previously denied a request to stay this plan — and a chilling development for anyone who cares about the planet. The Clean Power Plan is the Obama administration’s most ambitious effort to fight climate change. And it is difficult to exaggerate the consequences if these efforts fail:

In the relatively short term, the Environmental Protection Agency predicts that the Clean Power Plan will “avoid thousands of premature deaths and mean thousands fewer asthma attacks and hospitalizations in 2030 and every year beyond.” In the longer term, major cities could be swallowed by the ocean. Displaced residents will trigger a worldwide refugee crisis. Entire regions of the United States could be converted into a permanent Dust Bowl. The sheer magnitude of the catastrophe will rival any tragedy that has faced humanity since the Book of Genesis.

Scalia’s vote to stay the Clean Power Plan was enough to delay it, but not enough to destroy it. Now, however, the effort to permanently kill the plan is about to face its first big test.

A ten judge panel of the United States Court of Appeals for the District of Columbia Circuit — arguably the second-most powerful court in the country — will hear arguments on the fate of the plan on Tuesday. With Scalia dead, and the Supreme Court evenly split between Democrats and Republicans, the D.C. Circuit’s decision could be the last word on the plan’s legality.

While Scalia did not live to cast a vote eradicating the plan, his ghost still haunts this case. It lingers over the parties’ briefs, casting doubt upon long-settled doctrines viewed as rock solid just a few years ago. West Virginia v. United States Environmental Protection Agency, the challenge to the Clean Power Plan, is the culmination of a years-long effort by conservatives to hobble the executive branch — an effort Scalia started to embrace during his final years on the Court. And, if the Clean Power Plan falls, it will be because this effort scored just enough victories during the twilight of Scalia’s life.

See here, here, and here for the background. Needless to say, Texas is leading the charge in this litigation.

Texas Attorney General Ken Paxton on Monday accused the U.S. Environmental Protection Agency of trying to “force Texas to change how we regulate energy production,” through what he called an “unprecedented expansion of federal authority.”

“What we need is more reliable energy — not less, and the EPA is trying to stop that,” the Republican said while appearing on a panel in Washington, D.C.

Paxton specifically targeted the Clean Power Plan, President Obama’s state-by-state effort to fight climate change by shifting away from coal power to cleaner-burning natural gas and renewable resources.

His appearance on the panel, organized by the conservative Texas Public Policy Foundation, came one day before the U.S. Court of Appeals for the District of Columbia is to hear four hours of oral arguments over the carbon dioxide-cutting rule. Those watching the litigation say the outcome could make or break Obama’s legacy on climate change.

[…]

The regulations would force states to slash carbon dioxide emissions from power plants however they see fit — accelerating a shift from coal that started years ago. Carbon dioxide is a potent greenhouse gas that directly contributes to climate change.

For Texas — the nation’s biggest carbon dioxide emitter by far — that would mean cutting an annual average of 51 million tons of emissions, down about 21 percent from 2012 levels.

Paxton, Gov. Greg Abbott and other Texas Republicans have argued that doing so would cost the state jobs, push electricity costs too high and threaten reliability on the grid. They say the regulations subvert state power.

Eighteen states and a litany of health and environmental groups have joined the Obama administration in defending the Clean Power Plan.

On Monday, one environmental group criticized Paxton for championing coal interests while challenging the regulation.

“Dirty coal just doesn’t make sense anymore, economically or environmentally, but Attorney General Paxton appears to want to go down with a sinking ship,” Luke Metzger, director of the advocacy group Environment Texas, said in an email. “Texans support transitioning to clean energy and the Clean Power Plan is helping make that possible.”

Proponents of the rules, backed by early analyses, suggest that market forces and existing policies alone would push Texas most of the way toward its target.

One study released in May predicted that coal generation would shrink from about 28 percent of state power generation to 6 percent by 2035 — not factoring in the controversial federal regulation.

Aside from inflation, Texans would see “virtually no price increase” if natural gas and solar prices continue to get cheaper as some expect, concluded the study by the Brattle Group, a global research firm that often crunches numbers for Texas regulators. Funding for that study came from the Texas Clean Energy Coalition, which supports natural gas and renewable energy sources.

boy, nothing says “forward-thinking” like protecting the interests of coal-burning power plants. The DC Court’s decision here is very likely to be the final word. If it comes down to a Supreme Court that has a ninth member that was appointed by President Trump, it won’t matter anyway since the EPA will cease enforcing environmental regulations because global warming is a myth. So, you know, no big deal. The Observer and the Chron have more.

Full DC Circuit Court to review Clean Power Plan

From ThinkProgress, an update on yet another federal lawsuit involving Texas.

The Clean Power Plan will get its day in court, but in September, not June — and by the full en banc D.C. Circuit Court of Appeals, not the court’s normal three-judge panel that was scheduled to hear it in just over two weeks.

West Virginia v. Environmental Protection Agency is one of the most important environmental cases in almost a decade. The case will decide whether the EPA violated the law when it finalized its carbon rule to regulate greenhouse gas emissions from the power sector under the Clean Air Act.

So Monday evening the D.C. Circuit Court of Appeals announced it is bypassing its planned June 2 oral arguments over the Obama administration’s signature climate policy.

“It is ORDERED, on the court’s own motion, that these cases, currently scheduled for oral argument on June 2, 2016, be rescheduled for oral argument before the en banc court on Tuesday, September 27, 2016 at 9:30 a.m.,” the D.C. Circuit’s announcement read. “It is FURTHER ORDERED that the parties and amici curiae provide 25 additional paper copies of all final briefs and appendices to the court by June 1, 2016. A separate order will issue regarding allocation of oral argument time.”

See here and here for the proximate events that led to this, and here for all prior blogging on the Clean Power Plan. The linked article explains what the court’s order is all about, but the nickel version is that this ought to speed things up a bit, since the full court’s eventual ruling would go next to SCOTUS instead of being a midway point between the three-judge panel and SCOTUS. Since it was a 5-4 SCOTUS ruling that suspended the CPP pending judicial review – the first time that had ever happened – it’s highly likely that today’s diminished SCOTUS would deadlock if this were now on their plate. One presumes the high court will be at full strength by the time this does come their way, but regardless of that, it raises the stakes on the DC court’s eventual ruling. Buckle up, and get ready for a bunch of briefs to be headed the DC court’s way. E&E Publishing and the WaPo have more.

Pity the poor utilities

Sorry, but low electricity prices, especially when they are aided by record amounts of wind power generation, are good news.

ERCOT

Texas’ national lead in cheap wind power, combined with near historically low natural gas prices, mild weather, an abundant power supply and slower growth in electricity demand, can work to the detriment of power companies.

The combination weighed down wholesale power prices last year to their lowest averages since 2002. And the effects are only becoming more dramatic in 2016, even creating bizarre instances when, in the abstract at least, providers are paying to put electricity on the market.

“It’s pretty dire,” said Michael Ferguson, associate director at Standard & Poor’s covering utilities and infrastructure. “It’s a bad situation for gas generators, but for coal generation, it’s even worse.”

Texas’ wholesale power prices averaged $26.77 per megawatt-hour last year, down nearly 35 percent from $40.64 per megawatt-hour in 2014. The cost was more than $70 as recently as 2008.

While now is a good time for consumers to lock in cheaper electricity prices, well more than 25 percent of the state’s power plants are operating at a cash loss, especially the older coal-fired plants, power executives and analysts estimated. That’s before more stringent federal emissions regulations go into effect in coming years

Until coal plants start shutting down or the state tweaks regulations to artificially inflate prices, power companies will struggle, executives said. A new Moody’s Investors Service report concluded that Texas “power prices are unlikely to climb out of their doldrums.”

Already, less than a quarter of Texas’ coal fleet is operating early this spring, as more generators simply take their coal plants offline until the summer heat brings more demand, analysts from Tudor, Pickering, Holt & Co. noted.

In March, wind added to the grid more than coal power for the first time ever for a full month. Wind contributed 21.4 percent of the grid’s overall power, compared with 12.9 percent from coal, which used to be the dominant source of the state’s electricity generation, according to the Electric Reliability Council of Texas, which manages about 90 percent of the state’s electricity load.

“Ultimately, something is going to have to give here,” said Thad Hill, president and CEO of Calpine Corp., the largest power generator in the Houston region and owner of the nation’s largest fleet of natural gas-fired power plants.

[…]

Texas is home to nearly 20 coal-fired power plants and the near future of at least six of them are considered at risk.

They will require expensive upgrades to meet federal standards, according to a recent ERCOT analysis, and the costs could outweigh the benefits of keeping them open. That’s not even counting the effects of the federal Clean Power Plan, which is pending in court.

“Ultimately, we think the market could be a lot tighter than people think, particularly if people start mothballing or retiring units,” said Hill, whose Calpine would stand to benefit because it doesn’t own any coal plants.

At-risk plants include Luminant’s Big Brown, Monticello and Martin Lake coal plants in East Texas, half of Luminant’s Sandow plant east of Austin, NRG Energy’s Limestone plant east of Waco, and Engie’s Coleto Creek plant near Victoria that’s being bought by Dynegy.

It’s fine by me if those coal plants go the way of the dodo. It’s long overdue, and their demise will make meeting the Clean Power Plan benchmarks even easier. More investment in solar energy will help mitigate the low-wind periods and ensure demand can be met in the summertime. What’s not to like?

SCOTUS puts Clean Power Plan on hold

And in doubt.

ERCOT

In a major setback for President Obama’s climate change agenda, the Supreme Court on Tuesday temporarily blocked the administration’s effort to combat global warming by regulating emissions from coal-fired power plants.

The brief order was not the last word on the case, which is most likely to return to the Supreme Court after an appeals court considers an expedited challenge from 29 states and dozens of corporations and industry groups.

But the Supreme Court’s willingness to issue a stay while the case proceeds was an early hint that the program could face a skeptical reception from the justices.

The 5-to-4 vote, with the court’s four liberal members dissenting, was unprecedented — the Supreme Court had never before granted a request to halt a regulation before review by a federal appeals court.

“It’s a stunning development,” Jody Freeman, a Harvard law professor and former environmental legal counsel to the Obama administration, said in an email. She added that “the order certainly indicates a high degree of initial judicial skepticism from five justices on the court,” and that the ruling would raise serious questions from nations that signed on to the landmark Paris climate change pact in December.

In negotiating that deal, which requires every country to enact policies to lower emissions, Mr. Obama pointed to the power plant rule as evidence that the United States would take ambitious action, and that other countries should follow.

The White House said in a statement that it disagreed with the court’s decision and remained confident that it would ultimately prevail. “The administration will continue to take aggressive steps to make forward progress to reduce carbon emissions,” it said.

[…]

The E.P.A., represented by [Solicitor General Donald] Verrilli, called the requests for a stay “extraordinary and unprecedented.” The states challenging the administration’s plan, he said, could point to no case in which the Supreme Court had “granted a stay of a generally applicable regulation pending initial judicial review in the court of appeals.” In a later brief, the states conceded that point.

Mr. Verrilli said judicial review of the plan, including by the Supreme Court, will be complete before the first deadline for emissions reductions in 2022.

“There is no reason to suppose that states’ duties under the rule will be especially onerous,” Mr. Verrilli wrote. “A state can elect not to prepare a plan at all, but instead may allow E.P.A. to develop and implement a federal plan for sources in that state.”

Less than three weeks before this, the U.S. Court of Appeals for the District of Columbia denied the same request. As with everything the Roberts Court does, it’s hard not to read politics into their unprecedented granting of this request. I hope I’m wrong about that. The DC court will hear arguments on June 2, so one way or the other SCOTUS will be letting us know how they really feel in the near future. The Trib, Think Progress, SCOTUSBlog, Daily Kos, Slate, and the Observer have more.

Clean Power Plan can proceed for now

Good.

ERCOT

A federal appeals court has denied a request from Texas and other states to block President Obama’s Clean Power Plan, leaving the controversial climate change rules in place as a legal challenge winds through the courts.

The U.S. Court of Appeals for the District of Columbia wrote Thursday that the states — joined by the coal industry — “have not satisfied the stringent requirements for a stay.”

The two-page order was an early victory for Obama and others who support the state-by-state effort to combat climate change by slashing carbon emissions from power plants — largely through a shift from coal-fired power to natural gas and renewable sources.

Texas and West Virginia are leading a 25-state coalition challenging the plan, arguing that it could push electricity costs too high and threaten reliability. Beyond declining to immediately halt the rules, the court on Thursday set oral arguments in the case for June 2.

[…]

Texas must cut an annual average of 51 million tons of carbon to reach its federal target, a reduction of about 21 percent from 2012 emissions. The mandate rankles Republicans, but proponents of the rules — backed by early analyses — suggest that market forces and existing policies alone will push Texas most of the way toward its target.

As it stands, states have until Sept. 6 to submit a final plan or apply for an extension.

Texas leaders have refused to confirm whether they will create a carbon-cutting plan in case they lose in court. If the state flouts the rule, the EPA will impose its own plan on the state.

See here and here for the background. In addition to being not too hard a target to meet, the Clean Power Plan would have the ancillary benefit of saving water, and there are power companies in Texas who support it and oppose the lawsuit against the EPA. Not that any of that matters to Greg Abbott and Ken Paxton. FuelFix and Think Progress have more.

Some power companies like the Clean Power Plan

Not that you’d ever know it.

ERCOT

Thad Hill, in a split with many fellow power company executives, flatly opposes the lawsuits that Texas and 25 others states have filed to block the Obama administration’s Clean Power Plan.

The plan, which the Environmental Protection Agency unveiled in the summer, seeks to combat climate change by reducing carbon emissions at existing power plants. It would affect coal-fired plants most profoundly, because they emit the most carbon dioxide.

It’s no coincidence that the company Hill heads, Houston’s Calpine Corp., owns exactly zero coal plants.

While it’s intuitive that wind and solar power companies, which don’t emit greenhouse gas in generating power, support the Clean Power Plan, opinion within the traditional electricity generation sector is more nuanced.

Calpine, which operates the nation’s largest fleet of natural gas-fired generators, leads a relatively small group supporting the federal rule.

Most companies that generate power with coal oppose it, including Dallas-based Luminant, the state’s largest power generator. It also operates some gas plants and one of Texas’ two nuclear plants.

[…]

While the EPA has tightened other emissions regulations under President Barack Obama, the Clean Power Plan is the most sweeping overhaul, said Travis Miller, director of utilities research at Morningstar.

The plan is intended to reduce carbon pollution from existing power plants 32 percent from their 2005 levels by 2030.

“The Clean Power Plan is going to have ripple effects throughout the entire energy system in the U.S.,” Miller said. “Utilities need a long runway to adapt, but they’re willing to adapt.”

In the lawsuit challenging the rules put forth by the Democratic Obama administration, Republican Texas Attorney General Ken Paxton calls the plan a massive power grab by the EPA that would increase Texans’ electric bills significantly and threaten the reliability of the electric grid.

The Electric Reliability Council of Texas, which manages 90 percent of the state’s power grid, has estimated the rule could force the closures of some Texas coal plants and increase electricity prices 16 percent by 2030.

Miller agreed that the Clean Power initiative would affect Texas, though he said that Midwestern, Great Plains and Appalachian states most dependent on coal would feel the greatest effects.

Some of the changes in Texas’ power landscape are occurring anyway, because of cheap shale gas and Texas’ ranking as the largest wind power producer in the nation.

“There’s an impressive pipeline of new gas generation and new wind generation in Texas,” Miller said.

That presents market challenges to coal plants, and could move the state toward compliance with the Clean Power Plan. “Texas might not have to do all that much,” Miller said.

See here for the background. Miller’s statement is consistent with what ERCOT itself has said, and the Clean Power Plan would help conserve water, too. But this is Texas, and our leadership has to do things the hard way. Just remember, they don’t speak for everyone, not even in the power generation business.

The inevitable latest lawsuit against the EPA

As night follows the day.

ERCOT

As promised, Texas is suing the U.S. Environmental Protection Agency over President Obama’s plan to combat climate change, Attorney General Ken Paxton announced Friday, just after the new regulation had been finalized.

The state is suing as part of a bipartisan coalition of 24 states — including Missouri and Kentucky, which are led by Democrats — that will jointly request a stay on the plan Friday afternoon.

The regulation, known as the Clean Power Plan, requires states to cut carbon emissions by shifting from coal power to natural gas and renewables over the next 15 years.

Paxton has warned that the Clean Power Plan would dramatically inflate the cost of electricity for consumers and imperil the state’s power grid, describing the regulation as a federal “power grab.”

[…]

The coalition will argue that the EPA “cannot force the states to regulate where the EPA doesn’t have authority to regulate itself,” Morrisey explained.

It filed a petition for review of the regulation Friday morning with the U.S. Court of Appeals for the District of Columbia.

“Petitioners will show that the final rule is in excess of the agency’s statutory authority, goes beyond the bounds set by the United States Constitution, and otherwise is arbitrary, capricious, an abuse of discretion and not in accordance with law,” the petition says. “Accordingly, the petitioners ask the court to hold unlawful and set aside the rule, and to order other such relief as may be appropriate.”

See here for the background, and here for the AG’s complaint. ERCOT has actually confirmed that Texas is well-positioned to comply with the Clean Power Plan, but what fun would that be? The ritual must be observed, like the playing of the National Anthem before a sporting event. Round and round we go, and when the Supreme Court ultimately settles it, nobody knows.

Not everyone wants Texas to sue the EPA again

It won’t mean anything to those that are hell-bent on suing, but it is worth keeping in mind.

President Obama is set to unveil the nitty-gritty of his sweeping, state-by-state plan to fight climate change this week — his most determined effort yet to tackle the effects of global warming by reshaping the nation’s power sector.

When he does, no one doubts that Texas will sue.

Taking the federal government to court over environmental regulations has been a palpable source of pride and political capital for Gov. Greg Abbott, who filed dozens of lawsuits against the U.S. Environmental Protection Agency as attorney general. Both he and his successor, Ken Paxton, have promised the same approach with the so-called Clean Power Plan, which seeks to drastically cut carbon dioxide emissions from the nation’s power plants.

But some of those who will bear the brunt of complying with the new regulations are calling that knee-jerk reaction shortsighted.

Some Texas electric utilities are joining environmentalists in hoping policymakers — after securing another campaign trail talking point — eventually will craft a strategy to meet the new requirements to avoid being slapped with a mystery plan devised by the EPA and to bolster regulatory certainty.

“I think it’s always better for the state to participate in the plan rather than having the feds do the plan and tell you how it’s going to be,” said John Fainter, president and CEO of the Association of Electric Companies of Texas, referencing a similar situation in 2013 involving greenhouse gas permits. “So I hope when the litigation is concluded that there’s time and willingness to do so.”

[…]

Under a draft proposal outlined last year, Texas — home to about 20 operational coal-fired power plants — would have to slash roughly 200 billion pounds of carbon dioxide emissions in the next two decades. The state’s ultimate target will become known when the EPA unveils its final rule, expected as early as Monday.

The plan already has drawn one lawsuit from more than a dozen coal-friendly states. But a federal appeals court dismissed the challenge in June, concluding it was premature since the EPA had yet to finalize the rule.

While not part of that early lawsuit, the Texas attorney general’s office has spent $24,000 devising another that it has yet to file, according to information obtained by the Tribune under a public records request.

Initially, states were to submit plans by next summer detailing how they would reach compliance with the new standards by 2020. Word on the street, said Fainter, is that the EPA may give states extra time, responding to concerns from some utilities and states.

An EPA spokeswoman would not confirm or deny that change, but if true Fainter said it would make even less sense for Texas not to come up with a plan. Some utilities agree.

“If, in fact, the states are afforded more time to craft their (implementation plan), it seems logical that they would want to avail themselves of this time to develop a solution which addresses the individual and unique situation of each state,” said Brett Kerr, a spokesman and lobbyist for Calpine, the largest independent power producer in the nation.

Texas doesn’t “necessarily have to stand alone” and could team up with other states to craft a compliance plan if it makes the process smoother, Kerr said. “We believe that the state would be best served by participating in the process.”

See here, here, here, and here for the background. It would be nice to think that Texas could participate in the process rather than file another pointless lawsuit, but then it would also be nice to think I could eat pizza and ice cream every day while losing weight. Fish gotta swim, birds gotta fly, Texas AGs gotta file lawsuits against the public interest. It’s the way of the world. The plan has now been released, so cry havoc and let slip the lawyers of war. We’ll know in a couple of years if this is going anywhere or not.