Why is Louisiana complying with a costly plan already halted by the Supreme Court?
Recently, the U.S. Supreme Court took the unprecedented step of issuing a stay against President Obama’s massive “Clean Power Plan” (CPP.) The Court determined that states should not be compelled to pay the exorbitant costs of the plan until a federal court determines its legality. The ruling produced a huge sigh of relief from the 27 states currently suing to halt a large-scale transformation of their energy grid through one of the most far-reaching regulations ever imposed by the Environmental Protection Agency (EPA).
Essentially, states no longer need to scramble to achieve a 32% reduction in power sector carbon dioxide emissions by 2030. However, the power plan had required interim targets in 2022, and many states were already bracing for the costs of building new power sector infrastructure. Thankfully, states have been granted a reprieve. But Louisiana has chosen to move forward with the task of rebuilding its entire power generation sector. This means the state will still undertake the construction of new grid infrastructure, including the many new transmission lines and towers needed to carry electricity from planned wind and solar assemblies.
Ironically, wind and solar power have yet to prove reliable in terms of scalability for power generation. Such “renewable” sources of energy are intermittent—the sun doesn’t always shine, the wind doesn’t always blow—and require backup power generation from coal or gas plants. And so, even as Louisiana—a state that currently derives 29% of its power from coal—begins to shutter its coal-fired power plants, it will need to build new coal or gas systems to backstop these projected wind and solar plants.
The question is why Louisiana would bear this cost when it is currently under no legal obligation to do so. Higher utility bills will fall hardest on low-income families and America’s seniors, 70% of whom live on a fixed income. The stay by the Supreme Court means that all compliance deadlines are now suspended, and the stay will remain in effect until the Court has a chance to review the case following action by the D.C. Circuit.
In fact, the earliest decision from the Court on the merits of the case would likely come in mid to late 2017. But the stay is only part of the reasoning here. More importantly, the rule could be struck down on judicial review. Many legal observers view this as likely since the point of granting the stay was to alleviate the obligation of states to develop plans (and thus incur further economic harm.)
The Supreme Court’s issuance of the stay can only be read as reflecting a high level of dissatisfaction with the EPA’s legal basis for the rule. Even in the very unlikely event that the EPA ultimately prevails in court and the stay is lifted, the new compliance dates will most likely be delayed by the period of time that the stay was in effect. Or, a new, less sympathetic administration may set aside the entire rule.
Terry M. Jarrett is an attorney with Husch Blackwell, L.L.P. in Jefferson City, MO, and a former commissioner of the Missouri Public Service Commission.