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4 Key Takeaways from SCOTUS’s Clean Power Plan Ruling

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Yesterday, the U.S. Supreme Court issued a major ruling on the Clean Power Plan, ordering the Obama administration to postpone any implementation efforts until legal challenges are decided.  

The plan — which targets a 32 percent emissions reduction in the U.S. electric power sector by 2030 — will now be delayed until it is reviewed by the U.S. Court of Appeals for the D.C. Circuit, which has the first hearing set for June 2, under an expedited schedule.

While we’re months away from a final decision, here are four initial takeaways from the Supreme Court’s ruling:  

1. It’s a big win for opponents of the Clean Power Plan.

The Supreme Court ruling followed the U.S. Court of Appeals for the District of Columbia Circuit’s decision to deny a request to stay the Clean Power Plan in January.  

The opponents – which is a group of 29 states and industry leaders led by West Virginia Attorney General Patrick Morrisey and Texas Attorney General Ken Paxton – then appealed to the Supreme Court, which issued its decision yesterday.

In the interim, the ruling marks a major blow for Clean Power Plan proponents, the U.S. Environmental Protection Agency (EPA), and the Obama administration.

2. The decision fell along partisan lines, but does it matter?

In a narrow 5-4 ruling, the decision fell along ideological lines.

Chief Justice John Roberts and the other four Republican-appointed Justices supported the stay requests while the four Democrat-appointed Justices, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan would have denied the stay requests.

The Supreme Court offered no explanation on why it granted the stay, so it’s difficult to read between the lines and gauge whether all five Justices held the same rationale for supporting the stay. Justice Anthony Kennedy – often viewed as the Court’s swing vote – is certainly one justice to watch in future proceedings. While he voted for the stay, he also authored the pivotal 2007 Massachusetts v. EPA decision that set the stage for the Clean Power Plan.

3. It will likely affect state compliance timelines.  

These proceedings still have a long way to go.

After the D.C. Circuit rules on the case, the stay will remain while the losing party files a petition for writ of certiorari (or review) at the Supreme Court. If EPA wins at the D.C. Circuit, the stay would remain while states and other stakeholders seek a Supreme Court review of that decision. If the EPA loses at the D.C. Circuit, it is also likely to be granted a review.

Even if the Clean Power Plan is upheld, the stay on the rule’s implementation will affect compliance timelines for states and utilities. The EPA will be unable to enforce its September 6 deadline for states to submit compliance plans or request an extension. Without EPA enforcement, compliance decisions may be left to the states in the interim.

4. The 2016 presidential election could impact the legal battle.

The legal battle for the Clean Power Plan will continue into the next presidential administration, which could have a profound impact on the Clean Power Plan’s future.

As the Clean Power Plan is widely viewed a cornerstone of President Obama’s legacy, it is expected to be defended by a Democratic administration. However, a Republican administration might withdraw its legal support in Court or the rule entirely, although the latter would likely face legal challenges from a number of states.

Stay tuned to the Direct Energy Business Blog for more updates related to the Clean Power Plan. For more information, check out our Regulatory Update page

Posted: February 10, 2016