Justia Opinion Summary and Annotations

In 2015, the Environmental Protection Agency (EPA) promulgated the Clean Power Plan rule, which addressed carbon dioxide emissions from existing power plants, citing Section 111 of the Clean Air Act,” 42 U.S.C. 7411(d). Although the states set the enforceable rules governing existing sources, EPA determines the emissions limit with which they have to comply by determining the “best system of emission reduction” (BSER). In the Clean Power Plan, EPA determined that the BSER for existing coal and natural gas plants included “heat rate improvements” at coal-fired plants and “generation-shifting,” i.e., a shift in electricity production from existing coal-fired to natural-gas-fired plants and from both coal and gas plants to renewables (wind and solar). An operator could reduce the regulated plant’s production of electricity, build or invest in new or existing equipment, or purchase emission allowances as part of a cap-and-trade regime. No existing coal plant could achieve the emissions performance rates without generation-shifting.

The Supreme Court stayed the Clean Power Plan in 2016. It was later repealed when EPA determined that it lacked authority “of this breadth.” EPA then promulgated the Affordable Clean Energy (ACE) rule, mandating equipment upgrades and operating practices. The D.C. Circuit held that EPA’s repeal of the Clean Power Plan rested on a mistaken reading of the Clean Air Act and vacated the ACE rule.

The Supreme Court reversed. Congress did not grant EPA the authority to devise emissions caps based on the Clean Power Plan’s generation-shifting approach. Restructuring the nation’s mix of electricity generation cannot be the BSER under Section 111. Under the major questions doctrine, an agency must point to “clear congressional authorization” for such an unprecedented exercise of authority. On EPA’s view of Section 111(d), Congress implicitly tasked it alone with balancing vital considerations of national policy. Issues of electricity transmission and distribution are not within EPA’s traditional expertise. The Clean Power Plan “conveniently enabled” EPA to enact a program, cap-and-trade, that Congress rejected numerous times.

Annotation

Primary Holding

The “best system of emission reduction” identified by the EPA in the Clean Power Plan was not within the authority granted to the Agency in Section 111(d) of the Clean Air Act.