Regulatory Reform

Reports: EPA to release Clean Power Plan next week

According to reports published in both the New York Times and the Washington Post last night, the U.S. Environmental Protection Agency (EPA) is expected to release its final rule targeting greenhouse gas emissions from fossil fuel-fired power plants sometime next weeks, perhaps even as early as Monday.

The two newspapers are also reporting that the final rule will provide states with slightly more time to comply with the regulation as compared to the timeline presented in the draft version. Specifically, the proposed Clean Power Plan called for states to develop and submit state implementation plans (SIPs) to EPA by 2016 with the option to extend to 2017. States would then have to implement their SIPs by 2020. The final rule is expected to give states one more year to submit SIPs (i.e., by 2018) and wouldn’t require states to implement their SIPs until 2022.

Significantly, this momentous environmental regulation—undoubtedly the most far reaching of the Obama presidency—will come just months before the COP21/CMP11 climate change conference in Paris later this year. The New York Times suggests that the modest delay in state compliance could complicate international commitments already made by the Obama administration:

The Obama administration, in a formal submission to the United Nations ahead of efforts to forge a global climate change pact in Paris in December, has committed to cutting United States carbon pollution 26 percent to 28 percent by 2025. Moving the compliance date for the climate change plan to 2022 from 2020 could make achieving that goal more difficult.

COP21/CMP11 could also play a role as to when the rule will be published in the Federal Register. There is plenty of speculation that this will not happen until after the Paris conference since publication could prompt a Congressional Review Act (CRA) vote, which allows Congress to review any new federal regulation issued by the government, but only after publication in the Federal Register. Early publication of the final rule could also prompt a judicial stay before the Paris conference.  Andrew Grossman at the Cato Institute recently wrote about such a possibility, especially in light of the recent Supreme Court decision in Michigan v. EPA:

But there’s a more subtle, and perhaps more important, reason to expect trouble ahead for the Clean Power Plan. The Supreme Court’s failure to vacate the Mercury Rule reflects its recognition that the bulk of the rule’s costs—and it was one of the most expensive government regulations ever—has already been borne by industry. So there’s no urgency, at this point, to putting the rule on hold; to the contrary, doing so would be disruptive. But the flip side is that this means utilities and their customers spent tens of billions of dollars complying with a regulation that was always unlawful. One can imagine that the Court won’t be eager for that to happen again. And one can also imagine that the Court’s decision today is a shot across the bow of the D.C. Circuit: when the next billion-dollar rule comes up, and there’s any legal question about EPA’s authority, put the rule on hold so the courts have a chance to do their business. More reading-between-the-lines: if you don’t, we will.

Optically, a CRA or a judicial stay would be would be perceived as a devastating setback for an administration committed to supporting an international climate agreement of some sort.

ALEC will continue to monitor the situation and will provide initial and more in depth analysis and suggestions for states in the weeks and months ahead.




In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth