Court Denies Motion To Stay: Clean Power Plan Remains in Effect During Pendency of Litigation

01.28.2016

On January 21, 2016, the U.S. Court of Appeals for the D.C. Circuit denied the motions for stay (postponement) filed by various petitioners in State of West Virginia, et al. v. EPA, et al. The Court's denial of the motions for stay means that compliance with the Clean Power Plan (CPP) cannot be postponed—states  must take immediate steps to ensure that the required initial state plans are submitted to EPA by September 2016.  The decision is an early victory for proponents of the Clean Power Plan in a long battle that will very likely end up before the Supreme Court.

Background

In 2009, the U.S. Environmental Protection Agency (EPA) determined that greenhouse gas pollution had become a threat to the health and welfare of Americans and would lead to permanent changes in global climate that could have an array of negative effects on human health and the environment.  The EPA and the global scientific community has a widely-held belief that carbon dioxide (CO2) is the primary greenhouse gas culprit, accounting for approximately 82% of U.S. greenhouse gas emissions.

On August 3, 2015, President Obama announced the impending publication of the final version (known as the “final rule”) of the Clean Power Plan, a federal plan designed to implement emissions guidelines for electric power plants under authority granted to EPA by the federal Clean Air Act.  The Clean Power Plan has several features that reflect EPA’s commitment to (1) reducing the level of emissions of greenhouse gases and carbon pollution, (2) taking real action against climate change, and (3) ensuring that compliance with the Plan and the battle against climate change does not interfere with the power generation industry’s ability to maintain the reliability of the nation’s electric power supply.  In addition, President Obama clearly views the Clean Power Plan as an important part of the legacy of his presidency.

Mandatory Reductions and State Compliance

Under the Clean Power Plan, individual states must reduce their 2005 level of greenhouse gas emissions from electric power plants by 32% by the year 2030.  Mandatory reductions will begin in 2022 and performance rates will be phased in over the 2022-2030 reduction period, resulting in a “glide path” of reductions that “steps down” over time.  States also can decide to customize their individual glide path, as long as they meet their prescribed interim goals.

States must submit their respective individual state compliance plans by September 2016, or request an extension from EPA.  States seeking and receiving an extension of the submission date of their individual plan would have until September 2018 to submit a final plan.

Mixed Reception

Even before its August 2015 announcement, the Clean Power Plan was widely criticized, most notably by a coalition of coal-producing states concerned about the effect of the Plan on coal-burning power plants and the coal industry in general.  The Plan’s official publication in the U.S. Federal Register in October 2015 triggered a virtual flood of lawsuits challenging its constitutionality and legality.

Thus far, twenty-four states have either announced their opposition to the Plan, or have filed suit against it, or both.  Those states are Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, New Jersey, Nebraska, North Carolina, Ohio, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming.

On the other hand, fifteen states and two cities have gone on record as being in favor of the Plan.  The states and cities in favor of the Plan are New York, Massachusetts, Connecticut, New Hampshire, Maine, Rhode Island, Delaware, Illinois, Iowa, New Mexico, California, Oregon, Washington (state), Hawaii, Vermont, New York City and Washington, D.C.  In addition, numerous trade and industry groups have joined in the litigation either in favor of or in opposition to the Plan or certain component parts of the Plan.

Significance of State of West Virginia, et al. v. EPA, et al.

In hopes of delaying the implementation of the Plan until the D.C. Court of Appeals ruled on its substantive legal validity, opponents of the CPP filed motions for stay.  Led by the State of West Virginia, a coalition of states, utilities, fossil fuel companies and business groups argued that they would suffer irreparable harm if the Court did not stay the emissions regulations set forth in the Clean Power Plan.  The states argued that compliance with the Clean Power Plan mandate requires that they spend large sums of money and manpower reordering their electrical generation systems, and that such expenditures cannot be recouped if the Clean Power Plan is ultimately found to be unlawful.

In a two-page order, the Court held that the petitioners failed to satisfy "the stringent requirements for a stay pending court review."  The Court’s ruling is significant because it signals that states must immediately begin to prepare  their individual state compliance plans to meet the September 2016 deadline.

The Court did order that the case be fast-tracked—all briefs are to be filed by April 22, 2016.  Oral argument is scheduled for June 2, 2016 and will continue through June 3, 2016, if necessary.

The Hirschler Fleischer Energy and Renewable Practice will provide regular updates and analysis on the status of the Plan and resulting litigation.