FREQUENTLY ASKED QUESTIONS ABOUT THE U.S. SUPREME COURT STAY OF THE U.S. ENVIRONMENTAL PROTECTION AGENCY'S CLEAN POWER PLAN
In response to petitions by states and industry, including electric co-ops, the Supreme Court granted a stay of the Clean Power Plan (CPP) rule. This stay is unprecedented – never before has a stay been granted by the Supreme Court prior to the Circuit Court of Appeals issuing a decision on the contested regulation.
What does a stay mean?
The Supreme Court’s stay means that the Clean Power Plan has no legal effect while courts are reviewing the rule to determine whether it is lawful. During this period of time, EPA cannot enforce any of the deadlines or requirements contained in the rule. States (or anyone else subject to the rule) cannot be penalized for missing a deadline or a requirement.
What happens to the deadlines in the rule?
The deadlines in the rule are all currently suspended. The question of what happens to the deadlines is relevant only if the electric cooperatives’ side loses and the Clean Power Plan is upheld. Based on prior experience with other environmental regulations that were stayed and then upheld at least in part (e.g. the NOx SIP Call, the Cross-State Air Pollution Rule), lifting the stay results in the deadlines being reset based on the length of time that the stay was in place.
For example, if the stay were in place for 500 days, then 500 days are added to every deadline in the rule to establish new deadlines. Ultimately, changes to the deadlines will be decided in a future Court decision.
Does the granting of the stay mean electric utilities will win the litigation?
While it is not a guarantee of victory, the granting of the stay greatly improves the odds for electric cooperatives. The Supreme Court sent a strong signal that at least five Justices (including Justice Kennedy who is widely viewed as the key swing vote) have serious questions about the legality of the Clean Power Plan. In spite of the brave face in public comments from representatives of the Obama administration, EPA, and environmental groups, this ruling is a severe blow to the CPP rule.
How does this affect the D.C. Circuit Judges who denied the stay and will be hearing the case on the merits?
The Supreme Court stay signals to those D.C. Circuit judges that at least five Justices have serious reservations about legal issues surrounding the Clean Power Plan. It is also a strong indication that the case will ultimately be reviewed on its merits by the Supreme Court.
Electric cooperatives believe that this will prompt the reviewing D.C. Circuit judges to review the Clean Power Plan with much greater skepticism than might typically occur when the court reviews challenges of two administrative agency actions. Co-op’s hope that the Supreme Court’s action will lead at least two of the three reviewing judges on the D.C. Circuit to find the Clean Power Plan to be unlawful.
But even if two reviewing judges vote to uphold the rule, the Supreme Court’s action will likely encourage the remaining judge to write a powerful dissent based on the arguments in petitioners’ briefs that can be used to support subsequent petitions asking the Supreme Court to review this case.
When do electric cooperatives think the litigation will be resolved?
The stay does not change the briefing schedule in the D.C. Circuit. Argument in that court was heard on June 2, with a decision likely in the fall of 2016. Depending on how quickly the D.C. Circuit issues its decision and resolves any petitions for rehearing, if certiorari (a writ or order by which a higher court reviews a decision of a lower court) is sought and granted, it is possible the Supreme Court could hear argument in the case in early 2017 with a decision in June of 2017. However, it is also possible that Supreme Court review would not occur until the fall of 2017 with a decision in June of 2018.
What should co-ops, states be doing while litigation is proceeding?
States have no obligation to work on implementation of the Clean Power Plan; however, nothing prevents states from working on climate mitigation strategies if they choose to do so (as California and the states in the Regional Greenhouse Gas Initiative have chosen to do). But states are not required to do anything related solely to comply with the Clean Power Plan while the stay is in effect and should not feel compelled to do so by EPA.
States should not file a state plan or an initial submittal in September 2016. States and co-ops may choose to continue activities to prepare for the rule being upheld or for a Court decision that upholds a rule with limited EPA authority.
Can EPA proceed with the development of a final federal plan and model trading rules?
Yes. EPA intends to finalize at least the model trading rules as these would be “tools” to aid the states in plan development. If the proposed federal plan and model trading rules are finalized, those will have no effect until the litigation over the Clean Power Plan concludes.
If the next Administration does not support the Clean Power Plan, could the next Administration take action on the final rule prior to the Supreme Court decision?
The next Administration could tell the Court that it is reversing its position, specifying legal and/or factual defects in the CPP, withdrawing its defense of the rule and filing a substitute brief opposing the rule. This could still leave supporters of the rule to continue to defend the rule before the Supreme Court. The next Administration could also initiate a rulemaking to replace the Clean Power Plan but this would take time and would also be subject to legal challenge.
NEW REGULATIONS WILL COST MEMBERS MORE AND NOT ACCOMPLISH ENVIRONMENTAL GOALS
CLICK ON THIS COOPERATIVE ACTION LOGO TO PREVENT THE SHUT DOWN OF OHIO COAL PLANTS
EPA’s proposed carbon regulations are another example of its expansive and expensive regulatory agenda that is a burden to electric cooperative Member/owners and the U.S. economy.
‒ EPA regulations already are taking a heavy toll on the U.S. economy, manufacturing, small business, and low-income and middle-income families.
‒ Even before regulating carbon from power plants, seven of EPA’s final or pending regulations are projected to cost the economy more than $60 billion per year in lost GDP and to cause the annual loss of nearly 900,000 jobs.
– EPA’s proposal is unprecedented in its reach, cost and complexity.
‒ These carbon regulations could cause serious harm to the U.S economy–raising energy prices and costing jobs.
‒ Recent analyses of potential carbon regulations show:
- Compliance costs as high as $28 billion per year
- Lower disposable income for U.S. households totaling $586 billion through 2030
- As many as 178,000 jobs lost per year
- Double digit electricity price increases in many states
- $50 billion more in higher prices for natural gas
- Forced shutdown of more than half of all U.S. coal-fired power plants
‒ Many experts are concerned that carbon regulations are a threat to electric reliability. The winter of 2013-2014 highlighted the stress already being placed on the electricity grid. Due to recent EPA rules, nearly 20 percent of the nation’s coal fleet is slated for shut down in coming years. Newly proposed carbon regulations will aggravate reliability risks and the potential for brownouts and blackouts.
‒ Higher energy prices disproportionately harm lower-income and middle-income families. Since 2001, energy costs for middle-income and lower-income families have increased by 27 percent, while their incomes have declined by 22 percent.
‒ Higher energy prices from carbon regulations will do further harm to families who already are struggling.
– Carbon regulations will do virtually nothing to address global climate change. For all the economic pain of carbon regulations, there is NO environmental gain.
‒ U.S. power plants already have reduced CO2 emissions by 21 percent below 2005 levels, and emissions are projected to remain 19 percent below 2005 levels through 2020.
‒ CO2 emissions from U.S. power plants represent only 4 percent of global greenhouse gas emissions.
‒ A recent report by the U.S. Chamber of Commerce found that even aggressive emissions reductions resulting from potential EPA carbon rules would be offset more than six-fold by increased emissions from other countries.
With these regulatory approaches EPA takes for power plants, the climate effects will be negligible but the costs will be very high.
‒ Even complete elimination of every coal-fueled power plant in the U.S. would reduce global temperature by less than 1/20th of a degree and reduce sea level rise by less 1/25th of an inch (less than the thickness of a dime).
Many other countries continue to increase their use of coal, while EPA is taking unilateral action that penalizes the U.S. economy.
‒ The U.S. has led the world in reducing CO2 emissions since 2005. During that time, U.S. emissions have fallen by 13 percent while China’s have grown by 69 percent and India’s by 53 percent.
‒ Emissions growth in China and India account for 90 percent of global growth in CO2 emissions from 2005 to 2012.
‒ Other countries, such as Japan, Germany, China and Russia are continuing to build new coal-fired power plants, while EPA has proposed rules that will prevent the construction of new coal plants in the U.S. EPA’s policy to phase out affordable coal-fired electricity provides a clear advantage to international competitors.
‒ Russia is planning to build the world’s largest coal-fired power plant (8,000 megawatts) and sell the electricity to China.
EPA is trying to justify its carbon proposal by claiming it will prevent asthma and heart attacks.
‒ Reducing carbon does not prevent asthma or heart attacks.
‒ Conventional air pollution has been declining for years because EPA has adopted many other rules. According to EPA, emissions of six major air pollutants have been reduced by almost 70 percent since 1980.
‒ By the end of 2016, the U.S. coal fleet will have invested $144 billion to reduce air pollutants. This investment has reduced emissions of conventional pollutants by almost 90 percent for each kilowatt-hour of electricity.
‒ EPA uses an accounting trick (“double counting”) to claim health benefits from its carbon proposal that the agency also claims from other rules.
‒ These supposed health benefits are being claimed by EPA for reducing air pollution to levels below what EPA has already established as being safe.
‒ EPA’s carbon proposal could make public health worse by increasing energy costs, destroying jobs, and forcing low-income and middle-income families to choose between paying higher energy bills and paying for other necessities.
‒ Global GHG emissions have increased continuously since 1960, but EPA’s own data show U.S. ozone levels have declined 25 percent since 1980.
According to the NERA Economic Consulting, Economic Implications of Recent and Anticipated EPA Regulations Affecting the Electricity Sector, October 2012. The seven EPA regulations are the Mercury and Air Toxics Standards (MATS) rule; the egional haze rule; revised ambient air quality standards for particulate matter, ozone, and sulfur dioxide; as well as regulations for coal combustion residuals and cooling water intake structures.
– Strictly speaking, this represents job-equivalents, which are derived from changes in labor income. Lost job-years total as many as 2.85 million over the period 2018-2033.
‒ EPA has repeatedly stated its intention to work closely with states and stakeholders in a deliberative, collaborative process. Administrator McCarthy recently stated, “My goal is not to supplant what the states are doing, but to support it.”
‒ Despite requests for significantly longer regulatory development and compliance time from at least a dozen states under both Republican and Democratic leadership, EPA has given no indication that it will honor such requests.
‒ Last year, EPA held a series of “listening sessions” to gather public and stakeholder comments on its carbon rules. Unfortunately, EPA avoided areas of the country that will be most affected. With its proposal now public, EPA should host or agree to participate in public forums around the country to ensure that all stakeholders have the opportunity to provide feedback.
The potential negative impacts of these rules extend far beyond the electric power sector.
‒ Many industries will be hit twice: first as energy customers and then as industries that are next in line for follow-on rules that EPA has committed to pursuing.
‒ EPA’s current budget proposal will consider new GHG regulations for six sources: refineries, pulp and paper, landfills, iron and steel production, livestock operations, and cement manufacturing.
VISIT WWW.ACTION.COOP FOR MORE INFORMATION AND TO TAKE ACTION
Electric cooperatives rely on financial instruments and bi-lateral contracts to hedge risk and protect their Members from volatility in the energy and financial markets. These commercial risk management tools are essential to the development and financing of energy infrastructure to serve America’s demand for energy in the years to come.
Hancock-Wood's national organization the National Rural Electric Cooperative Association (NRECA) is working closely with cooperative members and other energy stakeholders to ensure that the Commodity Futures Trading Commission, as it implements new regulation under the Dodd-Frank financial reform bill, understands the needs and goals of cooperatives.
Where We Stand:
- Electric cooperatives support transparency and oversight of the over-the-counter (OTC) derivatives market.
- Electric cooperatives must be allowed to continue using OTC derivatives markets to insulate our customers from volatile wholesale electric power and natural gas prices.
- NRECA opposes unnecessary or burdensome regulations that could impose unnecessary costs, or hamper or even prohibit the participation of cooperatives in energy markets.
- NRECA opposes the imposition of duplicative and possibly conflicting regulation of the same markets and transactions by multiple regulators.
- Federal Energy Regulatory Commission expertise in and jurisdiction over energy markets should not be supplanted by the CFTC.
For more information or to support our position, visit www.action.coop
Locally-owned and operated electric cooperatives are working to protect the environment — after all, cooperative employees live and work in the same communities as their Members. That’s why cooperatives are researching and deploying cost-effective environmental technologies at power plants. New control technologies have allowed cooperatives to reduce air pollutants by 65% since 1990 and our emissions will be reduced ever further as we install more controls to meet new environmental regulations.
Electric cooperatives nationwide advocate for legislative and regulatory policies that are scientifically sound, cost-effective and balance consumer interest and environmental protection. We advocate for policies that protect health and the environment while ensuring reliable and affordable power.
Where We Stand:
- Cooperatives support sensible multi-emission legislation that can reduce power plant emissions more quickly and economically than continued regulation under current law. NRECA believes Congress should enact legislation that will address these objectives while balancing America’s energy, environmental and economic needs.
- Electric cooperatives believe that additional clean water requirements can meet environmental goals to enhance water quality through scientifically sound, cost-effective methods, while allowing utilities as much flexibility as possible.
- NRECA supports flexibility in the use of different types of mitigation, the use of preservation alone and the use of vegetated buffers for stream or wetlands impacts.
- NRECA and its members favor waste requirements that minimize economic impacts on the electric consumer, allow utilities as much flexibility as possible, recognize the need to provide economic and reliable electric power, and consider the regulatory effects on emerging competitive electricity markets.
For more information or to support our position, visit www.action.coop
As Member-owned, non-profit utilities, accountable to their members, cooperatives traditionally have promoted energy efficiency as a means to keep Members’ bills low. Now, many cooperatives see maximizing the efficiency of their Members and their own operations as a key part of a broader strategy to meeting the challenges of growing electricity demand and rising costs. Electric cooperatives believe energy efficiency, conservation and demand response can help lower Members’ energy costs, shift peak demand, bridge the gap in the power generation building cycle, meet power supply goals — and maintain positive Member relationships.
Where We Stand
Electric cooperatives strongly support federal energy efficiency incentives to promote energy efficiency, such as consumer tax credits, and increased federal investments in advanced efficiency technologies. As Member-owned entities, cooperatives are best positioned to know which energy efficiency and conservation programs will provide cost-effective benefits for their Members; therefore, we oppose state or federal mandated energy savings or efficiency programs. Through NRECA, Hancock-Wood is working with Congress and the Rural Utilities Service to develop a national loan program to provide Members with low-cost financing for energy efficiency improvements to homes and businesses. These loans would be paid back through energy savings on the electric bill.
For more information or to support our position, visit www.action.coop