Legal Blogs and Updates

On June 30, 2022, the United States Supreme Court held that the Environmental Protection Agency (EPA) does not have the authority to permit the promulgation of state regulations under the Clean Air Act that would result in or encourage “generation shifting” to clean energy. This decision will likely impact, and potentially limit the scope of, the Biden administration’s anticipated clean energy rules.

In so holding, the Court reversed a D.C. Circuit ruling that vacated the Trump administration’s Affordable Clean Energy rule, which had repealed the Obama administration’s Clean Power Plan. The Clean Power Plan had permitted states to issue regulations encouraging the use of cleaner power sources. The Court applied the major questions doctrine, which states that large-scale regulatory initiatives with broad impacts cannot be grounded in vague, minor and obscure provisions of law, therefore holding that this type of type of regulation is not authorized under Section 111(d) of the Clean Air Act as it goes beyond the mere regulation of individual power plants and their air emissions.

Earlier in June of this year, the EPA delayed plans to propose new greenhouse gas emission rules for the power sector until 2023. In light of the Supreme Court’s decision, the EPA may impose stricter pollution controls for stationary sources, a power historically used by the EPA under the Clean Air Act. The EPA may also enact more stringent rules for traditional air pollutions (such as ozone or particulates), which would, in effect, also lead to a reduction in greenhouse gas emissions. The EPA may also update standards for vehicles and craft methane rules for the oil and gas sector.

Connell Foley will continue to monitor this issue, including the anticipated release of new climate rules and air emission regulations by the EPA, and its potential impact on industry.