Today the U.S. Supreme Court issued a landmark decision in West Virginia vs. EPA, ruling that the Clean Air Act did not specifically authorize the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions from power plants. Now, any greenhouse gas regulations would need specific authorization from Congress.
Legally Speaking
- The main legal problem with the Clean Power Plan is that it relied upon a brand new and legally fraught interpretation of Section 111 of the Clean Air Act (CAA).
- This amounted to EPA inventing the authority to regulate greenhouse gasses under the CAA, but the Supreme Court ruled that these powers were never delegated to the agency.
Practically Speaking
- This decision is an enormous win for the reliability and affordability of the electric grid because it will give utility companies confidence that they can continue operating their existing coal and natural gas power plants, which are some of the most reliable and lowest-cost sources of electricity on the grid, without the looming threat of EPA regulations coming down the pike to close them down.
Baptists and Bootleggers, Utility Edition
- The CPP marked a turning point for the way investor-owned utilities like Xcel Energy and wind and solar special interest groups interacted
- Once, these stakeholders were at odds, but the CPP turned them into brothers in arms
- Electric companies in many states are government-approved monopolies and their customers are not free to choose another provider if the company in their service area charges too much or has too many power outages
- As a result, the price of electricity sold by utility companies is controlled by state utility regulators
- Revenue formula used by regulators allows electric companies to charge their customers enough for their electricity to cover the reasonable costs of operating and maintaining the electrical system
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