In a 6-3 decision, the Supreme Court ruled that the Environmental Protection Agency (EPA) does not have the authority to require “generation shifting” (essentially requiring the replacement of older units with natural gas units) for existing power plants under the Clean Power Plan.
To achieve industry-wide emission reductions goals, the EPA determined the applicable emissions performance rates. These performance rates were strict enough that many existing power plants could not have achieved them without introducing a “generation shift.” The multi-level shift would be involved at the grid level by shifting electricity production from higher-emitting to lower-emitting producers and by shifting from existing coal-fired power plants to natural gas-fired power plants.
Projected outcomes from the rule would impose billions in compliance costs, raise retail electricity rates, eliminate tens of thousands of jobs, and require the retirement of dozens of jobs.
The implications of this ruling may affect other programs, environmental and otherwise such as the FCC proposed requirement for ESG reporting, and is largely viewed as a reminder to agencies to “keep in their lane” and regulate only within their wheelhouse and with clear authority delegated by congress. This is a departure from previous years where agencies were usually only required to show that their method was reasonable and plausible, and then given the benefit of the doubt.