In a town famous for news leaks, the Supreme Court managed to deliver a genuine surprise when it moved this week to freeze the Obama administration’s signature regulation on climate change, raising doubts about U.S. promises to cut pollution blamed for Earth’s warming.
But although Tuesday’s ruling startled the White House and rattled U.S. allies, it appears to have had little effect on the electricity providers most directly affected by the Clean Power Plan. About 48 hours after the court’s decision, major utility companies are reacting to the move with a collective shrug.
Executives for electricity producers and industry trade associations say they expect little deviation from what was already an industry-wide move from coal-burning to cleaner and cheaper forms of energy to produce electricity. The shift is likely to accelerate further in the near future, industry officials and analysts said, meaning that many of the administration’s carbon-cutting goals may be met regardless of what courts and lawmakers ultimately decide to do.
“Electric utilities are investing in clean energy and pursuing energy efficiency,” Tom Kuhn, president of the Edison Electric Institute, the largest trade association of electricity providers, told a gathering of Wall Street investors less than a day after the Supreme Court announced its stay on the Clean Power Plan.
Institute officials said the court’s 5-to-4 decision “doesn’t really change anything” in an industry in which nearly all new electricity generation is coming from wind or solar facilities or from hyperefficient generators that burn natural gas. “You can’t simply put the genie back in the bottle when it comes to major strategic investments that the captains of industry are making,” said Quin Shea, the institute’s vice president for environment.
Even companies that have joined lawsuits against the administration over the rules said they already were on track to deliver reductions in carbon emissions on a scale that the Clean Power Plan envisions. For American Electric Power, an electricity provider and one of the country’s top coal users, the court case “doesn’t change our focus on the diversification of our generation fleet,” said spokeswoman Melissa McHenry. Those diversification plans include more natural gas and renewables, she said.
Administration officials on Thursday delivered an impassioned defense of the controversial regulations while also attempting to reassure other governments that U.S. promises to reduce greenhouse-gas emissions would be honored. Environmental Protection Agency Administrator Gina McCarthy declared in a speech that “nothing has changed” in the overall commitment to cut U.S. carbon emissions by up to 28 percent in the next 15 years, compared with 2012 levels.
“Am I disappointed in the court’s decision? My answer is ‘absolutely, yes,’ ” McCarthy told a gathering of state environmental regulators. “Does it stop or slow this country’s transition to a low-carbon future? Absolutely not.”
She described clean-energy tax credits approved by Congress last year as a kind of guarantor of continued progress on climate change. Recent decisions by Wall Street banks to invest billions of dollars in clean-energy projects were driven by market forces, not regulations, she said.
“The CPP is underpinning a transition that is already happening and will continue to happen,” McCarthy said.
McCarthy and other administration officials dismissed speculation that the court’s ruling would undermine the international climate agreement reached two months ago in Paris, where more than 190 countries signed an accord to scale back emissions from fossil-fuel burning.
Todd Stern, the State Department official who led the U.S. negotiating team in Paris, said a number of foreign diplomats had contacted him because they “essentially wanted to understand what the order meant.”
“I gave them the facts: that this is a procedural action,” Stern said, “and that we remain confident that the Clean Power Plan will be upheld when reviewed on the merits, and that we will keep faith with our emissions-reduction targets.”
The Supreme Court’s decision granted a stay request from a coalition of more than two dozen states who argue that the EPA overstepped its authority with regulations requiring them to reduce carbon emissions from coal-fired power plants. Before the stay was granted, states were obliged to develop plans by September of this year, spelling out how they intended to cut pollution from the electric utility sector beginning in the year 2022.
Coal-burning power plants are the biggest single source of greenhouse-gas emissions in the United States.
Although the Supreme Court’s ruling does not address the merits of lawsuits opposing the Clean Power Plan, the decision suggests that a majority of the justices think the objections raised by opponents are serious.
The stay means that questions about the legality of the program will remain after Obama leaves office. An appeals court is not scheduled to hear the case until June, and the Supreme Court’s order said the stay would remain in effect while the losing side petitions the Supreme Court. If the court were to accept the case, that would mean an ultimate decision in 2017, when a new president will be in office.
While administration officials and environmental groups express confidence that the regulation ultimately will be upheld by the courts, they argue that the climate fight will be won even if it fails.
“There’s no question that the Clean Power Plan will accelerate our country’s transition from coal to clean energy,” said Michael Brune, executive director of the Sierra Club. “It’s also true the trend across the country away from coal, with low-cost renewables such as wind and solar and new rules to protect public health and limit mercury, soot, smog and sulfur dioxide, show that coal is not faring well in a competitive market.”
Juliet Eilperin contributed to this report.