The Supreme Court’s ruling last month against the Environmental Protection Agency’s costly mercury regulation was a sharp rebuke to President Barack Obama’s environmental agenda. But it also serves as a cautionary tale to Gov. Tom Wolf and state lawmakers deciding whether Pennsylvania will help EPA impose its final “Clean Power Plan” regulation, which was announced this week.
First, the backstory. The EPA issued its Mercury Air Toxics Standard regulation back in 2012 to cut certain emissions from power plants. But regulators failed to consider its $9.6 billion price tag when drafting it. Last month, more than three years after the regulation was finalized, the Supreme Court ruled this benefits-only analysis was improper. It sent the EPA back to the drawing board.
Yet for millions of families, in Pennsylvania and elsewhere, this was too little, too late.
Despite the years-long legal process still playing out, coal plants were already closing. By one estimate, 90 percent of the damage was already done by the time the Supreme Court issued its decision last month. After the decision, one utility executive explained that those lost coal plants are gone for good: “We’re not bringing them back. Once that ball gets rolling, it’s not going to change.”
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This lost output was ultimately replaced with higher-cost alternatives. Thus despite the regulation being ruled illegal, it nonetheless imposed higher electricity rates on families and businesses already struggling to get by.
Wolf and state legislators should take note of this debacle as they decide whether Pennsylvania will submit plans for Obama’s carbon rule, which will force Pennsylvania to cut its carbon dioxide emissions by 32 percent by 2030.
The carbon rule will require a fundamental restructuring of the state’s energy grid — even more than the EPA’s mercury regulation. As traditional power plants are forced offline, Pennsylvanians will be forced to rely on more expensive and less reliable alternatives like wind and solar. NERA Economic Consulting estimates this will cause the state’s electricity rates to increase by 14 percent each year from 2017-2031.
Even worse, the North American Electric Reliability Corp., known as the nonpartisan “grid doctor,” said the rule could make it harder to keep the lights on.
But just like the mercury regulation, this new carbon regulation faces serious legal challenges. Fourteen states have sued to stop it in federal court, arguing it’s a brazen federal overreach.
And this isn’t just partisan squabbling. Liberal Harvard Law School professor Laurence Tribe, who mentored Obama, has argued the regulation amounts to “burning the Constitution.”
Pennsylvania therefore finds itself in a similar predicament to what happened after the EPA released the mercury regulation in 2012: Participate in the carbon regulation and risk the Supreme Court ultimately striking it down, or wait until the court rules before deciding how to proceed.
The latter approach is the right one. Wolf and other state lawmakers would be wise to take a wait-and-see approach. Submitting state plans to the EPA before the court rules may needlessly lead to hundreds or even thousands of dollars in higher electricity costs on Pennsylvanians.
Fortunately, there are other ways to protect families from this regulation’s crippling costs. One is for Wolf to simply refuse to submit a plan at all, which is his legal right under the Clean Air Act. A growing number of governors are choosing to exercise this option. State legislators could also pass legislation to the same effect.
The Pennsylvania Public Utility Commission should also get involved. Broadly speaking, utilities must seek permission before restructuring the electricity grid. The commission should deny utilities’ requests until the Supreme Court rules.
At a minimum, Pennsylvania policymakers should await a final Supreme Court decision before deciding how to move forward. It is simply irresponsible to foist higher costs on ratepayers when the rule stands a strong chance of being struck down.