Explainer: Here’s how the Supreme Court’s EPA ruling could play out for West Virginians

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When the U.S. Supreme Court handed West Virginia Attorney General Patrick Morrisey a win last month, he celebrated.

“In West Virginia v. EPA, West Virginia took on the swamp and won. Unelected bureaucrats must yield to Congress — Congress decides the major questions of the day!!” he wrote on Twitter.

At its heart, the case West Virginia v. EPA challenged whether the U.S. Environmental Protection Agency could set carbon dioxide emissions standards for states under the Clean Air Act. The EPA argued it was within its authority to determine the best way to reduce emissions. They also argued that the Clean Air Act already prevented them from restructuring the entire coal industry or shutting down all coal plants, as Morrisey and the other petitioners alleged they could do.   

Morrisey and others argued the authority wasn’t granted to the regulators under the Clean Air Act, and would turn the agency from an environmental regulator into a central energy planning authority. They claimed that the power to prevent utilities from using a certain energy source and compel them to use different ones was a matter of such significance that it should be up to Congress to clearly authorize the agency to act. And the Supreme Court agreed, ruling in Morrisey’s favor. 

But in West Virginia, the effects of the ruling might not be exactly what Morrisey predicted.

What was this Supreme Court case about? 

At issue was the Obama administration’s 2015 Clean Power Plan. The rule set state-specific standards to limit carbon dioxide (CO2) emissions from existing power plants, an option the administration said was legal under the Clean Air Act. Burning fossil fuels, especially coal, releases CO2, which plays a major role in climate change, and coal-fired power plants produce a larger share of greenhouse gas emissions than any other single source in the country. The power plant emissions caps that the Clean Power Plan established would have left it to each state to decide how to meet the standards, but ultimately, it would have required them to rely less on coal and more on renewable energy or lower-carbon natural gas.

Notably, the Clean Power Plan never actually took effect. The Supreme Court issued a stay before the EPA could use it. But many of the emissions reductions the Clean Power Plan would have required have already been met through market forces, and the Biden administration had planned to adopt a new rule or program that would have been even more aggressive toward reducing greenhouse gases. It chose not to take any action while West Virginia v. EPA was pending, however.

Morrisey said the significance of the case went beyond the Clean Power Plan. In a livestream outside the Supreme Court following his team’s oral arguments in February, he said he believed there was a place for environmental regulation, but that he had a significantly different opinion than the EPA about what that regulation should look like, and whether the authority the Obama administration granted it to rein in power plant emissions was even legal. 

He later said that part of what motivated him to bring the case was his desire to save West Virginia’s coal-dependent economy. “It’s not just about the coal-fired power plants,” he said. “Related retail jobs, the jobs at the restaurants, whole towns that can get shuttered down as a result of regulations that don’t have a lawful origination.”

A spokesperson for Morrisey declined an interview request for this story. 

What does this mean for West Virginia ratepayers?

In his justification for the lawsuit, Morrisey argued the Clean Power Plan would have hurt West Virginia by causing coal miners to lose their jobs and electricity rates to skyrocket.

But West Virginians have already seen electricity rates rise, even without these carbon dioxide limits in effect. The cost of residential energy increased by 90% from 2005 to 2020; more than twice as much as average prices increased nationally, according to data from the U.S. Energy Information Administration. That’s partly due to the West Virginia Public Service Commission: commissioners have voted several times in recent years to keep coal-fired power plants running, even though it is now more expensive for utility companies to do so than if they switched to cleaner energy. Ratepayers make up the difference. 

You read that correctly: In many cases, it is now more expensive for utility companies to burn coal than it is for them to rely on natural gas and clean energy. 

James Van Nostrand, a law professor at West Virginia University and the director of its Center for Energy and Sustainable Development, sees the ruling in that context.

“You’ve taken away a tool that EPA might have been able to use to force coal plants to close down more quickly, but they are closing down in every other state, just because of market forces,” Van Nostrand said. 

Contrary to common belief, environmental regulations did much less to kill the coal industry than market forces did, according to Van Nostrand and Jeremy Richardson, a manager at the clean energy think-tank RMI . Starting in 2012, natural gas became cheap and widely available. There were also technological breakthroughs for wind and solar energy starting around the same time that made those sources much cheaper. Meanwhile, the price of coal has remained the same. Most utility companies in other states ditched their coal-fired power plants in that time or converted them to burn natural gas, due not to federal regulation but to simple economics.

Companies like Appalachian Power and Wheeling Power were following these trends too, to some extent, until the Public Service Commission forbade them from doing so. The commissioners, some of whom have extensive ties to the coal, oil and gas industries, issued a rule last September requiring utility companies to operate their coal-fired power plants at least 69% capacity. As the companies’ vice president of regulatory and finance told them in testimony, the move forced the companies to charge ratepayers more than they would otherwise need to.

In effect, the Attorney General’s lawsuit has dealt a blow to federal regulatory agencies over an energy source that even its own utility companies wouldn’t naturally want to use as much anymore.

“The commission has a greater obligation to make sure that the utilities are engaging in things that produce the lowest reasonable costs for customers over time. But in West Virginia, we don’t care, the commission does not care,” Van Nostrand said, who just wrote a book discussing the commission’s impact on West Virginia.

And now that the Clean Power Plan is gone, West Virginians are likely to see their electricity rates rise even more, according to Van Nostrand. While the court took away the EPA’s ability to mandate how existing power plants limit their greenhouse gas emissions, it did nothing to strip it of its ability to limit them. 

Van Nostrand predicts that in response to the new ruling, the EPA is likely to adopt more rigorous standards for how much carbon dioxide West Virginia coal-fired power plants can emit. One of the only ways to meet those standards, short of switching to natural gas or renewables, will be through carbon capture and storage, which removes carbon dioxide from the air and prevents it from contributing to global warming. However, adopting this technology is bound to cost utility companies hundreds of millions of dollars, which Van Nostrand believes will be passed on to consumers once again.

Will this revive West Virginia’s coal economy?

For the most part, no. That’s because most utilities across the country don’t want to run coal-fired power plants anymore. Nothing about this ruling changes that math. Since West Virginia power plants appear to show no sign of moving away from coal, this does possibly guarantee a market for coal companies that already serve the state’s power plants. But West Virginia’s behemoth coal economy came to be because the country was burning a lot of coal, not because West Virginia was burning a lot of coal.

In order for Morrisey’s claims to make sense — that this lawsuit is about rescuing West Virginia’s coal economy — the ruling would need to do more than constrain the EPA from using the Clean Power Plan: it would need to weaken the EPA in general. The ruling may do that, and also may affect other federal agencies. 

What else could this do to regulatory efforts, environmental and otherwise?

While the ruling doesn’t expressly keep the EPA from doing what it has been doing, of primary concern is the never-before-used premise the Supreme Court majority deployed in their decision, the “major questions doctrine”, which states that federal agencies cannot introduce regulations that concern “vast economic and political significance” without explicit approval from Congress. The majority opinion said that the Clean Power Plan was attempting to do just that. While the breadth of the major questions doctrine remains to be seen, it is possible that it will prevent the EPA and other federal agencies from implementing, on their own, new regulations that are highly impactful.

For example, if the Occupational Safety and Health Administration wanted to implement new labor protection requirements that raised costs for businesses, it may not be able to due to the major questions doctrine. 

Still, “there could be examples where it cuts the other way,” Van Nostrand pointed out, noting that if OSHA wanted to wipe out regulations that force up costs for businesses under a Republican administration with a deregulatory philosophy, the major questions doctrine might force them to get approval from a Democratically-controlled Congress.

How will this affect climate change locally and nationally?

Angie Rosser, executive director of the West Virginia Rivers Coalition, notes that although the Clean Power Plan never took effect, the EPA losing the potential to use it is troubling considering the Intergovernmental Panel on Climate Change’s warnings that we need to reduce emissions by 50% by 2030 to prevent the most catastrophic and deadly results of climate change. 

“Our concern is, are we meeting the scale of what’s needed, and the timeline?” she asked.

Within West Virginia, a delayed transition could likely cause greater precipitation and flooding, Rosser said. West Virginia’s terrain makes it one of the most vulnerable states in the nation to flooding, and many of our homes, businesses, hospitals, and water and electric plants are within the floodplains. Our state fish, the brook trout, depends on cold water, and Rosser notes that we’re already seeing water temperatures rise in rivers and streams.

While the power plants are likely to be forced to implement carbon capture and storage technology, reducing total emissions, the technology does nothing to sequester the other environmental impacts of burning coal. Those effects, including the release of particulate matter, mercury, and sulfur dioxide can cause severe health problems for those living near the power plants, but are governed by previously-existing regulations. Also an issue in West Virginia are other long-term impacts of the mining process like black lung disease, acid mine drainage, and water contamination.

Reach reporter Alexa Beyer at alexabeyer@mountainstatespotlight.org.

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