Investigating the Constitutionality of EPA ’ s Clean Power Plan

William Yeatman:

Introduction:

Prognosticating the Constitutionality of EPA’s Options in Face of a State That Refuses to Comply with the Clean Power Plan

The generation and retail provision of electricity has been the exclusive prerogative of state governments since the New Deal. In 1935, Congress passed the Federal Power Act, which established a “bright line” between state and federal jurisdiction over the electricity sector that remains in force today: It’s the Federal Energy Regulatory Commission’s duty to regulate interstate wholesale power sales, while States are left to oversee retail electricity markets as they see fit. Federal Power Commission v. Southern California Edison Co., 376 U.S. 205, 215-216 (1964).

The Environmental Protection Agency’s Clean Power Plan (79 FR 34830) threatens to swallow this “bright line.” By its very terms, the rule would require system-wide compliance by the electricity industry. As such, the regulation necessarily expands EPA’s regulatory purview into discrete spheres of influence that heretofore had been the province of sister federal agencies and State governments.

To date, the agency’s source-specific emissions limitations have been bounded by actions that could be taken by the source—i.e., measures that can be adopted “inside the fence line.” The unprecedentedClean Power Plan, by contrast, requires the implementation of policies like increased renewable energy generation and end-user energy efficiency mandates, over which the regulated entity possess little to no control. Thus, the Clean Power Plan goes “beyond the fence line.”

It is incontrovertible that EPA’s Clean Power Plan would increase the federal government’s power over the electricity sector at the expense of the States’ existing authority. As a result, EPA’s interpretation of the Clean Air Act—as embodied in the Clean Power Plan—raises obvious 10th Amendment implications. These federalism concerns, moreover, are heightened by the fact that a number of States are giving serious thought to refusing to implement the rule altogether, a scenario that sets up a possible showdown between non-compliant States and the EPA.

Without a doubt, many States will seek judicial review of EPA’s Clean Power Plan on the grounds (inter alia) that EPA’s interpretation of its own statutory authority contravenes affirmative constitutional limitations on the Congress’s exercise of its delegated powers.

Alas, prognosticating federalism jurisprudence in Article III Courts is no easy task. The State-Federal balance of power has shifted much during U.S. history; the courts have adapted accordingly. As a result, the line dividing the co-sovereigns’ power has proven fluid, entailing “undoubte[d] . . .gray areas.” Fry v. United States, 421 U. S. 542, 558 (1975) (dissenting opinion). Indeed, the Court has conceded that its cases interpreting 10th Amendment limitations on federal authority have “traveled an unsteady path.” New York v. U.S. 505 U.S. 144 at 160.

The purpose of this working paper is to investigate the balance of power questions that will be raised by
EPA’s Clean Power Plan during judicial review. As I note above, the federalism tensions engendered by EPA’s Clean Power Plan are most taut in theincidence of States threatening to resist implementation of the rule. It follows that the interaction between “just say no” States and EPA presents these difficult constitutional matters in their starkest relief. And by extension, their most understandable light, it is hoped.

Therefore, in order to investigate the crucial federalism concerns broached by EPA’s Clean Power Plan, this paper performs a thought experiment regarding how the agency could address a noncompliant State. In this manner, EPA’s range of options in the face of a “just say no” State provides the medium by which I address the regulation’s constitutional consequences.

This brief proceeds thusly. First, I provide an introduction to the Supreme Court’s federalism jurisprudence. Against this background, the paper then analyzes the constitutionality of EPA’s options in response to States that refuse to comply with the Clean Power Plan. I conclude with three thoughts that lend context to the analysis performed by this paper.

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