The Inflation Reduction Act (IRA) offers a master class in implementing expensive, counterproductive, and highly partisan energy policy. In previous posts, I discussed 1) how the electricity generation subsidies in the IRA could cost taxpayers $2.5 or $3 trillion and 2) why policymakers should remove those subsidies before expanding the high‐voltage transmission system. As we count the reasons why repealing the energy subsidies in the IRA is a good idea, let’s also consider their interaction with the Environmental Protection Agency’s (EPA’s) proposed power plant rule.
It is technically true that, as Senator Joe Manchin has said, “[n]either the Bipartisan Infrastructure Law nor the IRA gave new authority to regulate power plant emission standards.” However, the IRA did provide the foundation upon which the EPA has built its power plant regulation by subsidizing the technologies that enable the new standards. Consequently, lawmakers who oppose the EPA’s overreach should consider repealing the energy subsidies in the IRA.
What is the EPA’s New Power Plant Rule?
Proposed in May of this year, the EPA’s new power plant rule looks a lot like the Clean Power Plan (CPP), which was struck down by the Supreme Court last year in the landmark case West Virginia v. EPA. Some have referred to the new rule as CPP 2.0, which is a much shorter name than the 39‐word title the EPA gave it (“New Source Performance Standards for Greenhouse Gas Emissions from New, Modified, and Reconstructed Fossil Fuel‐Fired Electric Generating Units: Emission Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel‐Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule”).
Many analysts believe, as I do, that CPP 2.0 ultimately will be struck down or rescinded for at least three reasons: 1) it will cause electricity prices to skyrocket, 2) it will exacerbate a looming grid reliability crisis (according to grid operators), and 3) it is a regulatory overreach just like CPP 1.0. (For a more thorough examination of the flaws in the CPP 2.0 proposal, see this set of joint comments submitted in the EPA docket.)
Although a final rule has not yet been published, I have no faith that the EPA will heed any of the recommendations offered by commenters on the proposal. After all, the EPA was rebuked just last year by the Supreme Court, yet its next action under the same statute—section 111 of the Clean Air Act (CAA)—once again violates the Major Questions Doctrine, the same doctrine invoked to invalidate the EPA’s CPP 1.0.
In other words, if the EPA won’t listen to the Supreme Court, what are the odds it will listen to commenters?
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