Today, the Environmental Protection Agency (EPA) continued their aggressive regulatory agenda  and announced the first of two rules affecting power plants that will significantly increase electricity prices for manufacturers and consumers. EPA Administrator Lisa Jackson today signed the Cross-State Air Pollution Rule (CSAPR) which requires power plants in 27 eastern states to reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions that move from one state to another.

In addition, the EPA plans to finalize the Utility MACT rule in November, which would require coal-fired power plants to reduce mercury emissions. The combination of CSAPR, Utility MACT and other regulations impacting coal-fired utilities are already having a significant impact on the economy. American Electric Power Co. Inc. (AEP), one of the nation’s largest generators of electricity, recently announced that it will retire coal-fired power plants with 6,000 megawatts of generating capacity and spend another six to eight billion dollars installing new emission control technology on the rest of its fleet.

In addition, a recent study from the National Economic Research Associates (NERA) estimates that CSAPR and Utility MACT would increase the nationwide average retail electricity price by 11.5 percent. Nationwide net employment losses are expected to total 1.44 million job-years between 2013 and 2020.

Higher energy prices heighten uncertainty and prevent manufacturers from investing in the future and expanding their operations, inhibiting the job creating necessary to get our economy back on track. Manufacturers urge the EPA to end these unreasonable, overreaching regulations. While manufacturers support a sensible way to reduce pollution, imposing regulations that will only hurt American workers, consumers and manufacturers is not the way to achieve such a goal.

Coverage of the Cross-State Air Pollution Rule:

Wall Street Journal: EPA Sets Rule Capping Coal-Plant Emissions
The Hill: EPA finalizes rules for cross-state air polution

Alicia Meads is director of energy and resources policy, National Association of Manufacturers

The only thing worse than the Executive Branch replacing Congress in the setting of federal economic, environmental and energy policy would be the federal courts assuming that role. A case before the U.S. Supreme Court will determine whether the judiciary gains that authority.

The Supreme Court hears oral arguments Tuesday, April 19, in American Electric Power Company Inc. v. Connecticut, et al., the suit by several states and environmental groups against five electric utilities for creating a public nuisance by contributing to global warming. (Docket, questions presented)

If the Supreme Court upholds the Second Circuit Court of Appeal’s ruling against the utilities – which included the court setting emission limits as a remedy – the judicial branch will reaffirm its role as a super-legislature, determining political questions that Congress chooses not to address, and activist state attorneys general will be elevated yet again in the U.S. system of government. Speculative shakedown suits like Kivalina v. ExxonMobil would multiply, and energy costs would skyrocket.

The suit began with ueber-activist Connecticut Attorney General Richard Blumenthal, now U.S. Senator, and included state governments of California, Connecticut, Iowa, Rhode Island and Vermont, as well as New York City.  Named in the lawsuit are American Electric Power Co., Cinergy Corp., Southern Co., the Tennessee Valley Authority and Xcel Energy Inc. New Jersey and Wisconsin have dropped out of the lawsuit since the dispute started in 2004. Three land trusts, the Audubon Society of New Hampshire, Open Space Institute and Open Space Conservancy, also are suing the utilities. Justice Sonia Sotomayor is recused because she heard the case at the appellate level. The Scotusblog entry has the rulings and briefs. (continue reading…)

The U.S. Supreme Court this morning announced it would hear American Electric Power v. Connecticut, an appeal of the U.S. Second Circuit Court of Appeals’s ruling that states and environmental groups could sue under federal public nuisance law to force electric utilities to reduce greenhouse gas emissions. The court’s order granting cert is here.

Justice Sotomayor, who as a member of the Second Circuit ruled with the states, will recuse herself. (In this case, “ruled with the states” means ruled with the ambitious state attorneys general.)

The appellate court’s decision was an egregious intrusion of the judicial system into the policymaking role of government, which appropriately belongs with Congress. The National Association of Manufacturers had filed an amicus brief supporting Supreme Court review — available here — and our NAM Manufacturing Law Center entry summarizes:

The Supreme Court will review a very troubling decision by the U.S. Court of Appeals for the 2nd Circuit that allows 8 states to sue 6 major electric utility companies under a public nuisance theory. The theory is that each state is adversely affected by climate change caused in part by the utilities’ electricity-generating plants, and the courts should impose emissions limits.

The NAM and other business groups filed an amicus brief in the Supreme Court on Sept. 1 urging that court to review the case. We argued that only the political branches of government are equipped to resolve the complex and dynamic issues relating to climate change regulation, that the plaintiffs’ legal claims exceed the boundaries of public nuisance litigation, and that judges and juries are not empowered or competent to exercise extraordinary regulatory powers without clear boundaries and guiding principles. (continue reading…)

From the Environmental Protection Agency, a news release, “EPA Marks the Clean Air Act’s 40th Anniversary/ Landmark law saves lives and provides billions of dollars in benefits“:

WASHINGTON – On Tuesday, Sept. 14, U.S. Environmental Protection Agency Administrator Lisa P. Jackson will deliver the keynote address at a conference marking the 40th anniversary of the Clean Air Act. The conference will bring together leading contributors who have helped shape the act over the past 40 years, including members of Congress, state and local government officials, and leaders in public health, business and technology, environmental justice, and advocacy.

The daylong event (agenda) features speakers who were around in the early days of the law, including the EPA’s first administrator, Bill Ruckelshaus.

Question to pose to all the participants: When Congress passed the Clean Air Act, do you believe it intended to use the law to control carbon dioxide emissions?

Or put another way: Isn’t the EPA creating law when it unilaterally amends the emissions limits established by the Clean Air Act to apply only to industrial sources for greenhouse gases, carbon dioxide included?

Meanwhile, mixing messages this week, President Obama campaigns for Richard Blumenthal, the Democratic attorney general of Connecticut who’s running for U.S. Senate. Blumenthal orchestrated the egregious multistate suit against electric utilities, Connecticut v. American Electric Power, claiming power plant emissions created a federal public nuisance. The Second Circuit found for the states, and the utilities are asking the U.S. Supreme Court to hear an appeal.

In August, the Solicitor General’s Office filed a brief stating the Obama Administration’s opposition to the Blumenthal-originated litigation and urging the Supreme Court to grant review. (See Jonathan Adler at the Volok Conspiracy, “The SG’s Brief in American Electric Power v. Connecticut.”) From the brief:

[This] Court should grant certiorari, vacate the judgments of the court of appeals, and remand to enable the court of appeals to consider two questions in the first instance: (1) whether, independent of Article III standing requirements, plaintiffs’ suits should be barred as a matter of prudential standing; and (2) whether, in light of multiple actions that EPA has taken since the court of appeals issued its decision, any otherwise cognizable federal common-law claims here have been displaced.

So what’s the campaign message from the President? “As attorney general, Blumenthal already thinks he’s a legislator, so let’s legitimize him by electing him to the Senate. Yea!”

The National Association of Manufacturers and other business groups filed an amicus brief in the Supreme Court on Sept. 1 urging that court to review the case. We argued that only the political branches of government are equipped to resolve the complex and dynamic issues relating to climate change regulation, that the plaintiffs’ legal claims exceed the boundaries of public nuisance litigation, and that judges and juries are not empowered or competent to exercise extraordinary regulatory powers without clear boundaries and guiding principles. The brief is available here.

From The New York Times, “States Can Sue Utilities Over Emission“:

A panel of the United States Court of Appeals for the Second Circuit, in New York, ruled that eight states — California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont and Wisconsin — as well as New York City and three land trusts could proceed with a suit against American Electric Power, Southern Corporation, the Tennessee Valley Authority, Xcel Energy and Cinergy Corporation, all large coal-burning utilities.

The case, brought in 2004, said the defendants were creating a “public nuisance” and sought reductions in emissions that scientists say are changing the climate.

The opinion from the Second Circuit in the case, Connecticut v. American Electric Power Co.,is available here. The National Association of Manufacturers had joined other business associations in filing an amicus brief in support of the utilities, which is available here.

This is a horrible decision, encouraging litigation to define activities essential to U.S. economic growth, jobs and government revenues as public nuisances. The ruling again places the judiciary in the constitutionally improper and anti-democratic role of policymaker.

As the brief argues:

Plaintiffs allege that emissions of CO2 contribute to global warming. CO2 is emitted principally from the combustion of fossil fuel to produce energy. Thus, if global warming nuisance suits were allowed, any human activity that involves combustion of fossil fuel would become a potential target of nuisance suits. Moreover, under plaintiffs’ theory, it would not matter where the emissions occur, because CO2 emissions from any location allegedly mix in the upper atmosphere with other CO2 emissions and allegedly contribute to warming worldwide. The result of plaintiffs’ theory would be that any person or organization alleging damage from global warming would be able bring a nuisance suit against any person, company, municipality or other entity, wherever located, that plaintiffs believe is using energy in an inefficient or excessive manner, or that plaintiffs believe to be capable of using a less carbon-intensive fuel or of reducing CO2 emissions in some other manner. The range of possible litigation targets is virtually endless, because combustion of fossil fuels, for both personal and business purposes, pervades American life.

Basically, what plaintiffs seek is nothing less than to have the judiciary decide how fossil fuel energy should be used in this country—a venture that would draw the judiciary deeply into difficult and contentious issues of national and international energy policy. The District Court correctly held that these issues of energy policy are political questions beyond the jurisdiction of the judiciary—questions that should be decided only after the kind of full debate and public participation that the political, legislative and administrative processes can provide. Congress and the President have recognized that global warming and energy policy are inextricably intertwined and should be addressed on a national and international basis. To address these issues in case-by-case litigation of nuisance suits can only lead to an unworkable patchwork of inconsistent and uncertain results, where no user of fossil fuel could be assured that its operation, even though compliant with existing law, could continue given the ever-present threat of a lawsuit—or perhaps multiple suits—seeking to control emissions.

The United States is only right now at the start of an economic recovery — perhaps. That recovery will require expanded energy production and business investment. But if you’re the head of a company that wants to invest for the future — in the process creating jobs and wealth — and you find that self-aggrandizing attorneys general and anti-growth environmentalists can simply litigate you into paralysis, well, the hell with it.

Yet that’s the situation as now exists in the states that comprise the Second Circuit.

• Reuters, “U.S. court reinstates emissions suit vs. utilities“
• Point of Law, Michael Krauss, “2nd Circuit Revives ‘Federal Common Law of Nuisance’ Suit”. Krauss, a professor of law at George Mason, had the same reaction as we did (or vice versa, as he wrote first): “If this Circuit ruling stands, why should investors have confidence in industrial projects that have received all necessary legal permits to be built? A ‘federal nuisance suit’ filed by a ‘land trust’ or a state other than the permitting state could destroy profitability. Presumably investors would need all 50 states’ approval plus that of the ‘land trusts.’ Talk about a chill to job creation.”

A round-up of commentary and reporting on President Obama’s nomination of Judge Sonia Sotomayor to the U.S. Supreme Court, focusing on the implications for business and business law…

Walter Olson of the Manhattan Institute has a dispassionate, analytical piece at Overlawyered.com, “Obama’s ‘Wise Latina’“:

Issues of business law don’t come across as Sotomayor’s great passion one way or the other, so it’s hard to know what all this portends for the high court’s direction on business issues should she be confirmed. As Home Depot‘s Bernard Marcus and others have pointed out, for all of David Souter’s predictable role on the court’s liberal side in most high-profile cases, he in fact steered to middle-of-the-road, hard-to-characterize views on many issues of litigation, liability and procedure, either as a swing vote or as the author of opinions. (Two key issues to watch: what sort of constitutional restraints, if any, there are on punitive damages, and how much scrutiny judges should give to initial pleadings to determine whether a federal lawsuit ought to go forward.)

Some of her backers say they expect that Sotomayor will emerge as a liberal in the less than fiery, relatively “legalistic” Ginsburg/Breyer mold. Even assuming that happens, some outcomes will soon change in a direction most businesses will find adverse. And in coming weeks, both friends and foes will be going over her published opinions–some with hope, others with dread–for clues to whether she might form the nucleus of some future new and more seriously left-wing faction on the court.

Also reporting on Sotomayor and business was Nathan Koppel at the Wall Street Journal’s Law Blog, “Sotomayor and Business: ‘No Reason . . . to be Concerned’“:

The judge, for example, has sided with defendants in cases involving the standards that govern when cases can be brought as a class actions and the extent to which plaintiffs’ claims can be preempted by more defense-friendly federal or international laws.

“There is no reason for the business community to be concerned,” says Lauren Rosenblum Goldman, a partner at Mayer Brown LLP. The judge has “ruled in favor of preemption about half of the times” that the issue has been presented to her, she says.

Two cases that went before the Second Circuit of Appeals on which Judge Sotomayor sits were certainly high-profile ones that concerned business; the National Association of Manufacturers was involved through filing of amicus briefs.

(continue reading…)

The post below on the various arguments against wind was written before we caught this editorial at the Wall Street Journal, “Wind Jammers.” It seems relevant:

[Greens] are blocking the very transmission network needed for renewable electricity to move throughout the economy. The best sites for wind and solar energy happen to be in the sticks — in the desert Southwest where sunlight is most intense for longest, or the plains where the wind blows most often. To exploit this energy, utilities need to build transmission lines to connect their electricity to the places where consumers actually live. In addition to other technical problems, the transmission gap is a big reason wind only provides two-thirds of 1% of electricity generated in the U.S., and solar one-tenth of 1%.

Only last week, Duke Energy and American Electric Power announced a $1 billion joint venture to build a mere 240 miles of transmission line in Indiana necessary to accommodate new wind farms. Yet the utilities don’t expect to be able to complete the lines for six long years — until 2014, at the earliest, because of the time necessary to obtain regulatory approval and rights-of-way, plus the obligatory lawsuits.

Jeez, you just can’t win.*

* Which appears to be the point for some opponents — no new energy, anywhere. Or as the Journal observes:

[The] liberal push for alternatives has the look of a huge bait-and-switch. Washington responds to the climate change panic with multibillion-dollar taxpayer subsidies for supposedly clean tech. But then when those incentives start to have an effect in the real world, the same greens who favor the subsidies say build the turbines or towers somewhere else. The only energy sources they seem to like are the ones we don’t have.