Coal, Utilities Hit With Double Whammy

Two important events have happened in the last few days that will have a direct impact on West Virginia’s energy-based economy and our state’s residents: Joe Biden was sworn in as President of the United States and a federal appeals court struck down a Trump administration rule that took a more reasonable approach to the use of carbon-based fuels for energy production.

A decision by the D.C. Court of Appeals undercut Trump’s Affordable Clean Energy (ACE) rule.  Environmentalists praised the decision, arguing that the Trump rule essentially gave a pass to electric generating utilities to continue burning coal and contributing to climate change.

More litigation will follow. It is likely that West Virginia and other energy-producing states will challenge the decision.  But in the meantime, the court’s ruling is a setback for West Virginia, which has been working with utilities to develop plans to comply with the Trump rule.

“Specifically, this decision disrupts West Virginia’s regulatory program, which was nearing finalization and predicated on the ACE Rule,” said Senator Shelley Moore Capito (R-WV).

This is yet another curve ball for utilities.  Previously, the Obama administration’s EPA adopted the Clean Power Plan—the precursor to ACE—which forced states to cut CO2 emissions to 32 percent below 2005 levels by 2030.

That goal could only have been met by dramatically reducing the use of coal as a power source, even though, by the EPA’s own models, the effect on global temperatures would have been statistically insignificant (0.01 degrees Celsius by the year 2100).

Notably, the U.S. Supreme Court issued a stay of the Clean Power Plan, thus signaling that the EPA likely would not succeed if the High Court heard arguments in the case.

And that brings us back to the new administration.

Trump’s rule is caught in a legal tangle and the previous Clean Power Plan is a non-starter, so the Biden administration’s EPA will likely come up with its own plan, something akin to the Clean Power Plan, but crafted in hopes of clearing legal hurdles.

Rest assured that plan will pressure utilities to stop using coal and possibly even drive them away from natural gas. That will lead to even more economic damage for West Virginia.

Biden’s nominee to head the EPA, North Carolina environmental regulator Michael Regan, will have to come before the Senate Committee on Environment and Public Works, where he will be quizzed on the administration’s plans.

Senator Capito, who will soon be the ranking Republican on the committee, will press Regan for answers and push him to at least hold a hearing in West Virginia on any new rule, something Obama’s appointees refused to do.

Utilities, the coal industry and related companies, rate payers and West Virginia policy makers deserve more certainty on regulations regarding carbon emissions.  The whipsaw regulatory approach is no way to operate.

 

 





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