The U.S. Supreme Court's June 30 decision to constrain the U.S. Environmental Protection Agency's authority to regulate greenhouse gas emissions from existing power plants will not materially thwart nationwide efforts to decarbonize the power grid, several industry experts said following the ruling.

In a 6-3 opinion, the court's conservative justices concluded that the Obama-era Clean Power Plan, a 2015 rule that never took effect, adopted an approach to curbing power plant emissions that exceeded the agency's authority. But the ruling will not stop efforts by states and power companies to reduce emissions.

"I don't think it derails clean energy efforts in this country," Glenrock Associates LLC analyst Paul Patterson said in an interview. "It is a tool that would've been useful for the Biden administration to have, but ... there's more than one way to skin a cat."

North American power and renewables analysts at S&P Global Commodity Insights agreed in an email that "while the ruling may constrain how the administration can develop future regulations, a substantial amount of that decarbonization is already happening regardless."

Remaining options

Members of Congress and industry groups urged the legislative and executive branches to take action to curb carbon emissions in light of the court's decision.

"EPA continues to have many powerful tools at its disposal, and there is more both Congress and the president can do to meet the climate crisis head-on," said U.S. Rep. Frank Pallone Jr., D-N.J., chair of the House Committee on Energy and Commerce, which has jurisdiction over the EPA's regulation of power plants.

Pallone's office did not immediately respond to questions June 30 regarding specific actions the committee may take in light of the court's decision.

U.S. Sen. Tom Carper, D-Del., who chairs the Senate Committee on Environment and Public Works, blasted the court's ruling and said he is "resolute in my commitment to passing legislation that reduces greenhouse gas emissions across our economy."

A committee spokesperson did not immediately respond June 30 on potential next steps.

In a statement, President Joe Biden promised to "find ways that [the executive branch] can, under federal law, continue protecting Americans from harmful pollution," while EPA Administrator Michael Regan committed to providing "certainty and transparency for the energy sector."

The Solar Energy Industries Association, a lobbying group, and the Clean Air Task Force, which promotes the deployment of low-carbon energy and climate technologies, asked Congress to codify environmental and renewable energy development policies.

"Unless Congress is hyper-specific, this court seems bent on limiting agencies' discretion when they take measures to protect public health, safety, and the environment, under long-standing statutory provisions," Clean Air Task Force attorney Jay Duffy, a co-litigant in the case, said in a statement.

The Clean Air Task Force called on the EPA to "use its full remaining authority and expertise" to drive power industry decarbonization. The Edison Electric Institute, a trade group for U.S. investor-owned utilities, said it still hopes that a new rulemaking "consistent with the court's decision" will come from the agency.

In April, Regan said the EPA will be "ready to go" with a proposed greenhouse gas rule for existing power plants after the Supreme Court issued its decision. But the EPA does not plan to propose such a rule until March 2023, according to the latest version of its regulatory agenda.

Market forces at play

Plaintiffs in the case, including Westmoreland Coal Co. and The North American Coal Corp., had asked the court to review whether Congress intended to give the EPA power to make decisions of vast "economic and political significance" under Section 111(d) of the Clean Air Act.

But Glenrock's Patterson pointed out that market forces such as inflation and reliability shortfalls would make it difficult for the EPA to implement a more aggressive emissions reduction plan right now.

Vistra Corp., for example, shut down its 1,333-MW coal-fired W.H. Zimmer plant in Ohio on May 31, five years earlier than planned, because the facility failed to secure any capacity revenues in PJM Interconnection LLC's 2022/2023 capacity auction. Wisconsin utility subsidiaries of WEC Energy Group Inc. and Alliant Energy Corp., on the other hand, said earlier in June that they would be delaying retirement of some coal-fired power plants to alleviate short-term reliability concerns in the Midcontinent ISO

"A lot of what the Obama administration was seeking to do through the Clean Power Plan, the market really took care of itself," Regulatory Research Associates analyst Russell Ernst said in an interview. "The economics of [the energy transition] just led to a lot of coal plant retirements, even in the last six, seven years."

Regulatory Research Associates is a group within S&P Global Market Intelligence.