LANSING — Gov. Rick Snyder is playing it safe while Michigan Attorney General Bill Schuette is doing his job.
That appears to be the consensus among business groups and conservatives in Michigan responding to the two elected officials’ disparate approaches to address President Obama’s Clean Power Plan. Nationally, those two cohorts have been the most vocal opponents of the rules that would limit carbon emissions from power plants over the next 15 years.
With broad support from Michigan utilities, industrial groups and environmental interests, Snyder announced on Sept. 1 that his administration would put together a “State Carbon Implementation Plan” for the federal rules.
But on Oct. 23 when the Clean Power Plan was formally published in the Federal Register, it set off a round of legal challenges from states and business groups looking to defeat it.
Schuette joined 23 other states in a lawsuit filed on the same day the rules were published alleging the Clean Power Plan is unconstitutional and exceeds federal regulatory authority. Administration officials have said Schuette is acting “in an individual capacity” by challenging the rules.
According to the Natural Resources Defense Council, Michigan and Arkansas are the only two states where the Republican governor supports a statewide compliance plan while the Republican attorney general joined the lawsuit to challenge the federal requirements.
While clean-energy advocates have applauded Snyder and criticized Schuette, conservatives and business groups say they aren’t surprised by the dynamic that has emerged between the two politicians.
“Regardless of the Clean Power Plan, we need to move forward on Michigan’s energy future and laws that pertain to it,” said Larry Ward, executive director of the Michigan Conservative Energy Forum.
The MCEF has lobbied in support of expanding Michigan’s renewable production and energy efficiency as part of an “all-of-the-above” energy policy.
Ward said Michigan’s energy policy as it relates to federal compliance is on two tracks — a legal one and a legislative one. His group is “following the track of the governor right now” and is not weighing in “one way or the other” on the legality of the Clean Power Plan.
“We’re not picking on the attorney general for doing his job — it’s very natural for him to do that,” Ward said. “We’re entrenched in the fact that this law is ahead, here’s the direction we’re heading with the (statewide) bills on the table, let’s go forward with what we have that suffices with the Clean Power Plan. I think we’re already ahead of the curve.”
GETTING A JUMP START
Indeed, Michigan is in a position to craft a new statewide energy policy that could heavily influence a compliance strategy with the Clean Power Plan. And those strategies will vary across the country, as some states have larger emission-reduction targets than others.
“This favors Michigan,” Ward said. “The state can use this to its advantage because it will be ahead of the curve with the Clean Power Plan. If we get the bills and laws on energy right, we can take advantage over neighboring states.”
Jason Geer, director of energy and environmental policy for the Michigan Chamber of Commerce, said his organization supports both Schuette’s and Snyder’s actions.
“First off, we’re opposed to the Clean Power Plan,” Geer said. “We think we should cautiously prepare a State Implementation Plan but obviously help the attorney general fight it in court. We believe this is a lot of overreach by the EPA.”
The U.S. Chamber of Commerce has joined a separate lawsuit against the Clean Power Plan. Geer added that his organization hopes to see Snyder “be a little more critical” of the rules.
“I think the attorney general is doing his job, which is to protect the state of Michigan,” Geer said. “Governor Snyder is taking a pragmatic approach.”
That’s not to suggest that businesses represent a unified front against the Clean Power Plan, however.
Earlier this year, more than 350 small and major businesses and investors — including 18 in Michigan, such as Grand Rapids-based Brewery Vivant and Nestle — signed a letter to state governors in support of the Clean Power Plan, encouraging statewide compliance plans.
“Our support is firmly grounded in economic reality,” the companies stated in the letter. “Clean energy solutions are cost effective and innovative ways to drive investment and reduce greenhouse gas emissions. Increasingly, businesses rely on renewable energy and energy efficiency solutions to cut costs and improve corporate performance.”
EXECUTIVE BRANCH OVERREACH?
Nationwide, business and manufacturing groups believe the Clean Power Plan is unconstitutional while environmental advocates are confident the U.S. Supreme Court will ultimately uphold the rules.
“The attorney general is concerned by yet one more executive action taken by President Obama and the EPA that violates the Clean Air Act and causes the price of electricity to increase, placing jobs and paychecks at risk and costing Michigan families more,” Schuette spokesperson Andrea Bitely said in an email.
She did not respond to additional questions.
Environmental groups accused Schuette of siding with “corporate polluters” by joining in the lawsuit.
“Attorney General Schuette continues to tilt at windmills, spending taxpayers’ dollars in a fruitless effort to block Michigan from moving forward in the fight against carbon pollution,” Anne Woiwode, the Michigan Sierra Club’s conservation director, said in a statement.
Samantha Williams, staff attorney and policy advocate with the Natural Resources Defense Council, said opponents are seeking to stop the rules from being implemented as a separate lawsuit challenges the Clean Power Plan on its merits.
She said it’s rare for courts to grant motions to stay in cases like this because there is an “extremely high burden” to show that the rules are likely to be struck down or will cause states irreparable harm.
Williams thinks a decision on halting the rules will be issued around the New Year.
OUTLINING LEGAL ARGUMENTS
On the plan itself, opposing states reportedly plan to argue three points. They say the Clean Power Plan is unconstitutional by commandeering states’ rights, that the EPA lacks the authority under the Clean Air Act for this specific set of rules because power plants are already regulated under a different section of the act, and that the agency’s development of the plan was “arbitrary and capricious.”
Specifically, opponents plan to argue that the EPA can’t force states to reduce carbon emissions outside of a power plant’s “fence line.”
Geer thinks challengers “have a good chance of success” in defeating the rules. He pointed to a court ruling earlier this year that blocked rules seeking to regulate mercury pollution from plants because the EPA didn’t properly account for costs when making the policy.
“The Clean Power Plan is no different — the EPA is not really looking at the economic impact of it in the real world,” Geer said.
He also doesn’t think the EPA can regulate beyond power-plant emissions, such as requiring energy efficiency or building a certain kind of generation like renewables.
“They can’t go outside the fence line,” he said.
But supporters say the EPA has a winning track record when it comes to regulating greenhouse gas emissions under the Clean Air Act. Specifically, the U.S. Supreme Court has allowed the EPA to regulate carbon dioxide as a pollutant that causes human and environmental harm.
“I think the Clean Power Plan is on firm legal footing,” said Williams of the NRDC.
She anticipates the legal challenges to make it to the U.S. Supreme Court, which some are suggesting could issue a decision in late 2017 or early 2018.
“Lo and behold, states will have had time to submit their plans,” she said.
CHALLENGE, BUT PREPARE TO COMPLY
The Clean Power Plan requires nationwide carbon emissions from existing power plants to drop by 32 percent below 2005 levels in the next 15 years. The final rules are more stringent than the initial 30 percent proposed, but they also give states two more years to comply with interim goals.
To meet the federal mandate, states can use a rate-based emission reduction approach measured in carbon pounds per megawatt hours or a mass-based approach measured in total tons of carbon emissions.
State officials announced in September that the state would submit an initial plan by Sept. 6, 2016.
While Williams said Snyder may be unique among Republican governors for announcing specific compliance plans, many states are heading down a “parallel track” of challenging the rules while also planning to comply with them.
Earlier campaigns to “just say no” to following the rules — initially championed by U.S. Senate Majority Leader Mitch McConnell from coal-dependent Kentucky — are starting to crumble.
“The vast majority of states, even the ones suing, see the writing on the wall and they don’t want to be left without a plan,” Williams said. “Even states that don’t love it will want to do it in the cheapest way possible. They want to have control over their own fate.”
LET LANSING DECIDE, NOT D.C.
That was precisely Snyder’s rationale when he announced the state’s intention to comply with the Clean Power Plan. Administration officials have said they believe the rules have several shortcomings — such as preventing roughly half of the state’s renewable energy from being credited for reducing emissions — but they think it would be in Michigan’s best interest to be prepared.
“The best way to protect Michigan is to develop a state plan that reflects Michigan’s priorities of adaptability, affordability, reliability and protection of the environment,” Snyder said in a September statement. “We need to seize the opportunity to make Michigan’s energy decisions in Lansing, not leave them in the hands of bureaucrats in Washington, D.C.”
Geer said there are potentially “scary” consequences of not developing a state plan — “ones that potentially erode state sovereignty.”
“We want to be careful to make sure Michigan is protected,” Geer said. “We don’t think there is anything wrong with preparing a plan and we need to be prepared for either path. Hopefully, we’ll be victorious in court.”