U.S. Supreme Court limits climate action, but Michigan aims to stay course

The U.S. Supreme Court on Thursday dealt a blow to the Biden administration’s efforts to decarbonize the nation’s power sector, issuing a ruling that worsens society’s odds of meeting global climate goals and could invite new legal challenges targeting federal agencies’ ability to regulate a host of industries.

But in Michigan, industry officials and experts say, the decision won’t slow electrical utilities’ steady shift away from fossil fuels and toward renewable energy.

“They're doing it because it's economical, it’s good for customers and it's the right thing to do,” Margrethe Kearney, a senior attorney with Grand Rapids-based Environmental Law and Policy Center, an environmental group, said of the utilities.  

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The court’s conservative majority sided with plaintiff coal companies and Republican attorneys general in a 6-3 ruling that curtails the U.S. Environmental Protection Agency’s ability to regulate industry-wide carbon dioxide emissions from power plants in a way that would force utilities off of coal. 

Whether a federal agency has broad authority to issue such regulations, Chief Justice John Roberts wrote, is a “major question” of vast economic and political significance, best left up to elected lawmakers unless they’ve given an agency explicit permission to regulate.

“A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body,” Roberts wrote. 

In dissent, the court’s three liberal justices called the ruling a “frightening” move that strips regulatory power from both lawmakers and federal regulators, and instead puts it in the hands of the court.

As the New York Times has reported, the litigation that spurred Thursday’s decision is part of a bigger push by conservative operatives to curtail federal agencies’ regulatory power over myriad issues, from the environment to the workplace. 

Nina Mendelson, a law professor at the University of Michigan and expert in administrative law, called the decision “an anti-regulatory power grab” that gives the Supreme Court broad authority to decide which issues are untouchable by regulatory agencies unless they get explicit Congressional permission.

But Michigan’s big utilities say despite the decision, shifting public sentiment and increasingly cost-competitive wind and solar energy are driving them to phase out coal-fired power plants and ramp up renewables even absent federal regulations compelling them to do so. 

Calling climate change “one of the defining issues of our time,” DTE spokesperson Peter Ternes said the utility remains on a path to be carbon-neutral by 2050. The utility’s Trenton and Saint Clair coal-fired power plants will be retired this summer. Its Belle River plant south of Saint Clair is slated to close in 2028. And DTE is considering an earlier closure of its Monroe plant, currently set to retire in 2040.

Consumers Energy spokesperson Josh Paciorek likewise said the company remains on track to close all of its coal plants by 2025 and go carbon-neutral by 2040 “because it’s what’s best for our customers and our planet.” 

Kearney credited Michigan’s existing regulatory structure — particularly sweeping bipartisan reforms passed by the state legislature in 2016 — for helping push utilities toward carbon neutrality. 

Among a host of changes to utility regulations, the 2016 package required electric providers to produce 15 percent of their power from renewables by 2021, and required them to compare the costs and benefits of renewables versus fossil fuels when planning their future power-generation investments.

Sen. Aric Nesbitt — a west Michigan Republican and key architect of the reforms who then-chaired the House Energy Committee — told Bridge Thursday the reforms were driven primarily by a desire to produce cost-effective, reliable and efficient energy in Michigan.

It represented an effort to “shift from mandates to what actually makes economic sense,” Nesbitt said. 

Still, environmental groups see room for Michigan to push utilities toward faster action. 

“It is now even more important that states like Michigan step up to defend and strengthen their environmental safeguards,” said Jim Olson, senior legal advisor at the Traverse City-based environmental group FLOW (For Love of Water). “Fortunately, under the (federal) Clean Air Act, states can continue to limit and force the shutdown of existing coal plants under state laws and regulations.”

The Midland-based Mackinac Center for Public Policy, a free-market think tank, hailed Thursday’s decision as a win over government overreach.

“Through the COVID crisis, we’ve seen firsthand the problems caused by unilateral executive action,” Patrick J. Wright, the group’s vice president for legal affairs, said in a statement. “The Court’s opinion upholds the separation of powers and takes steps to ensure that we won’t be ruled by bureaucratic fiat.”

Gov. Whitmer’s climate plan calls for a policy requiring utilities to get half of their energy from renewable energy by 2030. But enacting such a standard would require action by the Republican-led legislature and Kearney, of the environmental law center, said she sees little appetite in the current session.

Oday Salim, a U-M professor who directs the law school’s Environmental Law & Sustainability Clinic and serves as an attorney at the National Wildlife Federation’s Great Lakes Regional Center, pointed to other steps state regulators could take without the need for new laws or policies. 

He said, for instance, that the Michigan Public Service Commission could lean more heavily on Michigan’s public trust doctrine — a legal tenet that requires the state to protect public resources such as water  — when it considers whether to approve new fossil fuel infrastructure.

And Mendelson, of U-M, noted that state environmental regulators are generally free to regulate more aggressively than the federal government.

A spokesperson for the Michigan Department of Environment, Great Lakes and Energy (EGLE), said it’s not clear whether the agency could step in to regulate power sector emissions if EPA is unable. And officials with the Michigan Public Service Commission, which regulates power utilities, said the commission lacks “any direct authority to require the utilities to ratchet down their emissions.”

While Kearney expressed optimism about Michigan’s path, she said she worried how the Supreme Court decision affects utilities outside of Michigan, including coal-mining states that are unlikely to transition away from fossil fuels without a federal mandate. 

“There are states that are going to be laggards,” Kearney said, and delayed climate action anywhere means worse climate destruction everywhere, including in Michigan. 

Bridge capitol reporter Jonathan Oosting contributed to this report.