Supreme Court Axes Chevron Deference, Spanks Federal Bureaucracy

Friday's decision undermines the administrative state and "finally brings some balance into the regulatory world"

Linemen from the Meriwether Lewis Electric Cooperative in Tennessee in the 1940s. Credit: The Tennessee Magazine

Last Friday’s Supreme Court decision ending Chevron deference was a massive blow to the federal bureaucracy. It was also a big win for people like Jarrod Brackett.

Brackett wasn’t a named plaintiff in the landmark case Loper Bright Enterprises v. Raimondo, but he might as well have been. I met Brackett on May 20 in Savannah, 11 days after the EPA published a greenhouse gas rule in the Federal Register that would force the premature closure of the country’s coal plants and constrain the construction of new baseload gas-fired power plants. As the general manager and CEO of the Fort Loudoun Electric Cooperative in Vonore, Tennessee, the EPA rule had Brackett riled up.

“We strive for service,” he told me. But the EPA keeps making rules that will hurt the affordability and reliability of the electricity his coop provides to its member-owners. “How do coops stop the EPA’s regulatory onslaught?” he asked me. My response was simple: They would have to seek redress in the courts.   

Brackett is a friendly, stocky man with a (very) firm handshake who speaks with the sweet drawl of an eastern Tennessean. We met the night before I spoke at a meeting of the Tennessee Valley Public Power Association, which provides juice to 153 consumer-owned electric utilities in the southeastern U.S., including Brackett’s cooperative.

Jarrod Brackett, general manager and CEO of the Fort Loudoun Electric Cooperative. Photo: Fort Loudon Electric Cooperative

I love people like Brackett. I love folks who live in small towns. I love people who make things, grow things, turn wrenches, and fix things. That’s almost a perfect summary of Brackett and his life. He’s an anti-elite. Brackett and people like him are the Americans who do the real work that keeps this country running.

Brackett grew up on a farm near Madisonville. He served in the Marines Corps. After serving in the military, he got his college degree at the University of Tennessee. After graduation, he took a job at the coop in vegetation management, cutting grass and trimming trees away from substations, power poles, and electric lines. And over the course of 22 years, he worked his way to the top job. The Fort Loudon Electric Coop is a living remnant of the New Deal. Founded in 1940, it now has about 35,000 customers. Like the other utilities that get their power from the Tennessee Valley Authority, Fort Loudon gets some of its electricity from coal-fired power plants (about 15%). It also gets electricity from TVA’s nuclear plants, hydro plants, gas plants, and a bit from solar and wind.

Friday’s decision was a clear-cut victory that will go a long way toward reining in an out-of-control EPA and addressing the regulatory avalanche that Brackett and others like him have been facing. It’s beyond dispute that the administrative state in the U.S. has become too powerful and that legislators at the federal and state levels have ceded too much authority to the executive branch and the battalions of bureaucrats who infest Washington, DC, and state capitols across the country.

Indeed, what we’ve seen in Washington over the past few years is regulation by strangulation. I looked at four recent climate-related rules issued by the administrative state under President Joe Biden. The total number of words in those four regulations is 1.3 million. Here are the rules:

1. In March, the Securities and Exchange Commission issued a rule it claims will “enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations.” The rule covers 885 pages and has 288,000 words

2. On April 18, the EPA issued its rule on tailpipe emissions from automobiles, which is, in practice, a backdoor mandate for electric vehicles. The rule takes up 374 pages in the Federal Register. When put into a Word document, it covered 1,200 pages. Total word count: 371,000.

3. The May 9 EPA rule on emissions from power plants sprawls over 267 pages in the Federal Register. It contains over 300,000 words.   

4. On May 13, the Federal Energy Regulatory Commission published Order 1920, a complex rule about high-voltage transmission. As Travis Fisher, the razor sharp analyst who works at Cato Institute (and before that, at FERC) explained in a May 16 piece here on Substack, the order is “a gift to developers of solar and wind projects at the expense of consumers and taxpayers…The rule is a step away from true competition and a step toward a convoluted, partisan mess.” The pdf file of the FERC rule is 1,363 pages and contains 352,000 words.

The scale of those rules — 1.3 million words — shows just how bloated and disconnected the administrative state has become from the citizenry. Only a highly paid lawyer or lobbyist has the time (or inclination) to parse such complex regulations.

On Saturday, a lawyer working with some of the plaintiffs who have sued to stop the EPA’s emissions rule told me there’s no doubt that the electricity utilities will prevail in the litigation. He believed that was true before Friday’s decision. With the Loper Bright decision, their case is as good as won. And he expects a new round of litigation will roll back many of the EPA’s other rules. His exact words were, “We will run the table.” (The plaintiffs who have sued to stop the EPA greenhouse gas rule include the TVPPA, American Public Power Association, National Rural Electric Cooperative Association, Edison Electric Institute, and 27 Republican attorneys general.)   

To get a broader perspective on the Loper Bright case, I talked on Sunday with Meredith Angwin, the noted author of Shorting The Grid, and now, the “Electric Grandma” Substack writer, about her thoughts on the Supreme Court’s decision and how it will affect the reliability and affordability of the grid. Angwin, who reminded me she’s not a lawyer, later emailed this analysis:

In recent years, agencies have taken the Chevron deference too far. Agencies are not just interpreting Congress’s intent, they are adding their own de facto laws. Ending the Chevron deference can be a useful corrective. For example, Congress would be unlikely to pass a law requiring coal plants to shut down, but under the Chevron deference,  EPA made rules that basically require coal plants to shut down. I have noticed that legal issues tend to swing from one extreme to another. Over-deference to the agencies may be followed by over-deference to non-technical judges. However, I think that the end of the Chevron deference gives us an opportunity to reach a middle ground.

Many good analyses of the High Court’s decision have been published. Perhaps the best summary came from the Wall Street Journal’s editorial board, who applauded the decision and wrote, “Now regulators will have a harder time bending laws, and Congress will have to legislate more clearly. Imagine that.” Roger Pielke Jr. wrote that he would have joined the dissenters in the 6-3 decision. Another Substack writer, Thomas Shepstone, wrote a good piece on the decision, quoting Justice Clarence Thomas’s concurring opinion at length. Thomas wrote, “No matter the gloss put on it, Chevron expands agencies’ power beyond the bounds of Article II by permitting them to exercise powers reserved to another branch of Government.”

The law firm Latham & Watkins published a summary on Friday, calling the decision a “landmark holding of administrative law that will recalibrate the balance of power between agencies and courts. Its implications will likely be felt across virtually every federal agency.”

And what does Jarrod Brackett think? I talked to him on Sunday. He was pleased. His analysis was concise: “It’s huge,” he said. “We’ve had a decade of heavy regulation that has put the industry on its nose. This decision finally brings some balance into the regulatory world. It was long overdue.”

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