Supreme Court Axes Chevron Deference, Spanks Federal Bureaucracy
Friday's decision undermines the administrative state and "finally brings some balance into the regulatory world"
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.
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:
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
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.
The May 9 EPA rule on emissions from power plants sprawls over 267 pages in the Federal Register. It contains over 300,000 words.
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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The religion of transition using the EPA to halt power plants, emission controls that cannot be attained and mandating renewable energy not matter the consequences. The EPA got specifically called out by SCOTUS earlier this year, it didn't make a difference, until now. Hopefully for EPA, they will be restrained in making law since the Chevron rule is history. Hopefully this will get some control back from this out of control agency just halting projects on a whim. Of course, behind the guise of climate change nonsense.
So, it's great the EPA may have been cut down to some lesser degree, but then there is still the Department of Interior, (DOI), the Bureau of Land Management (BLM) and Bureau of Ocean Energy Management (BOEM) to hamstring energy development, while promoting and spending billions on renewable energy whatever the consequences. The BLM ignores the rights of communities and its concern for its resources as it the agency ignores all comers and plows through sensitive areas of historic tribal sites, impacts endangered species and all wildlife with abandon to build the SunZia 515 miles of twin transmission lines to hook into 1000 wind turbines being constructed in 3 counties in New Mexico. Now BLM is currently mowing down thousands of Joshua trees in the Joshua Tree National Park to spread thousands of solar panels across the Mojave. Both projects are to bring electricity to power 3 million homes in CA. CA is desperate to get all of this underway by 2025 into 2026 when the Diablo Canyon Nuclear Power Plant is shuttered (prematurely we should add). And, as so happens, FERC streamlines its plans and permitting process to make it harder for states to opt out on their 20 year transmission plan to cross cross the country at an initial cost by Federal Electricity Regulatory Commission of $1 billion. FERC is corralled PJM Interconnection that regulates a single coal plant in Maryland, that soon shells out $6.8 billion for a 13 state transmission line projects since Maryland has decided to close its one reliable coal plant. Now, Department of Energy steps in to take the lead on the main contact for project devleopers (Big Wind and Solar) so they wont' have to navigate different processes with 8 federal agencies. Unlike a natural gas pipeline company that will have to stick by the rules.
The agencies have become so powerful, it will take more than the SCOTUS revocation of the Chevron rule. These agencies are hell bent on getting this country into a made for government and its power brokers disaster, if it takes them getting a system that delivers energy that cannot be controlled or affordable.
Today, Biden comes up with more millions to bring the offshore wind turbines back from the dead that will start construction once again along the Atlantic coast. Gov. Murphy of NJ was to the moon and sent Biden a tweet "Thank you POTUS for bringing us one step closer to 100% clean energy future. That's a good one but he's in a bind once he singlehandedly killed the PennEast pipeline which was completed except one permit from NJ, - denied. Murphy is all in on wind, of course since NJ electricity rates are through the roof and the state is experiencing outages. (Uh Oh, climate change) but Murpy fails to mention to his taxpayers that he earmarked hundreds of millions of dollars for the projects. So, another wind developer Atlantic Shores will be sending out high sonar signals along the ocean floor and then begin laying cable for onshore connections the first quarter of 2025 so again, the impact will begin. Of course, the citizens along the coast are as mad as hell, but again, FERC, BOEM, their Governor give a rats ass. And now instead of hearing the pleas of the people that the don't want this visual blight offshore, Atlantic Shores will build turbine arrays within a 102,124 acre block and suck it up peasants we're bringing 200, 1,048' high turbines in from 12 miles offshore to 8.7 miles offshore so you can really enjoy the little red lights blinking on and off closer to shore for your visual pleasure.
On it goes and it will all create a costly, unreliable electric hodgepodge from coast to coast and north to south, but they'll never reach their goal to end fossil fuels since no matter how hard they try, they can't ignore physics as it pertains to the grid. So, they tell themselves it must be done but like everything the government does, its mania will bring the country to a new world just like the old world in 1882.
Use this to fix Sue and Settle.
At the urging of the federal government, various private groups sue the federal government over some issue. Rather than go to court, the Federal government decides to settle the lawsuit, one they could have easily won on the merits. This settlement is then blessed by the courts and enacted by the federal agencies that encouraged the lawsuit in the first place. This bypasses congress, laws, rulemaking, and allows the bureaucrats to dictate major policy changes without review or oversite. At the end of the day everyone gets to claim no responsibility for the new laws thus enacted. Congress never passed them. The bureaucracy claims they were "forced to write them by the court and the terms of the settlement. The court says "hey, we just rendered a judgement on the case the government decided to settle."
Hopefully this is the next issue the Supremes will tackle - Chevron repeal allows the courts to start questioning these settlements and stop deferring to the agencies that are making them. If the settlement creates a significant policy change, the court should insist that change MUST be blessed by congress.
As an example, between 2009 and 2012, EPA chose not to defend itself in over 60 lawsuits from special interest advocacy groups. These cases resulted in settlement agreements and EPA publishing more than 100 new regulations - including the Clean Power Plan.
Another example - The inflation reduction act required the federal government to hold lease sales in the Gulf of Mexico. The administration encouraged groups to sue over the leases. The feds then entered into a dubious settlement agreement with the Sierra Club. This stipulations in the settlement effectively ended leasing. Chevron sued over the settlement and won an injunction against it. The Feds immediately appealed the injunction, and suddenly seem more than interested in fighting things out in court.
Yes, they settled the case with the Sierra club, and when Chevron challenged that settlement, decided to fight things out in court.