By Michael Brooks

Since EPA finalized its Clean Power Plan last August, RTOs have been working to evaluate the compliance options for states in their territories and how they may affect energy prices and transmission needs.

Last week, the Supreme Court gave them another variable to account for.

The court’s surprise stay prevents EPA from enforcing the rule pending the outcome of court challenges, meaning states will most likely not have to file compliance plans or extension requests by September, as the rule requires.

RTOs said they will continue to analyze the plan but that it was too early to say how the court’s stay would affect their evaluations. (See related story, RTOs, States Respond to CPP Stay.)

States Hedging Bets

The stay was requested by officials from 29 states, led by Texas Attorney General Ken Paxton and West Virginia Attorney General Patrick Morrisey.

When EPA released its final version of the Clean Power Plan, Senate Majority Leader Mitch McConnell advised states to ignore the rule, calling it illegal.

On Wednesday, Paxton told reporters that Texas would heed that advice. “We had no plans to proceed with anything other than fighting this,” he said in a joint conference call with Morrisey.

And, he said, the state has no intention of preparing a compliance filing in case the rule is ultimately upheld. “The whole point of the stay is to stop us from having to provide any implementation plan, so we’re not moving forward with anything until this case is resolved,” Paxton said.

But while the plaintiff attorneys general joined Paxton in celebrating, some states are hedging their bets.

In Arkansas, Attorney General Leslie Rutledge said the stay “helps ensure that Arkansas and other states are not forced to comply with a rule that will likely be found unlawful and will skyrocket energy rates.”

But Department of Environmental Quality Director Becky Keogh and Public Service Commission Chairman Ted Thomas said that the state would “balance our obligation to be wise stewards of taxpayer money with our obligation to be fully prepared should the Supreme Court ultimately uphold the plan.”

The two officials, who have been leading the state’s work on an implementation plan, scheduled public hearings around the state to gathered stakeholder feedback. An ADEQ spokesperson last week did not know the status of those hearings.

“We’re evaluating our options on next steps,” Keogh said. “We’re seeking input from our stakeholders on what those next steps will be and will continue to engage our stakeholders on environmental policy matters.”

States that were not part of the challenge, such as Virginia and Pennsylvania, said they will continue to work on their compliance plans regardless of how the case proceeds.

“We will stay on course and continue to develop the elements for a Virginia plan to reduce carbon emissions and stimulate our clean energy economy,” Virginia Gov. Terry McAuliffe said in a statement.

For its part, EPA remains open to engaging with states.

“EPA firmly believes the Clean Power Plan will be upheld when the merits are considered because the rule rests on strong scientific and legal foundations,” EPA said in a statement posted on the rule’s website. “For the states that choose to continue to work to cut carbon pollution from power plants and seek the agency’s guidance and assistance, EPA will continue to provide tools and support.”

EPA Administrator Gina McCarthy told state regulators that they should continue work on emissions reductions. The stay “doesn’t mean we won’t continue to support any state that voluntarily wants to move forward,” she said at a meeting of the National Association of State Energy Officials in D.C.

President Obama also put on a brave face at a Democratic National Committee fundraiser in California on Thursday. “One of reasons I want to talk about this is because in the last couple of days I’ve heard people say, ‘The Supreme Court struck down the Clean Power Plan rule,’” Obama said. “That’s not true, so don’t despair, people. This a legal decision that says, ‘Hold on until we review the legality.’ We are very firm in terms of the legal footing here.”

‘Baked In’

Exactly why the court took the highly unusual — if not unprecedented — step to grant a stay before a lower court ruling on the merits is unknown. The one-page order provided no details. (See related story, Supreme Court Blocks Clean Power Plan.)

Opponents of the rule asked the court to prevent EPA from “baking in” its mandates before the court could rule to avoid a repeat of Michigan v. EPA, in which the court declared EPA’s Mercury and Air Toxics Standards illegal.

In their stay application, the plaintiffs pointed out that by the time the court reached a decision, most companies had put in place irreversible plans to shutter or upgrade plants to comply with the rules. (See MATS Challenge Too Late for Targeted Coal Plants.)

“The day after this court ruled in Michigan that EPA had violated the Clean Air Act in enacting its rule regulating fossil fuel-fired power plants under Section 112 of the CAA, EPA boasted in an official blog post that the court’s decision was effectively a nullity,” the plaintiffs wrote. “Because the rule had not been stayed during the years of litigation, EPA assured its supporters that ‘the majority of power plants are already in compliance or well on their way to compliance.’”

“In the present case, EPA is seeking to similarly circumvent judicial review, but on an even larger scale” and “deploy again the cynical tactic that [it] successfully used just last term to nullify this court’s holding” in the MATS case, they wrote.

— Amanda Durish Cook, Rich Heidorn Jr., Suzanne Herel, Tom Kleckner and William Opalka contributed to this report.

By Rich Heidorn Jr.

WASHINGTON — The death of conservative Supreme Court Justice Antonin Scalia likely improved the odds that the Clean Power Plan will survive court challenges.

Four days before his death Saturday, Scalia was in the majority in the court’s 5-4 vote to stay the EPA rule pending legal challenges.

Many observers took the stay as a sign that the court would likely reject the plan — which relies on a novel interpretation of the Clean Air Act — when it hears it on the merits.

But without a ninth member, a 4-4 split would prevent the court from overturning the D.C. Circuit Court of Appeals if it backs EPA. (If the lower court rejects the rule, of course, there would be no chance for the liberal justices to save it without help from another justice, such as swing vote Anthony Kennedy.)

While Democrats want President Obama to appoint Scalia’s successor, Republicans said the appointment should come after the presidential election. The GOP, which controls the Senate 54-46, could deny Obama the 51 votes needed for confirmation.

Senate Majority Leader Mitch McConnell (R-Ky.) and Judiciary Committee Chairman Charles Grassley (R-Iowa) said Saturday that it should be Obama’s successor who replaces Scalia.

Backfire?

Denying Obama the chance to add a fifth liberal to the court has implications for a number of divisive and high profile cases facing the court, including abortion, affirmative action and immigration. But it could backfire on efforts by McConnell and others to block the Clean Power Plan.

The three-judge D.C. Circuit panel appointed to hear the CPP appeal — which had earlier rejected a stay request — includes two jurists appointed by Democrats. (One of them, Obama appointee Sri Srinivasan, has been widely mentioned as a possible Supreme Court nominee himself.)

The D.C. Circuit will hear oral arguments June 2 and is expected to rule this fall. It would be up to the Supreme Court to decide first whether to hear an appeal of the D.C. Circuit’s ruling and second to rule on the merits.

In a 4-4 deadlock, “there is no majority for a decision and the lower court’s ruling stands, as if the Supreme Court had never heard the case,” wrote attorney and SCOTUSblog publisher Tom Goldstein. “Because it is very unlikely that a replacement will be appointed this term, we should expect to see a number of such cases in which the lower court’s decision is ‘affirmed by an equally divided court.’”

Goldstein noted that the court was also limited to eight members during Chief Justice John Roberts’ first term. To avoid equally divided rulings, he said, the court “decided a number of significant cases by instead issuing relatively unimportant, often procedural decisions.”

In televised remarks Saturday, Obama promised he will nominate Scalia’s successor before leaving office. After praising Scalia as a “brilliant legal mind,” Obama said he will nominate a new justice “in due time.”

“There will be plenty of time for me to do so and for the Senate to fulfill its responsibility to give that person a fair hearing and a timely vote,” he said.

Earlier in the day, McConnell had taken the opposite stance. “The American people should have a voice in the selection of their next Supreme Court justice,” he said. “Therefore, this vacancy should not be filled until we have a new president.”

McConnell famously vowed in 2010 that his top priority would be to deny Obama a second term. The coal-state senator took a similar stance when EPA released its final version of the Clean Power Plan, advising states to ignore the rule. (See related stories, States Evaluating Options Following Clean Power Plan Stay, EEI: Power Sector Carbon Reductions to Continue Despite CPP Stay.)

Precedent

Republicans cited historical precedent in contending Scalia’s replacement should be chosen by Obama’s successor. “The fact of the matter is that it’s been standard practice over the last 80 years to not confirm Supreme Court nominees during a presidential election year,” Grassley said.

In 1988, however, McConnell and Grassley voted to confirm Justice Anthony Kennedy, appointed by President Ronald Reagan during his last year in office. Kennedy was confirmed 97-0 by the Senate, which was then controlled by the Democrats. Kennedy’s confirmation ended a seven-month vacancy on the court, coming after the Senate rejected Robert Bork, and a second nominee, Douglas Ginsburg, withdrew.

If Republicans have their way, Scalia’s seat would likely be open for more than a year, a gap Senate Minority Leader Harry Reid (D-Nev.) called “unprecedented in recent history.”

From 1967 through 1994, according to a 2005 Congressional Research Service report, 12 of 19 court nominations were pending in the Senate for more than nine weeks before receiving final action.

CRS says the Senate has confirmed all but 36 of 160 Supreme Court nominees since 1789. Both of Obama’s previous nominees, Justice Sonia Sotomayor (August 2009) and Justice Elena Kagan (August 2010), were confirmed — albeit when Democrats controlled the Senate.

Scalia’s replacement has already become an issue in the presidential race, with Republican candidates calling for a delay and Democrats backing Obama.

Electoral politics also could be at play if Obama gets a nominee to a confirmation vote. Twenty-four Republican senators are seeking reelection including those in the swing “purple” states of Wisconsin, Pennsylvania and Illinois, where blocking a nominee could undermine their appeal to Democratic voters.

Obama would need at least 14 Republicans to compile the 60 votes to force a vote in event of a filibuster. In 1968, the Senate refused to vote on President Lyndon Johnson’s chief justice nominee Abe Fortas. The seat was filled by Johnson’s successor, President Richard Nixon, who nominated Warren Burger.

Political fallout over Scalia’s replacement also could poison attempts to pass a bipartisan energy bill this year. (See Utilities Make Their Case to Skeptical Wall Street.)