Wednesday, December 27, 2017

By Robert Romano

“Congress has abandoned much of its responsibility to legislate and has instead given unelected regulators extraordinary power to control the lives of others.”

That was President Donald Trump on Dec. 14 letting the American people know specifically why his administration has had to spend much of its first year in office taking apart the administrative state in Washington, D.C., where it is bureaucrats who make law, not Congress. “This excessive regulation does not just threaten our economy, it threatens our entire constitutional system,” Trump added. He’s right.

And so far, in 2017, the Trump administration has made more than good on its promise to begin rolling back onerous regulations.

The crux of the problem for the EPA or any other agency that wishes to end a regulation is that in 1983, the Supreme Court unanimously decided in Motor Vehicle Manufacturers Association v. State Farm Mutual an agency must supply a reasoned analysis. Thus, it is more difficult to eliminate an existing regulation than it is to change it.

Thus, every regulatory rescission is subject to judicial review to determine not only whether it was rational based on the statutory scheme, but to prove that the original regulation exceeded the statute.

Even when there is no basis in law, as in Massachusetts v. EPA, in 2007 the Supreme Court ruled carbon dioxide could be regulated under the terms of the Clean Air Act.

When the challenges come, as surely they will, the assumption courts will make is that the Clean Power Plan was properly enacted and based on the statutory scheme, leaving it to the Trump administration to prove otherwise. That could be a losing battle. But it need not be.

The Trump administration might be better served if Congress were to act to prohibit the use of funds to implement the Clean Power Plan and the carbon endangerment finding as well. Then when the regulatory rescissions come, the EPA could simply say it lacks funds to enforce the regulations.

Executive action alone is no silver bullet. Much depends presently on whether Justice Anthony Kennedy wishes to affirm his ruling Massachusetts v. EPA — which led directly to the carbon endangerment finding by the EPA in 2009 — by upholding the Clean Power Plan.

President Trump and Congress need to be smarter this time — and defund regulations via Congressional action. Then there will be no question that the Clean Power Plan exceeds statutory authority.

Permanently ending the Clean Power Plan will bolster the U.S. electric grid

If electricity consumption is supposed to be a reliable proxy for economic growth, the only conclusion one can come to is that the U.S. economy has not grown in any meaningful sense since 2007. That year, the U.S. consumed about 3.89 trillion kilowatt hours of electricity. It dipped to a low of 3.72 trillion kilowatt hours in 2009 after the financial crisis and now stands at 3.85 trillion kilowatt hours in 2016, according to data compiled by the U.S. Energy Information Administration. The U.S. is using no more electricity now than in 2007, even though the working age population has expanded by more than 16 million during that time.

After 2000 and China’s introduction to World Trade Organization, permanent normal trade relations, offshoring and Kyoto, and then the financial crisis and Obama administration’s war on coal, U.S. industrial use of the grid was flat and then dropping. 2016 actually marked a 25-year low, with industrial usage collapsing, from 1.03 trillion kWh in 2007 to 936 billion kWh in 2016, a drop of 91 billion kWh. Residential and commercial use of the grid kept rising.

Overall, had industrial, residential and commercial electrical use continued growing at the same rate as in the 1990s, national usage as measured as the percent of summer capacity megawatts used at peak demand would be nearing 100 percent of grid production now, according to an Americans for Limited Government study of data from the North American Electric Reliability Council and the Energy Information Agency. Today it stands at about 75 percent.

Grid capacity has been further harmed by former President Barack Obama’s war on coal. Coal as a percentage of net electricity generation has declined from 49 percent in 2007 to 30 percent in 2016, behind natural gas at 34 percent, according to the Energy Information Agency (EIA). Although nuclear and coal are by far the most efficient sources of electricity, they are making up a smaller part of the pie.

The fact the grid has not been maxed out is a testament to the offshoring of industrial capacity and the lack of robust economic growth since 2005. While undoubtedly the electric industry would move to meet additional demand as it has in the past, without new access to coal and nuclear power, that could become more difficult. It should not be left to chance.

That is why to help bolster capacity on the U.S. electric grid so that it is prepared when the U.S. economy starts booming under the Trump administration, the Clean Power Plan must be permanently repealed by Congress.

Had the economy been growing robustly during the Obama administration, grid capacity would have been tested.

To the extent that Republicans might not be in possession of Congressional majorities after 2018, and that otherwise the EPA’s action depends on uncertain affirmation by the Supreme Court and specifically Justice Anthony Kennedy, now is the time to pursue a legislative option while it remains open. There may not be a better chance to do this.

The Congress has numerous vehicles at its disposal to attempt to put a rider on legislation: the upcoming omnibus spending bill, the debt ceiling, the 2019 budget or the September continuing resolution. The risk is not by attempting to use a legislative vehicle, it is in waiting to see what happens without one.

 

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.