July 6, 2015

Supreme Court Ruling Against EPA Power Plant Rule Sidesteps Key Issue

Jerry Ellig

Research Professor, George Washington University Regulatory Studies Center
Summary

The EPA's rule was slapped down because because the agency explicitly claimed that it did not need to consider costs – i.e., that it could ignore them. But the Supreme Court left it completely up to the EPA to determine how to consider costs. This means courts provide no external check on the quality of analysis that agencies conduct, even for regulations that cost consumers billions of dollars per year. Correcting this problem should be regulatory reformers' first priority.

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Electric power producers and consumers who don't want to pay an extra $10 billion a year for electricity rejoiced last week when the Supreme Court struck down new Environmental Protection Agency regulations on power plants. Their joy, however, will be short-lived.

The EPA's rule was slapped down because because the agency explicitly claimed that it did not need to consider costs – i.e., that it could ignore them. But the Supreme Court left it completely up to the EPA to determine how to consider costs. This means courts provide no external check on the quality of analysis that agencies conduct, even for regulations that cost consumers billions of dollars per year. Correcting this problem should be regulatory reformers' first priority.

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