[View court decision here.]

Megan Houdeshel, a partner at law firm Dorsey & Whitney specializing in environmental and regulatory issues, said in an emailed statement that firms that work in or for the power sector should be prepared for a sea change in the federal government’s approach to regulating greenhouse gas emissions.

Houdeshel said, “Whether it be courts overturning regulations, or the incoming Biden administration reversing course on executive orders and policy, companies should be ready for changes in environmental regulations applicable to their business and operation.”

In a 2-1 decision on Jan. 19, the U.S. Court of Appeals for the D.C. Circuit said that the Trump decision to repeal and replace the Obama-era rule “hinged on a basic misconstruction” of the Clean Air Act.

The court also determined that the US Environmental Protection Agency’s attempt to use the ACE rule to slow the pace of reducing greenhouse gas emissions from power plants was “arbitrary and capricious.”

The regulation, which was finalized in 2019, now goes back to EPA for review.

The case was filed by the American Lung and American Public Health associations, They were joined by numerous environmental groups as well as attorneys general from 23 states against EPA and a number of coal and energy interests, including utility American Electric Power (AEP).

A spokesperson for AEP said in an email, “The court’s decision to vacate the Affordable Clean Energy rule will not change our long-term plans to continue moving to cleaner energy resources. We look forward to working with the new administration.”

Environmental groups say they are hopeful that the ruling will help set the tone for a different approach to addressing climate change during the new administration.

Andrea McGimsey, senior director for Environment America’s Global Warming Solutions campaign said the Trump rule was “a disastrous and misconceived regulation from the start…We hope this ruling will be reflective of a much brighter future.”

But supporters of the Trump rule say that it provided certainty to the power sector.  Sen. Shelly Moore Capito (W.Va.) a senior Republican on the Environment and Public Works Committee, said in a statement that the ruling is “a disaster for regulatory certainty in the power sector, particularly for coal production and generation states.”

Capito added that  the decision disrupts West Virginia’s regulatory program, which was nearing finalization and predicated on the ACE Rule. 

The ruling clears the way for the Biden administration to put its own stamp on policy to address climate change.