On Oct. 23, 2015, the U.S. Environmental Protection Agency released the final version of the “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electrical Generation Units” 80 Fed. Reg. 64,662, also known as the “Clean Power Plan.” The CPP’s unwieldy official title only hints at the complexity of this 303-page regulation. It consists not only of another 152 pages of legal memoranda to explain the government’s basis for the legal foundation of the regulation, but also the government’s 7,565 responses to public comments regarding concerns and requests for clarification. The EPA received over 4.3 million comments on the proposed rule.
As a governmental agency regulation, the CPP did not go through the ordinary legislative process but is nevertheless subject to unique administrative rule-making checks and balances, not the least of which is judicial review. Twenty-nine states and various private trade associations sued the EPA soon after the finalization of the CPP and, on Feb. 9, 2016, in a very succinct ruling from the U.S. Supreme Court, it halted enforcement of the CPP by granting a stay. The vote was five to four, and is reported to have been Justice Scalia’s last vote as a Supreme Court justice prior to his death.
In a nutshell, the CPP is a wide-ranging regulation aimed at reducing greenhouse gas by establishing mandatory state plans for energy industry emissions. These regulations, the states argue, are usurping traditional state-based regulation.
And This Applies How?
What does this have to do with the fenestration industry? As Jim Benney wrote for Window & Door in “The Talk” last June, the CPP pertains to this industry because of its underlying promotion of energy efficiency and potential impact on “demand-side” regulation.
The National Home Builders Association reports that, through its efforts during the comments process prior to the CPP’s final version, it was able to help limit demand-side impacts on the building industry. This was achieved via the EPA’s removal of provisions that might make energy-related building codes part of the mandatory federally enforceable state plans. However, the continuing evolution of the government’s role in energy conservation, whether code-based or through beyond-code incentives, makes it clear that the fenestration industry will be a guest at this party for the foreseeable future.
The NAHB suggests that increases in new construction costs through federal mandatory efficiency could price some potential new home buyers out of the market, keeping them in less efficient older homes and thereby undermining the intended benefits of energy conservation. While this economic argument applies generally in regard to changes to any applicable construction-related code, the larger point is to consider whether it makes sense to create a substantial burden without a corresponding substantial benefit in increased energy efficiency.
As admitted by the EPA in its praise for the incentive-based programs, new home construction is already on a well-established track to efficiency. When combined with the fact that the energy used by newly constructed structures represents a relatively small percentage of overall energy use, the costs could easily outweigh the benefits. The bottom line is that, if current demand-side management programs work, why upset that process?
The importance of the final CPP may not have an imminent direct impact to the fenestration industry. But, on a national level, the continued potential future impact of federal governmental regulation could direct the way buildings are constructed and the performance of products used to construct them. The question to consider is: if not now, when will the long-standing, well-developed process be challenged by a more comprehensive approach for the sake of carbon emission reduction in the future?
The legal challenge to the CPP is proceeding at the trial court level; arguments regarding the propriety CPP should continue well into this and perhaps next year. A new president, who sets policy for agencies such as EPA and the Department of Energy, as well as a new Supreme Court justice, will impact the scope of regulations such as the CPP and how they are implemented. We can be assured that staying abreast of these changes will be necessary for the fenestration industry.