New Eng. Power Generators Ass'n, Inc. v. Dep't of Envtl. Prot.

• Court: Supreme Judicial Court of Massachusetts
• Writing for the Court: KAFKER, J.
• Citation: New Eng. Power Generators Ass'n, Inc. v. Dep't of Envtl. Prot., 480 Mass. 398, 105 N.E.3d 1156 (Mass. 2018)
• Decision Date: 04 September 2018
• Docket Number: SJC-12477
• Parties: NEW ENGLAND POWER GENERATORS ASSOCIATION, INC., & others v. DEPARTMENT OF ENVIRONMENTAL PROTECTION & another.

480 Mass. 398

105 N.E.3d 1156

NEW ENGLAND POWER GENERATORS ASSOCIATION, INC., & others¹

v.DEPARTMENT OF ENVIRONMENTAL PROTECTION & another.²

SJC-12477

Supreme Judicial Court of Massachusetts, Suffolk..

Argued May 8, 2018

Decided September 4, 2018

Seth D. Jaffe, Boston (Stephen L. Bartlett, Boston, also present) for the plaintiffs.

Seth Schofield, Assistant Attorney General (Turner H. Smith, Shannon S. Beale, & Joseph F. Dorfler, Assistant Attorneys General, also present) for the defendants.

John A. DeTore, Boston, for Footprint Power Salem Harbor Development LP, was present but did not argue.

Nicholas J. Scobbo, Jr., Ann Ryan Small, Boston, & Sherry L. Vaughn, for Massachusetts Municipal Wholesale Electric Company, submitted a brief.

David K. Ismay, for Conservation Law Foundation, amicus curiae, submitted a brief.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

KAFKER, J.

Its name bespeaks its ambitions. The Global Warming Solutions Act, St. 2008, c. 298 (act), was passed to address the grave threats that climate change poses to the health, economy, and natural resources of the Commonwealth. See Massachusetts v. Environmental Protection Agency, 549 U.S. 497, 521-522, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) ; Kain v. Department of Envtl. Protection, 474 Mass. 278, 281-282, 49 N.E.3d 1124 (2016). The act is designed to make Massachusetts a national, and even international, leader in the efforts to reduce the greenhouse gas emissions that cause climate change. Id. at 281, 49 N.E.3d 1124. It thus establishes significant, "ambitious," legally binding, short- and long-term restrictions on those emissions. G. L. c. 21N, §§ 3, 4. See Executive Order No. 569 (Sept. 16, 2016).

The plaintiffs, New England Power Generators Association, Inc., and GenOn Energy, Inc., contend that a key provision, G. L. c. 21N, § 3 (d ) ( § 3 [d ] ), which directs the Department of Environmental Protection (department) to promulgate regulations establishing declining annual aggregate emission limits for sources that emit greenhouse gas emissions, does not apply to the electric sector, because that sector is specifically regulated by a separate provision, G. L. c. 21N, § 3 (c ) ( § 3 [c ] ). Consequently, the plaintiffs assert that the department and the Executive Office of Energy and Environmental Affairs (executive office) (collectively, agencies) exceeded their authority in promulgating 310 Code Mass. Regs. § 7.74 (2017) (Cap Regulation),³ which imposes declining greenhouse gas emissions limits on the in-State electric sector through 2050. Furthermore, the plaintiffs allege that the Cap Regulation will increase, rather than decrease, Statewide emissions. Lastly, the plaintiffs argue that, even if the Cap Regulation is valid, the "sunset provision" of the act prohibits additional § 3 (d ) regulations after December 31, 2020. We conclude that none of these arguments is meritorious and, accordingly, uphold the Cap Regulation.⁴

1. Background. "The act was developed against the backdrop of an emerging consensus shared by a majority of the scientific community that climate change is attributable to increased [greenhouse gas] emissions, as well as perceptions in the Commonwealth that national and international efforts to reduce those emissions are inadequate." Kain, 474 Mass. at 281, 49 N.E.3d 1124.⁵ "The act established a comprehensive framework to address the effects of climate change in the Commonwealth by reducing emissions to levels that scientific evidence had suggested were needed to avoid the most damaging impacts of climate change." Id. at 281-282, 49 N.E.3d 1124.

The act's sequenced and specific design sets out interim benchmarks to map out the course toward meeting the 2050 Statewide emissions limit goal. First, the act directs the department to determine the calendar year 1990 Statewide greenhouse gas emissions level and then to project the "2020 business as usual" level -- "the statewide greenhouse gas emissions level ... if no measures are imposed to lower emissions." G. L. c. 21N, § 3 (a ).⁶ Second, the act requires that the Commonwealth reduce its Statewide greenhouse gas emissions by at least eighty per cent below the 1990 level by 2050.⁷ G. L. c. 21N, § 3 (b ). The act also mandates that interim Statewide emissions limits for 2020, 2030, and 2040 be adopted and accompanied by plans for implementation.

Id. Third, the act requires that the executive office update its implementation plans and publish interim progress reports every five years. G. L. c. 21N, §§ 4 (h ), 5. Fourth, the act directs the department to adopt regulations to require the reporting and verification of Statewide greenhouse gas emissions and to triennially publish an inventory estimating the past three years' Statewide emissions. G. L. c. 21N, § 2 (a ) - (c ).

The act defines "Statewide greenhouse gas emissions" as "the total annual emissions of greenhouse gases in the [C]ommonwealth," including "all emissions of greenhouse gases from the generation of electricity delivered to and consumed in the [C]ommonwealth," even if that electricity is produced elsewhere. G. L. c. 21N, § 1. Massachusetts is served by a regional electric power grid that includes six States and is interconnected with the regional grids of New York and two Canadian provinces.

Most relevant to the instant case, the act also empowers the department, in consultation with the executive office and the Department of Energy Resources, to set "[e]missions levels and limits associated with the electric sector, ... based on consumption and purchases of electricity from the regional electric grid, taking into account the regional greenhouse gas initiative and the renewable portfolio standard"⁸ and directs the department to promulgate regulations establishing "declining annual aggregate emission limits for sources or categories of sources that emit greenhouse gas emissions." G. L. c. 21N, § 3 (c ), (d ).⁹

Prior to our decision in Kain, the department relied significantly on the Commonwealth's membership and efforts through the regional greenhouse gas initiative (RGGI), particularly its "cap and trade program for electricity-generating facilities," to satisfy the requirements of § 3 (d ). See Kain, 474 Mass. at 296-297, 49 N.E.3d 1124. As a participant of the RGGI, the Commonwealth "established the carbon dioxide budget trading program, which incorporat[ed] the RGGI scheme into its regulations and contain[ed] a schedule of the Commonwealth's annual ‘base budget’ ... of carbon dioxide." Id. at 296, 49 N.E.3d 1124.

In Kain, 474 Mass. at 280, 49 N.E.3d 1124, we concluded that the department had not fulfilled its statutory mandate under § 3 (d ). With respect to the electric sector, we reasoned that "although the RGGI program ... [was] very important to the over-all regional scheme," it was established under a statute entirely separate from the act. Id. at 296, 49 N.E.3d 1124. Furthermore, emission reductions from the RGGI regulation were already accounted for in the eighteen per cent reduction in emissions anticipated under the 2020 "business as usual" level. Id. at 296-297, 49 N.E.3d 1124. Additionally, given that in-State power plants could purchase carbon dioxide allowances from generators in other RGGI-participating States, there was no way to ensure mass-based reductions in carbon dioxide emissions. Id. at 297-298, 49 N.E.3d 1124. Accordingly, we ordered the department to "promulgate regulations that establish volumetric limits on multiple greenhouse gas emissions sources, expressed in carbon dioxide equivalents, and ... such limits must decline on an annual basis." Id. at 280, 49 N.E.3d 1124.

On September 16, 2016, approximately four months after Kain was decided, the Governor issued Executive Order No. 569, titled "Establishing an Integrated Climate Change Strategy for the Commonwealth." The order, in part, directed the department to promulgate final regulations by August 11, 2017, that satisfy § 3 (d ) and that ensure that the Commonwealth meets the 2020 Statewide emissions limit mandated by the act. Twelve days later, on September 28, 2016, the department began seeking input on proposed regulations of emission sources from stakeholders, including scheduling technical meetings for electricity sector stakeholders. During these meetings, the department considered establishing a declining greenhouse gas emissions cap for Massachusetts power plants, effective from 2018 through 2050, later proposed as 310 Code Mass. Regs. § 7.74, the Cap Regulation. The department also weighed establishing a clean energy standard, which would require an increasing percentage of new clean energy to Massachusetts from retail suppliers; this standard was later proposed as 310 Code Mass. Regs. § 7.75 (CES Regulation).

On August 11, 2017, after consultation with the Department of Energy Resources, the agencies published the final Cap Regulation pursuant to §§ 3 (c ), (d ) ; the final CES Regulation pursuant to § 3 (c ) ; and four additional complementary regulations, pursuant to § 3 (d ). Starting from a 2018 aggregate carbon dioxide emissions limit of 9,149,979 metric tons, the Cap Regulation mandated that in-State fossil-fueled power plants decrease their emissions by 223,876 metric tons each year until the emissions reach 8,507,299 metric tons in 2020 and 1,791,019 metric tons in 2050. 310 Code Mass. Regs. § 7.74(5)(a ). Complementing the Cap Regulation's reduction on emissions, the CES Regulation established an increasing level of clean nonemitting electricity that retail sellers must purchase annually. See 310 Code Mass. Regs. § 7.75(4). In 2018, the requirement was sixteen per cent. Id. By 2050, a minimum of eighty per cent of retail electricity sold to Massachusetts customers will be from clean energy sources. Id.

On September 11, 2017, the plaintiffs filed their complaint in the Superior Court for judicial review of the agencies' rulemaking, pursuant to G. L. c. 30A.¹⁰ The plaintiffs' key contention was...