Three more Trump executive orders in the past week have the potential to affect US power projects.

State Laws

A new executive order on April 8 directed the US attorney general to block enforcement of state and local laws that are obstacles to production or use of coal, oil, natural gas, hydropower, geothermal, biofuel and nuclear energy.

The attorney general has until June 7 to draw up a list of such laws and report on actions she is taking.

The new order can be found here. 

It is unclear whether state renewable portfolio standards, community solar programs and the low carbon fuel standards in California, Oregon and Washington will make the list. 

The order singles out laws in New York and Vermont that require compensatory payments from oil companies for their past contributions to greenhouse gas emissions and the California cap-and-trade program that requires businesses either to reduce CO2 emissions or buy tradable allowances to cover their emissions.

The federal government would have to prove any such laws impede interstate commerce or stray impermissibly into state regulation of the wholesale power market to be able to block enforcement.

The Trump administration sued in 2019 to weaken the California LCFS program, but the lawsuit failed.

The order is an effort to ensure that all states are rowing in the same direction as the Trump administration on energy policy.

Prices for renewable energy credits and CO2 emissions allowances dipped slightly in the first 24 hours after the new executive order and then recovered. 

A coalition of 22 states has already sued New York to have the Climate Change Superfund Act declared unconstitutional. The New York statute would require major fossil fuel companies to contribute $75 billion over the next 25 years to a state fund to help pay for coastal protection, flood mitigation and repairs to roads and bridges to harden them against climate change.

Federal courts have rebuffed past challenges to state renewable portfolio standards in Colorado and Connecticut.

A US appeals court said in 2015 that the Colorado RPS statute is not an unconstitutional restriction on interstate commerce even though it reduces demand for coal.  (For more details, see "Renewable Portfolio Standards" and here.) Another US appeals court said in 2016, while rebuffing a challenge to the Connecticut RPS statute, that states have authority to direct resource decisions of utilities under their jurisdiction. (For more details, see "Renewable Power Standard Upheld".) 

However, a US appeals court found fault in 2016 with a Minnesota law that barred construction of new power plants of 50 megawatts or more in the state that contribute to CO2 emissions unless an offset project is undertaken at the same time to reduce emissions by the same amount and that barred electricity from being imported into Minnesota from such power plants in other states.

The court said the Minnesota statute was unconstitutional because it required electric cooperatives in neighboring states with some members in Minnesota effectively to seek approval from Minnesota before buying electricity generated from fossil fuels to supply to their members. (For more details, see"Minnesota Carbon Statute Invalidated".) 

The US Supreme Court said in 2016 that power contracts that Maryland and New Jersey ordered utilities in those states to sign with an independent generator had the effect of setting the wholesale power rate the generator would receive for its electricity.

Only the Federal Energy Regulatory Commission can set wholesale power rates for electricity sold in interstate markets. States retain the power to regulate retail sales of electricity within their borders. The case raised the issue whether the state action to encourage a new capacity resource crossed the line into wholesale ratemaking. (For more details, see "Supreme Court Nixes Two PPAs".) 

Federal Energy Regulations

Trump signed two executive orders on April 9 that could lead to withdrawal of a large number of regulations affecting energy projects and the environment.   

He directed federal agency heads in February to draw up lists by April 20 of existing federal regulations that go beyond what the agencies are authorized by Congress to do. 

A new executive order on April 9 directs the agencies to remove any such regulations without following the normal Administrative Procedure Act process of giving the public notice and a chance to comment. It directs agencies simply to issue brief statements that going through a notice and comment period would be “impractical, unnecessary or contrary to the public interest.”

The order can be found here.

Another executive order on April 9 directs the Federal Energy Regulatory Commission, US Department of Energy, Environmental Protection Agency, Nuclear Regulatory Commission, the US Army Corps of Engineers, US Fish and Wildlife Service, Bureau of Land Management and three other parts of the US Department of Interior to add a sunset date of September 30, 2026 to their existing regulations. 

The agencies could extend the regulations up to five years if they find an extension is warranted.  Otherwise, the regulations will disappear after the sunset date, and the agencies are directed not to enforce them.

The sunset order can be found here.