Week of August 3
This was another week where the courts were as active as the regulators. Decisions involving EPA authority, climate liability, renewable energy development, and grid modernization continued to shape the legal and regulatory landscape, while states and regulators wrestled with the growing demand that AI and data centers are placing on the electric grid.
Appeals Court Limits EPA’s Clean Air Act Authority
The Ninth Circuit ruled that EPA exceeded its authority under the Clean Air Act when it approved portions of California’s air quality plans for the San Joaquin Valley. Relying in part on the Supreme Court’s decision in Loper Bright, the court held that EPA improperly created a feasibility-based exemption that was not authorized by the statute, underscoring the continued judicial scrutiny of agency interpretations of environmental laws. Read more: Ninth Circuit Opinion.
EPA Flags Additional Chemicals for Potential Regulation
EPA released draft risk evaluations concluding that two commonly used dichlorobenzene chemicals may present unreasonable risks to certain workers and consumers. If those findings are finalized, the agency would be required under TSCA to consider regulations aimed at reducing the identified risks. Read more: EPA Press Release.
Court Orders Resumption of Wind Project Reviews
A federal court ordered the Department of Defense to temporarily lift its freeze on reviewing wind energy projects for potential impacts on military operations. The ruling allows the review process to resume while litigation continues and could affect more than 100 projects that industry groups said were impacted by the freeze. Read more: District Court Opinion.
Texas Increases Scrutiny of Data Center Growth
Texas regulators have paused certain data center interconnection activities while state officials conduct a review of projects seeking access to the electric grid. The move reflects growing concern about the potential impacts of large data centers on grid reliability, transmission infrastructure, water use, and electricity costs as AI-driven demand continues to grow. Read more: Governor Abbott Press Release.
Supreme Court Takes Up Major Climate Liability Case
The U.S. Supreme Court announced that it will begin its next term with a case that could significantly affect state and local climate litigation against oil companies. The Court will review whether claims seeking to hold fossil fuel companies responsible for climate-related damage may proceed under state law, an issue with potentially significant implications for future climate litigation nationwide. Read more: SCOTUSblog Docket Page.
Court Upholds FERC’s Grid Interconnection Reform Rule
The D.C. Circuit upheld FERC’s landmark interconnection reform rule designed to address lengthy grid connection queues for new energy projects. The decision preserves reforms intended to speed project reviews, impose study deadlines, and reduce backlogs that have delayed the development of new generation resources. Read more: D.C. Circuit Opinion.