PowerSouth News Center

CEO Column: One Life: How the death of a Supreme Court justice could affect the cost of your electricity


The “Butterfly Effect” describes how small causes can have large effects.
 
It’s a concept named by mathematician and meteorologist Edward Lorenz that refers to how a butterfly in Africa might circulate air that ends up as a hurricane in the U.S. 
 
If the beat of a butterfly’s wings can cause a hurricane, how might one person’s life change the world? The easy response is that with so many people on the planet, no one life could affect us all. But sometimes it’s clear that one life can have widespread and long-lasting effects. This idea comes to mind with the death of Antonin Gregory Scalia.
 
Politics, the courts, and the EPA
Scalia was a United States Supreme Court Justice who passed away on Feb. 13. He served on the Court for 30 years after his appointment by President Ronald Reagan. He was known as an outspoken judge who used humor and satire in arguing issues. He was referred to as a “textualist” because he held to the plain meaning of the text of the Constitution. He was the principal voice for conservative values on the Supreme Court.    
 
Justice Scalia’s absence will certainly lead to more liberal decisions in several significant cases now before the Court. Those include abortion rights, affirmative action plans, voting rights and rules, the power of labor unions, contraception dissemination under Obamacare, and immigration policy.    
 
Justice Scalia’s death will even affect issues not before the Court. His replacement must be nominated by the president and confirmed by the U.S. Senate. Republican Senate leadership has said a Supreme Court nominee will not be considered until after a new president is elected. That political strategy could affect the presidential and Senate elections this fall. Those elections will set the path for U.S. leadership for years to come.
 
Justice Scalia’s death increases the odds that the Environmental Protection Agency (EPA) will prevail in litigation to determine the applicability of the Clean Power Plan released last summer. Twenty-four states and hundreds of businesses and individuals sued the EPA, arguing against the agency’s authority to impose the plan.
 
The Clean Power Plan litigation is currently being considered by the Washington, D.C., Circuit Court. But just four days before Justice Scalia’s death, the Supreme Court issued an unprecedented stay in the case, precluding the EPA from enforcing the rule until all litigation has been resolved. The grounds for the stay were based on whether the rule would result in irreparable damage and the likelihood it would ultimately be upheld by the Court. Therefore, the logical conclusion was that five Supreme Court justices (including Justice Scalia) thought there was a considerable likelihood the rule would not withstand the lawsuit.
 
The future of fuel prices 
However, with Justice Scalia’s death, the Supreme Court will operate with eight Justices until the president nominates and the Senate confirms a replacement. A 4–4 split by the Supreme Court would affirm the lower court’s decision. It seems likely that lower court will affirm the EPA plan, because two of its three judges are Democratic appointees. Without a conservative majority on the Supreme Court, a tie vote is likely, affirming the D.C. Circuit. Furthermore, if Justice Scalia’s replacement is appointed by a Democratic president, it is even more likely the Clean Power Plan will stand.
 
The Clean Power Plan would virtually eliminate coal as a fuel to produce electricity. While coal has traditionally been a low-cost fuel, lower-cost natural gas has recently replaced coal as the more economical fuel. But looking to the future, increasing demand for natural gas means its price is likely to increase. Also, a favorable ruling for the EPA on the Clean Power Plan will likely spark an EPA attack on natural gas fracking. It’s likely that the convergence of those two factors will lead to much higher natural gas prices and higher electric costs for you. 
 
With Justice Scalia’s support, it appeared we were in a favorable position on the Clean Power Plan to maintain coal as a viable fuel to produce electricity. With his death, it appears we are not. Just like the beat of a butterfly’s wing, one life can make a difference.
 
I hope you have a good month.


<< Back to all CEO Column Articles
<< Back to the News Center

2027 East Three Notch Street | Andalusia, AL 36421 | PO Box 550 | Andalusia, AL 36420 | (334) 427-3000 | info@powersouth.com