This is the Cato Daily Podcast for Tuesday, August 4th, 2015.

I'm Caleb Brown.

The Obama administration's EPA has moved ahead with a rule that may reshape the generation of electricity

across the United States.

The agency's claim of legal authority is dubious, but having that rule upheld in court years

from now may not be what the agency is going for.

Andrew Grossman is an adjunct scholar at the Cato Institute.

He comments on the EPA's new rule.

Well, just this week, the administration finally signed final rules implementing its clean power plan to reduce greenhouse gas emissions

from power plants.

For the past year since the proposed rule came out, there's been enormous controversy over

the extent of the EPA's legal authority to address these types of emissions at all.

For the first time ever, instead of looking at source level controls, in other words, can you somehow reduce the amount of emissions that are coming out of a particular source?

The agency is regarding the entire electric grid as a single device such that it can force coal plants to be replaced by windmills, solar panels, and other things like that.

It's like nothing that the agency has done ever in the past.

Under what authority is the EPA claiming it is able to regulate the entire grid this way?

Well for years nobody ever thought the EPA had any authority to do this whatsoever.

That's why in 2009 and 2010 the Obama administration made such a big push to get cap and trade through Congress which of course failed.

More recently the EPA has taken the view that a very old statutory program called the Section 111

program allows it to regulate these types of emissions. The problem is that that

program specifically precludes sources like power plants that are subject to regulation under a newer program called the section 112 program.

And that regulation, that's EPA's Mercury Rule, which at the time is one of the most expensive rules that had ever been promulgated by the federal government.

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