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Reading the Supreme Court’s decision in Sackett v. EPA might cause you to question your grasp of the English language. Wetlands are wet but are they water? What is water, anyway? Is it distinct from “waters,” plural? How about the word “adjacent” — does it mean “next to” or is it a nonsensical string of syllables signifying nothing?
Even attempting to explain the breakdown of the court’s decision, issued Thursday, requires small abuses of language. The ruling was “nominally unanimous” in that all the justices technically agreed the Environmental Protection Agency overstepped its jurisdiction when it dinged Michael and Chantell Sackett of Idaho in violation of the Clean Waters Act after they backfilled their property with dirt and rocks in preparation for construction. (The EPA claimed the Sackett’s land was protected wetland; in this specific case, the justices didn’t buy it). But the judges were far from unanimous in their reading of the law more broadly, with conservative Justice Brett Kavanaugh notably breaking from his ideological cohorts to issue a scathing clarifying opinion that was joined by the court’s four liberal judges.
Sackett v. EPA was probably always going to come down to semantics. The case marked the latest chapter in a decades-long legal debate over what counts as “waters” when it comes to the “waters of the United States,” which are federally protected by the 1972 Clear Water Act (CWA). In 1975, the Army Corps clarified that wetlands that are “adjacent to other navigable waters” should be considered a part of that protected body of water, and Congress codified this definition in 1977 when it made amendments to the CWA. This conventional interpretation of the words “waters” and “adjacent” had been the standard for 45 years and survived eight presidential administrations.
But hey, what is a word, really? Who decides what it means? Writing for the five other conservative justices, Samuel Alito proposed that wetlands might not be continuously wet enough to count as part of the larger protected whole:
The EPA argues that “waters” is “naturally read to encompass wetlands” because the “presence of water is ‘universally regarded as the most basic feature of wetlands...’”
… which, yeah, of course. Any child can tell you that wetlands are wet and that the “wet” in question is caused by water, not hot lava or buttermilk. But lo! “[T]hat reading proves too much,” Alito said. “Consider puddles, which are also defined by the ordinary presence of water even though few would describe them as ‘waters.’” It’s not even a creative false equivalency; besides, no one is trying to protect puddles.
Alito further fretted that by allowing for a definition of wetlands that includes, uh, wetlands, landowners could face “crushing” fines for “inadvertent violations” of the Clean Water Act “like moving dirt.” As Alito worried, “What are landowners to do if they want to build on their property?” (“Don’t pollute American waterways” seems like a pretty reasonable answer to that question!)
The real battle, though, boiled down to the word “adjacent.” In a 2006 Supreme Court opinion for Rapanos v. United States, the late conservative Antonin Scalia wrote for the plurality that wetlands only count as protected when they are “indistinguishable from waters of the United States.” (The court was divided and the case was ultimately sent back to the Sixth Circuit.)
By this unorthodox interpretation, the Clean Water Act would only protect “wetlands with a continuous surface connection” to protected waters, as Alito endorsed and wrote in the opinion released Thursday. What this means in real life is that when wetlands are separated from a larger body of protected water by something like a man-made levee or a naturally occurring berm or a sand dune — as many wetlands are — then the wetland in question is not indistinguishable from the larger body of water and thus no longer federally protected.
You might notice that “adjacent” and “continuous” are two different words. When Congress adopted the Army Corps’ language for protecting American waters from pollution, it did not protect wetlands that are “indistinguishable from other waters” but rather wetlands that are adjacent to other waters. As Kavanaugh pointed out:
The ordinary meaning of the term “adjacent” has not changed since Congress amended the Clean Water Act in 1977 to expressly cover “wetlands adjacent” to waters of the United States. Then as now, “adjacent” means lying near or close to, neighboring, or not widely separated. Indeed, the definitions of “adjacent” are notably explicit that two things need not touch each other in order to be adjacent.
Alito’s argument that adjacent means the same thing as adjoining goes “against all indications of ordinary meaning,” Kavanaugh added.
This isn’t just semantic nitpicking. The consequences of changing the definition of “adjacent” to something more like “an extension of” have huge ramifications for what the EPA can now protect. Because of that interpretation, millions of acres of wetlands theoretically just lost their federal protections. The Mississippi River, for example, uses levees to control flooding, but under Alito’s definition of “continuous surface connection,” such barriers would “seemingly preclude Clean Water Act coverage of adjacent wetlands on the other side,” Kavanaugh wrote. Federal protection of the Chesapeake Bay might also be up in the air for similar reasons.
Justice Elena Kagan, in her own extra spicy opinion joined by the other court liberals, ripped into the conservative majority for its word games. “[T]he majority shelves the usual rules of interpretation — reading the text, determining what the words used there mean, and applying that ordinary understanding concurring in judgment even if it conflicts with judges’ policy preferences,” she slammed, then added for good measure: “One last time: ‘Adjacent’ means neighboring, whether or not touching ... That congressional judgment is as clear as clear can be — which is to say, as clear as language gets.”
Of course, the decision isn’t about clarity or standard definitions. It’s about muddying the waters. What, after all, do we now make of wetlands that have surface water levels that fluctuate due to tides or dry spells? What of manmade barriers that existed before their builders knew the structures would cut off a wetland from federal protection? What even counts as a “continuous surface connection” — does a ditch? A pipe? How do we make sense of naturally shifting landscapes like dunes that temporarily cut off wetlands, only to eventually melt away again due to erosion or winds?
The conservative justices are more interested in exploitable ambiguities than answers to these questions.
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The companies just launched a major VPP play.
For all the hype surrounding virtual power plants, they’re still a niche player on the U.S. electric grid. A new partnership between three of the biggest residential energy companies in the country — Tesla, Sunrun, and Renew Home — aims to recast VPPs into a leading role.
The companies announced on Wednesday that they have more than 16 gigawatts of dispatchable VPP capacity available today to deliver to utilities and data center developers throughout the country. That’s about the same as 16 nuclear reactors, except instead of generating power round the clock from a central plant, the companies aggregate unused electricity capacity from thousands of individual home solar and battery systems and programmable thermostats, and can make it available for several hours at a time.
Today, the companies bid these resources into electricity markets as a sort of bespoke grid service. A few times per year — often in the summer months when demand spikes — the grid operator in California might ask Sunrun to switch on its VPP to prevent a blackout. That means Sunrun’s rooftop solar and battery customers all either begin exporting excess power to the grid or rely more on their energy storage systems for their own power needs, reducing strain on the grid. Tesla operates similar programs, some in partnership with Sunrun. Renew Home, which spun out of Google Nest, does the same thing but with thermostats and water heaters, nudging temperatures on thousands of devices up or down during peak demand hours.
“A lot of our assets are enrolled in a contract where they can be used up to 20 times per year,” Paul Dickson, the president and chief revenue officer of Sunrun, told me. Now the company, along with its partners, are making the pitch to utilities and hyperscalers to view VPPs as 365-day resources, and more fully integrate them into their grid planning.
It’s a “turnkey” solution, the companies wrote in a press release, “deployable in months, not years,” that requires “no additional hardware, software, interconnection, water, or land usage for offtaking parties.”
VPPs also typically kick back some of the proceeds they earn from the electricity market to the residential customers hosting the solar panels, batteries, and programmable thermostats providing the power, meaning they can meet growing energy demand while helping to lower household energy bills. Sunrun and Renew Home paid out a combined $67 million in customer rewards last year.
About 60% of the 16 gigawatts the companies have available are tied to Renew Home’s enrolled devices, with the remaining 40% coming from Sunrun and Tesla’s solar and battery assets, Dickson told me. The capacity is also spread out geographically. There’s about 1.7 gigawatts available in Texas — the second largest data center market in the country, Dickson pointed out. There’s 300 megawatts available in Virginia, which the companies expect to grow to 500 megawatts by 2030.
“Unlike a traditional power plant that's fixed in size, this number grows every single day as the combined three companies continue to add additional capacity,” Dickson said. Sunrun alone plans to more than double its energy storage capacity by the end of 2028.
If utilities and large industrial customers buy the VPP pitch, the companies will be able to expand even more quickly, he added. If regulators or utilities come back and say, we’ll take your existing capacity today, and if you can add another gigawatt in the next year, here’s what we’ll pay, Sunrun could potentially reduce the upfront cost to customers to host the solar and battery installations, driving faster adoption.
The new partnership follows a similar announcement earlier this month from the VPP company Voltus, which signed a three-year agreement with Google. Voltus will provide up to 100 megawatts per year of capacity for Google in PJM, the country’s largest (and most constrained) electricity market covering much of the Midwest and mid-Atlantic. In that case, however, Voltus is using the deal with Google to finance the VPP, with the capacity set to come online by 2027.
The Tesla/Sunrun/Renew Home group is simply announcing they are open for business — they haven’t signed up any offtakers yet. Dickson told me the companies wanted to “make everybody aware that there is this uncontracted capacity, and make sure that it goes to the place that it can be most impactful.” Wednesday’s announcement is accompanied by a live map that shows where the capacity is. The companies did, however, already bid over a gigawatt of capacity into PJM, the larger energy market that Virginia is a part of, as part of its emergency procurement to meet near-term load growth in the region, and are waiting to hear if they were selected.
Last year, the electrification advocacy group Rewiring America published a paper arguing that hyperscalers could free up grid capacity for at least a third of the load growth expected from data centers if they paid for residential households to get heat pumps. All of that capacity would simply be the result of swapping inefficient appliances for more efficient versions, reducing the overall energy use of the homes. If hyperscalers also financed residential solar and storage upgrades, they could more than meet data center demand, the report posited.
That’s not how these VPP proposals are going to work — residential customers will still have to pay something to Sunrun and Tesla for their solar panels and batteries. But Ari Matusiak, the executive director of Rewiring America, told me he viewed these new VPP partnerships as a step in that direction. Today, energy markets are largely bifurcated between residential market activity and large industrial customers. “Where we are going is toward a world where we think about the household as actual energy infrastructure and not simply an end of the line billpayer,” he said. “Once you start doing that, it changes the economics of how those household upgrades are treated and what the opportunities are.”
Current conditions: The warehouse fire in Boyle Heights is raging for a third day, spewing dark smoke over the Downtown Los Angeles skyline • The death toll from Western Europe’s heatwave has reached into the dozens • An 18-wheeler carrying more than 400 beehives overturned in eastern Texas and filled a small neighborhood with more than 2 million honeybees.
Wally World is soon to be powered by the atom. On Tuesday, Walmart announced a 15-year deal with Constellation, the nation’s largest operator of nuclear plants, for a chunk of the electricity coming from the Dresden Clean Energy Center in Illinois. The agreement included about 176 megawatts of wholesale supply from the two-reactor station southwest of Chicago, including 30 megawatts of expanded generating capacity through “uprates” — upgrades that allow operators to get more power out of an existing unit. Over the past two years, tech giants such as Google, Microsoft, and Meta, have bought shares of the power coming from nuclear power stations as the companies sought steady supplies of clean electricity for their burgeoning data centers. But the Walmart deal stands out as one of the first to involve a major brick-and-mortar retailer. “We’re constantly evaluating new capabilities and energy solutions that help ensure the electricity we rely on is dependable, responsibly produced, and built to support long-term growth,” Shayne Wahlmeier, Walmart’s senior vice president of energy, said in a statement.
The Trump administration just unveiled one of its biggest bets on nuclear power yet. The Department of Energy announced $17.5 billion in low-interest loans for utilities to pay for the equipment needed to order new Westinghouse AP1000 reactors. The program marks arguably the most significant effort yet to reclaim U.S. control over its flagship reactor design. While the two 1,100-megawatt units completed at Southern Company’s Alvin W. Vogtle Generating Station in 2023 and 2024 were the first installed in the U.S., China has been building its own version of the reactors at an industrial scale for years. The program will support up to 10 reactors, including two per venture with as many as five utilities. The power companies, currently in talks with the administration, have not yet been named. But Dan Sumner, the chief executive of Westinghouse Electric, told The Wall Street Journal the deal “really kick-starts fleet-scale nuclear development in the United States.” As my colleague Robinson Meyer wrote last night: “I hesitate to praise the project's climate bonafides at the risk of discouraging the Trump administration, but it is worth noting that if this project were to succeed, it would be one of the largest state-assisted build-outs of zero-carbon electricity in recent American history. But it would still take some time to arrive: These reactors aren’t forecast to come online til 2035.”
Yet another behemoth solar farm has come online. On Tuesday, the developer rPlus Energies said its Green River Energy Center had started operations. The facility in central Utah with 400-megawatts of solar panels and 1,600 megawatt-hours of batteries is now the largest solar-and-storage plant within PacifiCorp’s six-state territory out west, including Oregon, Washington, California, Utah, Wyoming, and Idaho. “Operation Gigawatt is about ensuring Utah has the reliable, homegrown energy needed to power opportunity for generations,” Utah Governor Spencer Cox, a Republican, said in a statement. “Green River Energy Center represents the kind of large-scale energy investment we need to deliver reliable energy, support rural Utah, and help power the next generation of prosperity across our state.”
The opening comes as solar is now generating more U.S. power than coal, as I told you recently.
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The Supreme Court ruled Tuesday that Exxon Mobil has the right to sue a Cuban-owned company to recoup more than $70 million in 1960 dollars from an oil complex seized by the Cuban government after Fidel Castro’s revolution. Havana later transferred the ownership of the refinery, terminals, plants, and service stations to Corporación Cimex, the state-owned conglomerate. The lawsuit could now see the oil major try to recover more than $1 billion in losses. “Today’s decision is a critical moment in a 60 year effort to be compensated for what the Cuban government illegally seized,” Exxon spokesperson Todd Spitler told E&E News in an emailed statement. “It reflects two things: the merits of our argument and the fact that our company will fight a good fight for as long as it takes.”
The Trump administration understands the importance of refining cobalt — that’s why, as I reported last year, the Pentagon’s Defense Logistics Agency is pumping money into a startup that promises a new and cheap way to process the mineral. Canada’s Sherritt International started shutting down its Fort Saskatchewan refinery after the U.S. expanded sanctions on Cuba, halting exports of a feedstock supply needed for the plant in Alberta, Canada. The move, in addition to the Supreme Court ruling, come amid intensifying pressure by Washington on the Cuban regime.
California is once again following a New York trend. Just weeks after Albany sued to stop the Trump administration’s bid to pay TotalEnergies to give up its offshore wind projects, Sacramento is joining the litigation. “At a time when the country needs more reliable and sustainable power supply, the Trump Administration is busy using taxpayer money to strike backroom buyouts that make clean-energy projects disappear,” California Attorney General Rob Bonta said in a statement. “California won’t stand idly by as the Trump Administration illegally strikes deals to kill offshore wind projects and replace them with more windfalls for his fossil fuel friends; we’re putting the Administration on notice that we intend to sue.”
Rob checks in with Commodity Context’s Rory Johnston as the Iran War (hopefully) draws to a close.
When Iran closed the Strait of Hormuz earlier this year, experts projected oil prices would go to $200 a barrel. But then… they didn’t. In fact, while gasoline prices rose in the United States, and Europe and Asia suffered higher costs, the resulting energy crisis wasn’t even as bad as what followed Russia’s 2022 invasion of Ukraine.
Why? China. The country seems to have absorbed the costs of Trump’s war of choice by releasing hundreds of millions of barrels from its strategic stockpile. On this episode of Shift Key, Rob is joined by Rory Johnston, an oil markets researcher and the author of the Commodity Context newsletter. They discuss China’s massive (and quiet) intervention, why it’s “the most important thing we learned” from the Iran War, and what it means for the future of energy and geopolitics. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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Mentioned:
China Oil Demand Doubts, Rory’s 2023 article about Chinese strategic stockbuilding
Previously on Shift Key: Why the Iran Ceasefire Hasn’t Ended the Energy Crisis, featuring Rory
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Music for Shift Key is by Adam Kromelow.