EPA Proposes Revising Mercury and Air Toxics Standards for Power Plants

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On December 27, EPA proposed to revise the cost finding associated with the Mercury and Air Toxics Standards (MATS) along with the risk and technology review required by the Clean Air Act.  (EPA Announcement).  The action is taken as a result of a 2015 Supreme Court decision, Michigan v. EPA.  The case involved EPA’s interpretation of a section of the Clean Air Act (42 U.S.C. §7412(n)(1)(A)), which requires the agency to regulate power plants when “appropriate and necessary,”  The Court held that the agency had interpreted the provision unreasonably when it deemed cost irrelevant to the decision whether it was appropriate and necessary to regulate coal- and oil-fired power plants for the emission of hazardous air pollutants.  EPA developed supplemental findings in 2016, but these were also challenged in several courts, resulting in EPA asking the DC Circuit Court to hold a pending case in abeyance so that it could review those proposed supplemental findings.  The revision proposed in December holds that it is not appropriate and necessary to regulate hazardous air pollutant emissions from coal- and oil-fired power plants under Section 112 of the Clean Air Act because the costs of such regulations significantly outweigh the benefits.  EPA will accept comments on the proposed rule for 60 days after publication in the Federal Register.  (How to Comment).

At the heart of this is the cost-benefit calculation.  The Administration is taking the position that EPA should exclude some of the classes of public health benefits from its assessment of new rules.  If adopted, the change would prevent regulators from calculating certain positive health effects (commonly referred to as “co-benefits”) that result from the cumulative effects of reducing pollutants rather the direct estimated benefits from regulating the targeted pollutant(s); mercury in this case.  If EPA is successful in implementing this proposal, future analyses will show fewer benefits, potentially making a possible new regulation less stringent or even less likely.

Note that the proposed action does not reverse the existing mercury rule (which the industry complied with even while challenging it).  Instead, by proposing to alter the economic-benefit calculation, EPA will establish a precedent for the evaluation of future proposals.  (Washington Post, 12/28/18).  As a result, the regulations are not expected to have a significant initial impact on operations at coal- and oil-fired power plants.  However, the fact of the assessment and the cost-benefit aspects of the assessment may ultimately result in challenges to the underlying mercury rule yet again.  (Utility Dive).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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