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07.09.2015 Legal News

Supreme Court Ruling on EPA Mercury Rule: Utilities Wins the Battle, But Lose the War

The Clean Air Act requires EPA to regulate emissions of hazardous air pollutants from coal-fired power plants if the agency determines that such “regulation is appropriate and necessary” after studying the hazards the emissions pose to human health.  EPA conducted the study and concluded that regulation was necessary.  The agency refused to consider costs in reaching its decision.  The final Mercury and Air Toxics Standards Rule (“Mercury Rule”) issued in 2012 requires power plants to install controls to limit emissions of mercury and other air toxics.  Industry groups sought review of the rule in the U.S. Court of Appeals for the District of Columbia Circuit.

In April of 2014, the D.C. Circuit upheld the rule, finding EPA did not have to consider the estimated $9.6 billion in annual compliance costs.  The decision was appealed.  Late last month, the U.S. Supreme Court ruled EPA should have considered costs during its rulemaking.  The decision may appear to be a big win for electric utilities with coal-fired power plants, but the reality is that it will benefit few if any of them.  There are two reasons for this outcome.

First, the Mercury Rule's initial compliance date was in April of this year, and most power plants met the deadline.  In fact, only 200 plants (about 20% of the U.S.’s power capacity) were given up to an extra year to comply, and most of this additional time was provided so they could complete their ongoing installation of mercury controls.  Twenty-two (22) of these 200 plants, less than 1% of U.S. power capacity in 2013, remained in operation without controls after the April deadline.  SNL Financial, (May 16, 2015).

Second, the Court did not strike down the rule, but merely remanded the case back to the D.C. Circuit.  The D.C. Circuit has the option of vacating the rule or remanding it to EPA and allowing it to stand while the agency weighs costs in determining if the rule is “appropriate and necessary.”

The wheels of justice turn slowly, perhaps too slowly in this instance to provide meaningful relief.

Michigan vs. EPA, No. 14-45 (June 29, 2015); 77 Fed. Reg. 9304, 9363 (Feb. 16, 2012)