EPA to Address Supreme Court MATS Ruling by Spring 2016

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By Patrick Ambrosio

Aug. 10 — The Environmental Protection Agency intends to address a recent ruling by the U.S. Supreme Court on the legality of the mercury and air toxics standards by spring 2016, the agency told a federal appeals court.

The EPA said the existence of “extensive documentation” of the cost of the mercury and air toxics standards indicates that the agency will be able to meet an “ambitious schedule on remand” once the U.S. Court of Appeals for the District of Columbia Circuit decides how to proceed. The agency indicated that it will be able to address the Supreme Court's decision before an Apr. 16, 2016, compliance deadline for power plants that received a one-year extension under the rule.

The Supreme Court in June ruled that the EPA was required to consider compliance costs when deciding whether it was “appropriate and necessary” to regulate mercury emissions from power plants, a finding that triggered promulgation of the MATS rule, which is estimated to bring compliance costs of $9.6 billion per year to the power sector (Michigan v. EPA, 135 S. Ct. 2699, 80 ERC 1577, 2015 BL 207163 (U.S. 2015).

The Supreme Court on July 31 formally sent the litigation back to the D.C. Circuit, which will decide whether the standards will be vacated or will remain in place while the EPA works to address the Supreme Court decision. Once the D.C. Circuit orders motions to govern further proceedings in the litigation, the EPA intends to seek a remand without vacatur of the MATS rule, the agency said.

In support of that request, the EPA said it will submit to the court a declaration establishing a plan to “complete the required consideration of costs” to support the “appropriate and necessary finding” by spring 2016.

Agency Cites Extensive Record 

The EPA said that while it has “not yet determined” how it will consider cost in order to address the Supreme Court's ruling, the existing record includes a full regulatory impact analysis that details the cost of complying with the standards. That cost-benefit analysis identified annual compliance costs of $9.6 billion and annual benefits of up to $90 billion.

“The existence of those documents indicates that the agency can meet an ambitious schedule on remand,” the EPA said.

The EPA outlined its plans in an opposition brief filed in response to an emergency motion by the Tri-State Generation and Transmission Association, which asked the D.C. Circuit to suspend compliance obligations for the company's coal-fired Nucla Station power plant in Colorado by Sept. 1. The company argued that such action is necessary because the company has until Sept. 1 to decide whether to shut down the plant or spend millions of dollars to install a new pollution-control device needed to meet the rule's emissions limit for hydrochloric acid.

The agency raised several procedural arguments against that emergency motion, most notably alleging that Tri-State failed to demonstrate the four factors that are necessary for a stay or injunction by the court. Specifically, the EPA argued that Tri-State is not likely to succeed on the merits when the court considers whether to vacate the MATS rule.

“Although the question of whether the court should remand the rule without vacatur has not been fully briefed by the parties, given the limited nature of the Supreme Court's decision and EPA's commitment to an ambitious schedule on remand, in addition to the public health and welfare benefits of keeping the rule in effect during remand, Tri-State's likelihood of success on the merits is far from certain,” the agency said.

The agency also argued that granting Tri-State's emergency motion would erode some of the public health protections of the MATS rule. The EPA said its motion to govern further proceedings will explain the public health and environmental benefits of leaving the MATS rule in place on remand.

Two other parties involved in the lawsuit filed opposition briefs in response to Tri-State's emergency motion: a collection of public health groups led by the American Lung Association and an industry coalition that includes Calpine Corp. and Exelon Corp.

To contact the reporter on this story: Patrick Ambrosio in Washington at pambrosio@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

The EPA's opposition brief in White Stallion Energy Ctr. LLC v. EPA is available at http://www.bloomberglaw.com/public/document/White_Stallion_Energy_Center_v_EPA_Docket_No_1201100_DC_Cir_Feb_1/4.