With Mercury Rules Imminent, Challenges Are Expected to Focus on Key EPA Finding

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By Jessica Coomes  

The Environmental Protection Agency will publish final mercury and air toxics standards for power plants Feb. 16, and industry groups and states are expected to challenge the agency's finding that it is “appropriate and necessary” to regulate such emissions.

Lawsuits must be filed in the U.S. Court of Appeals for the District of Columbia Circuit by April 16, which is 60 days after the rule's publication in the Federal Register.

Section 112(n)(1)(A) of the Clean Air Act required EPA to study “the hazards to public health reasonably anticipated to occur as a result of emissions by electric utility steam generating units.” Based on the results of the study, EPA is required to regulate power plants if the agency finds that doing so is “appropriate and necessary.”

“It certainly will be one big issue and probably the issue that is the likeliest to pull the rug out from under the whole rule,” Jeffrey Holmstead, a former EPA assistant administrator for air and radiation who now is an attorney at Bracewell & Giuliani LLP, told Bloomberg BNA Feb. 15. “If the court were to agree with the petitioners on that issue, basically, the whole rule goes away.”

EPA in December finalized stringent mercury and air toxics standards, which is called MATS or utility MACT because it requires the use of maximum achievable control technology (246 DEN A-1, 12/22/11).

Health Benefits Based on PM-2.5

EPA in 2000 made the finding that it is “appropriate and necessary” to regulate hazardous air pollutant emissions from power plants, but the D.C. Circuit will not review the finding until the mercury rule is final, William Bumpers, an attorney with Baker Botts LLP, said Feb. 15 during a teleconference presented by the American Law Institute and the American Bar Association.

“That will be an issue that is likely to be brought back to the D.C. Circuit by industry when this rule goes final,” Bumpers said.

Holmstead said the finding was based on the assumption that power plants' mercury emissions are a public health concern. However, he said, EPA largely has linked the health benefits in the mercury rule with reductions of fine particulate matter, called PM-2.5. In the rule, EPA used particulate matter as a surrogate for air toxics.

“EPA is in a bit of a bind here because they don't claim that there's any real benefit from reducing hazardous air pollutants. All of the benefits that they claim is to get reductions in PM-2.5, and PM-2.5 is not a hazardous air pollutant,” Holmstead said. “How can you say it was appropriate and necessary in light of the facts here? The only problem you're solving is PM-2.5, and you don't have authority to deal with PM-2.5 under [section 112 of the Clean Air Act].”

The centerpiece of the Clean Air Act Amendments of 1990 was the acid rain program, which required reductions in power plants' emissions of sulfur dioxide and nitrogen oxides, the primary precursors to acid rain, Bumpers said. In the amendments, Congress did not initially require EPA to regulate air toxics from power plants and instead required the study after the acid rain program's emissions reductions were implemented, he said.

Many Challenges Expected

EPA is defending in the D.C. Circuit another signature air pollution regulation affecting power plants, the Cross-State Air Pollution Rule, which requires power plants in 28 states to reduce interstate transport of nitrogen oxides and sulfur dioxide.

Forty-five petitions for review have been consolidated in that case.

Given the number of challenges to that rule, Janice Nolen, assistant vice president for national policy and advocacy for the American Lung Association, told Bloomberg BNA Feb. 15 that she also expects interest in challenging the mercury rule.

The association is considering its options, including intervening on behalf of EPA, Nolen said.

“We've been supportive of EPA on this rule all along. … We are glad that it's finally, finally, finally—21 years later—happening,” Nolen said, referring to the 1990 amendments. “It's tackling emissions that are not only carcinogens but can worsen asthma, can cause irritation to the lung, can cause premature death.”

Holmstead said he expects a similar number of entities to challenge the mercury rule as challenged the cross-state rule.

He said he expects petitions for review to be filed by many of the 25 states that asked the U.S. District Court for the District of Columbia in October to give EPA additional time to finalize the rule. Holmstead also expects challenges from companies, consumer groups, and state public utility commissions.

Smooth Implementation Sought

Janet McCabe, EPA deputy assistant administrator for air and radiation, said during the teleconference that the agency is making an “extensive effort” to ensure implementation of the rule goes smoothly.

She said EPA has reached out to various entities that have concerns about the rule, including regional transmission organizations, the Federal Energy Regulatory Commission, rural cooperatives, and state and local agencies that will implement the rule.

McCabe said EPA has paid particular attention to concerns that the rule would jeopardize electricity reliability by forcing coal-fired power plants to shut down. She cited reports that concluded there is no reliability concern, including a report by the Congressional Research Service (10 DEN A-3, 1/18/12).

“We feel confident that implementation of this rule will not pose a reliability concern,” she said.