Regulatory Developments

MATS Arguments Delayed by D.C. Circuit

In a one-page order, the U.S. Court of Appeals for the D.C. Circuit granted an EPA request to delay oral arguments over the legality of EPA’s Supplemental Finding that It Is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal—and Oil-fired Electric Utility Steam Generating Units (April 25, 2016, Federal Register (FR)). The oral arguments had been scheduled for May 18, 2018, but the EPA requested a renewable 90-day continuance to allow it time to fully review the Supplemental Finding and the positions taken by the Obama EPA, which the Trump EPA now says “may not necessarily reflect its ultimate conclusions.”

power plant

MATS and Supplemental Finding

EPA’s February 2012 Mercury and Air Toxics Standards (MATS) established emissions limits for toxic air pollutants such as mercury, arsenic, and heavy metals associated with coal combustion. MATS required all coal generators that sell power and have capacity greater than 25 megawatts to comply with the emissions limits by April 2015, although some units received a 1-year extension. In other words, there are now very few, if any, operating power plants that are not in compliance with MATS.

Issued by the Obama EPA, the Supplemental Finding states that consideration of the cost of MATS did not cause the Agency to change its determination that regulation of hazardous air pollutant (HAP) emissions from fossil-fuel power plants is appropriate and necessary and that these affected plants are, therefore, properly included on the Clean Air Act (CAA) Section 112(c) list of sources that must be regulated under CAA Section 112(d). The Supplemental Finding responded to the U.S. Supreme Court’s ruling in Michigan v. EPA that it was unreasonable for the Agency not to consider the annual $9.6 billion compliance cost of MATS in any determination that the rule is appropriate and necessary.

As noted, the cases being delayed (consolidated in Murray Energy Corporation v. EPA, No. 16-1127) are challenging the Supplemental Finding, not MATS itself. However, should the court rule that the Supplemental Finding is an abuse of EPA‘s authority, the Agency would have a strong basis to amend or even withdraw the rule. Should such a withdrawal occur, energy companies would be able to cut costs by deactivating pollution controls that would not be needed except to comply with MATS.

Discretion to Reappraise

In its motion to the D.C. Circuit, the EPA states that it is well established by the courts that a new executive branch has the discretion to reappraise the cost and benefits of its regulations and policies.

“The Clean Air Act complements EPA’s inherent authority to reconsider prior rulemakings by providing the Agency with broad authority to prescribe regulations as necessary to carry out the Administrator’s authorized functions under the statute,” said the EPA.

The Agency added that it needs sufficient time to complete an orderly review of the large body of scientific and technical evidence that provided the basis for the MATS Supplemental Finding. A delay of oral arguments is also warranted, said the EPA, given President Donald Trump’s March 28, 2017, Executive Order directing the EPA to review for possible reconsideration any rule that could potentially burden the development or use of domestically produced energy resources, especially oil, natural gas, coal, and nuclear energy.