Supreme Court to Review EPA’s Mercury (Utility MACT) Rule — We Told You So!

In what the Wall Street Journal calls a “setback for the Obama administration,” the Supreme Court today announced it will review a challenge by more than 20 states and industry groups to EPA’s Clean Air Mercury Air Toxics Standards (MATS) Rule, also known as the Utility MACT (Maximum Achievable Control Technology) Rule.

Petitioners argue that the Clean Air Act (CAA) required EPA to take implementation costs into account when deciding whether MACT regulation of hazardous air pollutant (HAP) emissions from power plants is “appropriate and necessary.” EPA did not do so.

By EPA’s own estimate, the MATS Rule will cost utilities $9.6 billion in 2016. Yet the HAP reductions that are the Rule’s ostensible purpose would yield only $0.5 million to $6 million in health benefits in the same year, even making outlandish assumptions in the rule’s favor.

My colleague William Yeatman predicted, back in April, that D.C. Circuit Court of Appeals Judge Brett Kavanaugh’s powerful dissent in White Stallion Energy Center LLC et al. v. EPA et al. would persuade the Supreme Court to review the decision. Here’s the nub of the commentary I posted at the time:

Perhaps more importantly, §112 [of the Clean Air Act] tasks EPA to determine whether MACT regulation of HAPs is “appropriate and necessary” only for “electric steam generating units.” For all other major sources of HAP emissions, EPA has no discretion and is simply required to promulgate MACT regulations. The statute thus seems to contemplate that, in the special case of coal power plants, MACT regulation may not be appropriate even if the associated HAP emissions pose public health hazards. In other words, a less stringent form of Clean Air Act regulation (such as new source performance standards) or state-level regulation might be “appropriate.”

Yeatman opines that Kavanaugh’s dissent may persuade the Supreme Court to review the case. If so, the Court might rule that EPA is allowed or even required to consider costs when determining what is “appropriate” when regulating HAP emissions from power plants. That, in turn, could set the stage for litigation on whether the MATS Rule is too costly to be “appropriate” within the meaning of the statute.