Trump's EPA Signals Changes for Power Plant Mercury Rule

The Trump administration is “closely” reviewing the Environmental Protection Agency’s (EPA’s) final cost consideration finding for its Mercury and Air Toxics Standards (MATS) to determine whether it should reconsider the rule or some part of it, it said in an April 18 federal court filing.

The EPA filed a motion with the D.C. Circuit urging the court to delay oral arguments scheduled on May 18 for a case filed by an assortment of coal producing and generating companies, which are challenging the agency’s “Supplemental Finding That It Is Appropriate and Necessary To Regulate Hazardous Air Pollutants From Coal- and Oil-Fired Electric Utility Steam Generating Units.”

Delay and Deflect

In its court filing, the agency said that it needs more time as it “intends to closely review the Supplemental Finding, and the prior positions taken by the Agency with respect to the Supplemental Finding may not necessarily reflect its ultimate conclusions after that review is complete.”

The Obama administration’s EPA issued the final supplemental finding a year ago after a divided Supreme Court in June 2015 (in Michigan v. EPA) told the agency it must consider costs in an “appropriate and necessary” finding that bolsters MATS.

MATS, finalized in February 2012, required all U.S. coal- and oil-fired power plants with a capacity of 25 MW or more to deploy pollution controls to curb emissions of mercury and other air pollutants such as arsenic and cyanide within three years. Nearly two years after the high court’s decision, almost all regulated entities have taken some action to comply with the rule.

Nevertheless, as with nearly every Obama administration environmental rule, MATS has been beset by legal challenges from power companies and industry groups. When it was first promulgated, many challengers argued that the EPA had failed to conduct a cost-benefit analysis in its initial determination that control of mercury and air toxics from power plants was “appropriate and necessary.”

The Supreme Court settled that issue in June 2015, ruling in Michigan v. EPA that the EPA interpreted the Clean Air Act unreasonably when it deemed cost irrelevant to the statutory decision of whether regulating power plants was “appropriate and necessary.” The high court, however, did not vacate the rule. In December 2015, the D.C. Circuit allowed the rule to remain in effect as the EPA worked on its final supplemental finding, which it ultimately issued in April 2016.

A Finding Conflict

The EPA’s April 2016 final supplemental finding evaluates several metrics relevant to the power sector and finds that public benefits offered by the MATS far outweigh the costs. The projected annual costs of MATS are just a “small fraction” compared to overall sales in the power sector, the analysis concludes. Projected annual costs range between 2.7% and 3.5% of annual electricity sales from 2000 to 2011, the Obama administration said. Meanwhile, capital costs to comply with MATS were also said to be small compared to capital expenditures in a historical context. These represent between 3% and 5.9% of total annual power sector capital expenditures over a 10-year period, it said.

But the EPA’s supplemental finding, too, has been legally challenged by several parties. Petitioners for Murray Energy Corp. v. EPA, et al., a case consolidating six appeals, filed their opening brief on April 25, 2016. They include coal mining company Murray Energy Corp., coal refuse–generation organization ARIPPA, several power companies and 15 states—including Oklahoma, the state for which Scott Pruitt served as attorney general before he was confirmed as Trump’s chosen EPA administrator on February 17. Seventeen states, five cities and counties, some power companies, and health and environmental groups are backing the EPA’s defense of the finding.

The EPA’s April 18 motion in that case to delay oral hearings is necessary because it “needs sufficient time to complete this review in an orderly fashion because the administrative record for the Supplemental Finding not only includes recent supporting material, but also incorporates the record for the Standards, which is extensive and encompasses a large body of scientific and technical evidence,” the agency said.

The EPA’s motion also notes that it is reviewing the supplemental finding to determine whether it is subject to President Trump’s March 28 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, with particular attention to oil, natural gas, coal, and nuclear energy resources.'”

Under the executive order, the EPA noted that it must submit a “review plan” to the White House within 45 days—around May 12, 2017. Within 120 days (July 26) of the order it must submit a draft plan, and then within 180 days (September 24), a final report with specific recommendations that would “alleviate or eliminate aspects of agency actions that burden domestic energy production.”

—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)