EPA Mercury Rule Upheld by Divided Court

A federal appeals court on Tuesday upheld the nation’s first-ever national standards requiring power plants to cut emissions of mercury and other hazardous air pollution.  The EPA rules require coal utilities to cut at least 90% of their emissions of mercury and require the installation of scrubber technology to reduce mercury emissions.

A divided three-judge panel of the United States Court of Appeals for the District of Columbia Circuit concluded the rule was “appropriate and necessary” – the standard set forth in the Clean Air Act – based on a study of emissions’ hazards to public health and rejected several legal attacks raised by challengers. The court’s majority ruled the EPA acted reasonably in issuing the rules.

The agency’s approach in crafting the rules “is entitled to deference and must by upheld,” according to the decision for a majority of three-judge panel written mostly by Judge Judith Rogers.

Several states and energy trade-groups, argued that EPA did not properly consider costs in drafting the standards, which apply to about 1,400 coal- and oil-fired generating units at 600 power plants.

“For EPA to focus its ‘appropriate and necessary’ determination on factors relating to public health hazards, and not industry’s objections that emission controls are costly, properly puts the horse before the cart,” Rogers wrote.

Judge Brett Kavanaugh dissented from those portions of the opinion regarding EPA’s duty to consider costs.  “In my view, it is unreasonable for EPA to exclude consideration of costs in determining whether it is ‘appropriate’ to impose significant new regulations on electric utilities,” Kavanaugh wrote citing the anticipated costs of compliance to  the electric utility industry estimated to be $9 billion dollars a year.

The rules are scheduled to take effect in April 2015.  In anticipation of the rule going into effect, power companies have announced plans to close nearly two dozen units at nine coal-fired power plants producing a total of 5.4 gigawatts of coal-fired capacity, according to the Energy Information Administration (EIA).

Between 2012 and 2020, EIA projects that the capacity to produce a total of 60 gigawatts will be retired due to stricter emissions rules and other factors, with 90% of these retirements coming by 2016. The retirements represent a challenge to the power industry which has struggled during recent extreme weather periods to meet demand for power.

The case is White Stallion Energy Ctr. LLC v. EPA, 12-1100, U.S. Court of Appeals for the District of Columbia Circuit (Washington).

Armando Benincasa concentrates his practice in the areas of energy law, environmental law, environmental litigation, administrative law, government affairs and lobbying. His practice consists of cases involving permitting and regulatory requirements for natural resources, including coal and oil and gas, solid waste, water resources, underground storage tanks, voluntary remediation, and the drafting of rules and statutes related to the environment.
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