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U.S. Environmental Protection Agency, Region 7 – 11201 Renner Blvd., Lenexa, KS 66219
Serving Iowa, Kansas, Missouri, Nebraska, and Nine Tribal Nations
EPA Finalizes MATS Supplemental Cost Finding and “Risk and Technology Review”
(Lenexa, Kan., April 17, 2020) – Thursday, the U.S. Environmental Protection Agency (EPA) corrected flaws in the 2016 Supplemental Cost Finding for the Mercury and Air Toxics Standards (MATS) for coal- and oil-fired power plants, consistent with a 2015 U.S. Supreme Court decision. The agency also completed the Clean Air Act-required residual risk and technology review (RTR) for MATS. Power plants are already complying with the standards that limit emissions of mercury and other hazardous air pollutants (HAPs), and this final action leaves those emission limits in place and unchanged.
“Under this action, no more mercury will be emitted into the air than before,” said EPA Administrator Andrew Wheeler. “EPA is following through on the Supreme Court’s direction and correcting the previous Administration’s flawed cost finding in its original rule. Today’s action maintains the mercury emissions standard and meets the statutory obligation to review the adequacy of those standards. This is another example of the EPA, under the Trump Administration, following the law while making reasonable regulatory decisions that are fully protective of the public health and environment.”
According to a 2018 report from the United Nations, based on 2015 emissions estimates after implementation of MATS, the U.S. accounts for less than 2% (1.64%) of global mercury emissions, while China accounts for more than 25% of global emissions, India emits 9% and the European Union accounts for 4%.
Today’s revised cost finding for MATS follows the law and was prompted by a flaw identified by the U.S. Supreme Court, which found that the agency had not properly taken the cost of compliance into account when proposing regulation of HAP emissions from coal- and oil-fired power plants in 2012. After losing at the Supreme Court, EPA then failed again to properly apply cost benefit principles in 2016. This final action re-evaluated how costs and benefits should have been considered and concluded that the projected compliance costs of MATS outweigh the projected monetized HAP-specific benefits by three orders of magnitude.
After properly evaluating the compliance cost to coal- and oil-fired power plants (costs that the EPA estimated range from $7.4 to $9.6 billion annually) and the benefits attributable to regulating HAP emissions from these power plants (of which the projected quantified benefits range from $4 to $6 million annually), the agency determined that it is not “appropriate and necessary” to regulate HAP emissions from power plants under section 112 of the Clean Air Act. However, with this final action, EPA is not removing coal- and oil-fired power plants from the list of affected source categories for regulation under section 112 of the Clean Air Act, consistent with existing case law. Those power plants remain subject to and must comply with the mercury emissions standards of the MATS rule, which remains fully in effect notwithstanding the revised cost-benefit analysis.
In addition, EPA has completed the required RTR for MATS and determined no changes to the rule are needed. The RTR satisfies the statutory requirements set out by Congress in the Clean Air Act.
Public Officials and Stakeholders Applaud EPA’s Action:
Jim Macy, Director, Nebraska Department of Environment and Energy: “Nebraska supports EPA using the rule of law to appropriately regulate our power suppliers. This change will allow Nebraska to keep reasonable energy rates and still protect the environment. In this supplemental response to the Supreme Court ruling, coal- and oil-fired power plants will still be regulated by the same standards that have proven to be effective in protecting our environment.”
Carol Comer, Director, Missouri Department of Natural Resources: “We appreciate EPA’s actions here which resolve outstanding regulatory questions and provide certainty for our sources subject to MATS, now and in the future.”
Background
Congress expressly directed that coal- and oil-fired power plants were to be treated differently than other sources of HAP emissions subject to regulation under section 112 of the Clean Air Act. The Clean Air Act lays out a multi-step process for regulating HAP emissions from power plants. In contrast to how every other category of stationary sources are regulated under section 112, Congress provided that, before EPA could move forward to regulate HAP emissions from power plants, the agency first had to decide whether such regulation was “appropriate and necessary” (A&N Finding). Only after finding that the regulation of HAP emissions from power plants was “appropriate and necessary” was EPA then authorized, under section 112(c), to place power plants on the list of source categories to be regulated. Once power plants were placed on the section 112(c) list, the Agency was then authorized, under section 112(d), to adopt HAP emission standards and other requirements for those sources.
In 2015, in Michigan v. EPA, the Supreme Court ruled that EPA had erred when, in promulgating the MATS rule, the Agency determined that, while it was permitted to consider costs when making the A&N Finding, the Agency was not required to consider costs. “Read naturally in the present context,” the Supreme Court said, “the phrase ‘appropriate and necessary’ requires at least some attention to cost.” “One would not say that it is even rational, never mind ‘appropriate,’” the Court continued, to “impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.” The D.C. Circuit subsequently remanded the A&N Finding and the MATS rule back to the EPA, leaving the rule’s HAP emission standards and other requirements in place while the agency addressed the identified deficiencies in the A&N Finding. EPA’s initial response to the Michigan ruling was the 2016 Supplemental Finding, in which the agency concluded that a consideration of cost did not change its previous A&N Finding.
This final action corrects flaws in the 2016 Supplemental Finding and makes a revised determination that it is not appropriate and necessary to regulate HAP emissions from coal- and oil-fired power plants. A proper consideration of costs under section 112(n)(1)(A) of the Clean Air Act demonstrates that the total projected costs of compliance with the MATS rule ($7.4 to $9.6 billion annually) dwarfs the monetized HAP benefits of the rule ($4 to $6 million annually). The EPA acknowledges the existence of HAP benefits that cannot be quantified but concludes that these unquantified HAP benefits cannot reasonably be expected to meaningfully redress the gross disparity between that cost and the monetized HAP benefits. Under this revised determination, EPA considers the “co-benefits” attributable to emission reductions for pollutants other than HAP in a way that properly accounts for the statutory direction Congress gave the agency in section 112.
EPA is not, however, rescinding or repealing the HAP emission standards and other requirements of the MATS rule, which have been in place since 2012 and with which, for a number of years, the electric utility sector has been complying. Coal- and oil-fired power plants have been listed for regulation under section 112(c) since December 2000. In 2008, the U.S. Court of Appeals for the D.C. Circuit held that, having been so listed, such sources could not be “de-listed” except pursuant to a certain specified procedure set forth in section 112(c)(9). Under this D.C. Circuit decision, EPA’s determination that it is not appropriate and necessary to regulate HAP emissions from power plants does not itself operate to remove those sources from the section 112(c) list. EPA is not “de-listing” power plants under the section 112(c)(9) procedure.
In addition, EPA has completed the required “risk and technology review” for MATS. EPA finds that residual risks after implementation of the rule are acceptable and that there are no new technologies or methods of operation that were not considered in the original rulemaking process. As such, the agency finds that no changes to the MATS rule are needed.
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