Political Ping Pong? What's Going On With The Utility Sector's Clean Air Act Mercury And Air Toxics Standards?

• Published date: 29 March 2022
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity, Clean Air / Pollution
• Law Firm: Williams Mullen
• Author: Liz Williamson

EPA recently issued a proposed rule ("the Proposed Rule") regarding the Mercury and Air Toxics Standards (MATS), which regulate hazardous air pollutant (HAP) emissions from coal and gas-fired electric generating units (EGUs) in the power sector. The Proposed Rule responds to Executive Order 13990's instruction to EPA to reconsider the MATS Appropriate and Necessary final rule published on May 22, 2020 ("the 2020 Rule"). EPA undertook a thorough review of the 2020 Rule and its findings. The 2020 Rule has two components. First, it addresses the Clean Air Act (CAA) Section 112(n)(1)(A) required determination as to whether it is "appropriate and necessary" to regulate HAPs from coal and gas-fired units. Second, the 2020 Rule undertakes the residual risk and technology review (RTR) under CAA Sections 112(f)(2) and 112(d)(6). This article discusses both elements.

The Appropriate and Necessary Determination.

In 2000, EPA determined that it is appropriate and necessary to regulate HAPs from coal and oil-fired EGUs. The Final MATS Rule reaffirmed this finding in 2012, establishing HAP emission limits for coal and oil-fired units. The Final MATS Rule was challenged in the D.C. Circuit. On appeal, the U.S. Supreme Court took up the narrow issue of whether EPA considered the costs of MATS compliance when making the appropriate and necessary determination. In Michigan v. EPA, the Court remanded the case back to the D.C. Circuit, finding that costs must be considered. On remand, EPA addressed MATS costs in the 2016 Rule ("the 2016 Rule") under the Obama Administration. The 2016 Rule found it is appropriate and necessary to regulate HAPs from EGUs. Then the 2020 Rule, under the Trump Administration, reconsidered the cost analysis and applied a different cost methodology than the 2016 Rule. In the 2020 Rule EPA found the MATS rule was not appropriate and necessary. By this point, the EGU sector had already achieved compliance with MATS by installing controls and monitors or opting to shut down units to avoid compliance costs.

The Proposed Rule rejects the 2020 Rule's cost methodology and finds it is appropriate and necessary to regulate HAPs from coal and oil-fired EGUs. EPA based its analysis on the complete MATS administrative record and the statute. EPA proposes a "totality-of-the-circumstances" framework for the appropriate and necessary analysis. It considers the advantages of regulation (public health, environmental effects) and disadvantages of the regulation...