EPA Reverses 2020 Clean Air Act Finding for Power Plants

On March 6, US EPA announced a finding that it is “appropriate and necessary” to regulate coal- and oil- fired electricity generating units (i.e., power plants) under section 112 of the Clean Air Act. In the same action, the agency revoked an earlier, opposite finding published in May 2020.

This Final Action from EPA is the latest development in a regulatory push-and-pull that started in 2012 when EPA finalized the Mercury Air Toxics Standards or MATS Rule, adding power plants to the list of “major sources” subject to national emissions standards for hazardous air pollutants or NESHAPs.

Since 2012, two important questions have guided the Rule’s trajectory:

1.) To what extent must US EPA consider costs to industry when developing and implementing environmental regulations?

2.) How should US EPA estimate and measure the “benefits” gained from regulating (or further restricting) a pollutant or a source of air pollution?

Section 112 of the Clean Air Act directs EPA to set limits on emissions of hazardous air pollutants (HAPs) and to require “major sources” of HAP emissions to implement pollution control technology that will reduce emissions to the maximum extent possible. This is referred to as “maximum achievable control technology” or MACT.

From the final action: 

“…the EPA concludes that the framework applied in the May 22, 2020 finding was ill-suited to assessing and comparing the full range of advantages and disadvantages, and after applying a more suitable framework, the 2020 determination is revoked. Additionally, the EPA is reaffirming that it is appropriate and necessary to regulate HAP emissions from coal- and oil-fired EGUs…” 

Here, in broad strokes, is a time line of relevant key events since 2012: 

2015 / Michigan v. EPA Supreme Court Decision  

A challenge to EPA’s MATS Rule reached the Supreme Court in 2015. In Michigan v. EPA, the court ruled that EPA should have considered the costs to power plants before implementing the regulation.

Section 112 of the Clean Air Act authorizes EPA to regulate air pollution from an industry if they determine a regulation is “appropriate and necessary.” In a 5-4 opinion, the court stated that EPA unreasonably interpreted the Clean Air Act by not considering cost as a relevant factor in its decision to regulate power plants. The cost of the regulation to power plants, as estimated by EPA, was about $9.6B/year. 

2016 / EPA’s Supplemental Cost Finding

EPA responded to the Michigan decision by presenting a supplemental cost-benefit analysis of its rule to regulate emissions of HAPS from power plants. The supplemental finding re-affirmed EPA’s earlier stance that regulated HAP emissions from power plants is, in fact, “appropriate and necessary.” 

2020 / Revised Response to Michigan v. EPA 

On May 22, 2020, EPA published a Final Rule to revise the 2016 supplemental cost finding and response to the Supreme Court. After re-calculating the costs and benefits of the MATS Rule using a different approach, EPA determined that the 2012 rule was not “appropriate and necessary.” 

This rulemaking did not change the air quality standards established in the MATS rule, and it did not eliminate the source category for power plants under the Clean Air Act, section 112. At this time, EPA also requested public comment about whether to repeal or revise the 2012 MATS Rule. 

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That brings us up to Monday, March 6, when EPA published a final action to revoke the 2020 finding and re-affirm its stance that regulated HAP emissions from power plants is “appropriate and necessary.”  

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