WASHINGTON—The U.S. Supreme Court on Tuesday said it would review the nation’s first-ever standards requiring power plants to reduce mercury emissions and other toxic air pollutants, taking up a case with implications for President Barack Obama ’s broader environmental agenda.
The high court accepted several challenges to the rules brought by the utility industry and a coalition of nearly two dozen states, including those where utilities rely on coal for most power generation.
The court will hear arguments in the case in the spring and is likely to rule in June 2015, as the Obama administration is planning to put the final touches on a separate proposal to cut carbon-dioxide emissions from existing power plants.
The high court’s decision to review one of Mr. Obama’s signature environmental achievements comes at a pivotal time. On Wednesday, the Environmental Protection Agency intends to propose an updated national standard for ground-level ozone, commonly known as smog, which is based at least in part on enforcement of the mercury rule.
The high court will decide if the EPA should have considered how much the rules would cost utilities, addressing a recurring complaint by companies about government regulations. The power companies and states said the rules would add $9.6 billion in annual costs to the utility industry. The EPA should have taken those costs into account, they said.
The EPA has said the public-health benefit of reducing the pollutants amounts to between $37 billion and $90 billion a year, far outweighing any industry costs. The agency also has said it believes the rule could prevent up to 11,000 premature deaths each year.
“We are disappointed in the court’s decision, but we are confident that EPA acted properly in regulating harmful toxic air pollution from power plants,” EPA spokeswoman Liz Purchia said in a written statement.
The outcome of the case could affect other EPA initiatives, including the separate proposed rule cutting carbon emissions from the same set of nearly 600 fossil-fuel power plants, which is underpinned by a 2007 Supreme Court ruling in favor of the EPA. If the court strikes down the entire or significant parts of the mercury rule, it could limit EPA’s ability to push forward on other regulations, some energy analysts said.
“Does it make EPA go away? No, but it could make some of their plans a little less ambitious,” said Christine Tezak, a managing director of ClearView Energy Partners, a nonpartisan policy-analysis firm. “The agency’s ability to be aggressive could be constrained by a need to give greater weight to cost impacts.”
The EPA, in an earlier version of the ozone proposal, estimated it could cost up to $90 billion annually. The EPA also intends in January to issue final rules cutting carbon emissions from new power plants and parallel standards for existing plants next summer. Both also mean increased costs for businesses, though less than the mercury and ozone rules.
The EPA’s mercury rule, adopted in 2012 and scheduled to take effect in April for existing power plants, requires coal and oil-fired plantsto cut most of their emissions of mercury, a neurotoxin the EPA says is particularly harmful for children, unborn babies and women of childbearing age.
Power plants are the dominant emitters of mercury in the U.S., according to the EPA. The rules require coal-fired utilities to install so-called scrubber technology, which is widely available, to reduce air emissions. The government has granted many utilities a year extension to comply with the rule.
“The EPA has expressly refused to consider the cost of its regulation, which will result in rate increases for citizens across the country, and threatens the reliability of the electricity grid by forcing the closure of many power plants,” Michigan Attorney General Bill Schuette, a Republican, said in a written statement. Michigan is a lead state plaintiff in the case.
Environmental groups expressed confidence the court would rule in the EPA’s favor. “EPA’s life-saving limits on mercury, arsenic and acid gases from smokestacks are thoroughly anchored in law and science, and we look forward to presenting a compelling case for these vital clean-air safeguards,” said Vickie Patton, general counsel for the Environmental Defense Fund, a party in the case.
The mercury case is the latest in a series of consequential environmental lawsuits that have landed at the Supreme Court during the tenure of Chief Justice John Roberts. The EPA has won more than it has lost.
The high court, in its 2007 ruling, allowed the agency to regulate carbon dioxide and other gases associated with climate change. This June, the court said the EPA overreached in claiming the authority to impose greenhouse-gas controls on small emitters, but it said the agency could require controls at power plants and other large pollution sources.
In another case this year, the Obama administration scored a notable victory when the justices revived an EPA program that sought to limit power-plant emissions blowing across state lines, called the cross-state air pollution rule.
The administration also won an important court victory in April when a divided U.S. Court of Appeals for the District of Columbia Circuit upheld the mercury rules, saying the agency acted reasonably in crafting them.
The cumulative effect of these regulations, coupled with low natural-gas prices, is compelling some utilities to close coal-fired power plants. Between 2012 and 2020, about 60 gigawatts of coal-fired capacity are projected to shut down, according to U.S. Energy Information Administration data published earlier this year. U.S. utilities have more than 1,000 gigawatts in capacity.
“A lot of utilities weren’t that concerned about the cross-state rule because MATS [the mercury rule] was already requiring them to install scrubbers,” said Brian Potts of Foley & Lardner LLP in Madison, Wis., who represents utilities but doesn’t have any clients involved in the mercury case. “But without MATS (or with a delay in MATS), the cross-state rule could become more significant.”
Akron, Ohio, utility FirstEnergy, which is a plaintiff in the case as part of its membership in the Utility Air Regulatory Group, is currently installing technology to comply with the mercury rule, though the high court’s ruling may change its plans, spokeswoman Jennifer Young said.
The court’s action Tuesday extends a saga that dates back more than two decades. Congress first required the EPA to issue regulations in 1990, but the agency’s efforts had been stalled for years due to several factors, including lengthy court battles and priorities that shifted with presidential administrations.
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- On November 26, 2014