The U.S. Supreme Court on Monday struck down the U.S. Environmental Protection Agency’s rule limiting mercury and other toxic emissions from power plants, saying in a 5-4 ruling that it should have considered the rule’s billion-dollar compliance costs first.
The high court’s majority says the EPA “strayed far beyond the bounds” of the standard established in Chevron v. NRDC when it issued its landmark power plant regulation. (Credit: AP)
Although the majority did find that cost must be considered, it said it does not hold that the law unambiguously required the agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value. The opinion said it will be up to the agency to decide how to account for cost.
The EPA had argued that the hazardous-air pollutants program does not require it to consider cost when first deciding whether to regulate power plants because it can consider cost later when deciding how much to regulate them.
But, according to the opinion, “Cost may become relevant again at a later stage of the regulatory process, but that possibility does not establish its irrelevance at this stage.”
States and industry groups challenging the 2012 Mercury and Air Toxics Standards claimed their $9.6 billion annual compliance costs far outweigh the benefits they will produce. The EPA argued that it had reasonably construed Section 112 of the Clean Air Act as directing it to consider compliance costs when establishing the appropriate level of any power plant regulation, but not when deciding whether to regulate those plants in the first place.
The cases are State of Michigan et al. v. EPA, case number 14-46, Utility Air Regulatory Group v. EPA, case number 14-47, and National Mining Association v. EPA, case number 14-49, in the Supreme Court of the United States.
By: Martin J. Milita, Jr. Esq., Sr. Director.
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