Court sides with industry on power plant emissions

Supreme Court decision is a setback to one of the biggest environmental actions of the Obama administration.

 

The Supreme Court this week dealt a setback to one of the biggest environmental actions of the Obama administration, a rule designed to slash mercury and other toxic air pollution from power plants. The court found that the Environmental Protection Agency acted irrationally and illegally when it failed to consider costs before it decided to write the first-ever regulations for this type of hazardous air pollution from electricity generated from coal and oil.

It was a clear win for the 21 states — including Arizona, Alaska, Utah, Wyoming, North Dakota and Idaho — and some industry groups that challenged the 2011 rule in Michigan v. EPA. But the ultimate outcome likely will not be a victory for the challengers. The Supreme Court did not cancel the rule but sent it back to the DC Circuit Court. In the meantime, the rule remains in effect and Janet McCabe, who heads the EPA’s air office, vowed to work to ensure “that standards remain in place to protect the public from toxic emissions from coal and oil-fired electric utilities.” The EPA estimates the rule will avert up to 11,000 premature deaths, 4,700 heart attacks and 130,000 asthma attacks every year.

Talen Energy's Colstrip power plant in Montana will still be upgraded to meet new EPA rule despite Supreme Court ruling.
The lower court could give the agency the chance to address the Supreme Court’s complaints without undoing the rule.

“I think this is completely fixable,” Carol Browner, former EPA administrator under President Clinton, told HCN.

Impacts on air quality likely will not be great, at least in the short term. The rule took effect in April, and many of the hundreds of power plants covered by the regulation already have installed pollution controls and some shut down[TW1]  or switched to natural gas. (They knew this was coming since 2011, so the requirements implicit with this rule as well as other air pollution regulations made these old coal plants too expensive to operate.) Many states — including Montana, Colorado and Arizona — also have their own mercury regulations.

  • In Montana, the Corette Power Plant recently closed, saying the plant was not profitable enough to justify installing the pollution control equipment required to meet the federal mercury rule. Talen Energy just bought that defunct plant and the much larger Colstrip Power Plant, which received a year-long extension to comply with the federal mercury rule. Despite the Supreme Court decision, the company plans to continue an $11 million upgrade to the scrubbers at Colstrip to meet the more stringent federal standards, according to Todd Martin, spokesman for Talen Energy, a new Allentown, Pennsylvania-based company that owns plants and generates power in several states.“From our perspective, this decision does not change our strategy, our planning or our operational approach,” said Martin.
  • In Utah, the Carbon plant in Price shut down this spring, as HCN reported, and PacifiCorp said it has no plans to reopen it.
  • In Arizona, all four major coal-fired power plants also got extensions. But under state rules those plants are obligated to slash mercury emissions by about the same amount as required by the federal rule, 90 percent, by 2016. So the air quality in Arizona will not be impacted regardless of the fate of EPA’s rule.

Still, Eric Massey, director of Arizona Department of Environmental Quality’s air quality division, hopes the EPA takes to heart a strong message from this Supreme Court ruling: “that cost has to play a significant role in determining reasonable emission reductions.” In particular, Arizona is asking the EPA to reduce the state’s target for reducing greenhouse gas pollution from power plants as part of the Obama Clean Power Plan.

The Supreme Court’s decision was just the latest expression of the majority’s intolerance with environmental regulations that fail to take costs into account. The EPA did consider costs later, when determining which pollution controls would be required for various types of power plants to meet the mercury rule. But in his majority opinion, Justice Anton Scalia said that was too late, especially given that the costs to industry were estimated at $9.6 billion a year.

“By EPA’s logic, someone could decide whether it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.”

But Justice Elena Kagan, who represented herself and three other justices in her dissent, called Scalia’s sport’s car comparison “witty but wholly inapt.” Pollution controls are not a luxury like a stereo but a remedy to a serious environmental problem that would save “many, many lives,” according to her dissent.

“A better analogy might be to a car owner who decides without first checking prices that it is ‘appropriate and necessary’ to replace her worn-out brake-pads, aware from prior experience that she has ample time to comparison shop and bring that purchase within her budget,” Kagan wrote.

The rule is part of a multi-pronged initiative by the Obama administration to clean up electricity generation. The heart of that effort, the Clean Power Plan — the first U.S. regulations of carbon dioxide from existing power plants — is due out later this summer.

Supporters of the Clean Power Plan say that the justices’ opinion in the mercury case did not undermine the legal footing of the Clean Power Plan.

“They didn’t have anything to say in this mercury decision that makes me worry for the carbon rule,” said David Doniger, a lawyer for Natural Resource Defense Council.

More challenges could await the mercury rule. The Supreme Court failed to provide direction on some of the most intensely disputed issues in Michigan v. EPA case. When the EPA calculated the health benefits of the rule, most came from reducing fine particles, pollutants that were not specifically targeted by the rule. Challengers argue that these ancillary benefits should not be counted.

“This is by no means the end of this,” said Thomas Lorenzen, an industry lawyer who used to work for the Justice Department.

Still, the decision was probably the Obama administration’s biggest loss in the Supreme Court on environmental issues.  “I can’t think of a bigger rule,” said Lisa Heinzerling, a professor at Georgetown University who served as senior lawyer for the EPA during Obama’s first term. “And I can’t think of a bigger defeat.”

Elizabeth Shogren is HCN's DC Correspondent.