The Environmental Protection Agency (EPA) has published a Notice of its proposal to reverse an Obama-era finding that it is “appropriate and necessary” to regulate emissions of mercury and other hazardous air pollutants from fossil fuel (coal and oil)-fired electrical power plants.  The deadline for submission of public comments on this proposal is 11:59 PM Eastern Time, April 17, 2019. A public hearing on this proposal will be held in Washington, DC on March 18. 

The Basics :
  • 1990 amendments to the Clean Air Act authorize the Environmental Protection Agency (EPA) to regulate emissions from electrical power plants (called electric utility steam generating units, or  “EGUs” ) if it finds that such regulation is “appropriate and necessary” after conducting a utility study.
  • In December 2000, the EPA issued notice of its finding that such regulation is appropriate and necessary, based largely on the results of a utility study showing that mercury emissions from EGUs are a threat to public health.
  • In 2005, the EPA reversed its findings and determined that it was not “appropriate and necessary” to regulate coal-and oil-fired EGUs. States and other groups challenged the validity of this determination, and the U.S. Court of Appeals for the District of Columbia Circuit held that the basis for EPA’s attempt to reverse its findings was invalid and unlawful.
  • In 2011, EPA confirmed its previous finding that regulation of coal- and oil-fired EGUs’ emissions of mercury and other hazardous air pollutants (‘HAPS”) is appropriate and necessary; and in 2012 the Agency finalized regulations establishing national emission standards for mercury and other hazardous air pollutants (NESHAP) from coal- and oil-fired electrical power plants.
  • By requiring compliance with emissions control performance standards, these regulations — known as the Mercury and Air Toxic Standards or “MATS” Rule — sought to protect air quality and promote public health by reducing emissions of hazardous air pollutants under the Clean Air Act.
  • State, industry, and labor groups challenged the EPA’s underlying  “appropriate and necessary” finding; and in 2015 the Supreme Court ruled that the finding was legally defective because EPA had failed to consider cost in determining what regulation was “appropriate.”
  • In 2016 EPA issued supplemental findings, specifically describing its consideration of cost as a factor among those relevant to its regulatory deliberations, and reaffirmed its initial determination that it is appropriate and necessary to regulate mercury and other HAP emissions from EGUs.
  • The current EPA now proposes to again reverse its finding, and to find — largely on the basis of costs to industry — that it is not necessary and appropriate to regulate emissions of mercury and other HAP from power plants that generate electricity by burning coal and/or oil.
  • The recent Notice does not formally or expressly propose repeal of the existing MATS regulations.  However, if finalized the proposed, negative “appropriate and necessary” determination would almost undoubtedly lead to a future Agency action rescinding the mercury and other HAP emissions standards for fossil fuel-fired electrical power plants. 
  • When mercury is emitted to the air from coal- or oil-fired power plants and is deposited into water or runs off into water, it can be converted to methylmercury and accumulate in the bodies of fish. When consumed by humans and wildlife, mercury contaminated fish represent a health risk because methylmercury damages multiple organ systems, including  the cardiovascular, renal and immune systems, as well as the nervous system.
  • Developing fetuses and young children are particularly vulnerable to the neurotoxic effects of methylmercury.

NOTE: We really hope you will read on through the rest of this post before deciding what you would like to tell the EPA about it’s proposed action.  But if you don’t have time to read more and want to send a comment to EPA now, you can go to the Comment Page for this topic on the Government’s eRulemaking website, type your views into the comment box on that page, and follow the simple instructions for sending them to the EPA. 

 

Summary of the Agency’s Proposal:

EPA proposes to find that the costs of regulating emissions of mercury and other hazardous air pollutants (HAP)  from fossil fuel-fired electrical power plants outweigh the benefits of Industry compliance with regulations to limit those emissions, and that such regulation is therefore not “necessary and appropriate.” The Agency now asserts that its own earlier assessment of cost as a factor in considering the appropriateness and necessity of regulations issued in 2015 (known as the Mercury and Air Toxics Standards, or “MATS”) was “flawed” in two major respects.

First, contrary to its express view as stated in 2016, EPA now regards it as irrelevant how significant the projected costs of regulation to Industry may be in comparison with the Industry’s projected profits.  In other words, whether the electrical power industry can easily afford to reduce HAP emissions in compliance with MATS without unreasonable impact on its profit margins (as EPA concluded in 2016 is the case) is no longer regarded as a valid consideration relating to cost.  Instead, according to the Agency, consideration of cost is strictly limited to a cost-benefit analysis consisting of a comparison of costs of regulatory compliance to the affected industry with the monetized sum of public benefits that will be foregone or lost in the absence of regulation.

Second, the present EPA rejects the validity of a cost-benefit analysis it conducted in 2016, because that previous analysis took into account certain public health costs that the Agency now regards as irrelevant to the analysis. Specifically, EPA’s new cost-benefit analysis fails to include monetized benefits to public health from reducing particulate matter (PM) that forms in the air when pollutants other than those categorized as HAP (such as nitrogen oxides and sulfur dioxide) are emitted from electrical power plants. The emissions control technologies and strategies required to comply with the MATS regulations would also reduce emissions of non-HAP gases that contribute to PM formation. Thus the previous EPA considered benefits to public health from such reduction as “co-benefits” of the MATS rules, properly included in a cost-benefit analysis. These  “co-benefits” accounted for a large percentage of the monetized public health benefits the Obama-era EPA weighed against projected costs to Industry of compliance with the MATS regulations.  Upon eliminating these “co-benefits” of MATS from consideration in its current cost-benefit analysis, and by declining to consider at all certain public benefits that will be foregone without the MATS rules but are not easily “monetizable” (for example, avoidance of neurodevelopmental effects on children such as deficits in attention, fine-motor function, confrontational naming, visual-spatial abilities, and verbal memory); EPA estimates the monetized foregone benefits of the rules at an annual level so low as to be “dwarfed” by the estimated costs to Industry of MATS compliance.

EPA’s characterizes its proposal as a reconsideration of its earlier findings on the appropriateness and necessity of regulating the electrical power Industry’s emissions of mercury and other hazardous air pollutants, not as a proposal to rescind the current regulatory standards for those emissions.  It asks for public comments, however, on not only its revised findings, but also on (1) whether the Agency has the authority or obligation to eliminate fossil-fuel-fired electrical power plants from the list of sources of hazardous air pollutants the Clean Air Act requires EPA to maintain and publish; and (2) whether to rescind (or to rescind without delisting) the regulations setting the Mercury and Air Toxics Standards (MATS) for those power plants.

The Agency’s Justification for the Proposed Action:

EPA’s seeks to justify its proposed reversal of its appropriate and necessary finding based in part on its reading of a 2015 Supreme Court case (Michigan v. EPA) to mean that the appropriate and necessary determination hinges exclusively on a monetized cost-benefit analysis. Having recently concluded that its own supplementary analysis in  2016 improperly took into account (1) the affordability to Industry of regulatory compliance, and (2) benefits to public health that would derive from MATS compliance even though not directly from HAP emissions reduction; the Agency bases its new determination on a new cost-benefit analysis that estimates the costs of industry compliance with MATS to total between $7.4 billion and $9.6 billion annually, while the monetized benefits to public health that will be sacrificed without MATS are estimated to total only between $4 million and $6 million annually.

Additional Information and Resources:

The Clean Air Act treats power plants differently from other sources of air pollution for purposes of the hazardous-air-pollutants program. In one part of Section 112 of that Act, Congress established specific criteria for EPA to apply when deciding whether to include sources of gaseous emissions in the statutory emissions control program.  The statute requires EPA to regulate sources (categorized as “major sources”) whose emissions exceed specified numerical thresholds of substances identified as hazardous air pollutants (“HAP”).  It also requires the Agency to regulate sources whose emissions fall short of these thresholds (area sources) if they are found to “presen[t] a threat of adverse effects to human health or the environment . . . warranting regulation.” By contrast, however, a separate subsection of the law directs EPA to regulate emissions from power plants if, but only if, the Agency finds regulation “appropriate and necessary.”

EPA has gone back and forth on the question of whether it is appropriate and necessary to regulate electrical power plant emissions.  In 2000, EPA made a determination that it was appropriate and necessary to regulate emissions from coal- and oil-fired electrical power plants (referred to as “electric utility steam generating units” or “EGUs”), and added them to the statutorily required List of Categories of Major and Area Sources subject to emissions regulation.

The appropriate and necessary finding was based largely on the Utility Study Report to Congress[ii], the Mercury Study Report to Congress[iii], a National Academy of Sciences Report entitled the Toxicological Effects of Methylmercury[iv]and data on emissions and coal collected from coal-fired power plants. EPA found that mercury was a significant hazard to public health, that power plants were the largest source of mercury emissions and that there were control strategies available to limit mercury emissions. Further, EPA found that power plants were the largest source of several other HAP as well. EPA found that it must regulate mercury and other HAP emissions because other sections of the CAA did not effectively promote reduction of those emissions. In light of the severity of the risks to public health posed by mercury and other HAP emissions, EPA drafted the MATS rules to reflecting application of the “maximum achievable control technology.”

The EPA reversed that finding in 2005, concluding that it was neither appropriate nor necessary to regulate EGUs under the program, and stating that the effect of its reversal of the appropriate and necessary finding was removal of coal- and oil-fired EGUs from the source category list. (At the same time EPA issued a cap-and-trade rule to control mercury emissions from new and existing EGUs, but that rule was invalidated in a court case, based on a judicial finding that the de-listing action was improper.)

In 2012 EPA reaffirmed the appropriate and necessary finding it had made in 2000, and issued the final MATS rule to establish national emissions standards for hazardous air pollutants for coal- and oil-fired EGUs.   In litigation brought by industry groups and certain states, however, the Supreme Court ruled that EPA improperly made its necessary and appropriate determination and issued regulations without considering cost as a factor relevant to its determination.  The ruling in this case, Michigan v. EPA, 135 S Ct. 2699 (2015), did not vacate the MATS regulations — rather, it required the EPA to reconsider its appropriate and necessary finding, taking cost into account as a relevant factor.  In 2016, in response to the Supreme Court’s decision, EPA issued Supplemental Findings addressing the issue of cost. Those supplemental findings explained EPA’s conclusion that the costs to industry were reasonable, in part because the huge profits earned by the electrical power industry made the projected costs of MATS compliance seem comparatively insubstantial.  The findings also set out an analysis of costs and monetized public health benefits associated with MATS compliance, including in those benefits improved public health effects (from the reduction of emissions other than HAP that give rise to the formation of airborne particulate matter) that would be a bi-product of MATS compliance measures even though not resulting from reduced HAP emissions.  The inclusion of these “co-benefits” of MATS compliance in the 2016 cost-benefit analysis increased the EPA’s monetized estimate of benefits by tens of billions of dollars, with the consequence that monetized public health benefits exceeded industry compliance cost estimates in the EPA’s analysis.  The expected reduction in non-HAP emissions associated with particulate matter formation was also projected by EPA to prevent up to 11,000 premature deaths annually.

As already noted, EPA has not yet formally proposed to rescind the MATS rules nor to formally “delist” fossil-fuel-fired electrical power plants as regulated sources of hazardous air pollutants. This may be because, based on court decisions that followed the Bush Administration’s 2005 finding that HAP emissions regulation of EGUs was not appropriate and necessary, it appears that delisting does not automatically follow from such a finding.  Thus EPA appears to be proceeding cautiously in an attempt to avoid legal pitfalls.  Nevertheless, should the negative “appropriate and necessary” finding be finalized as proposed, the eventual repeal of the MATS regulations (and quite likely removal of EGUs from the major source list) seems virtually inevitable.

There are numerous additional resources that you may wish to access online for a more complete understanding of the EPA’s proposed new finding and its probable effects. The website of Save EPA, an organization of former EPA employees, includes a particularly helpful explanation. Another informative article was published by National Public Radio (NPR); and the National Resources Defense Council includes on its website a statement of its position on the proposed MATS rollback, as well as a link to a more detailed Memo from the National Resources Defense Council Press Secretary on the topic. There is also a Western Kentucky University TOPscholar Paper providing more detail about Mercury Emissions from Coal-fired Power Plants, and a statement by the American Academy of Pediatrics stating opposition to the proposal.  Power Magazine (a power industry publication) has reported on the EPA’s proposed action, as has E & E News (a publication directed at energy and environment professionals).  If you are interested in reviewing more detailed, original source materials, you may wish to compare the EPA’s recent Proposed Rule document with the Final MATS Rule as it was published in 2012 and the Supplementary Finding in 2016 that regulation of HAP emissions by EGUs is appropriate and necessary (addressing cost as a factor in the decision-making process).  The Supreme Court’s Opinion in the case of Michigan v. EPA  (written by Justice Scalia) also contains an informative discussion of the regulatory history and issues relating to MATS up through 2015.

If you are ready to comment on the EPA’s proposed rollback of the controls on HAP emissions by electrical power plants :

The easiest way to communicate with the EPA is to go to the Comment Page for this topic on the Government’s eRulemaking website, type your comments into the box provided for that purpose, and follow the other instructions for submission.  The EPA prefers that commenters use this method, but will also accept comments submitted through the following alternative means:

  • Email: a-and-r-docket@epa.gov. Include Docket ID No. EPA-HQ-OAR-2018-0794 in the subject line of the message.
  • Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-2018-0794.
  • Mail: To ship or send mail via the United States Postal Service, use the following address: U.S. Environmental Protection Agency, EPA Docket Center, Docket ID No. EPA-HQ-OAR-2018-0794, Mail Code 28221T, 1200 Pennsylvania Avenue NW, Washington, DC 20460.
  • Hand/Courier Delivery: Use the following Docket Center address if you are using express mail, commercial delivery, hand delivery, or courier: EPA Docket Center, EPA WJC West Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004. Delivery verification signatures will be available only during regular business hours.

EPA will only consider comments that it receives by no later than 11:59 PM Eastern Time on April 17, 2019.

EPA has also published Notice of a public hearing on its proposal, to be held at the EPA WJC East Building, 1201 Constitution Avenue NW, Room 1153, Washington, DC 20004. The hearing will convene at 8:00 a.m. (local time) and will conclude at 6:00 p.m.  To register to speak at the hearing, you can use an online registration form available at https://www.epa.gov/mats/proposed-revised-supplemental-finding-and-results-residual-risk-and-technology-review or contact Adrian Gates at (919) 541-4860 or at gates.adrian@epa.gov. The last day to pre-register to speak at the hearing will be March 14, 2019; and on March 15, 2019, the EPA will post at https://www.epa.gov/mats/proposed-revised-supplemental-finding-and-results-residual-risk-and-technology-review a general agenda for the hearing that will list pre-registered speakers in approximate order. Government-issued ID will be required in order to gain access to the hearing (driver’s license from the District of Columbia or a U.S. State or Territory, Federal employee badge, passport, enhanced driver’s license, or military identification card).