March 26, 2015

Supreme Court Shows Ideological Divide over MATS Rule

By Rich Heidorn Jr., Editor and Publisher of RTO Insider

WASHINGTON — The Supreme Court’s ideological divide was on display Wednesday as justices sparred with attorneys over whether the Environmental Protection Agency should have considered costs before deciding whether to regulate mercury and other hazardous air pollutants from power plants.

The case combined what began as three challenges to EPA’s Mercury and Air Toxics Standards (MATS), which are due to take effect in less than three weeks.  After an appellate court upheld the rule in a 2-1 ruling in April 2014, the Supreme Court agreed to consider a single question: Whether EPA acted unreasonably because it refused to consider costs in  determining whether it is “appropriate and necessary” to regulate hazardous air pollutants emitted by electric utilities.

The 90-minute oral arguments saw the court’s liberal wing, led by Justices Elena Kagan and Sonia Sotomayor,  defending EPA’s stance that it should consider costs only after a cost-blind determination that the pollutants pose a public health risk and therefore should be regulated.

The regulations were initiated 25 years ago, when Congress amended the Clean Air Act in 1990. The amendments ordered EPA to regulate 189 hazardous air pollutants (HAPS), including mercury, arsenic and cadmium, which had not been previously controlled.

Conservatives, led by Justice Antonin Scalia, expressed sympathy for the challenge by Michigan and other coal-dependent states, some electric utilities and the coal mining industry.

As in many past decisions, the ruling may turn on the opinion of centrist Anthony Kennedy. In contrast with his colleagues, who appeared to have staked out firm positions, Kennedy’s questions suggested he was leaning toward EPA but willing to consider the challengers.


Early in the argument by Michigan Solicitor General Aaron D. Lindstrom, Kennedy observed that “’appropriate’ is a capacious term.”

“It is a capacious term,” Lindstrom agreed. But he said that “cuts against the government because one of the things that’s encompassed within the term ‘appropriate’ is that it looks at all of the circumstances in the context of determining whether or not you’re going to regulate costs is a relevant circumstance.”

Justice Kagan said Congress would have explicitly required EPA to consider costs if that was its intent. For sources other than electric generating plants, Congress expressly forbid EPA from considering cost when deciding whether to regulate. “To get from silence to this notion of a requirement seems to be a pretty big jump,” Kagan said.

Scalia said he disagreed with the premise that EPA could ignore costs because Congress did not give explicit instructions to the contrary. “I would think it’s [a] classic arbitrary and capricious agency action for an agency to command something that is outrageously expensive, and in which the expense vastly exceeds whatever public benefit can be can be achieved. I would think that that’s a violation of the Administrative Procedure Act.”

Uncertainty over Acid Rain Program

Among the issues in dispute is the significance and rationale for Congress’ decision to treat power plants differently from other air pollution sources.

Some provisions of the 1990 Clean Air Act amendments specifically targeted power plants, including the acid rain program which required regulations on sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from the largest coal-fired generators.

Congress ordered EPA to perform a study evaluating whether the acid rain and other programs had addressed all public health concerns from generators. It ordered EPA to develop additional regulations if the agency determined it was “appropriate and necessary.”

“So what, if anything, can we infer from” Congress’ decision to treat power plants differently from other HAPS sources, asked Justice Samuel Alito. Lindstrom was in the middle of his answer when J

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