EPA Releases Proposal to Revise MATS Supplemental Cost Finding and "Risk and Technology Review"
WASHINGTON (December 28, 2018) — Yesterday, the U.S. Environmental Protection Agency (EPA) issued a proposed revised Supplemental
Cost Finding for the Mercury and Air Toxics Standards (MATS), as well as the Clean Air Act-required "risk and technology review."
The Trump Administration is providing regulatory certainty by transparently and accurately taking account of both costs and benefits in the proposed revised Supplemental Cost Finding for MATS. After properly evaluating the cost to coal- and oil-fired power plants of complying with the MATS rule (costs that the Obama Administration estimated range from $7.4 to $9.6 billion annually) and the benefits attributable to regulating hazardous air pollutant (HAP) emissions from these power plants (benefits that range from $4 to $6 million annually) — as EPA was directed to do by the U.S. Supreme Court — the Agency proposes to determine that it is not "appropriate and necessary" to regulate HAP emissions from power plants under Section 112 of the Clean Air Act.
The emission standards and other requirements of the MATS rule, first promulgated in 2012, would remain in place as EPA is not proposing to remove coal- and oil-fired power plants from the list of sources that are regulated under Section 112 of the Act. The proposal also contains the required "risk and technology review," concluding that no changes to the MATS rule are needed, and also takes comment on establishing a separate subcategory for certain units that rely on coal refuse.
EPA will take comment on the proposal for 60 days after publication in the Federal Register and will hold a public hearing. Information regarding the time, date, and location of the public hearing will be published in a separate Federal Register notice. Additional information, including a pre-publication version of the Federal Register notice and a fact sheet, are available at www.epa.gov/mats.
Background
Congress expressly directed that coal- and oil-fired power plants were to be treated differently than other sources of hazardous air pollutants subject to regulation under Section 112 of the Clean Air Act. The Clean Air Act lays out a multi-step process for regulating (HAP) emissions from power plants. In contrast to how every other category of stationary sources are regulated under Section 112, Congress provided that, before EPA could move forward to regulate HAP emissions from power plants, the Agency first had to decide whether or not such regulation was "appropriate and necessary" – referred to as the A&N Finding. Only after finding that the regulation of HAP emissions from power plants was "appropriate and necessary" was EPA then authorized, under Section 112(c), to place power plants on the list of source categories to be regulated. Once power plants were placed on the Section 112(c) list, the Agency was then authorized, under Section 112(d), to adopt HAP emission standards and other requirements for those sources.
In 2015, in Michigan v. EPA, the Supreme Court ruled that EPA had erred when, in promulgating the MATS rule, the Agency determined that, while it was permitted to consider costs when making the A&N Finding, the Agency was not required to consider cost. "Read naturally in the present context," the Supreme Court said, "the phrase 'appropriate and necessary' requires at least some attention to cost." "One would not say that it is even rational, never mind 'appropriate,'" the Court continued, to "impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits." The Court remanded the MATS rule back to the EPA — while leaving the rule's HAP emission standards and other requirements in place — and instructed the Agency to address the identified deficiencies in the A&N Finding. EPA's response to the Michigan ruling was the 2016 Supplemental Finding, in which the Agency concluded that the consideration of cost did not change its previous A&N Finding.
This action proposes to correct flaws in the Supplemental Finding and proposes to make a revised determination that it is not appropriate and necessary to regulate HAP emissions from coal- and oil-fired power plants. A proper consideration of costs under section 112(n) of the Clean Air Act demonstrates that the total projected costs of compliance with the MATS rule ($7.4 to $9.6 billion annually) dwarfs the monetized HAP benefits of the rule ($4 to $6 million annually). Under this revised determination, EPA is proposing to consider the "co-benefits" attributable to emission reductions for pollutants other than HAP in a way that properly accounts for the statutory direction Congress gave the Agency in Section 112.
EPA is not proposing, however, to rescind or repeal the HAP emission standards and other requirements of the MATS rule, which have been in place since 2012 and with which, for a number of years, the electric utility sector has been complying. Coal- and oil-fired power plants have been listed for regulation under Section 112(c) since December 2000, and in 2008, the U.S. Court of Appeals for the D.C. Circuit held that, having been so listed, such sources could not be "de-listed" except pursuant to a certain specified procedure set forth in Section 112(c)(9). Under this D.C. Circuit decision, EPA's proposed determination to it is not appropriate and necessary to regulate HAP emissions from power plants does not itself operate to remove those sources from the Section 112(c) list. EPA is not proposing to "de-list" power plants under the Section 112(c)(9) procedure.
In addition, EPA has completed the required "risk and technology review" for MATS. EPA is proposing that residual risks after implementation of the rule are acceptable and there are no new technologies or methods of operation that were not considered in the rulemaking process. As such, the Agency is proposing that no changes to the MATS rule are needed. EPA is also taking comment on establishing a new subcategory for certain units that fire eastern bituminous coal refuse.
US EPA, Office of Public Engagement, 1200 Pennsylvania Avenue NW, Washington, DC 20460 United States
