The Environmental Protection Agency closed a chapter in a long fight over its landmark pollution rules for power plants by saying utilities can meet the standards on the cheap.
The agency was under a court-enforced deadline Friday to issue a cost study for previously enacted power plant rules cutting mercury and toxic air pollutants. The Supreme Court ruled last year that the rules were illegal because the EPA did not have the discretion to ignore the cost of complying with the regulation.
The EPA says it found that the cost of the regulations are a small part of what a power plant makes from selling electricity annually, validating the rules as not burdensome. “The projected annual cost of MATS [mercury and air toxics standards] is a small fraction compared to overall sales in the power sector — between just 2.7 and 3.5 percent of annual electricity sales from 2000 to 2011,” the EPA said in its regulatory notice.
The finding reaffirms the EPA’s original assessment, and the agency said it will continue to implement the regulations.
“For more than 45 years, the U.S. Environmental Protection Agency has been working under the Clean Air Act to clean up the air we breathe all while our economy has continued to grow,” the agency said. “The Mercury and Air Toxics Standards is an important step in our progress toward this goal.”
The regulations have caused scores of older, smaller coal- and oil-fired power plants to shutter operations over the last few years, which intensified partisan rhetoric against the Obama administration in what is referred to as the “war on coal.” Michigan led the charge against the EPA in the D.C. Circuit Court of Appeals to scrap the rules, but lost.
It later went to the Supreme Court, where it won on the cost issue. But critics say it was too late and the damage had already been done. Utilities say the rules cost them $9 billion per year to meet.
The 30 states and dozens of groups that are challenging the EPA over its separate Clean Power Plan, the centerpiece of President Obama’s climate change agenda, argue that the courts must act quickly to stop the plan, so as to avoid a repeat performance where judicial review came too slow. The argument appears to have paid off, winning the states a Feb. 9 stay by the Supreme Court until all court action is complete.
But that won’t stop the pollution rules. EPA’s cost study means it will proceed with the implementation of the mercury rules. Power companies will have to choose to abide by the EPA’s cost findings and comply, or decide the rules are too expensive and decide to close operations. It is likely that the cost study could lead to more court action.
EPA’s study also looked at the cost of complying with the rules given the utility sector’s annual expenditures, such as buying coal and maintaining boilers, and found the cost of compliance was low.
The agency also said the cost of the rules would not impose any significant burden on consumers in terms of higher prices for electricity.
“The projected impact on electricity rates of 0.3 cents [per kilowatt hour] represents a national average increase of 3.1 percent, well within the range of retail price fluctuations over a 10 year period,” the agency said.
