The American Public Power Association was recently joined by other power industry trade groups, labor unions, generators and an affiliate of the U.S. Chamber of Commerce in urging the U.S. Environmental Protection Agency to sustain the Mercury and Air Toxics Standards (MATS) rule given that industry has already fully implemented MATS.
In the March 26 letter to William Wehrum, Assistant Administrator in EPA’s Office of Air and Radiation, the Association and the other groups noted that the agency has proposed a “Reconsideration of Supplemental Finding for National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-fired Electric Utility Steam Generating Units,” as well as proposed a Residual Risk and Technology Review (RTR) concurrently with its reconsideration.
EPA’s 2016 Supplemental Finding followed the U.S. Supreme Court’s decision in Michigan v. EPA, which held that EPA must consider costs in evaluating whether it is appropriate and necessary to regulate EGUs.
“As many of our organizations and members noted to you last year, we again ask that EPA complete the statutorily mandated RTR for power plants as expeditiously as possible,” the letter to Wehrum said.
Since MATS became effective in 2012, it is estimated that the owners and operators of coal- and oil-based EGUs have spent more than $18 billion to comply and they have significantly reduced mercury and other emissions, as well as retired assets and invested in new, replacement generation, the signatories to the letter said.
“Given this investment and industry’s full implementation of MATS, regulatory and business certainty regarding regulation under Clean Air Act (CAA) section 112 is critical,” they said in urging EPA to leave the underlying MATS rule in place and effective.
“Many of these same units complying with MATS today are subject to ongoing rate reviews regarding recovery of costs by investor-owned electric companies. In the case of public power utilities and rural electric cooperatives (even those that are rate regulated by state commissions), compliance costs are directly borne by their customers,” the letter said.
The groups said that EPA should take no action that would jeopardize these investments or the underlying rule. “Should EPA take any action that could result in the rescission of the underlying MATS rule, despite the above request, EPA should consider the impacts such an action would have on these costs already borne by industry and how the recovery of these sunk costs could be put in jeopardy, consistent with the Supreme Court’s directive in Michigan v. EPA to ‘consider cost.’”
They said that given that industry has already fully implemented MATS, EPA should sustain the MATS rule, complete the RTR, and separately pursue a regulatory process regarding the considerations of costs and benefits analysis under the CAA.
EPA’s advance notice of proposed rulemaking on increasing consistency and transparency in considering costs and benefits in the rulemaking process could serve as a starting point for this effort, the groups said.
“EPA could also apply these principles in a prospective manner in separate rulemakings. Such a rule could establish general principles on cost considerations that recognize that there are statute specific requirements that may require different consideration of costs, at least with respect to standard setting.”
In addition, they argued that it would be appropriate for the rule to be implemented prospectively “both to ensure the consistent application of costs and benefits moving forward and to avoid potential disruption to previously implemented regulatory programs where real and significant sunk costs have already been incurred.”
The Association and the other parties said that EPA should focus on and finalize an RTR for power plants under CAA section 112. “A complete and robust RTR would recognize the capital investments already made for compliance and would allow the industry to continue full implementation of the MATS rule.”
They also urged EPA to consider separately proposing potential technical revisions to MATS unrelated to the standards themselves that could lower compliance costs, such as considering whether performance tests could be performed less frequently if units are running less frequently, while still ensuring that the standards are being achieved.
“This approach would ensure the standards are being achieved and provide the regulatory and business certainty our members need as they continue to provide safe, reliable, affordable, and increasingly clean energy to their customers.”
Along with the American Public Power Association, other parties signing on to the letter were: The Edison Electric Institute, the National Rural Electric Cooperative Association, the Clean Energy Group (a coalition of electric generating and electric distribution companies), the Class of ’85 Regulatory Response Group (a coalition of approximately 30 electric generating companies from around the country), the Global Energy Institute at the U.S. Chamber of Commerce and the Large Public Power Council. The LPPC is comprised of 27 of the nation’s largest public power systems.
The following labor unions also signed on to the letter: the International Brotherhood of Electrical Workers, the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers and the Laborers International Union of North America.
Comments on EPA’s Proposed Reconsideration of the MATS Supplemental Finding and Risk and Technology Review are due April 17, 2019. EPA also held a public hearing on the Proposed Rule on March 18. The Association plans to file comment on the proposal.