The U.S. Environmental Protection Agency on April 16 completed a reconsideration of the appropriate and necessary finding for the Mercury and Air Toxics Standards (MATS) rule, reversing the agency’s 2016 supplemental cost finding. After considering compliance costs relative to the hazardous air pollutants (HAP) benefits of MATS, EPA now concludes that it is not "appropriate and necessary" to regulate hazardous air pollutant emissions from steam electric generating units (EGUs).
The EPA also said that it will not remove coal- and oil-fired power plants from the list of affected source categories for regulation under section 112 of the Clean Air Act (CAA) and this decision will not affect compliance under MATS.
The agency finalized its conclusion that it is not “appropriate and necessary” to regulate emissions of air toxics from coal- and oil-fired power plants under section 112 of the CAA because the costs of such regulation outweigh the benefits of HAP emission reductions.
The EPA reexamined the cost analyses presented in a 2016 supplemental finding and determined that the finding’s approach to considering cost “did not satisfy the agency’s obligation under CAA section 112(n)(1)(A) as interpreted by the U.S. Supreme Court in Michigan v. EPA.”
The 2016 supplemental finding preferred approach, or “cost reasonableness test,” does not meet the statute’s requirements to fully consider costs and was an unreasonable interpretation of the CAA mandate.
The final rule used a different consideration of cost for purposes of the appropriate and necessary finding.
The EPA determined that the correct consideration of cost is to primarily compare the cost of compliance with MATS with the benefits that are specifically attributable to reductions in HAP emissions.
The Agency compared the direct benefits from reducing HAPs – a mere $4-6 million – to the much larger projected compliance cost of the rule – $7.4-$9.8 billion dollars annually– and concluded that the benefits of MATS do not justify its cost and therefore it is not appropriate and necessary to regulate EGUs under Section 112 of the CAA
The EPA acknowledged that there are unquantified HAP benefits associated with MATS, but it concluded that the identification of these benefits is not enough, considering the disparity between the monetized costs and HAP benefits.
Also, the EPA found it inappropriate for monetized particulate matter co-benefits to be the primary determinative factor in EPA’s appropriate and necessary finding.
EPA also takes final action on residual risk and technology review
The agency also took final action on the residual risk and technology review (RTR) that is required by CAA section 112.
The results from the RTR show that emissions of HAP have been reduced such that residual risk is at acceptable levels, that there are no developments in HAP emissions controls to achieve further cost-effective reductions beyond the current standards, and therefore, no changes to the MATS rule are warranted.
Association, other groups urge EPA to sustain mercury rule
The American Public Power Association in 2019 was joined by other power industry trade groups, labor unions, generators and an affiliate of the U.S. Chamber of Commerce in urging the EPA to sustain the MATS rule given that industry has already fully implemented MATS.
