EPA releases plan to revise MATS supplemental cost finding

The U.S. Environmental Protection Agency in late December issued a proposed revised supplemental cost finding for the Mercury and Air Toxics Standards, or MATS, rule as well as the Clean Air Act required risk and technology review (RTR).

EPA is proposing to revise its response to the U.S. Supreme Court 2015 decision in Michigan v. EPA, which held that the EPA erred by not considering cost in its determination that regulation under section 112 of the Clean Air Act of hazardous air pollutant (HAP) emissions from coal- and oil-fired electric utility steam generating units (EGUs) is appropriate and necessary.

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, thereby reversing the agency’s prior conclusion under Clean Air Act section 112(n)(1)(A) and correcting flaws in the EPA’s prior response to Michigan v. EPA.

EPA bases its proposed reversal on its conclusion that it is inappropriate to consider co-benefits – that is, the health and environmental benefits (those resulting from reductions in emissions of non-hazardous pollutants such as particulate matter) that result collaterally from the installation of pollution controls intended to reduce the emissions of HAP. By excluding the value of such co-benefits from its analysis, EPA concludes that the costs of complying with MATS (which EPA calculates are $7.4 to $9.6 billion annually) far exceed the direct benefit of MATS (which EPA calculates to be between $4 million and $6 million annually).

Despite the proposed reversal of the “appropriate and necessary” finding the emission standards first promulgated under the 2012 MATS rule would remain in place. EPA’s rationale for retaining the MATS emissions standards is based on the D.C. Circuit’s holding in New Jersey v. EPA  that ruled, once a source category is listed pursuant to CAA Section 112(c)(1), EPA may not remove EGUs from the list of categories to be regulated under Section 112(d) except through the rigorous de-listing process set forth in Section 112(c)(9).  However, EPA is soliciting comment on whether it has the authority or obligation to de-list EGUs from Section 112(c) and rescind (or to rescind without delisting) MATS.

In addition, EPA noted that it has completed the required RTR for MATS. The proposed RTR shows that no additional regulations are required.

The results of the residual risk analysis indicate that residual risks due to emissions of air toxics from this source category are acceptable and that the current standards provide an ample margin of safety to protect public health. No new developments in HAP emission controls to achieve further cost-effective emissions reductions were identified under the technology review.

As a result of the review, EPA is proposing no revisions to MATS is warranted. EPA is also soliciting comment on establishing a subcategory for emissions of acid gas HAP from existing EGUs firing eastern bituminous coal refuse.

In a joint letter sent to Assistant Administrator William Wehrum, the American Public Power Association urged EPA to complete is risk and technology review for power plants under section 112 of the Clean Air Act and to leave the underlying MATS rule in place and effective.