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Court Allows MATS Rule to Stand Pending EPA Reconsideration

An appeals court has ruled that the Environmental Protection Agency's (EPA) plans to limit mercury and other toxic emissions from coal-fired power plants may remain in place as the agency works to bring the proposed regulation in line with a previous U.S. Supreme Court ruling.

A three-judge panel of the United States Court of Appeals for the District of Columbia Circuit ordered Tuesday that the issue be remanded to EPA without vacating the toxic emissions rule. EPA has said it is on track to revise and reissue the rules by April 15.

In June, the Supreme Court ruled against the Obama administration in the case, saying EPA failed to adequately consider the regulation's costs to industry (see Daily GPIJune 29). The high court said that while the Clean Air Act authorizes EPA to regulate power plant emissions if the agency believes such rules are "appropriate and necessary," EPA held an unreasonable interpretation of the law when it deemed the costs to industry irrelevant.

The Supreme Court's decision reversed an earlier decision by the U.S. Court of Appeals for the District of Columbia Circuit, and sent the proposed Mercury and Air Toxics Standard (MATS) back to EPA for further consideration of the costs to industry. The circuit court was also instructed to determine whether MATS should remain in effect while EPA conducts its analysis.

EPA has said it plans to release documentation explicitly considering the costs of implementing its MATS emissions limits for power plants by the end of 2015.

Implementation of the MATS rule would spur retirement of coal-fired generation and would be a positive development for the natural gas industry, according to some analysts (see Daily GPIJuly 1).

The ruling comes two months after the U.S. Circuit Court of Appeals for the Sixth District in Cincinnati blocked implementation of the agency's controversial U.S. Water Rule (see Shale DailyOct. 9). The court cited pending litigation challenging the legality of the Obama administration's move. The order, following a more geographically limited one from a federal judge in North Dakota in late August (see Shale DailySept. 8), provided encouragement to 18 states that have challenged the EPA regulation, which would add ever-smaller bodies of water under the federal rules.

EPA continues to move forward on its controversial Clean Power Plan, an effort to cut greenhouse gas emissions from U.S. power plants (see Daily GPINov. 24). For states that do not submit their own implementation plans for the rule, EPA has said it will supply a federal implementation plan. The agency intends to finalize what that federal implementation plan will look like by September 2016.

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