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U.S. Supreme Court Rejects MATS Appeal

In a decision that creates an unusual victory for both the Obama administration and the natural gas industry, the U.S. Supreme Court on Monday declined a long-running request by 24 states and various energy and business groups to overturn a rule limiting mercury and other toxic emissions from coal-fired power plants.

The petitioners, led by Michigan, had been challenging the U.S. Environmental Protection Agency's (EPA) proposed Mercury and Air Toxics Standard (MATS) rule, which the agency unveiled in late 2011 (see Daily GPIDec. 21, 2011).

Nearly one year ago, the high court ruled against the EPA on the grounds that the agency failed to adequately consider the rule's costs to industry (see Daily GPIJune 29, 2015). The ruling in the case Michigan et al. v. Environmental Protection Agency et al. [No. 14-46], which was written by the late Justice Antonin Scalia, had reversed a decision by the U.S. Court of Appeals for the District of Columbia Circuit.

MATS was subsequently sent back to the EPA for further consideration of the costs to industry, and the appellate court was also instructed to determine whether MATS should remain in effect while EPA conducts its analysis. But last December, a three-judge panel of the appellate court ruled that MATS could remain in place as the EPA worked to bring the rule in compliance with the high court's directive (see Daily GPIDec. 15, 2015).

The Supreme Court did not give a reason for rejecting the MATS appeal. Since Scalia's death last February, the high court has been functioning with only eight justices.

Analysts believe implementation of MATS will spur retirement of coal-fired generation and be a positive development for the natural gas industry (see Daily GPI, July 1, 2015). According to the EPA, the public health benefits from MATS would total $90 billion annually, outpacing the cost of compliance.

"Today's Supreme Court decision further solidifies our efforts to protect American families and communities from mercury, arsenic, acid gases and toxic pollution," Graham McCahan, senior attorney for the Environmental Defense Fund, said in a statement Monday. "The polluters' case could have threatened not only MATS, but also the ability of [the appellate court] to recognize the serious practical impacts -- including the impacts on human health -- of their decisions and to craft their relief accordingly."

The EPA could not be reached for comment Monday.

Besides Michigan, the states that were challenging MATS included Alabama, Alaska, Arizona, Arkansas, Idaho, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, Texas, Utah, West Virginia and Wyoming. The Texas Commission on Environmental Quality, the Texas Public Utility Commission and the Railroad Commission of Texas were also petitioners.

Three additional states -- Florida, Pennsylvania and Virginia -- joined the case when it was at the appellate court level. Other petitioners included the National Mining Association, the American Public Power Association, Peabody Energy Corp., the United Mine Workers of America, and various state-level coal industry groups and chambers of commerce.

MATS is separate from the EPA's Clean Power Plan (CPP) -- the agency's landmark rule to limit carbon dioxide emissions from the nation's power sector -- which is also before the same appellate court. Opening arguments were supposed to be heard this month on the CPP, but the court pushed it back to late September (see Daily GPIMay 18).

In a surprise move last February, the Supreme Court temporarily blocked implementation of the CPP until all legal challenges have been resolved (see Daily GPIFeb. 10). West Virginia, Texas and 25 other states sued over the CPP, arguing that it is an overreach by the EPA. That case is State of West Virginia et al v. EPA et al [No. 15-1363].

Without Scalia, industry experts believe the stay of the CPP will remain in effect indefinitely, with a final decision not expected until well after President Obama leaves office (see Daily GPIFeb. 16).

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