The United States Supreme Court on Monday, June 29, 2015 vacated the Environmental Protection Agency’s (EPA) Mercury and Air Toxics Standards (MATS) regulating power plants. Justice Antonin Scalia’s opinion in Michigan v. EPA held that EPA’s interpretation of the Clean Air Act (CAA) was unreasonable when it decided not to consider the costs of regulation in making the determination that regulating coal- and oil-fired power plants’ emissions of toxic air pollutants was “appropriate and necessary” pursuant to 42 USC § 7412(n)(1)(A). As a result of the Court’s ruling, the MATS rules—which had already gone into effect and which limit the power plants’ emissions of mercury and other hazardous air pollutants nationwide—will be delayed as EPA revises its analysis to incorporate costs.
The Court reversed the decision of the DC Circuit upholding the standards, so there will be a remand to that court for a determination of what steps EPA needs to take in order to comply with the Supreme Court’s decision. Justice Scalia’s opinion expressly did not address this question, instead holding simply that EPA could not leave cost considerations to the next step in the regulatory process.
Michigan v. EPA represents a setback for the Obama Administration’s broad efforts to regulate power plant emissions, and may offer a delay for some owners and operators of coal- and oil-fired power plants. The length of this delay, and whether EPA makes any substantive changes to the MATS rules, will only become clear after the remand proceedings at the DC Circuit. Since a great majority or utilities have already taken steps to phase out their coal-fired power plants, the potential long-term effects of the Supreme Court’s ruling are likely limited.