Analyzing the Supreme Court’s MATS Ruling and the CPP


Earlier this month, we wrote on the U.S. Supreme Court’s ruling on the Clean Air Act’s mercury and air toxics (MATS) provision and how that can impact energy producers.

To recap, the Court ruled against the EPA, citing the fact that the agency did not factor costs into consideration when creating its limits on toxic emissions and pollutants from coal-fired power plants. Opponents of the provision successfully argued that regulations had to be “appropriate and necessary”, but a lack of a cost-based analysis made the agency’s regulations excessive.

We concluded that this ruling doesn’t mean that the EPA’s MATS provision is dead. Rather, the EPA was sent back to the drawing board, in a manner of speaking, forcing it to consider costs into its analysis when determining emissions limits.

After two weeks, there are additional points of analysis to make, especially how the ruling impacts the Clean Power Plan.

The True Impact of the Ruling

While in theory power plant producers can breathe a sigh of relief, like what we wrote earlier this month, in practice most power plants have already complied with the standards set forth by the EPA – thus taking much of the teeth out of the ruling altogether.

Plus, the law wasn’t vacated, or set aside. Chances are, the EPA will derive another version of the law that will pass muster and will still create stricter limits and emissions controls on MATS for power plants. In this way, plant producers aren’t out of the woods.

What most producers have wondered is how this ruling impacts the Clean Power Plan as proposed by the EPA. The CPP will undoubtedly be more far-reaching and invasive than the MATS provision, so it is proper to see it as a bigger consideration and potential obstacle to be overcome.

The Court and the CPP: Will the CPP Stand?

On the surface, it appears that the ruling dealt a severe blow to the CPP’s prospects.

Upon further inspection, though, the CPP survives unscathed. The key component to that determination is the fact that the ruling was based on the EPA’s failure to include costs in its decision.

However, costs have always been a part of the CPP’s provisions. They’re clearly delineated in section 111 of the CPP. The ruling also did not tackle co-benefits, such as reducing mercury and soot at the same time. Co-benefits help make the provision less costly, so it doesn’t appear that cost will be a successful avenue of attack for CPP opponents as it was for opponents of MATS.

Of course, all of this is a bit premature if and when a legal challenge to the CPP ever reaches the Supreme Court. The Justices are not bound to follow the same line of argument for the CPP as they did MATS; they could easily choose a different avenue and still attack the CPP.