Court rules against EPA in mercury pollution case

Melissa Nann Burke
Detroit News Washington Bureau

Washington — The U.S. Supreme Court ruled 5-4 Monday that the Environmental Protection Agency “unreasonably” refused to account for the cost of complying with its new standards limiting mercury and other hazardous pollutants from coal-fired power plants.

The decision is a victory for the utilities and 21 states that protested the federal agency’s refusal to consider costs in its Clean Air Act regulation.

After an appearance Monday at the National Zoo, EPA Administrator Gina McCarthy told The Detroit News and other reporters that she was disappointed in the ruling. But she downplayed its impact, noting that most power plants are on their way to making emissions reductions three years after the rule was issued.

“The rule still stands in place,” McCarthy said. “We’re going to get the reductions that the American public deserves.”

The High Court overturned a ruling by the U.S. Court of Appeals for the D.C. Circuit, which last year said the EPA properly looked at health risks — not compliance costs — in deciding that mercury and other hazardous pollutants should be regulated more strictly.

The EPA contended that Congress only requires the agency to consider cost when setting the level of regulation and not whether to regulate.

“By EPA’s logic, someone could decide whether it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system,” Justice Antonin Scalia wrote for the court’s majority.

The suit against the EPA was led by Michigan, which was joined by 20 other states siding with mining and utility industries.

“Today’s ruling is a victory for family budgets and job creation in Michigan,” Michigan Attorney General Bill Schuette said in a statement.

“The court agreed that we can and must find a constructive balance in protecting the environment and continuing Michigan’s economic comeback.”

EPA spokeswoman Enesta Jones noted the case was not about the substance of the standards or the EPA’s authority to limit air pollutants.

Asked by The Detroit News whether the decision could affect other climate change rules in the works, McCarthy said, “We haven’t read it in detail, but that’s not our understanding.” She added, “It’s not a setback, it’s an extra step.”

She said it is unclear what additional work the EPA must do as a result of the ruling.

Attorney Steve Kohl, who practices environmental law at Warner Norcross & Judd in Southfield, expects there won’t be a final resolution for the case until later this year.

“What’s at issue isn’t so much the rule itself but the predicate to the rule,” said Kohl, who wasn’t involved in the case. “It’s not really clear how much of a practical effect this would have on utilities.”

Federal law directs the EPA to regulate power plants when “appropriate and necessary,” but Congress was silent on whether the agency should pay attention to cost.

The Mercury Air Toxics Standards were issued to protect people and the environment from toxic air pollution, including mercury, from power plants. EPA estimated that for every dollar spent to reduce toxic pollution from power plants, the American public would see up to $9 in health benefits.

Public health officials in Michigan and other Great Lakes states have issued advisories warning people that it’s not safe to eat many fish caught in many lakes and rivers in the region because of high mercury levels.

Howard Learner, executive director of the Environmental Law & Policy Center, said the court’s ruling would delay the rules limiting pollution to protect children’s health and the Great Lakes. He called on the EPA to act promptly to finalize lawful standards.

“Unfortunately, the coal industry is being rewarded for endless litigation stalling the EPA’s reasonable standards to reduce mercury pollution in our environment and protect public health,” Learner said.

Jack Schmitt, deputy director of the Michigan League of Conservation Voters, said Schuette is “serving Michigan’s polluters, not its people.”

“With the costs of clean renewable energy continuing to decline, our Attorney General should be focused on moving Michigan to a cleaner energy future that saves money for families and small businesses and reduces pollution instead of fighting for companies that want to continue burning coal to pad their bottom lines,” Schmitt said in a statement.

The EPA’s rule applies to more than 50 boilers at 21 power plants in Michigan, according to the state Department of Environmental Quality. The regulations took effect in April, but many plants received a one-year extension for compliance.

Michigan has a mercury emissions rule in place that largely mirrors the EPA’s. The state rule remains in effect, requiring emissions reductions.

“We will stick with our state rule, which was developed as a backstop when the federal rule was called into question,” said Brad Wurfel, spokesman for the Department of Environmental Quality.

“Ratepayers will not notice any interruptions, and we will still achieve the same end result.”

Asked whether Schuette plans to challenge the state’s mercury rule, a spokeswoman said his office would decide on its next steps after reviewing the Supreme Court’s ruling.

Dan Bishop, a spokesman for Jackson-based Consumers Energy, said the company still plans to retire seven coal-fired plants in Michigan by April 2016 under the terms of a settlement agreement with the EPA.

“The retirement of these seven older coal plants underscores the urgent need for the Legislature to address the electric capacity shortfall in Michigan’s Lower Peninsula and support the next generation of clean and affordable power plants in the state,” Bishop said.

Republican U.S. Rep. Fred Upton, who chairs the House Energy & Commerce panel, said the court decision highlights how agencies “do not have unlimited authority to impose excessive costs on the American public.”

“Unfortunately, this ruling comes after the rule has already taken a toll, with a number of power plants shuttered and many jobs lost because of the EPA’s unlawful action,” Upton said in a joint statement with Rep. Ed Whitfield, R-Kentucky.

They also said the ruling underscores why implementation of the administration’s pending carbon rule should be delayed until all legal challenges are resolved — as required by legislation passed last week by the House.

Scalia said the Clean Air Act makes several mentions of cost, and that it should be one of many factors the agency considers as it proposes new rules.

He specified that the court isn’t requiring the EPA to conduct a formal cost-benefit analysis when making a preliminary determination on whether to regulate. “It will be up to the agency to decide (as always, within the limits of reasonable interpretation) how to account for cost,” Scalia wrote.

Justice Elena Kagan, writing for the dissenters, derided the ruling as “micromanagement” of EPA’s rulemaking that “deprives the agency of the latitude Congress gave it to design an emissions-setting process sensibly accounting for costs and benefits alike.”

Kagan said the decision “deprives the American public of the pollution control measures that the responsible agency, acting well within its delegated authority, found would save many, many lives.”

Justices Stephen Breyer, Sonia Sotomayer and Ruth Bader Ginsburg joined Kagan’s dissent.

In March, Michigan Solicitor General Aaron Lindstrom argued on behalf of the 21 states that said the regulations would mean higher prices for consumers and force power generators out of business.

In court briefs, the states said the estimated $9.6 billion cost for utilities in pursuit of $4 million to $6 million in benefits is unreasonable and contrary to the law’s language.

The EPA valued the rules’ impact on people’s health at an estimated $30 billion to $97 billion, avoiding up to 11,000 premature deaths and 4,700 heart attacks.

U.S. Solicitor General Donald B. Verrilli Jr., arguing on behalf of the EPA, said the Clean Air Act applies the same “regulatory logic” to power plants that it applies to every other source of pollution when regulating hazardous emissions.

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Detroit News reporters David Shepardson and Jim Lynch contributed.