Dive Brief:

• The Court of Appeals for the District of Columbia Circuit issued a ruling on Tuesday that allows the Environmental Protection Agency to enforce its Mercury and Air Toxics Standards (MATS) as it fixes the flaws in the regulatory program identified by a Supreme Court ruling earlier this year.
• In June, the Supreme Court ruled in a 5-4 decision that the EPA did not properly consider compliance costs in crafting the broad regulations aimed at reducing the emission of mercury and other harmful pollutants from coal-fired power plants. That decision remanded the MATS rule back to the D.C. Circuit to assess how the agency could fix the regulations. 
• Most power plants affected by the MATS rule have already made the necessary emissions control upgrades to comply with the pollution standards or have shut down. Earlier this year, analysts credited the regulations with about 12 GW of expected coal retirements in 2015 alone.

Dive Insight:

When the Supreme Court ruled against the MATS rule in June of this year, it did not throw out the regulation entirely. Justice Antonin Scalia, who wrote the majority opinion, did not deny that the EPA was justified in regulating mercury and other harmful pollutants, nor did he find that it had overstepped its role as a federal agency by making states and utilities comply.

Instead, the ruling centered on how the agency determined the MATS rule was "appropriate and necessary," an initial finding that starts the regulatory rulemaking process. The plaintiffs, a coalition of states and industrial groups led by the Michigan attorney general, argued the EPA should have taken costs into account during that initial finding. The agency said it evaluated costs at multiple points throughout the drafting process, but was under no obligation to do so for the "appropriate and necessary" finding.

The Supreme Court's majority sided with the plaintiffs, finding that EPA should have considered costs at that part of the process as well. 

The decision threw the MATS rule back to the D.C. Circuit, which earlier this month heard arguments from opponents who wanted it thrown out entirely. Judges told the plaintiffs at that hearing that there was precedent for sending flawed rules back to regulatory agencies for repair without vacating them completely. 

EPA spokesperson Melissa Harrison told The Hill that the agency is "very pleased" with the D.C. Circuit decision, saying that the MATS rule is "already cutting pollution from power plants that will save thousands of lives each year."

The agency has promised to fix the cost issues with the rule by April 16, 2016, the same deadline for plants that received extensions under the rule to come into compliance. The MATS rule originally called for plants to comply with its pollution standards by April 16 of this year, but about 200 plants were granted extensions to install pollution control equipment. 

The fate of those plants — representing about 20% of U.S. generating capacity — was the biggest uncertainty for stakeholders as the D.C. Circuit reevaluated the MATS standards. If the rule were vacated completely, regulatory lawyers told Utility Dive in June, utilities that had already made billion-dollar investments in pollution control equipment to meet the extended compliance deadline could have to face prudence reviews from state regulators on the expenditures. 

With the regulation now upheld, however, that uncertainty will be largely avoided, allowing utilities and generators to move forward with MATS compliance. Opponents call the regulation one of the costliest ever to come out of the EPA.

Earlier this year, SNL analysts estimated that more than 12 GW of coal would come offline in 2015, largely as a result of the rule, but more recent data from the Sierra Club estimates that well over 20 GW of coal power has either been retired, or will come offline before the end of the year: