EPA will open MATS rule for review despite utility objections

Dive Brief:

The Environmental Protection Agency (EPA) will reconsider the justification behind the Mercury and Air Toxics Standards (MATS), a major Obama-era air regulation responsible for the closure of scores of coal power plants.
The EPA will review the regulation's emissions standards, as well as the agency's justification that the rules were "appropriate and necessary" in the first place, spokesperson Molly Block said in an email. The agency will release proposed changes after an interagency review process expected to take 60-90 days, she said.
Most coal plants have either installed pollution controls to comply with MATS or have shut down, and utilities wrote to EPA last month asking it to keep the MATS regulation in place. Any proposed rollback is likely to be met with legal challenges from environmental groups and liberal states.

Dive Insight:

Because utilities are largely compliant with the MATS regulation today, the EPA's review is not likely to have major impacts on the existing generation fleet. It could, however, affect how EPA crafts air regulations in the future.

The interagency review is part of a broader initiative at EPA to reconsider how the agency views "co-benefits," or health impacts of a rule that come from reductions in pollutants not directly covered by the regulation.

In the case of MATS, conservatives and industry groups criticized EPA for partially justifying the regulation with benefits that came from reducing particulate emissions, rather than the mercury, dioxins and other pollutants directly targeted by the rule.

Consideration of co-benefits was a key element in the EPA's decision to keep the core of the MATS rule in place after the Supreme Court ordered it to review its cost-benefit analysis in 2015. The agency expects the rule to cost $9.6 billion annually, but in a supplemental finding a year later said that the health benefits were worth the price tag.

If EPA decides that it should not consider co-benefits, it could lead the agency to propose less stringent air regulations in the future.

EPA first signaled it would review the MATS rule last year, when it asked the D.C. Circuit Court to pause ongoing litigation over the plan brought by the coal sector.

In response, major trade groups representing electric utilities wrote to the agency, asking it to preserve the regulation. The sector has already invested more than $18 billion to comply with the rule, they wrote, and in many states regulators are still evaluating whether to allow utilities to recover the cost of pollution upgrades from customers.

"Units that retired in part due to MATS — along with other regulatory requirements, low natural gas prices, resource planning initiatives, and a variety of other factors — have been decommissioned and cannot be reinstated," utilities wrote.

The MATS review is the latest in a slate of Trump administration actions to roll back Obama-era environmental regulations. This month, the EPA announced it would replace Obama's Clean Power Plan with less ambitious carbon regulations for coal plants, and the Department of Energy is still working on a plan to bail out at-risk coal and nuclear plants following a presidential directive in June.