Washington (Platts)--20Oct2008

The Bush administration has asked the US Supreme Court to review a
lower-court ruling that struck down a power industry-backed rule regulating
mercury emissions from coal-fired power plants.

The request filed late Friday argues that the US Court of Appeals for the
District of Columbia Circuit erred when it threw out the Bush administration
mercury rule in February.

The rule was issued by the Environmental Protection Agency in 2005. The
power sector largely supported the measure, in part because it established a
"cap-and-trade" program that allowed utilities to buy and sell
emission-reduction "allowances" instead of installing expensive
pollution-control equipment to curb their own mercury emissions.

But a host of states and environmental groups sued EPA over the rule,
saying it was too weak to protect the public from mercury, a neurotoxin.

They argued that under the Clean Air Act, EPA must require all power
plants to install mercury-specific pollution controls, an approach known as
"maximum achievable control technology," or MACT.

But the administration objected to that reasoning, telling the Supreme
Court that the vacated rule "would provide the highest degree of mercury
control possible from power plants." The market-based rule would also "create
financial incentives for power plants to look for new and low-cost ways to
reduce emissions."

Attorneys representing American Electric Power, Southern
Company and other major coal-fired electric utilities last month asked the
Supreme Court to review the case, citing similar arguments as the Bush
administration.

Environmental groups, though, predicted that the Supreme Court will
rebuff both the administration and industry by refusing to hear the case.

"This appeal is an appalling waste of taxpayer resources and stands
little chance of going anywhere," said Frank O'Donnell, president of Clean Air
Watch, a Washington-based conservation group that vigorously opposed EPA's
cap-and-trade rule.

--Brian Hansen, brian_hansen@platts.com