Washington (Platts)--13Sep2012/357 pm EDT/1957 GMT

A federal court has agreed to hold in abeyance challenges to the US Environmental Protection Agency's Mercury and Air Toxics Standards by developers of new coal-fired units while the agency reconsiders parts of the major rulemaking that raised industry concerns.

The US Court of Appeals for the District of Columbia Circuit panel of Judges David Tatel, Thomas Griffith and Brett Kavanaugh on Wednesday also directed the EPA to file a status report within 30 days of its order and then every 30 days thereafter as the agency reexamines the rule.

While the decision may delay action on the lawsuit, White Stallion Energy Center v EPA (No. 12-1272), new unit developers were heartened that the court indicated it would keep close watch as the agency reworks the rule to address their concerns, an attorney for the developers said Thursday.

"The end result is that we have EPA on record acknowledging error, a commitment made to get that error corrected as quickly as the rulemaking process allows, and a Court expecting that to happen," said Eric Groten, a partner at Vinson & Elkins and counsel for White Stallion Energy Center.

EPA expects to complete its reconsideration of certain new-source issues of the MATS by March 2013. The compliance deadline for MATS, which calls for coal plants to install and operate maximum achievable control technology, is April 2013.

The agency said it would stay the rule for three months, the maximum allowed under the Clean Air Act, during the reconsideration process which would involve an "expedited, open and transparent process."

Earlier this year, the court agreed to sever and expedite consideration of the new unit developers' case over the slew of suits filed by the power industry expressing concerns about the operation of existing coal generation under the MATS. New-unit developers contend that unless their case is heard soon, they will miss the April 13, 2013, deadline for an exemption from a separate EPA rule setting greenhouse gas standards for new power plants.

--Cathy Cash, cathy_cash@platts.com 
--Edited by Katharine Fraser, katharine_fraser@platts.com

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