Another win for utilities: Supreme Court hits EPA hard on systematic failures
July 1, 2015 | By
Barbara Vergetis Lundin
The U.S. Environmental Protection Agency (EPA) is being hit from all sides. First, with the Supreme Court shooting down the federal Mercury and Air Toxics Standard (MATS) and now from the state side as the same court decides Michigan v. EPA, which sought to determine if the EPA must consider how costly it would be for power plants to comply with environmental rules before EPA decides to implement them.
The Supreme Court saw the same issue with the Michigan case as it did with MATS. EPA failed to adequately consider costs before deciding to regulate. This has been a systematic problem of the EPA. In its opinion, delivered by Justice Scalia, the Court determined that "the EPA must consider cost -- including cost of compliance -- before deciding whether regulation is appropriate and necessary. It will be up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost." The EPA had argued that the costs of implementation should not be considered until it issues specific pollution standards. Scalia pointed out in the decision, "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." The majority decision follows closely on the heels of Scalia's 2014 decision striking down, in part, EPA's regulation of greenhouse gases under the PSD program (Utility Air Regulatory Group v. EPA). "Many pundits in 2014 theorized that the Utility Air Regulatory Group (UARG) decision was a shot across EPA's bow about how the agency must approach rulemaking. Those pundits were proven correct [with the Michigan v. EPA decision]," said Thomas R. Wood, partner with law firm Stoel Rives. "The majority admonishes EPA for playing fast and loose with its justifications for rulemaking and for ignoring parts of the statute it doesn't like." As users of a third of the nation's energy, manufacturers are in a unique position when it comes to regulations that impact energy costs and reliability. "…the agency has repeatedly…[issued] overly aggressive regulations that place manufacturers at a competitive disadvantage. Manufacturers, as energy users and producers, depend on a reliable energy supply to remain competitive and face a suite of additional pending regulations, such as ozone and greenhouse gases, that will further burden them," said Linda Kelly, senior vice president and general counsel of the National Association of Manufacturers (NAMA). "Manufacturers look to [this] victory as a sign of progress and will continue to lead the way to promote a more environmentally sustainable future, but we need a balanced approach to regulations that considers both costs and benefits to continue to create jobs and economic growth. [This] decision puts the EPA on notice that when it refuses to follow the rules, manufacturers and the MCLA (Manufacturers' Center for Legal Action who filed an amicus motion supporting the ruling against EPA) will take action." For more:
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