On June 29, 2015, the U.S. Supreme Court rejected the Environmental Protection Agency’s (EPA) Mercury and Air Toxins (MATS) rule, ruling that the agency unreasonably overlooked the costs associated with the regulation. While the decision dealt a significant blow to the environmental agenda of the Obama administration and provided a rare win for the reeling U.S. coal industry, most power generation companies have already spent years retiring coal-fired power plants in order to comply with MATS. However, the ruling could impact future legal debates surrounding EPA regulations, including the contentious Clean Power Plan. The 5-4 decision means that MATS will now be sent to the Court of Appeals of the District of Columbia, which will decide whether the rule is invalid and the EPA must start anew or whether it can amend MATS to satisfy the Supreme Court’s ruling.

The majority opinion, authored by Justice Antonio Scalia, centered on the lack of a cost-benefit analysis for MATS, rather than the EPA’s authority to regulate mercury and air toxics emissions. Specifically, the majority believed that the EPA must consider costs when making an initial determination whether a new regulation is “appropriate and necessary”, as required by the Clean Air Act. The minority opinion, written by Justice Elena Kagan, argued that the EPA considered costs repeatedly throughout the rulemaking process, if not in its initial assessment, fulfilling the statutory requirement. The specific nature of the majority’s opposition makes it likely that the D.C. Circuit will allow the EPA to amend the rule, incorporating costs, rather than throwing it out entirely. However, the ruling sets a precedent for all federal agencies to consider compliance costs at the outset of the regulatory process.

Originally published by EnerKnol.

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