WASHINGTON--A federal appeals court on Tuesday upheld the
nation's first-ever national standards requiring power plants to
cut emissions of mercury and other hazardous air pollution.
The federal rules, scheduled to take effect in April 2015,
require the nation's 600 coal and oil-fired power plants to comply
with emissions limits set by the Environmental Protection Agency.
The standards are a notable environmental accomplishment for
President Barack Obama and a blow to the coal industry, which is
the biggest source of mercury emissions in the U.S., according to
EPA.
A divided three-judge panel of the U.S. Court of Appeals for the
District of Columbia Circuit in a 61-page ruling rejected several
legal attacks raised by challengers. These challengers include more
than 20 states with utilities that depend heavily on coal for
energy production, and several industry groups and companies,
including Peabody Energy Corp., FirstEnergy Corp., and the National
Mining Association.
The regulations, among several major air-pollution rules rolled
out by the Obama administration in the past few years, have been a
factor behind utility-company decisions to retire coal-fired units.
Cheap supplies of cleaner-burning natural gas and stagnant
electricity demand are other factors.
Since November 2013, companies have announced plans to close
nearly two dozen units at nine coal-fired power plants producing a
total of 5.4 gigawatts of coal-fired capacity, according to the
Energy Information Administration. Between 2012 and 2020, EIA
projects that the capacity to produce a total of 60 gigawatts will
be retired due to stricter emissions rules and other factors, with
90% of these retirements coming by 2016. U.S. utilities have more
than 1,000 gigawatts in capacity.
The EPA rules were first mandated by Congress in 1990 but were
delayed by litigation, lobbying and legislative battles. They
require coal utilities to cut at least 90% of their emissions of
mercury, a neurotoxin the EPA says is known to cause brain damage
and other health problems, particularly in developing fetuses and
young children. The rules require coal-fired utilities to install
so-called scrubber technology, which is widely available, to reduce
their air emissions.
The outcome of the appeals-court ruling was expected. "Industry
was always facing an uphill battle with this case," said Brian
Potts of Foley & Lardner LLP in Madison, Wis., who represents
utilities but doesn't have any clients involved in the case. "EPA
knew what it had to do to get it through the courts."
The court's majority ruled the EPA acted reasonably in issuing
the rules, rejecting arguments that the agency should have
considered the costs of its regulations before moving forward. A
dissenting judge, Brett Kavanaugh, warned the regulations would
cost utilities more than $9 billion a year.
FirstEnergy spokesman Todd Schneider said his company doesn't
plan to appeal and will continue to work on plans to bring its
plants into compliance with the new rules. A spokeswoman for
Michigan Attorney General Bill Schuette, one of the states in the
lawsuit, was less definitive. "We are reviewing the opinion and
considering our options in consultation with other states," said
spokeswoman Joy Yearout.
Write to Brent Kendall at brent.kendall@wsj.com and Amy Harder
at amy.harder@wsj.com
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