White Stallion Energy Center LLC, et al. v. Environmental Protection Agency (EPA)

Case Updates

The D.C. Circuit Court of Appeals rendered a split 2-1 decision that upheld the Environmental Protection Agency’s Mercury and Air Toxics Standards regulation known as the Utility MACT.

The U.S. Chamber urged the U.S. Court of Appeals for the D.C. Circuit to invalidate EPA's Utility MACT Rule, also known as the “Blackout Rule” because of the regulation's potential impact on grid reliability. The Utility MACT Rule sets new Clean Air Act emission standards for power plants. The rule will require power plants to be shut down, significantly modified, or replaced, and for gas pipeline and electric transmission infrastructure to be built. At a price tag of at least $10 billion per year, EPA’s Utility MACT rule is one of the most expensive regulations ever for power plants, and has already resulted in the announced shutdown of numerous coal-fired power plants in Maryland, Pennsylvania, Ohio and West Virginia, with more sure to come.

In order to justify the Utility MACT Rule, EPA relied on so-called “co-benefits,” a controversial and legally dubious accounting method that counts as “benefits” the ancillary emissions reductions that are not the target of the rule itself. The practice of counting “co-benefits” is particularly egregious when, as has become common in recent rulemakings, the supposed co-benefits associated with PM2.5 reductions comprise the overwhelming majority of all benefits from the subject regulation, as in the Utility MACT. The Utility MACT is not an aberration in this regard. According to a recent report by the Congressional Research Service (“CRS”), “co-benefits” associated with reductions in PM2.5 emissions accounted for more than half the benefits used to justify 21 out of 28 of the EPA’s economically significant regulations promulgated from 2004-2011.

Although the Utility MACT Rule allegedly targets mercury as a “Hazardous Air Pollutant” (HAP), more than 99% of the EPA's alleged benefits from the rule do not come from reducing HAP emissions, but instead from incidental emission reductions from “fine particulate matter” (“PM2.5”), which is already heavily regulated by the EPA under other regulations. Indeed, according to NCLC's amicus brief, the EPA has already reduced PM2.5 to a level sufficient to protect human health with an adequate margin of safety. It is logically inconsistent for EPA to now claim further reductions coincident with compliance with other requirements of the Act would benefit human health.

The U.S. Chamber's amicus brief challenges EPA’s claims that its stringent and costly regulations are “appropriate and necessary.” Not only did EPA justify Utility MACT based largely on questionable “co-benefits,” when the record reflects there is little or no public health benefit from the reduction in emissions of hazardous air pollutants (“HAPs”) -- EPA also reversed course and now claims it could not consider the significant costs imposed by the regulations. In doing so, EPA drastically re-interpreted the Clean Air Act. EPA designed the rule to achieve PM2.5 emissions reductions that it could not lawfully compel using provisions of the Act authorizing direct regulation of PM2.5.

The regulation at issue in this case is formally known as the National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units, 77 Fed. Reg. 9,304 (Feb. 16, 2012).