Utility MACT Rule

ALEC’s Utility Maximum Achievable Control Technology Rule Policy Guide

Regulatory Update and Specific Actions

June 13, 2012:

Republican members of the House Energy and Commerce Committee sent their fourth letter of the year to EPA Administrator Lisa Jackson asking the agency to assess the total economic impact of the Utility MACT rule released in December. The EPA has yet to release an estimate other than the $35 billion in capital costs, and the members are seeking a comprehensive total that includes the rule’s impact on consumers, electricity prices and the overall economy. Independent analysts have reported that costs may exceed $100 billion, making it the most expensive regulation ever imposed by the EPA on power plants.

“As set forth in the attached information requests, based on the estimates and assumptions published by EPA, it appears the total cost for the Utility MACT rule may exceed $108 billion,” wrote the members. “We specifically seek EPA’s response concerning whether this reflects a reasonable estimate of the total present value cost of this regulation rule, based on EPA analysis and assumptions.  We have continuing concerns about such an unprecedented, expensive rule with such far-reaching impacts across many states.”

The letter references the results of the recent PJM Interconnection auction showing an increase in electricity prices. “Our concerns about the total cost of the rule are based on the significant  electricity price increases that may be triggered in certain regions of the country by this and other recent or pending EPA power sector rules. As you may be aware, the 13-state PJM Interconnection Region recently announced that capacity prices for 2015-2016, the first year that electricity generators will be required to comply with the Utility MACT rule, will be 8 times higher than the price that was set for 2012 2013. As explained by PJM, the ‘auction was impacted by an unprecedented amount of planned generation retirements (morethan 14,000 MW) driven largely by environmental regulations, which drove prices higher than last year’s auction.’”

Click here to read the letter.

 

April 20, 2012:

Republican members of the House Energy and Commerce Committee have sent a letter to White House Chief of Staff Jacob Lew requesting greater transparency from the administration regarding the Utility MACT rule. The letter reiterates the members’ request for the total projected cost of the rule to be publicly released as per the President’s Executive Order 13563. The members go on to say that: “A cost estimate is critical not only for understanding the actual cost of the Utility MACT rule, but also for understanding the cumulative impact of EPA’s full suite of recent and pending regulations affecting the electricity sector. These regulations include the Cross-State Air Pollution Rule finalized last year as well as other major power sector regulations that EPA has proposed and that will directly regulate existing power plants.”

 

April 17, 2012:

A bipartisan group of twenty four state attorneys general have filed petitions challenging EPA’s Utility MACT rule.   Senator James Inhofe (R-Okla.) announced his support for the petitions during a recent hearing, saying: “I applaud Oklahoma Attorney General Scott Pruitt for standing up for Oklahomans as well as the attorneys general in states with Democrat Governors including Arkansas, Kentucky, Missouri, and West Virginia.  These Governors clearly understand that families in their states will be forced to pay the high costs of the Utility MACT rule, and suffer the consequences of regulations that have a cost/benefit ratio of 1,600 to 1.  They know that power plants in their states will shut down and the loss of tax revenue will hurt schoolchildren’s education and reduce emergency services in their communities.”

 

April 9, 2012

The Utility Air Regulatory Group (UARG) filed a second challenge to EPA’s Utility MACT (MATS) rule in Utility Air Regulatory Group v. EPA, D.C. Cir., No. 12-1166 in the D.C. Circuit.  The group’s second petition for review brings a challenge specifically against the New Source Performance Standards that are part of the rule.  In its prior challenge, filed on March 16, UARG challenged the air toxics standards generally and also specifically on EPA’s denial of its petition to remove electric generating units from he list of source categories regulated under section 112 of the Clean Air Act, which addresses sources of toxic pollutants. The filing deadline for challenges to the rule was April 16th.

 

March 28, 2012

Energy and Commerce Committee Chairman Fred Upton (R-MI), Chairman Emeritus Joe Barton (R-TX), and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) have sent a letter to Energy Secretary Steven Chu requesting the technical information on the “reliability of transmission distribution of energy” supplied by Department of Energy for the development of EPA’s power sector rules. The Congressmen wish to know how the EPA regulations could affect electricity prices and the reliability of the nation’s energy supply.

 

February 23, 2012

The National Mining Association (NMA) has filed a petition in the US Court of Appeals in order to force EPA to conduct a review of the Utility MACT rule. It also sent a letter directly to EPA requesting a stay and reconsideration of the rule. The NMA said the EPA has underestimated the potential economic damages of the rule as well as its negative effects on the reliability of the nation’s electricity grid.

Action: File petitions for reconsideration with EPA. For filing information consult the Judicial Review section of the rule under General Information.

 

February 22, 2012

Republicans on the Energy and Power Subcommittee of the Energy and Commerce Committee have sent a letter to EPA asking for a report on the full costs of implementing the Utility MACT rule. The letter asks for a total cost estimate of the rule in accordance with the President’s Executive Orders 13563 and 12866 requiring agencies to be more transparent and provide cost analyses for major regulations.

 

February 17, 2012:

Senator James Inhofe (R-Okla.), ranking member of the Senate Committee on Environment and Public Works, filed a joint resolution of disapproval under the Congressional Review Act (CRA) that will prevent the EPA from going through with its Utility MACT rule. The CRA provides for an expedited Senate floor procedure to overturn executive agency rules by a simple majority vote.  If passed by both chambers and signed into law, the joint resolution would effectively send the rule back to EPA to be rewritten in conformance with Congressional direction.

 

February 16, 2012:

EPA has published the finalized Utility MACT rule (also known as the Mercury and Air Toxics or MATS rule) in the Federal Register. The three year compliance period will start in 60 days (April 16, 2012) and affected power plants will have to comply with the standards by April 16, 2015. Publication in the Federal Register starts the clock for filing petitions for review challenging the final rule, as well as petitions for reconsideration of the rule.  All judicial petitions for review must be filed in the United States Court of Appeals for the District of Columbia Circuit by April 16, 2012.

Action: File petitions for reconsideration with EPA. For filing information consult the Judicial Review section of the rule under General Information.

 

January 30, 2012

The Federal Energy Regulatory Commission’s issued a white paper for comment regarding how the Commission should advise the EPA on power plant requests for extensions to comply with the Utility MACT rule.  The white paper outlines recommendations on how the Commission will view extension requests, what the Commission will base its review on, what standard of review it should use, and in what manner it will advise the EPA.  The Commission has asked for comments on the EPA’s Policy Memorandum of administrative orders, review policies relating to potential violations outside of a reliability standard, review standards for determining reliability standard violations, and what the Commission’s comments to EPA should highlight.

Action: Submit comments to FERC on its advisory policies. Comment submission information can be found here. Comments can be filed at http://www.ferc.gov/.

 

January 24, 2012:

Energy and Commerce Committee Chairman Fred Upton (R-MI), Chairman Emeritus Joe Barton (R-TX), and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) among others wrote to Lisa Jackson, Administrator of the EPA, to request an estimate on the total cost of the Utility MACT regulation, including the “total capital cost associated with compliance activities.” The letter notes that the current Regulatory Impact Analysis (RIA) produced by the EPA does not examine total costs but only “those costs assigned to three select years from costs that are amortized over 30 to 40 years.” The congressmen also requested an “assessment of the impact of the recent court decision to stay implementation of CSAPR (Cross State Air Pollution Rule) on the cost estimate” of the Utility MACT rule.

 

December 23, 2011:

EPA released the finalized Utility MACT rule. The finalized standards require utilities to be in compliance by 2015.

 

December 9, 2011:

Over 120 trade associations, chambers of commerce and other organizations from across the country sent a letter addressed to President Obama expressing a deep concern that the Utility MACT rule, due to be issued by the Environmental Protection Agency (EPA) on December 16, 2011 could cause significant electricity reliability constraints that would have a ripple effect through the economy, hurting businesses of all sizes. The letter urges President Obama to delegate presidential exemption authority under the Clean Air Act to provide additional time as needed for facilities that are making efforts to achieve compliance.

 

November 15, 2011:

House Science Subcommittee on Energy and Environment Chairman Andy Harris (R-MD) and Science Subcommittee on Investigations and Oversight Chairman Paul Broun (R-GA) sent a letter Tuesday to OMB’s Office of Information and Regulatory Affairs, which is reviewing EPA’s mercury and air toxics rule for utilities.  The Harris-Broun letter questions the cost benefit analysis and expresses “concerns with troubling scientific and economics accounting practices in the EPA’s Regulatory Impact Analysis used to justify Clean Air Act Rules”.

 

November 9, 2011:

Senators Joe Manchin (D-W.Va.) and Dan Coats (R-Ind.) introduced the “Fair Compliance Act” to create reasonable timelines and benchmarks for utilities to comply with the Cross State Air Pollution Rule. Additional cosponsors include Sens. Bob Corker (R-Tenn.) and Ben Nelson (D-Neb.).  The legislation would extend the compliance deadline for the Cross-State Air Pollution Rule by three years and the deadline for the Utility MACT rule by two years. This means both would fall on January 1, 2017.

 

October 24, 2011:

EPA is postponing the final MACT standards until December 16, 2011 but is opposing efforts to delay the rule for one year. The agency filed a brief with the U.S. District Court for the District of Columbia. The brief simply delays the final issuance date one month in order to respond to comments. EPA received 960,000 comments which are being reviewed in order to finalize the rule.

 

October 7, 2011:

A power plant industry trade group, backed by 25 states, has asked a federal court to postpone the Issuing of the final Utility MACT rule until 2012. The Utility Air Regulatory Group filed a motion Oct. 7 in the U.S. District Court for the District of Columbia for a delay that was endorsed in an amicus brief by 25 states and one territory. The states agreed that EPA needs more time to respond to comments on its proposed national emissions standards for hazardous air pollutants for power plants. The motion would extend the deadline for the final rule to Nov. 16, 2012. The amicus brief was submitted by Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wyoming, and Guam.

Action: Pursue all legal means for addressing the rule including filing appeals of EPA rules or filing interventions of amicus briefs.

 

September 2011:

The U.S. House of Representatives voted to approve an amendment to H.R. 2401, the Transparency in Regulatory Analysis of Impacts on the Nation (TRAIN) Act that would delay implementation of the Utility MACT Rule until its full economic impacts can be assessed. Implementation of the rule would have to be delayed at least an additional six months after the Aug.1, 2012 deadline for completing the economic impact analysis. Most Democrats in the House opposed the amendment, and its prospects in the Democrat-controlled Senate are grim. In addition, the White House has threatened to veto the full bill.

Resources:

Talking Points on the Utility MACT Rule. American Legislative Exchange Council. November, 2011.

EPA’s Regulatory Train Wreck: Strategies for State Legislators. American Legislative Exchange Council. February, 2011.

Lack of Benefits From the Regulatory Train Wreck. American Legislative Exchange Council. December, 2011.

Technical Comments on the Regulatory Impact Analysis Supporting EPA’s Proposed Rule for Utility MACT and Revised NSPS. NERA Economic Consulting. August 3, 2011.

EPA’s Pretense of Science: Regulating Phantom Risks. Texas Public Policy Foundation. May, 2012.

All Pain and No Gain: The Illusory Benefits of the Utility MACT. CEI. June, 2012.