WASHINGTON, July 1, 2015 – The Supreme Court ruled 5-4 Monday against the EPA’s rules to limit emissions of mercury and other air pollutants from coal-fired power plants, saying that the agency failed to take the cost of the new rules into consideration. The challenge was brought by industry groups and 23 states. 

“It is not rational, never mind 'appropriate,' to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits," Justice Antonin Scalia wrote in the majority’s decision. "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 court noted that, in the agency’s “Regulatory Impact Analysis” it estimated that “power plants would bear costs of $9.6 billion per year. The Agency could not fully quantify the benefits of reducing power plants’ emissions of hazardous air pollutants; to the extent it could, it estimated that these benefits were worth $4 to $6 million per year…..The costs to power plants were thus between 1,600 and 2,400 times as great as the quantifiable benefits from reduced emissions of hazardous air pollutants.”

In writing the dissent, Justice Elena Kagan noted that EPA did take costs into consideration – even though it was done later in the regulatory process.

“On the majority’s theory, the rule is invalid because EPA did not explicitly analyze costs at the very first stage of the regulatory process, when making its “appropriate and necessary” finding. And that is so even though EPA later took costs into account again and again and . . . so on.

She described the majority’s opinion as “a peculiarly blinkered way for a court to assess the lawfulness of an agency’s rulemaking.

“I agree with the majority—let there be no doubt about this—that EPA’s power plant regulation would be unreasonable if “[t]he Agency gave cost no thought at all. But that is just not what happened here. Over more than a decade, EPA took costs into account at multiple stages and through multiple means as it set emissions limits for power plants,” Kagan wrote.

The EPA said in a statement that it would review the decision and take "any appropriate next steps" when the review is completed.

Some Republicans cheered the decision. Sen. Lisa Murkowski, R-Alaska, chairwoman of the Senate Energy and Natural Resources Committee, said in a statement: “It is heartening to hear that the court has reined in the EPA, especially on the issue of the costs of regulation. We need balance, and I hope today's opinion will lead to it.”


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