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Highlights

Move to overturn MATS based on cost-benefit analysis

Utility sector beseeched administration to leave rule in place

Washington — The US Environmental Protection Agency has advanced a rule revoking the legal basis for Obama-era mercury controls on coal- and oil-fired power plants in one of the last steps before a final regulation is issued.

The rule, which would rescind EPA's "appropriate and necessary" finding that underpins the Mercury and Air Toxics Standards (MATS) rule, landed at the White House Office of Information and Regulatory Affairs on October 4.

That will kick off a roughly 60- to 90-day interagency review process. Once that process is complete, the final rule will be published in the Federal Register. EPA aims to issue a final rule sometime in November, according to its midyear regulatory agenda.

The Trump administration's reconsideration of the regulation centers on how EPA accounts for public health co-benefits in its rulemakings. When EPA issued the MATS rule in 2012, the agency calculated that the annual cost of complying with the regulation would be between $7.4 billion and $9.6 billion, while the annual benefits would total between $37 billion and $90 billion. However, all but between $4 million and $6 million of those benefits would be due to reductions in fine particulate matter, a pollutant regulated under a different section of the Clean Air Act.

In 2017, the Trump administration announced it would review a supplemental "appropriate and necessary" finding EPA issued a year earlier in response in response to a US Supreme Court ruling that held EPA failed to appropriately consider cost in the rulemaking.

With a legal challenge to that supplemental finding on hold, EPA in December 2018 proposed to rescind the finding because "a proper consideration of costs" demonstrates that the total cost of compliance with MATS "dwarfs" the monetized benefits of the rule.

The proposal was issued over the objections of the electric utility industry, which asked the EPA not to jeopardize billions of dollars in investments it made to comply with the rule that it is now recovering from ratepayers.

Meanwhile, EPA's Science Advisory Board informed the agency September 25 that it expects to complete its own review of the proposal within the first quarter of FY-20. That review will aim to ensure the "appropriate consideration of cost is incorporated into the agency's new assessment," according to a planning document prepared by the SAB's 10-member work group.

-- Zack Hale, S&P Global Market Intelligence, newsdesk@spglobal.com

-- Edited by Gail Roberts, newsdesk@spglobal.com