High Court Says EPA Must Consider Cost In Handing Down Power Plant Regulations

President Obama’s broad agenda to regulate dirty air emissions suffered a setback on Monday when the U.S. Supreme Court ruled that the federal Environmental Protection Agency (EPA) should have considered a cost-benefit analysis in settings limits to the amount of mercury and other toxic air pollutants at coal-fired power plants.

In a 5-4 decision, the Court ruled that the EPA “must consider cost — including cost of compliance — before deciding whether regulation is appropriate and necessary.“

The opinion added: “It will be up to the (EPA) to decide (as always, within the limits of reasonable interpretation) how to account for cost,” stated Justice Antonin Scalia, writing for the majority.

The EPA proposed to update emission limits for new power plants under the Mercury and Air Toxics Standards, or (MATS), in November 2012. After going back and forth with industry and opponents to reconsider certain aspects of the rules for more than two years, the U.S. Court of Appeals in Washington, D.C., denied those petitions in April ahead of the Supreme Court challenge.

In the 47-page ruling, Scalia wrote that federal administrative agencies are required to engage in “reasoned decision-making.”

“Consideration of cost reflects the understanding that reasonable regulation ordinarily requires paying attention to the advantages and the disadvantages of agency decisions,” the ruling stated. “It also reflects the reality that too much wasteful expenditure devoted to one problem may well mean considerably fewer resources available to deal effectively with other (perhaps more serious) problems.”

After the ruling was handed out, dozens of industry groups cheered the court’s ruling as a victory against EPA overreach. However, several supporters and legal analysts pointed out the court’s ruling left the door open for federal environmental regulators to re-write the rules again if they factored in the cost of the regulations.

The Sierra Club, which joined with other environmental groups in support of the EPA’s MATS standards, expressed disappointment in the court’s ruling. “As a father, I am appalled by today’s decision. Instead of ensuring that our children grow up safe, healthy, and protected from pollution, the court chose to reject common-sense protections,” said Glen Hooks, director of the Arkansas chapter the Sierra Club.

Sen. Tom Cotton, R-Arkansas, however, cheered the decision after expressing disappointment in an earlier ruling by the high court on Affordable Care Act subsidies.

“I am pleased the Supreme Court finally took steps to reign-in President Obama’s Environmental Protection Agency. Regardless of the regulation, it’s imperative its impact on Arkansas businesses and families is carefully considered,” Cotton said in a news release. “Regrettably, irresponsible overregulation has become a pattern in the Obama Administration and there are several other regulations that will also have a devastating impact on state economies across the country.”

Cotton also urged the Obama administration to withdraw the EPA’s proposed final rules on the Clean Power Plan, which would require states to cut existing power-plant carbon emissions from 2005 levels by 30% by 2030. The EPA is expected to issue final draft rules on those regulations later this summer.

Earlier this month, a D.C. Court of Appeals threw out a challenge to the EPA’s Clean Power Plan by attorneys general in several states, saying the plaintiffs’ lawsuit was prematurely filed before the federal agency had drafted final rules.