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MATS will remain in effect while US EPA reviews emissions program: court

The Mercury and Air Toxics Standards program that governs utility emissions will remain in effect while the US Environmental Protection Agency, under instruction from the US Supreme Court, continues to review the rules, an appeals court ruled Tuesday.

The US Court of Appeals for the District of Columbia Circuit issued a unanimous order Tuesday rejecting a motion by multiple utilities and states seeking to halt the MATS program.

The appeals court was tasked with deciding if MATS would continue after the Supreme Court in June found the EPA failed to adequately take into account the costs obligated to utilities for implementation of the emissions rules.

"It's not a surprise MATS is staying while the EPA reviews" the costs, said Seth Schwartz, president of Energy Ventures Analysis. "The EPA felt it didn't have to do a cost-benefit analysis, but the Supreme Court shut that down."

MATS rules went in effect on April 16, causing a string of coal-fired power plant retirements. Many units were granted a one-year extension to complying with MATS rules -- some to upgrade emissions controls and others to run to meet power demand before retirement.

The Supreme Court in June instructed the EPA to review the cost considerations of MATS implementation, a process the agency has said will be completed by April 16, 2016, when the one-year wave of compliance extensions ends.

"Staying MATS now while the EPA works on its cost-analysis benefits nobody, the EPA argues," Schwartz said. "By April, we'll have their findings."

On December 1, the EPA released its proposed supplemental findings in the case. In the report, the agency proposes no changes to MATS rules and says a consideration of cost does not change its determination in regulating air toxics.

The EPA also stated in its supplemental findings that the costs of MATS implementation to the power sector are "reasonable" and that the projected increase in electricity prices is "within the historical range and is reasonable."

Utilities have already made investments in emissions controls and are replacing retiring coal-fired units' capacity with other sources, Schwartz said, so an eventual repeal of MATS would do little to change what is already happening in the power sector.

source: http://www.platts.com