The Supreme Court appeared split Wednesday over a challenge to the Environmental Protection Agency's first-ever limits on mercury, arsenic and acid gases emitted by power plants, slated to take effect next month for some plants.
The court is tasked with determining whether EPA unreasonably refused to consider costs in deciding whether it was appropriate to regulate hazardous air pollutants emitted by electric power plants under the Clean Air Act.
The D.C. Circuit Court of Appeals sided with EPA, but twenty-three states and more than two dozen industry and labor groups argue that the agency unreasonably refused to consider costs before imposing the mercury regulations on coal- and oil-fired electricity generating units.
Chief Justice John Roberts said compared to the cost, the benefit “raises a red flag.”
The EPA estimates the rule would cost $9.6 billion and produce between $37 billion and $90 billion in benefits, preventing up to 11,000 premature deaths annually.
But challengers say the benefits of controlling the utility emissions of mercury, which ends up in fish that’s eaten, only amount to $4 million to $6 million annually and that the rest of the benefits come from the reduction of particle pollution, which is regulated by other EPA mandates.
“The benefit from the mercury is what, $4 million?,” Roberts asked EPA’s attorney Donald Verrilli Jr.
“Well…” Verrilli said.
Though Roberts went on to say it’s a good EPA’s regulation has other benefits, such disproportionate figures create cause for concern.
“You begin to wonder whether it’s an illegitimate way of avoiding the quite different limitations on EPA that apply in the criteria program,” he said.
Verrilli said EPA only quantified one public health benefit for mercury, but there are other benefits that can be difficult and challenging to quantify.
During Wednesday’s arguments Justice Sonia Sotomayor acknowledged that the agency did not consider costs when listing electric generating units as a source of hazardous air pollution, but she said the rulemaking process does permit the agency to consider the cost of technology in creating subcategories for those units.
“They proposed categories, and everybody had the opportunity to say it's the wrong category, correct?” she asked Aaron Lindstrom, the attorney representing Michigan – one of the challenging states.
Justice Elena Kagan stressed that subcategories determine what the minimum and maximum standards will be and because those minimum and maximum standards can vary dramatically, she said, so can the compliance costs.
Lindstrom argued that the EPA made those categorizations without considering costs.
“All right. Then how would you do that without considering cost?” Justice Stephen Breyer asked.
“I don't know how they did it, but they've said throughout that we’re not considering costs,” Lindstrom said.
Sotomayor said the agency has consistently said it doesn’t consider cost at the listing stage, because it considers it later on in the rulemaking process.
“The issue is do you have to do it at the listing stage,” she said.
“That’s exactly right,” Verrilli said. “The question here is whether EPA's got to conduct a cost-benefit analysis when it does the listing,”
But Justice Anthony Kennedy, a potential swing vote in the case, seemed skeptical of the EPA's rule, questioning whether merely listing the plant indicates standards will be set, regardless of whether the EPA examined the costs at a later time.
Hence, he suggested, the determination had already been made that the plants would be regulated, even before the EPA considered costs.
“At that point the game is over,” Kennedy said.
“No,” Verrilli said. “I don’t think it is.”
But the rule's challengers also faced tough questions from the justices. Under questioning from conservative Justice Samuel Alito, Paul Smith, an attorney representing the industry challengers, said he didn’t know what the criteria for the subcategories are.
“How can you tell if cost has been taken into account at all when you don’t know the criteria for how the subcategories are created?” Alito demanded.