Legal Analysis and Background on the EPA's Proposed Rules for Regulating Mercury Emissions from Electric Utilities

Publication Date: May 2004

Publisher: Library of Congress. Congressional Research Service

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Research Area: Energy; Environment

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Abstract:

Mercury is a hazardous air pollutant (HAP) that can pose a serious public health threat. In accordance with the authority provided by the Clean Air Act (CAA), the EPA is considering regulation of mercury emissions from electric steam generating units (electric utilities). Recently, the EPA proposed revising an earlier finding that regulation of such emissions was warranted under section 112 of the CAA, because the agency had failed to consider whether regulations promulgated under section 111 of the CAA would adequately address the health concerns associated with these emissions. The EPA now proposes regulation of electric utilities' mercury emissions under section 111 through the adoption of a national "cap-and-trade" program.

A potential challenge to the EPA proposal could grow out of the statutory basis for regulating electric utilities' mercury emissions under section 111. If the EPA implements the proposed revision and rule, it may argue that its interpretation should be upheld given (1) the arguably conflicting amendments made to section 111 in 1990 and (2) the deference shown by the courts to agency interpretations. Opponents may argue that the EPA's interpretation is unreasonable because the conflicting amendments do not represent a clear reversal of the previously explicit congressional intent to prohibit an HAP listed under section 112 from being regulated under section 111.

The EPA will also need to provide a substantive basis for revising its earlier findings and adopting any proposed rule for mercury regulation, as the agency is prohibited from executing its rulemaking authority in an arbitrary and capricious manner. Accordingly the EPA would need to provide a reasoned analysis for concluding that the public health threat posed by electric utilities' mercury emissions could be adequately addressed using section 111. The fact that the EPA previously concluded that regulation was warranted under section 112 may impose a heightened burden upon the EPA to prove that subsequent revisions do not violate CAA requirements.

Further, the agency may have difficulty "de-listing" electric utilities as a source for regulation under section 112, which may require the EPA demonstrate that these utilities are not a public health threat. The EPA may argue that this statutory requirement does not apply because the agency listed electric utilities for regulation only because it had previously failed to consider the possibility of regulating utilities under section 111. Opponents of "de-listing" may argue that reinterpretation of relevant CAA provisions should not be grounds to summarily rescind previous designations.

One potential obstacle to EPA regulation under section 111 may be a 1998 settlement agreement requiring the EPA to take "final action" on a proposed rule to regulate such emissions under section 112. Because this settlement decree was apparently not incorporated into a judicial order, however, it does not appear that the agreement could be used to restrict the EPA's rulemaking discretion.