# Amicus Curiae Brief — Michigan v. Envtl. Prot. Agency, 135 S. Ct. 702 (2014) (No. 14-46) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0331%3A26 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 2014 ## Text MAR 4- 206 Nos. 14-46, 14-47 & 14-49 Su The Supreme Court of the United States STATE OF MICHIGAN, ET AL., Petitioners, Vv. ENVIRONMENTAL PROTECTION AGENCY, ET AL., Respondents. On Writ of Certiorari to the United States Court of Appeals for the District of Columbia Circuit BRIEF OF EMISSION CONTROL COMPANIES AS AMICI CURIAE IN SUPPORT OF RESPONDENTS AND IN SUPPORT OF AFFIRMANCE ERIK S. JAFFE (Counsel of Record) ERIK S. JAFFE, P.C. 5101 34” Street, N.W. Washington, D.C. 20008 (202) 237-8165 jaffe@esjpc.com Counsel for Amici Curiae TABLE OF CONTENTS i rIIOIL, ss coen dalaleabetaate pun ubiienguaatiiseldsbubeediil i ee I ..., ... sciceinennsennraninneneniaiiainnieubbemenned ili ee I CID ain ccccisvcntsevtmesdecpeenenineubaniannaios 1 IT Ge CITI... consinsssnenainninnesbasnconnnennenenians 3 I. cccoctenscabanhittasdeeesiemieincmnentmiaeeesennnned 6 1. EPA Properly Considered Cost at the Standard-Setting Stage, Consistent with the Language of the Statute. ............................4. 6 A. EPA's Interpretation of “Appropriate” Best Fits the Language and Structure ib. ff) | Re a LS 7 B. Section 7412(n)(1)(A), Even Read Alone, Does Not Support a Preliminary and Preemptive Cost Bl iiceicisiiilllintimiinatiidaiatlaininatbidicednetunauaaes 8 Il. Regulation-Specific Consideration of Costs Is the Only Economically Sensible Means of Be I I inicniictncinvknccaunianvatieniecasicihs 11 A. The Future Cost of Market-Driven Solutions Cannot Reliably Be Measured at an Early or Abstract SUUIIINK: ctjccliscnieiecnihialendinuddsibalinbtinedeiiuiiudoenlendeasdins 12 B. Compliance Costs Rapidly Decline Once the Market Responds with Innovative Solutions to Anticipated SER AEN LIISA E Oe Rm ORE 15 li Ill. The Market’s Response to the Impending MATS Rule and EPA’s 2012 Regulatory Findings Make the Narrow Question Presented of Little Prospective Value and of Considerable Present Economic Risk. .......... 19 Conclusion 24 SSCS EEE EEE EEE HEE SHEET EER OEE HH EHH RR HEEHHEeeeeeeeee ee iil TABLE OF AUTHORITIES Statutes gk Rei REI REESSRSeraeh AS Melis UATE a Se clshtes 7 RR RRR AE ct SE LOM EE TIENEN 5 4,7 a dis oircitivanteccanhandusdaciesiassanesanae 22 ee ee sic oo secede vces cteceeente passim Regulations Final Rule, 77 FED. REG. 9304 (Feb. BI usctinntiinciersccaveconsaiiidacttten ccubanendédenaabaes 10, 14, 15 Other Authorities Electric Sales, Revenue, and Average Price, Table 5a (http://www.eia.gov/electricity/sales- _revenue price/pdf/table5 a.pdf)...............0...00...... 18 Illinois EPA Mercury and Clean Air Interstate Rule (CAIR) Rulemaking I] adie teaiinasil Petition of Otter Tail Power Company, Aug. 1, 2014 (available at /electric/2014/EL14-070/petition.pdf).............. 17, 18 INTEREST OF AMICI CURIAE ! Amici curiae Emission Control Companies are businesses that research and manufacture technology for reducing mercury and other hazardous substances from power-plant emissions. They each have invest- ed tremendous amounts of research and capital into developing effective and economically efficient means of helping their customers — power-generating com- panies — comply with the MATS Rule and other clean-air requirements. Precisely due to such re- search and investment, the methods for mercury re- moval have become better and less expensive than ever, and wil] continue to improve with experience. Amici are interested in this case because they are direct participants in the expanding market for mer- cury control and can offer expertise on the issue of cost and how the market adapts to new regulations with effective innovation. They also are interested in this case because of their substantial investments in preparing themselves and their customers for the im- pending effective date of the MATS Rule. Such in- vestments would be severely damaged or lost should the MATS Rule once again be delayed. Amicus curilae ADA Carbon Solutions, LLC was originally formed in 2008 in anticipation of the need for mercury removal. From 2008 to 2010 ADA Car- bon Solutions designed and built the largest, most 1 No counsel for a party authored this brief in whole or in part, nor did any person or entity, other than amici or their counsel, make a monetary contribution intended to fund the preparation or submission of this brief. This brief is submitted pursuant to the blanket consent lette;s from all parties, on file with this Court. 2 automated, and most environmentally friendly acti- vated carbon plant focused on products that are op- timized for mercury capture in North America. ADA Carbon Solutions is a market-leading supplier of ac- tivated carbon for mercury control, supplying over 30 GW of current North American power plants with their PowerPAC® and FastPAC™ activated carbons. They have a number of long-term contracts for the supply of activated carbons for mercury control. Some sites have been utilizing their products since 2009-2010 to maintain mercury compliance with state rules and consent decrees. Amicus curiae Cabot Corporation is a leading glob- al producer of specialty chemicals and performance materials for use in multiple industries. Cabot Norit Americas, Inc. is a subsidiary of Cabot Corporation and is a global leader in the research, development, manufacturing, and sale of high-grade activated car- bons and equipment systems. Its products are used in a growing range of environmental, health, safety, and industrial applications to remove pollutants, con- taminants, and other impurities from air, water, and other liquids and gases in an efficient and cost- effective manner. Cabot has been supplying its DARCO®-brand activated carbon to over 80 North American coal-fired power plants, some for over 6 years, specifically for the removal of mercury from flue gas, as contemplated by the MATS Rule. All of those plants have been meeting stringent emissions limits, including many with limits even more strin- gent than the MATS Rule. Amicus curtae Calgon Carbon Corporation is a global leader in the manufacture, reactivation, and 3 application of activated carbon and other advanced environmental technologies. Calgon Carbon has 20 years of experience in the removal of mercury from flue gas, and has supplied Fluepac® branded activat- ed carbon to coal-fired utilities for over 7 years. Calgon Carbon developed a first generation of ad- vanced carbon products that typically require less than half the usage rate when compared to a stand- ard carbon. More recently, second and third genera- tions of advanced products have been commercialized allowing further use-rate reductions of up to an addi- tional 40%. Amicus curiae ICL-IP America Inc. is a manu‘ac- turer of bromine-based mercury-emission-reduction materials, among other specialty chemicals based primarily on the rich mineral resources found in the Dead Sea. Bromine-containing compounds like those supplied by ICL-IP America, added to coal, injected into the boiler, or impregnated on sorbents can be used to oxidize mercury effluent, thereby enhancing the overall removal of mercury in downstream pollu- tion control equipment. SUMMARY OF ARGUMENT 1. Amici agree with Respondents that nothing in 42 U.S.C. § 7412(mn)(1)(A) requires EPA to balance cost at the initial stage of its regulatory analysis of hazardous air pollutant (“HAP”) emissions rather than at the later stages of setting and analyzing spe- cific HAP control standards. Indeed, given Con- gress’s careful inclusion and exclusion of cost as a consideration at other stages of the rulemaking pro- cess, EPA’s view is not merely permissible, it is a bet- 4 ter reading of the statute. Petitioners’ position that costs can be used to block regulation of power-plant HAP emissions in its entirety — rather than merely shape the standards adopted — would allow an end run around the minimum “floor” standards in § 7412(d)(3), which Congress made mandatory re- gardless of direct cost considerations. While EPA’s statutory interpretation best harmo- nizes the structure and language of § 7412 as a whole, even a narrower focus on the language of § 7412(n)(1)(A) alone supports what EPA actually did in this case, notwithstanding that it may have ap- plied different statutory labels to its analysis. If, as Petitioners suggest, § 7412(n)(1)(A) was meant as a substantive change of standards for power plants ra- ther than simply a delayed trigger for § 7412's tradi- tional two-step listing and standard-setting proce- dures, then the substance of § 7412(n)(1)(A) still does not support Petitioners’ approach. Rather, the re- quirement that the Administrator find “regulation” under this section to be appropriate more naturally refers to the final standards or rules being appropri- ate, not the initial and non-final act of “listing” a source. If cost analysis is indeed a required part of an “appropriateness” finding, then the statute cer- tainly permits such analysis at the end of the regula- tory development process, as EPA functionally did, and does not require it to be a preemptive hurdle to starting that process at all. Regardless how EPA parsed its obligations under the statute, it certainly satisfied this alternate con- struction of any obligation to find the MATS Rule ap- propriate, even with costs considered. EPA conduct- 5 ed a cost/benefit analysis and concluded that the reg- ulation was highly net-beneficial. That it labeled such finding a Regulatory Impact Analysis rather than an appropriateness analysis, or reached its con- clusion at the end of the regulatory process rather than at the beginning, is irrelevant even under a nar- rower reading of § 7412(n)(1)(A) alone. 2. Considering cost at the later standard-setting stage, rather than at a preliminary listing stage, also makes economic and regulatory sense. Cost calcula- tions at such earlier stage would be more speculative and likely overstated. The market needs time to re- spond to anticipated regulations and to research and invest in potential solutions. Cost estimates before such market response would be based on underdevel- oped technologies and strategies directed at unknown or uncertain emission standards. Deferring cost analysis to later in the regulatory process allows EPA to base its estimates on better-developed market da- ta. And even then, costs likely will continue to de- cline as the regulations become more imminent. In- deed, that is precisely what has happened with mer- cury control, with the costs of mercury removal] drop- ping rapidly as the efficiency of activated carbon and related products has increased. 3. Given the continued market adaptation to the impending rule, the limited scope of the statutory provision at issue, the narrow question presented, and the substantive findings by EPA, further review offers little prospect of benefit and considerable risk of wasted resources and harm. First, whatever perceived economic significance of this case that may have supported a grant of certio- 6 rari, circumstances have largely passed that consid- eration by. The MATS Rule will go into effect on April 16, 2015, before this Court renders a decision in this case, and most companies have already taken any necessary steps to comply. A decision halting or further delaying implementation of the MATS Rule would render such compliance efforts wasted. Re- versing course now threatens tremendous economic disruption and losses, while the economic costs of im- plementing the Rule have either been expended in many cases or are declining rapidly as the market continues to adapt to the impending Rule. Second, this case is a poor vehicle for any broad precedential pronouncements that might have legal benefit given the narrowness of the question present- ed and the limited future applicability of § 7412(n)(1)(A). In addition, this case offers little prospect of any substantive benefit vis-a-vis the MATS Rule given that the substance of EPA’s cost analysis is not part of the question presented, and will not change if EPA is instructed to conduct such analysis under a different label. This Court should either affirm on the narrow and fact-bound particulars of this case or perhaps consid- er dismissing the w: 't as improvidently granted. ARGUMENT I. EPA Properly Considered Cost at the Standard-Setting Stage, Consistent with the Language of the Statute. Amici agree with the court of appeals and Re- spondents that EPA properly considered cost in con- 7 nection with its specific proposed regulations, and was not required to speculate regarding cost when making preliminary findings whether to initiate the regulatory process in the first place. See National Mining Ass’n. (“NMA”) Pet. App. 22a-33a; Federal Resp. Br. at 17-19, 24-28; Industry Resp. Br. at 14, 24-27; State & Local Resp. Br. at 13-14, 28-32; Amer. Acad. Pediatrics (“AAP”) Resp. Br. at 14-15. A. EPA’s Interpretation of “Appropriate” Best Fits the Language and Structure of § 7412 as a Whole. As Respondents have noted, Congress’s express in- clusion and exclusion of costs in the statutory provi- sions for setting HAP emission standards, and the absence of any reference to cost in connection with the “appropriate and necessary” language at issue here, provides ample textual support for EPA's de- ferred consideration of cost. See Federal Resp. Br. at 35-36; Industry Resp. Br. at 19-21; State & Local Resp. Br. at 20-21; AAP Resp. Br. at 24-28; compare 42 U.S.C. § 7412(d)(2) and 42 U.S.C. § 7412(d)(3) with 42 U.S.C. § 7412(m)(1)(A). Indeed, to consider cost at the preliminary stage would allow an end run around the minimum floor standards methodology, § 7412(d)(3), which conspicu- ously supersedes and excludes the direct considera- tion of cost otherwise required in (d)(2). NMA Pet. App. 27a.2 The only thing that importing cost consid- 2 Because minimum floor standards are based on control lev- els actually being achieved in the market, they indirectly take cost into account. NMA Pet. App. 27a; Industry Resp. Br. at 3, 8 erations into a preliminary “appropriate and neces- sary” analysis would actually impose on EPA would be an up-front cost analysis of prospective minimum floor standards, since beyond-the-floor standards car- ry their own cost element anyway. That would be a very peculiar result and an odd way for Congress to exempt power plants from the minimum floor re- quirements. Had Congress actually meant to do that, it simply could have said as much and allowed the cost-inclusive “achievable” standard to govern all standards applicable to power plants. Read in context and giving meaning to all parts of the interrelated statutory language, EPA’s view that cost considerations are to be deferred to the regula- tion-setting stage is not merely a permissible reading of the statutory language, it is a better reading of the statute. Under EPA’s approach costs are still consid- ered, but they are considered in the “appropriate” context of concrete regulatory standards and only to the extent Congress allowed. B. Section 7412(n)(1)(A), Even Read Alone, Does Not Support a Preliminary and Preemptive Cost Analysis. Petitioners’ view of § 7412(n)(1)(A) as requiring a preliminary cost analysis stems largely from isolating the provision and its “appropriate and necessary” language from the rest of § 7412. But focusing on the language of § 7412(n)(1)(A) alone, and even assuming that the phrase “appropriate” requires a cost analy- sis, still does not support Petitioners’ claim that costs 26-26. Floor standards have a de facto limit of commercial! via- bility. 9 must be considered at the front end of any regulatory analysis rather than at the back end in support of the final proposed and implemented regulations. Noth- ing in § 7412(n)(1)(A) — or elsewhere — requires that power-plant source categories or subcategories be listed and standards set in temporally discrete stag- es. Rather, the only two stages mentioned in that section are reporting and regulating. The section first requires only that the “Adminis- trator shall develop and describe in the Administra- tor’s report to Congress alternative contro] strategies for emissions which may warrant regulation under this section.” 42 U.S.C. § 7412(n)(1)(A) (emphasis added). The statute next requires that the Adminis- trator “shall regulate electric utility steam generating units under this section, if the Administrator finds such regulation is appropriate and necessary after considering the results of the study required by this subparagraph.” Jd. (emphasis added). Nothing in the first step involves considering costs, and nothing in the second step requires listing power-plant source categories prior to proposing regulations for any emissions. EPA, of course, reads this provision against the backdrop of the rest of § 7412 and quite permissibly incorporates the two-step process — and the separa- tion of health and cost considerations — reflected in § 7412 as applied to other source categories. But viewed as Petitioners would have it — as creating a different procedure and requirement for power-plant regulation — there is no reason to read the language as setting a condition for the initial listing when, in setting a required finding for the command “shall 10 regulate,” it more naturally describes the full and fi- nal outcome of the regulatory process, not merely the gateway stage. It-is then “such regulation,” i.e., the proposed and eventually adopted rules, that EPA would need to find “appropriate and necessary.” To the extent § 7412(n)(1)(A) provides an alternative gateway to regulation than the previous listing pro- cess for other sources, the “appropriate and neces- sary” finding need not temporally precede proposed regulations. Rather, it is merely one of many re- quirements for such eventual regulations. Under this alternative approach, the entire “ap- propriate and necessary” finding would be made con- current with the final rule, as EPA eventually did when reaffirming its earlier finding in light of the updated record. Final Rule, 77 FED. REG. 9304, 9310- 11 (Feb. 16, 2012); NMA Pet. App. 14a.3 And this construction would provide better guidance regarding what was indeed “appropriate” based on the various rules for setting standards as well as Executive re- quirements for cost-benefit analysis. By focusing on the purported mandatory content of the word “appropriate,” Petitioners overlook what the text of § 7412(n)(1)(A) suggests regarding timing. EPA’s actual conduct in this case is fully consistent with this alternative reading calling for a preliminary 3 Under this approach, EPA’s 2000 finding was unnecessary, as was any initial decision to “list” power plants before propos- ing regulations. EPA could have identified its proposed source category concurrent with its proposed regulations and deemed the entire result appropriate and necessary in the final rule. EPA eventually did just that, and the court of appeals recog- nized that it made any objections to earlier procedures moot. NMA Pet. App. 17a. 11 report about HAP emissions that “may warrant regu- lation” — i.e., pose a potential health threat — followed by an “appropriate and necessary” finding at the time such actual regulations are approved. And while EPA housed its cost consideration under the rubrics of both its § 7412(d) standard setting and its Regula- tory Impact Analysis, rather than its “appropriate- ness” finding, the substance of what it did fully com- plies with what Petitioners read into the word “ap- propriate” even if the labels it used to describe why it did such analysis were different. Having eventually combined its “appropriateness” finding and its cost analyses into its final regulatory decision, EPA fully satisfied any supposed cost-consideration obligation under § 7412(n)(1)(A), notwithstanding that it gave separate names to those analyses. Even assuming a requirement to consider costs, there is no call for a further remand to have EPA do under a different regulatory label what it has already done. Il. Regulation-Specific Consideration of Costs Is the Only Economically Sensible Means of Applying the Statute. EPA’s approach to costs not only is a better read- ing of the statute as a whole (and fully consistent with a narrower. alternative reading of § 7412(n)(1)(A) alone), it also is more sensible from an economic and regulatory perspective. Attempting to estimate costs prior to doing the floor-standards analysis of what is actually being achieved in the market simply invites speculation and is not condu- cive to reasoned decision-making. 12 A. The Future Cost of Market-Driven So- lutions Cannot Reliably Be Measured at an Early or Abstract Stage. While Petitioners would have EPA consider the costs of hypothetical regulations at the beginning of the regulatory process, EPA’s decision to address costs at a later stage in connection with actual pro- posed rules makes far more economic sense. See In- dustry Resp. Br. at 24-27. From a purely practical perspective, cost information is highly variable and depends to a great degree on the targets being set and the technologies and methods that will be used. Some cost information regarding existing technol- ogies and methods will, of course, exist even at the outset of the regulatory process. But such infor- mation is necessarily speculative if there is little or no guidance regarding what level of emissions reduc- tion must be achieved. Certainly a market just be- ginning to consider how to achieve reductions in par- ticular pollutants will not have had time to innovate, become more efficient, or plan strategies to meet mul- tiple clean-air goals. And even where similar goals are being met and technology deployed on a small scale, the market needs time to assess the feasibility, costs, or economies of scale of ramping up to meet a nationwide requirement for greater emission controls. By contrast, once EPA has signaled, by listing or otherwise, its intent to regulate a particular source and particular pollutants, existing participants and new entrants into the market have strong incentives to research new and improved control strategies and to develop more accurate plans end cost estimates in order to attract investment. It is the very fact of 13 EPA’s intent to regulate that generates the market demand for such technologies and subsequently al- lows EPA to -obtain more accurate information re- garding cost and effectiveness. Mercury control provides a useful example of this market response. At the outset of the regulatory pro- cess, scrubbers previously installed at some plants to comply with SOz and particulate matter require- ments also provided a degree of mercury contro] and thus some baseline cost data. But § 7412(n)(1)(A) ap- plies precisely where such incidental HAP control is insufficient and further controls are needed; just as EPA determined was the case with mercury emis- sions. While mercury control technology such as ac- tivated carbon injection existed when EPA conducted its utility study, it existed on a much smaller scale. The cost and availability of such technology in vol- ume for full-scale use would have been uncertain, and a premature cost analysis, as sought by Petitioners, would have been based on older data and not have had the benefit of market innovation and develop- ment. EPA’s initial listing of coal- and oil-fired power plants, however, created a prospective demand for less expensive and more efficient mercury control and the market responded. Amici Emission Control Companies were part of that response. They produce activated carbon or bromine-based additives that help control mercury emissions and they have invested considerable scien- tific and financial resources in improving those prod- ucts. One such mercury control method involves inject- ing brominated powdered activated carbon directly 14 into the ductwork of a coal-fired power plant after the point of combustion but before an existing particulate collection device such as an electrostatic precipitator or a fabric filter baghouse. The bromine oxidizes any elemental mercury in the combustion emissions stream, the activated carbon efficiently captures the oxidized mercury, and then the mercury-imbedded activated carbon is removed from the system (along with other particulate matter) by the existing partic- ulate collection device. Cost and feasibility data for this type of approach was far better developed at the time of the final rulemaking than it was in 2000 when the initial “appropriate and necessary” deter- mination was made. Final Rule, 77 FED. REG. at 9425-26. Indeed, any attempt to estimate the costs of such an innovative approach at that earlier time would have involved considerable speculation. After the market had an opportunity to respond, however, credible cost estimates became much more reasonable and feasible.‘ The point is that any cost analysis done at the pre- liminary stage sought by Petitioners will inevitably be inaccurate and almost certainly overstated. Such estimates would take the field as it exists ~ underde- veloped and with little incentive for investment or innovation — rather than how it will be at the time the regulation goes into effect. The EPA’s approach 4 While this amicus brief contemplates the use of activated carbon anW/or bromine to capture mercury emissions, other technologies continue to be developed as a result of the MATS Rule. Those technologies include non-carbon-based sorbents, advanced particulate control systems, and other multi-pollutant contro) platforms. 15 at least gives the market a head start so it can inno- vate and provide improved strategies and reasonable cost estimates for subsequent specific proposals for HAP reduction. B. Compliance Costs Rapidly Decline Once the Market Responds with Inno- vative Solutions to Anticipated Regu- lation. No matter when a cost estimate is made, however, the market for emission control products will contin- ue to innovate and develop, rendering any cost esti- mates quickly outdated. In short, any gloom-and- doom cost scenarios suggested by Petitioners, NMA Pet. Br. at 1, 14-15, 18-19, will quickly be overrun by events. Such a market response to anticipated regu- lations is not merely conjecture — it is precisely what has happened in connection with the MATS Rule. Although EPA estimated $9.6 billion in annual compliance costs, 77 FED. REG. at 9424, technology and innovation are demonstrating that the costs of complying with the MATS Rule are in fact much low- er. For example, many power plants are already compliant with the MATS Rule and will not have to spend any additional money for mercury removal. Such plants either use fuels with lower mercury emissions, already employ control strategies for other pollutants that also reduce mercury emissions, or must already comply with mercury emissions stand- ards adopted in 14 States, Industry Resp. Br. at 9. Based on amiri’s own market research, we project that of the 271 Gigawatts (GW) of coal-fired power generation capacity expected to be in service as of 16 2017 and subject to the MATS Rule (“covered capaci- ty”), 36% will bear no direct costs for mercury compli- ance given their existing infrastructure or fuel source. An additional 66 GW (24%) of covered capaci- ty has already installed such controls pursuant to state regulations or consent decrees independent of the MATS Rule. Of the remaining 108 GW (40%) of covered capaci- ty that will need to install mercury controls specifi- cally as a result of the MATS rule, 90 GW of covered capacity has already installed or is in the final stages of installing mercury controls and the remaining 18 GW (7% of covered capacity or 17% of capacity need- ing to add controls specifically for the MATS Rule) will install such controls in 2015. For plants using activated carbon control methods, their costs involve initial construction of an injection silo and installing injection equipment, and then an- nually purchasing activated carbon. For the vast ma- jority of covered capacity, the up-front costs of in- stalling the needed equipment have already been or will be expended and will not change regardless how this case turns out. As for the annual costs for activated carbon control methods, developments in the market have dramati- cally reduced those expenses. While the annual mar- ket for activated carbon initially was projected to reach 800 million to 1.2 billion lbs., improvements in the efficiency of activated carbon and procedures for injecting it have significantly reduced projected an- nual consumption to less than half the previous pro- 17 jections — down to 350 million to 500 million Ibs.5 Not only has the quantity of activated carbon required for effective mercury control declined, the price per lb. also has declined by about 30% since 2010. As a re- sult of such efficiencies, the projected annual cost of this approach to mercury control has likewise de- clined. In short, whatever estimates were used to de- termine costs even as late as 2010, those estimates likely overstate the current reality as the market con- tinues to respond and innovate. Similarly, while EPA estimated that the MATS Rule would cause a 3.1% increase in energy prices, empirical results suggest that such estimate may have been overly pessimistic. For example, in a utili- ty rate filing seeking to recover the costs of MATS compliance in South Dakota, Petition of Otter Tail Power Company, Aug. 1, 2014 (available at //puc. ov/ issi ic/2014/EL 14-070/petition.pdf), the Otter Tail Power Company disclosed that three of its coal-fired power stations will make use of powdered activated carbon (of the type sold by one of the amici) to comply with the mer- 5 In Illinois, for example, state requirements announced in 2006 required the use of activated carbon to significantly reduce mercury emissions by 2009. See Illinois EPA Mercury and Clean Air prteretaie Rule es Rulemaking pr “The experience of 8 some > of amicrs customers under the Illinois rule shows that compliance with rules even stricter than the MATS standard can be achieved with far less activated carbon than originally projected and in some case with as little as 20% of what was initially required. Similarly, some of amici’s Canadian customers of activated carbon have seen as much as 50% or greater reductions in their activated carbon usage as they have migrated to 2% and 3” generation products. 18 cury portion of the MATS Rule. Jd. at 9. The compa- ny anticipates that the South Dakota share of its an- nual compliance costs will be approximately $314,000 spread over annual consumption of 424,651,653 kWhs of power. Jd. at 9-10, 13. Based on those figures, the price per kWh for an average residential customer in South Dakota would increase by $0.00074, or less than 1% of the average 2013 residential price in South Dakota of $0.1026 per kWh. See Electric om, Revenue, and Average Price, Table 5a v/ / ‘pene sla aaah Given the average residential consumption in South Dakota in 2013 of 1055 kWhs per month, this represents a mere $0.78 per month increase in the price of electricity. Id. Similarly at the national level, the average residen- tial monthly customer uses 909 kWh per month and pays $0.1212 per kWh for an average monthly cost of power of $110.20. Jd. While costs can obviously vary depending on plant configuration, fuel type, and oth- er factors, assuming, arguendo, a similar average ac- tivated carbon usage rate, an average residential cus- tomer would see an increase in his or her monthly bill of only 0.6% ($0.67). While secondary effects of the MATS Rule also factor into the Rule’s impact on elec- tricity prices, the direct costs of MATS compliance on electricity bills will be minimal. In short, whatever compliance costs and other im- pacts were estimated for the MATS Rule in 2011 and 2012, those costs and impacts have continued to de- cline. That result both supports having EPA wait as long as possible before analyzing the costs of pro- 19 posed regulations and also undermines Petitioners’ claims regarding the impact of the MATS Rule. Ill. The Market’s Response to the Impending MATS Rule and EPA’s 2012 Regulatory Findings Make the Narrow Question Pre- sented of Little Prospective Value and of Considerable Present Economic Risk. When this Court granted certiorari on the narrow question presented, it presumably did se because of the perceived economic importance of this case and some concern for the broader role of costs in regulato- ry analysis. As the briefing and evolving events re- veal, however, the MATS Rule does not pose the eco- nomic threat suggested by Petitioners. Remanding, vacating, or otherwise delaying the Rule now poses its own significant economic consequences and the le- gal or practical value of resolving the question pre- sented is limited at best and may not warrant this Court’s extended attention. First, because the MATS Rule goes into effect on April 16, 2015, well before any expected decision in this case, the market has already begun — and has in fact nearly completed — preparing to comply with the Rule. See supra at 15-16. Of the 174 GW of covered capacity that needs some sort of mercury control, 66 GW of capacity already has mercury controls because it is covered by state regulations or consent decrees. An additional 90 GW of covered capacity has already installed or is in the final stages of installing mercury controls to comply with the MATS Rule. Only 18 GW of covered capacity thus lacks installed equipment and that capacity will install such equipment in 2015. 20 In short, 93% of the 271 GW of total covered capacity either requires no additional mercury controls or has already installed the technology required. The market having already adapted to the impend- ing Rule, any action by this Court unwinding or de- laying the MATS Rule would cause substantial losses to those power companies and others who have in- vested in compliance. Industry has already spent bil- hons on updated pollution controls, Industry Resp. Br. at 10, and many of those sunk costs will be wast- ed in the absence of the MATS Rule. Additionally, various supporting industries have made huge investments to develop and manufacture the technology and products that will enable covered power plants to comply with the Rule. Amici, for ex- ample, collectively have spent over $750 million on activated carbon production capability. In fact, pro- duction capacity for activated carbon was accelerated in response to earlier attempts at a mercury rule and has been sitting idle as the Rule waxed and waned over the years. Those investments would be further damaged or lost should the Rule again be delayed for years.® Insofar as this case was taken for its perceived economic importance, therefore, events have outpaced such claims by Petitioners. The vast majority of up- front costs imposed by the Rule have already been expended and future costs are declining rapidly. See supra at 15-18. The economic costs of delaying or va- 6 Similarly, smaller companies developing other innovative technologies not yet widely adopted likely will go out of busi- ness, and investments in them will be lost, if the MATS Rule is further delayed. 21 cating the Rule, however, have continuously grown. It is now difficult to predict the mixed economic con- sequences of a decision in either direction and hence that factor should play little or no role in this Court’s decision whether this case remains worthy of its at- tention or how it should be resolved. Second, given the narrow question presented, there is little prospect this case will set meaningful precedent or resolve any pressing legal issues. In many ways this case is a one-off situation involving a limited legal issue and unusual and fact-bound pro- cedural history and findings. The question presented in this case is limited to whether EPA “unreasonably refused to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.” If that question implies that EPA never considered the cost of the MATS Rule before regulating, the an- swer is obvious: EPA did consider costs in setting emission standards and in the Regulatory Impact Analysis, and found the Rule to be cost-beneficial. If the question instead asks whether EPA’s cost analysis should have occurred earlier or had a differ- ent label — i.e., should have been part of its “appro- priateness” analysis — it adds little practical or legal value. Due to the convoluted procedural history of these regulations and the long delay between the ini- tial “appropriate and necessary” finding in 2000 and the renewed finding in 2012, the question whether EPA should have considered costs at the early or lat- er stages of the process or under a different analytic label is now largely besides the point. 22 In 2011 and 2012, EPA considered costs in the Regulatory Impact Analysis and found they were outweighed by the anticipated benefits of the MATS Rule. That substantive finding is not at issue here given the limited question on which this Court grant- ed certiorari. EPA simultaneously reaffirmed its 2000 finding that regulation was appropriate and necessary and made a new finding “ ‘confirm|[ing] that it remains appropriate and necessary today to regu- late’” certain power plants. Pet. App. 14a (quoting EPA; citation omitted). But for not having discussed costs, the substance of that finding is likewise no longer at issue in this Court. Given such simultaneous findings that regulation remained appropriate and necessary and that the benefits outweighed costs, arguing over which statu- tory or regulatory language required such findings, or when in the regulatory process they should have been made, is splitting hairs and an academic formality of doubtful value to either the country or this Court.’ The timing issue — whether costs should have been considered pre-listing — is particularly pointless given that any listing decision is not even reviewable until after the final regulations are issued, 42 U.S.C. § 7412(e)(4), and hence review of the cost analysis will necessarily occur at the same time as review of the substantive regulations and the final Regulatory Impact Analysis. And, as Respondents have noted, nothing meaningful would change if EPA is required to rename its cost/benefit analysis an “appropriate- 7 Had EPA concluded that the costs outweighed the benefits and proceeded anyway, then the question presented might have some practical relevance. 23 ness” finding. Federal Resp. Br. at 20, 55; Industry Resp. Br. at 39-41; State & Local Resp. Br. at 43. As further briefing and the passage of time now re- flect, events effectively have passed by the continued relevance of the question presented. Trying to un- wind or restart the process now would impose its own tremendous costs and will not change the eventual outcome. Because nothing in the statute plainly commands the reading offered by Petitioners, EPA has the lin- guistically better and more practical interpretation regarding the role of costs in the process, and EPA has already found that benefits outweigh the costs of the regulations in this case, there is very little to rec- ommend upsetting the apple cart now. In fact, con- stantly starting and stopping the mercury rules may impose such high transaction costs and losses that even an economically imperfect rule to which the market could adapt would be better than the shifting winds and uncertainties that would result from a fur- ther remand. Whether such considerations favor succinctly af- firming the decision below on narrow grounds or, perhaps, dismissing the writ as improvidently grant- ed, the alternative sought by Petitioners makes the least sense of all and would impose serious costs on the economy with little offsetting benefit. Indeed, it would penalize those who responsibly sought to com- ply with the impending Rule and might be unable to recover their expenses for doing so, and would reward those who dragged their heels at the expense of pub- lic health. Such considerations should at least inform this Court’s continuing discretion as to whether this 24 case is a valuable and productive use of its limited re- eources and certiorari jurisdiction. CONCLUSION For the foregoing reasons, this Court should affirm the decision below. Respectfully submitted, ERIK S. JAFFE (Counsel of Record) ERIK S. JAFFE, P.C. 5101 34% Street, N.W. Washington, D.C. 20008 (202) 237-8165 jaffe@esjpc.com Counsel for Amici Curiae Dated: March 4, 2015 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0331%3A26. Public record. Not legal advice.