Supreme Court decision weighs on coal-burning states

A decision expected some time next year from the U.S. Supreme Court has big implications for Ohio’s energy producers - and potentially ratepayers - as the justices decide tougher federal regulations that could further reduce coal use to generate electricity.

The justices heard 90 minutes of oral arguments this week over whether the Environmental Protection Agency exceeded its authority when it issued a cross-state air pollution rule in 2011. A divided federal appeals-court panel invalidated the rule last year.

The drift of exchanges on Dec. 10 indicate the Supreme Court could end up endorsing an Environmental Protection Agency rule requiring states to reduce power plant pollution from the South and Midwest - including Ohio - that governors in eastern U.S. states say fouls their air. A Supreme Court decision could come by late June.

Ohio’s use of coal for energy is already on decline. It’s declined from around 90 percent to 78 percent of the state’s energy use in fewer than 10 years as the price of natural gas hits historic lows and more power comes from renewable sources.

Zane T. Daniels, President of the Ohio Coal Association, said coal power still keeps electricity affordable in the state and further regulation isn’t worth it.

“Seventy-eight percent of Ohio’s electricity is generated from coal, as a result Ohioans pay approximately a penny less than the national average,” Zane said. “In many of the Eastern states listed in the petition, electricity rates are significantly higher than in Ohio. Although they cite environmental concerns as the catalyst for the petition, the rule would have little environmental benefit as even regulators reluctantly acknowledge.”

He said a ruling supporting the EPA “would do nothing more than destroy thousands of high paying jobs and increase electricity rates across the region - which is precisely their intent to boost the appeal of costlier renewable energy.”

Several justices suggested that they believe the Environmental Protection Agency did not exceed its authority.

The EPA sought to reduce pollution from power plants in 28 states that drifts above states in the Northeast and Mid-Atlantic regions. Texas led 14 states and industry groups in challenging the rule. Most downwind states support it.

Justice Department lawyer Malcolm Stewart said the EPA is trying to be an honest broker between upwind and downwind states.

Sulfur dioxide and nitrogen oxide pollution from power plants can be carried long distances and the pollutants react with other substances to form smog and soot, which have been linked to illnesses. The cross-border pollution has prevented many cities from complying with health-based standards set by law.

The EPA has long tried to find a way to enforce the so-called good neighbor provision of the federal Clean Air Act that prohibits states from polluting their neighbors’ air. The latest effort would cost energy utilities $800 million annually to install pollution controls on plants, according to EPA estimates.

The EPA said the investments would be far outweighed by the hundreds of billions of dollars in health care savings from cleaner air. The agency said the rule would prevent tens of thousands of premature deaths and hundreds of thousands of illnesses each year.

But the U.S. Circuit Court of Appeals for the District of Columbia said the EPA didn’t give states a chance to devise their own plans to reduce pollution. Because state-by-state limits on pollution were not matched with each state’s contribution to the problem, some were asked to do more to reduce pollution even though their power plants are not the worst offenders, the appeals court said.

At the Supreme Court, though, several justices said the agency appears to have wide latitude to come up with pollution controls.

Said Daniels: “We have always supported reasonable regulations that properly balance environmental protection and economic development. In fact, industry and utilities have spent over $90 billion in clean coal technology since 1990, and as a result, coal-fired power plants are burning coal cleaner than ever before.”

Staff Writer Steve Bennish contributed to this report.

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