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Comments to EPA on Utility Mact and Utility NSPS

August 4, 2011

The EPA released proposed regulations earlier this year in May to curb hazardous air pollutants, including mercury, from electric utility steam generating units (EGUs). Policy Integrity submitted comments today to the EPA on improving the efficiency of these rules, known as Utility MACT and Utility NSPS. They are both expected to be finalized later this year.

The EPA’s proposal divides EGUs into separate subcategories, but we point out that this may not represent the groupings that would lead to the most efficient regulatory program. EPA should instead be explicit in quantifying the costs and benefits of regulating subcategories and propose them only to the extent that different standards will enhance net benefits.

It’s also important that the EPA accounts for all of the “ancillary benefits” (or “co-benefits”), particularly for the Utility MACT rule, in line with best practices for cost-benefit analysis. These are benefits that are accrued in addition to those that come from reducing the targeted pollutants. Historically the focus of collateral consequences of regulations has been on the risks and costs, but failure to fully capture the indirect benefits of these rules can obscure their true value.

Finally, we urge the EPA to acknowledge potential grandfathering issues raised by setting different standards for new and existing sources of hazardous air pollutants. This can lead to perverse economic incentives to keep older, inefficient plants running longer than is ideal.

Filed under Climate Change and Energy Policy, Public Comments