In a 5-4 ruling, the justices ruled that the EPA should have taken into account the financial costs to utility companies, states and affected citizens before deciding whether to set limits for the toxic air pollutants it regulated in 2011.  SCOTUS forcing the EPA to consider the wholesale costs to the people benefiting from the power generation.

The Supremes 2012

This case arises from the EPA’s efforts to regulate pollution – and in particular mercury – from power plants. The question before the Court was whether, when determining whether to regulate the emissions from power plants, the EPA should take into account the cost to the plants of complying.

States and industry groups had argued that the EPA must do so, while the EPA argued that it does not have to consider costs until later in the process, when it issues specific pollution standards. Today the Court agreed with the states and industry groups, holding that the EPA’s refusal to consider costs when deciding whether to regulate was unreasonable.

The opinion remands the case to the D.C. Circuit for further proceedings. But from the opinion (embedded below) it seems likely that the agency will have to scrap their plans, try again and finding some mechanism to consider costs, before it can act on this issue.

The opinion states: “We need not and do not hold that the law unambiguously required the Agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value. It will be up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost.”

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