OREANDA-NEWS. The US Environmental Protection Agency (EPA) today reaffirmed its finding that it should regulate mercury emissions from coal-fired power plants, saying the costs to industry should be relatively low.

The agency issued a supplemental finding that the costs to utilities are "reasonable" and support keeping the mercury and air toxics standards (MATS) in place. The finding is the agency's response to decision from the US Supreme Court last year that said EPA should have looked at costs before determining it was "appropriate and necessary" to require power plants to cut mercury emissions.

"The electric power industry can comply with MATS and maintain its ability to provide reliable electric power to consumers at a reasonable cost," the agency said.

The regulations required power plants to cut emissions by 90pc by April 2015. About 180 units received a one-year extension for compliance.

The agency said it looked at a number of cost metrics to determine whether the regulations are still appropriate, including annual compliance costs, capital expenditures and the retail cost of electricity. The total cost of complying with MATS is equal to 2.7-3.5pc/yr of electricity sales from 2000-2011, while the regulations will increase retail rates by 0.3?/kWh, EPA said.

The proposed finding relies heavily on analyses EPA conducted when it issued the regulations in 2011. The agency has estimated the rule would cost $9.6bn/yr to implement, resulting in public health benefits of $37bn-$90bn/yr in large part because of co-benefits from reducing emissions of other pollutants.

The finding is likely to spur additional legal fights over the standards. The 5-4 decision last year by the Supreme Court did not address the rule itself, which the DC Circuit Court of Appeals upheld two years ago today. But industry opponents have criticized EPA for including benefits tied to reducing other pollutants in its calculations. They say the true benefits from reducing mercury are only $4-6mn/yr. New legal challenges can be filed within 60 days of the finding's publication in the Federal Register.

States and industry groups unsuccessfully asked the DC Circuit and the Supreme Court to put the mercury rule on hold while EPA prepared the supplemental cost finding. And a group of states last month petitioned the Supreme Court to review whether the rule should have been allowed to remain in place.

EPA says it has considerable discretion to decide how to look at costs in repose to the Supreme Court decision, as the section of the Clean Air Act governing the standards is largely silent on the issue.