Supreme Court Won’t Rehear Case Against EPA As States Face Electricity Shortfalls

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Michael Bastasch Energy Editor
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The U.S. Supreme Court declined to rehear a case against the Environmental Protection Agency’s (EPA) mercury emissions regulation for power plants, despite news federal regulations are contributing to a potential electricity reserve shortfall in some states.

Supreme Court justices refused to rehear a state lawsuit against the EPA’s Mercury and Air Toxics Standards, or MATS, regulation Monday. The court, in a 2015 decision, already ruled EPA did not properly consider the costs of regulating power plants when it issued MATS.

States, led by Michigan, want the EPA to completely redo the rule after a lower court allowed MATS to remain in place last year. This is the second time Michigan has tried to get the high court to rehear its case against EPA.

Michigan has its own reasons for challenging EPA. The state could be facing a potential energy shortfall due to a wave of power plant retirements in the coming years, according to a recent survey of utilities and power companies.

The Midcontinent Independent System Operator (MISO) warned Michigan could be facing a 300 megawatt shortfall in energy capacity reserves in 2017 due to power plant closures. Power plant closures from poor economics and federal regulations are occurring in many other states regulated by MISO.

MISO-regulated utilities have already retired 1,700 megawatts of coal-fired power since the end of 2015 due, at least in part, to EPA regulations, and plan to retire another 1,500 gigawatts, according to a recent survey.

MISO says states will have 2,700 megawatts in excess of what projected capacity will be in 2017, but that excess capacity could shrink to just 900 megawatts if planned retirements move forward.

Illinois and Missouri could also face energy capacity reserve shortfalls of 1,200 megawatts and 800 megawatts, respectively, due to EPA’s mercury rule and concerns about power plants being able to comply with the federal Clean Power Plan regulation.

“This is a crucial period given the number of generating plants that have retired recently and are expected to retire,” Sally Talberg, Michigan Public Service Commission chairwoman, told E&E News.

E&E News reports “Dynegy Inc. announced plans to mothball 1,835 MW of coal-fired capacity in southern Illinois” which comes after “the 435 MW lost when the Wood River coal plant along the Mississippi River shut down earlier this month.”

Dynegy is looking to retire another 500 megawatts of power in MISO, and will be moving its 260 megawatt plant from MISO to the PJM grid. Illinois is also closing a nuclear power plant after state lawmakers refused to subsidize it.

DTE Energy announced it would shut down another 900 megawatts of power in Michigan. MATS has forced older, less efficient coal plants to prematurely shut down because the cost of upgrading their emissions control equipment would be too high.

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