Resolution on the Mercury and Air Toxics Standard (MATS) Rule
WHEREAS, the U.S. Environmental Protection Agency (EPA) has adopted and has proposed a series of regulations establishing stringent new standards applicable to the electric power sector industry; and
WHEREAS, The Council of State Governments approved a policy resolution on October 23, 2011, to encourage the EPA and the Federal Energy Regulatory Commission (FERC) to create better coordination and communication between generators, system operators, and state policymakers with the goal of keeping all parties better informed of forthcoming regulations on air emissions from power plants. Further, The Council of State Governments agreed to promote better coordination within the environmental, energy, and financial regulatory communities and amongst state and federal policymakers to ensure the reliability of the electric system and develop reasonable timelines and cost efficiency models to minimize the financial impacts of federal regulatory decisions; and
WHEREAS, individual states, The Council of State Governments, regional transmission operators and other parties have raised significant concerns on the proposed Cross State Air Pollution Rule and the Mercury and Air Toxics Standards (MATS) Rule, such as the negative impact these regulations would have on states' ability to prepare compliance plans, electricity prices, the reliable operation of the electric power grid, the effective elimination of future electric generating plants that use clean coal technologies and on the interests of electric consumers to maintain affordable, reliable electricity; and
WHEREAS, the compliance deadlines set forth in EPA’s final MATS rule are insufficient according to state and industry experience to allow electric utilities time for preconstruction certification, engineering, permitting and other regulatory approvals that require up to three years and additional time to construct the necessary emission control technologies which in total can take five to six years; and
WHEREAS, the MATS rule provides for a three-year compliance period but EPA admits that many sources will need a one-year extension for non-reliability critical units (a four-year compliance schedule) to install controls, construct replacement capacity, or implement transmission reinforcement or other mitigation measures to assure the reliability of the electric grid, and EPA has stated that states may authorize an additional one year for compliance through an Administrative Order under Title V permits of the Clean Air Act; and
WHEREAS, electricity generators may enter into a consent decree on a case-by-case basis for reliability-critical units that require five or more years to complete construction and to assure the reliability of the electric grid; and
WHEREAS, states and electricity generators need regulatory certainty when developing retrofit plans to ensure their actions will comply with MATS and that such actions will not lead to power shortage, price spikes, and other negative consequences on jobs, the economy, and consumers.
NOW, THEREFORE BE IT RESOLVED, that The Council of State Governments encourages federal legislative and oversight actions such as, but not limited to, the Congressional Review Act to subject MATS to further analysis for its potential negative impacts on jobs, state economies and their recovery, electricity prices for consumers, domestic manufacturing, and international competitiveness in addition to the bipartisan Fair Compliance Act sponsored by U.S. Senators Joe Manchin (D-WV) and Dan Coats (R-IN) that would harmonize MATS compliance deadlines with pre-construction and construction timelines to install emission reduction technologies, construct replacement capacity, implement transmission reinforcement or other mitigation measures to assure electricity prices are reasonable, and the reliability of the electric grid is maintained without changing the final rule’s stringency or reduction levels.
BE IT FURTHER RESOLVED, that The Council of State Governments simultaneously encourages applicable state agencies to work closely with generation owners, regional transmission operators, federal agencies, including, but not limited to the Department of Defense installations in each state, the Department of Energy, the FERC, transmission and electric system reliability organizations, and the EPA and to avoid potentially unreasonable electricity price increases and grid reliability risks associated with these regulations.
BE IT FURTHER RESOLVED, that copies of this resolution are transmitted to the President, all members of Congress, the Chairman of the FERC, Secretary of the Department of Energy, the Administrator of the EPA, the leadership of the North American Electric Reliability Corporation (NERC), the Southwest Power Pool (SPP), the Electric Reliability Council of Texas (ERCOT), the PJM Interconnection (PJM), the Midwest Independent System Operator (MISO), the National Governor’s Association (NGA), and the National Association of Regulatory Utility Commissioners (NARUC) and other relevant organizations, all governors, all state utility regulatory commissions, all states' legislative leadership and The Council of State Government’s staff are directed to promote policies that reflect these principles.
Adopted this 20th Day of May, 2012, at CSG’s 2012 National Leadership Conference in La Quinta, California.