Court rules against Obama administration in EPA case

Getty Images The U.S. Supreme Court Building in Washington.

Getty Images
The U.S. Supreme Court Building in Washington.

The U.S. Supreme Court ruled on Monday that the Obama administration failed to consider costs when deciding to regulate mercury pollution from power plants. (Tweet this)

In a 5-4 ruling, the court ruled that the U.S. Environmental Protection Agency must consider costs before deciding whether regulation is appropriate and necessary.

Coal stocks, including Consol Energy and Peabody Energy, were trading up after the ruling was released.

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The question was whether the EPA should have considered the cost of compliance when deciding to regulate pollutants. Industry groups and some states challenged the regulation to limit emissions of mercury and other hazardous pollutants, claiming costs of up to $9.6 billion.

The regulation could help prompt utility companies to shut down some coal-fired plants due to the costs of compliance. The EPA says the rule, due to go into effect this year, applies to about 1,400 electricity-generating units at 600 power plants. Many are already in compliance, according to the U.S. Energy Information Administration.

In issuing the regulation, the EPA said it was not required to consider costs.

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The case marks the third time in the past year that the Supreme Court has reviewed Obama’s air pollution regulations, with his administration mostly winning the two previous cases.

In April 2014, the court upheld a regulation that limits air pollution across state lines. In June 2014, the court largely upheld the government’s ability to regulate greenhouse gas emissions from major utilities.

How the administration fares this time around will be closely watched by industry groups and states in part due to the EPA’s plans to issue new regulations aimed at curbing carbon emissions from power plants.

Read More Supreme Court approves Obamacare subsidies on HealthCare.gov

Last week, the Supreme Court handed down two landmark decisions. The court ruled that all states must allow same-sex couples the right to marry. In another ruling, it upheld the federal subsidies that help about 6.4 million people under the Affordable Care Act.

—Reuters contributed to this report.

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