Obama mercury air pollution rule faces test at U.S. top court

By Lawrence Hurley WASHINGTON (Reuters) - The latest legal test of President Barack Obama's environmental agenda reaches the U.S. Supreme Court on Wednesday as the justices consider a challenge to a regulation intended to limit emissions of mercury and other hazardous pollutants mainly from coal-fired power plants. The nine justices are due to hear a 90-minute oral argument on whether the Environmental Protection Agency should have considered the cost of compliance when deciding whether to regulate the pollutants. Industry groups and some states appealed after an appeals court upheld the regulation in June 2014. Among companies opposing the rule are Peabody Energy Corp, the nation’s largest coal producer. Exelon Corp, the biggest U.S. nuclear power plant operator, is one of several power companies that support the rule. The case marks the third time in the past year 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 limiting 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. The 2012 mercury regulation also covers oil-fired plants, although these are less common. It is being targeted by Michigan and 20 other states in addition to various industry groups, including the National Mining Association. The challengers say the EPA's refusal to consider the estimated $9.6 billion-a-year costs will lead to bigger electricity bills for Americans. The regulation could help prompt utilities to shut down some coal-fired plants due to compliance costs. 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, the U.S. Energy Information Administration said. In issuing the regulation, the EPA said it was not required to consider costs. It did outline what it saw as the rule's benefits, including preventing up to 11,000 premature deaths annually. The agency also said the regulation could generate billions of dollars in benefits including a reduction in mercury poisoning, which can lead to developmental delays and abnormalities in children. A ruling is due by the end of June. The three consolidated cases are Michigan v. EPA, 14-46, Utility Air Regulatory Group v. EPA, 14-47, National Mining Association v. EPA, 14-49. (Reporting by Lawrence Hurley; Editing by Will Dunham)