EPA Carbon Standards for Modified Plants Impose Double Regulation, Utilities Say

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By Andrew Childers

Oct. 20 — An Environmental Protection Agency proposed rule that would require modified and reconstructed power plants to meet two different carbon dioxide emissions standards under separate provisions of the Clean Air Act is illegal, states and industry groups said.

“The EPA provides no discussion regarding how an affected [electricity generating unit] could meet two different standards, the basis for the requirement to do so, or any analysis to support why such a requirement would be necessary or beneficial,” the Southeastern Legal Foundation said in its comments on the proposed rule.

Industry groups and some states also argued that the EPA's proposed carbon dioxide performance standards for modified power plants are too stringent and based on flawed analysis. The comment period closed Oct. 16.

The EPA's proposed carbon dioxide emissions standards for modified and reconstructed power plants (RIN 2060-AR88) issued under Section 111(b) of the Clean Air Act largely mandates operating practices and equipment upgrades to ensure those facilities are operating as efficiently as possible (79 Fed. Reg. 34,959).

Double Regulation Opposed

The EPA in its proposed rule said power plants that already are subject to the carbon dioxide emissions guidelines for existing power plants proposed under Section 111(d) of the Clean Air Act would remain subject to those standards as well as subject to the standards for modified and reconstructed units proposed under Section 111(b).

In addition to its proposed standards for modified and reconstructed power plants, the EPA has proposed carbon dioxide standards for existing units under Section 111(d) and for new power plants under Section 111(b).

Utilities and industry groups argued in their comments that subjecting modified power plants to emissions standards under two different sections of the Clean Air Act is illegal.

“Section 111(b) authorizes EPA to regulate new sources while Section 111(d) directs states to establish standards of performance for existing sources. There is no basis to suggest that Congress would have intended a source to be subject to two different standards of performance adopted by two different regulators,” a coalition of industry groups including the National Association of Manufacturers, the U.S. Chamber of Commerce and the American Petroleum Institute said in comments.

Some state regulators also were concerned with how the simultaneous standards should be administered.

“The Clean Air Act is clear in its interpretation which does not allow EPA to redefine what is applicable to 111(b) or 111(d). Therefore, EPA cannot require states to regulate an electric generating unit under 111(d) if the electric generating unit is modified and subject to 111(b),” the South Dakota Department of Environment and Natural Resources said.

Standards Called Unachievable

The EPA improperly relied on the performance of a single supercritical boiler when determining the emissions standard for modified units, utilities and unions said. That resulted in standards that are too stringent to be achieved by modified power plants, they said.

The EPA has proposed an emissions limit of 1,900 pounds of carbon dioxide per megawatt-hour for large reconstructed, coal-fired power plants and 2,l00 pounds of carbon dioxide per megawatt-hour for smaller reconstructed units.

“In so doing, EPA provided no technical explanation or justification as to whether a subcritical unit that is reconstructed could ever meet the levels that this newer supercritical unit can meet,” the International Brother of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers said.

The American Coalition for Clean Coal Electricity said the EPA's proposed carbon dioxide standard for large coal-fired power plants cannot be achieved even by new units.

“Not only is this standard unachievable for existing coal-fueled utility boilers undergoing a reconstruction, it is also too stringent for even new coal-fueled power plants,” the group said.

Utility groups also argued that the EPA is overestimating the energy efficiency improvements that can be achieved cost effectively by modified power plants.

Duke Energy said it already has retired many of its less efficient, smaller coal-fired power plants. That leaves few opportunities for cost-effective efficiency improvements at its remaining facilities, the company said.

“There are no 2 percent efficiency improvement projects in the $0.78 million to $4.5 million range,” Duke said. “In addition, any improvements achieved by routine maintenance are not sustainable and would start to degrade immediately after return to service. The opportunity for lasting efficiency improvements are very limited, and potentially cost prohibitive.”

Modification Trigger an Issue

States and industry groups also urged the EPA to explicitly state that installation of pollution controls for other agency rules such as the mercury and air toxics standards (MATS) for power plants will not trigger the carbon dioxide standards for modified power plants.

“Utilities spend billions of dollars and enormous amounts of time upgrading power plants to comply with expensive regulations, such as MATS. It is crucial that the EPA make absolutely clear that modifications undertaken for the primary purpose of installing pollution control technology are not subject to the EPA's proposed rule for modified and reconstructed sources,” an official in Utah's Governor's Office of Energy Development said.

To contact the reporter on this story: Andrew Childers in Washington at achilders@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

Comments on the EPA's proposed rule are available at http://1.usa.gov/1ychmcE.