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By Jessica Coomes and Andrew Childers
The Environmental Protection Agency issued a final rule Dec. 21 setting stringent mercury and air toxics standards for power plants, with an enforcement process for utilities to receive an additional year beyond the standard compliance period to install pollution controls.
The additional time is meant to address criticism that the regulation would force the shutdown of coal-fired power plants and jeopardize electricity reliability, EPA said.
“The lights will stay on, and we'll have clean air,” EPA Administrator Lisa Jackson told reporters Dec. 21 in announcing the release of the rule at the Children's National Medical Center in Washington, D.C.
Overall, the final rule is largely similar to the proposed version released in March, although EPA made some changes, including adjustments to some emissions limits for air toxics. For example, the final rule sets limits for filterable particulate matter, rather than total particulate matter, as a surrogate for metallic air toxics.
Although some industry representatives and lawmakers said the rule will force power plant shutdowns, health and environmental advocates hailed the regulation as a long-overdue victory that has been required since the Clean Air Act Amendments of 1990 were enacted.
The rule has been called utility MACT because it requires the use of maximum achievable control technology.
President Obama, in a video on a White House blog, said the 1990 law was “a bold and necessary step” but that “special interest groups” have delayed enactment of power plant emissions standards for 21 years.
“That was wrong,” Obama said. “Today, my administration is saying, ‘Enough.' ”
EPA said power plants account for half of the country's mercury emissions, and the final rule is expected to prevent as many as 11,000 premature deaths each year.
Jeff Holmstead, a former EPA assistant administrator for air and radiation and now an attorney for Bracewell & Giuliani LLP, told BNA Dec. 21 that EPA officials are on a mission “to do everything they can to ensure all coal-fired power plants have all of the latest and greatest pollution controls or shut down, and there is a recognition that this may create problems, but they view that as somebody else's problem. That puts more burdens on the utility industry to work to get something more reasonable in place.”
EPA estimated the regulation will entail an annual cost of $9.6 billion for the power industry, but $1 billion less than the proposed regulation would have cost. Jackson said the estimated compliance costs went down because the final rule adds flexibility to how industry can meet the standards.
“The rule is still the most expensive Clean Air Act rule ever imposed on the power sector,” Scott Segal, director of the Electric Reliability Coordinating Council, told BNA Dec. 21. “I'm not sure that [$1 billion] difference makes all that much difference.”
The standards apply to 600 power plants that have 1,400 electricity generating units—1,100 coal-fired units and 300 oil-fired units.
EPA said 40 percent of those units do not have advanced pollution controls. The agency is requiring the installation of controls, including electrostatic precipitators, baghouses, scrubbers, and dry sorbent injection.
Jay Timmons, president and chief executive officer of the National Association of Manufacturers, said in a statement Dec. 21 that the rule will cause electricity prices to rise.
“Manufacturers use one-third of our nation's energy supply, so a jump in energy prices will have a devastating impact on companies of all sizes, harming their ability to create jobs, invest, and grow,” Timmons said.
EPA expects the rule will prompt the retirement of 4.7 gigawatts of the country's 1,000 gigawatts of electricity generating capacity. Most of the retiring units are old and do not have modern pollution controls, EPA said.
Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, said in a statement Dec. 21 that “parts of the country face very real threats of rolling brownouts and blackouts” because of the utility MACT rule.
Sen. James M. Inhofe (R-Okla.), ranking member of the Senate Environment and Public Works Committee, said Dec. 21 he would file a joint resolution of disapproval under the Congressional Review Act to nullify the rule, which he called “a thinly veiled electricity tax that continues the Obama Administration's war on affordable energy and is the latest in an unprecedented barrage of regulations that make up EPA's job-killing regulatory agenda.”
Power plants will have three years to install pollution controls, as the Clean Air Act allows, with the possibility of receiving one-year extensions on a case-by-case basis from local permitting authorities.
Jackson said she will tell states to make “very liberal use of the fourth year for companies putting on controls.”
In addition, the administration is allowing utilities that are needed to ensure electricity reliability to schedule an additional year to install controls through an enforcement process under Section 113 of the Clean Air Act.
However, EPA said “there will be few, if any situations, in which this pathway will be needed.”
“In the unlikely event that there are other situations where sources cannot come into compliance on a timely basis, consistent with its longstanding historical practice under the Clean Air Act, the EPA will address individual noncompliance circumstances (if there are any) on a case-by-case basis, at the appropriate time, to determine the appropriate response and resolution,” the agency said in a fact sheet on the final rule.
EPA said it made changes to the rule based on the thousands of public comments it received, aiming to make “implementation easier and less costly.”
For example, EPA is allowing filterable particulate matter—rather than filterable and condensable particulate matter—to be a surrogate for metallic air toxics. The agency said most air toxics consist of filterable particles.
In addition, EPA is allowing work practice standards during periods of startup and shutdown because numeric emissions limits were not feasible.
“Those are meaningful, good changes, but they're not nearly enough,” Segal said. “When you look at the changes EPA has made in this rule, there is not a lot of additional flexibility.”
EPA said it also changed the definitions for subcategories of coal-fired electricity generating units because the proposed definitions were confusing and not specific enough.
The final rule also adds separate subcategories for oil-fired units that are outside the continental United States and units that are used on a limited basis.
The rule sets national emissions standards for hazardous air pollutants for power plants. MACT standards represent the emissions levels being achieved by the best-performing 12 percent of power plants, and they are issued under Section 112 of the Clean Air Act.
For coal-fired generating units, the rule sets numeric emissions limits for mercury, filterable particulate matter as a surrogate for toxic metals, and hydrogen chloride as a surrogate for acid gases.
For oil-fired units, the rule sets numeric emissions limits for filterable particulate matter as a surrogate for toxic metals, hydrogen chloride, and hydrogen fluoride.
In conjunction with the hazardous air pollutants standards, the final rule revises new source performance standards for power plants to address emissions of particulate matter, sulfur dioxide, and nitrogen oxides.
The utility MACT rule replaces the Clean Air Mercury Rule, which the U.S. Court of Appeals for the District of Columbia Circuit struck down in 2008 (New Jersey v. EPA, 517 F. 3d 574, 65 ERC 1993 (D.C. Cir. 2008); 39 ER 301, 2/15/08).
Under a legal settlement with health and environmental groups, EPA proposed the utility MACT rule in March (American Nurses Ass'n v. Jackson, D.D.C., No. 08-2198, order issued 10/24/11; 42 ER 541, 3/18/11).
A final rule originally was due Nov. 16 under the settlement, but EPA sought a one-month delay to respond to the 960,000 public comments it said it received on the proposal.
EPA signed the final rule Dec. 16 but did not release it publicly until Dec. 21.
Ann Brewster Weeks, legal director of the Clean Air Task Force, told BNA Dec. 21 that the final rule “struck exactly the right note” in achieving emissions reductions in a way that will ensure electricity reliability. The Clean Air Task Force represents parties in the litigation.
“We're pleased with what came out today,” she said. “Provided that the utility companies do what they're supposed to do, this will be implementable.”
Legal challenges are expected to be filed over the final rule. Holmstead said one issue he expects to come up in litigation is whether EPA acted legally when it made a finding that it is “appropriate and necessary” to regulate air toxics emissions from power plants.
The utility MACT rule is the second regulation issued in recent months targeting power plant emissions.
In July, EPA finalized the Cross-State Air Pollution Rule, which requires electric utilities in several states to reduce interstate transport of nitrogen oxides and sulfur dioxide. The compliance period for the cross-state rule begins Jan. 1, 2012.
The proposed utility MACT rule estimated it would save up to 17,000 premature deaths each year, while the final rule lowered that estimate to 11,000 deaths. Jackson said the number went down because the cross-state rule's health benefits were “greater than we thought, which means there's less pollution to be attacked by this one.”
The final utility MACT rule is available at http://www.epa.gov/airquality/powerplanttoxics/pdfs/20111216MATSfinal.pdf .
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