On the Horizon for Coal-Fired Plants

Over twenty years since the Clean Air Act Amendments were passed, coal-fired power plants have a target on their collective forehead, but remain under-regulated in many respects. The lengthy process of rulemaking along with heavy legal pushback from various States and industry has made achieving the goals of the Clean Air Act (CAA) difficult.

Now, the EPA is utilizing the CAA, Clean Water Act (CWA), and the Resource Conservation and Recovery Act (RCRA) to impose what could be a heavy regulatory burden on coal-fired power plants in the U.S.  The CAA regulations are currently experiencing heavy pushback from States and industry groups. This controversy (according to regulation opponents) injects a great deal of uncertainty into the future of our electric power grid, both in terms of cost and reliability.

CROSS STATE AIR POLLUTION RULE

First, EPA has promulgated the Cross State Air Pollution Rule (CSAPR) under the CAA, regulating sources of pollution that affect air quality in other states.  On December 30, 2011, two days before the EPA’s CSAPR was set to take effect, the Court of Appeals for the D.C. Circuit imposed a stay on the rule, pending the result of litigation.  Fifteen states, as well as multiple electric utilities and other organizations, have opposed the rule and petitioned for review.  The Court does not comment on the merits of the case, but the standard for imposing a stay requires that movants show a substantial likelihood of success on the merits.

CSAPR was promulgated in response to the Courts remand of the 2005 Clean Air Interstate Rule (CAIR).  In 2008, the Court held that parts of CAIR were unlawful, and ultimately remanded the rule to EPA without vacature.  CAIR remained in effect while EPA formulated a new rule in accordance with the Courts opinion.  CSPAR, was to take effect on January, 1, 2012, and in many respects imposes more stringent emissions standards than the previous rule.  Now CAIR remains in effect until a decision is reached on the fate of CSAPR.  The Court has attempted to expedite the process by requiring the parties to consolidate briefs and submit a plan that would allow the case to be heard by April of 2012.  EPA estimates that this rule will cost an additional $800 million in 2014 but will yield $120 to $240 billion in health and environmental benefits.

MERCURY AIR TOXICS STANDARDS

Second, and also imminently applicable, the Mercury Air Toxics Standards (MATS), also under the CAA and by court order, are designed to replace the now-vacated and never implemented 2007 Clean Air Mercury Rule (CAMR) that was to limit the emission of mercury, arsenic and other metals from coal-fired electric utility steam generating units (EGUs).

Mercury, arsenic and other metals emitted into the air by coal-fired power plants can cause serious health effects, but to-date have not been regulated by EPA.   Unlike CAIR, CAMR was vacated by the Court and never went into effect.  The rule was vacated, not for its substance, but because EPA has attempted to regulate both new and existing sources of Mercury under Clean Air Act section 111.  Regulation of electric utility steam generating units (EGU’s) used at coal-fired plants would only be allowable under this section if they were not listed as sources in section 112 of the Clean Air Act covering hazardous air pollutants.  It was EPA’s delisting rule, removing EGU’s from section 112, that the Court found to be unlawful because EPA did not comply with the section 112(c)(9) requirements for such action.  The Court held that CAMR must be vacated along with the delisting rule. The MATS rule has cured the defect by now regulating mercury and other emissions under both sections 112 and 111 of the Clean Air Act.

OTHER RULES REGULATING COAL FIRED PLANTS

In 2010, EPA issued a proposed rule that would fall under RCRA to regulate the disposal of coal ash (or coal combustion residuals).  The public comment period on the latest information ended in November of 2011.  Also, a proposed rule under the CWA, pursuant to a settlement agreement between environmental groups and the EPA, would provide more stringent standards for cooling water intake structures at power plants. The public comment period for this proposed rule ended in August of 2011.  Lastly, EPA is in the midst of preparing proposed rules regulating greenhouse gas emissions from coal-fired power plants and other sources. Some have already been challenged, and when new GHG rules will be completed is uncertain.

It remains to be seen how the various rules will play out, but experience shows that rules that would force coal-fired plants to shut down prematurely or to install costly controls will likely have a day in court and could be delayed for years.

 

– Shannon Lichtenberg, Associate Member

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