What are the implications of CSAPR delays?

Emissions control efforts are once again in flux after the U.S. District Court of Appeals recently granted a request to stay the U.S. Environmental Protection Agency’s Cross State Air Pollution Rule. What does the postponement of implementing the rule mean for the industry, and when will CSAPR go into effect?

The rule, which was originally scheduled to be effective beginning Jan. 1, is set to limit sulfur dioxide (SO2) and nitrogen oxide (NOX) emissions from power plants in 27 states. Several states, including Kansas and Texas, and power producers such as Luminant, Westar Energy and American Electric Power Co. (NYSE: AEP) sued the EPA prior to the stay announcement, saying the original Jan. 1 start date did not provide states and utilities enough time to meet the limits.

Luminant had planned to shut down units 1 and 2 at the Monticello coal-fired power plant on Jan. 1 to comply with CSAPR, but has continued operating them after the stay was granted.

Gov. Rick Perry (R-Texas) applauded the Court’s decision to stay CSAPR, saying that a Jan. 1 implementation date would have cost hundreds of Texans their jobs, including those working at the Luminant units. “Texas will now have a chance to discuss the devastating impact that this rule will have on our state’s economy and electric reliability – an opportunity that we were not given by the Obama Administration’s out of control EPA when they adopted the rule,” he said in a Dec. 30 press statement.
While the stay does provide a temporary reprieve for affected power generators, it does not guarantee that the Court will prevail in changing the rule, said Todd Palmer, an environmental lawyer with Michael Best & Friedrich LLP. However, this delay will allow the Court to hear all sides of the argument.

For now, the Court is deciding a process for companies and states to submit briefs. The Court is scheduled to submit a proposed briefing schedule and format by Jan. 17. Once the Court has reviewed the briefs, it is expected that a hearing may be held in April.

Palmer said it seems unlikely that the hearing will be able to take place that early, though. “If you back-calculate the time involved in all the briefs necessary to lead up to a hearing, that gives very little time for all the interested parties to brief the Court on all the concerns they have with the rule,” he said.

Kathleen Bassi, an attorney with Schiff Hardin who was previously with Illinois EPA, said it is likely that the hearing will be delayed until May or June, and that the decision could come three to four months after the arguments.

During this interim period, the Clean Air Interstate Rule is in effect for SO2 and NOx emissions at affected power plants.

The rule in question has brought the subject of the future of electric reliability under speculation. While some in the industry are applauding CSAPR’s postponement, this delay raises the possibility that CSAPR and the recently finalized Utility MACT will be implemented in near synchronicity.

Whether a delay in CSAPR implementation would also cause a delay in Utility MACT implementation, however, is unlikely, Bassi said. “A delay of the Utility MACT will depend on the outcome of appeals of Utility MACT. In the Court’s eyes, the two are totally independent.”

Palmer said one of the biggest concerns over CSAPR is whether the industry will be able to obtain all of the emissions control equipment needed in a timely manner. “There may be a larger number of people looking for supplies than what the market can supply,” he said. Another concern, he said, is a potential shortage of welders and other personnel.

For now, however, companies must wait for the Court’s decision on CSAPR before choosing compliance technologies. “Until there’s a final rule in hand, most companies don’t have the authority to start spending the money for compliance.”

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