By Robynn Andracsek, P.E., Burns & McDonnell and Contributing Editor
Would you play a game without knowing the rules? Or jump into a lake without knowing how deep the water is? Likewise, you wouldn’t attempt to comply with a law without understanding its requirements. Because laws and regulations should be clear, comprehensible and unambiguous, right? However, when it comes to the regulation of hazardous air pollutants emissions emitted by electric utilities under the Clean Air Act, the current situation is anything but clear.
The utility industry was recently thrown into the dark regarding mercury emission regulation. Mercury is a neurotoxin that, in the form known as methyl mercury, contaminates fish. Exposure by eating contaminated fish can lead to nervous system disorders and birth defects in humans.
The U.S. Court of Appeals for the District of Columbia vacated the Clean Air Mercury Rule (CAMR) in a case decided February 8, 2008. Here’s what happened. In 2005, EPA removed electric generating units (EGUs) from the list of regulated industries listed in Section 112 of the Clean Air Act. EPA then adopted CAMR under Section 111 to control only one hazardous air pollutant, mercury, which is emitted from coal-fired EGUs. The court found that in adopting CAMR, EPA had unlawfully removed EGUs from regulation under Section 112 of the Clean Air Act. Thus, the seemingly trivial act of delisting EGUs from Section 112 actually invalidated regulating them under Section 111. The court’s decision has no legal effect until the court’s mandate has been issued, further heightening the regulatory uncertainty for mercury emissions.
In March 2005, EPA promulgated CAMR in an attempt to permanently cap and reduce mercury emissions from coal-fired power plants. CAMR established “standards of performance” limiting mercury emissions from new coal-fired power plants. It also created a market-based cap-and-trade program for new and existing plants. These measures would reduce nationwide utility emissions of mercury in two distinct phases. The first-phase cap was 38 tons (nationwide). Emissions would have been reduced by taking advantage of “co-benefit” reductions—that is, mercury reductions achieved by reducing sulfur dioxide (SO2) and nitrogen oxides (NOX) emissions attributable to existing emission control technologies and to technologies installed as a result of the Clean Air Interstate Rule (CAIR). In the second phase, due in 2018, coal-fired power plants would have reduced emissions to 15 tons upon full implementation.
The impact of the court’s decision to vacate CAMR differs by state. This is because CAMR was implemented through a regulatory and not a legislative action. The distinction is that each state was required to use its State Implementation Plan (SIP) to enact mercury regulation. EPA provided a “model” rule which states could follow. However, many states decided to be different (as states tend to do) and implemented their own rules. Some included allowance trading programs, others didn’t. Some SIPs were more stringent than CAMR, others were equivalent. (See the figure on page 6.)
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Any state’s rule that included adoption of CAMR by reference, in whole or in part, will now be left in legal limbo by the effect of the court’s decision.
Dozens of prevention of serious deterioration (PSD) construction permits have been issued since the promulgation of CAMR. Each of these facilities must determine how their state enacted mercury regulation, either by following EPA’s “model” rule or with a customized mercury rule.
Dozens more PSD construction permit are pending. The permit for AECI’s Norborne power plant was issued on February 22, 2008, two weeks after the Court’s ruling. The state of Missouri used a bold wait-and-see approach: In the event that the CAMR was vacated permanently, AECI is required to take appropriate action, as required by EPA, or complete a case-by-case maximum achievable control technology (MACT) analysis for hazardous air pollutants. Missouri told AECI to act within 90 days of the court’s final mandate.
Some states may delay issuing pending permit applications, hoping that EPA will act to resolve the current morass. The resulting uncertainty will lead to delays in construction and could impact vendor delivery for major equipment orders. It is not unimaginable that a U.S. company whose permit is in limbo could lose its equipment production slot to a foreign firm that does not have such hindrances.
What’s a Power Plant to Do?
The potential vacatur of CAMR has left a void as to the appropriate mercury limits for new coal-fired boilers. The Clean Air Act clearly requires that MACT now be determined on a case-by-case basis. However, the mechanism proscribed is in conjunction with the Title V permit program, not the New Source Review (NSR) program. The 45-day appeal period on the D.C. Court’s ruling must first expire and then a mandate to EPA can be issued by the Court. At that point, EPA can issue guidance to the industry, likely this month.
The most likely outcome is that each facility will need to conduct a case-by-case MACT analysis, and possibly not just for mercury, but for all hazardous air pollutants. These case-by-case determinations are by definition not cookie-cutter. They take a considerable amount of time and effort to reach conclusion. The wise utility might begin its case-by-case determinations now, to keep in its back pocket. Such pre-planning may soon become invaluable.
References:
1. www.epa.gov/hg/health.htm
2. http://pacer.cadc.uscourts.gov/docs/common/opinions/200802/05-1097a.pdf
3. http://www.epa.gov/region07/programs/artd/air/nsr/archives/2008/
finalpermits/aeci_norborne_final_psd_permit.pdf