By Robynn Andracsek, P.E., Burns & McDonnell, Contributing Editor and Block Andrews, Burns & McDonnell
Coal-fired utilities deserve our respect and admiration for continuing to provide reliable, baseload power despite new regulations aimed at shutting them down. Many smaller coal-fired entities at universities or local governments, cannot afford to retrofit their units and are understandably choosing to repower to natural gas.
The mission statement of every electric utility is to provide low cost, safe and reliable power while complying with environmental regulations. However, the EPA regulatory process has inhibited this goal. Sometimes the courts will overrule EPA's regulations, but much of the problem is self-inflicted by EPA. The only thing certain about new regulations for coal-fired boilers is the uncertainty.
EPA's attempts to regulate transport of pollution across state lines clearly illustrate this. First, let's briefly review this particular legal journey. The Clean Air Interstate Rule (CAIR) was finalized in 2005 and overturned by DC Circuit Court in 2008. Two years later it was re-proposed and rechristened as the Clean Air Transport Rule (CATR) and last year it was finalized as the Cross State Air Pollution Rule (CSAPR). Utilities affected by the rule have been presented with five different sets of allowance allocations since July 2010. Some states have been "in" the group covered by the rule, then out, or vice versa. Allowances aren't the only aspect that has changed. Assurance provisions, which limit the amount of trading a state can do without being heavily penalized, have also gone through several iterations. Additionally, since the CSAPR is based on helping downwind states comply with ozone and Pm2.5 National Ambient Air Quality Standards (NAAQS), as the NAAQS limits are lowered, it is likely that the CSAPR allowance allocations will be reduced as well.
The CSAPR was scheduled to replace CAIR starting Jan. 1, 2012. However, on Dec. 30, 2011, the U.S. Court of Appeals for the D.C. Circuit issued a ruling to stay the CSAPR pending judicial review. But sometimes EPA can't seem to see the forest for the trees. During this stay, EPA used a direct final rule (i.e. no opportunity for public comment) to make "technical adjustments" to the allowances, correcting some of its errors in the previous allocations. The court obviously stayed the rule for issues larger than a few hundred tons of allowances.
With each rule change, utilities have to re-evaluate their compliance plan and timetable, which can both change significantly: from low NOX burner to SCR, fuel switching to scrubbing, and plus or minus several years to comply. Take Texas as an example. The chart on this page illustrates its nightmare as the CSAPR allowances oscillated over the past 18 months.
CSAPR is just one example of EPA's zeal; there are several other EPA rules that have their own set of uncertainties. The Greenhouse Gas Tailoring Rule is currently in litigation. While it is doubtful that the underlying endangerment finding will be revoked, if the court decides EPA overstepped its authority by eliminating smaller sources from regulation, the resulting universal applicability will overwhelm both state agencies and industry. The Mercury and Air Toxics Standards (MATS) are likewise still facing legal challenges. And, no one knows quite where regulations for coal combustion residues and cooling water intake and discharge systems [316(a) and (b)] are going to end up.
How can a utility do the right thing for its customers while complying with EPA rules when the rules of the game consistently change? Utilities want EPA to take the care necessary to "get it right the first time" when developing these rules. And plant owners need the time necessary to make the changes required for compliance with the rules without jeopardizing reliability or unduly increasing the cost of the electric power they provide.
Allowance allocations and deadlines for coal-fired utilities are destined to change yet again before they are definitively finalized. Coal is no longer a fuel for the faint of heart.
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