Air Pollution Control Equipment Services, Emissions

Supreme Court clears the air over new source review

By David Wagman
Managing Editor, Power Engineering

A United States Supreme Court ruling last month offers a “monumental improvement in clarity” for power plant owners and operators who need to figure whether an equipment improvement or replacement project will trigger new source review under the Clean Air Act.

That was the view, at least, of Gary McCutchen, a principal with RTP Environmental. McCutchen spent time at the Environmental Protection Agency where he helped write the new source review regulations. And he spoke with Power Engineering magazine about the Supreme Court decision.

Tight margins
McCutchen said that such enhanced clarity is good because a generating unit running even an extra 20 to 40 hours a year may see its emissions rise enough to reach NSR threshold. That, in turn, could lead to a mandatory investment to install flue gas desulfurization systems, upgraded electrostatic precipitators, ESP replacement with baghouses and even selective catalytic reduction systems to handle nitrous oxide emissions.

Had the Supreme Court upheld lower court rulings in the case involving Duke Energy, McCutchen said that such a decision actually would have flown in the face of case law already decided in Illinois, Indiana and Ohio. It also would have changed how the power industry approaches new source review.

“Now we know that it doesn’t matter if the project is designed to increase a plant’s capacity or not,” he said. The Supreme Court ruling means that the only factors that matter are if a project is considered routine or if it increases the power plant’s availability.

At issue was a Supreme Court review of a current U.S. EPA definition of the emissions increases necessary to trigger new source review requirements. The Court ruled 9-0 in March in favor of the current EPA definition. It found that an appeals court improperly invalidated those regulations (the case was Environmental Defense v. Duke Energy Corp., U. S., No. 05-848). The U.S. Court of Appeal for the Fourth Circuit had previously all but halted the EPA’s enforcement action against Duke for allegedly performing plant modifications without a required permit.

The EPA sued Duke Energy in 2000 saying the company modified its power plants in such a way that resulted in increases in actual emissions (measured on an annual basis) without acquiring “prevention of significant deterioration” (PSD) permits. Duke argued that because it did not increase the plants’ hourly emission rates it did not need to acquire PSD permits. The district court agreed, and its decision was affirmed by the Fourth Circuit.

Error in judgement
The Supreme Court, however, said the Fourth Circuit erred.

The decision, however, doesn’t do away with the need for some strategy on the part of a power plant operator when considering a major equipment upgrade, McCutchen told me.

Here’s why.

Consider a generating unit whose superheater began acting up two years ago. The trouble meant that the unit had to be shut for 200 hours a year even though the operator wanted to run it as a baseload unit. What’s more, the superheater worked just fine up until two years ago and had no ill effect on the unit’s availability.

With the superheater acting up the operator now wants to replace it. Before starting work, however, he or she must put together a new source review exemption application that includes 24 months worth of actual operating data. This serves as the unit’s baseline of operations and is critical in triggering a new source review.

The operator is allowed to choose data representing any 24-month period out of the last five years. One strategy would be to select 24 months of data that is free from superheater problems. That means the data would include the 200 additional trouble-free hours when the unit was operating at full capacity. It’s easy to see that the data set would also include an additional 200 hours of emissions records, important as the baseline is being set for the replacement project. In this way, the operator is able to show that projected future emissions will not be significantly different from the baseline reference point

Costly delay
Consider, however, an operator who had decided to conserve costs and failed to act quickly to replace the troublesome superheater. Imagine that he or she waited so long that the only baseline possible included a lot of outage time. In this instance, the projected future emissions compared with the baseline could well show a significant increase in anticipated emissions as a result of the superheater replacement. This may well trigger new source review and force still more projects to update for best available control technology.

This sort of scenario creates a “real need to be thinking about responding fairly quickly to these kinds of changes,” McCutchen said.