Emissions, Policy & Regulation, Policy & Regulations

What to Look for from EPA in 2014

Issue 1 and Volume 118.


A new year means new EPA challenges. EPA’s regulatory schedule for 2014 will keep the energy industry occupied, reading thousands of pages of guidance documents and court decisions. In turn, hundreds of questions will be generated on what all the words mean for compliance and what the broader implications are for energy markets.

From a strategic standpoint, on Nov. 19, EPA issued for public comment its four-year strategy document. This plan contains fve goals:

1. Addressing Climate Change and Improving Air Quality
2. Protecting America’s Waters
3. Cleaning Up Communities and Advancing Sustainable Development
4. Ensuring the Safety of Chemicals and Preventing Pollution
5. Protecting Human Health and the Environment by Enforcing Laws and Assuring Compliance

In the climate change arena, EPA proposed a greenhouse gas (GHG) New Source Performance Standard (NSPS) for new coal- and natural gas-fred plants and plans to fnalize these rules in 2014. For existing coal- and natural gas-fred plants, EPA is expecting to propose a GHG NSPS in 2014, with fnalization in 2015. EPA expects signifcant comments on these draft rules, and that the fnal rules will certainly undergo legal challenges. During EPA’s listening session roadshow, some agency personnel acknowledged that the GHG NSPS for existing units may be the most diffcult rule they have ever attempted to promulgate. We agree.

Several existing air quality regulations are still in fux. On June 25, EPA took comments on issues related to the Mercury and Air Toxics Standards (MATS) and NSPS. Numerous public comments were received concerning the defnition of “startup.” The EPA requested additional input on the use of default diluent gas cap values, procedures when a common stack is shared and default electrical production rate values to calculate outputbased emission limits during startup and shutdown hours where the electrical load is zero. EPA’s fnal determination on these issues will be critical to the ability of some utilities to achieve compliance with MATS and NSPS regulations. The MATS compliance deadlines are getting closer and thus any changes EPA makes could impact compliance strategies and mandated air pollution controls.

The Supreme Court is determining the validity of the DC Circuit Court decision which threw out the Cross State Air Pollution Rule (CSAPR) based on its “good neighbor” provision. EME Homer City Generation, L.P. v. E.P.A., 696 F.3d 7 (C.A.D.C. 2012). The Supreme Court could reinstate the rule in 2014, which would require utilities to have additional sulfur dioxide (SO2) and nitrogen oxide (NOx) reductions beyond those required by the Clean Air Interstate Rule (CAIR), reduce trading among states and limit statewide emissions through the assurance provisions. If the Supreme Court reinstates CSAPR, it is unknown how quickly utilities would have to comply, but let’s hope it is more than the six months EPA gave utilities originally.

There are continuing challenges to EPA’s Federal Implementation Plans for regional haze. EPA may set a new ozone National Ambient Air Quality Standard (NAAQS) in 2014. Compliance determinations for other NAAQS, such as SO2, NO2 and PM, will continue. Also, New Source Review (NSR) look-back and consent decrees continue to hang over all utilities. There are several rule reconsiderations pending, which may or may not be resolved in 2014, including NSR Aggregation Rule, NSR Reasonable Possibility Rule, and Fugitive Emissions Rule; all of which will affect modifcations at existing power plants.

Signifcant changes are expected for PM2.5. A rule is needed to fx the signifcant monitoring concentrations (SMCs) and signifcant impact levels (SILs) that were thrown out by the courts. Additionally, EPA will fnalize its guidance on demonstrating compliance with standards for secondary PM2.5 (i.e., particulate matter formed from sulfur, nitrogen and other compounds).

Air is not the only media that is seeing signifcant EPA action. On the water side, EPA is expected to fnalize the Clean Water Act Section 316(b) rules. The water discharge Effuent Limit Guidelines (ELGs) were proposed in 2013 and are expected to be fnalized in 2014. The Coal Combustion Residual (CCR) rules are also expected to be fnalized in 2014. To EPA’s credit, it is trying to coordinate the ELG and CCR rules. However, even more synergistic impacts exist in the real world between the air, water and CCR rules that have not been accounted for in EPA’s proposals. Beyond EPA, environmental groups such as the Sierra Club are challenging new and existing coal plants.

Unfortunately, 2014 looks like another year of dealing with new EPA rules and interpretations, court decisions and environmentalist challenges. Maybe someday we can have an atypical year

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