Coal, Gas, Policy & Regulations

Sticky Recipe: The Clean Power Plan

Issue 10 and Volume 118.

Robynn Andracsek   By Robynn Andracsek, P.E., Burns & McDonnell and Contributing Editor

EPA wants to use “commonsense” to reduce greenhouse gas (GHG) emissions by shifting electricity generation to more efficient, less polluting power plants. In theory, writing regulations with commonsense is a noble idea; in reality, EPA has created a recipe for a no-win scenario for utilities.

EPA’s proposed GHG rules split power plants into three categories: new sources, existing sources, and modified sources. Each group has its own new regulation and its own difficulties.

New power plants are limited to a gross energy output-based CO2 emission limit expressed in pounds per megawatt-hour (lb/MWh). The limits can normally be met for new combined-cycle turbines but are problematic for non-peaking simple-cycle turbines and impossible for coal-fired boilers without Carbon Capture and Sequestration (CCS). Essentially, new coal-fired boilers without CCS are outlawed by this rule and simple-cycle turbines are limited to less than 2,920 hours per year of operation.

Existing power plants have been given individual lb/MWh limits by state. In developing each state’s limit, EPA established four “building blocks”: 1) heat rate improvements, 2) dispatch changes among affected electric generating units (EGUs), 3) using an expanded amount of less carbon-intensive generating capacity, and 4) demand-side energy efficiency.

Building blocks 1 and 2 can cause New Source Review (NSR) permitting problems for individual EGUs. On one hand, EPA suggests heat rates can be improved by “specific best practices and equipment upgrades, including upgrades to boilers, steam turbines, and control systems.” On the other hand, EPA has a long history of enforcement actions against power plants that make non-routine modifications to coal-fired boilers and turbines, despite the fact that “routine” is not defined in the NSR regulations. EPA’s success is measured at over $19.4 billion in control retrofits, penalties, and environmental mitigation at almost 100 plants since 1999.

The enforcement case against Ohio Edison is especially on point. During the 1980s and 1990s, Ohio Edison developed a program to improve the heat rate of the Samis Station units, including replacements of furnace water wall tubes, economizer tubes, superheater tubes, reheater tubes, burners, coal pipes, pulverizers and low pressure turbine rotors. Ohio Edison lost the argument that the modifications were routine maintenance and was ruled to be in violation of the NSR requirement to obtain a preconstruction permit. It’s worth noting that emissions increased in terms of tons per year but not pounds per hour. In other words, the units were run for more hours after the modification but at the same or lower hourly rate.

EPA has a two-step test to determine if a modification is subject to NSR: 1) Is there a physical change or change in method of operation and 2) is there a resultant increase in emissions over the ton per year thresholds. This rather nicely parallels building blocks 1 and 2: 1) make a physical change to increase heat rate and 2) dispatch the affected unit for more hours per year. Bingo! You’ve just triggered NSR permitting. And if your combustion turbine doesn’t already have add-on control devices for NOx and CO, then through the best available control technology (BACT) process, it soon will.

Turning to modified units, the new regulation is just as tricky. A modification is defined as a physical or operational change to an existing source that increases the source’s maximum achievable hourly rate of air pollutant emissions. So, if in physically modifying a combustion turbine in order to increase its heat rate, you also increase the hourly emission rate of GHG and NOx, you can change an existing unit into a modified unit, which, in the case of combustion turbines, is then subject to the same limits as a new unit. Presto! What was old is new again.

Building block 1 makes it possible to increase hourly emissions on existing combined cycle units modifying them enough that they become subject to the limits for new units. Building block 2 encourages utilities to increase run time so that tpy increases occur, subjecting plants to NSR permitting and retrofit of add-on BACT control devices.

The end results of these three rules is to 1) encourage construction of new combined-cycle combustion turbines, internal combustion engines (which are typically under the MW threshold and therefore not subject to the rules) and new renewables, 2) create a regulatory pathway that turns all existing combined-cycle units into modified units subject to the new unit limits, and 3) discourages construction of non-peaking simple-cycle combustion turbines and 4) forbid construction of new coal-fired boilers without CCS. All of these will significantly increase costs to ratepayers. And, remember, enforcement can come at the request of any public interest group, not just the EPA.

EPA wants to have its cake and eat it too. But then, of course, they are the official baker!

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