Policy & Regulations

Another Setback for Coal

Issue 6 and Volume 119.

Environmental groups claimed victory last month after the U.S. Environmental Protection Agency rolled back decades-old policy that offered reasonable protections to power producers charged with providing homes and businesses a reliable supply of electricity.

U.S. power plants have long been exempted from exceeding emission standards during startup, shutdown or malfunction (SSM). Exemptions are granted for good reason. Emission control equipment in a power plant must warm up before the plant can effectively control emissions. The chemical reactions required for controlling emissions cannot occur in the cold. It’s a technical reality associated with the operation of combustion boilers and has long been recognized by EPA rules that exempt utilities from exceeding emission limits during SSM events.

Last month, however, the EPA issued a final rule, directing 36 states to stop providing exemptions for emission violations during SSM events. Not Surprisingly, EPA’s action is a response to a 2011 petition for rulemaking filed by the Sierra Club. It’s a legal tactic known as “sue and settle,” and it is being abused by the EPA and environmental groups engaged in a calculated campaign against the most important sector of the power generation industry – coal. In a sue-and-settle lawsuit, the plaintiff’s cause is supported by the defendant. In this case, the defendant is the EPA, which agreed to a prearranged settlement with the Sierra Club. In the end, both sides get what they want.

Astonishingly, the new rule fails to recognize the science and chemistry surrounding the operation of a power plant. Under the new rule, EPA now believes power producers should be able to anticipate emissions violations during a startup or shutdown and take steps to maintain compliance. But emission control systems work only under specific conditions, and those conditions cannot be achieved during startup or shutdown.

The truth is that the most efficient power plants are unable to meet emission standards outside of normal operation. That’s why states have long provided utilities an “affirmative defense” against enforcement actions and citizen lawsuits stemming from SSM events while other states unilaterally exempt emissions during such events.

EPA now contends the Clean Air Act (CAA) prohibits exemptions for CAA violations. The agency’s U-turn stems from a recent ruling by the D.C. Circuit Court of Appeals. In that case, which was brought by the Natural Resources Defense Council, the court found that affirmative defenses cannot be used to shield companies from private lawsuits and penalties for CAA violations. It is up to the courts, not the EPA, to determine the penalty awarded in a private civil suit, the court found.

Under the new rule, “Neither states nor the EPA have authority to alter either the rights of other parties to seek relief or the jurisdiction of the federal courts to impose relief for violations of CAA requirements.”

The new SSM rule will undoubtedly be another tool used in the Obama administration’s War on Coal, a conflict borne from real rulemakings and policies. Under the new rule, utilities could be fined as much as $37,500 for each violation.

Power producers contend EPA failed to prove the exemptions have caused specific harm and, therefore, does not have the authority to call on states to change their SSM provisions.

The 36 states directed to change their policies to prohibit exemptions for SSM events have until Nov. 22, 2016 to comply. Those states are: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington and West Virginia.

If you have a question or a comment, contact me at [email protected]. Follow me on Twitter @RussellRay1.