What does ACE rule really mean for utility power plants?

The Affordable Clean Energy (ACE) Rule, which was finalized June 19, replaces the Obama Administration’s Clean Power Plan (CPP) with a rule “that restores the rule of law and empowers states to continue to reduce emissions while providing affordable and reliable energy for all Americans.”

ACE finalizes the repeal of CPP, but beyond the dueling administrations, how does ACE affect today’s utility plant?

ACE is similar to what was originally proposed as Building Block 1: a list of “energy efficiency measures” that power plants will need to install; each unit will be prescribed its control measures individually by its state. “States will evaluate applicability to their existing sources of the six candidate technologies and improved operating and maintenance practices and take into consideration source-specific factors in establishing a standard of performance at the unit level.”

The rule did not set specific limits. It demands the State determine the limits. The rule only applies to certain existing coal-fired Electric Generating Units (EGUs) and excludes integrated gasification combined-cycle (IGCC) facilities.

ACE applies to plants which:

ACE excludes:

·         Were operating or in construction before January 8, 2014,

·         Simple cycle combustion turbines

·         That sell greater than 25 megawatts (MW) to the grid,

·         Combined cycle combustion turbines

·         Have a base load rating greater than 250 MMBtu/hr, and

·         Combined heat and power combustion turbines

·         Burn greater than 10-percent coal as part of the plant’s average annual heat input

·         IGCC

Heat Rate Improvement is the best system of emission reduction, but at least eight technologies must be evaluated by the states. Each of these eight technologies must be evaluated for what improvement (limit) they could achieve. Then each technology is accepted or rejected based on cost, feasibility, other reasons that are supported in the evaluation. However, similar to a best available control technology (BACT) analysis under PSD, the rule did not define what is “too costly.”

1)      Neural network

2)      Intelligent sootblowers

3)      Boiler feed pumps

4)      Air heater and duct leakage control

5)      Variable frequency drives

6)      Blade path upgrade (applicable to a steam turbine)

7)      Redesign or replace the economizer

8)      Improved O&M practices, such as operator heat rate improvement training, on site appraisals, and condenser cleaning

State must set an emission rate and it is anticipated this rate will be in terms of net or gross pounds of greenhouse gas per megawatt (lb/MW). The state must specify how these limits will be verified (continuous emissions monitors, annual stack test, etc.). States have flexibility in setting these limits, which can be set at various averaging periods or different rates can be set for different loads. Where rates not readily verified or measured, operating practices could be the solution. States can consider source specific factors like remaining useful life of an existing source in applying performance standards to that source, which gives a state the ability to exempt an older unit from compliance or setting a less stringent standard for older assets. Averaging across designated facilities at a single plant and averaging/trading between plants is NOT permissible.

Technologies that do not have to be reviewed include:

·         Natural gas repowering

·         Natural gas co-firing

·         Natural gas refueling

·         Carbon capture and storage

·         Co-firing with biomass is not allowed to be reviewed

·         Carbon capture and storage, full or partial

States have three years to evaluate all the units and submit a State Implementation Plan (SIP) to the EPA.  The EPA has 6 months to determine if the SIP is complete or not.  The EPA will act on the SIP within 12 months after determination if it is complete or 18 months after it is submitted if no completeness determination is made. The EPA has two years to issue a Federal Implementation Plan (FIP) after SIP is incomplete or disapproved, or failure of State to issue a SIP.

Finally, and importantly, the EPA has not finalized anything regarding proposed changes to New Source Review (NSR) for “energy efficiency projects,” which can easily trip Prevention of Significant Deterioration (PSD) permitting and installation of Best Available Control Technology (BACT) for non-greenhouse gas pollutants. The EPA intends to take final action on the proposed NSR reforms in a separate final action at a “later date.” Until then, consult with your legal staff for evaluation the PSD implications of implementing the ACE rule.


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