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Utilities, environmental groups disagree on US EPA approach to regulating CO2

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Utilities, environmental groups disagree on US EPA approach to regulating CO2

Electric utility associations and environmental groups were divided in responses to a footnote in the U.S. Environmental Protection Agency's proposed rule for new coal plants seeking comment on how it should regulate carbon dioxide emissions.

In addition to relaxing an Obama-era rule for new and modified coal plants, the EPA's December 2018 proposal invited commenters to weigh in on whether it needs to make a pollutant-specific endangerment finding before regulating CO2 emissions from new fossil fuel-fired power generators. The proposal also asked for comment on whether the EPA has "a rational basis for regulating CO2 emissions from new coal plants," citing a recent outlook from the U.S. Energy Information Administration that projected a continuing decline in coal-fired generation.

"No more than a few new coal-fired [electric generating units] can be expected to be built, which raises questions about whether new coal-fired EGUs contribute significantly to atmospheric CO2 levels," the footnote said.

Since the 1970s and pursuant to Section 111, the EPA has developed performance standards for categories of sources of air pollution that "may reasonably be anticipated to endanger public health or welfare."

Issued in 2015, the Obama-era rule used the EPA's 2009 finding that greenhouse gases endanger human health and the environment to set a standard of 1,400 pounds of CO2 per MWh for new and modified coal plants. That limit effectively required any new coal-fired power plants to capture at least some of their CO2 emissions using a technology known as carbon capture and sequestration. EPA estimated the regulation would not have a significant effect on CO2 emissions because few, if any, new coal plants would be built in the future.

Under the EPA's December 2018 proposal, large coal-fired EGUs would be allowed to emit up to 1,900 pounds of CO2 per MWh and smaller units could emit up to 2,000 pounds per MWh. The proposal would also establish that the emissions-control technology already installed at the nation's most efficient coal plants is the best system of emissions reduction under Section 111 of the Clean Air Act.

In addition, the footnote at issue contemplated a major change to the EPA's reading of Section 111. The footnote invited comment on whether the EPA correctly interpreted the "endangerment finding" requirement of Section 111 as requiring such a finding only once for fossil-fueled power plants at the time the EPA listed those plants as a source category, or whether the EPA must make an additional finding each time the agency regulates a new pollutant emitted by fossil-fueled source category power plants.

'Pollutant-specific finding of endangerment'

The National Rural Electric Cooperative Association argued in March 18 comments that the EPA's insistence that the statute gives it the authority to regulate any pollutant emitted by fossil-fueled power plants is simply wrong. "EPA should reconsider and abandon it in favor of an interpretation that requires a pollutant-specific finding of endangerment to trigger EPA's regulatory authority with respect to that pollutant," the group said.

The American Public Power Association argued that the EPA's 2009 endangerment finding, which laid the foundation for the agency to set CO2 emissions standards for motor vehicles, is not applicable to new or modified power plants because the finding was made under a different section of the Clean Air Act.

"EPA must make a finding that CO2 emissions from the new ... sources cause or significantly contribute to air pollution and may reasonably be anticipated to endanger the public health or welfare," the association said. The group added that it does not support overturning or reversing the EPA's 2009 endangerment finding.

The Edison Electric Institute said rescinding the finding would only create more uncertainty while leading to protracted litigation. Such a move "would not be resolved for years and could undermine any potential for generation owners and operators to consider new coal-based generation as a viable option," it said.

'The categorical level'

Environmental groups said the EPA was correct to propose retaining its interpretation that endangerment findings under Section 111 operate at the categorical level.

"The statute neither provides for nor authorizes withholding regulation based on the absence of a pollutant-specific endangerment finding," groups including the Sierra Club, Natural Resources Defense Council, and Clean Air Task Force said. Rather, the initial endangerment finding "looks at whether the sources in that category collectively cause or significantly contribute to endangering pollution."

The groups also noted that the EPA explained in its 2015 rule that even if an endangerment finding was required for each pollutant, the factual findings and rationale the EPA laid out in its rulemaking would "unquestionably" have the same effect.

With regard to whether new coal-fired generators would significantly contribute to CO2 emissions, the groups noted that emissions from even a single new coal plant may amount to millions of tons each year. Indeed, several environmental groups noted that one new 600-MW coal plant operating under the weaker proposed standards would negate the total CO2 emission reductions from all existing power plants anticipated in the EPA's Affordable Clean Energy rule many times over.

If the EPA decides to adopt a different interpretation of Section 111, the groups said the agency will need to issue a new proposal. "The footnote does not provide proper notice of any change to the 2015 interpretations and determinations, and any such change would not be a logical outgrowth of the proposal."