TheU.S. EPA has deniedfive petitions that sought review of carbon emissions guidelines for new,modified and reconstructed fossil fuel power plants, noting that a Canadian power plantusing carbon capture and sequestration is operating just fine.

Thenew source rule, published in the Federal Register in October 2015, requiresnewly constructed steam power plants to adhere to standards of performance equivalentto a highly efficient, supercritical pulverized coal-fired boiler using partialcarbon capture and sequestration technology. New and modified stationarycombustion turbines would have to match the performance of a "well-performing"natural gas-fired combined-cycle power plant.

Thenew standards were promulgated with the beleaguered Clean Power Plan, which was by the U.S. SupremeCourt in February pending the litigation against it. Although the new sourcerule is not impacted by the stay, the standards are facing their own .

Outsideof that court action, parties can ask the EPA to reconsider a rule under theClean Air Act so long as they prove to the agency that their concerns would nothave been practicable to raise during a regular public comment period. The EPAdenied many of the arguments in the petitions on this point, but also said theagency had properly developed the parts of the rule at issue.

Theagency was asked by AmericanElectric Power Co. Inc., AmerenCorp., the state of Wisconsin, the Utility Air Regulatory Group,Energy and Environment Legal Institute and the Biogenic CO2 Coalition toreconsider the final standards of performance that the rule is based on. TheEPA denied five of the petitions on April 29, and will defer a decision on theBiogenic CO2 Coalition's complaint while the agency considers how to accountfor biomass emissions when co-firing with fossil fuels.

TheEPA has been under fire since the release of the rule for keeping CCStechnology as a requirement in the final version when such an approach toemissions reduction has yet to be proven commercially viable. The petitionerscomplained that the EPA relied on SaskPower'sBoundary Dam Unit3 project that in October 2015 reported the facility was only running at about40% of its projected capacity.

Thepetitions also claimed that the EPA incorrectly calculated costs for scalingdown full carbon capture to partial capture.

Butin denying the petitions the EPA defendedits rule and the project, claiming that Boundary Dam is operating just fine. Inparticular, the EPA noted that the unit has reportedly been operational 82 of91 days in the first quarter of 2016 at a 90% reliability factor.

"Thesuggestion that BD3 has experienced operational failures calling into questionthe reliability, feasibility, or demonstrability of the carbon capturetechnology is greatly exaggerated and essentially incorrect," the EPAwrote. Moreover, the actual performance of the Boundary Dam unit confirms that "partialCCS is adequately demonstrated at the facility, and thus corroborates the EPA'sfinding that the technology is adequately demonstrated."

Theagency asserted that the Boundary Dam unit is meeting Canada's performancestandard for CO2 emissions, which the agency said are even stricter than thoserequired in the U.S. The EPA said most of the issues that shuttered the plantfor parts of 2015 did not actually relate to the carbon capture system, citingnumerous correspondences between officials at SaskPower and the EPA.

The UtilityAir Regulatory Group in its petition contended that since the concerns withBoundary Dam's CCS operations arose after the release of the new source rule,reconsideration of the rule is justified. The EPA agreed that the issuesbrought by the Utility Air Regulatory Group did in fact arise after the releaseof the new source rule; however, the agency said it did not base the rule ononly the performance of the single power plant.