The U.S. Environmental Protection Agency is opening up a can of worms if it replaces the Clean Power Plan for cutting carbon emissions, certain industry interests are telling the agency.
The EPA issued an advanced notice of proposed rulemaking in December 2017 seeking input on whether and how it should replace the carbon-cutting rule for fossil fuel power plants. For instance, the agency asked if one approach might be to require heat rate improvements at power plants to boost operating efficiency.
But some commenters told the agency that this and a handful of other possible measures suggested by the EPA would trigger more stringent emissions restrictions under the EPA's new source review program, or NSR, which is activated when a power plant undergoes major upgrades. They therefore asserted that if the EPA wants the new rule to require upgrades at the plant-level, the NSR rule also needs to be overhauled, either through legislation or a regulatory action.
"Whether these heat rate modifications can be implemented without triggering NSR is as important as the practical engineering or economic concerns," wrote Clare Schulzki, executive director of the Institute of Clean Air Companies.
The NSR program is triggered when a physical or operational change made at a power plant will boost emissions on a tons-per-year basis, with certain exemptions for routine maintenance and load growth. If the NSR program is triggered, a power plant owner has to install the latest emissions controls. The program impacts all sources of pollution covered under the Clean Air Act, including natural gas-fired generators, but over the past decade coal-fired generators have been the ones targeted most frequently for upgrades.
But the rule, according to critics such as the ICAC, has been applied inconsistently, prompting a confusing array of litigation and orders that have left power plant owners unsure of which actions will trigger NSR enforcement. This uncertainty has deterred upgrades that could reduce emissions, ICAC and others have maintained. ICAC also noted that five of the upgrade activities the EPA is asking questions about as part of its Clean Power Plan replacement inquiry have triggered the NSR program in the past.
Chiming in on the same issue, FirstEnergy Corp. urged the EPA to exempt any projects that may be spurred by a Clean Power Plan replacement rule from being considered a "modification" under the NSR program. The company said that EPA's Office of Enforcement and Compliance Assurance has previously focused on such projects for enforcement actions, as have citizens and third parties who file suits claiming the projects are in violation of the NSR program.
Should the "looming threat" of NSR enforcement actions remain, FirstEnergy contended that power plant owners will be unwilling to make the changes necessary to meet a new Clean Power Plan-type rule. Leaving NSR in place would also delay upgrade projects that do move forward, the company said. It therefore urged the EPA to state that activities conducted to meet a replacement Clean Power Plan are "routine maintenance, repair, or replacement" and exempt from enforcement under NSR.
Oklahoma Gas and Electric Co., however, recommended that the EPA not include measures that have previously triggered an NSR process in the new rule to avoid regulatory uncertainty. This approach would narrow the compliance options available for heat rate improvements.
But some states expressed concern that the intense focus on reforming the NSR program is an attempt to weaken a rule that requires power plants to meet the latest emissions control standards. The states argued in joint Feb. 26 comments that heat rate improvements can cut down on carbon emissions but raise power plant emissions of other pollutants.
"The agency's solicitation of comments on how it could lawfully allow power plants to avoid their permitting and pollution control obligations under ... [NSR], is further evidence that EPA's approach in the advance notice is fundamentally flawed," wrote the states, which included New York, California, Connecticut, Hawaii, Illinois and others.
The EPA itself seemed to acknowledge in its request for information that more efficient power plants are likely to be prioritized in the electricity dispatch order, running more often and possibly increasing pollution, the states noted. The states cited a 2003 federal district court case which found that increased utilization of a plant "means that more coal is burned and more emissions created," which effectively negates the benefits of an improved heat rate.
Speaking to some of the efficiency upgrades mentioned by the EPA, the states said replacing or upgrading economizers and coal pulverizers have resulted in significant increases in sulfur dioxide and nitrogen oxide pollution.
Power plants that undergo nonroutine maintenance must comply with NSR and the EPA lacks the authority to exempt from NSR requirements activities that would result in emissions increases, the states concluded.
