On 21 December the USA’s Environmental Protection Agency released two highly-anticipated final rules to regulate air toxics emissions and criteria air pollutants from coal-fired and oil-fired electricity steam units. EPA refers to the rules, together, as the Mercury and Air Toxics Standards (MATS). This rule package is the EPA's first national standard to reduce mercury and other air toxics from coal and oil-fired power plants.
One of the two final rules sets maximum achievable control technology (MACT) standards for mercury and other toxic heavy metals, acid gases, and certain toxic organic compounds; the other establishes New Source Performance Standards for EGUs (electrical generating units). Coal-fired and oil-fired power plants currently operating must comply within three years from the final rules’ publication in the Federal Register, with the potential for a one-year extension of the compliance date via the state and a second one-year extension available through an administrative order process. Natural gas-fired units are not covered by the MACT for EGUs but must comply with the NSPS.
The USA’s Clean Air Act of 1990 directs the EPA to set National Emission Standards for hazardous air pollutants for each category of sources listed by the CAA. EGUs were listed in 2000. The new rule replaces the Clean Air Mercury Rule (CAMR), issued by EPA in 2005 but struck down by the US Appeals Court in 2008. EPA was required to issue a proposed Utility MACT by March 16, 2011 and a final rule by November 16, 2011, later extended to December 16 to allow more time for comment. The final rule is the result of that proposal, modified to some extent following public comment.
The final MACT rule
Some aspects remain unchanged from the proposed rule.
Three-year compliance deadline With the final rule likely to take effect by March 2012, compliance is required by March 2015. State permitting authorities may grant an additional year. Separately, ‘reliability critical’ units may obtain an additional year. Questions remain, however, as to the legal effectiveness of this mechanism. Thus, sources could get up to five years to comply based on individual circumstances.
Standard-setting methodology EPA’s pollutant-by-pollutant approach for setting emission limits did not change from the proposed rule despite numerous comments explaining that sources cannot meet all the limits simultaneously. EPA did incorporate new data that was submitted during the comment period into its emission limit calculations.
The final rule included several notable changes from the proposal.
Revised requirements for particulate matter EPA includes only filterable PM in the emission limits rather than both condensable and filterable PM. For some subcategories, eg new coal units, new IGCC units, the emission limits are more stringent than those originally proposed.
Startup and shutdown The proposed rule included emission limits for startups and shutdowns, but the final rule now includes work practice standards for these periods.
Averaging period for Hg emissions For those sources using the emissions averaging provision, EPA extends the averaging period for mercury – to 90 days from the proposed 30 days – but sources exercising this option must comply with tighter mercury standards.
Options for monitoring The final rule narrows down the procedures to two options, either continuous monitoring or periodic quarterly testing.
Revised subcategories The final rule establishes seven subcategories to clarify what types of units are covered. EPA added “continental” and “non-continental” groups to the liquid oil-fired subcategories and added a limited-use liquid oil-fired subcategory. EPA also clarified its definition of coal-fired units to address fuel blending, stating that coal-fired EGUs are those that “burn ... coal or coal refuse for more than 10 % of the average annual heat input during any 3 consecutive calendar years or for more than 15 % of the annual heat input during any one calendar year.”
The final NSPS
Only units beginning construction, modification, or reconstruction after May 3, 2011 must comply with the final NSPS (New Source Performance Standards, regulating emissions from stationary spark-ignited engines, last finalised in January 2008) which amends the emission standards for SO2, NOx, and PM. Similar to the final Utility MACT, the final NSPS for PM is based only on filterable PM rather than total PM. The final rule promulgates work practice standards for startup and shutdown periods for PM only.
Implications
The finalisation of the Utility MATS means that coal and oil fired power plants nationwide in the USA will need to comply with stringent hazardous air pollutant (HAP) emission requirements in a relatively short period of time. EPA estimates that at least 4.7 GW of coal-fired capacity (approximately 2 % of the 2015 total) will become ‘uneconomic to maintain’ by 2015 as a result of this final rule. It predicts that the regulation will cost industry $9.6 billion annually and that retail electricity prices may increase by an average of 3.1% in 2015.
Due to the scope of the final rule and the short compliance period, reliability of the nation’s electricity grid has been a widespread concern. According to some estimates, the final MATS rule will accelerate the closure of coal-fired power plants critical to meeting the country’s electricity needs, thereby threatening the stability of the bulk power system in some regions of the country. Although several analyses have suggested that reliability will not be significantly affected, federal, regional, and state agencies with responsibility for assuring reliability may take action to allow for outages and retirements.
EPA likely will face opposition on several fronts to the implementation of the final MATS rule. For example, affected sources and industry groups are expected to challenge the rule in court, with the deadline for filing such petitions 60 days from the publication of the final rule in the Federal Register. A likely challenge will be to EPA’s contested pollutant-by-pollutant standard-setting methodology.
On the legislative front, members of Congress may still try to temper the final rule’s impact on EGUs and various bills designed to extend the deadline or soften the impact on power plants. It is even possible the entire Rule could be set aside under the Congressional Review Act, but this is a weak threat – even if it gets through Congress, the White House is sure to veto it.
Those coal-fired units that elect to remain in service must factor in the additional compliance burdens resulting from the rule’s implementation and plan carefully to ensure that pollution controls are installed in co-ordination with outages and retirements of other EGUs in their region during the short compliance time frame. Both mechanisms that could provide sources with additional time for compliance are legally uncertain.
Source: Van Ness Feldman
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