Public Power Magazine

Utilities Need More Time To Reduce Mercury Emissions


From the March-April 2012 issue (Vol. 70, No. 2) of Public Power

Originally published March-April 2012

Perspective
By Mark Crisson
President & CEO, APPA
March-April 2012

The hourglass will start dropping sand in March on the three-year deadline for coal-fired power plants to comply with the Environmental Protection Agency's new rule for reducing mercury emissions.

The challenges posed by this rule dominated a lot of our attention in 2011 and continue to do so in 2012. Adoption of the rule is no surprise and APPA members understand and support the need to reduce mercury emissions. We've known that EPA would regulate mercury emissions since 1996, when the agency issued its study of hazardous air pollutants and concluded that mercury from coal-fired power plants and nickel from oil-fired plants should be regulated.

photo of Mark Crisson-PPmagazine-JA2011

An earlier EPA rule on mercury emission limits was overturned by a federal court in 2008, leading the agency to propose a revised rule in March 2011. Suddenly, the rule was on a speedboat. Utilities had from March until August last year to review and comment on the 1,100-plus-page proposal. The agency issued the final rule in December.

During the five-month comment period, we surveyed members who operate coal plants and learned that meeting the emissions-reduction mandates of the rule would entail far more time than the three years granted by the Clean Air Act.

The final rule requires not only a 90 percent reduction in mercury emissions, but also an 88 percent reduction in acid gases and an additional 41 percent reduction of sulfur dioxide emissions (the latter beyond emissions cuts mandated by the Cross State Air Pollution Rule).

To comply with the rule, utilities must install fabric filters and scrubbers and equipment to operate activated sorbent injection—all high capital-cost projects. Coal-burning utilities that responded to our survey last year said it would take more than six years to plan and hold public hearings, secure financing and construct and install all of the pollution controls on a typical coal plant.

In our comments to EPA and in formal communications with the White House Office of Management and Budget, we urged the administration to recognize the complexity of these retrofits and to allow utilities more than the standard three years to comply with the rule. There are mechanisms in the Clean Air Act to permit additional time for compliance, beyond the standard three years. The rule has a provision to extend the compliance deadline by one year, if approved—on a case-by-case basis—by EPA and state air agencies. The request for the fourth year must be initiated in writing within 12 months of the promulgation of the rule. In the jargon of our federal government, the rule is "promulgated" when it is published in the Federal Register. As this is written, that is expected to occur in March. A memo issued by the EPA Office of Enforcement and Compliance indicates a fifth year could be added to the timeline if the agency concludes the plant is a "reliability-critical unit."

In our comments on the proposed rule, filed last August, we asked EPA to establish a subcategory for smaller coal plants, those with nameplate capacity of 100 or fewer megawatts. Our objective was to reduce emission-control costs for those smaller plants. EPA rejected that request.

The final rule has a few small improvements over the original proposal. For example it allows filtering of particulate matter rather than requiring complete elimination of fine particulates and monitoring requirements were improved.

We've warned EPA, the administration and Congress about the impact of this rule on energy prices. The capital costs of complying with this and other environmental regulations will significantly increase the cost of coal-fired generation. For many plants, the capital costs will be so great that it will drive utilities to abandon coal as a fuel and to turn instead to natural gas. Our July 2010 study on the potential impacts of environmental regulations on demand for natural gas found that utility demand for gas could increase by as much as 60 percent. If so, this demand will, in turn, put enormous upward pressure on gas prices.

We are not done with this issue. We understand and support the need to reduce mercury emissions. We are extremely disappointed that EPA failed to recognize the need for more time to comply with the new rule. We will continue to work with EPA and Congress to seek additional compliance time.

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March-April 2012
Digital Edition


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