Environmental regulation: Where we stand and what’s to come

A host of regulations affect how public power utilities protect the air, water, and natural environment of their communities. This year marks the 50th anniversary of the Environmental Protection Agency. We expect the agency to limit the issuance of new rulemakings in 2020 and instead to be focused on finalizing rules (for which it took comments in 2019), such as the rule on greenhouse gas emission standards for new sources and new source review provisions in the Affordable Clean Energy rule.

As we follow the EPA’s actions, here’s a rundown on where we stand on these rules and other environmental regulations that saw significant action from October 2019 through February 2020.

  • The Affordable Clean Energy rule. We continue to monitor the appeal of this rule, as public power utilities working with their states to develop unit specific performance standards could be affected by any court decision.
  • Project Emissions Accounting proposed rule. We support amendments to clarify the first step of the new source review applicability emissions determination, including the EPA’s interpretation that emission decreases and increases are to be considered during this step.
  • Coal Combustion Residuals Phase II proposal. We oppose certain aspects of the EPA’s proposal to address beneficial use of coal combustion residuals and temporary storage. We believe the revisions would restrict important and growing CCR beneficial use markets. We support the large scale unencapsulated use of CCRs, if managed in a manner that protects human health and the environment.
  • Reclassifying a Major Source to an Area Source. We support the EPA’s proposed rule allowing major sources to reclassify as area sources under Section 112 of the Clean Air Act. These changes would reduce the regulatory impact, particularly related to recordkeeping and reporting, while public power utilities continue to improve air quality.
  • MATS cost finding reconsideration. We advocated for the EPA retaining the 2016 Mercury Air Toxic Standards Supplemental Cost Finding and finalizing its residual risk and technology review for coal- and oil-fired electric generating units. While we believe there are substantial legal and policy concerns with the 2016 MATS Supplemental Finding, we believe the agency should leave the underlining “appropriate and necessary” finding in place.
  • National Environmental Policy Act reforms. We made several recommendations to the Office of Management and Budget and the Council for Environmental Quality to update and improve NEPA regulations. We emphasized that indirect effects and cumulative impact analysis should be limited to effects proximately caused by the action under review and within an agency’s authority to control.
  • Redefining Waters of the United States. We requested clarity around the final definition of “waters of the United States” (WOTUS); that it strike a proper balance between federal and state/local authority; that the rule eliminate the interstate waters category; eliminate impoundments and ditches as standalone categories; exclude ephemeral features; and include the proposed tributary and adjacent definition as well as a definition for waste treatment systems.
  • Effluent Limitation Guidelines. We generally support the EPA’s proposed rule to revise the technology-based effluent limitation guidelines for stream electric generating units applicable to flue gas desulfurization wastewater and bottom ash transport water. We recommend that the EPA establish an alternative low-utilization threshold; create a subcategory for boilers retiring by 2028 (and recommended adding units that repower to it); allow states to set water quality best limits and monitoring requirements for bromine; allow a 10% by volume purge for BATW systems; and adjust the data used to set FGDW limits.

Looking ahead, a review of the national ambient air quality standard from particulate emissions is underway and a proposal is expected in March. The EPA is not expected to lower the standard but will face significant pushback from the environmental and public health community should it decide to keep its 2012 standard.

In 2020, we also anticipate a proposal from the EPA on increasing consistency and transparency in considering benefits and costs in the Clean Air Act rulemaking process. How the agency determines costs and benefits has long been contentious, as illustrated in the MATS cost finding reconsideration. This new proposal would seek to provide the public and stakeholders with a better understanding of the process and allow them to provide feedback to the EPA on potential future proposed rules.

Lastly, we expect to see federal agencies and aligned stakeholders vigorously defending regulatory reforms in court in 2020, such as amendments to the Endangered Species Act and the new definition of WOTUS. These agencies want to codify and defend as many reforms as possible should the political winds shift.