In the last month of 2018, EPA released two proposals that it claims will have no immediate effect—revised CO2 standards for new coal-fired power plants that EPA does not expect anyone to build, and a determination that it is not “appropriate and necessary” to have a mercury rule that it nevertheless plans to keep on the books. The question many may be asking is why EPA would issue two highly controversial rules if they won’t have any practical effect? The answer may lie in the precedent they will set.
On December 28, 2018, the U.S. Environmental Protection Agency (“EPA”) released a pre-publication version of a proposal revisiting the cost analysis underlying the Mercury and Air Toxics Standards (“MATS Rule”) for coal- and oil-fired electric generating units (EGUs) and conducting the residual risk and technology review required by the Clean Air Act (“Proposal”). The Proposal would reverse a previous finding, issued by EPA under the Obama Administration, that regulation of hazardous air pollutant (“HAP”) emissions from EGUs under the MATS Rule was “appropriate and necessary” but would nonetheless leave the rule in effect. The Proposal also concludes that more stringent HAP emission limits are not warranted by the required risk and technology reviews.
This afternoon, EPA announced proposed revisions to performance standards governing CO2 emissions from new, reconstructed and modified coal-fired electric generating units. The proposal would drop carbon capture and storage (CCS) as the best system of emission reduction (BSER) for new units in favor of efficient supercritical steam design for large units and subcritical design for smaller units, both in combination with best operating practices. EPA proposes to increase the corresponding performance standards consistent with the change in the BSER. Given the change in new source standards, EPA is also proposing conforming revisions to the standards for modified and reconstructed units and will add a proposed new standard for new and reconstructed units that burn coal refuse.
Overview of Proposed Changes
|Current Performance Standard||Proposed New Performance Standard|
|New Coal-Fired Units||
1,400 lb CO2/MWh gross
1,900 lb CO2/MWh gross for large units1 2,000 lb CO2/MWh gross for smaller units2
|Reconstructed Coal-Fired Units||
1,800 lb CO2/MWh gross for large units
2,000 lb CO2/MWh gross for smaller units
1,900 lb CO2/MWh gross for large units
No change for smaller units
New & Reconstructed Coal-Refuse-Fired Units
No separate standard
|2,200 lb CO2/MWh-gross, regardless of the size of the unit|
|Modified Coal-Fired Units||
Unit-specific standards based on the unit’s best historical annual CO2 emission rate but no lower than 1,800 lb CO2/MWh gross for large units and 2,000 for smaller units
Same unit-specific approach but conforming the lower limit to the new source standards: 1,900 for large units, 2,000 for smaller units, and 2,200 for coal-refuse-fired units
1 Large units are defined as those having a base load rating of greater than 2000 MMBtu/hour.
2 Smaller units are defined as those having a base load rating of 2000 MMBtu/hour or less.
In addition to these changes, EPA is soliciting comment on the proper interpretation of the regulatory language providing the predicate for the regulations – the cause or contribute determination. Under Section 111 of the Act, before EPA can regulate, it must find that emissions from the source category “cause or contribute significantly to air pollution which may reasonably be anticipated to endanger public health or welfare.” EPA requests input on “the proper interpretation of this phrase, the agency’s historic approach to this requirement, and whether this requirement should apply differently in the context of greenhouse gases than for traditional pollutants.”
While EPA is not proposing revisions to the CO2 performance standards for natural gas fired units (simple cycle combustion turbines and combined cycle units), it does request comments on the current standard for new simple cycle aero-derivative turbines, including those used as back-up generation for wind and solar generation. Based on the feedback, EPA notes it might undertake separate action in the future on those standards.
This proposal responds to the Trump Administration’s Executive Order on Promoting Energy Independence and Economic Growth, which directed EPA and other agencies, to review existing regulations and revise or rescind “those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law.”
Comments on the proposed revisions will be due 60 days from the date of publication in the Federal Register. EPA’s proposal and supporting documentation are available here on EPA’s website.
EPA posted its final implementation rule for the 2015 ozone standard on its website November 8, 2018, the day after it was signed by Andrew Wheeler. The final rule, like the proposed rule published in November 2016, retains many of the provisions from the implementation rule for the 2008 ozone standard, including provisions related to SIP submittal deadlines, modeling and attainment demonstration requirements, Reasonable Further Progress (RFP), Reasonably Available Control Technology (RACT), and Reasonably Available Control Measure (RACM) requirements, and ambient monitoring requirements.
New provisions from the 2016 proposal that were retained in the final rule include allowing states to use inter-precursor emissions trading and requiring state agencies to consider the impacts of in-state emission sources located outside the nonattainment area and require control measures on those sources if necessary to achieve attainment by the deadline. EPA’s final rule also addresses state concerns about international transport impacts and makes clear that nonattainment areas do not have to adjoin international borders for states to make a claim under Section 179B of the Clean Air Act that international transport affects their ability to attain the 2015 ozone standard.
The final rule specifically sidesteps addressing a February 2018 ruling by the D.C. Circuit in South Coast Air Quality Management District v. EPA which stayed certain anti-backsliding requirements in the 2008 implementation rule that were also contained in the 2016 proposal. EPA has indicated that it will address any revocation of the 2008 ozone standard and related anti-backsliding requirements in a separate future rulemaking. The final implementation rule will become effective 60 days after its eventual publication in the Federal Register.
This morning, the Environmental Protection Agency (EPA) released its proposed replacement for the Clean Power Plan (CPP) titled the “Affordable Clean Energy Rule,” which would regulate greenhouse gas emissions at existing coal-fired power plants. The proposed rule gives discretion to states for determining the greenhouse gas performance standards achievable for existing coal-fired power plants within their state. Specifically, the proposed rule would require states to evaluate a menu of heat rate improvement options and, taking into account the unit’s remaining useful life and other factors, determine the lb/MWh CO2 emission rate achievable at each affected unit. While the rule proposes to allow for emissions averaging among affected units at an individual source, it does not provide for broader averaging or emissions trading. To facilitate the heat rate improvement projects, EPA also has proposed an option for states to adopt a new emissions test under the New Source Review program for EGUs that is based on both hourly and annual emissions.
The unprecedented legal battles over the Clean Power Plan have been on ice for quite some time. However, recent events suggest the rule may start making headline news once again very soon.
On April 17, 2010 EPA issued a guidance document on the implementation of significant impact levels (“SIL”) for ozone and fine particles. Under EPA’s air pollution permitting regime known as “New Source Review,” SIL values are one way to demonstrate that a new facility or modification of an existing facility will not cause a violation of the National Ambient Air Quality Standards (“NAAQS”) or Prevention of Significant Deterioration (“PSD”) increments for a regulated pollutant. In short, if a source’s “projected impact on air quality” is below the “SIL,” the source is deemed to have no significant impact on air quality. If a source’s impacts are above the SIL, far more extensive modeling analyses are needed to demonstrate compliance, so the SIL helps streamline the permitting process for projects that can meet it.
On March 20th, the DC Circuit upheld EPA’s June 2012 “CSAPR = BART Rule,” establishing that compliance with EPA’s Cross State Air Pollution Rule (CSAPR) will satisfy the Best Available Retrofit Technology (BART) requirements for SO2 and/or NOx under the Regional Haze Rules for electric generating units (EGUs) subject to CSAPR. Under the Regional Haze Program, EPA has issued regulations that allow the Agency to approve alternatives to BART if EPA finds that the controls are “better than BART.”
NSR—the program imposing onerous permitting requirements on the construction of new sources and “major modification” projects at existing sources—requires industrial sources of air emissions to determine whether the projects they propose will increase those emissions. EPA adopted regulations in 2002 to provide a new structure for those critical emission calculations, which specifies that sources must calculate the “sum of the differences” between a baseline and a future projection for each existing emission unit. That language is particularly important for individual projects that may cause emissions to go down at one unit but up at another.
On March 1, 2018, EPA released a final rule defining nonattainment area classifications under the 2015 ozone standard, along with attainment deadlines for each classification. The rule finalizes the classifications and deadlines that were originally proposed by the Obama administration in a proposed rule issued on November 17, 2016. (81 Fed. Reg. 81,276). According to Section 181(a)(1) of the Clean Air Act, nonattainment areas must be classified at the time of designation, so this rulemaking clears the way for EPA to issue final designations for the 2015 standard. The air quality thresholds for each classification and the associated attainment deadlines are listed in the chart below. The final rule has not yet been published in the Federal Register.
|CLASSIFICATION||THRESHOLD||MAXIMUM ATTAINMENT DATE|
|Marginal||71 ppb up to 81 ppb||3 years|
|Moderate||81 ppb up to 93 ppb||6 years|
|Serious||93 ppb up to 105 ppb||9 years|
|Severe||105 ppb up to 163 ppb||15 years (or 17 years)|
|Extreme||163 ppb||20 years|
* from effective date of designation