EPA Rulemakings Affecting
the Power Sector: an
Overview
Kyle Danish
Member
Van Ness Feldman, P.C.
Wisconsin Public
Utilities Institute
March 29, 2011
Overview
 Major rulemakings coinciding
 Conventional air pollutants (e.g., SO2, NOx, PM)
 Mercury and other hazardous air pollutants
 Coal combustion residuals (e.g., fly ash, scrubber byproducts)
 Cooling water intake structures
 GHG emissions from stationary sources
 Requirements converge over the next 5 to 7 years
 Complications
 Uncertainties
 Near-term compliance deadlines
 High costs of compliance
 Some facilities may retire rather than retrofit
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Summary of New EPA Regulations
Regulation
Target Pollutants or Practices
Target Industry
Control Options
Utility MACT
Hazardous Air Pollutants – e.g. mercury,
other metallic particles, acid gases, and hazardous
organics
Coal- and oil-fired
power plants
―Maximum achievable control technology‖ –
e.g. Sorbent injection; Baghouses; co-benefit controls such as
scrubbers, SCRs.
Ambient Air Standards
(NAAQS)
Backbone of the Clean Air Act that drives stringency
of local/federal controls – new standards for SO2,
NOx, PM2.5, and ozone expected.
Power plants and other
stationary sources
Controls for limits SOx, NOx, VOCs and PM.
Transport Rule I
Reduce downwind contribution to ozone and PM2.5
non-attainment via control of precursor SO2 and
NOx emissions
Power plants larger than
25 MW in 31 Midwestern/
Eastern states
Scrubbers; SCRs, SNCRs; Low NOx Burners; Fuel Switching; Minimal
Allowance Trading
Transport Rule II
Reduce downwind contributions to ozone nonattainment in accordance with upcoming 2011
ozone NAAQS thru seasonal NOx controls
Power plants and possibly
other large stationary
sources of NOx
SCRs, other NOx control technologies, and fuel switching
Transport Rule III
Reduce downwind contributions to PM nonattainment in accordance with upcoming 2011 PM
NAAQS thru annual SO2 and NOx controls
Power plants and possibly
other large stationary
sources of SO2 and NOx
Scrubbers, SCRs, other SO2 and NOx control technologies, and fuel
switching
Regional Haze BART
SO2, NOx and PM2.5 to improve visibility in Class I
national parks
Power plants and other
large stationary sources
contributing to visibility
impairment in national
parks
―Best Available Retrofit Technology‖– scrubbers; SCRs; SNCRs; low
NOx burners; emissions trading
Coal Combustion
Residuals
Fly ash, bottom ash, boiler slag, and
scrubber byproducts
Coal-fired power plants
Surface impoundment liners (to separate ash from soil); leachate
collection; groundwater monitoring systems; dispose ash in offsite
dry landfills
Cooling Water Intake
Design
Mitigate the adverse impacts resulting from
entrainment/impingement of aquatic species during
water intake
Thermal power plants (coal,
nuclear, oil and gas) that
use cooling water from U.S.
surface waters
―Best technology available‖ for minimizing adverse impacts—e.g.
screening and other retrofits to single loop intake structures to
minimize environmental impacts; closed-loop water intake systems
that require cooling towers
Waste Water Toxic
Metals
Mercury, arsenic, chromium and other heavy metals
and toxins most prevalent in coal combustion
residuals.
Thermal power plants (coal,
oil and gas)
―Best technology available‖ for wastewater discharge treatment.
Performances standards for GHGs from new and
existing sources.
Power plants and oil
refineries first; other large
stationary sources next
Energy efficiency, fuel switching.
PSD and Title V permits for GHGs from new or
major modifications to large stationary sources.
Large stationary sources
exceeding ―Tailoring Rule‖
applicability thresholds for
GHG emissions
"Best available control technology‖ (BACT) determined on case-bycase basis by state permitting authorities.
Greenhouse Gases
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EPA’s Impending Rules
Clean Air Transport Rule (Clean Air Act)
Utility MACT (Clean Air Act)
Section 316(b) Rule (Clean Water Act)
Coal Combustion Residuals (Resource
Conservation and Recover Act)
 New Source Performance Standards for
Greenhouse Gases (Clean Air Act)
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Clean Air Transport Rule
(Proposed)
 Addresses

―Significant contribution‖ of upwind states to downwind state
nonattainment:



2006 24-hour fine particulate matter (PM2.5) NAAQS
1997 annual NAAQS for PM2.5
1997 ozone NAAQS
 Proposed


July 2010
Subsequent revisions through notices of data availability

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Affects power plants in 31 Eastern states
Requires reductions in SO2 and NOx emissions
States are subject to SO2 and NOx emissions budgets
Cap-and-trade with limited trading
Retrofits: Scrubbers, SCR, fuel-switching, low NOx burners
2012 and 2014 budgets
 Details
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
2012 is supposed to reflect already-planned or required controls
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CATR: Wisconsin
 Covered only for the NAAQS for PM2.5
 No need for additional ozone season controls
 Part of group of states subject to more
stringent SO2 controls in 2014 (group 1)
 WI base case 2012 EGU emissions: 107,365
 WI CATR 2012-13 EGU budget: 96,439 tons
 WI base case 2014 EGU emissions: 117,253 tons
 WI CATR 2014 EGU budget: 66,683 tons
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Utility MACT (Proposed)
 Addresses
 Mercury, other metallic particles, hazardous organics
 Affects
 Coal- and oil-fired industrial boilers, utility boilers
 Standard
 Maximum Achievable Control Technology

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New source: best source in category
Existing sources: avg reduction achieved by top 12%
 Proposal
 EPA to re-propose industrial boiler rule
 Utility proposal required in March; final rule by November
 Compliance deadline
 3 years (+1 year allowable extension)
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Utility MACT Details
 Compliance deadline
 3 years after enactment – with potential 1 year
extension
 Only 5 subcategories
 Coal-fired units with greater than or equal to 8300
lbs/btu
 Coal-fired units with less than 8300 lbs/btu (lignite)
 IGCC units
 Liquid oil-derived units
 Solid oil-derived units
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More Utility MACT Details
 Surrogates

For coal-fired units and solid oil-fired units

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Total PM  non-Hg metallic HAPs
HCl  acid gases
 Alternative standards

For units using flue gas desulfurization:

SO2 is an ―alternative equivalent‖ to HCl
 Emission limits apply during start-up, shut-down and malfunction
 A facility with multiple units may apply emissions averaging

Existing units only
 Likely controls

Activated carbon injection, ESPs, co-benefit controls (from SCRs and FGDs)
 Work practice standards for organic HAPs
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Annual performance test
Failure to meet test results in required adjustments or repairs
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Proposed MACT Limits
Coal-fired Existing Sources
Subcategory
Total PM
HCl
Hg
Existing coal > 8,300
Btu/lb
0.030
lb/MMBtu
(0.30 lb/MWh)
0.0020
lb/MMBtu
(0.020 lb/MWh)
1.0 lb/TBtu
(0.0008 lb/GWh)
Existing coal <
8,300 Btu/lb
(i.e. lignite)
0.030
lb/MMBtu
(0.30 lb/MWh)
0.0020
lb/MMBtu
(0.020 lb/MWh)
11.0 lb/TBtu
(0.20 lb/GWh)
4.0 lb/TBtu*
(0.040 lb/GWh*)
Existing - IGCC
0.050 lb/MMBtu
(0.30 lb/MWh)
0.00050 lb/MMBtu
(0.0030 lb/MWh)
3.0 lb/TBtu
(0.020 lb/GWh)
*Beyond-the-Floor Limit
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Proposed MACT Limits
Coal-fired New Sources
Subcategory
Total PM
HCl
New coal > 8,300
Btu/lb
0.050 lb/MWh
0.30 lb/GWh
0.000010 lb/GWh
New coal <
8,300 Btu/lb
(i.e. lignite)
0.050 lb/MWh
0.30 lb/GWh
0.040 lb/GWh
New - IGCC
0.050 lb/MWh*
0.30 lb/GWh*
0.000010 lb/GWh*
*Beyond-the-Floor Limit
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Hg
Proposed MACT Limits
Oil-fired Existing Sources
Subcategory
Total PM
Existing
Solid Oil-derived
0.20 lb/MMBtu
(2.0 lb/MWh)
Subcategory
Total PM*
Existing
Liquid Oil
0.000030
lb/MMBtu
(0.00030
lb/MWh)
*Includes Hg
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HCl
0.0050 lb/MMBtu
(0.080 lb/MWh)
Hg
0.20 lb/TBtu
(0.0020 lb/GWh)
HCl
Hg
0.00030 lb/MMBtu
(0.0030 lb/MWh)
0.00020 lb/MMBtu
(0.0020 lb/MWh)
Proposed MACT Limits
Oil-fired New Sources
Subcategory
Total PM
New
Solid Oil-derived
0.050 lb/MWh
Subcategory
New
Liquid Oil
Total PM*
0.00040 lb/MWh
*Includes Hg
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HCl
0.00030 lb/MWh
HCl
0.00050 lb/MWh
Hg
0.0020 lb/GWh
Hg
0.00050 lb/MWh
New Conventional
Pollutant NSPS
 Part of proposed Utility MACT Rule
 Amends the PM, SO2, and NOx New Source Performance Standards
(NSPS) for new, modified, and reconstructed EGUs
 Adopts a fuel- and technology-neutral approach for setting the
limits as much as possible, but NSPS standard is based on best
demonstrated technology (BDT)
 Limits apply at all times, including during SSM periods, although
malfunction is an affirmative defense against a violation if certain
criteria are met
 Natural gas-fired units are not covered by the MACT for EGUs but
must comply with certain aspects of the NSPS
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NSPS
 PM:
 7.0 nanograms per joule (ng/J) (0.055 pound per megaWatt hour
(lb/MWh)) of gross energy output for new and reconstructed units
 15 ng/J (0.034 lb/MMBtu) heat input for modified units
 SO2:
 130 ng/J (1.0 lb/MWh) gross energy output for new and
reconstructed steam generating units
 EPA declined to set amended standards for modified units.
 NOx:
 EPA’s preferred option is to set a combined standard for emissions
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of both NOx and carbon monoxide (CO) because ―it provides
additional compliance flexibility while still providing an equivalent or
superior level of environmental protection.‖
150 ng/J for new and reconstructed units
230 ng/J for modified units.
WPUI Webinar 29 March 2011
Coal Combustion Residuals
Rule (Proposed)
 Addresses
 Fly ash, bottom ash, boiler slag, and FGD byproducts
 Affects
 Coal-fired power plants
 Final rule
 Sometime in 2012
 3 Potential Standards
 Compliance deadline
 Ranging from 2015-2024 depending on form of
regulation
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CCR Rule Options
 Subtitle C Option
 Hazardous waste regulation
 Disposal of ash in federally-permitted landfill
 Numerous design, engineering, and performance standards
 Existing impoundments must meet standards or

Stop receiving waste in year 5 and close in year 7
 Subtitle D Option
 Similar requirements for landfills
 States and localities regulate
 Subtitle D Prime Option
 Same as D except existing impoundments are grandfathered
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Potential CCR Rule
Impacts
 Surface impoundment liners (to separate ash from soil),
leachate collection, groundwater monitoring systems
 Coal ash pond closure in most cases
 Options 1 & 2 could also force pre-2017 closure of
existing surface impoundments (e.g., coal ash ponds)
 Would require disposal of all CCRs as ―dry waste‖ in
landfills
 Closure costs estimated to be $150,000-$200,000 per
acre
 Surface impoundments typically occupy 25 - 100 acres
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Section 316(b) Rule
(Proposed)
 Addresses
 Impacts of cooling water intake structures
 Affects
 All steam electric generation units that use cooling
water (fossil and nuclear)
 Standard
 Best Technology Available to minimize adverse aquatic
impacts
 Proposal Expected: Mar. 28
 Final rule by July 2012
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316(b) Rule Issues
 Which facilities will have to construct closedloop cooling water systems?
 Size
 Proximity to coasts
 Available space
 Lower cost alternatives
 fish screening or other retrofits to single loop intake
structures
 Compliance deadline
 2017-2022
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GHG NSPS
 December 2010 consent decree

EPA to propose GHG NSPS for EGUs by July 2011 and finalize by May 2012
 NSPS basics
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EPA sets performance standard for new and modified units
States set performance standards for existing units, subject to EPA
―guideline‖
Standard must be based on ―best demonstrated technology,‖ taking into
account cost
EPA can sub-categorize
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Vintage
Fuel source
Size
 Interaction with PSD Permitting
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NSPS is a nationally-applicable standard for new/modified facilities
The NSPS is the ―floor‖ for any BACT determination for GHGs
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GHG NSPS Issues
 Stringency of standard
 New / existing
 Based on


Efficiency?
Natural gas switching?
 Extent of discretion to anticipate future use of technology
 Compliance deadlines
 Form of standard
 Rate-based
 Rate-based with credit trading
 Other market-based designs
 State programs
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Take-aways
 Convergence of requirements
 Will EPA use discretion to moderate impacts
 Challenges for compliance planning
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For more information:
Kyle Danish
202-298-1876
[email protected]
For weekly news and analysis about climate change policy and business
developments, go to:
www.vnf.com/news-signup.html
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