Several ongoing US Environmental Protection Agency (EPA) rulemakings and a piece of federal legislation would, if promulgated or enacted, impose significant new regulatory requirements on the power plant industry. These proposed regulatory and legislative efforts, three of which are described below, would significantly affect coal-fired plants.
In addition to these, EPA has several other rules in the works that would impact the power plant industry.
Carbon Pollution Standard for New Power Plants
EPA's proposed Carbon Pollution Standard for New Power Plants, which would set the first federal limits on carbon emissions from certain new power plants, generated quite a bit of controversy when it was proposed in 2012. After receiving more than 2.5 million comments, EPA announced that it would issue a new proposal. In his Climate Action Plan released on 25 June 2013, President Obama gave top priority to cutting carbon pollution from power plants in order to meet the objective he announced in 2009 of reducing greenhouse gas emissions in the range of 17 per cent below 2005 levels by 2020. On 20 September 2013, EPA then issued its new proposal, which regulates carbon emissions from "new" fossil fuel-fired electric generating units (EGUs), i.e., power plants for which construction commences after publication of the proposal in the Federal Register.
Under the proposal, coal EGUs would be limited to 1,100 pounds of carbon dioxide (CO2) emissions per megawatt-hour (lbs/ MWh) of produced electricity, with compliance measured on a 12 operating month rolling average basis. The proposal would require small natural gas EGUs to meet a 1,100 lbs/MWh CO2 limit and larger, more efficient natural gas EGUs to meet a limit of 1,000 lbs/MWh. Although natural gas-fired EGUs probably would be able to meet these new limits without difficulty, the proposal likely would require coal-fired EGUs to implement carbon capture and storage technology, which is quite costly and still under development.
After publication of the proposal, interested parties will have 60 days to comment, after which EPA presumably will promulgate a final rule. A Presidential Memorandum, also issued on 25 June 2013, directed EPA to promulgate the final rule "in a timely fashion after considering all public comments, as appropriate." The Presidential Memorandum also directed EPA to issue proposed carbon pollution standards, regulations or guidelines "as appropriate" for modified, reconstructed and existing power plants by 1 June 2014, and to issue final standards, regulations or guidelines for such power plants by 1 June 2015. After this date, states must submit plans addressing how they will implement the new requirements.
EPA's timely issuance of a proposed rule for new power plants suggests that it is on track to comply with President Obama's directive concerning existing power plants. On 28 October 2013, however, a bill was introduced in the US House of Representatives that would void EPA's pending rulemaking and restrict EPA's issuance of any new proposal to regulate carbon emissions from new and existing power plants. The legislation, if enacted, could also hinder EPA's ability to comply in time with President Obama's directive.
Legislation Regulating Coal Combustion Residuals
The US Congress is also taking steps to address the regulation of environmental issues relating to coal-fired power plants. On 25 July 2013, the US House of Representatives passed legislation, entitled the Coal Residuals Reuse and Management Act of 2013, that would significantly alter EPA's authority with respect to the regulation of coal combustion residuals (CCR) under the Resource Conservation and Recovery Act (RCRA). This legislation, which would amend the Solid Waste Disposal Act, would authorise states to develop and maintain permit programs for handling CCR. The proposed law would require states to notify EPA within six months of the legislation's enactment whether or not they plan to implement such a program. Although states choosing to create such programs would need to comply with certain federal standards and requirements, EPA would have the authority to issue permits only in limited circumstances. Furthermore, the legislation provides that, except as allowed in certain subsections authorising EPA to review state permit programs for consistency with the law and providing for EPA implementation of the permit program, EPA must defer to the states with respect to CCR regulation.
In late July, the Obama administration expressed interest in working with Congress to address the issues raised in the legislation to develop standards to manage CCR and to encourage its beneficial uses, suggesting that a legislative compromise may be attainable.
Aside from creating an entirely new permitting regime for CCR, this legislation, and its potential enactment, further complicates the already uncertain status of federal regulation of CCR, specifically, EPA's long-pending rulemaking concerning the handling of CCR under RCRA. In June 2010, EPA issued a proposed rule to reclassify CCR under RCRA, which currently considers CCR exempt wastes. In the rulemaking, EPA proposed to instead consider CCR as either special wastes pursuant to RCRA Subtitle C or as nonhazardous wastes pursuant to RCRA Subtitle D. In August 2013, EPA reopened the comment period on the proposed rule, suggesting that EPA may soon take action to finalise the proposal.
The effect on EPA's proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (see below), pursuant to the Clean Water Act (CWA), is uncertain. The legislation was placed on the Senate calendar on 30 July 2013, but has since seen no action.
Steam Electric Power Generating Effluent Guidelines
On 7 June 2013, EPA proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, pursuant to the CWA, which would impose new requirements on wastewater associated with fly and bottom ash, and possibly address ash pond closures in order to reduce the toxicity of wastewater discharges from power plants. The proposal seeks to update standards that were last updated in 1982. A consent decree requires EPA to publish a final rule by 22 May 2014.
The rule would affect new and existing sources discharging to surface waters and publicly owned treatment works, and would impose new or additional requirements for wastewater associated with flue gas desulfurisation, fly ash, bottom ash, flue gas mercury control, combustion residual leachate from landfills and surface impoundments, nonchemical metal cleaning waste and gasification of fuels.
The rule would apply to discharges from the operation of a generating unit by a facility where generation of electricity is the predominant source of revenue or principal reason for operation, and where the discharge results primarily from a process using fossil fuels, fuel derived from fossil fuels or nuclear fuel in conjunction with a thermal cycle employing the steam water system as the thermodynamic medium. The pollutants addressed by the rule depend on the specific waste streams, but include oil and grease, total suspended solids, arsenic, mercury, nitrate/nitrite, selenium, copper and iron.
EPA is also considering establishing best management practices for surface impoundments containing CCR, such as weekly inspections and corrective action requirements, and a voluntary program to provide incentives to existing power plants to close CCR-containing surface impoundments and to eliminate the discharge of all process wastewater (except cooling water discharges). Some states, such as Illinois, are also considering regulatory options for addressing the closure of such impoundments. Plants choosing to voluntarily close surface impoundments would receive a two-year extension of the rule's compliance date, and plants choosing to eliminate all process wastewater would receive a five-year extension.
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