EPA TO RECONSIDER SOME TECHNICAL ASPECTS OF MATS RULE FOR NEW POWER PLANTS

Tamar Hallerman
GHG Monitor
07/27/12

The Environmental Protection Agency announced late last week that it will reconsider some of the technical information underpinning its Mercury and Air Toxics Standards (MATS) finalized for power plants earlier this year. The agency said it would undertake what it considers a “routine” review of some of the technical aspects of the rule over the next several months based on new information provided by industry stakeholders after the rule was published in the Federal Register in February. “EPA will review monitoring issues related to the mercury standards for new power plants and will address other technical issues on the acid gas and particle pollution standards for these plants,” EPA said on its website. “The agency’s review will not change the types of state-of-the-art pollution controls new power plants are expected to use to reduce this harmful pollution.”

According to the EPA, the review will “provide greater certainty” for five planned coal facilities in Georgia, Kansas, Texas and Utah and that existing plants will not be affected by the reconsideration, which is expected to be completed by March. In a July 20 letter to groups that had petitioned for the rule’s reconsideration, EPA Assistant Administrator for Air and Radiation Gina McCarthy said the review will not change the expected costs or public health benefits of the overall standards. “Our expectation is that under the reconsideration rule new sources will be required to install the latest and most effective pollution controls and will be able to monitor compliance with the new standards with proven monitoring methods,” McCarthy wrote. She added that the review would maintain the progress of the original rule while ensuring that the standards for new sources are “achievable and measurable.” The agency said it would stay the final standards for the five new power plants for three months during the review.

EPA Says MATS Will Lead to Substantial Health Benefits  

Finalized late last year, MATS is the first federal rule to limit mercury and air toxics like arsenic, nickel and cyanide, which can cause respiratory and other illnesses particularly in children, from coal and oil-fired power plants. The standards, which EPA estimated will cost industry $9.6 billion annually to comply, require utilities to install pollution-control technology like scrubbers, baghouses, dry sorbent injection technology or electrostatic precipitators to all new and existing coal and oil-fired units within the next three to five years, depending on the unit. EPA has touted the rulemaking largely for its health benefits, saying that it will help prevent up to 11,000 premature deaths and 4,700 heart attacks, ultimately saving up $90 billion in annual healthcare costs.

However, industry has estimated that MATS will have a far larger effect on the country’s coal fleet, and could lead to the shuttering of tens of gigawatts of electric generating capacity. A group of utilities and other stakeholders has sued EPA over the rulemaking in federal court, while members of Congress have organized several legislative challenges, all of which have failed to date. In addition to political and legal grounds, opponents have also tried to challenge the rule on a technical basis, with several utilities and interest groups filing petitions for reconsideration with the agency and arguing that the mercury standard for new plants is not technically feasible.

While many of the parties seeking reconsideration included the utilities that own the new plants being affected by the rulemaking, perhaps the most unexpected reconsideration request came from the Institute for Clean Air Companies, the trade organization that represents the manufacturers of air pollution monitoring and control equipment for stationary sources, whose members could stand to gain greatly from MATS. The group wrote a letter to EPA in April saying that its members can not yet commercially guarantee pollution control equipment for the levels of mercury being mandated by EPA, saying that state-of-the-art technology currently on the market cannot continuously monitor such low concentrations of mercury in a reliable way. “This is an extremely stringent standard, requiring approximately a 99.7 percent [mercury] removal efficiency based on the average [mercury] content of coal. This standard will make it nearly impossible to construct a new coal-fired [electric generating unit] because financing of such units requires guarantees from equipment suppliers that all emission limits can be met,” the letter said. The group asked EPA to revise the standard for new units utilizing virgin coal from 2.0E-4 lb/GWh to what it says is a technically achievable rate of 3.0E-3lb/GWh. An ICAC official did not return calls for comment.

Concession from EPA?

Scott Segal, director of the Electric Reliability Coordinating Council, a group of utilities largely against the rule, called the announcement an “important admission of flaws within the MATS rule” and a “step in the right direction.” “Today, EPA has finally admitted what we have known for a very long time: there are significant technical flaws in the way the MATS standards were set,” he said in a statement, adding: “While the EPA is only acting for new sources today, it is fair commentary to observe that these and similar issues may well be in play for rule as it applies to the existing fleet of power plants.” Ken Anderson, executive vice president of Tri-State Generation and Transmission Association, a Colorado-based wholesale electricity supplier that owns one of the affected plants, said that EPA now needs to “come back with a regulatory standard that has a proper timeframe and is rooted in the realities of science and engineering.”

While some utilities tried to frame the reconsideration as a concession from EPA, many in the health and environmental community aimed to play down the announcement. “I think it’s a fairly routine matter and more along the lines of an attempt to make a quick fix in response to some new information. I don’t think it has any sweeping implications other than the fact that obviously the entire rule is being sued by some of the interest groups, and I think this will shore up EPA’s position with regard to those lawsuits,” Clean Air Watch President Frank O’Donnell told GHG Monitor. “In terms of the big picture, it’s not affecting the standards for existing sources, and that’s the big deal in the rule.”