FIRST YEAR OF MATS IMPLEMENTATION SEES PROGRESS, EPA OFFICIAL SAYS

Tamar Hallerman
GHG Monitor
7/26/13

The Environmental Protection Agency’s first year of implementing new Mercury and Air Toxics Standards (MATS) has progressed smoothly and that despite early concerns, the sweeping rulemaking has “churned action” among stakeholders, a senior EPA official said this week. During a speech at a forum held by Alstom, Joseph Goffman, senior counsel for EPA’s Office of Air and Radiation, said that stakeholders now “have a much firmer handle on what [MATS is] going to do and how it’s going to achieve emissions reductions while … generating affordable and reliable electricity.” MATS has been “substantial in its costs, but way more substantial in its positive impacts,” Goffman said. “It’s a very high-leverage rule in terms of delivering a wide variety of public health protections.”

Finalized in late 2011 and implemented the following spring, MATS has spawned some of the fiercest opposition ever seen in response to an EPA rulemaking. Opponents in Congress had organized—but failed to pass—several legislative challenges to stymie the rulemaking, as a federal court challenge emerged and utilities warned of tens of gigawatts of capacity shutting down. Some large, coal-reliant generators, such as Southern Company, had warned of rate increases of up to 20 percent in order to cover massive compliance costs. But much of that criticism has died down in the months since as the rule’s implementation period kicked into high gear and generators planned for massive retrofits or new natural gas capacity to replace retiring coal units.

MATS aims to limit the emissions of mercury and air toxics like arsenic, nickel and cyanide from the nation’s coal and oil-fired power plants by mandating the installation of pollution control technologies like scrubbers, baghouses, dry sorbent injectors or electrostatic precipitators to all new and existing units by spring 2015. States can also extend the compliance timeline for projects by one year on a case-by-case basis, the EPA has said. The final rule also outlines that the Agency can greenlight an extra fifth year of compliance for individual units if the local reliability of the power grid is threatened. Goffman said this week that the EPA has not yet received any applications for a fifth compliance year, but that it “stands ready to be responsive to any such application.”

What remains unclear is exactly how much coal capacity will be retired as a result of MATS. The D.C-area consulting group ICF International has projected that between 2011 and 2016, roughly 68 GW of coal capacity will have been retired, due to a combination of MATS, low natural gas prices and excess capacity in the grid. “This is the largest retirement of power plants anywhere in the world. It’s a lot of capacity that’s being retired,” Managing Director for ICF’s Power and Fuels Group Judah Rose said in a speech at the Alstom-hosted event this week. “It is certainly a very tough time today for coal plants given the [MATS] deadline.”