Tuesday, June 3, 2014
Past Issues | Subscribe | Printer-Friendly | Advertise |
PublicPower.org | PublicPowerMedia.org | APPA Online Suppliers Guide | Public Power TV
EPA issues proposed rule on CO2 emissions from
existing power plants
Existing fossil-fueled power plants would have to reduce their
carbon emissions by approximately 30 percent from 2005 levels
by 2030 under a rule proposed June 2 by the Environmental
Protection Agency. Rather than directly regulate individual plants,
EPA proposed state-specific rate-based goals for carbon dioxide
emissions (in pounds per megawatt-hour) from the power sector,
as well as guidelines for states to follow in developing plans to
achieve the state-specific goals. In response, APPA said "climate
change should be addressed, but Congress, not EPA, should
determine the best framework outside of the Clean Air Act to do
so while ensuring affordable, reliable electricity from all fuel
sources, including coal and natural gas."
EPA yesterday also issued a separate proposed rule to limit
carbon emissions from modified or reconstrued power plants (see
story, this issue).
"Public power utilities are good environmental stewards," APPA
President and CEO Sue Kelly said. "But we need a middle path,
one that respects the needs of energy producers and the
pocketbooks of energy customers." (Editors’ note: The complete
text of APPA’s statement was sent to Public Power Daily
subscribers earlier today in a special edition and is posted on
APPA's website.)
Public power utilities using coal-fired generation—especially units
that are now being upgraded and retrofitted to deal with current
EPA regulations—need to be able to continue to use those
facilities for their remaining useful life, APPA said. The association
also voiced concern that utilities with only one baseload
generation unit (coal or natural gas) will find it far more difficult to
meet steeper CO2 reduction targets. "We will review the EPA
proposed rule language to ensure suitable accommodation for the
unique needs of single generation units," said Joe Nipper, APPA’s
senior vice president, regulatory affairs and communications.
"I want to give a shout out to all the local officials, rural co-ops,
public power operators, and investor-owned utilities that have
been leading the charge on climate change," EPA Administrator
Gina McCarthy said in unveiling the proposed rule.
The regulation, once finalized, is certain to wind up in court. The
proposal generated plenty of controversy. "For years, I have
expressed concern that EPA’s unilateral regulations will come at a
high cost and harm the affordability and reliability of our energy
supply," said Sen. Lisa Murkowski, R-Alaska. "Nothing I have
seen today, including the general dismissal of concerns about the
rule’s costs, has lessened my concerns."
EPA said a mix of four "building blocks" make up the best system
of CO2 emission reductions under the Clean Air Act: make fossil
fuel power plants more efficient (by increasing heat rates); make
more use of lower-emitting power sources (natural gas combinedcycle units); use more zero- and low-emitting power sources
(nuclear and renewables); and use electricity more efficiently.
The state-specific emission reduction goals reflect EPA’s
quantification of adjusted state-average emission rates from
affected electric generating units (EGUs) that could be achieved
at reasonable cost by 2030 through implementation of the four
building blocks described above, the agency said. EPA said it
considered the reductions achievable through measures that
reduce CO2 emissions from existing fossil fuel-fired EGUs either
by reducing the CO2 emission rate at those units or reducing the
units’ CO2 emissions total to the extent that generation can be
shifted from higher-emitting fossil fuel-fired units to lower- or zeroemitting options.
EPA is proposing a two-part goal structure: an "interim goal" that
a state must meet on average over the ten-year period from 20202029 and a "final goal" that a state must meet at the end of that
period in 2030 and thereafter. Once the final goals have been
promulgated, a state would no longer have an opportunity to
request that EPA adjust its CO2 goal.
Each state would have to determine, and include in its plan,
emission performance levels for its affected plants that are
equivalent to the state-specific CO2 goal in the emission
guidelines, as well as the measures needed to achieve those
levels and the overall goal. "A state plan must include enforceable
CO2 emission limits that apply to affected EGUs," EPA said. "In
doing so, a state plan may take a portfolio approach, which could
include enforceable CO2 emission limits that apply to affected
EGUs as well as other enforceable measures, such as [renewable
energy and energy efficiency] measures, that avoid EGU CO2
emissions and are implemented by the state or by another
entity."
No less than every two years, beginning January 1, 2022, each
state would be required to compare emissions performance
achieved by affected EGUs in the state with the emissions
performance projected in the state plan, and report that to EPA.
States would be able to choose between a regional or state
compliance approach. With the state approach, a state is
assumed to comply with the guidelines by implementing
measures solely within the state and emissions rate averaging
occurs between affected sources on an intrastate basis only, EPA
said. Under the regional approach, groups of states are assumed
to collaboratively comply with the guidelines.
All states must submit initial or complete plans by June 30, 2016,
although individual states would be eligible for a one-year
extension to June 30, 2017, to submit a final plan. Multi-state
plans would be eligible for a two-year extension to June 30, 2018,
and would need to submit a progress report in the interim by June
30, 2017. Once a state submits a complete plan, EPA said it
would review the plan and make a determination, within 12
months, to approve or disapprove the plan through a notice-andcomment rulemaking process.
Average nationwide retail electricity prices are projected to
increase roughly 6 to 7 percent in 2020, and roughly 3 percent in
2030 (contiguous U.S.), compared to base case price estimates
modeled for these same years, according to EPA. Average
monthly electricity bills are anticipated to increase by roughly 3
percent in 2020, but decline by roughly 9 percent by 2030
because increased energy efficiency will lead to reduced usage,
the agency said. The use of coal by the power sector will
decrease by roughly 30 to 32 percent in 2030.
EPA also projects that the electric power sector-delivered natural
gas prices will increase by 9 to 12 percent in 2020, with negligible
changes by 2030 relative to the base case. Natural gas use for
electricity generation will increase by as much as 1.2 trillion cubic
feet in 2020 relative to the base case, declining over time, the
agency said.
The agency said it looked at the types of changes in the
generation fleet that were projected to occur through retirements,
additional generation and energy efficiency. "The analysis did not
raise concerns over regional resource adequacy," EPA said.
EPA will take public comments for 120 days after the rule is
printed in the Federal Register and plans to hold four public
hearings. On July 29, one public hearing will be held in Atlanta
and one will be held in Denver; on July 31, a public hearing will be
held in Pittsburgh, Pa., while the final one will be held in
Washington, D.C., during the week of July 28.
The proposed rule and related documents are posted on EPA’s
website at http://www2.epa.gov/carbon-pollution-standards/cleanpower-plan-proposed-rule.
EPA anticipates issuing a final rule by June 1, 2015. — ROBERT
VARELA
EPA proposes carbon limits for modified and
reconstructed power plants
In addition to the proposed rule on existing fossil fuel-fired power
plants (see story, this issue), the U.S. Environmental Protection
Agency on June 2 released a proposed rule on modified and
reconstructed units. The rule also falls under Section 111(b) of the
Clean Air Act and, like the proposed rule for existing power plants,
it, too, will have a 120-day comment period, starting on the day it
is published in the Federal Register.
The EPA said a modification is "any physical or operational
change to an existing source that increases the source's
maximum achievable hourly rate of air pollutant emissions."
A reconstructed source "is a unit that replaces components to
such an extent that the capital cost of the new components
exceeds 50 percent of the capital cost of an entirely new
comparable facility."
"The proposed emission limits for modified or reconstructed
sources are based on the performance of available and
demonstrated technology," the EPA said in a fact sheet posted on
its website. They "do not require implementation of carbon
capture and storage (CCS) technology, nor are they based on that
technology."
The agency is proposing separate numeric standards for different
types of units.
For modified fossil fuel-fired electric steam generating units (utility
boilers and integrated gasification combined-cycle, or IGCC
units), the agency is proposing two alternative standards of
performance. Under the first alternative, all modified units would
be subject to a single standard of performance. In the second
alternative, the agency is proposing that the specific form of the
standard will depend on whether the source makes the
modification before or after becoming subject to a Clean Air Act
Section 111(d) state plan. This recognizes that actions taken to
comply with a Section 111(d) state plan may result in improved
performance at the source, the EPA said. In all cases, "the level
of the proposed standards is based on a combination of best
operating practices and equipment upgrades."
For modified natural gas-fired stationary combustion turbines, the
agency is proposing standards based on efficient natural gas
combined-cycle technology. Those standards would apply
whether or not a unit is subject to a Section 111(d) state plan.
For reconstructed fossil fuel-fired electric utility steam generating
units (utility boilers and IGCC units) and for affected reconstructed
natural gas-fired stationary combustion turbines, the EPA is
proposing standards of performance "based on the most efficient
generating technology that is applicable to each category of
units." This standard would not be affected by the submittal of a
state plan under Section 111(d) of the Clean Air Act.
The proposed rule is available on the EPA's website. The agency
also posted a regulatory impact analysis it carried out on the
proposal, as well as a fact sheet on the proposed rule for modified
and reconstructed power plants. — JEANNINE ANDERSON