The US Environmental Protection Agency (EPA) defended its proposed rule to cut emissions of mercury and other toxic air pollutants from coal- and oil-fired power plants, saying the plan will result in widespread health benefits that heavily outweigh the costs to generators of compliance.
In written responses to questions from Breaking Energy, the agency said the rule would provide $5-$13 in benefits of not breathing polluted air for every dollar in additional cost. Retail electricity prices would rise by about 3.7% in 2015 and 2.6% by 2020, and could be offset by adopting energy-efficiency policies and individual practices, it said.
EPA officials rejected arguments by the Electric Reliability Coordinating Council, a group of power-generating companies, that the rule would be an “extraordinary threat” to the industry because it would impose sharply higher costs.
“Not issuing the proposed toxics rule would be even more expensive to public health than putting the rule into place,” the officials wrote on June 30.
They argued that more than half of coal-fired plants that would be subject to the rule are already fitted with the technologies that would allow them to meet the standard, and that others would have to pay less than 4% of annual revenues to meet the new requirements.
The ERCC’s Scott Segal told an EPA hearing in Philadelphia on May 24 that the rule under the Clean Air Act would be the most expensive in the agency’s history, costing generators $300 billion over five years to retrofit or retire plants.
The cost would be equivalent to the earnings of up to 2.5 million full-time workers, Segal said, quoting research by the consulting firm ICF.
In response, EPA officials reiterated their estimate that the total annual cost of the rule would be $10.9 billion in 2015 and would yield up to $140 billion in health benefits annually.
The agency also rebuffed Segal’s argument that EPA figures showed the maximum benefit to society of mercury-reduction requirements is valued at only $6.1 million. That figure applies only to recreational fishers, and represents on a small portion of overall health benefits, the unnamed officials said.
The rule, issued in March 2011, would reduce emissions of mercury, arsenic, chromium, nickel, and acid gases including hydrogen chloride and hydrogen fluoride, all of which are known or suspected to be carcinogenic.
Generators could meet the new standards by fitting available technologies including scrubbers and dry sorbent injection systems, the EPA says.
The agency said it calculated the dollar value of the rule’s health benefits first by estimating the number of IQ points that would be gained by reducing people’s mercury exposure, and by estimating the number of deaths, heart attacks and hospital admissions that would be avoided by reducing fine particles in the air.
The economic value of the IQ points and the benefits of reducing particulate pollution was estimated using “long-standing, peer-reviewed” practices on the effect of regulations, officials said.
For mercury, the EPA focused on expected increases in childhood IQ and the resulting rise in lifetime earnings. To estimate the value of effects such as fewer hospital visits, the EPA included lower direct medical costs and the value of earnings that would be lost because of such visits.
The agency has received more than 300,000 comments on the rule and has extended the public-comment period until Aug. 4 in response to requests from Congress, and to encourage more input. It is scheduled to issue the final rule in November.
