Lone Star State Slammed By EPA Ruling

on July 08, 2011 at 6:00 AM

The US Environmental Protection Agency (EPA) shocked Texas generators on Thursday by unexpectedly including the state in its new rule on reducing SO2 and NOx emissions from power plants.

The EPA issued its final Cross-State Air Pollution Rule which, together with other state and EPA actions is intended to reduce SO2 emissions by 73% from 2005 levels by 2014, and will cut NOx emissions by 54%.

The rule is designed to ensure that people don’t suffer the effects of air pollution generated in distant states.

The EPA said the resulting cleaner air will mean thousands fewer cases of asthma, bronchitis, heart attacks and premature deaths.

In its draft rule, the agency indicated it would exclude Texas because EPA modeling did not show significant downwind impacts from the state’s emissions.

“The late decision to apply the rule to Texas and the modeling for the rule have resulted in wholly unreasonably mandates and unrealistic timelines for Texas,” electric generator Luminant said in a statement.

“The industry standard time frame for permitting, constructing and installing major new emissions controls is several years, yet the rule unrealistically requires compliance in six months,” the statement said.

Luminant, which operates 12 coal-fired units in Texas with 8,000 MW of capacity, said the rule will have a “disproportionate” effect on Texas. The company said it has cut SO2 emissions by 21% since 2005.

The Texas part of the new rule will be subject to litigation, Jeff Holmstead, an industry attorney with the Washington firm Bracewell & Giuliani, predicted.

The agency is “quite aggressive in going after Texas,” Holmstead said. “There will certainly be litigation about this.”

The 1,300-page rule also sets a challenging timeline of six months for the first phase of compliance, Holmstead said. Otherwise, “industry in general is going to be able to live with this,” he said.

EPA spokewoman Enesta Jones said Texas and its utilities had “ample” opportunity to comment on their inclusion in the rule, and provided extensive comment on it.

“Without this rule, Texas power plants will contribute significantly to air pollution in downwind states, tribes and local communities … in all cases unfairly depriving thousands of families of the health benefits associated with breathing clean air,” Jones said in a statement.

Many plants have already invested in the equipment that will enable them to reduce emissions, the EPA and industry sources said.

But Doug Biden, president of the Electric Power Generators Association, a trade association based in Harrisburg, Pennsylvania, said 25-30% of plants operated by the group’s 11 members don’t have the scrubbers needed to comply with the rule, and some of those would be forced to close.

“There is still a lot of investment that needs to be made now,” Biden said.

The rule, which will affect 28 states, is one of a number including new mercury standards, clean water regulations and greenhouse gas emissions rules that will challenge generators in coming years, he said.

“There are too many things coming at them at the same time,” he said.

The EPA said the resulting cleaner air will mean thousands fewer cases of asthma, bronchitis, heart attacks and premature deaths. It estimated that lower health-care costs will save $280 billion a year, far outweighing the $800 million a year that will be spent on compliance in 2014, and the $1.6 billion in capital investments already being made.