The Environmental Protection Agency will work with generators, especially public power agencies, that have difficulty meeting new mercury reduction deadlines, but doubts many will need more time, says Assistant Administrator Gina McCarthy.

Speaking to a breakfast hosted by ICF International in Washington Thursday, McCarthy defended EPA’s decision to stick with a three-year compliance deadline in its final Mercury and Air Toxics Standards (MATS) rule issued December 21.

Plant owners must decide whether it’s more cost-effective to retrofit old coal- and oil-burning units with control technology, or replace them with less polluting plants, and comply by 2015. About a third of US coal capacity has been “grandfathered” under other clean air rules and has no pollution controls, but all plants must comply with MATS, in development over the last decade.

McCarthy said “dozens” of coal generating plants already meet the requirements, so technology is available, and the rule lets states give facilities a fourth year for compliance if there are delays in procuring or installing equipment. The rule includes an administrative order setting out how plants may get a fifth year if the delay affects grid reliability.

Industry Warnings

The power industry has been protesting the compliance time is too short. Edison Electric Institute President and CEO Thomas Kuhn told a US Energy Association forum in Washington Wednesday that power facilities simply need longer time lines than three years for large capital investments.

Mark Crisson, President and CEO of the American Public Power Association, called the deadlines “onerous.” He said, “Our members have unique requirements” for major expenditures, such as holding voter referenda to obtain financing, and many have few facilities, so shutdowns impact cost and reliability.

For more on dire predictions from the power industry on new emissions compliance deadlines, read a post from Breaking Energy on the potential for rolling blackouts here.

McCarthy said EPA is aware that public power agencies face different situations than investor-owned generators, and said the time line set out in the MATS rule is “not the only tool in our toolbox.” If generators find themselves unable to meet deadlines, she said, EPA always has the ability under its enforcement procedures to work out consent agreements to accommodate particular cases.

Many in the power industry are wary of consent agreements because they require a utility to admit it was in violation of a standard.

But McCarthy added that EPA officials do not believe they’ll need to make widespread use of their flexibility. “We think technology installations are do-able” within the rule’s timeline, she said.

“We are doing outreach” with grid operators, regional planning agencies and other stakeholders on implementing MATS, she said, and the agency will work with them to ensure continued grid reliability.

Cumulatively Contradictory?

Power industry officials have been warning about the cumulative effects, on power reliability and cost, from multiple rules coming out of EPA, including MATS, the Cross-State Air Pollution Rule (CSAPR) now in court, and greenhouse gas regulations expected this year.

McCarthy said EPA is already looking at cumulative effects, particularly as it considers how to regulate GHGs, since controls under one rule may incidentally aid compliance under another.

She said EPA will be “close” to its late January schedule for releasing GHG New Source Performance Standards for new or substantially modified facilities, but that developing similar standards for existing generators and refineries remains “a significant challenge.” She gave no target date.

McCarthy expressed optimism about CSAPR’s prospects after the US Court of Appeals for the DC Circuit Wednesday ordered plaintiffs to file arguments on a schedule ending March 16, a far shorter time schedule than they wanted.

CSAPR aims to limit pollution from upwind states endangering downwind air quality, and it has split states against one another. The appeal involves 45 cases consolidated for hearing. The judges rejected plaintiff proposals to split up the issues and consider them in phases.

“Should petitioners desire to expand the briefing format and schedule, they may move to lift the stay currently in effect,” the judges wrote.

CSAPR opponents say the stay, issued Dec. 31, indicates they have a good chance of getting the rule voided. But McCarthy said, “I think we got the vast majority of this right,” and the tight schedule is “a clear signal the court does not want a long delay.”

Read more about CSAPR here.