New Coal Fired Power Plant Rules – a big expense – a long time coming

22 Dec 2011

In what is certain to be derided as part of President Obama’s “war on traditional energy,” the EPA released new rules relating to so-called air toxics, such as mercury, arsenic and other metals. This is aimed at coal (and oil) burning power plants under the 1990 Clean Air Act. I admit that I have not read the 1117 pages of the EPA notice but here are some of the more salient points:

  • Until now there have been no federal standards requiring power plants to limit their emissions of toxic air pollutants.
  • The final rule sets standards for all hazardous air pollutants (HAPs) emitted by coal- and oil-fired energy generating units (EGUs) with a capacity of 25 megawatts or greater.
  • Existing sources generally will have up to 4 years if they need it to comply.
    • This includes the 3 years provided to all sources by the Clean Air Act. EPA’s evaluation holds that this will be sufficient time for most, if not all, sources to comply.
    • Under the Clean Air Act, state permitting authorities can also grant an additional year as needed for technology installation. EPA expects this option to be broadly available.
  • The EPA estimates the rules will cost utilities $9.6 billion by 2016 to install special equipment known as “scrubbers.” EPA also estimates that these rules will save $37 to $90 billion in health care and other costs.

While I suspect many will somehow try to make this about President Obama, these standards date back to the 1990 Clear Air Act and relate back to a 1997 EPA study on mercury, a 1998 study on utilities and a 2000 Regulatory Determination, where EPA concluded that it was “appropriate and necessary” to control mercury emissions from power plants. The Bush administration finalized a rule to cut mercury pollution from power plants, but the D.C. Circuit struck the rule down and required EPA to develop standards that follow the law and the science to protect human health and the environment.

Given that 45% of our electricity comes from coal (Ohio close to 100% and Michigan over 70%) and EPA estimates that there are approximately 600 power plants with 1,400 units affected by these rules, this is going to impose some significant short term economic burdens – particularly on the Midwest.

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