Older power plants under siege for air emissions

Older power plants under siege for air emissions

November 01, 1998

By Roy S. Belden

A group of utilities failed in a last-minute bid in November to persuade Congress to freeze the penalties that they might be found to owe the federal government for violating federal Clean Air Act rules.

The utilities have been accused by the US Environmental Protection Agency, the New York attorney general, and environmentalists of modifying coal-fired power plants in the late 1970’s and 1980’s without going through required permitting reviews. The penalties to the federal government alone may potentially run at least $25,000 a day. The statute of limitations on federal enforcement actions in this area is typically five years, but the government takes the position that every day the power plants operate is a separate violation.

Since the government enforcement actions may drag on for several years, the utilities hoped to persuade Congress to freeze the damages they might owe. Congress adjourned for the year without acting on the utility proposal.

EPA Targets Utilities

Several of the power plants under investigation have either been sold in utility asset divestitures or are up for auction. The US Environmental Protection Agency has been collecting detailed information on coal-fired plants for the past two years. The agency is currently focusing on approximately 120 plants owned by many of the major utilities in the country.

The Department of Justice and the EPA announced on November 3 that they filed civil complaints targeting 17 coal-fired plants owned by seven utilities for alleged Clean Air Act violations. Another eight plants owned by these utilities were issued “notices of violation” for similar infractions.  EPA also issued an administrative order to the Tennessee Valley Authority ordering seven of its plants to install control technology to reduce sulfur dioxide and nitrogen oxide, or SO2 and NOx, emissions. The coordinated enforcement action is one of the largest in EPA history.

The power plants in question are exempted from EPA rules called “prevention of significant deterioration” and “new source review” because they were already in operation when the rules were adopted. However, they lose their exemptions if the plants undergo a “major modification.” The federal government charges that all the plants underwent major modifications in the late 1970’s and 1980’s.

The case raises the issue of how much a power plant can change before the changes are considered a “major modification.” Routine repairs and maintenance are allowed. However, the owner of the power plant may go too far if he makes substantial physical changes that extend the life of equipment and lead to a significant increase in air emissions.

“Prevention of significant deterioration,” or “PSD,” is the standard for permitting review for power plants in socalled “attainment areas” — areas that have relatively little air pollution. “New source review,” or “NSR,” is generally referred to as the standard for issuing permits for power plants in “nonattainment areas” — areas that exceed permissible federal standards for air pollution. Understandably, the limits on new emissions are much more strict under an NSR review.

The federal government is seeking in the enforcement action to force the seven utilities to install appropriate pollution control technology at the targeted plants, and it may also require retroactive application of PSD or NSR review. The EPA said last year that it believes PSD and NSR violators should be forced to comply fully with current applicable permitting procedures, control technology requirements, air quality analysis, and emission offsets requirements, if applicable.

Others Also Sue

The New York attorney general joined the fray this fall by sending notice-of-intent-to-sue letters to owners of 17 utility plants in Ohio, Indiana, Virginia, West Virginia and Kentucky that allegedly contribute to unhealthy air in New York. Connecticut sent a similar letter targeting many of the same plants. Several environmental groups also recently sent a notice-of-intent-to-sue letter to American Electric Power Service Corp. alleging that 11 of its plants violated the federal Clean Air Act.

New York and Connecticut are focusing on several of the same plants involved in the federal action. On November 29, New York and Connecticut filed a “citizen suit” pursuant to the federal Clean Air Act against American Electric Power Service Corp. alleging that 10 AEP plants violated PSD/NSR requirements. The suit was filed in the U.S. District Court for the Southern District of Ohio. Five of the AEP plants were previously targeted in the federal government’s lawsuit. New York and Connecticut are also seeking to intervene in the federal case. The environmental groups may also seek to join the litigation against AEP. New York and Connecticut also intend to file lawsuits in the near future against other utilities named in the notice letters.

The New York attorney general has also started investigating several power plants in New York that it thinks may have made major modifications. Eight plants received information request letters along the lines of the information requests that EPA sent earlier this year to coal-fired boiler manufacturers about the 120 plants the federal government has under investigation.

Congress Gets into the Act

A number of bills have been introduced in Congress to ratchet back air emissions from coal-fired power plants. Many of the bills target older plants built before the 1970’s that are grandfathered from many key federal air regulations. Most of the bills take the approach of imposing emissions caps on SO2, NOx and other pollutants, with the intention of leveling the playing field among all electric generators.

Clean Air Act issues have also arisen in electricity restructuring legislation, with several members of Congress pushing for safeguards that will ensure that competitive electricity markets do not foster greater air pollution from older plants. This issue and others are currently bogging down the electricity restructuring bills.

There is not much chance of Congress rewriting the Clean Air Act before the elections next fall, but the bills could foreshadow the importance of the issue in the upcoming campaign.

State Activism

In addition, there is a growing activism in a number of states to roll back air emissions. For example, earlier this year, Texas stopped short of repealing grandfather status for older plants and opted instead for a voluntary program to encourage grandfathered plants to obtain air permits. This was a compromise after legislation that would have revoked grandfathered status was defeated.

In New York, Governor Pataki directed the Department of Environmental Conservation recently to issue regulations requiring electric generators to reduce SO2 emissions by another 50% below federal standards. The governor also wants to impose stringent NOx reduction requirements on a yearround basis, rather than just during the summertime ozone season. The new regulations would be phased in starting on January 1, 2003, with implementation completed by January 1, 2007.

by Roy S. Belden, in Washington