POWER September 2011 - 24

Critics Get Crossways with
New Cross-State Air Rule
By Angela Neville, JD
F
rom the East Coast to the Lone Star State, a number of elected
officials and power industry representatives are bashing
the new aggressive regulation aimed at controlling specific
power plant emissions.
Complying with a federal court mandate, the U.S. Environmental
Protection Agency (EPA) finalized the Cross-State Air
Pollution Rule (CSAPR) on July 6. The new standard requires
27 states to reduce power plant emissions that contribute to
ozone and/or fine particle pollution in other states. Barring
a court challenge, the new rule will begin taking effect as
soon as early 2012 and be fully in place by 2014. It's aimed
at slashing power plant pollution that drifts across state borders
and prevents downwind states from achieving ozone and
particulate matter standards. The EPA said that by 2014 the
CSAPR rule and other EPA and state actions will cut sulfur
dioxide emissions by 73%, and trim nitrogen oxides emissions
by 54%, below 2005 levels.
The new rule replaces the EPA's 2005 Clean Air Interstate Rule
(CAIR), which was issued under former President George W. Bush
and rejected in 2008 by a federal court that said its trading
provisions wouldn't adequately protect communities against pollution
blowing in from nearby states. The court allowed CAIR to
remain in place temporarily while the agency worked to finalize
this replacement rule.
" These Clean Air Act safeguards will help protect the health of
millions of Americans and save lives by preventing smog and soot
pollution from traveling hundreds of miles and contaminating the
air they breathe, " said EPA Administrator Lisa Jackson.
By 2014, utilities are projected to spend $800 million annually
on additional emissions controls, combined with $1.6 billion per
year in capital investments already under way when CAIR was
issued, according to the EPA. The agency also estimates that the
improved air quality resulting from the CSAPR will result in $120
billion to $280 billion in annual health benefits.
Testy Reactions Down in Texas
In the final version of the CSAPR rule, the EPA decided to expand
its scope to include Texas.
Texas Gov. Rick Perry, who at press time in August appeared
to be considering a run as a Republican candidate in the 2012
presidential race, strongly criticized the new environmental
rule. On July 7, he called the EPA's action " another example of
heavy-handed and misguided action from Washington, D.C. that
threatens Texas jobs and families and puts at risk the reliable and
affordable electricity our state needs to succeed. "
" Texas will keep standing up to this destructive federal overreach
and working to enhance environmental protection and domestic
energy exploration and production, " he emphasized.
In a similar vein, 31 members of the state's congressional delegation
in early August urged the White House in a letter to
24
delay implementation of the rule, according to the Fort Worth
Star Telegram.
In addition, the Electric Reliability Council of Texas, the operator
of the state's major power grid, has expressed concern that
the rule could lead to a future shortage of power generation. CEO
H.B. " Trip " Doggett said in a July 19 statement that the rule, if
implemented as written, could within a few years cause Texas to
" face a shortage of generation necessary to keep the lights on. "
The Texas Public Utility Commission estimated the new standard
could force 18 plants-many of which were built in the
1970s-to install expensive equipment, change fuel, or prematurely
retire.
The EPA's Jackson said such fears in Texas were exaggerated
and pointed out that some utilities have already moved to
clean up their coal-fired plants. " Texas has an ample range of
cost-effective emission reduction options for complying with the
requirements of this rule without threatening reliability or the
continued operation of coal-burning units, " she said.
Other Complaints About the New Standard
The American Coalition for Clean Coal Electricity (ACCCE), an
association that includes coal companies and utilities, funded
a recent study that concluded the additional costs related to
implementing the rule would lead to a 13% drop in coal-fired
generation. It said electricity prices would increase by double
digits for ratepayers in Indiana and more than 20 other states.
" America's coal-fueled electric industry has been doing its part
for the environment and the economy, but our industry needs
adequate time to install clean coal technologies to comply with
new regulations. Unfortunately, EPA doesn't seem to care, " said
Steve Miller, ACCCE president and CEO.
Seeking a Balanced Approach
It's unclear if the new rule will be challenged in court. In the
meantime, utilities have a mandate to start working on compliance
strategies so their facilities will be ready when the new
rule goes into effect next year. To remain competitive in today's
challenging economy, utilities must comply with the new EPA
regulation so they can avoid expensive penalties and adverse
media coverage.
The U.S. electric generation industry needs a sensible air quality
policy that balances economic demands with protecting human
health. The EPA should consider the costs borne by utilities
that are being asked to comply with the CSAPR rule in a short
time frame and their need for flexibility in implementing the rule
in order to avoid future power shortages. Regulations that put
a strain on the power generation system and threaten the reliable
delivery of electricity can also cause serious adverse health
consequences. ■
www.powermag.com
-Angela Neville, JD, is POWER's senior editor.
POWER | September 2011
http://www.powermag.com
POWER September 2011

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