EPA Proposes to Replace Clean Power Plan with New Rule

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Posted: Tuesday, September 25, 2018 9:10 pm

WASHINGTON, D.C. -- The U.S. Environmental Protection Agency in August proposed to replace the Clean Power Plan with a new rule that would let states decide how to make existing coal-fired power plants more efficient to lower their greenhouse gas emissions.

The Obama administration’s Clean Power Plan exceeded the EPA’s legal authority and would in some areas lead to double digit rate hikes, Andrew Wheeler, the EPA’s acting administrator, told reporters in a conference call after the proposal was unveiled.

The Clean Power Plan aimed to cut greenhouse gas emissions from the U.S. power plant fleet by 32 percent below 2005 levels by 2030. The plan, which was stayed by the U.S. Supreme Court while litigation was ongoing, would have required states to meet emissions reduction targets using various options such as energy efficiency, renewable resources, and carbon dioxide trading programs.

The EPA contends its proposed rule will roughly lower greenhouse gas emissions as much as the Clean Power Plan would have, partly because the power sector has been shifting away from coal-fired generation towards low and non-emitting generation resources since the Clean Power Plan was drafted, according to Bill Wehrum, EPA assistant administrator for the Office of Air and Radiation. According to the U.S. Energy Information Administration, U.S. energy-related CO2 emissions have declined in 7 of the past 10 years, and they are now 14 percent lower than in 2005.

The EPA is proposing that heat rate improvement measures are the "best system of emission reduction" for the roughly 600 existing coal-fired units that will be affected by the rule.

"EPA believes that a BSER focused on making these plants as efficient as possible is the best way to ensure GHG emission reductions regardless of other factors such as technology changes for other types of generation, changes in fuel price, changes in electricity demand, or changes in energy policy that neither environmental regulators nor power companies have the power to control," the agency said in the draft rule.

Under the proposed Affordable Clean Energy rule, states will have three years to develop state plans. States would have flexibility in determining which heat rate improvement measures and processes they put in place for affected power plants to meet their compliance obligations using guidelines issued by the agency. The EPA would then have a year to act on the state plans.

The proposed heat rate improvement guidelines are a set of technologies and operations and maintenance practices. They include neural networks, intelligent sootblowers, boiler feed pumps, air heater and duct leakage control, variable frequency drives, blade path upgrades, redesign or replacement of economizers, improved steam surface condenser cleaning, and improved operation and maintenance practices.

The EPA decided not to include switching a coal-fired unit to natural gas as a BSER option because it would fundamentally redefine the source, the agency said in the proposed rule. 

The EPA’s proposal would allow states to set performance standards, based on a power plant’s age, location, and design.

The EPA is also proposing an hourly "preliminary applicability test" that would allow operators to make changes to coal-fired units without triggering New Source Review permitting requirements.

"This change will allow states, in establishing standards of performance, to consider [heat rate improvements] that would otherwise not be cost-effective due to the burdens incurred from triggering NSR," the EPA said.

The American Public Power Association said the proposed plan respects the legal limits of the Clean Air Act while comporting with prior Supreme Court precedent on CO2 and gives states needed flexibility when it comes to setting performance standards for electric generating units.

Additionally, the rule provides a framework that recognizes each state’s unique conditions and avoids interfering with established state energy policies.

"We look forward to participating in EPA’s rulemaking to finalize its proposal so that our members, community-owned, not-for-profit electric utilities, can make long-term planning decisions and investments to best serve their customers with reliable, affordable, and environmentally responsible power," said Sue Kelly, president and CEO of the Association.

SOURCE: American Public Power Association

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