A U.S. Power Industry Regulatory Update

The U.S. power sector has seen a number of developments on the regulatory front in recent months. Here’s where major federal rules stand today. (For a more dynamic and graphic version of this article, see http://powermag.com/long-form-stories/bw-power/ .)

GHG Rules

New Power Plants. The Environmental Protection Agency (EPA) in September 2013 revised a 2012 proposal to limit carbon emissions from new coal- and natural gas–fired power units. The New Source Performance Standards developed under Section 111(b) of the Clean Air Act (CAA) require new gas plants of 100 MW or more to emit no more than 1,000 pounds of carbon dioxide/MWh of power produced (as achievable with the latest combined cycle technology), but calls for smaller gas plants to achieve a less-stringent standard of 1,100 pounds CO2/MWh. Coal plants can either use carbon capture and storage technology soon after startup (to achieve a 12-month average emission rate of 1,100 lb CO2/MWh) or after seven years of startup to achieve a seven-year average emission of between 1,000 and 1,050 lb CO2/MWh.

Existing Power Plants. As directed by President Obama’s Climate Action Plan, the EPA on June 2 proposed its “Clean Power Plan” emissions guidelines for existing power plants under the CAA Section 111(d). The proposal sets state-specific, rate-based goals and relies on four “building blocks” to establish the best approach for each state to slash power sector CO2 emissions by 30% from 2005 levels by 2030.

BACT for GHG Emissions. The U.S. Supreme Court on June 23 reversed the EPA’s Tailoring Rule but affirmed the agency’s authority to regulate greenhouse gases (GHGs) under the CAA’s Prevention of Significant Deterioration permit program. Specifically, the high court said the EPA could permissibly require sources that are obligated to obtain permits “anyway” (because of their emission of non-GHG pollutants) to adopt GHG Best Available Control Technology (BACT).

Mercury and Air Toxics Standards (MATS)

The U.S. Court of Appeals for the D.C. Circuit on Apr. 15 upheld MATS, rejecting numerous challenges from industry, states, and environmental petitioners. Over July and August, at least 23 states and two energy industry groups petitioned the U.S. Supreme Court to review the decision, arguing the rule would drive up power prices and harm the coal industry. The rule requires all existing coal- and oil-fired power units to meet specific, numeric emission limits for mercury, particulate matter, and acid gases by Apr. 15, 2015, unless granted a one-year extension.

Cross-State Air Pollution Rule (CSAPR)

The U.S. Supreme Court on Apr. 29 reversed and remanded the D.C. Circuit’s 2012 decision that vacated CSAPR. The high court concluded that the EPA’s approach in issuing the CSAPR as a federal implementation plan first was lawful. However, the D.C. Circuit’s stay of CSAPR remains in effect, and the case now goes back to the appeals court to address substantive issues left open by the Supreme Court. More legal process is required before CSAPR is put back into effect, including certain debate over timing and compliance deadlines.

PM (2.5) Standard

The EPA in December 2012 strengthened the primary annual final particle (PM2.5) national ambient air quality standard from 15.0 micrograms per cubic meter (μg/m3) to 12.0 μg/m3. On Aug. 19, the agency designated 14 areas in six states as “nonattainment” and all other areas of the country as “unclassifiable/attainment.” States must submit state implementation plans to meet the PM2.5 standard by fall 2016.

316(b) Cooling Water Rule

The agency on Aug. 15 published its final rule establishing requirements under Section 316(b) of the Clean Water Act for all existing power generating facilities that withdraw more than two million gallons per day of water and use at least 25% of the water they withdraw exclusively for cooling purposes—about 540 power plants. The rule goes into effect on Oct. 14, 2014.

Coal Combustion Residuals

Though proposed more than four years ago, rules governing the disposal of coal combustion residuals—including fly ash, boiler slag, and flue gas desulfurization waste products—remain in limbo. But on Oct. 29, 2013, the D.C. Circuit directed the EPA to establish a timeline for reviewing coal combustion residue regulations, and on Jan. 29, a consent decree between the agency and environmental groups was reached that requires the EPA to issue a proposed revision to its rules no later than Dec. 18, 2014.

Effluent Limitation Guidelines

A consent decree between environmental groups and the EPA reached this April suggests the final rule establishing national technology-based effluent limitation guidelines and standards to reduce wastewater discharges of pollutants from nuclear and fossil power plants will likely be delayed until September 2015. Current rules, last updated in 1983, do not “adequately” address the pollutants being discharged and have not kept pace with power sector changes, the agency says.

Ozone Standard

A California federal judge this April ordered the EPA to propose primary and secondary national ambient air quality standards for ozone by Dec. 1, 2014, and finalize them by October 2015. The rule’s last revision in 2008 set the ozone standard of 75 parts per billion (ppb). But before the EPA could finalize a rule proposed in 2010 to set a stricter standard of between 60 ppb and 70 ppb, President Obama in 2011 scuttled the rule to reduce regulatory burdens and uncertainty. An August-released EPA final policy assessment provides “strong support” for revising the standard within the range of 60 ppb to 70 ppb.

Radiation Protection Standards for Nuclear Plants

The EPA on Feb. 4 proposed a thorough review of these standards, given changes in the industry and in scientific knowledge. In contrast to tightened standards for other risks, the draft version for exposure from radiological incidents proposes to substantially relax existing limits. The current standards were promulgated in 1977 to limit radiation releases and doses to the public from nuclear power plants and uranium fuel-cycle facilities.

Continued Storage of Spent Nuclear Fuel

Finalized on Aug. 26, this rule replaces the 2010 Waste Confidence Rule that was vacated by a federal court in 2012 and confirms that nuclear fuel from commercial reactors can be safely managed in reactor fuel storage pools in the short term and in steel and concrete storage containers for longer timeframes. The Nuclear Regulatory Commission (NRC) on Aug. 26 also lifted a suspension on final decisions on 19 pending reactor license applications.

Critical Infrastructure Protection (CIP) Reliability Standards

Cybersecurity Standards. The Federal Energy Regulatory Commission (FERC) on Nov. 21, 2013, approved with modifications the North American Electric Reliability Corp.’s (NERC’s) Version 5 CIP reliability standards, calling for the first time for all cyber assets to be categorized as low-, medium-, or high-impact assets and approving 12 new requirements with new cybersecurity controls.

Physical Security Standards. FERC proposed to approve NERC’s submitted rule to enhance physical security for the most critical bulk power system facilities on July 17. In a March 7 order, FERC determined that existing CIP reliability standards did not address physical attacks. n

—Sonal Patel is a POWER associate editor (@POWERmagazine, @sonalcpatel).