Legal & Regulatory

EPA Postpones Compliance Dates for FGD, Bottom Ash Transport Requirements in ELG Rule

Steam electric power plants preparing to comply with the Environmental Protection Agency’s (EPA’s) effluent limitations guidelines (ELG) and standards as they concern bottom ash transport water and flue gas desulfurization (FGD) waste streams will get—for now—a two-year reprieve under a new rule the agency finalized on September 12.

The ELG rule, which was finalized by the Obama administration in September 2015, set the first federal limits on levels of toxic metals in wastewater that can be discharged from existing coal, gas, oil, and nuclear plants. That rule set new requirements for wastewater streams from FGD, bottom ash transport water, fly ash transport, flue gas mercury control, gasification of coal and petroleum coke, and combustion residual leachate.

But on Tuesday, in a new final rule, the Trump administration said it would conduct a rulemaking to evaluate and possibly revise best available technology (BAT) effluent limitations and pretreatment standards only as they pertain to bottom ash transport water and FGD wastewater streams. To avoid unnecessary costs that facilities may incur making changes, the agency postponed compliance dates for those requirements for two years.

The agency estimated that it would take about three years to propose and finalize revised effluent limitations guidelines and standards, suggesting it could issue a new rule in the fall of 2020. The final rule issued on Tuesday postponing compliance dates is “intended only as a relatively short-term measure until EPA completes the next rulemaking, and EPA anticipates that the next rulemaking will necessarily address compliance dates in some fashion,” the agency said.

As significantly, the rule issued on Tuesday doesn’t amend the 2015 ELG rule for steam electric plants. Notably, the agency also stressed that it “does not intend to conduct a rulemaking that would potentially revise the new, more stringent BAT effluent limitations and pretreatment standards in the 2015 Rule for fly ash transport water, flue gas mercury control wastewater, and gasification wastewater, or any of the other requirements in the 2015 Rule.” Compliance deadlines for those waste streams are still effective, though the EPA noted that permitting authorities continue to have the discretion under the 2015 rule to consider time needed to plan, design, procure, and install equipment to comply with the rule.

The final rule comes on the heels of the EPA’s June 6 proposed rule, which sought to postpone compliance dates for other waste streams beyond FGD, and bottom ash—including fly ash, flue gas mercury control, and gasification.

A Somewhat Lighter Regulatory Burden 

Plants had been expected to comply with 2015 ELG rule between 2018 and 2023, depending on when they needed a new Clean Water Act permit. The new final rule means that the earliest compliance dates for plants to meet the rule’s stringent requirements for FGD wastewater and bottom ash wastewater limitations and standards will be determined by the permitting authority beginning in November 2020.

However, the EPA declined to change the “no later than” date of December 31, 2023, “because EPA is not aware that the 2023 date is an immediate driver for expenditures by plants.” Petitioners concerned by the rule, it noted, had only requested relief from “fast-approaching compliance deadlines” in the 2015 rule.

While the EPA estimated that only about 12% of steam electric power plants would incur some costs to comply with the rule, it estimated annual compliance costs for the final rule would be about $480 million. “Although there is a wide degree of variability among the costs particular plants would expend, EPA estimates that the average post-tax annualized capital compliance costs for a plant would be approximately $1.5 million/year,” it said.

Average costs for the first five years of compliance, meanwhile, could soar to $1.2 billion per year, while benefits associated with the rule range between $451 million and $566 million, it added.

Costs to comply with the rule have prompted strong industry pushback. And, as with nearly every environmental rule promulgated by the Obama administration, the ELG rule has been challenged in court. The Fifth Circuit consolidated seven separate petitions for review of the ELG rule filed by a coalition of utilities led by the Southwestern Electric Power Co. and is reviewing the case, Southwestern Elec. Power Co. v. EPA, et al, No. 15-60821.

The federal appeals court, however, granted an April 14-submitted motion by the EPA to hold the case in abeyance while the agency reconsiders the rule. And on August 22, it granted another motion by the EPA calling on the court to sever and hold in abeyance all judicial proceedings concerning parts of the rule related to requirements for FGD and bottom ash waste streams.

A Barrage of Opinions

The EPA on Tuesday said it also received seven petitions for review of the 2015 rule, including one this March from the Utility Water Act Group (UWAG), which is an unincorporated association of 163 individual energy companies and three national power sector trade associations: the Edison Electric Institute, the National Rural Electric Cooperative Association, and the American Public Power Association. It received at least one other petition from the Small Business Administration Office of Advocacy, a Congressionally appointed independent council that advises the federal government on small business matters.

It also received “thousands of written comments” on the proposed rule to postpone compliance deadlines. Commenters that opposed the proposal questioned the EPA’s authority to postpone the rule. Additionally, they claimed that the technology bases underlying the 2015 rule are widely available and affordable now, and that many steam electric plants have already installed or are in the process of implementing these technologies.

According to the EPA, UWAG’s petition pointed to new data that the group said showed that plants burning subbituminous and bituminous coal cannot comply with the 2015 rule’s limitations and standards for FGD wastewater. The petition also “questions EPA’s characterization of bottom ash transport water,” the agency said.

The UWAG’s petition prominently also notes that costs in the 2015 ELG rule “were grossly underestimated by EPA,” and that it would cause regulatory burdens, forcing plant closures.  Dynegy, the petition claims, estimated its costs of compliance with the ELG rule to total approximately $308 million, “with $41 million to be spent in less than one year and $178 million to be spent within three years.” Similarly, it says, NRG Energy anticipates that its total ELG costs will be approximately $200 million. American Electric Power expects that ELG Rule compliance costs between 2018 and 2023 could range from $400 million to $550 million. The group also claims that smaller, local utilities are experiencing high compliance costs relative to their lower numbers of ratepayers.

Agreeing with Industry

EPA Administrator Scott Pruitt first announced the EPA would review and reconsider revisions to the ELG rule in April. On Wednesday, Pruitt said in a statement that the new rule postponing the ELG compliance dates by two years “resets the clock for certain portions of the agency’s effluent guidelines for power plants, providing relief from the existing regulatory deadlines while the agency revisits some of the rule’s requirements.”

In its final rule on Tuesday, the EPA meanwhile added that it “has discretion in determining technological availability and economic achievability and is not constrained by the [Clean Water Act] to make the same policy decision as the former Administration, so long as its decision is reasonable.”

The agency “may also reconsider technical determinations in light of new information submitted to the Agency that was not in the record for the 2015 Rule,” it said.

“EPA intends to fully evaluate all of the issues raised in the petitions, including concerns about: cost and impacts to steam electric facilities, public availability of information on which the rule is based, lack of data for plants that burn certain types of coal, and validity of certain pollutant data used in EPA’s 2015 Rule analysis.” That will include costs of biological treatment and a review of certain data that was based on faulty data acceptance criteria, obsolete analytical methods, and non-detect analytical results, which may have resulted in an overestimation of pollutant loadings for bottom ash transport water.

That “may be disruptive to vendors and treatment technology suppliers,” the EPA acknowledged, but the agency was obligated to “also consider the substantial investments required by the steam electric power industry to comply with the BAT limitations and [pretreatment standards for existing sources],” it said.

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









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