NRG Energy’s $1.2 billion plan to build a 744-MW pulverized coal unit at its Limestone Electric Generating Station near Jewett, Texas, got a boost last week as the Texas Commission on Environment Quality (TCEQ) approved air permits for the plant.

NRG submitted a request to the TCEQ for an air permit to build the third unit at the facility in 2006. A draft permit was issued in November 2007, and last month the TECQ adopted the judges’ proposed decision to issue permits and directed revisions be made prior to final approval of the order and the permit.

The TCEQ’s decision prompted heated responses from environmental groups like the Sierra Club that had been challenging the permit. In 2008, NRG agreed in a settlement with the Environmental Defense Fund and the Texas Clean Air Coalition that it would offset 50% of Limestone 3’s carbon emissions and reduce other pollutants below state-required levels.

The Sierra Club said in a statement last week that the permit would be the first issued for a coal plant by the TCEQ since the Environmental Protection Agency (EPA) proposed rules that “find that TCEQ has not been adhering to the Clean Air Act in its issuance of new permits.”

“The new EPA is taking steps that make coal plants more and more obsolete,” said Eva Hernandez, Sierra Club Texas coal organizer. “The EPA has said that TCEQ is not applying certain provisions of the Clean Air Act;  the EPA found on Monday that carbon dioxide and other greenhouse gases represent a significant threat to public health and welfare;  and the EPA plans to announce its new ozone standard on December 21. These important decisions signal serious changes in coal plant regulation and point to smarter clean energy solutions.”

The group said it plans to file a motion for re-hearing at the TCEQ and if denied would file an appeal in state district court.

Texas has 14 proposed coal plants in various stages of permitting or construction—more than any other state in the U.S. In September, Luminant completed the 581-MW Sandow 5 unit in Milam County, Texas—the first new coal unit build in Texas in 17 years. It uses circulating fluidized bed technology and burns Texas lignite coal. The Dallas-based company expects to complete the first of two coal units at its Oak Grove site before 2010, and at least two more coal units are expected to come online in 2010.

NRG’s Limestone Station is made up of two lignite/coal-fueled steam units that generate more than 1,700-MW of baseload capacity. The facility, which went into operation between 1985 and 1986, operates throughout the year and employs 250 people full time. 

The new unit, Unit 3, will be built adjacent to existing Units 1 and 2. NRG says on its website that the expansion features more than $400 million in environmental controls. Unit 3 will primarily use low-sulfur coal. It will also be equipped with low-NOx burners/overfire air and selective catalytic reduction for NOx control, flue gas desulfurization (scrubber) for sulfur dioxide control, and a fabric filter baghouse for particulate control. The company plans to reduce mercury emissions “through a combination of controls that will exceed current regulatory requirements.”

The project is wholly owned by NRG, but the company is actively seeking equity partners for it.

Sources: NRG Energy, TCEQ, Sierra Club, Luminant