The Environmental Protection Agency (EPA) in early November wrangled with some older coal-fired power plants, and the resulting cloud of dust has not yet settled. In fact, electric utilities went so far as to attempt to garner an act of Congress for provision of a temporary reprieve from enforcement actions.
The Justice Department, on behalf of EPA, filed seven lawsuits against electric utility companies in the Midwest and South (see table), charging that 17 of the companies` power plants made major modifications without installing the equipment required to control emissions, which EPA alleges increased as a result of the modifications. EPA also issued an administrative order against the Tennessee Valley Authority, charging the federal agency with similar violations at seven plants, and issued notices of violations to the utilities, naming an additional eight plants where the agency maintains similar violations occurred.
Definitions provide grist for debate
A shared refrain in the utilities` responses is this: EPA is reinterpreting its regulations as to what is considered routine maintenance. Power plants existing at the time the Clean Air Act (CAA) was amended in the late 1970s were “grandfathered.” Utility companies were not required to retrofit existing plants with new air pollution control equipment, unless the utilities undertook major modifications of those plants.
EPA administrator, Carol M. Browner, said, “The companies were allowed to perform routine maintenance, but they were not allowed to make significant changes to the plant-such as increased generating capacity, increased burning of coal, or modifications that prolonged the life of the plant-without seeking permits and adding the best available pollution control devices.”
The distinction between routine maintenance and major modifications will surely provide the grist for this debate. The following modifications/replacements were among those cited in the violations: economizers, cyclone furnaces, primary burners, coal pulverizers, main condenser tubing, forced draft fans, high pressure heaters, superheaters, coal bunkers, and turbine blades.
American Electric Power`s Mark Gray, manager of the environmental services division, said, “I think the EPA believes that the normal routine replacement of pressure parts in boilers, which may be sections of tubing, things called superheaters or reheaters-things of that nature-they believe to be non-routine, even though they have a design life that is clearly within the realm that you would expect replacement in the normal operating life of the unit. These are the types of things that they have pointed out and they really go against what has been the history in the industry.
“These are components that have limited life spans, they have been replaced for many years in the industry. The agency has been aware of these replacements for decades and now they have decided to take an action.”
Why the 10-year delay in enforcement?
In an exclusive interview with EL&P, an agency official of EPA`s Office of Regulatory Enforcement, Air Enforcement Division, explained the evolution of events leading up to the lawsuits.
Initial EPA review of permitting and emissions compliance related to construction occurred about 10 years ago in the wood products industry. EPA discovered that lumber companies, such as Georgia-Pacific, were progressing with new greenfield development without filing the required Prevention of Significant Deterioration (PSD) permits.
The CAA provides for the prevention of significant deterioration of air quality in areas designated as either attainment or unclassifiable for purposes of meeting the national ambient air quality standards (NAAQS). To assure that existing clean air resources are preserved, any decision to permit increased air pollution is to be made only after careful evaluation of all the consequences of such a decision and after public participation in the decision-making process. EPA`s requirement for PSD permits is intended to provide public notice of construction/modifications that may affect compliance with air standards.
The EPA official said it took several years to review the lumber industry. “A couple years ago, EPA wondered if there was the same problem in other industries.
“Companies are supposed to self-report these activities. We looked and there weren`t that many filed permits. We suspected there ought to be many more. Having noticed there weren`t a lot of these permits, we selected three industries for review.”
The industries-coal-fired power plants, pulp & paper, and refining-were selected because they were identified as gross emitters in the country.
A year ago EPA began looking at public utilities` PSD permit filings to determine if the permits were just not showing up in records, or if there really was an absence of construction. The EPA official said, “Only after determining there was construction, but no permits filed did we pursue facility-specific reviews. They are supposed to self-report. They may be reporting to state public utility commissions, but they are not reporting to state departments of environmental conservation.”
Utilities face possible financial hits
If the cited utilities are found in violation, CAA authorizes civil penalties of up to $25,000 for each day of violation at each plant prior to Jan. 30, 1997 and $27,500 for each day thereafter. However, many industry experts believe the intention of the lawsuits is to force the installation of pollution control equipment at the affected units.
AEP`s estimated costs for installation of selective catalytic reduction (SCR) NOx controls at $100 per kW installed capacity. Estimates for installation of high efficiency SO2 scrubbers were $175 to $225 per kW installed capacity.
Moody`s Investors Service believes while the specific violations are not yet known, the capital costs of compliance are not expected to be as onerous as the possible monetary penalty.
The Edison Electric Institute, an industry trade group, led an attempt to gain congressional approval for a temporary ban on further EPA enforcement actions.
In a letter to Senators Trent Lott and Tom Daschle, dated November 10, the group wrote, “These routine repair and maintenance projects, many of which have already been planned and are necessary to maintain reliability in a capacity-short region of the country, must be allowed to go forward without fear of penalties while courts decide the outcome of these cases.”
An early draft of the utility company rider said, “The owners and operators of such electric generating units shall not be subject to criminal penalties for modifications made before December 31, 2000.”
At press time, EEI held little hope for passage of the proposal due to the limited time for congressional review before year`s end.