APPA calls for reintroduction of EPA rule on EGU MACT

Washington, D.C., August 3, 2011 — In comments filed with the Environmental Protection Agency, the American Public Power Association cited a host of changes it would like to see EPA make to its Electric Generating Unit Maximum Achievable Control Technology proposed rule to avoid dramatic and costly impacts to APPA members and their customers.

"APPA recognizes the need to regulate mercury and nickel to protect public health," said Mark Crisson, president and CEO of APPA. "At the same time, the implications of this regulation will stretch from industrial customers all the way down to residential customers and both sectors will most definitely see a rise in electricity rates as a result. Therefore, in APPA's comments, we propose a number of changes on timing and the setting of subcategories in order to mitigate the regulatory burdens and avoid excessive costs to consumers while still protecting public health."

The EGU MACT rule, proposed under the Clean Air Act, covers coal-fired and oil-fired power plants greater than 25 MW and is designed to reduce emissions of mercury and acid gases from coal-fired generation and to reduce nickel emissions from oil-fired generation through a series of new pollution control devices.

In the comments, APPA revealed the results of its recent public power utility survey conducted with its members on the proposed rule. The survey clearly showed that APPA members need more time and flexibility to comply with the new rule.

For instance, the survey revealed the time needed to finance, procure, construct, install, and calibrate the new equipment needed to meet the rule exceeds the three years for compliance provided under the Clean Air Act.

Most APPA members indicated they need at least nine months to plan, six months to finance (including time for government utility boards to meet) and multiple years to construct the new equipment. An analysis of the data determined that 77 months will be needed for 90 to 99 percent of public power utilities to comply.

In addition, APPA objects to the inclusion of acid gas and particulate matter controls in the rule. The acid gas control requirements, not specified under the Clean Air Act or EPA's own 1997 utility sector study, will add tremendous costs and regulatory burdens to public power utilities.

Given that the proposed rule is expected to be finalized in late 2011 and the deadline for compliance is three years from the date of the final rule, APPA believes that addressing the timing and cost impacts in the final rule is essential. Many APPA utilities will have to install baghouses, scrubbers, and other pollution controls while working around other scheduled outages at investor-owned utilities in the coming three years to avoid regional reliability concerns.

Moreover, many APPA members are small and per-megawatt compliance costs will be higher for smaller units. Also, as many APPA members have only one generating unit, they may have to shut down to retrofit, threatening reliability.

Therefore, APPA would prefer EPA not expand the proposed rule beyond mercury and nickel since EPA has provided no data as to any health risk associated with non-mercury metal hazardous air pollutants and acid gases related to fossil-fuel-fired electric generating units. If EPA does not scale back the scope of the rule or address the timing issues, APPA's comments point out the need for an administrative compliance procedure in the Title V operating permit program.

For these and other technical reasons laid out in the comments, APPA asks that the EPA re-propose the rule with these key changes so that industry has the time and flexibility needed to retrofit its coal fleet without threatening the reliability of the electric system and saddling consumers with excessive costs, especially during a time of serious economic uncertainty for the country as a whole.

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