EPA proposes easing Cross State Air Pollution Rule

The U.S. Environmental Protection Agency (EPA) has proposed changes to the Cross State Air Pollution Rule (CSAPR), easing some of the regulation’s requirements. The rule is aimed at limiting the amount of sulfur dioxide (SO2)and nitrogen oxides (NOx) emissions levels in 27 states.

Taking into consideration additional data from states and companies, EPA announced several proposed changes to the rule on Oct. 6, including state budget increases in 10 states and unit level allocations in six states.

Texas, which sued the EPA in September in an effort to block CSAPR, is one of the 10 states proposed to experience slight budget increases. EPA regional administrator Al Armendariz said the change in Texas is being made because the EPA now understands it had been provided incorrect information from some utility companies, including Luminant. For example, three flue gas desulfurization (FGD) controls were included on sources that did not have FGDs. Additionally, full flue gas treatment was assumed in existing scrubbers at five facilities. This revision would result in an additional increase to Texas’ ozone season NOx and annual NOx budgets.

Other states proposed to experience budget increases are Florida, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New York, Wisconsin and Arkansas.

Additionally, EPA is proposing to revise some unit level allocations in six states: Alabama, Indiana, Kansas, Kentucky, Ohio and Tennessee. In essence, EPA had not taken into account that some units already have federal consent decrees limiting emission levels. EPA is proposing that CSAPR allocations not exceed the terms of consent decrees already in place. This action does not add to any state budgets but ensures that these allowances can be fully available for statewide compliance with CSAPR.

The proposal also amends the assurance penalty provisions, thus increasing the opportunity for market‐based compliance options until January 2014. The assurance level is the margin above the budget that states are permitted to exceed.

“There are concerns that emission units could not fully operate at historic levels within the budgets at the assurance levels,” said Todd Palmer, an environmental lawyer with Michael Best & Friedrich LLP. “It appears EPA acknowledged that concern and has decided to delay the penalty provisions until 2014.”

While EPA asserts that compliance does not have to be demonstrated until 2013, sources will be required to present information to EPA on how much they emitted in 2012. Therefore, many companies, as well as the state of Kansas, have consented that power plants will not have enough time to install the proper control technologies by Jan. 1, 2012.

Scott Segal, director of the Electric Reliability Coordinating Council, said he is concerned that EPA has not decided to delay the rulemaking. “One of the greatest problems with the rule is the completely inadequate implementation time allowed, meaning that we are still likely to see a crunch in available capital, access to engineering resources and technology.”

Segal suggests that in order to fix CSAPR, the Agency should stay its implementation, retain the protections of the Clean Air Interstate Rule in meantime and re-propose the rule “when it is fixed.”

Palmer said the proposed changes in the rulemaking address some concerns but will not satisfy litigants challenging CSAPR. “These revisions merely correct technical errors that were very apparent in EPA’s budget calculation process; they do not address more substantive concerns about the CSAPR program and allocation revision that have been raised by many states and companies.”

The proposal will be open to public comment for 30 days from publication in the Federal Register. Click here to read all of the proposed changes.

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