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April 18, 2022
by Paul Ciampoli
APPA News Director
April 18, 2022
Citing the need for regulatory certainty, the American Public Power Association (APPA) is voicing support for the U.S. Environmental Protection Agency’s (EPA) finding in a proposed rule related to the agency’s Mercury and Air Toxic Standards (MATS) that it is “appropriate and necessary” under a section of the Clean Air Act to regulate hazardous air pollutant emissions from electric generating units.
APPA, which outlined its position in April 11 comments submitted to EPA, noted that its members continue to utilize coal-fired power subject to MATS.
“The Association and our members have and continue to be dedicated to clean air in our communities and protection of the environment. Our members have made significant investments to reduce air toxics and become compliant with MATS,” APPA said.
“Many members continue to pay for those investments through loan obligations. For these reasons, APPA members have a significant stake in EPA’s Proposed Rule and the forthcoming residual risk and technology review (RTR) process,” it said.
Air emissions data from the utility sector show vast reductions in emissions and hazardous air pollutant emissions, APPA noted. “MATS compliance is a significant contributor to this result. These reductions provide important context for EPA’s reconsideration in the proposed rule and for the forthcoming RTR.”
Finalized in 2012, the MATS rule, paired with other rulemakings at the time, caused significant reductions in mercury and other hazardous air pollutants in the electric utility sector, the trade group pointed out. EPA estimates coal- and oil-fired electric generating units have reduced total hazardous air pollutant emissions by 96 percent since 2010.
These achievements have not been without expense to generators and end users, APPA said. Owners and operators of coal- and oil-fired electric generating units have spent more than $18 billion to comply with MATS, while concurrently retiring and investing in replacement generation, such as natural gas, renewables, hydro, and nuclear. Utilities opted to either retire affected units, based on economics often dictated by unit capacity, or install the control technologies required by the rule.
“APPA emphasizes that retirements to comply with MATS are part of the unprecedented investment to air quality made by numerous cities and municipalities. A decision to retire a coal facility is not reversable given permit restrictions, physical decommissioning, and the economics of the power market. Contemporaneous with retirements, public power made substantial new investments to replace the coal-fired baseload generation with lower or non-emitting generation resources,” the trade group said in the comments.
Regulatory Certainty Is Essential
“Regulatory certainty is essential to municipalities and cities,” APPA went on to say. “At this juncture, the electric utility industry has fully implemented MATS. States have relied on MATS-related ancillary benefits in their state plans for other Clean Air Act programs.”
Sources have also relied on these same controls to comply with other Clean Air Act obligations, such as requirements for non-hazardous air pollutant MATS surrogate pollutants.
Now that these capital expenditures are complete, sources are realizing the value of their investments and anticipate doing so in the future, APPA said. Electric generating units “have relied on MATS rulemakings when making these substantial financial commitments. Single unit and single plant owners cannot pivot quickly to regulatory change. Generation shifting is not an option.”
APPA noted that cities and municipalities are committed to the transition to cleaner energy. “Renewable energy projects require financial investment, asset procurement, and permitting. Commissioning clean energy requires time and money. If public power utilities must contend with unanticipated new environmental projects for MATS, resources may need to be diverted away from renewable projects to address new MATS-related environmental projects.”
APPA continues “to emphasize that public power has fully implemented MATS and has relied on previous investments to reduce” hazardous air pollutants in planning for future energy transitions. “Regulatory certainty is critical to ensuring future plans can be sustained to transition to a cleaner energy future. For these reasons, we ask EPA to consider the challenges that a change in MATS would have on this cost-sensitive subset” of electric generating units.
EPA’s proposed rule recommends revoking a prior finding that it is not “appropriate and necessary” to regulate electric generating units under Clean Air Act Section 112. The proposed rule instead finds that it is “appropriate and necessary” under Section 112(n)(1)(A) of the Clean Air Act to regulate hazardous air pollutant emissions from electric generating units. The proposed rule uses a new methodology to support its proposed “appropriate and necessary finding” the new approach considers the advantages of regulation (public health, environmental effects) and disadvantages of the regulation (costs, impacts to the EGU sector, and society). EPA has also offered an alternative methodology which compares the monetized benefits and consequences of the rule.
APPA said that the public power community has expended substantial resources to comply with MATS. “Notably, our support does not extend to all aspects of EPA’s ‘appropriate and necessary’ methodology and analysis in the proposed rule. We note that the Section 112(n)(1)(A) analysis is a one-time event and has no application in other Clean Air Act contexts. The proposed rule should have no precedential influence in other Clean Air Act regulatory frameworks.”
The BCA monetizes the benefits and consequences of the rule. The proposed rule, using the BCA approach, found that the benefits of MATS regulation far exceed costs, even without accounting for nonmonetized benefits of reduction.
The BCA approach is “a reliable, analytic approach to tally benefits and costs of regulating EGUs under Section 112,” APPA said. APPA said it supports EPA’s decision in the proposed rule, reiterating the need for regulatory certainty.
APPA, Other Groups Send Letter To EPA
Meanwhile, in an April 11 letter to EPA, APPA and other trade groups and unions said that restoring the appropriate and necessary determination responds to the Supreme Court’s decision in Michigan v. EPA that EPA must consider costs in evaluating whether it is “appropriate and necessary” to regulate “and enables electric companies to remain focused on getting the energy we provide as clean as we can as fast as we can, while maintaining the reliability and affordability that our customers value.”
The groups also said that should EPA move forward with any reconsideration of the RTR, it should ensure that any new standards are consistent with the ongoing transition of the power sector and allow for companies to make holistic decisions as they deploy additional clean energy resources.
Along with APPA, the following groups signed on to the letter:
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