APPA Urges EPA To Withdraw Proposed Ozone Federal Implementation Plan

by Paul Ciampoli
APPA News Director
July 8, 2022

The Environmental Protection Agency (EPA) should withdraw a proposed Federal Implementation Plan (FIP) addressing regional ozone transport for the 2015 Ozone National Ambient Air Quality Standards, the American Public Power Association (APPA) said in recent comments.

The proposed FIP provides for ozone season NOx reductions from electric generating units and industrial stationary sources.  For EGUs, EPA proposed unprecedented NOx reductions due to effective retirements due to costly selective catalytic reduction (SCR) installation requirements and timeframes in addition to reduced capacity factors.  The proposed FIP also introduces stringent new concepts such as a daily NOx rate, dynamic budgeting, and routine allowance bank recalibrations.

APPA’s June 21 comments recommend EPA publish a supplemental proposed rule that would correct many of the errors and assumptions under which the proposal is basedEPA published the proposed FIP in April 2022.

In the proposed rule, EPA claims to adhere closely to the four-step Cross-State Air Pollution Rule (CSAPR) framework that it has used in recent interstate transport rules to address interstate transport for the 2015 ozone national ambient air quality standard (NAAQS).

At the same time, EPA outlined changes to reflect “lessons learned from the performance of regulatory programs established by previous interstate transport rulemakings” and to incorporate “recent information on the nature of ozone transport and emissions reductions opportunities.”

“This is a vast understatement of the magnitude of the Proposed Rule’s deviations from EPA’s CSAPR framework,” APPA said.

EPA’s proposed changes to the electric generating unit trading program – including “dynamic budgets” and other proposed “enhancements” — exceed EPA’s authority under the Clean Air Act, APPA asserted.

To the extent EPA moves forward with its proposal, APPA offered a set of recommendations to improve implementation.

It said that EPA should undertake full notice-and-comment rulemaking if the agency adjusts state emission budgets from year to year and where state emission budgets are subject to year-over-year change, EPA should conduct an overcontrol analysis in those years.

EPA should also correct its air quality modeling in urban coastal areas to account for the unique characteristics of ozone formation in those areas. EPA must also conduct a new overcontrol analysis of these coastal areas using corrected modeling, APPA said.

EPA should increase compliance flexibility in the Groups 2 and 3 trading programs, it added.

And EPA should update its Reference Case analysis, NOx control technology modeling, cost projections, and equipment installation timelines, APPA said.

Reliability Concerns

Other industry stakeholders such as regional transmission organizations (RTO) and independent system operators (ISO) commenters raised concerns with EPA’s proposed FIP, pointing to energy reliability concerns due to the forecasted and rapid loss of fossil-fuel-fired generation by 2026.

In a joint set of comments filed by the Electric Reliability Council of Texas, Inc.; Midcontinental Independent System Operator, Inc. (MISO); PJM Interconnection, L.L.C. (PJM); and Southwest Power Pool, Inc. (SPP) the RTOs/ISOs observe that the proposed FIP could cause reliability challenges because:

•            RTOs/ISOs are currently experiencing declining reserves when higher reserve margins are needed to address “extreme weather, high load conditions and generator retirements;”

•            Time is needed to construct new generation and build transmission facilities;

•            Thermal generators provide essential reliability services;

•            The SCR installation date in 2026 presents a potential grid reliability concern due to likely retirements; and

•            The Proposed Rule may cause non-retiring assets to operate at lower levels.

 The RTOs/ISOs advocated for a “Reliability Safety Valve.” The Safety Valve concept was floated as part of the Clean Power Plan, as well. Here, the specifics of a safety valve are not defined in the Joint comments, but the RTOs/ISOs stated that it would not be a “blanket exemption” from compliance.  Rather, a safety valve would be “tools and processes” tailored to address reliability issues.

Now that the comment period is closed EPA will be working to review the comments and draft a final rule which is expected next March.