EPA’s final suite of power plant rules

Environmental Compliance News

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Stronger carbon pollution standards for new gas and existing coal power plants

The final rule includes subcategories that recognize the fact that the older and more heavily used a power plant is, the more cost-effective it is to install controls for carbon dioxide (CO2) emissions. For new combustion turbines, the final rule establishes three subcategories based on how intensively they’re operated:

New baseload turbines (defined as units that are generating at least 40% of their maximum annual capacity, i.e., greater than 40% capacity factor) are subject to an initial "phase one" standard based on efficient design and operation of combined-cycle turbines and a "phase two" standard based on 90% capture of CO2 with a compliance deadline of January 1, 2032.
New intermediate-load turbines (defined as units that are generating between 20% and 40% of their maximum annual capacity, i.e., 20% to 40% capacity factor) are subject to a standard based on efficient design and operation of simple-cycle turbines.
New low-load turbines (defined as units that are generating less than 20% of their maximum annual capacity, i.e., less than 20% capacity factor) are subject to a standard based on low-emitting fuel.

For existing coal-fired electricity-generating units (EGUs), the final rule establishes subcategories based on how far into the future the plant intends to operate:

Units that intend to operate on or after January 1, 2039 (i.e., “long-term” units), will have a numeric emissions rate limit based on application of carbon capture and sequestration (CCS) with 90% capture, which they must meet on January 1, 2032.
Units that have committed to cease operations by January 1, 2039 (i.e., “medium-term” units), will have a numeric emissions rate limit based on 40% natural gas co-firing that they must meet on January 1, 2030.
Units that demonstrate they plan to permanently cease operations before January 1, 2032, will have no emissions reduction obligations under the rule.

For existing units, states can provide a variance for individual sources based on the consideration of remaining useful life and other factors. An alternative standard may be appropriate when an individual existing source has fundamentally different circumstances than those considered by the EPA and the source can’t reasonably achieve this required degree of emissions limitation.

For existing coal-fired power plants and other existing steam-generating units, these rules outline a process—as required by the Clean Air Act (CAA)—by which states must submit plans to the EPA for establishing standards.

Under this process, states will have 2 years from the publication date of these rules to submit plans to the EPA for review and approval.
The rule requires that states include a description of their meaningful engagement with a range of stakeholders in developing their plans, including communities that are affected by air pollution from existing power plants, energy communities and workers, small businesses, and reliability authorities. This process is intended to help ensure states consider the needs of impacted communities and stakeholders in deciding appropriate standards and compliance strategies for existing power plants.
These rules also provide states with a range of flexibilities, including clear articulation on how localized circumstances can be reflected in compliance requirements under Remaining Useful Life and Other Factors (RULOFs), provisions for allowing emissions trading and averaging that maintain the environmental integrity of the standards, and a pathway for sources to seek a 1-year compliance extension for unanticipated delays with control technology implementation that are outside the owner’s or operator's control.
The EPA also has added two optional reliability-related mechanisms that states may choose to incorporate into their plans. One is a short-term reliability mechanism for units responding to declared grid emergencies. (This mechanism is also available to new units.) The other is a reliability assurance mechanism for units with cease operations dates that may need to stay online longer than anticipated due to documented reliability needs.

West Virginia v. EPA

In this rulemaking, the “EPA attempted to address the Supreme Court’s decision in West Virginia v. EPA—a 2022 case that announced the ‘major questions doctrine,’ which is a judicial rule that limits federal agencies from passing regulations with ‘vast economic and political significance’ without clear Congressional authorization,” K&L Gates says. “Using the major questions doctrine, West Virginia rejected the EPA’s assertion of authority underlying its 2015 Clean Power Plan (CPP). In the CPP, EPA read section 111 of the [CAA’s] BSER (best system of emissions reduction) language to include ‘generation shifting.’ The Supreme Court found that this reading of the BSER raised a ‘major question’ because it would essentially allow the EPA to shut down coal power plants altogether, substantially restructuring the American energy market. In the face of this major question, the court concluded that Congress had not clearly authorized a regulation of such magnitude.

“In its current rulemaking, EPA noted that the West Virginia decision declined to address the lower court’s conclusion that CAA section 111 does not limit the type of system that EPA could consider as the BSER at an individual source. In EPA’s view, the Supreme Court confirmed that section 111 authorizes the EPA to determine the BSER and the degree of emission limitation that state plans must achieve. Accordingly, in this final rule, EPA specifically considers CCS as the BSER by which to measure emissions reduction, which it contends, is not in conflict with West Virgina v. EPA. EPA asserts that this final rule is consistent with the West Virgina decision and does not implicate the major questions doctrine.”

New litigation

Led by West Virginia Attorney General Patrick Morrisey, a coalition of 25 states recently announced they had filed suit against the EPA to block this new rule, alleging “that the rule exceeds the EPA’s authority under the [CAA], and that the administration’s newly promulgated suite of standards is ‘aimed at destroying traditional energy providers,’” says a Lexology article by law firm Troutman Pepper.

West Virgina has a long history of fighting against any rules regulating coal-fired power plant emissions.

“As these rulemakings have made clear, EPA is attempting to shut down existing coal-fired power plants and to stop new plants from being built,” according to Morrisey’s website. “These rules will cause West Virginia coal miners to lose their jobs and West Virginians’ electricity bills to skyrocket. EPA’s actions will upset the careful balance of ensuring reliable, affordable electricity while encouraging job growth and responsible protection of the environment. Because EPA's actions are destructive to West Virginia, the Office of Attorney General is taking every reasonably necessary action to stop them.”

Strengthening MATS

In the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for Coal- and Oil-Fired Electric Utility Steam Generating Units, also known as MATS, the EPA set technology-based emissions standards for mercury and other hazardous air pollutants (HAPs) emitted by units with a capacity of more than 25 megawatts.

The final rule reduces the mercury emissions limit by 70% for lignite-fired units and reduces the emissions limit for toxic metals by 67% for all coal plants while requiring the use of continuous emissions monitoring systems to provide real-time, accurate data to regulators, facility operators, and the public to ensure plants are meeting these lower limits and that communities are protected year-round from pollution exposure.

Stronger limits on water pollution from power plants

The third rule in the PPRs strengthens wastewater discharge standards that apply to coal-fired power plants by reducing discharges of toxic metals and other pollutants from these power plants into lakes, streams, and other water bodies.

Following EPA Clean Water Act (CWA) authority, the Agency predicts this action will prevent more than 660 million pounds of pollution per year from being discharged into water systems, protecting freshwater resources that provide sources of drinking water for communities, support economic development, enhance outdoor recreation, and sustain vibrant ecosystems.

Power plants that burn coal to create electricity use large volumes of water. When this water is returned to lakes, streams, and other water bodies, it can carry pollutants, including mercury, arsenic, selenium, nickel, bromide, chloride, iodide, and nutrient pollution.

The EPA’s final rule establishes technology-based discharge standards—known as Effluent Limitation Guidelines (ELGs)—that will apply to four types of wastewater:

Flue gas desulfurization wastewater
Bottom ash transport water
Combustion residual leachate
“Legacy wastewater” that’s stored in surface impoundments (for example, coal ash ponds)

The Agency’s final rule includes implementation flexibilities for power plants. For example, the final rule creates a new compliance path for EGUs that permanently stop burning coal by 2034. These units will be able to continue meeting existing requirements instead of the requirements contained in this final regulation. In a separate action finalized last year, the EPA updated but maintained an existing provision allowing units to comply with less stringent standards if they’ll permanently stop burning coal by 2028.

Protecting communities from coal ash contamination

This final rule, under the Resource Conservation and Recovery Act (RCRA), is expected to protect communities and hold polluters accountable for controlling and cleaning up the contamination created by the disposal of coal combustion residuals (CCR or coal ash), which can pose serious risks to public health. The Agency is finalizing regulations that require the safe management of coal ash at inactive surface impoundments at inactive power plants and historical coal ash disposal areas.

The final rule requires “groundwater monitoring, corrective action, closure and post-closure care requirements for [CCR] management units when they are located at active or inactive facilities with legacy CCR surface impoundment,” K&L Gates says. “Entities must also issue public reports identifying the units, including figures of the facilities where the units are located and the sizes of the units. This rule becomes effective on 25 October 2024.”

Without proper management, coal ash, which is created by burning coal in power plants, can pollute waterways, groundwater, drinking water, and the air. It contains contaminants like mercury, cadmium, chromium, and arsenic, which are associated with cancer and various other serious health effects.

The final rule expands protections for the communities and ecosystems near active and inactive coal-burning power plants, ensuring groundwater contamination, surface water contamination, fugitive dust, floods and impoundment overflows, and threats to wildlife are all addressed.

Typically, inactive coal ash surface impoundments at inactive facilities—referred to as “legacy CCR surface impoundments”—are more likely to be unlined and unmonitored, making them more prone to leaks and structural problems than units at facilities that are currently in service. To address these concerns, the EPA established safeguards for legacy coal ash surface impoundments that largely mirror those for inactive impoundments at active facilities, including requiring the proper closure of the impoundments and remediating coal ash contamination in groundwater.

In addition, through implementation of the 2015 CCR rule, the EPA found “historic” disposal units that are leaking and contaminating groundwater at currently regulated power plants but that were exempt under the original 2015 regulations. These are areas where coal ash was placed directly on the land, such as coal ash in surface impoundments and landfills that closed before the effective date of the 2015 CCR rule and inactive CCR landfills. This final rule extends a subset of the EPA’s existing CCR requirements to these historic disposal units that will ensure any contamination from these areas is remediated and will prevent further contamination. These requirements will apply to all active CCR facilities and inactive facilities with legacy CCR surface impoundments.

The EPA doesn’t expect this rule to affect power plants’ current operations, and it therefore doesn’t anticipate impacts to electricity generation or grid reliability.

Opposition to the PPRs

The new rules mean all existing coal-fired plants and new natural gas-powered plants will be required to capture 90% of emissions. Coal-fired plants must reduce mercury emissions by 60%, and plants using brown coal will be required to reduce mercury emissions by 70%, according to an opinion piece by The Post and Courier.

“The rules exempt natural gas-powered plants already operating in the United States but will apply to future natural gas facilities,” The Post and Courier article says. “The downside is the rules will almost certainly mean less investment in natural gas power generation at a time when the push to auto electrification is straining the ability of the grid to meet demand.”

Additionally, industry experts, including Edison Electric Institute President and CEO Dan Brouillette, don’t believe CCS technology will meet the demand for full-scale use by 2032, when the regulations are scheduled to become effective, The Post and Courier adds.

“EPA’s finalized Power Plant Rules nest within the Biden Administration’s commitment to provide regulatory certainty in a transition to a clean energy economy,” K&L Gates says. “But broad opposition is forming from industry, certain state and federal political leaders, and electricity customers. Industry opponents argue that burdening new gas plants will impact energy reliability and affordability—particularly in the Southeastern United States, where the coal industry argues that the rules further force closer of operating coal plants.”

The one certainty about the new regulations is that they’ll be challenged in the federal court system and will likely end up before the U.S. Supreme Court.

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