US power plants may need 'stricter controls' under new SO2 rule

Washington (Platts)--26Jul2013/237 pm EDT/1837 GMT


In a move that could have adverse implications for coal-fired electricity generators in Ohio, Pennsylvania and more than a dozen other states, the Obama administration has identified a host of areas across the US that it says do not meet national air-quality standards for sulfur dioxide.

Gina McCarthy, the newly installed head of the Environmental Protection Agency, signed a 54-page rule late Thursday that designates 29 areas in 16 states as being in "nonattainment" with national ambient air-quality standards (NAAQS) for SO2.

EPA's rule says the single largest source of SO2 -- 73% of the US total -- comes from "fossil fuel combustion at power plants." A fact sheet accompanying EPA's rule says those plants and other types of industrial facilities may have to install "stricter controls" as a result of being located in non-attainment areas for the SO2 NAAQS.

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Power plants and other industrial facilities that are located in non-attainment areas for SO2 or other pollutants can also encounter difficulties in obtaining permits to expand their operations, as state permitting agencies are under pressure from EPA to clean up the local air quality.

Still, EPA says the new non-attainment designations for SO2 will not force the power sector and other industries to spend more than $100 million annually on new pollution controls, which is the cost threshold for what the US government calls a "major" regulatory action.

"EPA believes that any new controls imposed as a result of this action will not cost in the aggregate $100 million or more annually," EPA's new rule says. "Thus, this federal action will not impose mandates that will require expenditures of $100 million or more in the aggregate in any 1 year."

Many of EPA's newly designated non-attainment areas for SO2 are located in so-called "Rust Belt" states such as Pennsylvania, Ohio, Indiana, Illinois, Missouri, which are home to many coal-fired power plants. The Phoenix, Arizona, area is also on EPA's list, as are parts of Montana, Wisconsin, Florida, Georgia, Iowa, Michigan, Tennessee and New Hampshire.

A number of electricity generators and other industries have faulted EPA in recent months over the way the agency has complied evidence of potential air-quality problems, among other things. For example, Ameren Corporation, a St. Louis, Missouri-based generator, took issue with the way that EPA measured air quality in the Pekin, Illinois, area, which is home to the company's 650-MW coal-fired Edwards Energy Center.

In a March 15 letter, Ameren disputed EPA's assertion that the power plant was a chief cause of the area's air-quality problems, saying EPA installed an air-quality monitor in an ill-advised location, and did not accurately assess the direction of the prevailing winds, among other things.

"It is presumptuous of EPA to assume that a source that emits SO2 automatically contributes to the exceedances measured without considering all relevant information," Kenneth Anderson, the managing supervisor of Ameren's air quality division, told EPA in the letter.

Now that EPA has designated non-attainment areas for SO2, state air-quality agencies will now develop plans to improve air quality in those areas. States will have 18 months to submit those plans, EPA said.

--Brian Hansen, brian.hansen@platts.com
--Edited by Katharine Fraser, katharine.fraser@platts.com

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