Enforcement and Inspection

Coal-Fired Utility NSR Violations

Coal-Fired Utility NSR Violations

Power plants and other major sources of air pollution in attainment areas are required to comply with NSR requirements for Prevention of Significant Deterioration (PSD) when constructing new sources and when making major modifications at existing sources. These requirements include installing best available control technology (BACT) and undertaking an air quality analysis, an additional impacts analysis, and public involvement.

In July 2014, the EPA and the U.S. Department of Justice (DOJ) announced a settlement with one major power company in Minnesota that failed to meet these requirements during major modifications, resulting in considerable penalties and environmental mitigation projects. The company serves 16 municipalities and some of the nation’s largest industrial electricity customers. Plants subject to the settlement have a combined capacity of 1,450 megawatts (MW) and 350,000 pounds per hour of steam generation. The plants include:

  • Cohasset—four coal-fired electric utility steam-generating units identified as Units 1, 2, 3, and 4,
  • Hoyt Lakes— two coal-fired units, Units 3 and 4,
  • Schroeder—three coal-fired electric utility steam-generating units identified as Taconite Harbor 1, 2, and 3, and
  • Grand Rapids—two industrial biomass-and-coal-fired steam and electricity cogeneration units, co-located at a paper mill.

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Following EPA inspections, one notice of violation (NOV) was issued for two of the company’s plants in 2008 and, in 2011, a third plant was also cited. Both of the NOVs alleged the company performed projects that triggered PSD applicability, and the EPA also alleged violations of the CAA for failure to submit an application to include all applicable requirements in the company’s Title V permits, as well as New Source Performance Standard (NSPS) violations.

Under the settlement, all of the company’s coal-fired power units and its one biomass-and-coal-fired steam and electricity cogeneration plant will be impacted by diverse requirements such as retirement, refueling, or repowering units; installation of new emissions technologies; combustion optimization; optimization of existing particulate matter (PM) controls; capping heat input from coal; and surrendering excess sulfur dioxide (SO2) and nitrogen oxide (NOx) allowances resulting from the settlement actions.

Overall, the EPA expects the following emissions reductions (compared to 2010 emissions) to result from the settlement:

  • SO2—about 8,500 tons per year
  • NOx—about 4,200 tons per year
  • PM—about 650 tons per year

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In addition to approximately $500 million for the new emissions controls and a civil penalty of $1.4 million, the company will also spend $4.2 million on environmental mitigation projects, including:

  • $2,000,000 for Large-Scale Solar Photovoltaic Development on Fond du Lac Tribal Land – the array will have 1.0 MW of capacity. The project is estimated at about $2.5 million and the Band has indicated its willingness to cover the remainder of the costs and will retain all renewable energy credits and other environmental benefits solely for its own use.
  • $500,000 and $1,000,000 to sponsor a Residential Wood-Burning Appliance Change-Out Project in 17 counties within or near the company’s service area.
  • $200,000 for U.S. National Park Service Funding for Land Restoration Project—To address damage from the company’s alleged excess emissions to wetlands in Voyageurs National Park in International Falls, Minnesota.

The company must also choose to perform a selection of the following projects:

  • Up to $750,000 for a Land Donation and Restoration Project—To donate and/or restore lands alleged to have been adversely affected by emissions from Minnesota Power’s plants.
  • Up to $1,500,000 for a Small-Scale Solar Photovoltaic, Solar Water Heating, and Geothermal Project—To install the technologies on buildings or sites owned or operated by public schools, nonprofit groups, and/or federal, state, or local governments located within the company’s service territory.
  • Up to $500,000 for a Clean Diesel Project—To complete projects to significantly reduce emissions from diesel engines/vehicles that serve public needs in Northern Minnesota.
  • Up to $500,000 for an Electric Vehicle Infrastructure Enhancement Project—To fund the installation of electric vehicle charging stations in Northern Minnesota. The stations will be powered by solar or wind energy and, thus, will be considered zero emissions.

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