Energy, Regulatory Developments, Special Topics in Environmental Management

Simultaneous EPA Proposals Look to Cut Costs for Coal-Fired Power

The Trump administration is relying heavily on its environmental authority to try to reverse the declining role of coal in energy generation. Under both the Resource Conservation and Recovery Act (RCRA) and the Clean Water Act (CWA), the Agency has the power to regulate how much the coal-fired electricity sector must do and how much it must spend to dispose of and manage wastes caused by coal combustion.

In 2015, the Obama EPA issued two major rules affecting the RCRA and CWA obligations of coal-fired power plants. Both rules were challenged in court—by industry for being too stringent and by environmental groups for being too lenient. Those court opinions factor into two new proposals the Agency has issued to amend the 2015 rules. Following are summaries of the proposed actions.

Coal Combustion Residuals

The current proposal is the second containing revisions the Agency wants to make to the Obama EPA’s April 2015 final rule that established extensive requirements for the management of coal combustion residuals (CCR) generated by coal-fired power plants and placed in landfills or impoundments. Several of the proposed changes are intended to comply with the D.C. Circuit’s order in Utility Solid Waste Activities Group, et al v. EPA (USWAG). The proposal increases the stringency of portions of the 2015 rule. However, the proposal would also provide utilities with options to delay the closure of surface impoundments when they need alternative capacity to manage their wastestreams (both CCR and non-CCR waste). These deadline extensions are expected to reduce the industry’s cost of complying with the CCR regulations by about $40 million a year.

The proposal includes the following:

  • A new date of August 31, 2020, for facilities to stop placing waste into all unlined and clay-lined impoundments and either retrofit them or begin closure. The current deadline is October 31, 2020, for CCR units to cease receipt of waste and initiate closure because the unit either is an unlined or formerly clay-lined CCR surface impoundment or failed one or more location standards.
  • A revision to the provision that allows classification of clay-lined or compacted-soil lined impoundments as lined, thereby allowing such units to operate indefinitely. This proposed revision responds to a D.C. Circuit vacatur. The EPA notes that based on the data on the CCR publicly accessible websites, there are 28 active surface impoundments that certified as clay-lined. Of these 28, 7 failed at least 1 location restriction, and therefore, closure would have been required irrespective of the court decision.
  • The proposal includes the following options whereby utilities may obtain time beyond the August 31, 2020, deadline for initiating closure of their surface impoundments so they can develop alternative capacity to manage their wastestreams.
    • Facilities can obtain a 3-month extension to continue to receive CCR and/or non-CCR wastestreams to complete the development of alternative capacity. This short-term alternative is designed to be self-implementing and for units that need 3 additional months or fewer to complete the necessary measures to achieve cease-receipt of waste into the CCR surface impoundment in question.
    • For facilities that cannot initiate closure by November 30, 2020, the EPA is proposing a site-specific alternative that would allow the owner or operator to seek approval from the EPA or the participating state director to continue to operate the CCR surface impoundment for a specified amount of time. The EPA is proposing two bases on which a facility can obtain a site-specific deadline to cease receipt of waste: (1) a demonstration that development of alternate capacity for CCR and/or non-CCR cannot be completed before November 30, 2020; and (2) a demonstration of lack of capacity, as well as permanent cessation of coal-fired boilers by a certain date.

As noted, this is the second set of proposed changes to the 2015 rule. In August 2019, the EPA proposed to modify that rule by simplifying requirements applicable to beneficial use of CCR. The Agency says its two proposals would leave the “vast majority” of the 2015 rule unchanged (including, for example, monitoring and corrective action requirements). However, the EPA also indicates that it is not done with rulemaking to amend the 2015 action.

Effluent Limitations and Guidelines              

Also in 2015, the Obama EPA issued revisions to effluent limitations guidelines and standards (ELGs) for existing coal-fired power plants. At that time, the Agency stated that steam electric power plants contribute the greatest amount of all toxic pollutants discharged to surface waters by industrial categories regulated under the CWA. The final rule established the first nationally applicable limits on the amount of toxic metals and other harmful pollutants that steam electric power plants are allowed to discharge in several of their largest sources of wastewater. As required by the CWA, the ELGs were based on the Best Available Technology Economically Achievable (BAT). BAT is intended to reflect the highest level of pollution control in the industry.

In its proposal, the EPA notes that since the 2015 rulemaking, it has obtained additional information specific to BAT for two of the largest wastestreams subject to the ELGs—flue gas desulfurization (FGD) wastewater and bottom ash (BA) transport water. According to the EPA, these technologies are more affordable than those used to write the 2015 regulations and are capable of removing a similar amount of pollution. The proposal affects only the FGD and BA wastestreams and does not seek to alter ELGs affecting other pollutants regulated under the 2015 rule.

The proposed rule would revise BAT and apply it to the following:

  • Two sets of limitations for FGD wastewater. The first is a numeric effluent limitation on total suspended solids (TSS) in the discharge of FGD wastewater. The second comprises numeric effluent limitations on mercury, arsenic, selenium, and nitrate/nitrite as nitrogen in the discharge of FGD wastewater.
  • Two sets of limitations for ash transport water. The first is a numeric effluent limitation on TSS in the discharge of these wastewaters. The second is a not-to-exceed 10 percent volumetric purge limitation.

In addition, the proposal includes:

  • Separate requirements for high-flow facilities, low-utilization boilers, and boilers retiring by 2028.
  • A voluntary incentives program that provides more time (until December 31, 2028) for facilities to implement new standards and limitations if they adopt additional process changes and controls that achieve more stringent limitations on mercury, arsenic, selenium, nitrate/nitrite, bromide, and total dissolved solids in FGD wastewater.

“The proposed modifications to the 2015 rule will reduce compliance costs, saving approximately $175 million pre-tax annually, while also further reducing the pollutant discharges over the 2015 rule,” says the EPA. “Cost savings are primarily attributable to lower technology costs associated with the pollutant control systems available today to effectively treat and manage the wastewater, flexibility in the management of those systems, additional subcategorization of affected power plants, and establishing new compliance timeframes.”

The pivotal court decision in the Agency’s ELG proposal is by the 5th Circuit in Southwestern Electric Power Company v. EPA. In that decision, the court vacated portions of the 2015 rule and remanded them to the Agency for reconsideration.