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EPA Issues First Mercury And Air Toxics Standards For Utilities

Alert
12.21.2011

Summary of Action

Today, the U.S. Environmental Protection Agency ("EPA") announced the issuance of final Mercury and Air Toxics Standards ("MATS") establishing National Emission Standards for Hazardous Air Pollutants ("NESHAPs") from coal and oil-fired utility steam generating units.  The MATS sets technology-based emission limitation standards for mercury ("Hg"), arsenic ("As"), chromium ("Cr"), nickel ("Ni"), particulate matter ("PM")(a surrogate for toxic non-mercury metals), and acid gases, including hydrogen chloride ("HCl")(a surrogate for toxic acid gases), and hydrogen fluoride ("HF").
 
The final rule establishes a standard for SO2 (as an alternative to HCl) and individual non-mercury metal air toxics (as an alternative to PM), as well as total non-mercury metal air toxics for certain subcategories of power plants. The proposed rule also includes revised New Source Performance Standards ("NSPS") for new oil- and coal-fired power plants.  The revised NSPS would limit emissions of particulate matter (PM), sulfur dioxide (SO2), and nitrogen oxides (NOX).

Legal challenges to these final MATS are expected.  The proposed rule received significant interest -- EPA received roughly 900,000 comments.  Of the 900,000 comments, EPA deemed 20,000 of the comments to be unique.  Pursuant to the Clean Air Act ("CAA") and the Administrative Procedures Act, EPA has the discretion to stay the effective date of a final rule pending the outcome of litigation.  There has been no indication that EPA will initiate such a stay following the inevitable legal challenege to the rule.  Even if the proposed standards are not stayed, however, existing facilities have at least three years (and possibly a fourth year if entities ) to comply with the standards.

Background

Section 112 of the CAA requires EPA to establish NESHAPS for major (and area) sources of hazardous air pollutants ("HAPS") that are subject to regulation. Major sources generally must install and operate maximum achievable control technology ("MACT") to limit HAPS emissions.  For new sources, MACT-based emissions standards cannot be less stringent than the emissions control achieved in practice by the best-controlled similar source.  MACT-based standards for existing sources may be less stringent than standards for new sources but can not be less stringent than the average emission limitation achieved by the best performing 12 percent of existing sources.

On December 20, 2000, EPA issued a determination (pursuant to Section 112(n)(1) of the CAA) that it was appropriate and necessary to include coal- and oil-fired power plants among HAPS sources subject to regulation.  On March 29, 2005, EPA decided to delist these utilities from regulation. 

On May 18, 2005, EPA issued a final rule on mercury emissions from new and existing coal-fired power plants.  The so-called Clean Air Mercury Rule (CAMR) set  NSPS for new coal-fired power plants under Section 111 of the CAA, and established a national mercury cap and trade program for electric generating units, allocating a mercury emission budget to each state.  CAMR was designed to reduce mercury emissions from electric generating plants by 70 percent by 2018.  CAMR was appealed and the U.S. Court of Appeals for the D.C. Circuit, on February 8, 2008, remanded CAMR to EPA.

On December 18, 2008, EPA was sued for its alleged failure to issue MACT-based NESHAPS for coal- and oil-fired electric power plants. That lawsuit resulted in an October 2009 consent decree under which the MATS rulemaking proceeding was initiated.   EPA agreed to issue a final rule by November 16, 2011, but after receiving over 900,000 comments, requested a 30-day extension to issue the final rule.  EPA reports that it signed the final rule on December 16, 2011. 

Implications

An EPA Fact Sheet issued today states that the MATS will impact approximately 1,100 existing coal-fired units and 300 oil-fired units at approximately 600 power plants.  EPA represents that a wide range of economically feasible technologies are available to power plants to meet the emissions limits, including wet and dry scrubbers, dry sorbent injection systems, activated carbon injection systems, and fabric filters. 
While some existing coal-fired plants will meet the proposedstandards, EPA estimates that 40 percent of coal-fired plants lack advanced pollution control equipment, and the annual cost of the rule on utilities would be $10.9 billion by 2015. 

Questions?

If you have questions regarding this rule or would like assistance understanding its implications, please contact Jeff Talbert or David Van Slyke with Preti Flaherty's Environmental Group.