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EPA Final CSAPR and MATS Regulations Update

Eugene M. Trisko

General Counsel

Unions for Jobs & the Environment, Inc.

UJAE BOD Meeting

January 24, 2012

(Rev. January 31, 2012)

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Today’s topics

• Examination of proposed new source air toxics emissions in the final MATS rule

• Quick CSAPR update, and new data on the need for this rule

• Implications for jobs and coal plant retirements

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Evaluation of air permit limits for all coal power plants permitted over the past decade. (40 units in-service or currently under construction)

The 40 units:

- employ the most advanced combustion technologies available

- are equipped with state-of-the-art (BACT) emission controls

- are subject to the most stringent air permit limits ever established

If any existing coal unit could meet the final limits for New Sources, it should be among these 40 developed since 2001

None can meet all of the New Source MACT limits

New Source MATS vs. Existing Source Limits

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New Source Mercury MATS

0.013

0.015 0.015

0.017

0.018 0.018

0.008

0.00088

0.012 0.012

0.00000

0.00200

0.00400

0.00600

0.00800

0.01000

0.01200

0.01400

0.01600

0.01800

0.02000

MATS Limit forExisting Sources

0.013 lb/GWh

MATS Limit for

New Sources 0.0002 lb/GWh

Note: Historically, mercury limits have been based on annual averages. The Final MATS applies a more stringent 30-day average.

Source: Derived from AEP MATS Comments to U.S. EPA (2011).

Mercury MATS vs. Current Air Permit Limits*

(*most stringent permit limits identified by an analysis of new coal units built since 2001)

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0.080.09

0.10 0.10 0.10 0.10 0.100.11

0.12 0.12

0.0000.0070.0140.0210.0280.0350.0420.0490.0560.0630.0700.0770.0840.0910.0980.1050.1120.1190.1260.1330.1400.1470.1540.1610.1680.1750.1820.1890.1960.2030.2100.2170.2240.2310.2380.2450.2520.2590.2660.2730.2800.2870.2940.3010.308

New Source Filterable Particulate MATS

MATS Limit for Existing Sources

0.30 lb/MWh

MATS Limit for New Sources 0.007 lb/MWh

Particulate MATS vs. Current Air Permit Limits*

(*most stringent permit limits identified by an analysis of new coal units built since 2001)

Source: Derived from AEP MATS Comments to U.S. EPA (2011).

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2.5

5.2 5.45.9 6.2 6.6

2.32.2

0.003

2.0

0.0000.4000.8001.2001.6002.0002.4002.8003.2003.6004.0004.4004.8005.2005.6006.0006.4006.8007.2007.6008.0008.4008.8009.2009.600

10.00010.40010.80011.20011.60012.00012.40012.80013.20013.60014.00014.40014.80015.20015.60016.00016.40016.80017.20017.60018.00018.40018.80019.20019.60020.00020.40020.80021.20021.60022.000

New Source HCl MATS

MATS Limit for Existing Sources

20 lb/GWh

MATS Limit for New Sources 0.40 lb/GWh

HCl MATS vs. Current Air Permit Limits*

(*most stringent permit limits identified by an analysis of new coal units built since 2001)

Source: Derived from AEP MATS Comments to U.S. EPA (2011).

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Elimination of New Coal Plants?

To meet the New Source limits, owners will have to:

1) operate well beyond manufacturer performance guarantees

2) achieve emission limits that are so low that compliance will be influenced by uncontrollable variables (changes in load, minor variations in fuel chemistry, etc.), at emission rates below the detection limits of available monitoring equipment

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The new plant of the future per EPA (the one unit in the EPA database that

allegedly meets new source MATS

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Logan characteristics

• 219 MW capacity, cogen (most “best performing” units are cogenerators)

• Spray dryer scrubber and baghouse, low-NOx burner with overfire air

• Coal sourced from Upshur and Webster counties WV, average 1.2% sulfur, 12,800 BTU/lb

• Delivered cost >$4/mmbtu, >$100/ton

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Upshur & Webster counties

• In 2010, Upshur produced 567,000 tons with 105 employees.

• Webster produced 4.2 million tons with 348 employees.

• These two counties accounted for 3% of total WV 2010 production.

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MATS: Inadequate FGD retrofit time even with 4th year – non-reliability-critical units

need not apply for 5th year

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CSAPR update

• Court of Appeals stayed CSAPR on December 30, two days before it was scheduled to take effect.

• Court’s order provided additional words for petitioners’ briefs.

• January 19 order requires accelerated briefs by February, oral argument in April (decision in June-July?)

• EPA is optimistic, has not acted on petitions for administrative reconsideration.

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Is CSAPR Needed?Monitored air quality in 2008-10 versus EPA modeled estimates of air quality in 2003-07 (the basis for the SO2 and NOx

reductions in CSAPR)

Alpine Geophysicshttp://midwestozonegroup.com/files/Impacts_of_Updated_DV_Memorandum__Oct_2011_.pdf

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The jobs math

• EPA and Center for American Progress claim MATS creates 40,000 jobs.

• EPA MATS RIA shows 9,000 utility permanent jobs plus 31,000 “job-years” in construction (31,000 + 9,000).

• RIA warns not to add the two figures, notes that the 9,000 estimate is not statistically different than zero.

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Math, continued

• UMWA screening analysis (2010) estimated 54,000 direct jobs “at risk” and 251,000 direct and indirect at risk, based on 56 GW of retirements.

• NERA/ACCCE study (2011) estimates net loss of 1.65 million job-years with 39 GW capacity loss, equivalent to 239,000 permanent jobs.

• EPA final MATS RIA reduced estimated plant closures from 9.9 GW to 4.7 GW.

• EPA job estimates may be accurate if its capacity projections also are accurate.

• Most analyses put capacity loss at 30-70 GW.

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EEI List of Coal Plant Retirement Announcements (48 GW)