Nebraska Sues U.S. EPA Over Proposed Greenhouse Gas Emissions Standards for New Power Plants

by Stoel Rives LLP
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Nebraska filed suit against the U.S. Environmental Protection Agency (EPA) in federal court on Wednesday, challenging the agency’s newly proposed standards for greenhouse gas emissions from new power plants. Nebraska argues that EPA’s proposed regulation, officially released last week, violates the Energy Policy Act of 2005. The Act prohibits EPA from considering new technology or a level of emissions reduction to be “adequately demonstrated” under the Clean Air Act where the emissions reduction is achieved ‘solely by reason of the use of the technology’ by one or more facilities receiving funding under the Act. Under the Clean Air Act, any new source performance standard (NSPS) must be based on the “best system of emissions reduction” that EPA determines has been “adequately demonstrated.”

EPA has proposed a greenhouse gas NSPS for new fossil fuel-fired boilers, including coal-fired power plants, based on the partial implementation of carbon capture and storage (CCS). EPA’s notice of the proposed NSPS cites to various facilities that have successfully implemented CCS, adequately demonstrating the commercial viability of the technology as a basis for the stringent greenhouse gas emissions standard of 1,000 to 1,100 lb CO2/MWh. The flaw, Nebraska argues, is that the very CCS projects that support EPA’s determination have all received significant funding under the Energy Policy Act, which prohibits EPA from considering such technology as “adequately demonstrated.” Nebraska, and other critics of the proposed standard, argue that the proposed NSPS would severely limit the construction of any new coal-fired plants in the U.S. 

Nebraska’s lawsuit may be more of a political statement than anything, however. The suit challenges the proposed rule under the Administrative Procedure Act as a “final” action of EPA. The “proposed” NSPS was just released, however. The proposed rule is open for public comment until March 10, 2014 and may not be finalized by EPA until mid-2015. The Nebraska suit is wide open to challenge on the basis that the case is not ripe for judicial review until a final NSPS has been issued by EPA.

For more details on the proposed NSPS, including the standards proposed for natural gas-fired facilities,

EPA issued a pre-publication version of the proposed greenhouse gas NSPS last September, but just released notice of the official proposal last week, on January 8. The primary elements of the NSPS proposed last week do not appear to differ substantively from those published in September.  

The proposed emissions standards are: 

  • 1,000 lb CO2/MWh, for natural gas-fired stationary combustion turbines with a heat input rating greater than 850 MMBtu/hr.
  • 1,100 lb CO2/MWh, for natural gas-fired stationary combustion turbines with a heat input rating less than or equal to 850 MMBtu/hr.
  • 1,100 lb CO2/MWh, for fossil fuel-fired boilers, calculated on a 12 month rolling average.  Alternatively, 1,000 lb CO2/MWh to 1,050 lb CO2/MWh, calculated on a 84 month rolling average.

EPA has proposed the above standards, but is soliciting comments on a range for each of the emissions standards:

  • 950-1,000 lb/MWh for combustion turbines greater than 850 MMBtu/h.
  • 1,000-1,200 lb/MWh for combustion turbines less than or equal to 850 MMBtu/h.
  • 1,000-1,200 lb/MWh for fossil fuel-fired boilers.

As mentioned above, the standard for fossil fuel-fired boilers is based on partial implementation of CCS, as the best system of emission reduction. The standards for natural gas-fired combustion turbines are based on the use of the latest combined cycle technology. Exceptions to the proposed NSPS are designed to exclude simple-cycle peaker plants; stationary combustion turbines that use fuels other than natural gas are also expressly excluded.  The proposed NSPS applies only if a unit:

  • is capable of combusting more than 250 MMBtu/h heat input of fossil fuel,
  • supplies more than one-third of its electric output capacity to the grid, calculated on a three-year rolling average,
  • supplies more than 219,000 MWh net electric output capacity to the grid annually, calculated on a three-year rolling average, and
  • more than 10% of the heat input over the three-year period is derived from fossil fuel.  

The draft rule replaces a previously proposed NSPS for greenhouse gases from new power plant, published by EPA in April 2012. EPA received an incredible 2.5 million comments on the proposed rule, which proposed a single standard for all power plants of 1,000 lb CO2/MWh. EPA withdrew the April 2012 proposal, in favor of the proposed standards issued last week. The proposed rule differs significantly from the previous iteration in proposing separate standards of performance for natural gas-fired stationary combustion turbines and for fossil fuel-fired electric utility steam generating units and integrated gasification combined cycle units.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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