Surprise -- EPA's Proposed CO2 Control Regulation Would Affect More Than Just Coal Utility Boilers

by Pierce Atwood LLP

Anyone who has read the newspaper or watched the news in the past month will know that EPA has proposed a regulation that would require coal-powered plants to reduce greenhouse gas (primarily carbon dioxide (CO2)) emissions.  What is less apparent from the reporting is the fact that EPA’s proposed rule for existing units (published in the Federal Register on June 18, 2014) would affect other types of boilers and electrical generating units, including certain industrial boilers.  If a source operates a boiler that supplies steam to an electrical generating turbine, the source should review EPA’s proposed CO2 regulation carefully to determine whether it may impact its boiler.  If so, the facility will want to consider assessing the impacts of the proposed regulation and the potential to submit comments to EPA on the proposal during the public comment period that expires October 16, 2014.

The key applicability criteria of the proposed regulation are as follows:

  • “Any affected steam generating unit…that commences construction on or before January 8, 2014.”
  • An “affected steam generating unit” is:
    • “A steam generating unit…that has a base load rating greater than 73 MW (250 MMBtu/hr) heat input of fossil fuel (either alone or in combination with any other fuel) and was constructed for the purposes of supplying one-third or more of its potential electric output and more than 219,000 MWh net-electric output to a utility distribution system on an annual basis.”
  • “Base load rating” means “the maximum amount of heat input (fuel) that a steam generating unit can combust on a steady state basis, as determined by the physical design and characteristics of the steam generating unit at ISO conditions….”
  • “Net-electric output” means “the amount of gross generation the generators produce (including, but not limited to, output from steam turbines, combustion turbines, and gas expanders), as measured at the generator terminals, less the electricity used to operate the plant (i.e., auxiliary loads)….”

Some initial observations that may be of concern and have not been evident from the national reporting on this regulation: 

  • Under the definitions above, a unit could be an affected electric generating unit (EGU)  if it burns ANY amount of fossil fuel.  Applicability is not based on a unit burning a certain amount of coal.
  • It appears that a unit otherwise meeting the applicability criteria, could not avoid being subject to the regulation by obtaining a license condition limiting a unit to burning less than 250 MMBtu/hr of fossil fuel.
  • The Preamble to the proposed regulation makes it clear that EPA will consider use of biomass to be CO2 reduction strategy.  However, the rule does not exempt facilities that burn primarily biomass and only a small percentage of fossil fuel.
  • Under the proposed definitions, it appears that applicability is based on the original purpose for which the unit was constructed – not how a unit has actually performed or how it will perform. 

The proposed rule would require states to develop plans to achieve statewide performance goals based on the average of all affected EGUs.  The performance goals:

  • Maine:

    Interim (2020-2029) = 393 lbs CO2 per net MWh
    Final (2029 and thereafter) = 378 lbs CO2 per net MWh
  • New Hampshire:

    Interim (2020-2029) = 546 lbs CO2 per net MWh
    Final (2029 and thereafter) = 486 lbs CO2 per net MWh
  • Massachusetts:

    Interim (2020-2029) = 655 lbs CO2 per net MWh
    Final (2029 and thereafter) = 576 lbs CO2 per net MWh

States are given a great deal of flexibility to develop a plan that achieves performance goals.  However, state plans must identify affected EGUs and the performance requirements and compliance schedules for all such 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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