Depending on certain regulatory approvals related to regional haze rules, NV Energy (NYSE: NVE) expects to: retire Tracy Units 1-2; install retrofit controls on Tracy Unit 3 and Ft. Churchill Units 1-2; and install selective non-catalytic reduction (SNCR) on the coal-fired Reid Gardner Units 1-3.
NV Energy (NVE) noted in its Nov. 8 quarterly Form 10-Q report that in June 2011, the U.S. Environmental Protection Agency published in the Federal Register its proposal to approve Nevada’s State Implementation Plan (SIP) implementing the Regional Haze Rules. That plan covered affected units in Nevada, which includes units at the Reid Gardner, Tracy and Ft. Churchill plants. However, in March, the EPA approved Nevada’s SIP as it relates to all affected units and emissions, except for NOx controls at Units 1-3 at Reid Gardner. In that March Federal Register notice, the EPA stated that it intended to make a Best Available Retrofit Technology (BART) determination on those Reid Gardner units at a later date.
In August, the EPA published its final determination for NOx BART controls for Reid Gardner Units 1-3, approving and rejecting certain components of Nevada’s SIP. For the limited portions of Nevada’s SIP that EPA rejected, it put in place a Federal Implementation Plan that will remain enforceable until such time as Nevada submits a revised SIP to address the concerns the EPA noted in its August Federal Register notice. Within the August notice, the EPA approved Nevada’s determination in its SIP that the installation of SNCR represented BART for purposes of compliance with the Regional Haze Rule.
“NVE continues to work toward finalizing the retrofit designs for the affected BART units,” said the Form 10-Q. “Depending on certain regulatory approvals, NVE expects to retire Tracy Generating Station Units 1 and 2, install retrofit controls on Tracy Generating Station Unit 3, Ft. Churchill Generating Station Units 1 and 2, and install SNCRs on Reid Gardner Generating Station Units 1, 2 & 3. Compliance with the Regional Haze Rules are estimated to cost approximately $80 million over the next several years; however, these costs are preliminary and subject to change based on final engineering analysis and retirement of generating station units. NVE expects that costs incurred to comply with the Regional Haze Rules would be capitalized and recovered through the Utilities’ regulatory proceedings similar to other environmental compliance requirements.”
Enviro groups appeal EPA decisions on Nevada haze plan
Impacting this decisionmaking is the fact that environmental groups have challenged both of the EPA’s final determinations with respect to Nevada’s regional haze SIP submittal.
In May, WildEarth Guardians petitioned the U.S. Ninth Circuit Court of Appeals to review the EPA’s March approval of Nevada’s SIP for all affected units and emissions except NOx controls at Reid Gardner, alleging that the EPA’s approval did not conform to the Regional Haze Rule. NVE has intervened in that lawsuit. In October, Earthjustice, on behalf of the Moapa Band of Paiute Indians, Sierra Club, and the National Parks Conservation Association, petitioned the Ninth Circuit to review the EPA’s August final determinations for NOx controls at Reid Gardner. NVE said it intends to intervene in this lawsuit.
“At this time management is unable to determine the likelihood of success by petitioners in these litigation matters,” said the Form 10-Q. “An adverse decision in either lawsuit could impact our compliance strategy for the Tracy, Ft. Churchill and Reid Gardner Generating Stations, and could result in the requirement to install more stringent emissions controls, or the retirement of certain units earlier than currently planned.”
Reid Gardner is a coal-fueled plant with four operating units producing a total of 557 MW. Three of the units, built in 1965, 1968, and 1976, are BART eligible and were determined by the state of Nevada to be subject to BART. Each of these units produces about 100 MW. At present, the units are equipped with low NOx burners and overfire air, mechanical collectors for particulate control, wet scrubbers that use soda ash for SO2 removal and recently-installed baghouses.
Ft. Churchill Units 1-2 and Tracy Units 1-3 are oil- and gas-fired facilities.
EPA says SO2 BART decision for Reid Gardner was within its discretion
In the May lawsuit by WildEarth Guardians, EPA filed a Nov. 9 response at the appeals court that said in part: “EPA approved Nevada’s regional haze SIP containing a 0.15 lb/MMbtu 24-hour-average emissions limit for SO2 at all three Reid Gardner units with use of the wet soda ash scrubbers. In response to Guardians’ comment that the facility was actually achieving a lower emission rate, EPA explained that Guardians were comparing an annual average emission rate to a 24-hour average emission rate and that the two rates are not directly comparable. EPA noted that the BART limit of 0.15 lb/MMbtu is more than fifty percent lower than the 0.40 lbs/MMbtu 10-day-rolling-average limit in the source’s current operating permit. EPA also concluded that as result of this, there is no valid reason to suspect that Reid Gardner’s SO2 emissions will increase above what the source has been achieving under the substantially higher limit in its operating permit. Nonetheless, EPA indicated that it will use the State’s 2014 five-year progress report to determine whether any increased emissions have occurred and encourage Nevada to take appropriate action if necessary at that time.”
EPA later added in the Nov. 9 brief: “Ultimately, the determination of a BART emissions limit requires the exercise of the scientific agencies’ expertise as to what control technology is best and what emission limitation is achievable by that technology. EPA reasonably approved Nevada’s BART determination for Reid Gardner in consideration of all the relevant data, and this Court should defer to EPA’s judgment in doing so.”
Also of note is that NV Energy’s Nevada Power unit on Oct. 22 filed a notice of appeal at the Ninth Circuit of EPA’s Aug. 23 approval of the NOx BART guidelines for Reid Gardner. The notice doesn’t offer details on why the appeal was filed, just attaches the Aug. 23 Federal Register notice from EPA.