Appeals court rules for EPA over Oklahoma coal plant mandate

A federal appeals court on July 19 ruled that the U.S. Environmental Protection Agency had the authority to impose its own regional haze requirements on four coal units in Oklahoma after the agency rejected a more lenient haze plan from the state.

The ruling came from a three-judge panel at the U.S. Tenth Circuit Court of Appeals in a case involving Best Available Retrofit Technology (BART) determinations under the regional haze rule. The petitioners in this case included the state of Oklahoma, the Oklahoma Industrial Energy Consumers group and Oklahoma Gas and Electric (OG&E).

The petitioners argued that the EPA impermissibly rejected Oklahoma’s plan to limit the emissions of SO2 at two Oklahoma Gas and Electric power plants and replaced it with its own more stringent regulations, which petitioners contended usurped the state’s authority and will require sizable expenditures on unnecessary technology. “We conclude that the EPA has authority to review the state’s plan and that it lawfully exercised that authority in rejecting it and promulgating its own,” said the July 19 ruling. “Exercising our jurisdiction under 42 U.S.C. § 7607(b)(1), we deny the petitions for review.”

The contested requirements from EPA came under an agency Federal Implementation Plan (FIP), which overrode an Oklahoma State Implementation Plan (SIP). At issue in the petition to the appeals court were the SIP’s BART determinations with respect to two units at OG&E’s Muskogee Generating Station and two units at its Sooner Generating Station.

The Oklahoma SIP set an SO2 emissions limits of 0.65 lb/mmBtu (thirty-day average) and 0.55 lb/mmBtu (annual average) for each of these four units. The BART for each of these units included OG&E’s continued use of low-sulfur coal. The SIP considered, but rejected, an emissions limit that would require the installation of costly SO2 scrubbers.

EPA says dry scrubbers are cost effective for these units

On March 22, 2011, the EPA proposed a rule that would partially approve and partially disapprove Oklahoma’s SIP. The SO2 emission limitations for OG&E’s four units were among the parts of the SIP that the EPA proposed disapproving.

The EPA said that Oklahoma failed to follow the regulations in determining BART. Specifically, the EPA said that Oklahoma “did not properly ‘take into consideration the costs of compliance’ when it relied on cost estimates that greatly overestimated the costs of dry and wet scrubbing to conclude these controls were not cost effective.”

The EPA found the scrubbers to be substantially more cost effective than Oklahoma did. For example, Oklahoma estimated the cost of the scrubbers to be $7,147 per ton of SO2 removed at one of the Sooner units. The EPA projected a scrubber at that same unit would cost $1,291 per ton of SO2 removed.

In addition to proposing the partial disapproval of the SIP, the EPA proposed creating its own FIP in the same action. EPA proposed an SO2 emissions limit of 0.06 lb/mmBtu (thirty-day average). Based on this limit, the EPA believed the use of dry scrubbers would be cost effective. EPA in December 2011 published the final rule enacting these emissions limits.

On Feb. 24, 2012, the state of Oklahoma and the Oklahoma Industrial Energy Consumers filed in the appeals court a petition seeking review of the final rule. OG&E filed its petition for review the same day. The cases were later consolidated.

A two-judge panel of this court granted the petitioners’ motion to stay the portion of the rule requiring the reduction of SO2 emissions at the four OG&E units. The petitioners raised a number of objections to the final rule, arguing that the EPA usurped the state’s authority in an effort to force OG&E to spend more than $1bn to install unnecessary technology in the next five years.

EPA recently filed its own lawsuit about these two plants

This isn’t the only recent court action concerning these plants. The U.S. Justice Department on July 8 filed enforcement actions against these same plants, claiming that OG&E increased the output of coal-fired boilers at the plants without installing modern pollution protections.

Justice filed the case in the U.S. District Court for the Western District of Oklahoma against OG&E on behalf of EPA under the New Source Review (NSR) provisions of the Clean Air Act for modifying and operating the Sooner and Muskogee coal plants without first installing modern pollution control technology like SO2 scrubbers. The complaint focuses on plant improvements made between 2003 and 2006.

As an example of a project undertaken during that period, the EPA complaint said: “On or about September 18, 2003, OG&E began actual construction of an approximately $3.73 million overhaul of Muskogee Unit 4 that was completed and became operational on or about October 26, 2003. These modifications included one or more physical changes at Muskogee Unit 4 including the complete replacement and reconfiguration of the economizer. OG&E identified this modification as a ‘reliability’ and ‘end of life’ project intended to ‘greatly enhance the operability, efficiency, and maximum continuous net generation’ of Muskogee Unit 4.”

OG&E spokesperson Brian Alford said in a July 9 e-mail that the utility believes that it is and has been in compliance with all state and federal requirements, and intends to vigorously defend its position as it relates to the NSR complaint. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.