EPA files New Source Review complaint against OG&E

The U.S. Justice Department on July 8 filed enforcement actions against two coal-fired power plants operated by Oklahoma Gas and Electric (OG&E), 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 the U.S. Environmental Protection Agency 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.”

Around the time OG&E began construction on these projects, OG&E sent a report to Oklahoma Department of Environmental Quality (ODEQ) describing each project and purporting to set forth NSR applicability analyses for each project, said EPA. In each instance, OG&E failed to include a projection of post-project emissions as required by EPA and ODEQ regulations, it added. Instead, in each letter, the company proposed to limit emissions from the generating units such that the emission increase would not exceed the prevention of significant deterioration (PSD) significant threshold increase level during the five years following each project. OG&E described this as its “proposed plan of action for compliance” with the Clean Air Act’s (CAA) PSD requirements. “OG&E’s emissions analysis is insufficient under the CAA and implementing regulations,” the lawsuit said.

EPA said it issued a Notice of Violation (NOV) to the utility in April 2011 and provided a copy of the NOV to the state of Oklahoma. The 30-day period between issuance of the NOV and commencement of a civil action has long elapsed. OG&E’s Sooner plant consists, in part, of Units 1 and 2, which are coal-fired electric generating units. OG&E’s Muskogee plant consists, in part, of Units 4, 5, and 6, which are also coal-fired facilities.

OG&E spokesperson Brian Alford said in a July 9 e-mail that first and foremost, the utility believes that it is and has been in compliance with all state and federal requirements, and intends to vigorously defend its position. “We followed procedures, and actual monitored data indicates that emissions did not increase as a result of the work performed,” he added. “Prior to the work done between 2003 and 2006, the company provided information on each project to the Oklahoma Department of Environmental Quality that not only stated that the company’s projections showed no emissions increases resulting from the work to be performed but also that the company was committing to monitor and submit emissions data annually to verify its projections. It’s important to note that the lawsuit does not say that OG&E exceeded allowable emissions as a result of the work that was done.”

Utility parent OGE Energy (NYSE: OGE) said about the NOV in its May 2 Form 10-Q filing: “In March 2013, the DOJ informed OG&E that it was prepared to initiate enforcement litigation concerning the matters identified in the notice of violation. OG&E subsequently met with the EPA and DOJ representatives regarding the notice of violation and proposals for resolving the matter without litigation. OG&E cannot predict at this time when or if litigation will be filed against it as a result of the notice of violation and, if litigation is filed, OG&E cannot predict the outcome of such litigation, but at this time has no reason to believe that it has not acted in compliance with the Federal Clean Air Act.”

The Form 10-Q added: “The Sierra Club, an environmental organization, also has threatened to file a citizen suit under the Federal Clean Air Act alleging similar violations against OG&E, and OG&E entered an agreement with the Sierra Club to toll the statute of limitations with respect to claims the Sierra Club may assert. The EPA and the Sierra Club could seek to require OG&E to install additional pollution control equipment and pay fines and significant penalties as a result of the allegations in the notice of violation. Section 113 of the Federal Clean Air Act (along with the Federal Civil Penalties Inflation Adjustment Act of 1996) provides for civil penalties as much as $37,500 per day for each violation. The cost of any required pollution control equipment could also be significant.”

“We are glad that the Justice Department has stepped up to enforce clean air protections here in Oklahoma,” said Whitney Pearson, an Organizer with Sierra Club’s Beyond Coal Campaign, in a July 8 statement about the EPA lawsuit. “There is no longer any excuse for OG&E to hide from their responsibility. It’s time they retire their old, dirty coal plants and begin investing in smart twenty first century energy solutions. Wind power has already created thousands of jobs right here in Oklahoma and there’s plenty more where that came from. We should stop importing coal from Wyoming mines 1,000 miles away and instead invest in Oklahoma’s future.”

OG&E is also facing separate legal requirements to clean up its coal plants under the Regional Haze provisions of the Clean Air Act, which are designed to protect parks and wilderness areas and also upcoming deadlines to reduce SO2 pollution to meet national health-based air quality protections. “Today’s government action adds further pressure on OG&E to clean up or retire these aging coal plants,” the Sierra Club said in the July 8 statement.

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.