One Northeastern coal unit to shut in 2016 under new haze plan

The U.S. Environmental Protection Agency plans to withdraw a Federal Implementation Plan (FIP) covering Public Service Co. of Oklahoma’s Northeastern coal plant now that the state of Oklahoma has submitted an acceptable State Implementation Plan (SIP) for that facility.

EPA, in a notice to be published in the Aug. 21 Federal Register, is proposing to approve a revision to the Oklahoma SIP submitted on June 20 by the Oklahoma Secretary of Environment addressing the Best Available Retrofit Technology (BART) requirements for SO2 and NOX for Units 3 and 4 of the Northeastern Power Station in Rogers County.

The EPA is proposing to find that this revised BART determination meets the requirements of the Clean Air Act (CAA) and the Regional Haze Rule. EPA is also proposing to approve a related SIP revision submitted to address the impact of emissions of Northeastern Units 3 and 4 as required by CAA provisions concerning non-interference with programs to protect visibility in other states.

In conjunction with these proposed approvals, EPA proposes to withdraw FIP emission limits for SO2 that would otherwise apply to Northeastern Units 3 and 4.

The Oklahoma Department of Environmental Quality (ODEQ) submitted a Regional Haze SIP (Oklahoma RH SIP) in February 2010 to address the requirements of the regional haze program for the first implementation period. In December 2011, EPA partially approved, partially disapproved, and took no action on various portions of this SIP. EPA disapproved ODEQ’s BART determinations for SO2 emissions from six coal-fired electric generating units (EGUs): Units 4 and 5 of the Oklahoma Gas & Electric (OG&E) Muskogee plant; Units 1 and 2 of the OG&E Sooner plant, and Units 3 and 4 of Northeastern.

Concurrent with these final disapprovals, EPA promulgated a FIP that requires SO2 emission limits on these six EGUs to address deficiencies identified with the BART determinations of the SIP submittal.

Subsequent to this action, stakeholders, including Public Service parent American Electric Power (NYSE: AEP), ODEQ, and EPA, began working on the development of a revised SIP (Oklahoma RH SIP revision) designed to address BART requirements for Northeastern Units 3 and 4 for SO2 and NOX and allow for withdrawal of FIP requirements for controls of SO2 that are applicable to those units.

On June 20, ODEQ submitted a revised BART for SO2 and NOX and a related revision to the SIP addressing requirements to prevent interstate transport of emissions from interfering with other states’ plans to address visibility impairment.

The basics of this new emissions control program have been in the works for some time, with Public Service seeking an approval from the Oklahoma Corporation Commission for these controls.

Revised NOx limits:

The Oklahoma RH SIP Revision explains that it does not reopen the prior and EPA-approved NOX technology determination, but does require earlier installation and compliance with reduced emission limits prior to the original SIP-imposed deadline.

EPA’s prior approval of NOX BART for Unit 3 and 4 required that these units meet a NOX emission limit of 0.15 lb/MMBtu (based on a 30-day rolling average) within five years from the effective date of EPA’s approval, or by Jan. 27, 2017. However, under the Oklahoma RH SIP Revision, both units are now required to meet an initial NOX emission limit of 0.23 lb/MMBtu (based on a 30-day rolling average) by Dec. 31, 2013, with additional limits of 1,098 lb/hr per unit on a 30-day rolling average basis and a 9,620 tpy combined cap for both units.

By April 16, 2016, one unit is required to be permanently shut down, while the remaining unit is required to meet a NOX emission limit of 0.15 lb/MMBtu (based on a 30-day rolling average), with an additional limit of 716 lb/hr on a 30-day rolling average basis and a cap of 3,137 tpy on a 12-month rolling basis. This second unit is required to shut down by Dec. 31, 2026.

This revised NOX BART determination is more stringent than the determination that EPA previously approved because it requires compliance with the 0.15 lb/MMBtu limit on a faster schedule.

SO2 BART revisions:

The Oklahoma RH SIP Revision also includes a new SO2 BART determination for Units 3 and 4, which differs from both Oklahoma’s original determination of no new controls and EPA’s SO2 BART emission limit of 0.06 lb/MMBtu, which can be met by the installation of Dry Flue Gas Desulfurization/Spray Dryer Absorber technology (DFGD/SDA).

Oklahoma’s new SO2 BART determination contains several elements, including interim emission limits, the installation of Dry Sorbent Injection (DSI) technology and a fabric filter baghouse, phased reductions in capacity utilization, and enforceable deadlines by which Units 3 and 4 must be shut down entirely. The Oklahoma RH SIP revision requires:

  • By Jan. 31, 2014, Units 3 and 4 must comply with an emission limit of 0.65 lb/MMBtu on a 30-day rolling average basis, to be met through the use of low-sulfur coal. An additional limit of 3,104 lb/hr on a 30-day rolling average basis will also apply to each unit;
  • By Dec. 31, 2014, Units 3 and 4 must comply with a reduced emission limit of 0.60 lb/MMBtu on a 12-month rolling average basis and a combined emissions cap of 25,097 tons/year on a 12-month rolling basis;
  • By April 16, 2016, one of the two units must be permanently shut down, while the remaining unit must comply with a reduced emission limit of 0.4 lb/MMBtu (based on DSI) on a 30-day rolling average basis. Additional limits of 1,910 lb/hr on a 30-day rolling average basis and 8,366 tons per year on a 12-month rolling basis will also apply;
  • The capacity utilization of the remaining unit will be capped at 70% by Jan. 1, 2021, 60% by Jan. 1, 2023, and 50% by Jan. 1, 2025; and the remaining unit must be permanently shut down by Dec. 31, 2026.

ODEQ weighed the five statutory factors in comparing its new proposal against the FIP. After factoring in a ten-year amortization period for DSI (due to the shutdown of the second unit in 2026), ODEQ determined that DSI would have an average cost-effectiveness of $1,005/ton, while the installation of two DFGD/SDA systems, as contemplated by EPA’s FIP, had an average cost-effectiveness of $1,544/ton. ODEQ further noted that the incremental cost-effectiveness of the DSI/shutdown scenario versus the FIP scenario was $4,718/ton in the first year, with worsening incremental cost-effectiveness as the capacity utilization of the remaining unit decreased starting in 2021.

ODEQ said that the installation of DSI will necessitate the addition of a fabric filter baghouse to further control particulate matter (PM) emissions. ODEQ explained that, despite the installation of this baghouse for the purposes of accommodating DSI, ODEQ is not re-opening its determination in the original Oklahoma RH SIP that no further controls are required to satisfy PM BART.

Public Service has been pursuing needed state commission approval

Said AEP’s July 26 Form 10-Q report about the process of getting needed Oklahoma Corporation Commission approval: “In September 2012, PSO filed an environmental compliance plan with the OCC reflecting the retirement of Northeastern Station (NES) Unit 4 in 2016 and additional environmental controls on NES Unit 3 to continue operations through 2026. The plan requested approval for (a) an estimated $210 million of new environmental investment, excluding AFUDC and overheads of $46 million, that will be incurred prior to 2016 at NES Unit 3, (b) accelerated recovery through 2026 of the net book value of NES Units 3 and 4 (combined net book value of the two units is $231 million as of June 30, 2013), (c) an estimated $83 million of new investment incurred through 2016 at various gas units and (d) a new 15-year purchase power agreement with a nonaffiliated entity, effective in 2016, with cost recovery through a rider, including an annual earnings component of $3 million. Although the environmental compliance plan does not seek to put any new costs into rates at this time, PSO anticipates seeking cost recovery in a future rate proceeding.”

In January, several parties filed testimony with various recommendations. In March, the OCC granted a stay in this proceeding. In July, the OCC staff filed a motion to lift the stay and dismiss PSO’s environmental compliance plan case without prejudice. A hearing on the motion will be held in August. If this case is dismissed, PSO will address the environmental compliance plan issues in future regulatory proceedings when it seeks cost recovery of the plan, AEP noted.

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.