Oklahoma Gas and Electric loses – again – over EPA haze plan

A three-judge panel at the U.S Tenth Circuit Court of Appeals on Oct. 31 turned back an appeal by the Oklahoma Attorney General over a prior ruling from the panel backing a U.S. Environmental Protection Agency clean air plan.

Besides the three-judge panel refusing to rehear the case, the Oct. 31 court decision said there was no interest on the part of the judges in the full appeals court to take up this matter. The case involves air mandates for coal-fired capacity of Oklahoma Gas and Electric (OG&E).

The Sierra Club on Oct. 31 immediately hailed the ruling. “Today’s ruling re-affirms what we already know: EPA’s plan to reduce serious pollution levels is common sense and good for Oklahomans,” said Whitney Pearson, with Sierra Club. “We will see cleaner air and clearer skies when the plan is put into action.”

Pearson added: “We look forward to working with the Governor, Attorney General, OG&E and other stakeholders to move forward, put this litigation behind us, and chart an Oklahoma-first path to responsibly replace the coal plants with local clean energy solutions. We can build clean energy resources like wind farms in Oklahoma, which will put millions of dollars into our rural communities and schools and create the jobs here at home.”

Public Service Co. of Oklahoma (PSO) announced in April 2012 that it would gradually phase out coal use at its Northeastern power plant in Oologah in order to reduce its haze-forming SO2 pollution, the club noted in basically saying what OG&E should be doing. PSO also recently announced a large purchase of wind power, an investment which will result in more than $50m in savings for its customers, the club added.

Utility says appeal to the U.S. Supreme Court is possible

“We’re very disappointed for our customers,” said OG&E spokesman Paul Renfrow in an Oct. 31 statement. “While we continue to weigh our legal options, including an appeal to the Supreme Court, the 10th Circuit’s decision makes it increasingly likely that our customers will be paying higher rates on their electric bills because of the sizeable investment needed to meet the regional haze requirements mandated by the EPA’s plan.”

Renfrow added that while the company has been challenging the EPA’s federal implementation plan, it also has been studying plans to install emission control technology, or scrubbers, on its coal-fired plants due to the time allowed for compliance with the EPA plan.

In the past, the Governor’s office, state Attorney General, Oklahoma Corporation Commissioners, Oklahoma Department of Environmental Quality and other state leaders voiced opposition to the EPA plan saying that the state developed a plan that would be equally effective as costly scrubbers and cost far less. Fourteen other states also joined Oklahoma to oppose the EPA at the Tenth Circuit.

Instead of scrubbers, the Oklahoma plan called for use of low-sulfur coal and gives affected utilities in the state the flexibility of burning less coal and more natural gas on a timetable that achieves the goals of the Regional Haze rule while limiting the cost to customers. The Regional Haze Rule pertains to visibility in national parks and wilderness areas and not to public health, the utility noted.

In a Sept. 3 petition, OG&E joined Oklahoma Attorney General Scott Pruitt in requesting a rehearing before the full 10-judge panel to determine if EPA acted appropriately in rejecting the state’s regional haze plan. On July 19, the three-member panel ruled 2-1 that the EPA lawfully exercised its authority to impose a federally mandated plan on the state. The case involves two units at OG&E’s Sooner plant and two units at the Muskogee plant.

This ruling is important outside of just this case. In a brief dated Sept. 10 filed in this case by several states, including Michigan, Alabama and Montana, they said: “The Panel’s decision is the first of multiple expected judicial decisions reviewing EPA disapprovals of State [best available retrofit technology] determinations under the regional haze program both in this Court and in other Circuits. At least eleven other similar cases are now pending involving eight other State plans, including two in this Court, and more may be filed. Thus, the Panel’s decision, if not reconsidered, will have an immediate and important effect.”

The states added: “Moreover, the regional haze plans at issue are only first-phase plans that will be followed by multiple additional rounds of State plans nationwide over at least the next fifty years. Setting the correct legal rules-of-the-road at the outset of this long-term program is critically important. These issues are more than academic. EPA’s actions in just the pending cases will impose billions of dollars in costs on the citizens of our States. Yet EPA’s actions will not result in meaningful environmental benefits.”

OG&E is a subsidiary of OGE Energy (NYSE: OGE), and serves more than 800,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas.

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.