Dynegy settles air permit tiff with Illinois agency over Newton coal plant

The Illinois Environmental Protection Agency on Feb. 25 put out for comment proposed changes in an air permit for Dynegy‘s (NYSE: DYN) Newton coal plant that settle a dispute that the company had over the original permit issued by the state agency.

The permit was issued under the Clean Air Act Permit Program (CAAPP). These revisions arise from the settlement negotiations for the permit appeal currently pending before the Illinois Pollution Control Board (IPCB) for the CAAPP permit that was initially issued by the Illinois EPA for this source,” said an Illinois EPA permit document.

The Newton Energy Center is a 1,230-MW (net), coal-fired plant with two generating units. The initial CAAPP permit was issued by the Illinois EPA in September 2005. The permit addressed the applicable emission standards and requirements that existed at the time the permit was issued. In a subsequent permit appeal to the Illinois Pollution Control Board, Illinois Power Generating Co. (at the time known as Ameren Energy Generating Co.) challenged the applicability of certain legal requirements and the imposition of certain requirements for monitoring in the CAAPP permit.

In the years since the filing of the appeal, the issued permit has been stayed in its entirety. The initial steps to advancing the development of an appropriate CAAPP permit for this source is to provide for the effectiveness of a CAAPP permit and the resolution of the permit appeal, the agency said. The CAAPP permit for the source can and must then be brought up-to-date by the Illinois EPA through permit reopening and, as needed, additional permit revisions.

Dynegy in its Feb. 25 annual Form 10-K report offered an update on a separate clean-air matter affecting Newton and four other former Ameren coal plants in Illinois. These plants are working under a state-mandated Multi-Pollutant Standards (MPS) program initiated years ago. The MPS imposes declining limits that started in 2009 for mercury and in 2010 for NOx and SO2. Compliance with the MPS’ final SO2 limit is required beginning in 2017.

The IPCB has granted these plants a variance which provides additional time for economic recovery and related power price improvements necessary to support the installation of flue gas desulfurization (i.e. scrubber) systems at the Newton facility such that this coal-fired fleet in Illinois can meet the MPS system-wide SO2 limit. The IPCB approved the proposed plan to restrict the SO2 emissions through 2014 to levels lower than those required by the MPS to offset any environmental impact from the variance. The IPCB’s order also included a schedule of milestones for completion of various aspects of the installation of the Newton scrubber systems.

The first milestone relates to the completion of engineering design by July 2015, while the last milestone relates to major equipment components being placed into final position on or before September 1, 2019. The variance also requires additional environmental protections in the form of enforceable commitments to cap the SO2 emissions of these plants by Dec. 31, 2020, retire Edwards Unit 1 as soon as permitted by the Midcontinent ISO, and, during the variance period, use only low-sulfur coal at the Newton, Edwards and Joppa facilities and maintain operation of the existing scrubbers at the Duck Creek and Coffeen facilities to achieve a 98% annual average SO2 removal rate.

This segment consists of five plants, totaling 4,057 MW. The Coffeen, Edwards, Duck Creek and Newton facilities are located in the MISO region. Joppa, which is within the EEI control area, is interconnected to MISO, the Tennessee Vally Authority and Louisville Gas & Electric where it sells its power.

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.