Appeals court again denies MATS stay for Tri-State’s Nucla coal plant

A federal appeals court on Sept. 1 again denied an emergency motion from Tri-State Generation and Transmission Association for a break related to federal Mercury and Air Toxics Standards (MATS) compliance at the 110-MW Nucla coal plant in Colorado.

The Sept. 1 ruling from a three-judge panel at the U.S. Court of Appeals for the D.C. Circuit said that in light of the U.S. Environmental Protection Agency’s representation that it has extended Tri-State’s impending deadlines, and because Tri-State may now seek administrative relief during this interim period, the motion is denied. This denial is without prejudice to Tri-State filing a motion should administrative relief be denied, the ruling added.

Tri-State on Aug. 31 had filed a brief with the court responding to an EPA brief of Aug. 28. Tri-State noted that it had asked this court on Aug. 24 for very limited relief – to take action by Sept. 1 to suspend one compliance obligation for one small power plant known as Nucla Station until EPA responds to the Supreme Court’s June decision in Michigan v. EPA, where the high court found that EPA didn’t do enough economic analysis on the impacts of MATS, but otherwise left MATS in place pending further appeals court review.

Tri-State said that EPA refuses to acknowledge that Michigan has created an immediate dilemma for Tri-State – whether to make a commitment right now to purchase additional control equipment that may not be necessary depending on EPA’s response to Michigan. Instead of responding to a letter, numerous emails and a phone call from Tri-State’s counsel to discuss potential relief for Nucla in light of Michigan, EPA consulted with the state of Colorado on numerous occasions regarding potential options for Tri-State and then unilaterally granted “relief” that Tri-State did not request because it is essentially meaningless, Tri-State said.

EPA then suggests that Tri-State should pursue another option for relief that does not in any way address the dilemma that Tri-State now faces, the cooperative said. According to EPA, Tri-State should not purchase the control equipment now but instead hope that, sometime before April 2016, the extended deadline for MATS compliance at Nucla, EPA will agree that Nucla is “reliability critical” and will therefore agree to enter into an administrative order that would extend the April 2016 compliance deadline.

Tri-State: emissions control equipment not subject to ‘magic wand’ procurement

“EPA makes a great deal of the fact that, just hours before filing its Opposition, it sent a letter to Tri-State purporting to eliminate the ‘compliance schedule’ established by Colorado – and in particular, the September 1 deadline by which Tri-State is required to notify the State whether it will install new control equipment at Nucla,” Tri-State argued in its Aug. 28 brief. “In EPA’s mind, this last minute legal maneuvering apparently undercuts TriState’s motion, but this is not the case.

“As Tri-State has noted, it could have asked Colorado to change the September 1 date in its compliance schedule, but it did not have a legal basis for doing so because this date is tied to the ultimate April 2016 compliance deadline. If Tri-State decides to install controls at Nucla, it must order the controls in September to ensure that they can be fabricated, installed and tested by April 16, 2016. Unless the April 2016 deadline is extended, eliminating the September 1 deadline does not provide meaningful relief.

“September 1 is not an artificial deadline to satisfy an arbitrary requirement to have a date in Tri-State’s compliance extension and Clean Air Act permit. It is also a real-world, practical deadline. Tri-State cannot wave a magic wand that will instantaneously order, fabricate, install and test the requisite control equipment. To ensure compliance by April 2016, Tri-State must meet various key milestones for delivery and installation to occur, including ordering the equipment in September 2015.

“It is notable that EPA is willing to violate its own regulations and policies regarding compliance schedules in an effort to persuade the Court not to grant TriState’s motion. Despite adopting regulations that require interim compliance deadlines in order to obtain a MATS compliance extension, 40 C.F.R. §63.6(i)(6)(i)(B), EPA has now purported to erase all such deadlines for Tri-State. Ironically, EPA’s own Enforcement Response Policy also addresses the need for compliance plans. Specifically, the Policy states that ‘EPA expects that owners/operators will begin compliance planning early, and will provide early notice of their compliance plans to the appropriate [authorities].’”

Any temporary shutdown of Nucla as of April 2016 puts Tri-State in an impossible position. Nucla does not operate frequently, but when transmission lines go down (as sometimes happens in the Colorado mountains), it could be needed to maintain electric reliability in parts of Colorado. Tri-State said it should not be forced to “roll the dice” and hope that Nucla is not needed during the seven or more months it could be forced out of service under EPA’s recommended approach.

EPA said it has given Tri-State an option; several power generators opposed Tri-State

Said EPA in an Aug. 28 brief about the Tri-State motion that was rejected on Sept. 1, and a first motion that had previously been rejected by the court: “In the handful of days since the Court denied Tri-State’s first motion, EPA has consulted with the State of Colorado on numerous occasions regarding potential options for Tri-State, communicated to Tri-State what it believes is a viable path forward for Nucla Station under EPA’s Enforcement Response Policy, and acted swiftly to alleviate Tri-State of its immediate time constraints, including the September 1 deadline, that are allegedly causing Tri-State an emergency dilemma in order to allow Tri-State time to pursue that path. To date, Tri-State has not pursued relief under the EPA’s Policy (at least not with a well-supported application) and has therefore failed to exhaust administrative relief.” 

The power industry is not exactly united in its opposition to MATS. On Aug. 28, Calpine Corp., Exelon Corp., National Grid Generation LLC and Public Service Enterprise Group filed a joint brief with the appeals court opposing the Tri-State emergency motion. Their brief said: “Only seven days after this Court denied its first such motion, Tri-State Generation and Transmission Association, Inc. (‘Tri-State’), has filed another ’emergency motion’ seeking to suspend its obligation to comply with the Mercury and Air Toxics Standards (‘MATS’) at its Nucla Station by April 16, 2016. Industry Respondent Intervenors respectfully request that the Court deny this motion for the same reasons it denied Tri-State’s first motion.

“Unsurprisingly, nothing has changed in a week that should alter this Court’s thinking regarding Tri-State’s motion,” the power companies added. “Tri-State sent an email and a letter, but this preliminary effort can hardly be said to have ‘exhausted’ the administrative remedies available. Indeed, while Tri-State has requested relief from EPA pursuant to its Enforcement Response Policy, it has not complied with the clear requirements of that policy to support its request with facts. For example, Tri-State has not made the required demonstration that the Nucla plant is required to operate to maintain reliability. At the moment, EPA is in the same posture as the Court: Tri-State has asked them both for relief, but has not provided a factual record on which relief can be granted. Given that Tri-State’s second motion is not materially different from its first, Industry Respondent Intervenors ask the Court to consider the pending motion in light of their response to Tri-State’s first motion, which they hereby incorporate by reference. Tri-State’s motion should be denied.”

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.