There are a lot of details yet to work out when it comes to complying with the U.S. Environmental Protection Agency’s Clean Power Plan, which was published on Oct. 23, with individual states having an initial deadline of only September 2016 to submit their compliance plans.
Speakers at a Dec. 8 session at Pennwell‘s Power Generation Week 2015 gathering in Las Vegas addressed the known knowns and the known unknowns about the plan and how to comply with it. The plan calls for 32% greenhouse gas reductions from existing power plants by 2030, with a 2022 initial compliance deadline. The rule applies to all power plants that went into construction by January of this year, with a separate New Source Performance Standards rule, also published in final form on Oct. 23, applicable to new power plants.
Andrew Byers of Black & Veatch noted that states are “wrestling” with key concepts related to the Clean Power (CPP), like whether to subimt a state plan at all (EPA would impose a federal plan in those cases) by the deadline in September 2016, whether to ask for a two-year delay of that plan submission deadline (which would push the state and its power plants closer to the 2022 initial compliance deadline by the time the plan is in approved form), and whether to participate in a multi-state compliance plan.
Byers noted how the CPP is subject to several lawsuits at the U.S. Court of Appeals for the D.C. Circuit, putting into doubt the plan’s future, and there is the likelihood that all or many of the state implementation plans will themselves be the subject of separate litigation. The appeals court might impose a stay on the rule in early to mid 2016, but it wouldn’t be until perhaps 2018 before the U.S. Supreme Court can weigh in on whatever the appeals court eventually rules. “There will be some time before the dust actually settles” on this litigation, Byers said.
Joseph Rubino of Stanley Consultants said that out of the recent “regulatory wave” of rules out of the EPA, like in the area of coal combuston residuals, the CPP has perhaps the most wide-ranging impacts on power generation, transmission and consumption. Rubino approached the rule from a perspective of the western U.S. states. He noted that Hawaii and Alaska aren’t covered by the CPP, though they will probably be subject to some future rulemaking.
Rubino pointed out that EPA in the final CPP actually imposed stricter greenhouse gas reductions than it had in the proposed version of the CPP, like with Montana, Utah and Wyoming, but went easier on some other western states.
One state with a particular issue is Colorado, where the legislature several years ago enacted the Clean Air, Cleans Jobs Act, which called on generators like Public Service Co. of Colorado to reduce emissions on pollutants like SO2 by shutting some older coal capacity and replacing that capacity with largely gas-fired generation. Colorado is not getting credit for the attendant CO2 reductions from that law and must further reduce its greenhouse gas emissions by 40% under the CPP, Rubino pointed out.
Emily Kunkel of Sargent & Lundy said one big problem under EPA’s program of three building blocks is that Block 1 encourages heat rate improvements at existing coal plants to make them more CO2-efficient, but Block 2 pushes more output from natural gas combined cycle plants and Block 3 calls for more renewables generation. Blocks 2 and 3 would cause coal plants to be backed down to lower capacity utilization rates, and the inefficiencies in plant operations that are caused by that pretty much negate any heat rate improvements the power generator can get from its plant by making equipment changes.
And Kunkel pointed out that many power plant operators are using best maintenance practices already, meaning there is little in the way of extra efficiency they can wring out of plant improvement projects.