We strongly encourage EPA to use the flexibility tools currently available under the Clean Air Act to address both timing and technical issues in order to hold down costs to consumers and avoid possible reliability impacts in some areas.

Following are highlights of key elements of EEI’s comments.

. . . . .

America’s electric generation fleet—including coal-based power plants that still produce nearly half of the nation’s electricity—has become increasingly clean during the last two decades, and this transition will continue over the next decade. EPA’s regulation to control utility emissions of mercury and other hazardous air pollutants, or the utility MACT (“maximum achievable control technology”), will figure prominently in this transformation. It represents one of the agency’s most ambitious undertakings for the power sector, due to the fact that it has implications for virtually every coal- and oil-based electric generating unit in the country—about 1,350 boilers located at 525 power plants.

The power sector already has invested tens of billions of dollars to achieve substantial air emissions reductions.  We’ve reduced annual emissions of both sulfur dioxide (SO2) and nitrogen oxides (NOx) by about 70 percent since 1990. These reductions also have led to substantial cuts in other emissions, including mercury and other HAPs. During this same period electric generation has increased 38 percent, and real GDP, literally fueled in large part by electricity, has increased 65 percent.

EEI shares EPA’s objective of industry compliance with reasonable environmental regulations and urges that it be accomplished in a cost-effective manner. To that end, we are encouraged that EPA has incorporated some key elements of flexibility in the proposal.

However, there are a number of areas where the proposed standards are unnecessarily restrictive or could benefit from additional flexibility afforded EPA under the Clean Air Act, which would help reduce compliance costs and head off potential local electric reliability issues, while ensuring compliance with emissions limits.

Our main concern with the proposed rule is the timeframe for implementation and compliance. While EPA acknowledges that some generating units may require more than three years to meet the new standards, we urge the agency to use its existing authority under the Clean Air Act to extend the compliance deadline an additional year for all units installing new pollution controls, being replaced or repowered, or requiring expanded transmission capacity.

The number of generating units needing additional time likely will be sufficiently large that a case-by-case review of individual requests for extensions could actually delay overall compliance. Allowing for this additional time up front will help protect reliability and achieve compliance in the most cost-effective manner possible.

In addition, because some units may require more than four years to achieve compliance, we urge the President, as authorized by the Clean Air Act, to issue an executive order to allow additional time in instances in which the utility is continuing to take diligent, good-faith measures to achieve compliance; the needed emission control technology is not available; and the appropriate regional transmission organization (RTO), the North American Electric Reliability Corporation (NERC), or appropriate state regulators certify that an extension of time is necessary to address reliability  and economic impact issues.

Generating units designated for shutdown, on the other hand, should be closed within three years after the rule takes effect, unless it is determined that operation of the unit is required for reliability purposes and the utility demonstrates that the reliability issue is being diligently addressed.

EEI’s concerns about the timeline are shared by the National Association of Regulatory Utility Commissioners (NARUC), whose July 20, 2011, policy resolution concluded that “a retrofit timeline for multimillion dollar projects may take up to five-plus years” and that “[t]imelines may also be lengthened by the large number of multimillion dollar projects that will be in competition for the same skilled labor and resources.” In addition, time is needed for environmental permitting, public utility commission approvals, and, in some cases, additional transmission and natural gas infrastructure.

In addition to the timeline issue, EEI is providing extensive comments on several technical issues. For example, the proposal applies a new methodology for deriving a particulate matter emissions standard—used to determine appropriate emissions levels for non-mercury metals—that deviates from the other standards in the rule, as well as the standard EPA used in its MACT rulemaking for industrial boilers. The agency’s imposition of this standard lacks adequate justification and would be extremely troublesome: Accurate measurements are very difficult to obtain, and questions exist about the reliability of the underlying data and of future compliance testing.

EPA’s utility MACT proposal is as complex as it is far-reaching. As such, EEI’s member companies have worked collaboratively to provide a substantive response that we believe will improve the rule and help set our industry on a clear and manageable path to compliance.