EPA Investigating Aging Coal Plants, Like N.H.'s Merrimack

The EPA is beefing up its enforcement division and taking a closer look at the nation's aging coal-fired power plants.

EPA Administrator Lisa Jackson today introduced the agency's largest budget proposal in its 39-year history, one that moves away from what she described as eight years of "austerity budgets" under President Bush and improves enforcement.

The $10.5 billion budget proposal includes $600 million for enforcement and compliance – a 5 percent increase over last year – plus 30 new enforcement officers.

Those new lawyers and investigators will have plenty of work to do. Jackson is on the lookout for Clean Air Act violators, and she's starting with the nation's aging power plants.

"I don't know that every single state has a coal-fired plant under review, but I can tell you there's national interest from headquarters at looking at whether coal-fired power plants are in compliance with the Clean Air Act," said EPA enforcement attorney Greg Dain.

"They're the largest kind of stationary source in terms of the amount of pollutants emitted that are regulated by the Clean Air Act, so it makes sense to look at them."

The latest target is a familiar one: PSNH's Merrimack Station, the largest single source polluter in New Hampshire.

Several of New Hampshire's leading businesses, including Stonyfield Farms and Timberland, are glad to see the EPA stepping in. They have been trying to stop PSNH from constructing a new scrubber on the Merrimack plant ever since the company jacked up its cost estimate from the $250 million to $457 million, and they hope the EPA can pry loose answer they haven't been able to get from PSNH.

At that price, the businesses say, PSNH should shut down the 41-year-old Merrimack station and build a cleaner plant – if a new power plant is even needed. The nearly half-billion dollars worth of upgrades won't do anything to reduce the plant's carbon emissions, which could make it even more costly for New Hampshire customers down the road under future climate protection rules.

PSNH, which was ordered by the legislature to install scrubbers to clean up its mercury pollution, says keeping Merrimack running is necessary.

The company certainly has incentive to keep its aging coal-fired plant in operation. As a regulated public utility, PSNH is allowed to charge its ratepayers and get a 9.67 percent rate of return on its investments. Adding the scrubbers at a cost of $457 million means PSNH will be getting an extra $20 million to $25 million a year – for equipment that likely won't keep the plant in compliance with clean air regulations for very long.

Enter the Investigators

After the state gave PSNH the green light to proceed earlier this year, two groups filed notices of intent to sue PSNH, claiming the company violated the Clean Air Act.

Then, last month, the EPA got involved.

The agency sent a letter to PSNH requesting information about all major physical projects undertaken at Merrimack Station since 2000. The EPA said the move was unrelated to the potential lawsuits and the fight over the scrubber, but it should force PSNH to release more information about Merrimack's costs, its pollution and PSNH's future plans for the facility.

In the April 3 letter, the EPA orders PSNH to detail all of its construction work exceeding $100,000 involving boilers, turbines, engines and other pollution-producing equipment at its Merrimack and Schiller stations. For each project, it wants a breakdown of the costs, pollution analyses and any analyses of the options considered before work began. Due date for Merrimack: July 20 (the deadline was pushed back at PSNH's request, though not as far back as the utility had hoped).

"This is routine," PSNH spokeswoman Mary-Jo Boisvert said of the EPA inquiry. "It's a national effort. It's not targeted to one state or one entity."

Opponents in New Hampshire say Merrimack is the ideal place to start. In their intent to sue notices, the Conservation Law Foundation and Freedom Logistics say so much work was done on Merrimack before the project's construction was even approved that PSNH is projecting at least a 6 megawatt increase in power capacity, meaning emissions increases this years as a result of the modifications.

"Our concern is this whole scrubber law was about extending this plant's life perhaps several decades at great detriment to the state given the amount of pollutants coming from it," said CLF's Melissa Hofer.

NOx, SOx and NSR

When the Clean Air Act was approved in the 1970s, existing power plants like Merrimack station were grandfathered in, but there was a catch. If those plants were modified, they faced New Source Review rules that could require them to install the best available pollution-control technology to reduce their emissions.

In the most basic terms, New Source Review applies if there is a physical change that will lead to increase in emissions such as for nitrogen oxides and sulfur dioxide. If there is no emissions increase, New Source Review doesn't apply.

The EPA "engineers and lawyers will look at all the information to determine when they physically modified their source – was there an associated increase in emissions as a result of those physical changes. If yes, they should have installed controls," Dain said.

If PSNH is found to have violated the Clean Air Act, then it will be order to install the proper controls and pay a penalty. Considering the amount of materials expected from PSNH, the review will likely take several months.

National Checkup, Long Overdue

Boisvert is correct that PSNH is just one target.

"Coal fired power plants generally are drawing attention at headquarters," Dain said. "It's something you might not have seen four years ago, but you might have seen it 10 years ago."

In New Hampshire, ratepayers who are now stuck with the Merrimack Station bill hope to the investigation and the potential lawsuits will keep the pressure on PSNH, a company that wields a great a deal of power in state government. They also hope their efforts will lead to reforms of the state's energy policy to open New Hampshire to other suppliers and cleaner energy.

 

See also:

Survival Strategy for an Aging Coal Plant: New Hampshire's 'Big Dig'

Another State Urges Utility to Think Twice About New Power Plant Plans

Obama's EPA Calls a Time-Out on Dirty Coal

EPA Review Reverberates Through U.S. Energy Industry

EPA Issues Endangerment Finding, Increases Pressure on Congress to Act on Climate

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