New source review an 'essential tool,' states say

Current enforcement policies of 'new source review' rules under the Clean Air Act don't inhibit electric power companies from expanding capacity or improving efficiency, state and local pollution control officials said in comments to the US Environmental Protection Agency.


By the OGJ Online Staff

HOUSTON, July 30 -- Current enforcement policies of "new source review" rules under the Clean Air Act don't inhibit electric power companies from expanding capacity or improving efficiency, state and local pollution control officials said in comments to the US Environmental Protection Agency.

The Bush administration ordered a 90-day review of the program as part of his proposed energy policy. The EPA recently held a series of hearings around the country to get input on the program's effectiveness and possible alternatives.

In congressional testimony last week, EPA Administration Christine Todd Whitman said the administration will propose legislation to replace the rules with a "cap and trade" program similar to the one used to reduce acid rain. The electric power industry has complained the new source review (NSR) create uncertainty about enforcement and what was considered permissible maintenance under the rule designed to reduce pollution at old plants.

Testifying before the US Senate Environment and Public Works Committee, Whitman said the proposal would set targets to reduce power plant emissions of sulfur dioxide (SO2), nitrogen oxide (NOx), and mercury.

In a letter to Whitman, state and local pollution control officials said NSR programs have been an "essential tool" to their ability to "attain and maintain the health and welfare standards" mandated in the Clean Air Act.

NSR rules have allowed state and local permitting agencies the opportunity to review proposed new and modified stationary sources to ensure they install the best available control technology (BACT), said William O'Sullivan, chairman of the NSR subcommittee of the Association of Local Air Pollution Program Administrators, and John A. Paul, NSR subcommittee chairman of the Association of Local Air Pollution Control Officials.

And while some reforms may be in order, they noted "tens of thousands of megawatts" of new capacity have been added under the current process. Even in cases involving plant modifications to existing sources, "permitting agencies have been able to address the vast majority of changes in a timely manner under the current NSR process," they said.

Opposed to 'netting'
The associations also "strongly" recommended EPA eliminate "netting," a policy that allows new units at existing sources to net out of NSR requirements. The netting exemption is inconsistent with EPA's state position that good pollution control technology is needed at the time of installation, they said.

The state and local officials previously recommended coal-fired boilers that have operated for 30 years or more be placed on an upgrade schedule for air pollution control equipment to be completed by 2010.

They also recommended emissions trading should be allowed among coal-fired units to allow the utility industry flexibility in reaching best available control technology levels between now and 2010. Once controlled at BACT levels, the organizations recommended these existing coal-fired units be governed by the clean unit concept for future modifications.

In her testimony, Whitman said the Bush administration proposal will provide regulatory certainty to allow utilities to modify plants without fear of litigation and will include market-based incentives, such as emissions trading, to help achieve the required reductions in pollution.

She declined, however, to reveal preliminary emissions targets being considered by the agency. Whitman said targets would be phased in over a "reasonable" time period, similar to the acid rain program established by the 1990 amendments to the Clear Air Act.

"If we have new legislation that significantly reduces emissions of SO2, NOx, and mercury, we can eliminate many of the individual programs that apply to the power generation sector and replace them with a system that will reduce the administrative burden on industry and governments, use market-based incentives to keep compliance costs low, and provide industry with more certainty about its future regulatory obligations," Whitman said.

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