Bush plan could help coal-fired plants

By Kate Thomas
OGJ Online Staff

HOUSTON, May 17 -- Coal-burning power plants in the Midwest and Southeast could benefit from recommendations included in President George W. Bush's energy plan directing federal air regulators to reconsider rules governing power plant maintenance and upgrades.

The energy blueprint also calls for a review by the Department of Justice of 11 pending multibillion dollar lawsuits against utilities and others being prepared against oil refineries to see if they would still be justified, if Clinton Administration interpretations were rescinded.

Reexamination of the Environmental Protection Agency's new source review regulations was high on the priority list of the utility and refinery industry, but the proposal was immediately criticized by an environmental umbrella organization as a move to "gut the heart and lungs of the Clean Air Act."

The 1970 Clean Air Act grandfathered existing plants and exempted them from requirements to install new emissions control equipment with the thought the plants would be phased out. Plants which underwent major work were subjected to a 5-year review under the new source regulation and could be subject to stricter controls and penalties for violations.

Industry claims Clinton Administration tightened interpretation of the rules deterring much needed investment that could increase plant efficiency.

There is a "lot of uncertainty over what companies can and cannot do in terms of maintenance at existing plants," said Pat Hemlepp, a spokesman for American Electric Power Co. Inc., Columbus, Ohio, one of the companies targeted by the government lawsuits. The lawsuits allege the companies illegally upgraded the plants.

AEP is "pleased" the plan directs the EPA administrator and the Department of Energy to conduct a comprehensive review of the rules, Hemlepp said, "we are as anxious to see [results] as anybody. The plan directs EPA administrator Christie Whitman to report the results to Bush within 90 days.

William McCormick, CEO of CMS Energy Corp., Dearborn, Mich., singled out review of the new source review rules as important to ease utilities "ability to perform routine maintenance and make efficiency improvements as existing power plants."

John Stanton, vice-president of the National Environmental Trust, Washington, DC, said the proposal would effectively "gut" the Clean Air Act. "Here we are 25 years later and none of these plants has closed," he said.

He said rescinding the stricter interpretation of the rules also would punish utilities that acted in good faith and good environmental citizens.

"The stakes are very high," Stanton said. Among the choices left to environmentalists are attempting to work with the administration and continuing the lawsuits.