July 7, 2011- by John Blair, Valley Watch President.
Valley Watch generally applauds the finalization of the Cross-State Air Pollution Rule. In fact we know that when fully implemented between now and 2014, the lives of many people in the tri-state of Indiana, Kentucky and Illinois will be improved, if not saved by the significant reduction in pollution the rule requires for coal plants across the nation and across the region.
We do have two caveats in our endorsement of the rule however that warrant wider community discussion and decision making instead of decisions being made solely in the board rooms of regional utilities as to how those plants will meet therules as well as the new standards for both ozone and fine particles that are to be announced this summer.
This, like the Acid Rain Program, creates a mechanism that gives states “allowances” for pollution and it generously allows the states to determine how those allowances will be distributed to achieve the proposed 73% reduction in SO2 and a 54% reduction in NOx across the board from the level established by data in 2005. If a plant does better in reducing their emissions allowances as decided by either the state or federal government, they can engage in selling some excess improvement to utilities that fail to meet those reductions.
We have been skeptical of pollution trading methods due to the concern that pollution “hot spots” could result if all the power plants in a single region decided to buy credits instead of building controls or switching fuels. However, even though we remain concerned about that, we understand that air quality will significantly improve in regions like the tri-state due to the fairly stringent “caps” that are being placed on emissions of SO2 and NOx in every state impacted by the rule.
Old power plants as exist in the tri-state are already more than fifty years old, and completely amortized. We are concerned that utilities will simply choose to install the pollution controls and keep dirty plants from retiring until they are more than 100 years old due to the investment this rule could make happen. After all, a plant can still be competitive if the only debt for the plant is what is required to build a scrubber or low NOx burner etc. as the rule suggests should occur. Such an investment although seemingly large could amount to a pittance compared to conversion to cleaner energy. Valley Watch does not want this region to be permeated with century old, dirty coal plants in the year 2050.
EPA also has pending several other rules regarding toxics, coal ash and climate change that if administered and regulated separately could result in the expenditure on these old power plants of hundreds of millions when the money might otherwise be spent on new non coal or nuclear technologies as well as increased energy efficiency.
In many regulated states like Indiana, if something is mandated by the Federal government, regulated utilities can pass along the cost of building pollutions controls with little or no oversight. In that scenario utilities could build nearly every kind of pollution control available and place their investment immediately in their rate base such that taking the myriad of rules one by one could result very old power plants becoming very expensive power plants whose improvements result in massive rate increases that might have been avoided by looking at the issue comprehensively instead of piecemeal.
It is time for utilities and state governments to democratize their decision making on how states will comply with not only this rule but also the rules that govern coal plant toxic emissions, disposal of their hazardous ash waste, and the globally important issue of carbon loading the atmosphere and its impact on climate.
By spending money on actual renewable energy like wind and solar as well as efficiency, the cost of compliance is likely to be less that spending additional capital on numerous improvements to keep dinosaur plants alive, even though that might make sense for the profitability of the utility.
We encourage consumers and public health advocates to participation in the formation of the State Implementation Plans that will occur in the next few months to assure that their interests are equally protected to those of the utilities.
Valley Watch looks forward to this opportunity to greatly advance the cause of public health, which is the purpose for which this organization exists.
Salient points of the rule as outlined by USEPA
The Cross-State Air Pollution Rule will protect communities that are home to 240 million Americans from smog and soot pollution, preventing up to 34,000 premature deaths, 15,000 nonfatal heart attacks, 19,000 cases of acute bronchitis, 400,000 cases of aggravated asthma, and 1.8 million sick days a year beginning in 2014 – achieving up to $280 billion in annual health benefits. Twenty seven states in the eastern half of the country will work with power plants to cut air pollution under the rule, which leverages widely available, proven and cost-effective control technologies. Ensuring flexibility, EPA will work with states to help develop the most appropriate path forward to deliver significant reductions in harmful emissions while minimizing costs for utilities and consumers.
The rule will improve air quality by cutting SO2 and NOx emissions that contribute to pollution problems in other states. By 2014, the rule and other state and EPA actions will reduce SO2 emissions by 73 percent from 2005 levels. NOx emissions will drop by 54 percent. Following the Clean Air Act’s “Good Neighbor” mandate to limit interstate air pollution, the rule will help states that are struggling to protect air quality from pollution emitted outside their borders, and it uses an approach that can be applied in the future to help areas continue to meet and maintain air quality health standards.
The Cross-State Air Pollution Rule replaces and strengthens the 2005 Clean Air Interstate Rule (CAIR), which the U.S. Court of Appeals for the D.C. Circuit ordered EPA to revise in 2008. The court allowed CAIR to remain in place temporarily while EPA worked to finalize today’s replacement rule.
The rule will protect over 240 million Americans living in the eastern half of the country, resulting in up to $280 billion in annual benefits. The benefits far outweigh the $800 million projected to be spent annually on this rule in 2014 and the roughly $1.6 billion per year in capital investments already underway as a result of CAIR. EPA expects pollution reductions to occur quickly without large expenditures by the power industry. Many power plants covered by the rule have already made substantial investments in clean air technologies to reduce SO2 and NOxemissions. The rule will level the playing field for power plants that are already controlling these emissions by requiring more facilities to do the same. In the states where investments in control technology are required, health and environmental benefits will be substantial.