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The Week Ahead

NARUC Focuses On EPA's Power Plant Rules, Senate Panel Weighs Key EPA Nominees

Posted: July 22, 2013

State utility commissioners will be grilling top EPA officials on the agency's power plant rules, including pending water and waste rules, as well as the already issued mercury rule. The Senate environment committee is holding a hearing on several nominees for top EPA offices. And House appropriators are beginning to mark up EPA's fiscal year 2014 spending bill with a measure that will slash funding and block dozens of rulemakings.

EPA's Utility Rules

Top EPA officials are scheduled to address the National Association of Regulatory Utility Commissioners (NARUC) summer meeting in Denver later this week, where state regulators are likely to continue to raise concerns over the agency's suite of air, climate, water and waste rules governing coal and other power plants and whether they will adversely impact electricity generation.

EPA waste chief Mathy Stanislaus and senior air office counselor Joe Goffman are slated to address a special joint forum July 24 hosted by NARUC and the Federal Energy Regulatory Commission (FERC) on “Reliability and the Environment.” The hosts for the joint forum include FERC commissioners Cheryl LaFleur and Philip Moeller.

Coal Ash & Effluent Limits

Stanislaus is slated to address a panel on whether coal ash and effluent discharge from power plants is “hazardous or not?” opening the door to a discussion on EPA's pending waste and water rules.

Electricity generators and their regulators are increasingly concerned that the agency's pending Clean Water Act effluent limitation guideline (ELG) for power plants, and a related Resource Conservation and Recovery Act rule setting standards for coal ash disposal, will impose a new set of regulatory requirements just as they are beginning to implement the agency’s recently released air rules.

The ELG, which EPA proposed last April, is slated for promulgation next May. EPA proposed a coal ash rule in 2010 but EPA has not committed to a firm deadline for completing the measure.

While industry groups are concerned about the rules’ potential costs, they have welcomed EPA efforts to coordinate the two measures’ potentially overlapping requirements. In its recently proposed ELG, the agency indicated it is leaning toward regulating coal ash as a “solid waste” rather than as a “hazardous waste” subject to strict waste management rules, a move that industry officials are welcoming. For example, EPA proposed to allow power plant operators up to an additional five years to comply if they agree to close coal ash storage impoundments and take other actions to limit discharges that go beyond what the ELG requires.

But environmentalists are increasingly concerned over such flexibilities, fearing it will undercut the need for a strict coal ash disposal rule. “I don’t think [the voluntary compliance provisions are] a good step for EPA if it means that there is not going to be a strong [coal ash disposal] rule,” one advocate says.

Environmentalists' Report

To drive home their point, several environmental groups -- including Sierra Club, Environmental Integrity Project and Water Keeper Alliance -- July 23 will release a new report “Long-Overdue EPA Rules Would Stop Billions of Pounds of Toxic Water Pollution from Coal Plants,” which seeks to detail the environmental and human health benefits of the ELG and the coal ash rule.

“Newly released data will show that a strong EPA rule would sharply reduce human and wildlife exposure to dangerous water pollution such as arsenic, mercury, lead, cadmium, selenium, and other heavy metals,” the groups say in a press release.

Environmentalists have long called for EPA to tighten its power plant liquid and solid waste rules, arguing that as air rules governing smokestack emissions are getting stricter, more toxins are now ending up in other waste streams, yet the rules governing their disposal have not been updated to reflect the increased toxicity.

As a result of those concerns, EPA is currently revising its ELG for the first time since 1982, for which it is currently accepting comments, and is weighing how to move forward with a RCRA coal ash disposal rule.

Congressional Republicans are also poised to advance a bill, H.R. 2218, as soon as this month, that would preempt EPA's coal ash rulemaking and instead give states power to regulate ash disposal.

Mercury Rule

Back at NARUC, Goffman, the air office official, is scheduled to participate in a panel on EPA's mercury air toxics standard (MATS) for coal- and oil-fired power plants, which will question whether “there [is] sufficient time [and] flexibility” as the rule's deadlines approach.

EPA has long argued that the rule is flexible and cost-effective, saying that studies showing significantly higher costs or coal plant retirements were inconsistent with the agency's final rule. EPA and FERC officials have also said they are working to address any potential reliability impacts, but say that any reliability impacts are likely to be local in nature.

LaFleur, for example, told a House hearing earlier this year that EPA and FERC as well as the Department of Energy (DOE) and federally overseen grid operators are staying in close contact to discuss the implementation of the MATS, including scheduling installations of pollution control technologies and other retrofits, and potential retirements of units. But she said the current effort appears to be addressing concerns about the rule's compliance period.

A study conducted by Resources for the Future has also indicated the rule is not likely to undermine reliability.

But concerns remain, with EPA drawing recent lawsuits over its recently revised portion of the rule setting standards for new sources, while litigation of the existing source rule continues.

Climate Change

NARUC officials are also scheduled to hold several sessions addressing regulation of greenhouse gas (GHG) emissions, an issue that is likely to gain increasing attention now that EPA is crafting power plant rules for new and existing sources.

One session, slated for July 23, will discuss “the myth of carbon pollution.” It will include a presentation from Princeton University Professor of Physics Dr. Willam Happer, who will discuss how computer modeling has “greatly exaggerated the warming from additional” GHGs, a “lack of evidence” linking increased GHG levels to to increased extreme weather, increased GHG emissions is a “benefit.”

Another session will discuss the flaring of methane, a potent GHG, from oil and gas wells in the Bakken Shale and elsewhere and how “advances in technology and economic incentives are creating opportunities to reduce gas flaring.”

In Congress

Days after the Senate confirmed Gina McCarthy as the next EPA administrator, the Senate environment committee is preparing to act on several pending sub-cabinet level nominees at EPA.

The committee has scheduled a July 23 hearing to consider nominees to lead EPA's water, toxics and general counsel's offices.

Republicans are not likely to allow easy approval. Sen. David Vitter (R-LA), the committee's ranking Republican, has indicated he is setting tough conditions for the water and general counsel nominees over unrelated agency policy positions. For Ken Kopocis, the nominee to lead EPA's water office, Vitter wants the agency to “disavow” its claim that it has authority to veto the planned Pebble mine in Alaska before the developers have sought a permit. He repeated his threat, saying last week that EPA's failure to address the lawmakers' concerns that its draft assessment of the mine's impact will prejudice the permitting process once industry has applied for a permit “will definitely be a factor in considering Kopocis' nomination to head the Office of Water.”

Vitter is also setting an early test for Avi Garbow's nomination to be the next EPA general counsel by asking him to allow industry groups to intervene in alleged “sue-and-settle” suits that environmentalists bring to to force EPA to set binding regulatory deadlines.

In the House, the Interior and Environment Appropriations Subcommittee is holding a July 23 markup on a draft bill to set fiscal year 2014 funding levels for EPA and other agencies and the bill being considered is likely to be a lightning rod.

Unveiled July 22, the bill would cut funding for EPA to $5.5 billion, a reduction of $2.8 billion, or 34 percent, from pre-sequester levels.

In particular the State Revolving Fund (SRF) program, which funds revolving loans for water infrastructure improvements, would be reduced from $1.4 billion in FY13 to $600 million in FY14, and mandate the use of domestically-produced iron and steel in all projects funding by the SRF.

The bill would also block implementation or development of dozens of proposed, pending or discussed rules and executive actions, including pending measures to clarify the reach of the Clean Water Act, new source performance standards for greenhouse gases, Tier 3 fuel rules, stormwater permitting for logging roads, lead paint cleanups, farm data and many others.

On a less partisan note, the Senate environment committee's Superfund subcommittee is slated to hold a July 24 hearing, entitled “Cleaning Up and Restoring Communities for Economic Revitalization,” which will focus on EPA's brownfields program. Participants, including EPA waste chief Stanislaus, are likely to make the case for the agency's brownfields program and pending legislation, S. 491, that reauthorizes the program.

The bill, which enjoys bipartisan support, amends the agency's brownfields grant program to ensure technical assistance funding reaches smaller communities following complaints by some Central Plains and South Central states that rural areas are being passed over for the awards in favor of more populated Rust Belt cities.

Sen. James Inhofe (R-OK), one of the bill's sponsors, told the National Brownfields Coalition recently that as a conservative, he rarely has the opportunity “to speak positively about any program that comes out of the EPA. But the Brownfields program is a conservative program. It leverages public finances with private investors to clean up contaminated areas that would otherwise be abandoned so they can redeveloped into something productive and profitable.”

And Smart Growth America President Geoff Anderson, who is also slated to testify, says he will make the case for Congress to approve the legislation. “If passed, the bill would help communities across the country clean up contaminated and abandoned land and put it back into productive use,” he said in a blog post July 18.