By Claudia O’Brien, Karl Karg, and Joshua Marnitz

On April 19, 2013, the US Environmental Protection Agency (EPA) announced proposed technology-based effluent limitation guidelines and standards for steam electric power generating units. The proposed national standards, which are based on data collected from industry, provide for a phased-in approach and the use of technologies already installed at a number of plants. EPA argues that this regulatory action is necessary to reduce the amount of toxic metals and other pollutants discharged to surface waters by power plants, in part because the development of new air pollution control technologies over the past 30 years has altered existing wastewater streams at many power plants, particularly those burning coal.

EPA’s proposal would set federal limits on the levels of toxic metals in wastewater discharged from seven waste streams: flue gas desulfurization (FGD) wastewater, fly ash transport water, bottom ash transport water, combustion residual leachate, nonchemical metal cleaning wastes, and wastewater from flue gas mercury control (FGMC) systems and gasification systems. To that end, EPA presents eight regulatory options for public comment, four of which are EPA’s preferred regulatory alternatives for existing sources. EPA also identifies one preferred alternative for the regulation of new sources. The regulatory options presented by EPA differ in terms of the number of waste streams covered, the size of the units controlled, and the stringency of the controls that would be imposed.  For a detailed summary and discussion of EPA’s preferred alternatives for both existing and new sources, please review our Client Alert available here.  The public comment period on the proposed rule will be open for 60 days from the date the notice is published in the Federal Register.

EPA’s proposed rule is the latest in a series of aggressive rulemakings targeting coal-fired power. In connection with each rulemaking, EPA assesses the economic impact of the individual rule and makes some pronouncement regarding its projected effect, including whether any facilities will be forced to close as a result of the rulemaking. EPA believes compliance with this proposed regulation would be economically achievable – costing between $185 million and $954 million, depending on the alternative chosen – and does not project that it will force any coal-fired plants to close.  In fact, EPA believes that fewer than half of all coal-fired power plants are estimated to incur costs under the proposal because most power plants already have in place the technology and procedures to meet the proposed pollution control standards.

Lacking from this analysis, however, are considerations of the cumulative effects of an avalanche of EPA rules affecting the coal-fired power industry. Since 2009, EPA has proposed at least five major rules that will significantly impact coal-fired power. (The other rules include the Cross-State Air Pollution Rule, which was vacated by the D.C. Circuit last summer; the coal combustion residuals rule; the cooling water intake structure (§ 316(b)) rule; and the Mercury and Air Toxics Standard.)  In addition, EPA plans to issue greenhouse gas regulations for existing power plants (and has already proposed rules that would prevent new coal-fired power plants from being built without the installation of currently cost-prohibitive carbon capture and sequestration technology), and has imposed greenhouse gas permitting requirements on coal-fired power. EPA’s proposed effluent limitation guidelines will certainly impose significant costs on many facilities, and when coupled with the cost of EPA’s rules under the Clean Air Act, there can be little question that some coal-fired facilities will close as a result.