Power Plant Emissions
NPA members operate their generating stations in compliance with all federal, state, and local environmental regulations. Complying with those regulations can be expensive: advanced pollution-control equipment can account for up to 25% of the cost to build a new power plant.
In 2011, NPA member utilities spent tens of millions of dollars complying with power-plant environmental regulations. We expect those costs to rise—perhaps quite sharply—over the next five years. And we expect the costs of complying with environmental regulations will be reflected in future electricity prices and your monthly bills.
NPA member utilities work hard to provide low-cost electricity that is clean and reliable. We built large coal-fired generators because they are the least-expensive way to generate electricity. Looking forward, we see the potential for many changes in the cost of electricity and the way it is produced.
SO2 and NOx Emissions
In 2011, the U.S. Environmental Protection Agency (EPA) finalized two new regulations to lower emissions from coal- and oil-fired power plants, using its authority in the federal Clean Air Act:
- The Mercury and Air Toxics Standards (MATS) rule, finalized at the end of 2011, is the nation’s first-ever rule to limit power-plant emissions of mercury and other hazardous air pollutants.
- The Cross-State Air Pollution Rule (CSAPR) was issued, then subsequently revised, in 2011. This rule applies to coal-fired power plants, of which there are 7 in Nebraska. In addition, Nebraska’s utilities also buy power from two out-of-state coal-fired power plants, one of which (MidAmerican Energy’s Walter Scott Unit 4 in Council Bluffs, Iowa), is affected by this rule. CSAPR sharply limits power-plant emissions of sulfur dioxide (SO2) and oxides of nitrogen (NOx) in 28 states, including Nebraska.
At the end of 2011, a federal court in Washington, D.C., delayed implementation of CSAPR until it could issue a decision on the numerous lawsuits that had been filed against that rule. Oral arguments in the case are scheduled to take place during the spring of 2012 with a ruling by the court expected during the summer of 2012.
Nebraska’s Attorney General was one of several state attorneys general that filed federal lawsuits against CSAPR. Some members of NPA filed a petition with EPA asking the agency to reconsider CSAPR’s aggressive implementation schedule.
CSAPR is the result of years of federal rulemakings on power-plant emissions of sulfur dioxide (SO2) and oxides of nitrogen (NOx) under the federal Clean Air Act.
In 2005, the EPA proposed the Clean Air Interstate Rule (CAIR) to reduce the interstate transmission of those emissions from power plants located in Eastern, Southeastern, Midwestern and Great Plains states. As those emissions drifted eastward, they were affecting the vibrancy of lakes and forests. But in 2008, a federal court told the EPA to find another way to regulate those emissions. The agency responded in 2010 with the Clear Air Transport Rule, which proposed several ways to control the interstate movement of power-plant emissions.
But the Transport rule contained a number of factual errors and methodological lapses that affected utilities in a number of states, including Nebraska. In mid-2011, the EPA replaced the Transport rule with a new rule, the Cross-State Air Pollution Rule (CSAPR), which was opposed by a wide range of utilities and utility organizations – including NPA — due to the questionable modeling and the unreasonably short amount of time allowed for implementation.
Nebraska’s utilities seek to be exemplary resource stewards – protecting the environment while also protecting customers from dramatic price increases. The MATS rule provides utilities three years to meet the new standards for emissions of mercury and other hazardous air pollutants. But CSAPR became effective in January 2012, only a few weeks after a revised final rule was issued in late 2011. Our concerns over CSAPR mainly stem from the extremely short amount of time given to utilities to comply with stringent new emissions standards. The final rule differed meaningfully from earlier drafts which required more modest emissions reductions from Nebraska’s utilities.
Carbon Dioxide Emissions
Neither CSAPR nor MATS address emissions of carbon dioxide (CO2) and other greenhouse gases (GHGs) from power plants. In early 2012, the EPA proposed a rule to regulate CO2 emissions from new fossil-fueled power plants. The regulation does not apply to existing fossil-fueled power plants or fossil-fueled power plants built within one year of this new rule taking effect.
The proposed CO2 rule requires any new coal- or oil-fired power plant to be equipped with carbon capture & sequestration (CCS) technology, which is extremely expensive and as yet unproven commercially. This rule effectively limits future power plants to be either natural gas-fired, nuclear, or renewables. For more on emissions of CO2 and other GHGs, click here.