Originally published in
Environmental Quarterly
Spring 2012
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EPA’s Utility MACT - The Bell Tolls for Older Plants

By Russell Bailey
Principal Consultant
Trinity Consultants - Roanoke, VA

On February 16, 2012 (77FR9304), EPA released the final National Emission Standards for Hazardous Air Pollutants (NESHAP) for electric utilities. Despite the opportunity to use either risk-based (adequate margin of safety) or generally available control technology (GACT) standards (for non-major sites), EPA decided instead to use maximum available control technology (MACT) to set all emission limits under the rule, for all sites (major or not). Although EPA has coined the term Mercury and Air Toxics Standards (MATS) for the rule, this article will use the most common moniker, Utility MACT.

Of EPA’s many new and developing rules affecting electric utilities, the Utility MACT is likely the single rule with the greatest potential impact on industry. EPA’s new Transport Rule puts financial pressure on utilities (presuming it survives the current court challenge that led to the staying of the rule at the end of 2011) due to limited trading 2014-onward. EPA’s voluntarily initiated coal combustion residual (CCR) rule (proposed only) also adds risk and likely costs to coal-fired electric utilities, and the proposed Clean Water Act Section 316(b) rule has the potential to impact both nuclear and fossil fuel plants with once-through cooling. While the CCR and Section 316(b) rules are not yet finalized, these rules will likely only modestly impact most electric utility facilities. In contrast, the Utility MACT will directly result in the shutdown of many smaller coal-fired electric utilities by effectively requiring BACT level controls for PM and SO2 (two pollutants not even regulated by the NESHAP requirements).

Covered Units

Electric generating unit (EGU) regulation under the NESHAP program has a unique history. In contrast to all other sectors, Congress required EPA to specifically study and assess whether it was “appropriate and necessary” to regulate electric utilities. EPA found regulation by NESHAP “appropriate and necessary” in the last days of the Clinton administration, then found it not necessary under the Bush administration, and has now reaffirmed the Clinton finding. In the final rule, EPA determined that if the risk exceeds the Section 112(c) delisting criteria for a single electric utility unit, then it is “appropriate and necessary” to regulate the entire sector under the NESHAP program.

Utility MACT_ektron3.jpg

The Utility MACT rule covers coal-fired and oil-fired steam electric plants and integrated gasification combined cycle (IGCC) units, each with a minimum combustion unit size of 25 MWe output (approximately 250 MMBtu/hr input). Steam electric plants fired by natural gas are not included in the listed source category and are not regulated under NESHAP.

The dividing date for existing and new units is May 3, 2011 which, consistent with other NESHAPs, is the date of the proposed rule. However, differing from other NESHAPs, Section 63.9985 defines new as an EGU that commenced construction, reconstruction or modification after May 3, 2011. It is unclear whether EPA is intentionally expanding the universe of new sources to include those that are only modified, or, if in EPA’s rush to publication, an error was made in this section. Regardless of the origin, including modified units as a new source would be a major change from other NESHAPs. EPA identifies the following unit sub-categories within the Utility MACT.

  • Coal Boilers
    • designed for low rank virgin coal (e.g., lignite)
    • designed for all other coals
  • Oil Boilers
    • continental
    • non-continental
    • limited-use
    • solid oil-derived fuel (e.g., petcoke)
  • IGCC combusting gasified coal or gasified solid oil-derived fuel

To be classified as a fossil-fired unit, the unit must combust fossil fuel for more than 10% of the average annual heat input during any three consecutive calendar years, or more than 15% of the annual heat input in any one calendar year. Thus, combustion units, such as recovery boilers and biomass boilers that fire only small amounts of fossil fuel, are not covered under the rule, even if they combust small amounts of coal or oil.

The limited-use oil subcategory includes electric utility units with an annual capacity factor of less than 8% of the maximum or nameplate heat input, averaged over a 24-month block average beginning with the compliance date for the rule (first-half of 2015).

As with the Industrial Boiler MACT, units burning a solid waste are not subject to MACT, but are instead covered by the Commercial Industrial Solid Waste Incinerator (CISWI) rule. Sources transition between CISWI and Utility MACT via the same process as Industrial Boilers.

Cogeneration units have one significant exemption from otherwise being covered by this rule. For a cogeneration unit to be an electric utility, it must sell at least 1/3 of its potential electric output capacity and 25 MWe to a utility power distribution system for sale. Thus, units that might otherwise be covered under the Utility MACT may instead be covered under the Boiler MACT if they sell only modest amounts of power. However, EPA has narrowed the definition of cogeneration to require efficiency standards like those in CAIR/Transport Rule. The addition of the efficiency requirement is significant, as units at industrial facilities that sell any electricity could be regulated under the Utility MACT if they do not meet the cogeneration efficiency requirements, regardless of the amount of electricity sold. Also, unlike the interaction with CISWI, once a unit is subject to the Utility MACT, it may choose to remain subject to Utility MACT even if it again sold less electricity than the threshold to be subject.

Emission Standards

For existing coal units, most of the standards can be met with BACT-level controls, with the possible exception of mercury, which for some units will require additional sorbent injection.

  • Filterable PM - 0.03 lb/MMBtu (surrogate for metal HAP)
  • SO2 - 0.20 lb/MMBtu (surrogate for acid gas HAP)
  • Hg
    • Low rank - 4.0 lb/TBtu
    • Normal coal - 1.2 lb/TBtu

For new coal units, the standards are much lower, particularly for PM. The values below are converted to equivalent mass per heat input (e.g., lb/MMBtu) values, while the actual standards are in mass per power output (e.g., lb/MW-hr).

  • Filterable PM - 0.0007 lb/MMBtu (surrogate for metal HAP)
  • SO2 - 0.04 lb/MMBtu (surrogate for acid gas HAP)
  • Hg
    • Low rank - 4.0 lb/TBtu
    • Normal coal - 0.02 lb/TBtu

Existing continental oil-fired units must meet the following limits (no new oil-fired units are expected).

  • Filterable PM - 0.03 lb/MMBtu (surrogate for metal HAP)
  • Hg - 0.2 lb/TBtu
  • HCl - 0.002 lb/MMBtu
  • HF - 0.0004 lb/MMBtu

Limited-use oil units have no emission limits, but instead have work practice standards. Also, organic HAP is controlled via work practice standards for all categories.

Existing units at the same site and within the same sub-category may also use emissions averaging.

Compliance

Quarterly testing, CEMS, or sorbent traps are required for monitoring in most cases. Units qualifying as low emitters qualify for reduced monitoring.

Timing

The rule publication was February 16, 2012, which means an effective date of April 16, 2012 and a default compliance deadline of April 16, 2015. Where extra time is needed to accommodate installation of emission controls, the Title V permitting agency may allow an extra year, which could extend the compliance date to April 2016. EPA discusses a range of possibilities of scenarios that could qualify for an extra year in the preamble to the final rule.

Next Steps

All parts of the rule will likely be subject to vigorous legal challenge, with separate challenges on both the “appropriate and necessary” finding and the rule requirements. However, with final regulations (barring successful legal challenge) known, electric utilities must study and make difficult decisions now about the likely fate of their systems. Coal units with only ESPs less than 200 MW and uncontrolled oil units are particularly at risk for shutdown. Numerous shutdowns have already been announced, and it is likely more will follow.