Using Clean Air Act Section 111(d) to Regulate Greenhouse Gases from Existing Electric Utilities



This article is the second in a series of articles covering new or proposed regulations targeting greenhouse gas (GHG) emissions from electric generating units (EGUs). This article discusses proposed GHG regulations of existing EGUs. Important background information, as well as EPA’s proposed regulation of new, modified, and reconstructed EGUs can be found in the Winter 2014 issue of Environmental Quarterly.

Background

On February 27, 2006, EPA issued revisions to New Source Performance Standard (NSPS) Subpart Da, which regulates electric generating units (EGUs). Environmental groups and eleven states subsequently objected to the exclusion of GHG from the NSPS, leading to a lawsuit in the D.C. Circuit Court of Appeals New York v. EPA.  In August 2009, EPA requested a voluntary remand from that lawsuit, and on December 16, 2010, it announced a proposed settlement agreement with petitioners. The settlement agreement established the following actions by EPA.

  • NSPS under Clean Air Act (CAA) Section 111(b) for new and modified EGUs subject to Subpart Da
  • Emissions Guidelines (EG) under CAA Section 111(d) for existing EGUs

The original proposed settlement was published in the Federal Register on December 30, 2010, and established deadlines for final rules in 2012, which were not met. President Obama established a new schedule and plan for GHG EGU regulations in his June 25, 2013 Presidential Memorandum and companion Climate Action Plan, respectively. Milestones include standards, regulations, or guidelines (SRGs) for modified, reconstructed, and existing sources, according to the following schedule:

  • June 1, 2014 - Proposed SRG
  • June 1, 2015 - Final SRG
  • June 30, 2016 - States to submit state implementation plans (SIPs) to implement SRG

This article specifically explores the use of CAA Section 111(d) to regulate existing (unmodified) EGUs.

Precedent for Regulating Existing Sources under Section 111(d)

Broadly, Congress intended CAA Section 111(b) to be used to regulate new and modified sources, and Section 111(d) to be used to regulate existing sources. EPA has used Section 111(b) to issue NSPS for nearly 100 categories of emitting sources. These source categories can be found in individual subparts of 40 CFR 60, beginning with Subpart D. Section 111(d) has been used less frequently to regulate sources, in part because of the restrictions on its use established by Congress, and the greater intended role of States in establishing regulations for existing sources.

EPA has used 111(d) to regulate existing sources through two means. First, EPA has established EGs for a handful of source types listed in 40 CFR 60, Subpart C. These include existing municipal solid waste landfills, municipal waste combustors, sulfuric acid production plants, and hospital/medical/infectious waste incinerators. EPA has also written control technology guidelines (CTGs) pursuant to 111(d) for phosphate fertilizer manufacturing facilities (1977), kraft pulp mills (1979), and primary aluminum reduction plants (1980). In turn, States used these CTGs to update their SIPs as necessary to address existing units within their borders.

Since Congress was dealing with existing emissions sources in 111(d), it included provisions to allow States to take into consideration the remaining useful life of an existing source, in establishing regulations potentially affecting that source.

EPA Plan Ignites a Firestorm of Debate

EPA’s proposed plan is controversial. Historically, the U.S. government has by and large sought to regulate new and modified sources preferentially to existing sources. For instance, NSPS and state and federal construction permitting programs target new and modified sources. And while post-1990 National Emissions Standards for Hazardous Air Pollutants (NESHAPS), including Maximum Achievable Control Technology (MACT) standards, regulate new and existing sources of hazardous air pollutant (HAP) emissions, standards for new sources are more stringent, and apply earlier, than standards for existing sources. Reasonably Available Control Technology requirements target existing sources of non-attainment pollutants and precursors, but only in areas not meeting one or more ambient air quality standards.

In September, 2013, EPA requested comments from States on establishing standards for existing EGUs. States, working in concert with various stakeholders, provided comments, as did industry groups and environmental interest groups. Interested parties on both sides of the issue have argued whether the language of Section 111(d) does or does not expressly prohibit EPA from using 111(d) to regulate existing fossil fuel fired electric utilities since these electric utilities are already regulated under CAA Section 112, specifically the Mercury and Air Toxics Standard. The Section 111(d) language regarding source categories regulated under a Section 112 standard is admittedly confusing, and was the subject of much interest in the litigation of the Clean Air Mercury Rule.

Other issues raised by commenters include:

  • Whether EPA’s approach will give States the latitude they have come to expect in implementing Section 111(d) EGs
  • Whether standards established pursuant to Section 112(d) apply specifically to the affected unit (“inside the fenceline”) or also to activities beyond the affected unit (e.g., energy efficiency measures undertaken by electricity consumers “outside the fenceline”)
  • Interaction of a proposed EG with existing State programs (e.g., renewable portfolios), and credit for CO2 reductions already achieved
  • Treatment of biomass energy for EGUs co-fired with fossil fuels
  • Cost considerations, including for older EGUs nearing retirement

With so much interest and debate generated in advance of an EG for existing sources, litigation is perhaps the only certain outcome.

CAA Reg GHG Existing Electric Utilities