American families and businesses expect the lights to stay on at a cost they can afford. But that’s no longer a guarantee. The North American Electric Reliability Corp. has warned that all or parts of 19 states are at high risk of rolling blackouts during normal peak conditions over the next five years.
Electricity demand is increasing rapidly as new data centers and manufacturing facilities come online. At the same time, electricity supply is decreasing as the premature retirement of always-available generation continues. And new environmental rules will exacerbate the problem.
Ozone Transport Rule
The rule is aimed at reducing ozone-forming emissions of nitrogen oxides from power plants and industrial facilities that cross state boundaries. The final rule requires additional emissions controls by 2026 for electric utilities in 22 “upwind states” to help assure “downwind states” can meet the Environmental Protection Agency’s limits for ozone concentrations in ambient air.
Impact on Co-ops: Affected co-ops in covered states must install a selective catalytic reduction system or take equivalent measures to reduce nitrogen oxide emissions in order to attain thresholds set by EPA-mandated state emissions budgets. Units that already have SCRs need to optimize them during summer ozone seasons.
Advocacy and Next Steps: The final rule was published on June 5, 2023. NRECA sought flexibilities, some of which were incorporated into the final rule, including additional time to comply and less stringent state emissions allowance budgets. Grid reliability concerns remain. Litigation is underway, with the Supreme Court expected to rule on a motion to stay the rule in spring 2024.
Mercury and Air Rule
The rule is aimed at reducing mercury and particulate matter emissions from power plants. The proposed rule requires coal plants to install additional emissions controls to reduce emissions of these pollutants.
Impact on Co-ops: The proposal requires significant reductions in allowable emissions from facilities, which could require some plants to install expensive emissions control technologies like baghouses (fabric filters).
Advocacy and Next Steps: NRECA filed comments on June 23, 2023, recommending that EPA keep current standards in place since the costs of the proposed requirements are not justified and would result in the premature retirement of some coal-fired units that underpin reliability. A final rule is expected in spring 2024.
Power Plant Greenhouse Gas Rule
The rule is aimed at reducing greenhouse gas emissions from covered coal and natural gas-fired power plants. It requires the most-used power plants to install emissions control technologies that are unproven at scale, either carbon capture and storage or clean hydrogen co-firing. Specific requirements depend on unit usage for natural gas and retirement date for coal.
Impact on Co-ops: The proposal raises reliability concerns because of the uncertainty that these technologies will be ready when required by EPA. Many units will be forced to retire or drastically curtail their production rather than hope the technologies become commercially viable in time. Planning for new generation will become difficult.
Advocacy and Next Steps: In comments filed on Aug. 8, 2023, NRECA explained that the proposals exceed EPA’s statutory authority and would jeopardize affordable and reliable electricity by mandating nascent, inadequately demonstrated technologies and unachievable emissions limits on an unworkable timeframe. A final rule is expected in spring 2024.
Particulate Matter Air Standards
The final rule revises annual average limits on fine particulate matter (PM) in ambient air, lowering them to levels close to those that naturally occur. The rule could put much of the country into “non-attainment,” or in violation of the standards.
Impact on Co-ops: If an area is designated as in “non-attainment,” obtaining permits for much-needed new generation sources becomes exceptionally difficult, as any project that could emit PM will be scrutinized. Existing units may also be required by their states to add new emission controls, despite the fact that reductions in emissions will have little to no impact on air quality.
Advocacy and Next Steps: NRECA filed comments on the proposal in March 2023 urging EPA to keep the previous standards in place. The final rule was published on March 6, 2024. States and impacted industries have already begun litigation to block the rule.
Legacy Coal Ash Ponds Rule
The rule is aimed at regulating coal ash sites that have not been subject to EPA’s federal regulations for coal combustion residuals (CCR). The proposed rule establishes two new classes of units that would be subject to many of the existing CCR requirements: “legacy ponds” (inactive coal ash ponds at inactive power plants that contained both CCR and liquids on or after Oct. 19, 2015) and “CCR management units” (coal ash ponds and landfills closed prior to the effective date of the 2015 CCR Rule, inactive coal ash landfills and areas where coal ash was or is directly on the land).
Impact on Co-ops: Co-ops will need to evaluate, identify and document in a report whether they have any CCR management units. Co-ops with legacy ponds or CCR management units will need to comply with numerous regulatory requirements on an expedited compliance timeline and will incur compliance costs.
Advocacy and Next Steps: In comments filed on July 17, 2023, NRECA urged EPA to separate the legacy surface impoundments and CCR management unit proposals into two separate actions; address practical, legal, economic and electric reliability concerns; and reconsider proceeding to a final rule without significant changes. A final rule is expected in spring 2024.
NEPA Phase 2 Rule
The rule, which will further revise the Council on Environmental Quality (CEQ) National Environmental Policy Act (NEPA) regulations, is aimed at ensuring that federal agencies consider the environmental impacts of their actions, including permitting or financing projects. The proposal includes burdensome and subjective new requirements that will prolong and complicate environmental reviews.
Impact on Co-ops: Co-ops that seek federal funding, permits or right-of-way authorizations for projects such as new transmission lines are likely to face even longer NEPA reviews and additional litigation risk, which jeopardizes affordable, reliable and safe electricity.
Advocacy and Next Steps: In comments filed on Sept. 29, 2023, NRECA opposed the NEPA Phase 2 Rule and urged CEQ to revise and reissue a proposal before proceeding. A final rule is expected in spring 2024.
Power Plant Wastewater Rule
The rule is aimed at reducing discharges of wastewater into the environment as part of EPA’s Effluent Limitation Guidelines (ELGs). EPA proposed more stringent limitations on wastewater discharges from coal-fired power plants than those included in the 2020 ELG rule, including setting zero-discharge limits for two wastewater streams (flue gas desulfurization wastewater and bottom ash transport water) and strengthening standards for combustion residual leachate.
Impact on Co-ops: Covered co-ops will need to install pollution control technology to meet the new limits, which may impose significant costs and be technically challenging. This may waste investments made to comply with the 2020 ELG rule and force early closure of essential power plants.
Advocacy and Next Steps: In comments filed May 30, 2023, NRECA urged EPA to reconsider its proposal due to technological and economic concerns with the proposed limits that will require certain power plants to make significant investments in new equipment or to shut down. A final rule is expected in spring 2024.
2023 Waters of the United States Rule
The Waters of the United States rule defines which waters are under federal jurisdiction, establishing when federal permits and associated National Environmental Policy Act reviews may be required. Following the U.S. Supreme Court’s May 2023 decision in Sackett v. EPA, which narrowed the scope of Clean Water Act jurisdiction, the EPA and Army Corps of Engineers issued a rule in September 2023 that amended the WOTUS rule they had issued in January 2023. The amended final rule removed certain provisions that were effectively invalidated by the Sackett decision.
Impact on Co-ops: Despite the agencies’ amendments, the WOTUS rule still takes an overly broad approach to federal jurisdiction and could result in unnecessary permits and other delays for various construction and maintenance projects. Regulatory uncertainty continues as the amended WOTUS rule is the subject of ongoing litigation. In addition, because the January rule is enjoined in 27 states, there are currently two regulatory definitions in effect, which might complicate permitting for certain projects.
Advocacy and Next Steps: NRECA is part of a multi-industry coalition that is engaging with members of Congress to oppose the rule. The coalition is also meeting with EPA and the Army Corps to address implementation concerns. Litigation challenging the rule is proceeding.
Regional Haze Rule
The rule is aimed at improving visibility in 156 national parks and wilderness areas. State plans for the second planning period covering 2018-2028 were due in July 2021. In August 2022, EPA issued a finding that 15 states failed to submit adequate implementation plans. EPA has two years from that finding to issue federal implementation plans for these states. In March 2024, EPA proposed a timeline for proposing and finalizing action on state implementation plans for another 33 states over a prescriptive timeline stretching through 2026.
Impact on Co-ops: Co-ops in affected states may be required to install pollution control equipment and systems to reduce visibility-harming pollutants.
Advocacy and Next Steps: NRECA will monitor EPA’s federal plans for the affected states to gauge the impact on affected co-ops. EPA has until August 2024 to issue federal implementation plans.