Nine Regulations Threatening Reliability

American families and businesses expect the lights to stay on at a cost they can afford. But that’s no longer a guarantee. Nine states saw rolling blackouts last December as the demand for electricity exceeded available supply. 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 EPA’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 will need to optimize them starting in 2023.

Advocacy and Next Steps: 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. The final rule was published on June 5, 2023, and litigation is possible.

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 technologies like baghouses (fabric filters).

Advocacy and Next Steps: NRECA filed comments on June 23 recommending that EPA keep current standards in place since the minimal health benefits do not justify the costs of the proposed requirements and would result in the premature retirement of some coal-fired units that underpin reliability.

Clean Air Act Section 111(b)
New Power Plant Greenhouse Gases Rule

The rule is aimed at reducing greenhouse gas emissions from covered coal and natural gas-fired power plants. It requires new, modified and reconstructed natural gas units to have hydrogen capability or carbon capture and storage. Specific requirements depend on unit usage.

Impact on Co-ops: Co-ops seeking to build new natural gas units to provide baseload power need to co-fire hydrogen by 2032 or equip units with CCS by 2035. The proposal raises reliability concerns because of the uncertainty that these technologies will be ready when required by EPA. Many units may opt to curtail their production rather than hope the technologies become commercially viable in time.

Advocacy and Next Steps: In pre-rule comments, NRECA explained that EPA’s preferred technologies are not commercially viable. NRECA will advocate to ensure that new natural gas plants can be brought online while industry waits for hydrogen and other possible technologies like CCS to be viable. The proposed rule published May 23 and takes immediate regulatory effect for the purposes of defining new units. Comments are due Aug. 8.

Clean Air Act Section 111(d)
Existing Power Plant Greenhouse Gases Rule

The rule is aimed at reducing greenhouse gas emissions from existing coal and natural gas-fired power plants. It is EPA’s latest attempt to stay within the legal limits of how the agency can limit greenhouse gas emissions from existing fossil fuel units. The Supreme Court ruled in 2022 that EPA is limited to measures that take place within the electric generating unit.

Impact on Co-ops: Coal units operating past 2040 must be able to meet 90% carbon capture and storage by 2030. Those retiring earlier face other requirements. Existing gas units that provide baseload power will need to co-fire hydrogen or meet CCS standards.

Advocacy and Next Steps: NRECA will advocate to ensure that the rule does not threaten grid reliability and consumer affordability through reduced use and premature retirement of these units. The proposed rule was published May 23, and the comment period ends Aug. 8.

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. 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: NRECA will advocate for a commonsense rule with appropriate regulatory requirements and adequate compliance timelines. The proposed rule was published May 18 with a 60-day comment period. Public hearings will be held June 28 and July 12, and comments are due July 17.

NEPA Phase 2 Rule

The rule, which will further revise the Council on Environmental Quality NEPA regulations, is aimed at ensuring that federal agencies consider the environmental impacts of their actions, including permitting or financing projects. The proposed rule will expand on last year’s NEPA Phase 1 rule and will likely include additional requirements for NEPA reviews, including expanded consideration of climate impacts.

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.

Advocacy and Next Steps: NRECA will advocate against requirements that unnecessarily lengthen reviews and increase costs and has been actively pursuing permitting reform in Congress. The proposed rule slated for June 2023 appears delayed as CEQ works to incorporate changes in response to recent NEPA reform legislation.

Power Plant Wastewater Rule

The rule is aimed at reducing discharges of wastewater into the environment. EPA proposed more stringent limitations on wastewater discharges from coal-fired power plants, 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 required by the 2020 ELG rule and force early closure of essential power plants.

Advocacy and Next Steps: NRECA is engaging with EPA on the proposed rule directly and through the Utility Water Act Group, a coalition that represents electric utilities. NRECA filed comments that focused on co-op concerns with the proposed rule. The final rule is expected in 2024. Litigation is possible.

2023 Waters of the United States Rule

The rule defines which waters and features are under federal jurisdiction, establishing when federal permits and associated NEPA reviews are required for certain projects. The final rule takes a broader approach and lacks the clarity needed for consistent, predictable and efficient permitting for electric co-op infrastructure projects. It also provides the EPA and Army Corps of Engineers more discretion as they make case-by-case determinations about coverage.

Impact on Co-ops: The new rule expands federal jurisdiction over waters and features. This will further delay and increase the costs for any projects that require Clean Water Act Section 404 permits for dredging or filling.

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. Two federal judges have granted preliminary injunctions blocking EPA and the Army Corps from implementing the rule in 27 states. Additionally, the U.S. Supreme Court’s recent Sackett decision, which limits the reach of the Clean Water Act, will require the Agencies to issue guidance or revise the 2023 WOTUS rule.

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. More states may be included.

Impact on Co-ops: Co-ops in affected states may be required to install 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 proposed and final federal implementation plans.

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