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EPA's Emissions Rule: Reliability at Stake?
Some fear NO x controls will spawn outages and higher power prices.
Utility executives say the EPA's plan to reduce ground-level ozone in the nation's eastern half by controlling emissions of nitrogen oxides in upwind states could undermine electric reliability and force power prices higher.
And that prospect loomed larger in late June, after the U.S. Court of Appeals for the D.C. Circuit turned down a last-ditch effort to sink the EPA plan, widely known as the "SIP Call." Seeing no reason to interfere any longer, it denied motions for rehearing and left intact its ruling issued March 3 that the Environmental Protection Agency had struck a proper balance under the Clean Air Act between air quality and technological cost constraints. At the same time, the court lifted a stay in force since May 1999 that had suspended the deadline for those upwind areas to prepare a state implementation plan (SIP) for NO x control and file with the EPA.
Of course, the EPA's opponents are still alive in the U.S. Supreme Court, which will review the EPA's aggressive 8-hour standard for measuring nonattainment of air quality standards for ozone. And many downwind states might still be heard on their "section 126 petitions"--fixing blame for their ozone nonattainment on upwind polluters. But the SIP Call still stands. The EPA last year had lowered its sights by asking the D.C. Circuit to evaluate its NO x plan under the old, less-stringent one-hour standard. Thus, this latest ruling from the court of appeals would not be undone by a Supreme Court order striking down the new eight-hour standard. All the same, many in the energy industry still question the basic philosophy behind the SIP Call.
"The EPA is changing the rules in mid-game with a flurry of new regulations--not based on objective science--and with unrealistic deadlines," cried William T. McCormick Jr., chairman and chief executive officer at CMS Energy, at a May press briefing in Washington, D.C.
"Electric reliability will be seriously degraded, especially in the Midwest, because of the large number of plant outages needed to backfit selective catalytic reduction and other technologies over the next three years to meet EPA's 2003 deadlines," he said.
McCormick's comments highlight industry concern that the EPA rule will force utilities to have their power plants offline for longer than planned to install technology for reducing emissions. That time offline could cause reliability problems if the outages extend into times of high power demand.
McCormick cites a study released in February by the North American Electric Reliability Council, "Reliability Impacts of the EPA NO x SIP Call," in which NERC found impacts of the EPA rules ranging from insignificant to cause for concern.
In particular, the NERC study predicted significant impacts on electric reliability in the Midwest, both in the ECAR region (East Central Area Reliability Coordination Agreement) and in MAIN (Mid-America Interconnected Network Inc.). It cited smaller reliability impacts on the Eastern Seaboard, in the MAAC (Mid-Atlantic Area Council) and SERC (Southeastern Electric Reliability Council) regions. But reliability studies performed by the EPA and others