(May 2008) Senators were voting on legislation to extend the renewable production tax credit (PTC) as this issue of Fortnightly went to press. But with federal tax support for...
Wind and the Environment: The EPA's Tech Divide
Does the Clean Air Act require the agency to consider the most low-emission coal plant technologies in permitting new plants?
is required as part of BACT, and some have taken a contrary view. Texas has followed EPA’s approach after EPA’s issuance of its recent interpretation. Many states have on the books laws precluding the imposition of requirements more stringent than those imposed by the EPA. In such states, the EPA decision could have particular significance and impact.
In Illinois, as part of its efforts to reduce mercury emissions from coal-fired power plants, the Illinois EPA requires plant applicants to evaluate the use of IGCC as part of a BACT analysis. 13 These efforts arose out of concerns that “federal mercury legislation does too little, too late and in Illinois could actually lead to increased mercury emissions.” 14 In June 2005, Illinois Gov. Rod Blagojevich bolstered the state’s IGCC program by signing Senate Bill 90, which permits gas utilities to enter into long-term supply contracts with any plant that uses IGCC to produce natural gas from Illinois coal. 15 Moreover, Senate Bill 90 sets the price for IGCC-produced gas 18 to 30 percent lower than that of conventional natural gas. 16 The legislation was intended to provide incentives for the purchase of IGCC-generated energy and to facilitate financing for the development of IGCC facilities.
Like Illinois, Montana requires coal-fired power-plant applicants to evaluate the use of IGCC as part of meeting the state’s “top-down” BACT demonstration. 17 In describing its adoption of this approach, the Montana Department of Environmental Quality (Montana DEQ) noted that “using the BACT requirement as a means to redefine the design of the source when considering available control alternatives is an aspect of the permitting process in which the [Montana DEQ] has the discretion to engage in a broader analysis.” 18 The Montana DEQ elaborated that “under an applicant’s proposal for a coal-fired electrical power generating plant, the [Montana DEQ] considers any process beginning with coal as a fuel and ending with the production of electricity to be appropriate for consideration under the top-down BACT analysis process. This analysis would include IGCC, [circulating fluidized bed, and] pulverized coal-fired boiler.” 19
But unlike Illinois and Montana, Wisconsin has determined that consideration of IGCC is not required as part of a BACT analysis.
In February 2005, a Wisconsin administrative law judge affirmed the decision by the Wisconsin Department of Natural Resources (DNR) to issue a permit to the Wisconsin Electric Power Co. to construct the Elm Road Generating Station, to consist of two SCPC units and one IGCC unit. 20 In so ruling, Judge Coleman rejected environmental groups’ claims that the Wisconsin DNR erred in excluding IGCC from its BACT analysis of the proposed plant. 21 Instead, Judge Coleman concluded that, based on the EPA’s New Source Review Manual, 22 the design of the proposed station would be redefined if IGCC units were substituted for the SCPC units and, therefore, could not be required as part of BACT. 23 Judge Coleman noted that the only commonality between IGCC and SCPC units is that both types of units would use coal as the fuel stock; 24 beyond this feature, there are “innate