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Clean Air Rules: A New Roadmap for the Power Sector

How new market-based regulations fit with today’s programs.

Fortnightly Magazine - June 2007

a year of visibility-impairing pollution and cover 26 categories, including utility and industrial boilers and large industrial plants such as pulp mills, refineries, and smelters.

Many of these facilities have not been subject to federal pollution-control requirements for these pollutants. Under the 1999 regional-haze rule, states are required to set periodic goals for improving visibility in the 156 “Class I” natural areas such as national parks. CAVR includes guidelines for states to use in determining which facilities must install controls and the type of controls the facilities must use. States must develop their implementation plans by December 2007, identify the facilities that will have to reduce emissions under BART, then set emissions limits for those facilities and require installation of BART in 2014.

For CAIR-affected EGUs, participation in the CAIR programs is considered to meet their federal source-specific BART requirements, because CAIR was determined to be better than BART controls of CAVR in the CAIR region. Specifically, controls for EGUs subject to CAIR will result in more visibility improvement in natural areas than BART would have provided. States could, however, require additional reductions.

Projected Controls in Response to Clean Air Suite

Although aspects of CAIR and CAMR are being litigated, implementation moves ahead. Briefs have been filed by industry and stakeholders. EPA has filed a brief on CAMR and will file on CAIR this month. Having worked very hard to develop the details of these critically important environmental programs, EPA has gone on to work with states, which are now working aggressively to put implementing rules in place. The regulated community is going forward with installing equipment for CAIR, entering into contracts for construction of mercury controls and putting monitoring systems in place.

Sources have begun responding to the new requirements with investments and application of retrofit technology. EPA estimates that in 2010, 60 percent of total capacity will be scrubbed, increasing to 73 percent by 2020. Modeling shows that the percentage of advanced controls will go up (with the amount of capacity with advanced controls projected to increase even faster) and the number of units without advanced controls will go down, especially for larger units.

As observed with previous programs, the regulated community responds with a sense of purpose and alacrity to cap-and-trade programs. EPA, using existing Clean Air Act authority, is moving to address interstate transport of SO 2 and NO X emissions and lower mercury emissions with CAIR, CAMR, and CAVR. We expect these programs to deliver significant human health and environmental improvements in a cost-effective manner by harnessing market forces to achieve substantial required emissions reductions.

EPA has worked diligently to promulgate rules to meet regional needs, all the while preserving to the greatest extent possible the essential accountability, simplicity, flexibility, high level of compliance, and efficiency of the cap-and-trade mechanism. If our experience to date is any indication, the next generation of programs promises to continue this legacy of results.

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