Congress, Energy, Environment, State Government

New EPA Good Neighbor Plan could close 13% of nation’s coal-fired power capacity

MORGANTOWN — The U.S. EPA’s Good Neighbor Plan released this week requires power plants in 22 states to further reduce emissions by 2027, and EPA projects the plan could lead to retirement of 13% of current national coal-fired generating capacity.

The new rule will have a bearing on Mon Power’s Fort Martin Power Station as the company considers a Public Service Commission Consumer Advocate Division recommendation to buy Pleasants Power Station and close Fort Martin.

EPA released its final Good Neighbor Plan last week. It is a new version of the Cross-State Air Pollution Rule issued under the Clean Air Act’s Good Neighbor requirements.

It applies to 23 states but will require power plants in 22 of them to reduce their nitrogen oxide — NOx — emissions by 50% compared to 2021 levels.

EPA says the plan “will improve air quality, saving lives and improving public health in smog-plagued communities across the United States. This final rule, which requires pollution reductions from power plants and industrial sources whose pollution crosses state lines, delivers substantial health benefits using proven, cost-effective control technologies and strategies. In addition, the Good Neighbor Plan provides sufficient lead time and compliance flexibility to make it feasible for sources to reduce their pollution at reasonable cost.”

Across the 22 states, EPA said it predicts retirement of 14 gigawatts (GW) of coal-fired power, with estimated compliance costs of $1.3 billion by 2030. But EPA said the benefits far outweigh the costs. In 2026 alone, it estimates the rule will prevent up to 1,300 premature deaths and reduce hospital and emergency room visits for respiratory illness. After taking in compliance costs, it puts these benefits in the range of $3.7 billion to $14 billion.

PJM, the 13-state regional energy grid, said that some plants in its footprint will have to invest in selective catalytic reduction (SCR) units — which remove the NOx — to meet the plan’s goals.

Assuming that some plant owners won’t make the investment, PJM in February estimated 4.4 GW of retirements spurred by the policy. But it added Thursday, “However, changes made in the final rule provide more time, out to 2030, for large coal-fired generators to install needed controls.”

It said on Thursday, “PJM worked extensively with other affected regional transmission organizations and EPA to address our reliability concerns with the rule as originally proposed. We are encouraged by the changes that EPA has made and their indication of a willingness to develop various mechanisms to ensure the adequate availability of allowances to meet reliability needs. PJM expects to work closely with EPA and stakeholders to further the development of these reliability assurance provisions to accompany the final rule.”

EPA charts the 2023-29 NOx emissions budgets under the plan. West Virginia’s 2023 budget is 13,791 tons; that falls to 9,678 tons for 2027 and remains at that level through 2029.

SCR units are one of the reasons that the PSC’s CAD is recommending Mon Power — a FirstEnergy subsidiary — buy Pleasants and close Fort Martin. Pleasants has SCR. Fort Martin has Selective Non-Catalytic Reduction, which, CAD said, “does not achieve the same level of NOx reductions as SCR.”

Asked about this, FirstEnergy said, “We are in the process of evaluating the new regulation to determine what effects it may have on our generating plants. Mon Power’s evaluation of the possibility of purchasing the Pleasants Power Station is still ongoing. We plan to report our findings back to the commission in the coming weeks.”

Pleasants is a 1,300 megawatt plant that employs 158 people and contributes $1.75 million in annual taxes to the county and school board. Fort Martin is 1,098 MW, employs 180 people and pays $3.4 million in annual property taxes.

Political responses

The Dominion Post contacted Sens. Joe Manchin and Shelley Moore Capito, state Attorney General Patrick Morrisey (who has pursued successful lawsuits against the EPA) and the Sierra Club for comments on the rule.

On March 8, Manchin, Senate Energy chair, wrote to EPA Administrator Michael Regan to urge EPA to postpone finalizing this rule until it addressed warnings from electric reliability experts and the significant concerns expressed by state environmental agencies.

Manchin said on Wednesday, “Today’s reckless decision by the EPA totally disregards 23 states’ existing plans to address ozone levels and completely ignores warnings from electricity reliability experts, elected officials and key manufacturing industries. This Administration is determined to advance a progressive, radical climate agenda. By EPA’s own analysis, the Good Neighbor Rule will drive up West Virginians’ electricity prices and cause premature closures of baseload power plants during a time when households are already facing high inflation and increasing energy costs.”

Capito, ranking member of the Environment and Public Works Committee, said the plan “has two things in common with the Inflation Reduction Act: a misleading name and disastrous impacts for American energy producers. This regulation not only burdens 23 states with overreaching emissions reductions requirements for power plants, it also targets specific industries vital to our economy, including iron, steel, cement, and pulp and paper. With this plan, the Biden administration is imposing yet another regulation to accomplish its ultimate goal of shutting down fossil fuel plants and making America less energy independent.”

Morrisey commented, “As he promised the radical left, President Biden is going after our nation’s coal-fired power plants and the jobs they support. This is going to hit close to home here in West Virginia. We are looking closely at the final rule and are considering our legal options to push back against this reckless anti-coal agenda.”

On a more positive note, Sierra Club West Virginia chapter chair Jim Kotcon said, “Communities across the country continue to suffer from the health effects of ozone pollution produced by coal and chemical plants that refuse to use all available pollution controls. The Good Neighbor Rule will protect residents in West Virginia and in dozens of other states who are unknowingly and unwillingly subjected to smog pollution from power plants and industrial facilities in upwind states, often hundreds of miles away.”

He continued, “EPA based the pollution reductions in the rule on pollution controls that two thirds of coal-fired power plants already have, but often fail to use effectively. The health of West Virginia citizens must take precedence over industry profits.”

TWEET David Beard @dbeardtdp