American Electric Seeks Easing of EPA Toxics Plan for Particles

Power producers fighting the U.S. Environmental Protection Agency’s $11 billion rule to curb mercury and toxic emissions are gaining ground in a drive to revise part of the standard.

American Electric Power Co. (AEP) and Southern Co. (SO) asked the EPA to ease its planned limits on small-particle emissions from coal-fired plants. Otherwise the rule would require expensive changes to plants that already have pollution-controls, the companies said in a closed-door meeting with the EPA this year.

The agency is likely to adjust the particulates standard, according to Christine Tezak, a senior policy analyst at Robert W. Baird & Co. in McLean, Virginia. “They’ve done something constructive,” she said in an interview.

A revision in the rule, set to be released within days, may be a way for the agency to deal with complaints from American Electric and Southern that the standard will put unnecessary burdens on operators of coal-fired power plants. The change isn’t the top demand of such power companies, and would leave the rest of the obligations it imposes in place.

The EPA rule was initiated after a federal court threw out standards issued by the Bush administration to limit mercury pollution. Under the proposal, plants will need to install controls to curb toxic materials released when coal is burned.

The agency has opposed demands from the companies that President Barack Obama grant an across-the-board waiver to delay implementation, according to people briefed on the matter who declined to be identified before an announcement. White House officials haven’t indicated whether they may intervene to change the EPA’s proposal.

‘Rosy’ Assumptions

The EPA will need to change the particulate-matter levels because the “rosy technological assumptions just didn’t add up” in its proposal, said Scott Segal, a lobbyist for companies including Southern. “Those numbers need to be adjusted just to be plausible.”

The EPA rule incorporates three separate limits: one for mercury, a second for acid gases and a third for particulate matter, which is used to target emissions of metals such as chromium, selenium and cadmium.

The EPA declined to comment on how it might adjust the particles standard.

“We hope those interested in these standards will withhold judgment until they are actually finalized and released,” Betsaida Alcantara, an agency spokeswoman, said in an e-mail.

The proposed rule, released in March, set the standard for dust and finer particles that are 1/30th the width of a human hair at 0.3 pounds per megawatt-hour for coal-fired plants. A megawatt-hour of electricity can power 800 average U.S. homes for an hour, according to the Energy Department.

Eliminate Emissions

For American Electric, the proposed standard will require eliminating 99.8 percent of emissions at plants where it has installed pollution-control equipment, up from the current 99.6 percent, costing more than $600 million, Chief Executive Officer Nick Akins said in an interview Nov. 2.

“You are really getting into a marginal return at a high cost to the economy and to ratepayers,” Akins said.

American Electric, based in Columbus, Ohio, said in June that proposed EPA rules would force it to close parts or all of 11 power plants, eliminating 600 jobs. Complying with the rules would cost $8 billion, most of it on cleaning up or shutting plants that lack pollution-control equipment, it said.

American Electric and Atlanta-based Southern made a similar case at a closed-door meeting with EPA Administrator Lisa Jackson on Sept. 26, according to a record posted by the agency on the government website www.regulations.gov.

Time to Comply

Southern also pushed the agency to ease its standard for mercury emissions. That’s not likely, according to Frank O’Donnell, president of Clean Air Watch, an environmental group in Washington.

Most utilities are focused on how long they would get to meet the new standards.

Power-plant operators would get three years to install pollution scrubbers. The EPA has said it will grant an additional year on a case-by-case basis, although it hasn’t outlined a process for such extensions.

Power companies are backing a proposal from the Edison Electric Institute, an electric-company trade group, for a blanket one-year extension. Companies are also seeking a presidential waiver for further extensions. Southern CEO Tom Fanning told Jackson it needed six years.

Tezak and O’Donnell say the final regulation from EPA is likely to be in line with its earlier proposal, which would be welcomed by health groups such as the American Lung Association and would disappoint coal producers. That’s unlike Obama’s decision in September to scrap an EPA proposal to reduce smog.

“The opposition is nowhere near as broad nor as intense” as it was to the ozone rules, O’Donnell said in an interview. “And the White House would like to keep health and environmental groups on its side this time.”

To contact the reporters on this story: Mark Drajem in Washington at mdrajem@bloomberg.net;

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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