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New Effluent Guidelines Add to Power Industry Challenges

New Effluent Guidelines Add to Power Industry Challenges

June 2013 Issue

Archives of Energy Strategies Report.

   Subject Matter Expert:

  
Andy C. Byers
   Director of Environmental Services
   and Associate Vice President
   Black & Veatch’s energy business
   ByersAC@bv.com

New Effluent Guidelines Add to Power Industry Challenges

What began as a seemingly frenzied barrage of rulemakings, the pieces of the current U.S. government administration’s environmental regulatory puzzle are steadily falling into place.  In the power generation sector, the Environmental Protection Agency (EPA) has managed to finalize major rulemakings on air toxics, cap-and-trade, and even greenhouse gas regulatory programs.  And while its 2010 rulemaking on designation and management of ash ponds and landfills has been placed in limbo, its proposed regulation of power plant cooling water intake structures is scheduled to be finalized by mid-year.  Now with the April 19 release of its proposed effluent guidelines, the agency has placed a full set of air, water and waste pieces on the table. 

Curiously, this latest rulemaking offers up multiple alternative puzzle pieces while taking on the shapes of previous regulatory efforts. 

EFFLUENT RULEMAKING SUMMARY

The Clean Water Act authorizes EPA to establish national technology-based effluent limitations guidelines and standards (ELGs) for discharges from different categories of point sources, such as power plants.  The current ELGs for steam electric power plants were last updated in 1982.  The subsequent development of new generation technologies (coal gasification, for example), and increased implementation of air pollution controls from other regulatory initiatives has altered the existing, or created new, wastewater streams, which – along with lawsuits to force EPA to update these standards – prompted EPA to propose these revisions. 

EPA’s proposed rule would establish new or additional requirements for wastewaters associated with flue gas desulfurization (FGD), fly ash, bottom ash, flue gas mercury control, leachate from ash landfills and surface impoundments, nonchemical metal cleaning wastes, and gasification of fuels such as coal and petroleum coke. The proposed rule actually presents eight alternative ELGs for existing power plants discharging directly to surface waters. Depending on the alternative, EPA is proposing to revise or establish new ELGs based on what it believes can be achieved by utilizing a variety of combinations treatment technologies, including chemical precipitation, biological treatment, vapor compression evaporation, settling ponds, and dry handling systems.  

Pursuant to the lawsuit consent decree, EPA must finalize this ELG rule by May 22, 2014.  Compliance with the new standards would then be phased in between July 2017 to July 2022.  EPA believes that this will provide sufficient time for most facilities to plan, design, contract and install system modifications during future planned maintenance periods to avoid causing forced outages. 

COAL COMBUSTION RESIDUALS

In addition to the proposed requirements, EPA is considering establishing best management practices requirements that would apply to surface impoundments containing coal combustion residuals (such as ash and FGD wastes). It would impose many of the same requirements that EPA proposed in its 2010 ash rulemaking for construction, operation and maintenance of surface impoundments, including periodic structural integrity inspections and remedial action obligations.

EPA is also considering a voluntary program under the ELG rulemaking that would provide incentives such as two additional years for existing power plants to comply if they dewater and close their surface impoundments, or an additional five years if they eliminate discharges of all process wastewater to surface waters, with the exception of cooling water discharges.  In essence, the ELG rule would use Clean Water Act authority to accomplish many of the same best management practices that would otherwise be required under the agency’s currently shelved ash rule.   

INDUSTRY IMPACTS

EPA asserts that compliance with the proposed regulations is economically achievable, and estimates annual industry costs of between $185 million to $954 million depending upon which option is finalized.  Of course, these costs are based on their models, and would be in addition to other new EPA regulatory requirements for power generation facilities.  EPA maintains that less than half of all coal-fired power plants will likely incur costs. However facilities with wet FGD systems, wet ash handling systems, and gasification plants may be forced to make very costly investments to meet the final standards. 

The ELG rulemaking will prompt many utilities to examine their wastewater treatment systems at existing plants.  The combination of incentives to eliminate process wastewater discharge and other proposed EPA rules for cooling water intakes and ash pond management will also cause many utilities to re-evaluate each power station’s overall water management systems and plans. Mounting pressures to address water conservation, water reuse and wastewater treatment may ultimately lead to fundamental changes in plant water intensive processes – particularly for older power stations that were constructed at a time when water resources may not have been as constrained or wastewater discharge as tightly regulated.

The proposed ELGs add yet another environmental regulatory challenge to electric utilities.  Power plant operators must now work potential impacts of the ELGs into the mix of new air, water and waste rules in their future planning process.  Ultimately, the additional costs and incentives posed by the ELG rulemaking may tip the scales in decisions to retrofit, retire or switch fuels at existing coal-fired power plants.

Story by Andy C. Byers, Black & Veatch’s energy business

@black_veatch