[37 Pa.B. 883]
[Saturday, February 17, 2007]
[Continued from previous Web Page] 14. Issues Regarding Cost and Electricity Availability
The Department conducted an analysis to determine the cost of this final-form rulemaking above and beyond the CAIR. The CAIR involves the installation air pollution control equipment for SO2 and NOx. Under the EPA's CAIR analysis, this Commonwealth' average retail electric prices without the CAIR would be as follows: in 2010--$0.0593 kWh; and in 2015--$0.0695 kWh. Under this same analysis, this Commonwealth's average retail electric prices with the CAIR would be as follows: in 2010--$0.061 kWh; and in 2015--$0.072 kWh. Consequently, the average retail electric price in this Commonwealth would rise approximately 3% because of CAIR compliance costs.
For each unit, the capital cost, annualized capital costs and operating costs were determined. This was offset against how much it would cost to purchase an equivalent amount of emissions allowances based on the EPA's projections of mercury allowance costs from 2010--2030. These projections come from a United States Department of Energy (DOE) document entitled ''Annual Energy Outlook 2006 With Projections to 2030.'' The costs of control were based on cost estimates for installing and operating ACI systems. The capital costs were determined by estimating the cost ranging from $2/kW to $4/kW of plant electrical generating capacity. This capital cost was then annualized over 20 years assuming a 10% interest rate. The operating costs were calculated for Phase 1 based on a B-ACI injection rate of 6 lbs. per million actual cubic feet of exhaust gas. For Phase 2, an injection rate of 4.84 or 9.68 pounds per million actual cubic feet of exhaust gas was used depending on how much was needed to meet the emission limit. The injection rate was multiplied by the average of the 3 highest years of heat input between 1998 and 2002 and then multiplied by $ 0.0175 lb of sorbent/Million ''Btu''. This calculation was performed for each effected emission unit.
For each applicable EGU in this Commonwealth, the Department determined the amount of mercury, if any, that would need to be controlled beyond CAIR control levels for Phase 1 and Phase 2. For Phase 1, the Department estimated that 16 units at 7 facilities might opt for mercury-specific control beyond the CAIR control installations. The total capital costs needed for B-ACI were estimated to be approximately $4.9 to $9.8 million. The annual operating costs were estimated to be approximately $14.7 million. The total annualized costs for Phase 1 were estimated to be approximately $15.4 to $15.8 million.
For Phase 2, the Department estimated that 18 units at 7 facilities might opt for mercury specific control beyond the CAIR control installations. Some EGU owners and operators may choose to install compact hybrid powdered activated carbon (COHPAC) filter systems to comply with the Commonwealth's mercury final-form rulemaking. The Electric Power Research Institute has patented the ''TOXECON'' process which employs COHPAC in the control configuration. TOXECON/COHPAC has been demonstrated to achieve around 90% reduction of mercury emissions. The capital costs for were determined by estimating the cost ranging from $56.53/kW to $125/kW of plant electrical generating capacity.
The difference between the lower-bound and upper-bound costs estimates for Phase 2 reflects the difference between carbon injection and the installation of COHPAC filter systems. The total capital costs are estimated to range from $141.6 to $313.3 million. The total annualized cost (capital and operating) of mercury-specific control technology that EGU owners and operators might opt to install beyond CAIR to comply with the final-form rulemaking would range from $16.7 to $53 million per year. The estimated total cost of purchasing mercury allowances (using $2,619 per ounce, according to a DOE estimate) would be approximately $28.3 million per year if EGU owners and operators did not implement additional measures beyond the CAIR to comply with the CAMR.
As previously noted, this final-form rulemaking is designed, in part, to take advantage of the cobenefit reductions that will occur under the CAIR, designed to reduce SO2 and NOx emissions from EGUs. The Phase 1 and Phase 2 timeframes under this final-form rulemaking coincide with the time frames under the CAIR. It is anticipated that the majority of EGUs in this Commonwealth will opt to comply with both phases of the rule using existing WFGD and SCR technology, which will be necessary to comply with the CAIR. While some EGUs may opt to install mercury specific control technology, the Department believes that there are a number of currently available control technologies that coal-fired power plants can use to reduce their emissions of mercury to the atmosphere, which will result in a minor cost increase on a cents per kW-hr. basis.
As previously described for Phase 1, the total annualized cost (capital and operating) of mercury-specific control technology that EGU owners and operators may opt to install beyond the CAIR to comply with the Pennsylvania-specific mercury rulemaking would be $15.4 million per year. The total cost of purchasing mercury allowances if EGUs did not do anything beyond the CAIR to comply with the CAMR would be $15.7 million per year. As a result, the total cost of complying with the Pennsylvania-specific mercury rulemaking for Phase 1 would be no more than the cost of complying with the CAMR.
As previously described for Phase 2, the total annualized cost (capital and operating) of mercury-specific control technology that EGU owners and operators might opt to install beyond the CAIR to comply with the Pennsylvania mercury final-form rulemaking would range from $16.7 to $53 million per year. The resulting cost per kilowatt-hour would be no greater than $0.0038/kWh for EGU owners and operators utilizing the TOXECON/COHPAC control technology to comply with the Phase 2 limits. The cost of $0.0038/kWh represents the upper bound cost estimate for the owners and operators of EGUs to comply with the Phase 2 limits.
The cost differential between allowance costs and technology costs were $25.1 million on the high end and an incremental cost reduction of $11.6 million on the low end. The total kilowatt-hours calculated for the 18 units that will not be installing CAIR controls to meet the Phase 2 requirements are 13,748,393,901. The resulting cost per kilowatt-hour ranges from $0.0018/kWh for the use of the TOXECON/COHPAC control technology to $0.00084/kWh for using B-ACI to comply with the Phase 2 limits.
Because of these analyses, the Board concludes that the costs regarding the control of mercury emissions from coal-fired EGUs is reasonable and that any increased cost in electricity is insignificant on a dollar per kilowatt hour basis.
15. Impacts on Pennsylvania Coal
When coal burns, mercury vapor can be released to the atmosphere. Therefore, any regulatory approach aimed at reducing these emissions is of concern to the coal mining industry. This is especially the case in this Commonwealth, which is the fourth largest coal producing state in the Nation with approximately 66 million short tons mined annually. Wyoming is first with 396 million short tons. West Virginia is second with 148 million short tons. Kentucky is third with 114 million short tons. Texas is fifth with 45 million short tons.
According to the Department's Pennsylvania Coal Report for 2004, 6,825 miners are employed in this Commonwealth with about 55% of the miners employed in Greene and Washington Counties. In addition, these two counties account for over 66% of the coal mined in this Commonwealth. Moreover, the Department determined that the median mercury content of the coals mined in these two counties is approximately 8.8 lb of mercury per Trillion ''Btu'' (lb. Hg/TBtu). The median content of mercury from all coals mined in this Commonwealth is 18.1 lb. Hg/TBtu.
Data acquired by the Department shows that coal washing is a viable pretreatment option. For example, the data from our analysis shows an average ''as received'' mercury content of 26.73 lb. Hg/TBtu. The average ''as washed'' mercury content is 12.93 lb. Hg/TBtu. This translates into an average removal of 49.5%. As a result of this study and comments received during the proposed rulemaking, a pretreatment credit has been added to this final-form rulemaking.
The EPA CAMR finalized New Source Performance Standards Mercury limits for new units are: bituminous coal at 20 × 106 lb/MWh; subbituminous coal (wet units) at 66 × 106 lb/MWh; subbituminous coal (dry units) at 97 × 106 lb/MWh; lignite coal at 175 × 106 lb/MWh; coal refuse at 16 × 106 lb/MWh; and IGCC at 20 × 106 lb/MWh. This clearly shows that the most stringent standards have been reserved for bituminous and coal refuse units. All units in this Commonwealth burn either bituminous or coal refuse. As a result, all new EGUs in this Commonwealth would be subject to the most stringent mercury emission standards in the Nation.
On the other hand, this mercury final-form rulemaking is fuel-neutral. All new and existing units, regardless of fuel-type, are subject to the same mercury emission standards. New pulverized coal-fired (PCF) units must meet an emission standard of 0.011 pound of mercury per gigawatt hour (lb. Hg/GWh) or a minimum 90% of total mercury removal. New circulating fluidized bed (CFB) units burning 100% coal refuse must meet a mercury emission standard of 0.0096 lb. Hg/GWh or a minimum 95% control of total mercury as measured from the mercury content in the coal, as fired. New CFBs burning 100% coal must meet an emission of 0.011 lb. Hg/GWh or a minimum 90% of total mercury removal. New IGCC must meet a mercury emission standard of 0.0048 lb. Hg/GWh or a minimum 95% of total mercury removal.
Existing PCF units must meet an emission of 0.024 lb. Hg/GWh or a minimum 80% of total mercury removal in Phase 1, and an emission of 0.012 lb. Hg/GWh or a minimum 90% of total mercury removal in Phase 2. Existing CFB units burning 100% coal refuse must meet a mercury emission standard of 0.0096 lb. Hg/GWh or a minimum 95% control of total mercury as measured from the mercury content in the coal in Phases 1 and 2.
In addition to these fuel neutral emission standards, the Department anticipates the vast majority of the mercury reductions in this Commonwealth will be achieved through the installation of CAIR controls for NOx and SOx. Therefore, the same incentive does not exist to utilize fuel switching to lower mercury content coal as there is under the CAMR. Based on emissions data submitted to the Department's data request, fuel switching is not necessary to comply with the emission standards.
One of the more significant changes to the final-form rulemaking involves the demonstration of compliance under subsection (o) for those EGUs subject to § 123.207 (relating to annual emission limitations for coal-fired EGUs). In addition to compliance on a unit-by-unit and facility-wide basis, owners and operators of affected EGUs may now demonstrate compliance through system-wide demonstration. For example, so long as the actual emissions of mercury from the EGUs at the facility and other EGUs at other facilities covered in the system-wide demonstration are less than the allowable emissions of mercury from all EGUs covered by the demonstration on an annual basis compliance has been demonstrated. This additional compliance option will make it even less likely that owners and operators will opt to switch fuels as a compliance option.
As a result of the Department's analysis and changes made between proposed and final-form rulemaking, the Board does not anticipate adverse impact on the local coal industry because of the Pennsylvania-specific mercury rulemaking.
16. Reductions Beyond the CAMR
The Department reviewed the list of Integrated Planning Model (IPM) runs that the EPA conducted in support of the CAMR. Base case model runs for this Commonwealth in 2010 and 2020 include the National Title IV SO2 cap-and-trade program and the NOx SIP Call regional ozone season cap-and-trade program without the CAIR or the CAMR. These show mercury emissions from coal-fired power plants in this Commonwealth in 2010 and 2020 as 5.862 tons (11,724 lbs.) and 5.625 tons, (11,250 lbs.), respectively. A second round of model runs was conducted for 2010 which included CAIR and CAMR control strategies and for 2020, which included CAIR and CAMR control strategies. These show mercury emissions from coal-fired power plants in this Commonwealth in 2010 and 2020 as 1.491 tons (2,982 lbs.) and 1.153 tons, (2,306 lbs.), respectively. While these model runs show that coal-fired power plants in this Commonwealth will emit 16% less mercury or 0.279 ton (558 lbs.) than the established cap in 2010 of 1.77 tons of mercury (3,540 lbs.), these same model runs show that coal-fired power plants in this Commonwealth will emit 39% more mercury 0.451 ton (902 lbs.) than the established cap of 0.702 ton (1,404 lbs.) in 2020. As a result, the owners and operators of these EGUs would be required to purchase allowances to come into compliance with the CAMR. The purchase of additional allowances needed to comply with the CAMR is particularly troublesome given the Commonwealth's experience under Title IV of the CAA. In this Commonwealth, the total current SO2 acid rain allowances equal 540,000. EGUs in this Commonwealth emit about 1 million tpy of SO2. Therefore, this Commonwealth currently ''imports'' about 460,000 SO2 allowances per year from reductions in other states. The trading of mercury allowances under the CAMR may mimic the Acid Rain Program.
In comparison, the Pennsylvania mercury final-form rulemaking would require an 80% reduction of mercury present in the coal fired in EGUs on a 12-month rolling average by 2010, and 90% reduction of mercury present in the coal fired in EGUs on a 12-month rolling average by 2015. After Phase 1 of the program, it is anticipated that the Pennsylvania mercury final-form rulemaking would achieve a 29% greater reduction than required under the CAMR or a 16% greater reduction that the EPA projects from its IPM model runs. This would amount to 1.2567 tons (2,513.4 lbs.) of mercury emissions as opposed to 1.77 tons (3,558 lbs.) mercury emissions under the required CAMR cap or 1.491 tons (2,983 lbs.) as projected under the EPA's IPM model runs. After Phase 2, it is anticipated that the Pennsylvania mercury final-form rulemaking would achieve a 39% greater reduction than what would be achieved by the CAMR under Phase 2. This would mean that the Commonwealth would achieve its cap of 0.702 ton (1,404 lbs.) by 2015 rather than exceeding it by 0.451 ton (902 lbs.)
However, it should be noted that the EPA concedes that due to the banking and trading provisions of the CAMR, projected reductions may not be achieved until 2026 or later. Moreover, as the previous analysis shows, the EPA's IPM models expect coal-fired power plants in this Commonwealth will emit 64% more mercury 0.451 ton (902 lbs.) than the established cap of 0.702 ton (1,404 lbs.) in 2020. As a result, under a Pennsylvania-specific rulemaking no mercury allowances would be imported which would result in greater mercury emissions and greater local mercury deposition.
Due to this analysis, the Board finds that a Pennsylvania-specific mercury rulemaking would result in faster and steeper cuts in mercury emissions than under the CAMR.
17. Benefits to Residents of this Commonwealth
Prior to the CAIR and the CAMR, in the base year of 2001, the EPA estimates fish-tissue methylmercury concentrations at the 90th percentile, 99th percentile, and maximum levels attributable to coal-fired power plants are 0.11, 0.27 and 0.85 milligram per kilogram (mg/kg), respectively. The EPA estimates that after CAIR and CAMR implementation, these concentrations at the 90th percentile, 99th percentile, and maximum levels attributable to coal-fired power plants would be reduced by 0.06, 0.19 and 0.44 mg/kg, respectively.
However, the Department estimates that after implementation of the Pennsylvania-specific mercury final-form rulemaking in Phase 2, these concentrations at the 90th percentile, 99th percentile and maximum levels attributable to coal-fired power plants would be reduced to 0.0985, 0.31 and 0.72 mg/kg, respectively. This means that these concentrations at the 90th percentile, 99th percentile and maximum levels would be reduced by an additional 0.0385, 0.12 and 0.28 mg/kg, respectively. As a result, the Pennsylvania-specific mercury final-form rulemaking would amount to an additional 36% reduction in fish-tissue methylmercury concentrations.
The EPA estimates that when the CAMR is fully implemented it will reduce mercury emissions from coal-fired power plants to 15 tpy by 2018. If this goal is reached, NESCAUM estimates that the predicted annual benefit associated with IQ increases in the annual birth cohort ranges are $119 million to $288 million. This benefit is from reduced fetal methylmercury exposure. If cardiovascular effects are only experienced by male populations that consume nonfatty freshwater fish, the monetized annual benefits are $86 million. If these cardiovascular effects are experienced by the whole population of the United States, then the monetized annual benefits are predicted to be $4.9 billion.
If, as the EPA predicts in Phase 2, EGUs in this Commonwealth emit 1.153 tons (2,306 lbs.), then the annual benefit associated with IQ increases in the annual birth cohort ranges are $2.66 million to $6.45 million. This benefit is from reduced fetal methylmercury exposure. If cardiovascular effects are only experienced by the male population that consumes nonfatty freshwater fish, then the monetized annual benefits are $1.15 million. If these cardiovascular effects are experienced by all residents of this Commonwealth, then the monetized annual benefits are predicted to be $128.6 million.
However, under a Pennsylvania-specific mercury rulemaking, EGUs in this Commonwealth will emit no more than 0.702 ton (1,404 lbs.) by 2015. As a result, annual benefit associated with IQ increases in the annual birth cohort ranges are $4.165 million to $10.08 million. This benefit is from reduced fetal methylmercury exposure. This means that the Pennsylvania rulemaking will provide an additional benefit of $1.49 million to $3.63 million per year over the CAMR. If cardiovascular effects are only experienced by the male population that consumes nonfatty freshwater fish, then the monetized annual benefits are $1.8 million. This means that the Pennsylvania rulemaking will provide an additional benefit of $0.65 million per year over the CAMR. If these positive cardiovascular effects are experienced by all residents of this Commonwealth, then the monetized annual benefits are predicted to be $200.9 million. This means that the fully implemented Pennsylvania final-form rulemaking will provide an additional benefit of $72.3 million per year over the CAMR. Moreover, residents of this Commonwealth will see these results being achieved by 2015.
In comparison, the total cost of complying with Phase 1 of the Pennsylvania-specific rulemaking would be no more than the cost of complying with the CAMR. For Phase 2 at the low end of the cost estimate, the annualized cost of mercury specific technology may not be any more than the costs of purchasing the allowances. However, at the high end of the cost estimate, the additional cost above purchasing allowance would be around $24.7 million. Nevertheless, the benefits of a Pennsylvania rulemaking outweigh the costs. Therefore, the Board finds that this difference will result in significant environmental improvement with reduced fish-tissue methylmercury concentrations and increased monetized benefits for all residents of this Commonwealth as well as future residents of this Commonwealth.
18. Conclusion
A large body of scientific evidence, some of which was developed as a result of the EPA's obligations under the CAA, has clearly demonstrated that mercury is a persistent, toxic, bioaccumulative pollutant which can have adverse effects on human health and the environment. The Board has determined that effective mercury control technology does exist to significantly reduce mercury emissions from EGUs. Furthermore, mercury control technology is presently being implemented at a number of air pollution emitting sources and recent testing of mercury control technologies on coal-fired utilities has been shown to be effective in reducing mercury emissions. The Board has determined that the provisions in the EPA's final mercury rule for the utility sector that was promulgated under section 111 of the CAA are not adequate to ensure that the citizens of this Commonwealth and the environment will be adequately protected from the harmful effects of mercury emissions.
The CAMR does not require specific reductions in mercury emissions from any specific EGU facility. Due to the CAMR cap-and-trade provisions, the owners and operators of a facility that emits mercury beyond its CAMR allowance level can purchase allowances from credits generated at a facility that emits below its CAMR allowance level anywhere in the United States. A large portion of the mercury emission reductions that will occur will be as a result of cobenefit reductions occurring when a CAIR compliance plan for a facility to reduce both its NOx and SOx emissions involves the installation of SCR and wet WFGD control technologies. The NOx emission control equipment of SCR oxidizes elemental mercury of the mercury emissions, which makes the removal of mercury emissions even more efficient by the wet WFGD controls. However, where a facility only reduces its NOx emissions with a SCR control to meet the CAIR requirements, but does not also utilize a wet WFGD for SOx control, this will result in much higher quantities of the ionic form of mercury to be emitted and deposited nearby, and this will result in a much greater negative mercury impact on the nearby environment.
Additionally, under CAMR mercury emissions trading, it is even possible that mercury emissions in this Commonwealth could actually increase because there would not be a regulatory ability to restrict actual emission increases due to the importation of out-of-State allowances. Another important problem with the EPA's National mercury emissions trading provisions under the CAMR is that it allows significantly less control of mercury in one area compared to another; and it allows emissions to be further increased through the use of banked allowances from previous years. Allowing mercury emission reductions to be used in different control periods further delays the real mercury emission reductions that are seen by the environment. The GAO evaluation of the CAMR states that the mercury emission levels that are required by 2018, during the second Phase of the required CAMR reductions, will not actually occur until 2030, or later. This will result in a larger burden of mercury into the ecosystem resulting over time and a significant lengthening of the time exposure to these emissions.
The Pennsylvania State-specific mercury rulemaking assures a specific maximum level of actual mercury emissions from utilities in this Commonwealth, and assures that these levels are achieved in a much shorter time than the CAMR. The Phase 2 mercury emissions caps will be achieved in this Commonwealth by 2015, not 2018, which translates into 2026 or 2030 because of emissions trading under the CAMR. Furthermore, each and every owner or operator of an electric generating facility in this Commonwealth will make significant reductions in their mercury emissions at each and every one of their facilities. This is not the case under the CAMR.
Data generated by the EPA has shown that this Commonwealth has the highest wet deposition of mercury in the Nation with a direct correlation to the location and quantity of mercury emissions from coal-fired electric generating facilities. Research has also shown that higher percentages of more recently deposited ionic mercury are more quickly methylated in the ecosystem. The methylation of mercury eventually leads to a concentration of methylmercury in the tissue of fish and other wildlife. These higher concentrations of mercury in the wildlife are not only directly affecting the wildlife in ways such as reduced reproductivity, but also affecting humans when they eat this wildlife.
Recent studies in the Florida Everglades and in Massachusetts indicate that mercury concentrations found in fish and wading birds in the Everglades have dropped significantly. These illustrate the point that despite the fact that there are global mercury transportation issues, local emission reduction efforts are very significant to the local air quality and environmental impacts and reductions in mercury emissions do translate into real, measurable improvements in the environment. Continued improvements to the ecosystem are expected in the long-term as these reductions work their way through the food chain and residents of this Commonwealth will receive the greatest portion of these benefits.
After consideration of mercury control technology, the Department has determined that a State-specific mercury reduction rulemaking is necessary to protect the public health and environment. Moreover, the required control levels of 80% in Phase 1 and 90% in Phase 2 are achievable and will allow the Pennsylvania emission limits under the CAMR to be achieved as well.
E. Summary of Final-Form Rulemaking
The final-form rulemaking amends Chapter 123 by adding § 123.201 (relating to purpose) to provide that §§ 123.202--123.215 establish mercury emission standards, annual emission limitations as part of a Statewide mercury allowance program with annual nontradable mercury allowances and other requirements for the purpose of reducing mercury emissions from coal-fired EGUs or cogeneration units.
Section 123.202 (relating to definitions) defines terms used in §§ 123.203--123.215. The definitions include: ''Act,'' ''Administrator,'' ''Btu--British thermal unit,'' ''Bottoming-cycle cogeneration unit,'' ''CFB--circulating fluidized bed unit,'' ''CO2,'' ''CS-ESP--cold side electrostatic precipitator,'' ''Clean Air Act,'' ''coal,'' ''coal refuse,'' ''cogeneration unit,'' ''commence operation,'' ''control period,'' ''EGU--electric generating unit,'' ''existing EGU,'' ''FF--fabric filter,'' ''facility,'' ''GWh--gigawatt-hour,'' ''heat input,'' ''IGCC--integrated gasification combined cycle unit,'' ''MMBtu,'' ''MW--megawatt,'' ''MWe--megawatt electric,'' ''MWh--megawatt-hour,'' ''nameplate capacity,'' ''new EGU,'' ''O2,'' ''operator,'' ''owner,'' ''PCF--pulverized coal-fired unit,'' ''Phase 1,'' ''Phase 2,'' ''rolling 12-month basis,'' ''SCR--selective catalytic reduction,'' ''SO2,'' ''space velocity,'' ''standby unit,'' ''system,'' ''system-wide compliance demonstration,'' ''topping-cycle cogeneration unit,'' ''WFGD--wet flue gas desulfurization unit'' and ''watt-hour.'' The proposed definition of ''bituminous coal'' has been deleted. While the definition of ''EGU--electric generating unit'' remains, it has been amended to reflect a change made by the EPA during its reconsideration process. Minor changes between the proposed and final-form rulemaking were made to the terms ''CFB--Circulating fluidized bed unit,'' ''existing EGU'' and ''new EGU.'' The following terms were added between the proposed and final-form rulemaking: ''Act,'' ''administrator,'' ''bottoming-cycle cogeneration unit,'' ''Clean Air Act,'' ''coal,'' ''commence operation,'' ''control period,'' ''heat input,'' ''operator,'' ''owner,'' ''system,'' ''system-wide compliance demonstration'' and ''topping-cycle cogeneration unit.''
Additionally, a subsection was added to § 123.202 between proposed and final-form rulemaking to provide that the definitions under the Standards of Performance for New Stationary Sources and Emission guidelines for Existing Sources Promulgated in 40 CFR Part 60, Subparts Da and HHHH are adopted in their entirety and incorporated by reference. The provisions will be used in the interpretation of applicable requirements in §§ 123.202--123.215.
Section 123.203 (relating to applicability) provides that the requirements of §§ 123.201, 123.202 and 123.204--123.215 and this section apply to owners and operators of EGUs in this Commonwealth and except, as otherwise noted, supercedes those requirements adopted in their entirety and incorporated by reference under § 122.3 (relating to adoption of standards).
Section 123.204 (relating to exceptions) provides that the owner or operator of an EGU that enters into an enforceable agreement with the Department for the shutdown and replacement of the unit with IGCC technology shall be exempted from compliance with the Phase 1 requirements of § 123.205 (relating to emission standards for coal-fired EGUs). This section was revised between proposed and final-form rulemaking so that owners or operators that shutdown and replacement a unit with IGCC technology are not exempt from compliance with the Phase 2 emission limitation requirements under § 123.207.
Section 123.205 establishes emission standards for coal-fired EGUs. New PCF EGUs and IGCC EGUs are required to meet either a certain mercury emission standard or minimum mercury control percentage upon construction and new CFB EGUs are required to meet a certain mercury emission standard upon construction. In addition, existing PCF EGUs are required to meet either an increasingly stringent mercury emission standard or minimum mercury control percentage from Phase 1 (effective from January 1, 2010, to December 31, 2014) to Phase 2 (effective beginning January 1, 2015). Existing CFB EGUs are required to meet a certain mercury emission standard or minimum mercury control percentage, which does not change from Phase 1 to Phase 2. IGCC units are regard to meet a 95% mercury reduction.
This section was revised between proposed and final-form rulemaking to provide that CFB EGUs must meet either a certain mercury emission standard or minimum control efficiency of mercury emissions. The owners and operators of CFB EGUs must comply with either: (1) a mercury emission standard of 0.0096 pound of mercury per GWh; or (2) a minimum 95% control of total mercury as measured from the mercury content in the coal refuse, either as fired or as approved in writing by the Department. Changes were also made to ensure that owners and operators of new EGUs comply with the standards promulgated under 40 CFR Part 60, Subparts Da and HHHH. Modifications were further rendered to allow owners and operators to receive mercury reduction credit for the pretreatment of fuel. Additionally, modifications were made to delete the terms ''bituminous'' and ''rolling 12-month basis'' under specific subsections.
Section 123.206 (relating to compliance requirements for the emission standards for coal-fired EGUs) establishes compliance requirements for the emission standards for coal-fired EGUs. Compliance can be demonstrated on a unit-by-unit basis or by facility-wide emissions averaging. The Department may approve in a plan approval or operating permit an alternative mercury emission standard or schedule, or both, if the owner or operator of an EGU subject to the emission standards of § 123.205 demonstrates in writing to the Department's satisfaction that the mercury reduction requirements are economically or technologically infeasible. Lastly, the Department has established certain calculation requirements to ensure that a facility does not exceed the applicable emission standard or control percentage requirement.
The Board has made some significant modifications to this section. The compliance presumptions for owners and operators of an existing EGU combusting 100% bituminous coal controlled by certain air pollution control device configurations has been deleted because of constitutionality concerns raised by commentators. The Board has also added language that the Department's approval of an alternate emission standard or a compliance schedule will not relieve the owner or operator of the EGU from complying with the other requirements of §§ 123.207--123.215. Additional language has been added to provide that the Department's approval of an alternative emission standard or compliance schedule shall be based on the information provided in the application submitted by the owner or operator of the EGU. Another addition includes certain provisions related to facility wide averaging. Subsection (f) allows an EGU owner or operator to demonstrate compliance with the requirements of § 123.205 by means of facility-wide averaging that demonstrates that the actual mercury emissions from EGUs covered under the emissions averaging demonstration are less than the allowable mercury emissions from all EGUs covered by the demonstration on a 12-month rolling basis.
Section 123.207 (relating to annual emmission limitations for coal fired EGU) establishes an annual emission limitation for coal-fired EGUs. In addition to the mercury emission standard requirements in § 123.205, the owner or operator of a new or existing affected EGU subject to § 123.203 shall comply with the annual emission limitations established through a Statewide mercury nontradable allowance program under this section. The total ounces of mercury emissions available for emission limitation set-asides as annual nontradable mercury allowances in the Statewide mercury allowance program are 56,928 ounces (3,558 pounds) of mercury emissions for Phase 1, effective from January 1, 2010, through December 31, 2014, and 22,464 ounces (1,404 pounds) of mercury emissions for Phase 2, effective beginning January 1, 2015, and each subsequent year. Of this overall total, 5% of the Phase 1 annual allowances will be set aside for new units and 3% of the Phase 2 annual allowances will be set aside for new units for the calendar year beginning January 1, 2015, and subsequent years. However, annual allowances will not be set aside for the owner or operator of an existing affected EGU, which is already shut down, scheduled for shutdown or is on standby as of the effective date of each set-aside phase.
The maximum number of annual nontradable mercury allowances set aside for the owner or operator of each existing affected CFB or PCF will be determined by multiplying the affected unit's baseline heat input fraction of the State's total baseline annual heat input for all EGUs. The Department will publish in the Pennsylvania Bulletin the maximum number of annual allowances set aside for the owner or operator of each existing affected CFB and PCF. If the actual emissions of mercury reported to the Department are less than the maximum number of annual allowances set aside in the allowance program for the owner or operator of an EGU, the Department will place the unused portion of annual allowances in the annual emission limit supplement pool established under § 123.208 (relating to annual emission limitation supplement pool).
A number of modifications have been made to § 123.207 between proposed and final-form rulemaking. First, subsection (a) additionally provides that the Department will issue to the owner or operator of an affected EGU a plan approval or operating permit that contains the applicable requirements of this section and §§ 123.202--123.206 and 123.210--123.215 before the later of January 1, 2010, or the date on which the affected EGU begins operation. Second, because of changes made by the EPA during the reconsideration process, the Commonwealth was allotted 2 lbs. less than under the original CAMR. As a result, this change is reflected in the final-form rulemaking. Third, the Board has established a more detailed process for the allocation of allowances for new EGUs under subsection (c). For instance, after a new EGU has begun operation and completed three control periods, the EGU will become an existing EGU. The new EGU will continue to receive nontradable allowances from the new unit set-aside until the new EGU is eligible for nontradable allowances allocated from the existing EGU set-aside. Fourth, the Board has promulgated additional procedures for the allocation of allowances for permanently shutdown units under subsection (k). For example, annual nontradable mercury allowances will not be set aside for the owner or operator of an existing affected EGU that is already shut down or scheduled for shutdown, unless the owner or operator of the EGU obtains a plan approval for the construction of a new EGU.
One of the more significant changes to this section involves the demonstration of compliance under subsection (o) for EGUs subject to § 123.207. In addition to compliance on a unit-by-unit and facility-wide basis, owners and operators of affected EGUs may now demonstrate compliance through a system-wide compliance demonstration. For example, so long as the actual emissions of mercury from the EGUs at the facility and other EGUs at other facilities covered in the system-wide demonstration are less than the allowable emissions of mercury from all EGUs covered by the demonstration on an annual basis compliance has been demonstrated. However, an owner or operator may not include an EGU in more than one system-wide averaging demonstration submitted for the purposes of complying with the requirements of §§ 123.202--123.215. Additionally, the Board has made a number of minor changes to subsections of this section to ensure consistency with the more significant changes that were made.
Section 123.208 establishes the annual emission limitation supplement pool. Annual allowances that have either been created as part of the new EGU set-aside or are unused annual allowances as part of the annual emission limitation for coal-fired EGUs will be set aside in the supplement pool for future use. Minor clarifications were made to this section between proposed and final rulemaking.
Section 123.209 (relating to petition process) establishes a petition process for the owner or operator of an EGU to request additional annual allowances from the annual emission limit supplement pool. Each calendar year beginning January 1, 2010, the Department may, at its discretion, allocate allowances from the supplemental pool to the owners or operators of new or existing affected EGUs that successfully petition the Department in accordance with the requirements of this section. If the petition for supplemental annual nontradable mercury allowances is approved by the Department, the supplemental annual nontradable mercury allowances set aside for the owner or operator of the new or existing affected EGU will be added to the maximum number of annual nontradable mercury allowances set aside for the owner or operator of the EGU under § 123.207 only for the calendar year of the request.
The major change to § 123.209 that occurred between proposed and final-form rulemaking is the deletion of the order of preference for the allocation of supplemental allowances generally, and the order of preference for the allocation of supplemental allowances as it specifically relates to those owners and operators that burn 100% bituminous coal and employ certain air pollution control technologies. The Board has added a provision that the Department's approval of supplemental annual nontradable mercury allowance allocations shall be based on the information provide in the petition submitted by the owner or operator of the EGU.
Section 123.210 (relating to monitoring and recordkeeping requirements) creates general monitoring and reporting requirements for the owner or operator of a new or existing EGU subject to §§ 123.201--123.215. The owner or operator of a new EGU shall demonstrate compliance with §§ 123.205 and 123.207 by installing and operating a continuous emissions monitoring system to measure, record and report the concentration of mercury in the exhaust gases from each stack. The owner or operator of a new or existing affected EGU shall comply with the monitoring, recordkeeping and reporting requirements in this section, §§ 123.211--123.215 and § 139.101 (relating to general requirements), the applicable provisions of the Continuous Source Monitoring Manual (DEP 274-0300-001) and 40 CFR Part 75, Subpart I (relating to Hg mass emission provisions). Additionally, for purposes of complying with this section, the definitions in § 123.202 and 40 CFR 72.2 (relating to definitions) are applicable requirements. However, the owner or operator of an existing affected EGU that emits 464 ounces (29 pounds) or less of mercury per year shall either demonstrate compliance with the requirements of §§ 123.205 and 123.207 and 40 CFR Part 75, Subpart I or implement the excepted sorbent trap monitoring methodology for an EGU meeting the requirements in 40 CFR 75.81(b)--(e).
The Board has made a number of modifications to § 123.210 between proposed and final-form rulemaking. For example, the owner or operator of a new or existing affected EGU shall comply with the monitoring, recordkeeping and reporting requirements in this section, §§ 123.211--123.215 and 139.101, the applicable provisions of the Continuous Source Monitoring Manual (DEP 274-0300-001) and 40 CFR Part 75, Subpart I. Also, 40 CFR 60.4110--60.4114 are adopted in their entirety and incorporated by reference in this subsection in response to the EPA comments concerning mercury designated representative provisions. Additionally, for purposes of complying with the requirements of this section, the definitions in § 123.202 and 40 CFR 72.2 apply. Also, the owner or operator of an existing affected EGU that emits 464 ounces (29 pounds) or less of mercury per year shall either demonstrate compliance with the requirements of §§ 123.205 and 123.207 and 40 CFR Part 75, Subpart I or implement the excepted sorbent trap monitoring methodology for an EGU meeting the requirements in 40 CFR 75.81(b)--(e). Additional minor changes were also made to § 123.210 to ensure consistency with the more significant changes that were made.
Subsection (h) was added in the final-form rulemaking to provide that the owner or operator of an EGU for which construction of a new stack or flue, installation of add-on mercury emission controls, a flue gas desulfurization system, an SCR system or a compact hybrid particulate collector system is completed after the applicable deadline must comply with the monitoring system certification and other requirements in § 123.210.
Additionally, subsection (k) now provides that owner or operator of an EGU shall not use an alternative monitoring system, alternative reference method or other alternative to any requirement in 40 CFR Part 75 unless the alternative system, method or requirement is approved, in writing, by the Administrator in accordance with 40 CFR Part 75, Subpart E.
Subsection (n)(3) now provides that the owner or operator of an EGU that is using a continuous emission monitoring system or a sorbent trap system to continuously monitor mercury emissions under § 123.210(c)(1) and 40 CFR 75.81(a) may elect to comply with the methodology in § 123.210(c)(2) and 40 CFR 75.81(b)--(f).
Section 123.211 (relating to initial certification and recertification procedures for emissions monitoring) creates initial certification and recertification procedures for emissions monitoring. By the applicable deadline in § 123.210, the owner or operator of an affected EGU shall comply with certain initial certification and recertification procedures for a continuous monitoring system or continuous emission monitoring system and an excepted monitoring system (sorbent trap monitoring system) as required under 40 CFR 75.15 (relating to special provisions for measuring Hg mass emissions using the excepted sorbent trap monitoring methodology) and Chapter 139, Subchapter C (relating to requirements for source monitoring for stationary sources). Only minor changes were made to this section between proposed and final rulemaking to reflect that § 123.210 also applies in certain circumstances.
Section 123.212 (relating to out-of-control periods for emissions monitors) creates out-of-control periods for emissions monitors if an emissions monitoring system fails to meet the quality-assurance and quality-control requirements or data validation requirements. One change to this section has been made between proposed and final-form rulemaking. If a mass emissions monitoring system fails to meet a quality-assurance or quality-control requirement, mass emissions data shall be substituted using the missing data procedures in 40 CFR Part 75, Subpart I.
Section 123.213 (relating to monitoring of gross electrical output) creates monitoring requirements regarding gross electrical output of an affected EGU. One minor change to this section has been made between proposed and final-form rulemaking. The owner or operator of an EGU complying with the requirements of only § 123.206(d) and not § 123.206(e) must monitor gross electrical output of the associated generators and report in watt-hours per hour.
Section 123.214 (relating to coal sampling and analysis for input mercury levels) creates sampling and coal analysis for input mercury levels of affected EGUs. The Department may revise the frequency of the sampling of the coal combusted in the EGU for the mercury content based on historical data provided by the owner or operator of the EGU. One change to this section has been made between proposed and final-form rulemaking. The Department now has the authority to approve, in writing, an alternate coal sampling and analysis program submitted by the owner or operator of an EGU to demonstrate compliance with §§ 123.201--123.215.
Section 123.215 (relating to recordkeeping and reporting) creates recordkeeping and reporting requirements. Among other things, the owner or operator of an affected EGU must comply with the recordkeeping and reporting requirements in this section and the applicable recordkeeping and reporting requirements in Chapter 139, Subchapter C and 40 CFR Part 75. Minor clarifications were made to this section between proposed and final rulemaking.
F. Comments and Responses
The Board received nearly 11,000 comments on the proposed rulemaking. The Board determined that over 99% of the commentators are in favor of the proposed rulemaking. The commentators were extraordinarily diverse ranging from the public, sportsmen, industry, trade associations and the EPA. Additionally, comments were received from the Senate Environmental Resources and Energy Committee and the Independent Regulatory Review Commission (IRRC). The complete set of comments and responses is in the Comment and Response document for the final-form rulemaking. A summary of the comments and responses follows.
While other commentators echoed many of the comments of the Senate Environmental Resources and Energy Committee, the Committee recommended that the advanced notice of final rulemaking process be used to solicit comment and input on its revisions. The Board disagrees. Since the close of the public comment period, the Department has held additional meetings with the Workgroup, the Citizens Advisory Council and the AQTAC on the draft final-form rulemaking. Notices of these meetings were published in the Pennsylvania Bulletin and the meetings were open to the public to comment on the revisions. As a result, the Board believes that sufficient comment has been received on the revisions.
IRRC also had many of the same comments posed by other commentators, but believes that a ''health-based'' analysis is necessary as provided under section 6.6 of the APCA. The Board disagrees. The statutory requirements in section 6.6 of the APCA do not apply to this final-form rulemaking because the EPA revised the ''appropriate and necessary'' finding to establish a cap-and-trade scheme under section 111 of the CAA for the trading of mercury allowances. As part of its decision making process, the Department has completed an analysis of the health impacts of this final-form rulemaking. A detailed summary of the health benefits resulting from the implementation of this final rulemaking is provided in Section G of this Order.
An overwhelming number of commentators strongly supported the proposed rulemaking on mercury reductions from coal-fired power plants in this Commonwealth. The Board appreciates this strong support for this final-form rulemaking.
One commentator noted lakes, rivers and streams in this Commonwealth are contaminated with mercury pollution. The Board agrees. There is a Statewide fish consumption advisory in effect in this Commonwealth. The 2006 advisory covers water bodies in the Delaware River Basin, Susquehanna River Basin, Lake Erie Basin, Ohio River Basin and the Potomac River Basin. Over 60% of those advisories are for mercury.
Another commentator said mercury pollution builds up in areas close to the source, creating dangerous ''hot spots'' of high mercury concentrations. The Board agrees. The preliminary results of the study title ''Sources of Mercury Wet Deposition in Eastern Ohio, USA'' (Steubenville Study) conducted by Dr. Gerald J. Keeler, et al., found that local and regional wet deposition of mercury from coal-fired powered plants is much higher than anticipated. This study was published on the American Chemical Society's website on September 8, 2006, and was subsequently published in Environmental Science and Technology.
Approximately 70% of the wet mercury deposition has been attributed to coal-fired units. Moreover, in May 2006, the EPA's Acting Inspector General, Bill Roderick, stated that the EPA's analysis of the methylation of mercury '' . . . did not fully account for the highly variable ways that mercury bioaccumulates in fish.'' See also ''Monitoring Needed to Assess Impact of EPA's Clean Air Mercury Rule on Potential Hotspots, Report No. 2006-P-00025.''
A commentator found that this Commonwealth is number two in the Nation for mercury pollution to air from coal-fired power plants and that the most recent Toxic Release Inventory from the EPA ranks this Commonwealth as second worst in the Nation for mercury pollution to the air, behind Texas. The Board agrees with this comment. According to the 2004 Toxic Release Inventory, mercury emissions from coal-fired EGUs in this Commonwealth accounted for approximately 79% of the mercury emitted to the atmosphere.
One commentator said the CAMR does too little too late. CAMR proponents claim that this Commonwealth will see an 86% drop in mercury pollution as a result of the Federal rule. The Congressional Research Service detailed that the CAMR won't deliver the reductions it promises due to mercury pollution trading, when dirty plants are allowed to buy credits from cleaner, more modern ones. The Board agrees. The claims that implementation of the CAMR in this Commonwealth would result in an 86% reduction in mercury emissions in this Commonwealth by 2018 overestimates the actual reduction under the cap-and-trade program. According to the independent Congressional Research Service, the EPA projected mercury emission reductions may not be met until 2030. The final-form ''state-specific'' regulation establishes emission standards requiring at least an 80% mercury emissions reduction by January 1, 2010, and at least a 90% reduction by January 1, 2015, from existing EGUs or in the alternative a numerical emission standard.
One commentator contended that mercury pollution controls are available and affordable, and coal-fired power plants in this Commonwealth are very profitable. The Board agrees. The Board has determined that a control technology combination of cold side-ESP and WFGD would result in at least 80% control efficiency of mercury emissions from coal-fired power plants in this Commonwealth. Moreover, a control technology combination of cold side-ESP, WFGD and SCR would result in at least 90% control efficiency of mercury emissions from coal-fired power plants in this Commonwealth. Because of this determination, the Board has selected the 80 and 90% control efficiencies as requirements for the Pennsylvania-specific mercury final-form rulemaking. In addition, the Board has selected the Phase 1 and Phase 2 compliance dates of 2010 and 2015 because they coincide with the deadlines under the CAIR. As this analysis relates to mercury-specific control technology, the Board believes there is sufficient evidence to show that for owners and operators that choose to this type of technology it is cost-effective and commercially available.
Another commentator noted that the Federal mercury rule is bad for this Commonwealth's economy. Mercury contamination is threatening this Commonwealth's sporting, angling and recreation industry, a significant source of revenue and jobs throughout this Commonwealth. Because of the trading system in the CAMR, plants in this Commonwealth are more likely to pay for pollution credits than to clean up and modernize old plants. Most importantly, there are significant costs associated with the devastating health impacts, rates of learning disabilities and associated health effects of mercury in children are increasing.
The Board agrees. The Fish and Boat Commission determined that in 2005 approximately 800,000 anglers fished in waters in this Commonwealth. Fish licensing sales in this Commonwealth amounted to $18.5 million in 2005. According to the Erie Regional and Growth Partnership, residents of this Commonwealth 16 years of age and older spent $400 million on fishing in this Commonwealth in 2001. The average angler spent $458 in 2001 on fishing. These direct expenditures created $1.2 billion in economic output in this Commonwealth. As a result, this Commonwealth has a significant economic interest in fresh water fishing as an economic driver. The purchase and sale of mercury allowances will not be allowed under the Pennsylvania-specific final-form rulemaking. The Board shares this concern regarding the adverse health impacts of exposure to mercury emissions. According to Dr. Leonardo Trasande, Assistant Director for The Mount Sinai Center for Children's Health and the Environment, it is found that each year between 316,588 and 637,233 children '' . . . have cord blood mercury levels >5.8 µg/L, a level associated with loss of IQ.'' The resulting loss of intelligence causes diminished economic productivity that persists over the entire lifetime of these children. This lost productivity is the major cost of methylmercury toxicity, and it amounts to $8.7 billion annually (range, $2.2--$43.8 billion; costs are in 2000 dollars). Of this total, $1.3 billion (range, $0.1--$6.5 billion) each year is attributable to mercury emissions from American power plants.
One commentator said that each unit should make mercury reductions. The Board agrees. In February 2005, the EPA OIG issued a report to the EPA stating '' . . . the EPA did not fully analyze the potential for hot spots (i.e., areas of elevated pollutant concentrations) to occur under its proposed cap-and-trade option.'' The potential for hot spot formation under the proposed cap-and-trade rule has generated a great deal of concern and debate among various stakeholders. In the Decision Document, the Department has a summary of the hot spot analysis it conducted and determined that a reduction in the local contribution of mercury emissions from coal-fired utilities in this Commonwealth through a Pennsylvania-specific mercury final-form rulemaking would result in direct benefits to the citizens of this Commonwealth. The Commonwealth will receive the majority of a reduction that is required to come from a coal-fired utility in this Commonwealth. The CAMR not only ignores the issue of potential local mercury hotspots, but also does not guarantee that any reductions in mercury emissions will occur at coal-fired utilities in this Commonwealth. As a result, a Pennsylvania-specific mercury final-form rulemaking would improve local ecosystems and concomitantly improve public health by reducing mercury deposition.
One commentator supported the fastest and furthest reduction of mercury emissions to protect citizens in this Commonwealth from even low levels of exposure. The Board agrees that the CAMR will not adequately protect public health and the environment within the borders of this Commonwealth. The final-form rulemaking does not establish a cap-and-trade program and will ensure that greater reductions in mercury emissions are achieved prior to the 2018 compliance deadline established under Phase 2 of the CAMR. The final-form rulemaking will achieve a 90% reduction in total mercury removal from coal-fired power EGUs by January 1, 2015. Alternatively, the owners and operators of PCF units may comply with an output-based standard of 0.012 pound of mercury per gigawatt-hour (lb/GWh) starting January 1, 2015 (Phase 2) and each year thereafter. The owners and operators of CFB EGUs will have the option of complying with an emission standard of 0.0096 lb/GWh or a minimum 95% control of total mercury, as measured from the mercury content in the coal as fired.
A commentator stated that no evidence was presented by any party showing the proposed rulemaking will provide additional environmental or health benefit to this Commonwealth beyond the EPA CAMR and that no credible evidence of mercury ''hot spots'' was presented by any party. The commentator stated that evidence was presented that there were no local mercury ''hot spots.'' The Board strongly disagrees. The Department's analysis has determined that a reduction in the local contribution of mercury emissions from coal-fired utilities in this Commonwealth through a Pennsylvania-specific mercury final-form rulemaking would result in direct benefits to the citizens of this Commonwealth. For instance, it is well known that some forms of atmospheric mercury are rapidly deposited by both wet and dry processes, and emissions of these forms of mercury, especially near ground level, are responsible for a large portion of the observed mercury deposition in a surrounding area. These more reactive forms of mercury, which are emitted by EGUs burning bituminous coal, are usually deposited from the atmosphere before they can travel long distances. Therefore, the Department can say with confidence that elemental mercury is more inert and can be transported globally, and that oxidized mercury compounds are more reactive and travel much shorter distances before depositing. As a result, the Commonwealth will receive the majority of any reduction that is required to come from a coal-fired utility in this Commonwealth. The CAMR not only ignores the issue of potential local mercury hotspots, but also does not guarantee that any reductions in mercury emissions will occur at coal-fired utilities in this Commonwealth.
One commentator said that mercury pollution credit trading cannot be allowed. The Board agrees. The Board believes the EPA is without the legal authority to regulate HAPs such as mercury under section 111 of the CAA. The Board also believes that the EPA is not legally authorized under section 111 or section 112 of the CAA to implement a cap-and-trade program. The Congressional intent regarding the regulation of mercury is clear and unambiguous--it must be regulated under section 112 of the CAA. Mercury is explicitly identified as an HAP under section 112(b) of the CAA. For sources other than coal-fired units, the EPA must list source categories under section 112(c) of the CAA and the set emission standards for those categories under section 112(d) of the CAA. While the statutory scheme for regulating mercury from coal-fired units is under section 112(n) of the CAA, the Congressional intent is the same--mercury emissions from these units must be regulated under the Section 112 MACT approach. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (where if the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.) The EPA's proposed cap-and-trade program is an unreasonable interpretation of its statutory authority under sections 111 and 112 of the CAA. The fact that Congress chose to list specific HAPs under section 112 of the CAA indicated that Congress believed that these pollutants required more stringent measures than those permitted under section 111 of the CAA. Moreover, regulation under section 112 of the CAA has been historically and consistently interpreted as requiring HAPs to be controlled through installation and operation of MACT. A cap-and-trade approach under this section was never contemplated as a control technology.
A commentator requested that the Commonwealth revise the definition of ''EGU'' in the State's rule to reflect the EPA's revised definition in the rule published at 71 FR 33388 entitled ''Revision of December 2000 Clean Air Act Section 112(n) finding Regarding Electric Utility Steam Generating Units: and Standards of Performance for New and Existing Electric Utility Steam Generating Units: Reconsideration.'' The Board agrees. This change has been made.
One commentator requested that a number of terms that are now included in the CAMR by virtue of its reconsideration process be included in the final-form rulemaking. In addition, new definitions may be added once the EPA finalizes its Federal implementation plan on the CAMR. The Board agrees. To address the fact that the EPA will be revising definitions, possibly even after the Board's regulation is final, ''incorporation by reference'' regulatory language has been added. This new provision reads as follows: ''The definitions under the Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources promulgated in 40 CFR Part 60 Subparts Da and HHHH are adopted in their entirety.'' The Board's final-form rulemaking contains the necessary EPA definitions and also provides for additional definitions, or changes in definitions, that are required for implementation of the Board's regulation.
The commentator was concerned by proposed § 123.204 that exempts EGUs replaced with IGCC technology from the emission limitations under § 123.207 may not assure that the State Plan will meet the cap on annual mercury emissions for the State in 40 CFR 60.24(h) (relating to emission standards and compliance schedules). As a result, the Commonwealth's proposed rulemaking may not to be approvable under 40 CFR 60.24(h) if the Commonwealth submits it with § 123.204 as proposed. The Board agrees. Owners and operators of EGUs that are replaced with IGCC technology will only be exempt from the emission standards under § 123.206.
The commentator requested that the Commonwealth include a provision in § 123.205 notifying all owners and operators of new sources that they must also comply with the mercury control requirements in the EPA's NSPS as specified in 40 CFR Part 60, Subpart Da and as adopted by reference by the Commonwealth. The Board agrees. The final-form rulemaking will reflect this change.
Commentators proposed that owners and operators be given credit for coal cleaning. The Board agrees. Proposed § 123.205(a)(4) has been amended to read that the mercury removal efficiency due to pretreatment of coal or waste coal may be credited towards the minimum percent control efficiency of total mercury.
A commentator recommended that the Board eliminate the annual emission limitations for coal-fired EGUs and recommends a restricted market based trading program. The Board disagrees with this recommendation since it does not believe there is sufficient legal authority under existing Federal and State law to allow for the trading of a statutorily recognized HAP and potent neurotoxin like mercury.
A commentator asserted that the proposed rulemaking's prohibition of allowance trading and banking would cause the premature shutdown of smaller, older coal-fired plants in this Commonwealth leading to loss of jobs and reliable electric power. The Board disagrees. Section 123.206 provides that the Department may approve of an alternative mercury emission standard or schedule, or both, if the owner or operator of an EGU subject to the emission standards of § 123.205 demonstrates in writing to the Department's satisfaction that the mercury reduction requirements are economically or technologically infeasible. The provision was added at the request of the AQTAC to address the concerns about smaller, older plants. While the Department's approval of an alternate standard or a compliance schedule will not relieve the owner or operator of an EGU from complying with the other requirements of §§ 123.207--123.215, owners and operators of these smaller, older plants may also petition the Department for supplemental allowances under § 123.209. The Board also added a provision to § 123.207 to allow the owner or operator of an EGU to demonstrate compliance with the annual emission limit by using system-wide averaging. This compliance option will be in addition to the options included in the proposed rulemaking for compliance on a unit-by-unit basis or by facility-wide emissions averaging. As a result, there are a number of provisions in the final-form rulemaking to ensure that smaller, older plants are safeguarded. Because the Commonwealth is not electing to participate in the CAMR, the EPA has not provided the Department with the option of banking allowances from year to year.
A commentator stated that the CAMR allows emission trading, which provides a strong incentive for generators to reduce emissions more than and sooner than required. The Pennsylvania mercury rulemaking does not. The Board disagrees. The EPA admits that compliance with CAMR caps will not be achieved by 2026 or as late as 2030. To provide further incentive in this Commonwealth, the Board has revised § 123.207 to add a provision to allow the owner or operator of an EGU to demonstrate compliance with the annual emission limit by using system-wide averaging. This compliance option will provide an incentive for units within a system to over-control and will be in addition to the options included in the proposed rulemaking for compliance on a unit-by-unit basis or by facility-wide emissions averaging.
A commentator stated that the CAMR does not disadvantage Pennsylvania coal, which contains more mercury than coal from other states. The Pennsylvania mercury rulemaking disadvantages Pennsylvania coal. The Board disagrees. The CAMR discriminates against bituminous coal through the allowance allocation program as well as the NSPS emission limits. The final-form rulemaking treats all coal types evenly. Owners and operators may now take credit for the pretreatment of coal as a means of compliance. These same owners and operators may also take advantage of a system-wide compliance demonstration. Since owners and operators may use CAIR-type technologies to reduce mercury emissions, they are less likely to switch coals because bituminous coal allows for a higher capture rate. Additionally, this Commonwealth has an abundance of low-mercury-content coal found in the southwestern part of this Commonwealth.
Another commentator stated that under the proposed rulemaking, the Commonwealth will be in violation of its CAMR State Budget beginning in 2018. The Board disagrees. The Board reviewed the list of IPM runs that the EPA conducted in support of the CAMR. These model runs show that coal-fired power plants in this Commonwealth will emit 64% more mercury 0.451 ton (902 lbs.) than the established cap of 0.702 ton (1,404 lbs.) in 2020. In contrast, after Phase 2, it is anticipated that the Pennsylvania mercury rulemaking would achieve a 39% greater reductions than the CAMR under Phase 2. This means that the Commonwealth would achieve its 2018 cap of 0.702 ton (1,404 lbs.) by 2015.
Commentators asserted that the annual emission limit in § 123.207, which is based on the CAMR allocations, is an extremely stringent and unnecessary requirement. The imposition of this on a unit or even facility basis will force many Pennsylvania high-mercury coals out of the market for the generation of electricity. Some smaller generating units cannot employ the maximum control technologies that would be necessary to achieve the levels specified in this section and remain competitive in the wholesale power market. The Board disagrees. The annual emission limitation provisions are designed to ensure that the mercury emission cap established for EGUs in this Commonwealth is not exceeded. The Board has revised § 123.207 to include the option of system-wide emissions averaging. This provision allows the owners or operators of two or more affected EGUs under common ownership or operator control within this Commonwealth to demonstrate compliance by ensuring that the aggregate of actual mass emissions from all units, under the averaging demonstration, is less than the aggregate of allowable mass emissions from these units. Therefore, smaller units that belong to systems that include larger units that over-control will be able to average their annual emissions as part of the system-wide averaging provision. This averaging will help the smaller units meet their annual emission limitations. The Board has also decided to give credit to EGUs that pretreat their coal to reduce its mercury content. This will help EGUs meet both the unit-specific emission standards and the annual limit. Also, these owners and operators may petition the Department for alternative emission standards or compliance schedules under § 123.206 and supplemental allowances under § 123.209.
Some commentators believed that the unused nontradable allowances in the new source set aside provision in § 123.207(c)(2) should not be retained in the supplemental pool. Those unused nontradable allowances should be returned to the affected units. The Board disagrees. The final-form rulemaking does not include banking and trading provisions. The Department made the determination that the state-of-the-art mercury control technology is such that each unit can, if the appropriate measures are taken, meet its emissions cap. The Department will retain the unused allowances for each unit and allocate them to units that have not met their cap and have applied for additional allowances from the annual emission limit supplement pool. The Department's petition process will ensure that those units that have demonstrated the most effort in reducing their mercury emissions will be eligible to receive allowances. The Board has also revised § 123.207(o) to include the option of system-wide emissions compliance demonstration. This provision allows the owners or operators of two or more affected EGUs under common ownership or operator control within this Commonwealth to demonstrate compliance by ensuring that the aggregate of actual mass emissions from all units, under the averaging demonstration, is less than the aggregate of allowable mass emissions from these units. This compliance option will be in addition to the options included in the proposed rulemaking for compliance on a unit-by-unit basis or by facility-wide emissions averaging.
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