Luminant believes the agency is proposing a rule so restrictive for Texas that it would increase power costs for consumers, threaten grid reliability and potentially throw thousands of Texans out of work. Not only that, in extensive comments filed today with the EPA, Luminant described the proposal released by the EPA in late 2014 as unlawful and urged the agency to withdraw it.
Some background: Regional haze is the impairment of visibility at national parks caused by many sources, such as vehicles, windblown soil and power plants, but also emissions and smoke blown in from Mexico. Importantly, unlike other Clean Air Act rules regarding emissions, regional haze regulations don’t have anything to do with health. These rules require each state to prepare what’s called a state implementation plan, or SIP, to gradually improve visibility over decades at national parks inside their borders and those in other states impacted by their emissions.
Texas’s regional haze SIP—submitted to the EPA in 2009—covers Big Bend and Guadalupe Mountains in West Texas and the Wichita Mountains Wildlife Refuge in Southern Oklahoma. The CAA gives states substantial flexibility and discretion in determining “reasonable progress goals” for improving visibility at the parks. And note the critical distinction here in that we’re talking about goals, not standards.
The CAA also requires states to consult each other on emission reductions needed to achieve that progress. And Texas and Oklahoma did that. They went through extensive, mutual consultations on the Wichita Mountains prior to each state submitting their respective plans to the EPA.
But, when the EPA announced its proposal in November, it rejected the cooperation between Texas and Oklahoma. For the first time in history, the EPA is proposing to disapprove a consultation between two states over regional haze plans. In a move that ignores the CAA’s direction for the state to be the primary author of its own plan, the EPA now proposes to substitute its own judgment for that of the state via a federal implementation plan, or FIP, for Texas.
In doing so, the EPA invented new requirements in this federal plan for the three parks that, in effect, treat Texas different than all other states. The agency even concedes that what it has cobbled together for Texas is “without…prior precedent.”
Relying not on real world data but instead on skewed computer modeling and non-statutory factors, the EPA is ordering additional emission reductions and unlawfully picking the specific plants where they’re to be made, which has never been done before. The EPA is ignoring court decisions and even its own regional haze guidance which instructs that progress on regional haze is not determined by singling out individual sources.
The results for Texas under the EPA’s demands would be harsh:
- More than $2 billion in unjustified costs for new upgrades by 2018 and retrofits by 2020 to further control sulfur dioxide at 14 Texas coal units, nine of them Luminant’s, all of which are located far away from these parks.
- Higher bills for consumers, as the Texas Commission on Environmental Quality has said the costs will be passed on to them.
- A risk to reliable electric power in Texas, cited by the TCEQ and ERCOT if coal plants are forced to retire prematurely.
- No detectable change in visibility at Big Bend, Guadalupe Mountains and Wichita Mountains since the improvement projected by the EPA is so small it could not be detected by the human eye.
That last point demands some explanation. Regional haze is measured by deciviews. The human eye can only detect a change of 1.0 deciview or more. Yet, as the foreword in our comments points out, the EPA’s plan would, at most, improve visibility in 2018 at the parks by significantly less than that.
Incredibly, the EPA wants to unload severe costs on Texas and risk grid reliability for no perceptible improvement in visibility.
What’s very clear, though, is the toll this would take on the Texas economy and jobs. Higher power costs would ripple through the state economy.
Two of Luminant’s plants, Big Brown and Monticello, would be required to install SO2 scrubbers for more than $1 billion, as estimated by the EPA. Our company’s 10-K disclosure filed with the SEC recently laid out the risk: “New scrubbers at the Big Brown and Monticello units necessary to achieve the emission limits required by the proposed FIP (if those limits are even possible to attain) would likely challenge the long-term viability of those units.”
Big Brown and Monticello are valuable not only because they can power more than 1.5 million Texas homes with dependable, affordable electricity, but also for their impact in local economies. These are communities with hard working Texans targeted by the EPA under the guise of improving visibility.
None of this debate is necessary. The Texas regional haze SIP has been in place since 2009 and is working. Texas emissions have decreased. Visibility has improved beyond what even the EPA would require in this proposal that relies on computer models. Based on real world data, not models, from EPA’s own visibility monitors at these three federal parks, visibility has surpassed the levels that EPA asserts are necessary by 2018.
At Luminant, we’re proud of our environmental record of meeting or exceeding the laws and rules of our nation and state. We’re Texans and we want clean air, water and natural resources now and for generations to come. Our state plan is succeeding – visibility at these three national parks has improved and has even gone beyond the goals set by the EPA.
Simply put, there is no need for this unlawful rule.