Luminant Joins State of Texas, other Generators in Court Challenges to the EPA’s Regional Haze Final Rule

Luminant has filed a motion at the U.S. Fifth Circuit Court of Appeals to stay the Environmental Protection Agency’s Regional Haze Federal Implementation Plan final rule for Texas and Oklahoma. Along with two other power generators, Luminant is asking the court to stop implementation of the final rule while under legal review because the rule is causing irreparable harm to businesses and communities across Texas.

Luminant filed a petition for review challenging the EPA Regional Haze FIP on Feb. 29.  The state of Texas, other power generators and the Utility Air Regulatory Group have also filed petitions for review, and all petitions have been consolidated into a single case.

The EPA proposed this rule in 2014 and we laid out our serious concerns on our POV blog and in comments filed. The final rule was issued in January.

As these legal cases get underway, what’s important to remember is that the Regional Haze Rule under the Clean Air Act is not a health-based program. It’s designed to improve visibility over decades at national parks. Environmental activists and some in the media often mislead on this point by trying to connect the rule with health effects to garner support for yet another government regulation. Indeed, under the EPA’s final rule, Texas is unlawfully burdened with unnecessary regulations and costs while visibility is improving under the Texas State Implementation Plan.

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 for generations to come.

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. 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 in Southern Oklahoma.

The CAA requires states to consult each other on emission reductions needed to achieve 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 proposed rule in November 2014, it rejected the cooperation between Texas and Oklahoma. For the first time in history, the EPA disapproved 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 substituted 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 differently than all other states. The agency even concedes that what it has cobbled together for Texas is “without…prior precedent.”

In his comments to the EPA, Texas Governor Greg Abbott underscored the EPA’s arbitrary view of the Texas SIP compared to other states. While the Texas plan proposed to eliminate regional haze at Big Bend and Guadalupe Mountains by 2155, Abbott pointed out the EPA gave California until 2307 to restore visibility at two national parks, almost 300 years from now.

Relying not on real world data but instead on computer modeling and non-statutory factors, the EPA is ordering additional emission reductions and unlawfully picking the specific plants where those reductions must be made, which has never been done before in this way.

The results for Texas under the EPA’s demands would be harsh:

  • More than $2 billion in unjustified costs for new upgrades by 2019 and retrofits by 2021 to further control sulfur dioxide at 14 Texas coal units, nine of them Luminant’s, all of which are hundreds of miles from these parks.
  • A risk to reliable electric power in Texas cited by 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.

Further, 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 federal monitors at these three parks, visibility has surpassed the levels that EPA asserts are necessary by 2018.

Incredibly, the EPA wants to unload severe costs on Texas for no perceptible improvement and while federal monitors show visibility already improved beyond the 2018 goals set in the final rule.

Luminant and other generators will be forced to spend billions of dollars in non-recoverable costs while this case is being decided because of a rule that is manifestly illegal.

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 March 1 laid out the risk that new scrubbers “would likely challenge the long-term economic viability of those units.”

With the EPA unyielding, the time has come to let the courts decide.

Our official statement can be found here.

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