## Assessment of EPA’s Utility MACT Proposal

Q: What is the EPA Utility MACT Rule?

A: The Maximum Achievable Control Technology (MACT) rule requires coal and oil

- fired power plants to reduce emissions of mercury , other metallic toxics , acid gases , and organic air toxics

. Q: Why is EPA proposing these regulations now?

A: EPA’s March 16, 2011 Utility MACT rule complies with a Consent Decree of the D.C. Court of Appeals that requires EPA to fulfill the 1990 Clean Air Act regarding hazardous air pollut ion from power plants

. The Clean Air Act require d EPA to determine whether such regulation is “appropriate and necessary , ” which EPA did in 2000

. The Court established deadlines of March 16, 2011 for the proposed rule and November 16, 2011 for the final rule.

Q: What does the rule require?

A: Following the Clean Air Act’s approach for toxic pollutants, the rule requires “command and control” emission rate limits for mercury, acid gases, and particles. The limits must represent Maximum Achievable Con trol Technology, defined as the top 12% performance of existing units , which EPA set after collect ing performance data from industry

. In addition, the proposal establishes “ work practice standards ” to reduce organic air toxics, such as dioxin and furan s

. Q: How will power plants comply with the rules?

A: A number of plants already have pollution controls that will comply with MACT limits. Others, in order to comply with the established emission rates, will need to install pollution controls, inclu ding activated carbon injection , scrubbers or dry sorbent injection , and upgrade particulate controls (see attached Glossary

. ) Nationwide, EPA projects 10 gigawatts of existing generation (1% of national electric generation capacity) will retire rather than install required pollution controls . This is because the se units would no longer be economic to operate

. Under a scenario of higher gas prices or greater electric demand, fewer existing units would be expected to retire.

Q: Why are EPA’s retirement projections so much lower than most previous studies had predicted?

A: Previous studies, including those by the North American Electric Reliability Corporation (NERC), the Edison Electric Institute (EEI), and several investment analysts were conducted prior to EPA’s proposal and made worst case estimates about what EPA was likely to require. For example , other analyses

assume d that higher cost technology , such as scrubbers , w ould be required at every unit

. In contrast, EPA assu me d that lower cost pollution technologies , including dry sorbent injection, will allow some units to compl y without invest ing in a scrubber

. These units would be able to continue operation andwould not retire. In addition, EPA’s analysis to support the Utility MACT rule does not include

assumptions about future regulation of coal combustion ash and cooling water , as some previous analyses have

. Unlike EPA, s ome studies have also include d a future carbon price that drives ad ditional retirements

. Q: How much will the rule cost?

A: EPA estimates the Utility MACT cost at $10.9 billion per year with retail electricity prices increasing by an average of 3.7% and consumer natural gas prices increasing by 0.6% to 1.3%

. To put this into context, a nnual costs of the recently proposed Transport Rule , which will reduce sulfur dioxide and nitrogen oxides, is $2.8 billion . The Utility MACT is more expensive per ton of reduction than previous power sector rules because the che apest reductions will already have occurred and the cost per ton removal increases as more reductions are required, particularly on smaller units.

Q: What are the projected health benefits of the rule?

A: Power plant air pollution, including metallic toxics such as mercury and arsenic , acid gases, and particles , cause s several health problems, including neurological damage, cancer, lung damage, heart and respiratory disease, and premature death. EPA projects the benefits of reducing such emissions in the Utility MACT rule at $ 59

- 160 billion per year . EPA argues that for every dollar spent on pollution controls , there are five to thirteen dollars in health benefits. T hese benefits are primarily associated with avoiding premature death from fine par ticle pollution, which is a co

- benefit of the pollution controls used to comply with the MACT limits.
Q: Has EPA incorporated features to reduce impacts on cost and electric system reliability?

A: EPA’s recent Utility MACT proposal incorporates several flexibilities that minimize costs a s well as the potential for disruption to electric reliability

. These include work practice standards in lieu of limits for dioxin and furans; facility

- wide avera ging , which could allow some individual units to exceed MACT limits; sub

- categorization to establish limits by boiler

- type and fuel

- type ; exemptions for units that infrequently burn oil ; and alternative standards that could reduce monitoring requirements

. In addition, although the Clean Air Act generally allows 3 years to comply with MACT, EPA’s proposal emphasizes that states c ould provide waiver s to allow a fourth year for facilities to install controls.
Q: Why didn’t EPA establish less stringent “health

- based emission limits” for acid gases?

A: The CAA section 112(d)(4) offers an alternative "health

- based emission limit (HBEL)" approach , in lieu of the conventional MACT approach

. EPA c ould set a less stringent health

- based emission limit, as lo ng as it can ensure a margin of safety above a pollutant

- specific health standard. For one of the acid gases, hydrogen chloride ( HCl ) , EPA previously used this discretion to exempt sources (e.g., paper and pulp, lime manufacturing) from a MA CT limit. EPA notes that it did not set hea l th

- based emission limits for acid gases in th e Utility MACT rule for seve ral reasons, including: a) lack of information on cumulative impacts from other respiratory irritants, environ mental effects of acid gas es , and signi ficant health co

benefits of a MACT limit for acid gases (i.e. , reduced pre mature deaths through reductions in fineparticles )

. Because compliance with a less stringent health

- based emissions limit could cost less , this

may b e a point of controversy going forward.

Q : Does the MACT rule address greenhouse gases?

A : The MACT rule is not designed to reduce greenhouse gases. However, because there would be some retirement of coal units and substitution of natural gas capacity for coal, modest reductions of greenhouse gases are expected.

Glossary of Pollution Contro l Technologies
Activated Carbon Injection (ACI): a commercially available technology that, in combination with particulate controls, removes mercury from the exhaust stack of a power plant. Many units currently employ ACI to remove mercury in order to comply with state regulations.
Dry Sorbent Injecti on (DSI): a commercially available technology ( similar to ACI for mercury) that , in combination with particulate controls, has been shown to significantly reduce acid gases , as well as sulfur dioxide ( SO 2 ). DSI is currently employed on a number of existing power plants to control other pollutants and other companies have announced installation plans. DSI has significantly lower capital costs than a scrubber, but non

- trivial operating costs due to the cost of sorbent . T his feature makes it best su ited for certain fuels and for smaller, less frequently operated units that want to avoid a more expensive scrubber and don’t need large amounts of sorbent (e.g., Trona)

. Particulate controls: P article pollution can be captured by particulate controls installed on the exhaust stack of a power plant. All existing power plants have some particulate controls, namely electrostatic precipitators (ESP) or fabric filters/baghouses. The Utility MACT rule may require upgrades, including from ESP to fabric fil ters for some units, depending on the other controls in use and type of fuel burned.

Scrubber or Flue Gas Desulfurization (FGD): a commercially available technology that remove s SO 2 as well as acid gases from power plant exhaust. More than half of existi ng coal

- fired generating units currently have a scrubber installed for SO 2 control . Variations include wet scrubbers and dry scrubbers. Wet scrubbers are the mo st expensive pollution control technolog y relevant to the Utility MACT rulemaking.

Selective Catalytic Reduction (SCR) : is commercially available technology that removes nitrogen oxides (NO X ) from power plant exhaust and is currently installed at many facilities, particularly in the e astern states. In combination with a wet scrubber, SCR also re moves mercury.