On May 18, 2005, the U.S. Environmental Protection Agency (EPA) promulgated the first national standards for mercury emissions from coal-fired electric power plants. Mercury is a potent neurotoxin that can cause adverse health effects (principally delayed development, neurological defects, and lower IQ in fetuses and children) at very low concentrations. The principal route of exposure to mercury is through consumption of fish. Mercury enters water bodies, often through air emissions, and is taken up through the food chain, ultimately affecting humans as a result of fish consumption. According to the EPA, as of December 2004, 44 states had issued fish consumption advisories due to mercury. Twenty-one states (primarily in the Midwest and Northeast) have issued advisories for mercury in all their freshwater lakes and/or rivers. Twelve states in the Southeast and New England, have advisories for mercury statewide in their coastal waters, and Hawaii has a statewide advisory for mercury in marine fish. Mercury reaches water bodies from many sources, including combustion of fuels containing the substance in trace amounts. In the United States, coal-fired power plants are the largest emission source, accounting for 42% of total mercury emissions according to EPA. EPA's 2005 regulations, referred to as the Clean Air Mercury Rule (CAMR), establish a cap-and-trade program for power plant mercury that will take effect in 2010. CAMR will have little impact on emissions before 2018, however. At that time, the regulations call for a 69% reduction in emissions as compared to the 1999 level. In setting the limit so far in the future, EPA stated, in part, that mercury control technologies are not commercially available, and will not be generally available until after 2010. Many observers disagree with that conclusion, including a growing number of states. This report describes what those states that have chosen alternative forms of regulation are requiring. As of February 2007, 18 states have established more stringent emission limits that will take effect sooner than will EPA's, and four other states are developing regulations that would do so. The states with regulations already promulgated (or laws enacted) represent a broad cross-section of states, including Arizona, Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, and Virginia. Together, these states have 177 coal-fired power plants, with a total of 414 electric generating units. The combined generation capacity of these units is estimated at 97,138 megawatts (Mw), 32% of total U.S. coal-fired electric generation. The four states that have proposed but not yet finalized mercury standards (Georgia, Michigan, Washington, and Wisconsin) have an additional 51 plants. Their combined generation capacity is estimated at 33,986 Mw, an additional 11% of total U.S. coal-fired generation. As shown in Appendi x es A and B , the specifics of the state standards vary in stringency, in effective dates, and in numerous other details. Nevertheless, at least four generalizations, regarding rates, dates, compliance measurement, and allowance trading, can be made. First, at least 15 of the state programs will require reductions of 80% to 90% in mercury emissions when fully implemented. Second, the effective dates range from 2007 at the earliest to 2015, with a majority of the programs imposing at least a first phase reduction by 2010. [The CAMR rule, as noted earlier, also imposes a cap in 2010, but it calls for a 22% reduction in that year, whereas most of the state requirements call for 80% to 90% reductions by then.] Third, in general, the programs provide some flexibility by measuring compliance as a rolling 12-month average of emissions, rather than setting an emission limit to be met at all times. CAMR, of course, is even more flexible, allowing utilities to exceed the standard at individual facilities and even company-wide, provided that they obtain allowances for each pound of mercury emitted. Fourth, unlike the CAMR program, a key feature of which is the trading of emission allowances, the state programs generally prohibit interstate trading of mercury credits; many prohibit in-state trading, as well. These prohibitions address the concern that mercury hot spots might persist if individual plants could avoid installing controls by buying credits. Also, the states that prohibit interstate trading are insuring that emission reductions within their state not generate credits that could be used to delay reductions by plants in other states (i.e., states participating in the CAMR program). Beyond the four generalizations, there are a number of aspects to the state mercury control programs that vary from state to state. For one, there are varying forms in which the emission limits are expressed, the most commonly used being: 1) as a percentage reduction from the amount of "inlet" mercury; or 2) as a fixed emission limit (either pounds per gigawatt-hour of electricity produced or pounds per trillion Btu of energy consumed). At least one state (Montana) plans to vary the emission limit depending on the type of coal used (allowing substantially higher emissions for lignite). Others set different limits depending on the size of the plant or of the company that owns it. Thus, it can be difficult to compare the stringency of various state requirements. The common rule of thumb in press accounts describing these programs seems to be the percentage emissions reduction that they would require, but it is important to ask, first, compared to what, and, second, whether there is an alternate fixed limit or alternate method of compliance that provides a less stringent standard. Further complicating the emission reduction math are two other factors: first, the mercury content of coal varies (making it difficult to estimate inlet mercury); and second, many power plants are already achieving substantial emission reductions as a result of their existing emission control equipment. EPA estimates that existing controls are already reducing mercury emissions (as compared to inlet amounts of mercury) by about one-third nation-wide, with substantially greater reductions at some plants. Thus, to achieve a 90% reduction of inlet mercury does not require a reduction of 90% in current emission levels. In some cases, particularly at plants with baghouses (fabric filters), a 90% reduction may require little additional control. Data on current mercury emission levels are not generally available in any comprehensive fashion, either. The best national data come from a survey conducted by EPA in 1998, which relied on sampling at 80 of the nation's more than 1,000 coal-fired units rather than continuous emissions monitoring at them all. The mercury content of coal is known to vary even within a given coal seam. Until better monitoring equipment is installed (which will be an effect of the state and federal programs), it will be difficult to establish with any precision both current emission levels and the exact reductions one can expect from emission control programs. Other complicating features unique to some of the states laws and regulations are worth noting. New Jersey, for example, which has the earliest compliance deadline (December 15, 2007) would extend its deadline to 2012 for half of a company's capacity if the plants also make major reductions in sulfur dioxide, nitrogen oxides, and particulates. Virginia has different requirements for the state's largest utility (which controls 63% of the state's coal-fired generating capacity) than it has for others. Minnesota's law only applies to facilities with capacity above 500 Mw; most other states apply requirements to units 25 Mw or larger. Pennsylvania would presume that units with specific combinations of control technology are in compliance with the regulations' emission limitations. In addition to the states that have enacted laws or are developing regulations to control mercury, three other states and the District of Columbia have de facto limits of zero for mercury emissions as a result of the federal CAMR rule. An irony of the federal rule is that, because it grants allowances to each state based on current emissions of mercury from power plants larger than 25 Mw in that state, states that have no coal-fired power plants or that only have plants smaller than 25 Mw are given no allowances. The District of Columbia and the states of Idaho, Rhode Island, and Vermont fall into this category and, thus, have a limit of zero for power plant mercury emissions. Under CAMR, states are not required to adopt the federal cap-and-trade program, but, if they do not do so, they are required to show that state regulations are at least as stringent as the federal. If D.C., Idaho, Rhode Island, and Vermont do not join the federal program, they have to demonstrate that they have limited emissions through in-state controls to zero; this would effectively prohibit the siting of new coal-fired power plants in these jurisdictions. By joining the federal program, on the other hand, these states (and D.C.) would become part of the federal allowance trading program; new coal-fired power plants would be able to operate in these jurisdictions by buying emission allowances from facilities outside the state that have reduced emissions sooner or to a greater extent than CAMR requires. As of February 2007, Idaho, Rhode Island, and Vermont had all decided not to participate in the CAMR program, effectively prohibiting the construction of new coal-fired power plants in their jurisdictions. Five additional states (Alaska, California, Hawaii, Maine, and South Dakota) have so little coal-fired generation that their combined 2018 allowances under CAMR are 118 pounds, substantially less than 1% of the national total. Table 1 shows the 2018 allowances under CAMR for each of these states. For these states also, there would be little alternative to joining the CAMR program if the state wished to preserve the option of coal-fired power plants, since a state program would have to show that it would limit emissions to as little as 2 pounds in the case of Maine, or 32 pounds in the case of California. Thus, Alaska, Hawaii, and South Dakota have decided to participate in the CAMR program. Maine has decided to let EPA administer the program. California, however, is reported to be considering a state program, and is unlikely to consider participating in CAMR. In addition to the programs developed by individual states, the State and Territorial Air Pollution Program Administrators (STAPPA) and Association of Local Air Pollution Control Officials (ALAPCO) developed a model rule in 2005 to encourage more stringent controls on power plant mercury emissions. (STAPPA and ALAPCO are now known collectively as the National Association of Clean Air Agencies, NACAA.) The model, which was publicly released November 14, 2005, offers two options. The first option calls for an average 80% capture of inlet mercury from existing units (or an equivalent output-based emission standard of 0.010 lbs./Gwh) based on a 12-month rolling average, beginning December 31, 2008. During this phase, owners or operators could comply by averaging emissions from all their existing units within the state. A second phase, beginning December 31, 2012, would require a 90-95% capture of inlet mercury or an output-based emission standard of 0.0060-0.0025 lbs./Gwh. During this phase, averaging would be limited to units located at a single electric generating plant. The rule would prohibit interstate trading of allowances. A second option in the STAPPA/ALAPCO model rule, like a provision in New Jersey's law, would provide more flexibility to electric generating units in return for the installation of control technologies designed to capture additional pollutants. Under this option, an owner or operator could delay compliance with the mercury emission limits for four years at up to 50% of its generating capacity if it agreed to meet stringent standards for emissions of sulfur dioxide, nitrogen oxides, and particulate matter, in addition to mercury by the end of 2012. While no state has adopted the STAPPA/ALAPCO model intact, the model serves as a window on what state and local officials closely involved in regulating power plant emissions believe is feasible. Nineteen of the 22 states that have proposed or adopted programs more stringent than the federal CAMR rule have done so since the model rule's unveiling. With a few exceptions, it is a general precept of federal environmental laws that more stringent state standards are not preempted. Relying on this authority, some states (particularly, California and a number of Northeastern states) have adopted various environmental requirements that address problems that are judged to be unique to their state or more severe in their state than elsewhere. Thus, state actions to set more stringent limits on mercury emissions are not considered unprecedented or unusual. Nevertheless, the degree to which states are opting out of the federal program and the speed with which they are doing so appear noteworthy. In part, the development of these state programs reflects a judgment by state regulators or legislators that the CAMR rule is not sufficiently stringent. In part, it reflects a judgment that EPA's assessment of the availability and cost of technology to control mercury emissions are unduly pessimistic. State actions were also dictated by a looming deadline for submission of programs for EPA approval. Under the CAMR rule, states had until November 17, 2006 to submit their programs (either programs adopting CAMR or programs at least as stringent) to EPA. Failure to submit can leave states liable to imposition of a Federal Implementation Plan (FIP), which would impose the CAMR rule's requirements on a state through an EPA-run program. EPA officials have aggressively promoted CAMR and the threat of FIPs, testifying before state legislatures against the adoption of more stringent state programs, and questioning the authority of states to prohibit interstate trading of allowances. At the same time, many of the states adopting more stringent requirements are pursuing legal action to overturn EPA's rule and force the agency itself to adopt more stringent requirements. It may be some time before these issues are resolved. In the meantime, if state programs with stringent control requirements are successfully implemented, it will become more difficult for EPA to argue that technology is unavailable to more aggressively control power plant mercury emissions. Conversely, if the technology fails to do its job or proves to be more expensive than emissions control industry spokespersons have asserted, EPA's hand will be strengthened. Since the earliest state requirements take effect at the end of 2007 and early in 2008, these questions may continue to merit congressional oversight at least through that period. Appendix A. Enacted / Promulgated Mercury Controls Appendix B. Other State Actions

Summary: In March 2005, the U.S. Environmental Protection Agency (EPA) promulgated the first national emission standards for mercury emissions from electric power plants. EPA studies conclude that about 6% of American women of child-bearing age have blood mercury levels sufficient to increase the risk of adverse health effects (especially lower IQs) in children they might bear. Power plants account for 42% of total U.S. mercury emissions, according to EPA. Thus, there has been great interest in the agency's power plant regulations. The regulations established a cap-and-trade program to address power plant emissions, but the program would have little impact on emissions before 2018. At that time, the regulations call for a 69% reduction in emissions as compared to the 1999 level. In setting the limit so far in the future, EPA stated, in part, that mercury control technologies were not commercially available, and would not be generally available until after 2010. Many observers disagreed with that conclusion, including a growing number of states. As of February 2007, 18 states (Arizona, Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, and Virginia) have established more stringent emission limits, which take effect sooner than will EPA's, and four other states are developing regulations that would do so. The state standards vary in stringency, in effective dates, and in numerous other details, but a number of generalizations can be made: Most of the state programs will require reductions of 80% to 90% in mercury emissions when fully implemented; by comparison, the federal program requires a 22% reduction in its first phase and 69% when fully implemented. The effective dates of the state programs range from 2007 at the earliest to 2015; the federal requirements will not be fully implemented until at least 2025. The state programs generally prohibit interstate trading of mercury credits, and many also prohibit in-state trading. The trading prohibitions address the concern that "hot spots" with high concentrations of mercury might persist if individual plants could avoid installing controls by buying credits. This report reviews the state standards for mercury emissions from power plants and discusses issues raised by the promulgation of such standards. Among these are whether states can prevent the sale of credits generated by compliance with state regulations in EPA's national credit trading program, and the potential impact of state programs on court challenges to EPA's national regulations.