Policy and Regulation

EPA issues Water Discharge Rules Impacting the Energy Industry

EPA released one of two major water rules late Friday, April 19. It’s called the Effluent Limitations Guidelines, which means limits on discharges of pollutants from power plants into US waterways. Some folks in the energy industry think this is another backdoor to regulate and eventually kill coal by making coal plants costly to run. It’s not enough that air regulations require plants to install air pollution controls, but water rules then regulate the waste streams that come from pollution controls and spill into US waters.

What of plants are at risk? Mainly fossil plants and primarily coal. Even plants that may have spent hundreds of millions installing a wet scrubber are at risk. As the name suggests, wet scrubbers use water and end up catching pollutants from the air which then get discharged as a sludge or slurry waste stream, which is subject to a limit.

I have not had a chance to delve into this rule in detail. I have worked for the past six years as an “air head,” a label in industry that signifies you focus on air pollution. I am excited to explore a water rule and will report back on my read of the rule. To find out more on your own, I found EPA’s factsheet helpful and the proposed rule is here: http://water.epa.gov/scitech/wastetech/guide/steam-electric/proposed.cfm.

EPA mentions in their factsheet that they analyzed the economic impact from the rule: “Electricity rates are projected to stay well within normal historical fluctuations. Additionally, no coal plants are projected to close as a result of this rule.”  In a low-gas price environment, I assume that coal plants may not close but they could suffer disadvantages. How many more coal plants will be mothballed-or temporarily shut off–if they have to spend to limit their discharges while gas plants may not experience similar costs?