Regulation of Power Plant Wastewater Discharges: Summary of the EPA Final Rule

Summary

To implement the Clean Water Act (CWA), the Environmental Protection Agency (EPA) issues effluent limitation guidelines (ELG), or technology-based standards, for categories of industrial dischargers. These standards are implemented through permits issued by states or EPA to individual facilities. In November 2015, EPA promulgated revised effluent limitations for the steam electric power industry to replace rules that were issued in 1982. The new rule was effective on January 4, 2016.

Two factors have altered existing wastestreams or created new wastestreams from many power plants since promulgation of the 1982 ELG. These factors are the development of new technologies for generating electric power, such as coal gasification, and, as a result of federal and state requirements, the widespread implementation of air pollution controls to reduce emissions of hazardous air pollutants and acid gases, such as flue gas desulfurization (scrubber) systems. While scrubbers dramatically reduce emissions of harmful pollutants into the air, some create a significant liquid waste stream. As a result, pollutant discharges from this industry to surface waters have increased in volume, with additional chemical constituents, and EPA believes that many current CWA permits for power plants do not fully address potential water quality impacts of these discharges.

Based on studies of the industry and to settle litigation brought by environmental advocates, EPA proposed a rule in April 2013 to revise the steam electric ELG and issued a final rule in November 2015. A total of 1,080 steam electric plants that burn fossil fuels and whose primary purpose is generating electricity are subject to the ELG. Only a subset of these plants is likely to incur compliance costs as a result of the 2015 rule—only 133—because a large portion of the industry has already implemented processes or technologies that are required by the rule. All of the plants that are expected to incur compliance costs are coal- or petroleum coke-fired. EPA estimates that the annualized compliance costs for the rule are $496 million pre-tax and $340 million after-tax, costs that the agency believes are economically achievable and would have minimal effects on the electricity market, both nationally and regionally. The rule also would reduce pollutant discharges by 385 million pounds annually and reduce water use by 57 billion gallons per year. Estimated costs of the rule exceed estimates of monetized benefits; however, the CWA does not require that the benefits of regulation exceed or even equal the costs.

An EPA rule under the Resource Conservation and Recovery Act (RCRA) on managing coal combustion residuals (CCR) also relates to the CWA ELG rule, because both statutes address coal ash that is generated by power plants and released to the environment. The scope of the CWA and RCRA rules differ. While both address disposal of CCR in surface impoundments at power plants, only the RCRA rule regulates disposal of CCRs in landfills. To coordinate the two rules, in the final CCR rule, EPA extended by one year that rule’s deadline for owners or operators of covered facilities to prepare a closure plan. This would give owners or operators 24 months after publication of the CCR rule, or slightly more than 6 months after the effective date of the revised ELG, to understand the requirements of both regulations and to make the appropriate business decisions and prepare closure and post-closure plans.

Many in industry are concerned that the 2015 rule will impose new requirements and compliance timelines at the same time that power plants are implementing other EPA rules. One issue concerns impacts of the proposal on small entities, including small businesses and small governmental jurisdictions. Environmental advocates view the ELG differently from industry and reportedly are generally satisfied with the final rule, but many do have concerns with issues such as compliance deadlines in the rule. Both industry groups and environmental groups have challenged the rule in federal court.

EPA rules affecting steam electric power plants have been scrutinized and criticized based on their stringency, feasibility, and projected compliance costs. Congressional interest has been evident in legislation to alter the direction and substance of some of EPA’s regulatory actions and initiatives. To this point, discussion of the power plant ELG has centered on the administrative proceedings at EPA and has not drawn specific attention of lawmakers.