Communicating Environmental Regulations: It's Good Business
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The document summarizes environmental regulations affecting the power industry and tips for communicating about these complex regulations to business managers. It outlines upcoming regulations for air, climate, water, and waste that will impact power companies' strategies. These include regulations for transport of air pollutants, mercury emissions, greenhouse gas emissions, cooling water intake, wastewater discharge, and coal ash storage. It advises power companies to take a comprehensive view when planning for regulations. It also provides tips for refining key messages about regulations, targeting the right audiences, and effectively presenting complex technical information.
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Communicating Environmental Regulations: It's Good Business
- 1. Prairie State Energy Campus, IL, USA 38°16'18"N | 89°40'34"W Communicating Environmental Regulations: It's Good Business Michelle Golden, Principal Environmental Engineer October 25, 2013 CIVIL GOVERNMENT SERVICES MINING & METALS OIL, GAS & CHEMICALS POWER
- 2. Overview © Bechtel | 2 The US has been and continues to be in a very active period of environmental regulatory change, particularly with respect to energy production. These regulatory changes impact the short and long-term business strategies of power companies. Today’s presentation is designed to give you brief highlights of regulations affecting the Power Industry, touch on why this matters to Bechtel Power Corporation and offer tips regarding effective communication of complex topics such as these to business managers.
- 3. Regulations Affecting the Power Sector © Bechtel | 3
- 4. 1/30/2012 4
- 5. 5/25/115 Possible Timeline for Environmental Regulatory Requirements for the Utility Industry
- 6. Regulations Affecting the Power Sector © Bechtel | 6 Air: Transport (CSAPR/CAIR) Ambient Air Quality Standards (NAAQS) Mercury and Air Toxics (MATS) a.k.a. Utility MACT MACT for Industrial Boilers Climate Greenhouse Gas New Source Performance Standards, Water: Cooling Water Intakes (Section 316(b)) Steam Electric Effluent Guideline (ELG) Waste Coal Combustion Residuals (CCR)
- 7. Air – Uncertainty is the Status Quo In 2013, EPA will focus on implementing and defending the suite of air regulations promulgated over last 4 years. Rule Final CSAPR July 2011 Vacated – Aug 2012 US Supreme Court Review underway MATS April 2012 Appealed, briefings through spring MATS – New EGU Reconsideration March 2013 Timing critical due to GHG NSPS NAAQS – PM 2.5 Jan 2013 May drive transport rule requirements. NAAQS – Ozone Feb 2014 © Bechtel | 7
- 8. Air Transport : Litigation = Uncertainty © Bechtel | 8 Clean Air Interstate Rule (CAIR) – Final regulations published March 2005 – Challenged and remanded without vacature July 2008 Cross State Air Pollution Rule (CSAPR) – Transport Rule to replace CAIR, final July 2011 – Numerous petitions for review and request for stay filed (Consolidated case: EME Homer City v. EPA) – Court ordered stay 12/29/11, CAIR remains in effect. – CSAPR Vacated August 2012 – Decision 2-1 – EPA requested re-hearing by full panel of 9 judges, re-hearing denied January 24, 2013 – EPA petitioned US Supreme Court , granted petition June 2013 What does this mean for the Power industry? – Ongoing uncertainty – Uncoordinated Air Quality Control System (AQCS) planning/design/schedule
- 9. Climate: Greenhouse Gas Regulation Mandatory Reporting Rules (MRR) – Sept 2009 Endangerment Finding – December 2009 Mobile Source Rule – April 2010 Tailoring Rule – May 2010 GHG Permitting (PSD/BACT & Title V) Guidance – Nov. 2010 Carbon Capture Sequestration Underground Injection Rule – Dec 2010 New Source Performance Standards for Power Plants – New plants regulations re-proposed September 2013, final rule projected to be published June 2014 – Existing plants proposed rule projected for June 2014 © Bechtel | 9 EPA moving ahead with regulations multiple fronts:
- 10. Water Regulations Steam Electric Power Generating proposed Effluent Limitation Guidelines (ELG) •Last updated 1982, EPA proposed rule issued June 2013 •Existing ELG retained but standards added for waste streams from AQCS •Environmental groups pushing EPA to require zero liquid discharge (ZLD); cited by EPA as available technology. •Final Rule projected May 2014 What are the implications for the Power industry? •New water treatment facility requirements •Additional considerations for AQCS retrofits © Bechtel | 10
- 11. Water Regulations Cooling Water Intake (316(b)) Regulations Phase I – Final 2001 (new intakes) Phase II/III addresses existing power plants, other types of facilities. •Rule proposed March 2011 •Settlement agreement required final rule by July 2013; •However EPA obtained approval of an extension that requires final rule publication by November 2013 States have been addressing in NPDES renewals © Bechtel | 11
- 12. Waste: Coal Ash Coal Combustion Residuals (CCR) Reconsideration driven by TVA impoundment failure (Kingston, TN Dec 2008) EPA proposed rule (June 2010) sought comments on two approaches Subtitle C Hazardous Waste Subtitle D Solid Waste EPA not projecting when this will be finalized, studying impacts of beneficial use Bills have been floated in Congress to mandate regulation by the States and ban EPA from regulating coal ash. © Bechtel | 12
- 13. Strategic Implications for Power Companies © Bechtel | 13
- 14. Power Industry Challenges © Bechtel | 14 Proper planning means that utilities and merchant power companies cannot plan for one rule at a time but rather take a comprehensive view to: Minimize economic impacts to shareholders and consumers Continue environmental improvements Maintain system reliability Maintain fuel diversity options Obtain access to capital and/or cost recovery Negotiate myriad political landscapes Complex, intertwined regulations in place or pending present barriers to new generating units (particularly coal-fired and possibly gas-fired) and require decisions to be made to retrofit or retire existing units.
- 15. Communicating Complex Messages to Business Leaders © Bechtel | 15
- 16. Getting the Message Out © Bechtel | 16 Costs associated with these regulations affect customer decisions to retrofit/retire/replace existing generation. Senior Management awareness is critical for meeting customer needs and strategic planning. Challenges: •Honing the message •Securing the audience •Delivering the message effectively
- 17. Getting the Message Out Refining the Message: – Assess what you think business leaders need to know and why – Prepare your “elevator speech” Getting the opportunity: – Target the managers who have the most to gain from the message – Be prepared to be flexible about your delivery Effective presentation: – Limit the technical details to those that matter to the mission / business – Make your best effort to assess impact / benefit – Be prepared to get into details if necessary – Be confident! © Bechtel | 17
Notas del editor
- 2011 EEI timeline illustrating the myriad regulations.
- EEI Expanded timeline illustrates in more detail the regulation development, including the proposed rule period (yellow), final rule (green) compliance /reporting dealine (black) and interestingly, a litigation window (thin blue line)
- The prior slides illustrate the volume and compexity of the regulatory change faced by the power industry over the recent years. Key regulations to introduce to you are listed here and I will provide a brief overview limited to the time we have. Air: the CAA has what are called “good neighbor” provisions that allow EPA to stepto assist down wind states that have difficulty achieving ambiemt air quality standards. Transport rules are the means by which EPA has been addressing this going back to to the early 90’s, particularly in the eastern states (mention hazy summer days and AQ indexes)
- Obama Administration achieved most air regulatory agenda in 1st term, now the focus turns to defending those in litigation and implementing those that are not. Two key points to take away: There is some degree of interaction between many of the rules. Implementation of one affects the others. (Two examples 1- types of AQCS for both MATS & CSAPR, and 2- changes to NAAQS drive potential to Transport rules) The impact of litigation is tremendous; both industry and NGOs routinely appeal and/or file suit over regulations such as these. The outcome is uncertainty: timeframe for implementation, what will be required etc. Lets look at that more closely on that next slide.
- CAIR was remanded without vacature 12/23/2008, left CAIR in place until a new rule could be finalized—CSAPR was the CAIR replacement. EPA will likely not be able to finalize a new program until at least 2014, and such a program, if adopted, will likely not impose new requirements on power plants until 2016 at the earliest. Thus, the compliance deadlines for EPA’s “Mercury and Air Toxics Standards” rule will likely arrive before a new rule to replace CSAPR can come into effect. What does this mean for the Power Industry? How does one plan amid this type of constant change? Ongoing uncertainty for power companies as rules are vacated or challenges linger. Modifications of existing units for MATS, CSAPR may trigger GHG NSPS applicability New/Revised NAAQS could affect modeling and out come of new rule
- Clean Water Act requires EPA to regulate discharge from categories of industry. The Effluent Limitation Guidelines are the regulations by which EPA executes this requirement. EPA has completed a study that indicates update is due for the steam electric. Proposed rule sent to OMB 1/15/13, 90 day review but can takes longer EPA said the rule would apply to about 1,200 electric power plants, with a "particular focus on about 500 coal-fired power plants" saying new air pollution controls drove the need to revise the current rules as they are expected to cause significant increases in the concentration of pollutants in effluent
- The Clean Water Act also has a provision requiring EPA to address the impact of the use of water for cooling purposes. Both the thermal impact from heated discharges and the impact to aquatic species from the act of withdrawing the water. Once again appeals and litigation have had an affect. Litigation goes way back to the 1980’s when Enviro’s sued EPA for failure to meet their obligations. Ultimately a Settlement Agreement agreed to in 1999 set a schedule for EPA to act. EPA met their obligation with a rule for new power plants in 2001 but 2 more difficult elements remained which were 2 categories of exiting power plants.
- Have you noticed a theme with the regulations yet? Delay, litigation etc? Coal ash has been going through this since the 1980’s when Congress first passed a law to regulation wastes (RCRA) Coal ash was exempted but EPA required to study the impact of coal ash disposal. The have since been multiple reports to Congress and regulatory determinations made. However, in the background there has remained a push to regulation this very large volume waste.
- All of the regulations discussed above have cost implications for existing power plants: AQCS retrofits – what type and for what control levels yet to be determined. GHG requirements are not yet clear Water treatment system retrofits or additions Intake and cooling water modifications Modifications of ash disposal methods All of these things have to be considered in the planning of future generating capacity – what units are too expensive to retrofit, if retrofits are considered what types and so on.