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Forethought versus foot-dragging in EPA power plant mercury case

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A split has solidified between power generation companies that have prepared to meet limits on emissions of mercury and other air toxics and the companies that are fighting those limits.

Four power companies have broken from the pack's request for petition of review of the new limits in the case White Stallion Energy Center et al. v. United States Environmental Protection Agency  in the District of Columbia Circuit Court of Appeals.

In an April 8 final brief, Calpine Corp., Exelon Corp., National Grid Generation and Public Service Enterprise Group ask that the petition for review be denied — that limits the agency set in December 2011 on power plant emissions of mercury and other hazardous air pollutants and updated on March 29 remain in place.

The four companies have invested heavily in natural gas and nuclear power, so they are less affected than many by the new limits.

But that is at least in part due to foresight, the companies point out.

Their primary argument is that the EPA's rule has been more than a decade in the making. Power generators that chose not to install pollution controls on their coal-fired plants in preparation for the rule have had an advantage over that period in the competitive power markets and have actually skewed the markets, they said.

"Competitive electricity markets create strong incentives for (electric generating unit) owners to avoid, as much as possible, the operation of pollution controls that raise operating costs," their brief reads.

Units that never installed pollution controls and those that installed controls voluntarily but prefer to buy pollution allowances in the market, when they're cheap, rather than to operate the  controls "routinely underbid well-controlled (electric generating units) and other cleaner energy sources," the brief reads. "As a result, uncontrolled units operate more, pollute more and depress wholesale electricity prices paid to all generators, assuring that it will remain uneconomic even to operate existing pollution controls, much less to install new controls or to build new, cleaner generation sources."

The petitioners that are seeking to have the agency's rule thrown out point to reductions in power industry emissions over the past decades, these companies note, but "they neglect to mention … that these improvements came from their competitors' investments, while their uncontrolled units continue to make (electric generating units) the largest source of hazardous pollutants in the nation."

The EPA's rule levels the playing field, they said.

The four companies also argue for the long-awaited regulatory certainty finally offered by the rule.

"The generation industry requires regulatory certainty to engage in long-term planning and to invest in pollution control projects and new clean generation capacity necessary to replace antiquated, uncontrolled plants," their filing reads.

The long delay in the rule's development has harmed the industry, they wrote. The massive capital investments needed to maintain the integrity of the nation's power grid are protected only they emphasized the word "only" — by foresight dependent on regulatory certainty.

The certainty the rule brings will again be lost if the court disturbs EPA's "thoroughly-considered, technically-justified," reasonable application of the law, they conclude. "The petition for review should be denied."

The case was in abeyance while the EPA completed its update but, with the update issued last month, is now moving forward.