WASHINGTON -- A new Environmental Protection Agency regulation on power plant emissions due Friday promises to further inflame debate surrounding the Obama administration’s most polarizing arm -- and could inflate Georgians’ utility bills in years to come.
Many utilities that rely on coal, such as Atlanta-based Southern Company, claim new regulations on mercury and other toxic emissions will cost the struggling economy dearly. Southern is the parent of Georgia Power and one of the most aggressive utility lobbies in Washington.
Environmental groups contend the regulations will save lives cut short by hazardous fumes, and save money due to less illness. Under a court consent decree the agency must regulate the toxic emissions under the Clean Air Act by Friday, though the rule might not be made public until Monday.
“I think it will be the crowning clean air achievement of the Obama administration because dirty coal-burning power plants have resisted cleanup in America for the better part of five decades,” said John Walke, a senior attorney at the Natural Resources Defense Council.
It is the first time the EPA has proposed a national standard on mercury and other toxic emissions from coal- and oil-fired power plants, and it will require many plants to update pollution controls. The agency initially proposed the rule in March, and the industry has been pushing to weaken or delay it.
The requirements could mean Southern spends years and billions of dollars closing or cleaning up its coal-fired plants before the rule goes into effect in 2015. In the first quarter of 2011, 51 percent of the fuel for Southern’s four utility companies came from coal-fired plants, compared to the national average of 45 percent.
Southern ranked No. 3 in the top five mercury-polluting power companies for 2010, according to a report released Wednesday by the nonprofit Environment Georgia, mostly because a plant owned by the company’s Alabama Power utility was rated the sixth-largest mercury emitting plant in the United States. The report is based on annual EPA toxic data.
Georgia Power’s Plant Scherer, one of the largest coal-fired power stations in the United States, was listed as the 92nd-most mercury-polluting plant out of 457 nationwide. Georgia Power’s other coal plants ranked farther down the list.
Southern estimates the cost for all of its utility companies to comply with the rules could cost between $13 billion to $18 billion through 2020. Georgia Power alone said complying with new regulations to cut toxic emissions will cost from $741 million to nearly $3 billion and lead it to close or refit six additional coal or oil-fired plants by 2015.
Mercury pollution can be curbed by installing pollution controls known as baghouses, which Georgia Power already has done at Plant Scherer’s four units. The work took five years and cost $558 million. The utility currently is seeking state regulators’ approval to start designing and building baghouses for units at Plant Bowen, Hammond and Wansley.
The utility can ask to recover those costs through customer bills, but any added fees would not be added until the baghouses are installed and start working.
Still, the prospect of higher bills comes as Georgia Power customers already are paying an average $10.76 more each month compared to 2010 because of a fee related to a planned nuclear expansion project on top of a three-year rate increase approved a year ago. The nuclear fee will increase annually through 2015.
Georgia Power and Southern officials also have warned that a wave of retrofit projects around the country could create competition for materials and labor, complicating the projects. And they say temporary shutdowns during the work could threaten the availability of power during peak demand on very hot or cold days.
Walke, a former Clinton administration EPA official, said the smoke signals he saw this week suggested EPA will not dilute the rule issued in March.
That would surely prompt outcry among Capitol Hill Republicans. The House already passed a bill to block the mercury rule -- among others -- and create a commission to study the economic effect of any such regulation before it can be approved. The Clean Air Act requires only health and safety be considered.
The Democrat-controlled Senate has blocked the bill, as well as several other House-passed measures aimed at the EPA. This week, Republicans attached a provision rolling back EPA limits on emissions from industrial boilers to a bill to extend a payroll tax cut and unemployment benefits, helping to prompt a still-unresolved row with the Senate.
Athens Republican U.S. Rep. Paul Broun cited the closing of two Georgia Power units at Plant Branch in Putnam County, which the company blamed on the cost of environmental compliance, as evidence that the EPA is damaging the economy.
“It’s absolutely critical the American people understand that this Marxist president and his Marxist agenda being promoted through EPA and other administration positions are trying to destroy everything that’s made this country great,” Broun said.
Many Republicans express similar, if less bombastic, hostility toward the agency, arguing that it is causing job loss.
The economic consulting firm National Economic Research Associates, in a report prepared for the American Coalition for Clean Coal Energy, says the mercury rule combined with other EPA regulations issued this year could cost 183,000 jobs a year.
Nearly two dozen industries rely on affordable and reliable electric power to be competitive in the international marketplace, according to the federal government’s system for classifying industries.
“If electric prices go up in the United States, they will do more business overseas,” said Scott Segal, co-head of the federal government relations practice at Bracewell & Giuliani and director of the Electric Reliability Coordinating Council, a coalition of companies including Southern.
Economic arguments have persuaded the administration to scale back some costly regulations. In September President Barack Obama overruled EPA Administrator Lisa Jackson on toughening a smog standard, for instance.
Walke called it a “crass political decision out of character with the Obama administration’s usual respect for science and the law.”
Mercury’s hazards make regulation an easier political sell. Even some utilities back the rule. The Wall Street Journal printed two letters to the editor last week from CEOs of utility companies arguing in favor of new standards.
“The vast majority of power plants can meet this schedule,” wrote Ralph Izzo, CEO of New Jersey-based Public Service Enterprise Group Inc. “These regulations are not the death knell you would have everyone believe, but provide a clear path for responsible coal generation. Action is long overdue.”
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