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A Bush administration proposal would substantially back off earlier antipollution regulations, saving utilities millions.
By ALEX LEARY, Times Staff Writer
© St. Petersburg Times
published December 1, 2002
CRYSTAL RIVER -- With its nuclear plant under close scrutiny amid ongoing terrorist warnings and nearly half its workforce threatening to strike, these are challenging times for Florida Power Corp.
But not everything is going against them.
On Nov. 22, President Bush's administration announced sweeping proposals that would allow Florida Power more flexibility to upgrade its aging coal-fired plants without having to spend millions on modern antipollution equipment.
Florida Power and other utilities lobbied against existing regulations governing pollution, saying they worked as a disincentive to make improvements for safety and efficiency.
Clean air advocates, however, say utilities are sliding off the hook and will be able to increase emissions to the detriment of public health.
"This leaves communities like Crystal River with no assurances that dirty power plants will ever clean up," said Holly Binns of the Florida Public Interest Research Group.
The battle over the proposed changes is far from over, but 90 miles away, in Tampa, the window has long since closed for TECO Energy Inc. Several years ago, TECO paid a steep fine to settle a dispute over the very rules Bush wants to change.
Bush's proposals, issued by the Environmental Protection Agency, center on a 25-year-old amendment to the Clean Air Act. Based on the industry argument that power plants built before 1977 would soon be retired, those plants were exempt from new pollution rules as long as major modifications were not made to prolong their lives or boost power, and thus create a new source of emissions.
If that happened, a provision called new source review compelled the utilities to install the best available technology to control emissions, including sulfur dioxide, a cause of acid rain and nitrogen oxide, which produces smog. Fine particles found in emissions have been associated with serious illnesses and premature death.
Against that bleak backdrop, new source review "provided a day of reckoning for the old plants," said Eric Schaeffer, a senior EPA official who resigned in March to protest the Bush administration's retreat from new source review.
The problem with new source review was that many companies made changes while ignoring the obligation to make antipollution upgrades. That was the view of the Clinton administration, which filed lawsuits against 51 utilities in 1999 and 2000.
TECO was one of the targets. Rather than fight, the company agreed to pay a $3.5-million fine and spend up to $1-billion to reduce emissions at its plants.
To do so, TECO is converting two coal-burning generators at its Gannon plant in Tampa to natural gas use. Once the conversion is completed by the end of 2003, it will shut down four other coal-fired generators.
"Resolving the situation early was the prudent and responsible thing to do," TECO spokesman Ross Bannister said. "It's good for customers. It's good for shareholders. It's good for the environment. More utilities probably should have made the choice we did."
For utilities that did not upgrade, holding on may pay off.
When the Bush administration signaled its intent to scale back new source review in June, the head of the EPA, Christie Whitman, said existing cases would be pursued, but "I would hope we would greatly reduce the number of lawsuits" under the new regulation.
Florida Power was not among the utilities sued by the Clinton administration, though the company was asked to present reams of detailed operations and maintenance records.
The EPA was presumably looking for evidence of upgrades that would trigger new source review. Florida Power has still not heard the outcome, if any, of the review.
"All we have done is routine maintenance to keep the units available and operating," spokesman Mac Harris said.
Given the political change in Washington, chances appear better than ever that Florida Power could avoid any forced efforts to upgrade its pollution controls.
The company said it would live with whatever standards are made final. Officials stress that the company is far below state ambient air limits, which seek to protect public health and the environment. "We have never even approached the limits," Harris said.
Progress Energy, Florida Power's parent company, points to its newer plants, which are run on cleaner natural gas. But the company says coal, which is readily available, is important because it keeps its energy resources diverse.
Of Florida Power's four coal plants in Crystal River, two were built prior to 1977. Unit 1 (1966) and Unit 2 (1969) have a combined power output of 904 megawatts.
Under the rules Bush wants to change, if Florida Power wanted to keep Units 1 and 2 for running for years, the corporation might have had to eventually install pollution controls such as "scrubbers" to reduce sulfur dioxide, or "selective catalytic reduction" to trim nitrogen oxide.
Scrubbers can cost $60-million per boiler, while selective catalytic reduction equipment adds an additional $30-million to $40-million, according to rough estimates provided by Florida Power.
The utility might even have to use cleaner coal. Combined, the four plants consume about 6-million tons of coal each year.
The fuel is not all the same, however. Florida Power uses low sulfur coal to meet the higher emissions standards imposed on its plants built in 1982 and 1984. Sometimes called compliance coal, it is more costly than regular fuel. But the emissions are considerably less.
When asked why the company did not use cleaner coal for all units, Harris conjured up a '65 Chevy. The owner, he said, could install a catalytic converter, a landmark pollution control used on automobiles since 1975. "But why spend money on equipment not required for the car?"
He was less definitive when asked if the maintenance done on the units has extended their life span, which would trigger new source review.
One of the major problems with new source review, utilities say, is that what constitutes "routine" maintenance is not that clear.
Bush's proposal puts forward two options to address that concern. One would allow plants to replace certain parts with equivalent new ones. The other would create an annual allowance for maintenance. Routine would be defined as anything done to promote safe, reliable and efficient operation of a plant.
Groups critical of this approach say it would provide utilities such as Florida Power with a way to virtually rebuild plants from the inside out and violate the spirit and maybe even the letter of the environmental protection law.
"For utilities, there's the promise of a loophole," said Schaeffer, the former EPA official. He is now director of the Environmental Integrity Project in Washington and is a leading advocate for stronger pollution regulations.
Throughout the debate, the power companies have held that the fear of new source review has discouraged small safety, efficiency and emission improvements.
"An inflexible new source review program actually makes air emissions worse," said Scott Segal, spokesman for the Electric Reliability Coordinating Council, a consortium of energy industry groups.
Keith Poston, spokesman for Progress Energy, points to EPA data that show that since 1982, sulfur dioxide emissions have fallen 23 percent and nitrogen oxide emissions have dropped 12 percent -- this while the use of coal to produce electricity has risen by more than 60 percent.
"What I think is somewhat forgotten in the debate is emissions continue to go down," Poston said. "The air is cleaner today than it was 10 years ago."
That is true in the national aggregate.
Records show that Florida Power's nitrogen oxide emissions have decreased. But sulfur dioxide emissions have climbed. In 1990, Florida Power's operation released 86,824 tons of sulfur dioxide; in 2001, the number was 94,851 -- a 9 percent increase.
Under an acid rain program in which utilities can buy emission credits from plants that have cleaned up, Florida Power has been able to exceed sulfur dioxide allowances.
In 2001, the allowance was 75,640, but the actual emissions level, as noted above, was nearly 95,000.
This market approach is driving President Bush's "Clear Skies" proposal, which he says would reduce power plant emissions by 70 percent by 2018.
The program, seen as a replacement for new source review, would set caps for sulfur dioxide and nitrogen oxide and mercury. A credit program would also be implemented.
For now, the debate will rage on over the merits of new source review. Changing the rules will take months or more and will involve public comment periods and hearing.
A coalition of northeastern states, led by New York, said it would challenge the changes in court. Some Democrats have called on Whitman, who, as governor of New Jersey, supported efforts to enforce the rules her new boss is trying to alter, to resign.
She refused the request.
-- Alex Leary can be reached at (352) 564-3623 or email@example.com .