The U.S. Environmental Protection Agency’s proposed greenhouse gas (GHG) regulations for “new” and “existing” power plants have received substantial media attention, but regulated parties should also be aware of the third piece of EPA’s self-styled “Clean Power Plan”:  Proposed carbon dioxide (CO2) emission limits for “modified” and “reconstructed” electricity generating units (EGUs).

EPA proposed CO2 limits for “modified” and “reconstructed” EGUs on June 2, 2014, the same day it issued its proposed regulations for existing power plants, but it did not release its proposed regulatory text for those limits until several days later.  The proposed regulatory text is now available on EPA’s website, and power plant owners and operators should scrutinize it carefully – it amends the proposed regulatory text that EPA released in January 2014 in connection with its proposed limits for “new” power plants.

As defined in EPA’s regulations, “modified” units are existing units that undergo a physical or operational change that results in an increase in their hourly rate of air emissions, while “reconstructed” units are existing units where components have been replaced to such an extent that the fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility, and it is technologically and economically feasible to meet the emission standards set by EPA.

Under EPA’s June 2 proposal, neither modified nor reconstructed steam units would have to install carbon capture and storage technology or meet the more stringent CO2 emission standards that EPA has proposed for newly constructed units.  Instead, those units would be required to meet an emission standard based on a combination of best operating practices and equipment upgrades (to improve the unit’s efficiency).  Modified gas turbines would be required to meet the corresponding emission limits for new gas turbines.

More specifically, the proposal would set different standards of performance for different types of units, as follows:

  • Modified fossil fuel-fired EGUs (i.e., utility boilers and integrated gasification combined cycle (IGCC) units):  the source must meet a EGU-specific emission limit (a) determined by the EGU’s best historical annual CO2 emission rate from 2002 to the date of modification, plus an additional 2 percent emission reduction, or (b) determined depending on whether the modification occurs before or after the EGU becoming subject to a Clean Air Act Section 111(d) state plan.  For option (a), the limit must be at least 1,900 pounds of CO2 per net megawatt-hour (lb/MWh-net) for sources with a heat input exceeding 2,000 million British thermal units per hour (MMBtu/h), or 2,100 lb/MWh-net for sources with a heat input of 2,000 MMBtu/h or less.
  • Reconstructed fossil fuel-fired EGUs:  sources with a heat input exceeding 2,000 MMBtu/h must meet a limit of 1,900 lb/MWh-net, and sources with a heat input of 2,000 MMBtu/h or less must meet a limit of 2,100 lb/MWh-net.
  • Modified or reconstructed natural gas-fired stationary combustion turbines:  sources with a heat input exceeding 850 MMBtu/h must meet a limit of 1,000 pounds of [...]

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