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Defending the industry against attacks

Update on Lignite Council activities on behalf of and with work in conjunction with members, state leaders, and state agencies to defend the industry against federal and neighboring states.

Lignite Council task force leads work against rulemaking

The Lignite Energy Council provides opportunities for members to connect and work together through several committees and task forces. One task force that has been working overtime is the 25-member Environmental Managers co-chaired by Jennifer Charles of Rainbow Energy and Scott Hopfauf of Minnkota Power Cooperative. The group has been working diligently to address multiple challenges from federal agency rulemaking attempts. The impacts of these rules could cause additional premature retirements of coal plants, jeopardize the reliability of the electric grid, raise electricity prices, lose hundreds of millions in state and local tax revenue, and severely hamper the industry’s ability to construct and fully utilize carbon capture technology.

EPA Mercury and Air Toxics Standards (MATS)

The Mercury and Air Toxics Standards (MATS) rule promulgated in 2012 set limits on mercury and other hazardous air pollutant emissions from coal plants. Currently, EPA is soliciting information that could lead to more stringent MATS limits based on either (1) “residual risks” to public health after taking into account emission reductions achieved by the 2012 rule, or (2) advancements in “practices, processes, and control technologies” that have occurred since the 2012 rule. (Together, these are referred to as the “risk and technology review” known as RTR).

EPA is proposing performance standards that have been documented not to be achievable using North Dakota lignite.  

  • A central component of EPA’s MATS RTR is the proposal to eliminate the “low rank coal” subcategory established for lignite-powered facilities, which would treat all coal types as though they have the same chemical properties.
  • The proposed rule is a major reversal of EPA regulations which has long held that characteristics of lignite are different than non-lignite and therefore require different control standards.
  • This rule is specifically targeting North Dakota lignite plants, who do not blend their coal with other coal types to achieve lower mercury readings as is the case in other states.

One of the Lignite Council’s greatest concerns with EPA’s proposed MATS RTR is the potential impact that it may have on electric grid reliability, particularly when the effects of EPA’s proposal are combined with those of all the other many electric utility sector-focused rules that EPA is actively pursuing.

ACTION and timeline:

Public comments were submitted June 24, 2023, by ND Department of Environmental Quality, Lignite Energy Council, electric utilities, mining companies and Coal Conversion Counties. A decision on whether to tighten MATS regulations is expected sometime this year.

EPA Coal Combustion Residuals (CCR)

EPA’s 2015 coal combustion residuals (CCR) rule establishes requirements for the management and disposal of CCR and non-CCR waste streams generated by coal plants. EPA is in the process of determining whether to approve applications from utilities to either extend closure deadlines for unlined CCR surface impoundments or commit to retire by 2028.

EPA is proposing to deny the applications for continued use of unlined surface impoundments at six facilities across the country which includes Coal Creek Station in Underwood, ND.

  • If EPA does not approve these requests, plants could be forced to idle for up to several months until alternative disposal capacity can be developed or could retire prematurely.
  • In September 2020 and May 2021, NDDEQ submitted a program approval package to the United States Environmental Protection Agency (EPA) for regulating CCR’s from power plants.
  • The 68th Legislative Assembly passed HB1090 to redefine the term groundwater, for purposes of regulating CCRs, to meet EPA’s definition requirements. Without this change, EPA would not approve North Dakota’s program.
  • This change was supposed to allow the Department to continue pursuing program approval for CCR regulations in the state. Since this time action, EPA has moved the goalposts and has still not approved the program approval package.

ACTION and timeline:

The Lignite Council and Rainbow Energy Center each submitted comments on April 12, 2023, and helped ND District 33 legislators send a letter to EPA voicing their concerns with the rulemaking. Multiple state agencies, including the Attorney General’s office, also filed comments.

EPA Legacy CCR Surface Impoundments/CCRMU Rule

The EPA is proposing changes to the coal combustion residuals (CCR) regulations for inactive surface impoundments at inactive electric utilities, referred to as “legacy CCR surface impoundments.” EPA is proposing that within tailored compliance deadlines, owners and operators of legacy CCR surface impoundments comply with all existing requirements applicable to inactive CCR surface impoundments at active facilities, except for the location restrictions and liner design criteria. This action is in response to the August 21, 2018, opinion by the U.S. Court of Appeals for the District of Columbia Circuit (Utility Solid Waste Activities Group, et al v. EPA) that vacated and remanded the provision that exempted inactive impoundments at inactive facilities from the April 17, 2015 CCR rule.

EPA is also proposing to establish groundwater monitoring, corrective action, closure, and post-closure care requirements for all CCR management units (regardless of how or when that CCR was placed) at regulated CCR facilities.

  • EPA is attempting to usurp a state run program that has a long history demonstrating responsible management and beneficial use of CCRs.
  • This rule would expand federal regulations past facilities to now include legacy management units and surface impoundments in violation of existing law.
  • EPA has utilized flawed data analysis and has not identified any significant environmental benefits associated with its proposed changes.
  • EPA has not fully considered the negative environmental consequences or costs, or energy system impacts of its sweeping change in the regulatory structure.

The Lignite Council contends that legacy units that are subject to state oversight should be exempt from any new federal rule and that EPA needs to approve state CCR programs and finalize the federal permitting program. The proposed rule is too broad, exceeds the agency’s authority and does not take into account the environmental and economic risks due to sudden changes to the regulatory process.

ACTION and timeline:

The Lignite Council, ND Department of Environmental Quality, and industry will all be filing comments opposing this rule. The deadline for comment submission is July 17, 2023.

EPA Section 111 Greenhouse Gas Emissions/Carbon Rule

Following the Clean Power Plan, Affordable Clean Energy Rule, and the US Supreme Court decision on West Virginia (North Dakota) v. EPA, the agency issued a replacement rule that is focused on tightening greenhouse gas emissions.

EPA has developed requirements for four subcategories of existing coal units:

  • Units that commit to retire before 2032 are subject to a unit-specific performance standard (lb CO2/MWh) based on routine O&M with no increase in their CO2 emissions rate.
  • Units that commit to retire before 2035 and limit operation to a 20% capacity factor (CF) are subject to a performance standard based on routine O&M with no increase in their CO2 emissions rate.
  • Units that commit to retire before 2040 are subject to a performance standard based on co-firing with 40% natural gas.
  • Units that retire 2040 or later are subject to a performance standard based on 90% CO2 capture with CCS.

It is important to understand that the proposed compliance date for all four categories is January 1, 2030. In other words, existing coal units in each subcategory must start complying with the requirements for their subcategory by that date. For example, a coal unit that chooses to install carbon capture and storage (CCS) to operate after 2040 must have CCS installed and operating less than seven years from now.

ACTION and timeline:

Public comments are due on August 8, 2023, after EPA approved a 15-day extension in June 2023. The Lignite Council will be submitting comments on this proposed rule.

Minnesota 100% Carbon Free by 2040 Rule

Minnesota’s aggressive Carbon Free by 2040 legislation was signed into law earlier this year. It imposes aggressive “carbon-free” energy requirements and targets out-of-state “electric utilities” that provide vital baseload electricity to the upper Midwest multi-state region. It also seeks to eliminate regional baseload power generation sources by mandating unrealistic procurement of “carbon-free” power sources, which are defined to mean “a technology that generates electricity without emitting carbon dioxide.”

The bill will force all electric utilities located anywhere in the multi-state region that generate or procure any energy for service or sale in Minnesota to “generate or procure sufficient electricity generated from a carbon-free energy source” to meet the following minimal standard percentages of the electric utility’s sales to retail customers in Minnesota by the end of the following years:

  • 80 percent by 2030;
  • 90 percent by 2035;
  • 100 percent by 2040.

The practical reality is that utilities do not and cannot control which resources operate and generate electricity at any given point in time, and utilities cannot physically control the flow of electricity and therefore, cannot ensure electricity sold to retail users in Minnesota comes from any specific source. Consequently, this proposed legislation, if enacted, would require the elimination of baseload power sources to comply with the aggressive standards forth above—and this in turn would weaken the regional grid, undermine the reliable delivery of power and increase costs throughout the upper Midwest region.

ACTION and timeline:

The Lignite Council is waiting on the MN Public Utilities Commission to begin rulemaking to see how stringent the commission will interpret the law and propose to regulate the activities before making a decision on legal action.

Northwest Landowners Pore Space Lawsuit

The NW Landowners lawsuit argues that amalgamation of underground pore space represents an unconstitutional taking of an individual’s property. The suit also contends that a state law requiring “equitable” compensation for non-consenting pore space owners is not the same as a provision in the state constitution that states that “private property shall not be taken or damaged for public use without ‘just’ compensation.”

The NWLA lawsuit argues that amalgamation is a taking of land, and for a taking to occur, an entity must file eminent domain proceedings against the nonconsenting landowner. 

  • It also points out that the state constitution requires that “just” compensation be paid before any taking of private property.
  • It also requires that a landowner be given the opportunity for a jury trial unless it is waived.

This lawsuit endangers the future of carbon capture sequestration and storage planning as the court could decide that the process that has been already worked on could be deemed insufficient or invalid. The result has the potential to derail the construction timeline and put the development in financial jeopardy due to increased uncertainty on a multi-billion-dollar project.

ACTION and timeline:

The Lignite Council is currently monitoring the lawsuit.

Bureau of Land Management – Resource Management Plan

On January 20, 2023, the Bureau of Land Management (“BLM”) announced the proposed revisions to the North Dakota Resource Management Plan entitled “Notice of Availability of the Draft Resource Management Plan and Draft Environmental Impact Statement for the North Dakota Field Office.” Together, the documents address the management of approximately 58,500 acres of BLM-administered surface and 4.1 million acres of federal mineral estate in North Dakota for the next 20 to 30 years.

Among the chief concerns is that BLM’s two preferred plan alternatives would withdraw large portions of public lands in North Dakota from mineral development.

  • BLM also would effectively strand many acres of state-owned and privately owned land because of the checkerboard pattern of mineral ownership in North Dakota.
  • The state and industry each filed comments arguing that BLM lacks authority from Congress to impose these blanket surface restrictions on state and private lands or those managed by other federal agencies.
  • Additionally, comments noted that restricting mineral development on these lands won’t reduce demand for minerals but will hurt the environment by forcing state and private minerals to be developed less efficiently.

With this proposed rule, BLM and Dept. of Interior are threatening to put the world’s largest lignite deposit off limits for Federal coal leasing except within these extremely restrictive, and demonstrably illegal, confines.

ACTION and timeline:

The Lignite Council filed comments on May 22, 2023, and is waiting on BLM to issue the final rule for further analysis and potential legal action.

EPA Effluent Limitations Guidelines

Effluent Limitations Guidelines (ELG) set limits for certain pollutants discharged into wastewater streams from coal plants. Besides setting limits, the current ELG rule provides incentives for coal plants to retire by 2028. In addition, EPA has begun to develop more stringent limits for scrubber wastewater and bottom ash transport water, as well as set limits for wastewaters not covered by the 2015 rule.

EPA comment period closed May 20, 2023 and is expected to issue the final ELG rule by spring 2024.

ACTION and timeline:

The Lignite Council is waiting to see the final rule language.

EPA PM2.5 Standard

In January 2023, EPA issued a proposed rule to increase the stringency of the current annual PM2.5 air quality standard from 12 micrograms per cubic meter (μg/m3) down to 11 to 8 μg/m3. EPA is taking comments primarily on 10 and 9 μg/m3 and is expected to make a final decision by August 2023. A more stringent standard would require further SO2 and NOx reductions from fossil-fueled power plants and other major emission sources as early as 2027 or 2028. These reductions could be required by individual states to remedy in-state nonattainment problems or by EPA through another transport rule.

EPA is expected to issue a final rule to tighten the PM2.5 standard by the end of 2023 or early 2024.

ACTION and timeline:

The Lignite Council is waiting to see the final rule language.

EPA Regional Haze

States have an obligation to develop and submit regional haze plans for addressing visibility impairment in Class I areas. On July 8, 2021, EPA issued guidance to limit the broad discretion and flexibility that states have in the development of their plans. Similarly, the EPA regions also have begun to take a narrow interpretation of states’ discretion when reviewing regional haze plans for the second planning period.

The intent of this new interpretation is to require the installation of scrubbers and selective catalytic reduction (SCR) on the remaining coal plants that are not already operating with those controls.

  • Installation of scrubbers and SCR could be required by the end of 2027 for coal plants that do not already have these controls.
  • If EPA disapproves a plan or if a state does not submit a plan, EPA can impose emission controls through a federal implementation plan (FIP).
  • States must submit implementation plans (SIP) for EPA approval that require additional SO2 and/or NOx controls on coal plants whose emissions are causing or contributing to visibility impairment in Class I Areas (national parks and wilderness areas).

As of August 2022, 15 states had failed to submit regional haze SIPs for EPA review. Almost all the SIPs conclude that additional controls are unnecessary because of coal retirements and the effects of other EPA rules. EPA could begin imposing FIPs in 2024.

ACTION and timeline:

North Dakota Department of Environmental Quality submitted a SIP that did not require costly upgrades into environmental controls at existing lignite power plants. Public comments were filed in July 2022. Comments were submitted by LEC, electric utilities, lignite mining companies, Coal Conversion Counties and ND Department of Environmental Quality.

STATUS:

We have not received any rulings or feedback from EPA to date but expect to see a partial disapproval in the SIP that would require significant investment in plant upgrades that would jeopardize the future operations of facilities with no measurable improvement in haze across the region.

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