|
Legislation and Regulations.
New Source Review
On August 27, 2003, the EPA issued a final rule defining
certain power plant and industrial facility activities as “routine
maintenance, repair and replacement,” which are not subject
to new source review (NSR) under CAAA90. As stated by the EPA, “these
changes provide a category of equipment replacement activities that
are not subject to Major NSR requirements under the routine maintenance,
repair and replacement (RMRR) exclusion” [28]. Essentially
this means that power plants and industrial facilities engaging
in RMRR activities will not be required to obtain State or EPA approval
for those activities and will not have to install the “best
available” emissions control technologies that might be required
if NSR were triggered.
Although the RMRR exclusion is not new, in the past
it has been evaluated on a case-by-case basis. The new rule attempts
to give affected entities some regulatory clarity by defining the
specific activities that qualify for the exclusion. The new rule
“specifies that the replacement of components of a process
unit with identical components or their functional equivalents will
come within the scope of the exclusion, provided the cost of replacing
the component falls below 20 percent of the replacement value of
the process unit of which the component is a part, the replacement
does not change the unit’s basic design parameters, and the
unit continues to meet enforceable emission and operational limitations”
[29]. Knowing the costs and scope of any changes they are
considering, industrial and power plant facility owners will be
able to determine whether they might trigger NSR.
The potential impact of the new rule is unknown.
During its development, some observers argued that uncertainty about
whether actions under consideration would trigger NSR had led facility
owners to forgo investments that might improve the efficiency, reliability,
and/or capacity of their units, and that the change in rules could
lead to significant increases in the efficiency of coal-fired power
plants and their electricity production [30].
Even without the rule change, however, coal-fired
generation has been increasing. For example, between 1990 and 2002
coal-fired generation in the electric power sector increased by
21 percent, while coal-fired capacity increased by only 2 percent.
Clearly, operators have been able to maintain their coal-fired power
plants and increase their output under the old rules. These revisions
should enable coal plant operators to continue maintaining their
plants and increase their use with less worry about triggering NSR.
In AEO2004, coal-fired generation is projected to increase
significantly as existing plants are used more intensively and new
plants are added.
No explicit changes to address the impacts of the
new NSR rule have been made in AEO2004. As more data become
available, they will be included in future AEOs.
.
Notes and Sources
Released: January 2004
|