EPA Finalizes Greenhouse Gas Rules for Power Plants 

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By Derek Furstenwerth, SVP, Environmental Services 

On May 9, 2024, the United States Environmental Protection Agency (“EPA”) published its final greenhouse gas (“GHG”) regulation for power plants (“Power Plant GHG Rule”) in the Federal Register. This rule became effective on July 8, 2024. The final Power Plant GHG Rule was released as part of a suite of final rules applying to power plants. The other rules address updates to the Mercury and Air Toxics Standards (“MATS”), limitations on wastewater from coal-fired power plants, and coal ash disposal requirements.  Key provisions of the new GHG rule are: 

  • It applies to: 
  • Existing coal, gas, and oil-fired power plant boilers; and 
  • New and reconstructed1 natural gas-fired combustion turbines (“CTs”). 
  • It does not apply to modified2 or existing CTs.   

The standards in the final Power Plant GHG rule are based on the best system of emission reductions (“BSER”) for each category of affected sources. BSER provides the technological basis for the emission standards, from which a numerical emission standard is calculated. Affected sources are required to meet the emission standard but are not required to employ the specific controls identified in BSER.  

The standards are described below, with CT standards first and standards applicable to boiler-based power plants to follow. 

New Source Performance Standards (“NSPS”) – New and Reconstructed Combustion Turbines (Subpart TTTT) 

The rules apply to any CT greater than 25 megawatts (“MW”) that produces electricity for sale to the grid and was constructed or reconstructed after May 23, 2023. Modified units are not subject to the rule. 

The key change in the final Power Plant GHG rule compared to the proposal is the exclusion of existing CTs from the final rule. EPA has indicated an intent to regulate existing CTs in the future. These future regulations will address emissions from pollutants like nitrogen oxides (“NOx”), hazardous air pollutants (“HAPs”), and GHG. The final rule is less complicated than the proposal, with BSER now consisting of a combination of good operations and maintenance (“O&M”) practices, high-efficiency generating equipment, clean fuels (i.e., distillate oil or natural gas), and carbon capture and storage (“CCS”), depending on unit characteristics.  EPA removed options involving low-GHG hydrogen co-firing from BSER, noting that it is not demonstrated in practice at sufficient scale. The standards are set in two phases, as proposed, the first of which takes effect on July 8, 2024, but compliance date for Phase II has been moved up from 2035 in the proposal to 2032.  Phase I limits, applicable immediately, are based on a combination of high-efficiency generating equipment, good O&M practices, and clean fuels.  In Phase II, units with a capacity factor (“CF”) of 40% or higher are required to meet a standard based on 90% CCS.  

Most of the standards are expressed in pounds of carbon dioxide (“CO2”) emitted per gross megawatt-hour (“MWh”) of electricity produced (“lb CO2/MWh-g”). Compliance with these standards is evaluated on a rolling 12-operating month basis. An operating month is “a calendar month during which any fuel is combusted … at any time.” For infrequently operated units for which add-on controls or fuel changes are not justifiable, the standards are a fuel-based standard, in lb CO2 per million British Thermal Units of fuel consumed (“lb CO2/mmBtu”). 

No CAMS-operated or -managed facilities are affected by these standards. Final standards for new and reconstructed CTs are summarized in Table 1 below.  

Table 1 – BSER and Emission Standards for New and Reconstructed Combustion Turbines 

Duty Cycle Phase I BSER and Standard  (Effective 7/8/2024) Phase II BSER and Standard (1/1/2032) 
Baseload – >40% capacity factor  High-efficiency combined cycle generation (“CC”) with best O&M practices 800 lb CO2/MWh-g (heat input ≥2,000 mmBtu/hr) 800-900 lb/MWH-g (heat input <2,000 mmBtu/hr) Highly efficient CC generation with 90% CCS 100 lb CO2/MWh-g 
Intermediate Load – 20-40% CF High-efficiency simple cycle generation (“SC”) with best O&M practices 1,170 lb CO2/MWh No standard 
Low Load – <20% CF Use lower-emitting fuels (e.g.,  hydrogen, natural gas, and distillate oil) 160 lb CO2/mmBtu No standard 

Standards for Existing Fossil-Fueled Steam Generating Units (Subpart UUUUb) 

Standards for New, Modified, and Reconstructed Steam Generating Units (Subparts TTTT and TTTTa) 

The standards apply to fossil fuel-fired steam generating units (i.e., boilers) with a heat input greater than 250 mmBtu/hr and which serve a generator greater than 25 MW. While the proposed regulations were rather complex regarding applicability, BSER, and emission standards, the final rules have been streamlined. Similar to the combustion turbine NSPS noted above, BSER for this group of sources is based on good O&M practices, lower emitting fuels, and, for some sources, CCS. As with the NSPS for CTs, affected sources are not required to install BSER – they are required to meet the emission rate associated with that BSER. Some of the standards for existing units are based on percentage reductions in emissions compared to a baseline period, defined as any 8 consecutive calendar quarters from July 8, 2019 through July 8, 2024. Details are provided in Table 2. 

Table 2 – Standards for Existing Fossil-Fueled and New/Modified/Reconstructed Steam Generating Units 

Unit Category & Description BSER and Standard Compliance Date 
Long-term Coal Units – Units to operate after 12/31/38 CCS with 90% CO2 capture (88.4% emission rate reduction in lb CO2/MWh*) 1/1/2032 
Medium-term Coal Units – Units to operate after 1/1/2032, retire before 1/1/2039 Co-firing natural gas at 40% of annual heat input (16% reduction in emission rate) 1/1/2030 
Short-term Coal Units – Units ceasing operation before 1/1/2032 Exempt from rule N/A 
Baseload Gas/oil Units – CF>45% 1,400 lb CO2/MWh* 1/1/2030 
Intermediate Gas/oil Units – 8% < CF ≤ 45% 1,600 lb CO2/MWh* 1/1/2030 
Low load Gas/oil Units – CF ≤ 8% 130 lb CO2/mmBtu (operating on gas) 170 lb CO2/mmBtu (operating on oil) 1/1/2030 

* Standards are in lb CO2 per gross MWh, assessed on a 12-rolling operating month basis. Percent reduction standards are evaluated against a unit-specific 8-calendar quarter baseline emission rate. 

In CAMS’ fleet, these standards affect coal-fired power plants – Gavin, Merom, Keystone, and Conemaugh – and gas- and oil-fired boiler-based power plants, specifically Oswego, Middletown, Montville, New Haven, Chalk Point, and Danskammer. 

Reliability Mechanisms 

In response to significant comments relating to the potential impacts of this rule on electric grid reliability, EPA added multiple provisions intended to provide additional flexibility to address grid reliability. Generally, the maximum extension available for each provision is up to one year, and that type of extension can only be provided once.  

  • For units slated to retire in 2032 (“medium term units” or 2039 (“long term units”), EPA added a mechanism to allow an extension of the retirement deadline if electric reliability would be threatened by the unit’s retirement. This extension mechanism must be included in the state’s plan for compliance with the rule to be available. The extension application must be requested within twelve months of the scheduled retirement date and requires support from the state.  
  • Extensions are also available for units (existing units and new/reconstructed turbines) that intend to comply by installing control equipment, but which experience permitting delays, component equipment availability, and construction delays beyond the owner/operator’s control.  
  • In the event of grid emergencies, EPA provides alternate performance standards during such emergencies. The alternate standards are based on lower-emitting fuels for new and reconstructed units and a baseline emission rate for existing units. Emissions during emergencies would not be counted toward the 12-operating-month emission rate.  

The final rule also allows a state to consider remaining useful life and other factors in determining a final emission rate for a particular facility. “Other factors” may include electric reliability, which could provide another way to factor reliability concerns into the final compliance plan for a particular facility. This option is not described in detail in the rule and is ambiguous by design, providing states with additional flexibility to innovate. In general, a state would produce a plan that varies from the standards described above regarding the compliance options for a unit or plant and would present information demonstrating how that plan better accomplishes the intended outcomes of the Power Plant GHG Rule in that state. If approved, the plan would be implemented through requirements in the site’s Title V air permit. 

Compliance Flexibility 

The final rule also indicates that states may use other means of achieving emissions reductions that provide greater flexibility to affected sources.  However, the final rule doesn’t provide clear guidance on how states must demonstrate that these programs achieve acceptable emissions reductions. These measures could include emission trading programs like the Regional Greenhouse Gas Initiative or California Cap-and-Trade. Another possible option would be to assign unit-specific mass compliance limits, CO2 tons per year emission limitations that would equate to the emissions if the standards in the final rule were applied to those units. This may be an attractive option for intermediate-term coal plants. 

If you have any questions about the Power Plant GHG Rule, please contact CAMS Environmental Services.