Off the Kuff Rotating Header Image

Luminant

Some power companies like the Clean Power Plan

Not that you’d ever know it.

ERCOT

Thad Hill, in a split with many fellow power company executives, flatly opposes the lawsuits that Texas and 25 others states have filed to block the Obama administration’s Clean Power Plan.

The plan, which the Environmental Protection Agency unveiled in the summer, seeks to combat climate change by reducing carbon emissions at existing power plants. It would affect coal-fired plants most profoundly, because they emit the most carbon dioxide.

It’s no coincidence that the company Hill heads, Houston’s Calpine Corp., owns exactly zero coal plants.

While it’s intuitive that wind and solar power companies, which don’t emit greenhouse gas in generating power, support the Clean Power Plan, opinion within the traditional electricity generation sector is more nuanced.

Calpine, which operates the nation’s largest fleet of natural gas-fired generators, leads a relatively small group supporting the federal rule.

Most companies that generate power with coal oppose it, including Dallas-based Luminant, the state’s largest power generator. It also operates some gas plants and one of Texas’ two nuclear plants.

[…]

While the EPA has tightened other emissions regulations under President Barack Obama, the Clean Power Plan is the most sweeping overhaul, said Travis Miller, director of utilities research at Morningstar.

The plan is intended to reduce carbon pollution from existing power plants 32 percent from their 2005 levels by 2030.

“The Clean Power Plan is going to have ripple effects throughout the entire energy system in the U.S.,” Miller said. “Utilities need a long runway to adapt, but they’re willing to adapt.”

In the lawsuit challenging the rules put forth by the Democratic Obama administration, Republican Texas Attorney General Ken Paxton calls the plan a massive power grab by the EPA that would increase Texans’ electric bills significantly and threaten the reliability of the electric grid.

The Electric Reliability Council of Texas, which manages 90 percent of the state’s power grid, has estimated the rule could force the closures of some Texas coal plants and increase electricity prices 16 percent by 2030.

Miller agreed that the Clean Power initiative would affect Texas, though he said that Midwestern, Great Plains and Appalachian states most dependent on coal would feel the greatest effects.

Some of the changes in Texas’ power landscape are occurring anyway, because of cheap shale gas and Texas’ ranking as the largest wind power producer in the nation.

“There’s an impressive pipeline of new gas generation and new wind generation in Texas,” Miller said.

That presents market challenges to coal plants, and could move the state toward compliance with the Clean Power Plan. “Texas might not have to do all that much,” Miller said.

See here for the background. Miller’s statement is consistent with what ERCOT itself has said, and the Clean Power Plan would help conserve water, too. But this is Texas, and our leadership has to do things the hard way. Just remember, they don’t speak for everyone, not even in the power generation business.

We’ve got mercury, yes we do

Once again, Texas overachieves at something bad.

Martin Lake coal plant

Even though mercury and other hazardous air pollution from U.S. power plants are declining, the progress at the coal-fired power plants are uneven, leaving in place a significant remaining risk to the health of the public and environment, according to a new report by the Environmental Integrity Project (EIP).

Coal-burning power plants release millions of pounds of toxic pollutants into the air every year, including mercury and carcinogens like arsenic and chromium. US EPA’s Toxics Release Inventory (TRI) can be used to identify the largest sources of these dangerous pollutants based on annual reports the electric power industry submits to the Agency under federal Right to Know laws. Mercury is a potent neurotoxin, especially harmful to developing fetuses and young children.

Available online at http://environmentalintegrity.org/news_reports/01_03_2013.php, the new EIP report uses TRI data for 2011 (the most recent full year available) to identify the 10 largest sources of power plant mercury emissions – five of these are in Texas, of which four are owned by Luminant Generation.

[…]

EIP Attorney Ilan Levin said: “Nationwide, equipment has been installed over the years to reduce emissions of sulfur dioxide and particulate matter. That has helped cut down on the release of mercury, toxic metals and acid gases from power plants over the last ten years. However, that progress is uneven, and the dirtiest plants continue to churn out thousands of pounds of toxins that can be hazardous to human health even in small concentrations. For example, emissions of mercury from coal-fired power plants have actually increased in the last decade in the state of Texas.

Levin added, “Emissions from local power plants deposit mercury and other toxic metals in nearby rivers and streams, where these pollutants concentrate in aquatic organisms at levels that can make fish unsafe to eat. The fact that so few plants are responsible for so much of the mercury pollution makes the solution less complicated; the dirtiest sources need to clean up their act.”

You would think, given his deep and abiding love for fetuses, that Rick Perry would be all over this. You would, of course, be wrong. The full report is here; note that not only does Texas have five of the top ten, we have four of the top five. And as the report notes, the news just keeps getting better.

Fortunately, mercury emissions from coal-fired electric power plants have declined over the past decade, from 88,650 pounds in 2001 to 53,140 pounds in 2011. States like Maryland have cut mercury emissions from coal plants at least 80 percent through tough new state standards, while reductions in other states are a byproduct of pollution controls installed to meet other federal standards. For example, scrubbers that reduce sulfur dioxide to comply with acid rain or fine particle standards will also remove mercury. These reductions have not been evenly distributed; for example, mercury emissions from Texas power plants have actually increased since 2001. That matters, because rivers and lakes closest to power plants are the most likely to be the hardest hit by power plant mercury pollution.

The EPA’s long-delayed Mercury and Air Toxics (“MATS”) rule, which gives power plants until February of 2015 to comply, would level the playing field by requiring the industry’s laggards to catch up with companies that have already cleaned up their plants. EPA estimates that the rule will cut annual power plant mercury emissions to just over 13,000 pounds by 2016, about 75 percent below current levels. But the rule is being fiercely challenged by Luminant and other companies seeking to avoid the cost of the pollution controls needed to meet the new standard.

Yes, they are fighting it fiercely. See here, here, and here for some background. After that story about the connection between lead contamination and crime rates, we should all be very, very afraid of anything that dumps large quantities of heavy metals into our air, water, and soil. There is one bit of genuine good news in all of this, and that is that the proposed White Stallion coal plant has been cancelled, and with the boom of natural gas there’s no new coal-burning plants on the horizon. That won’t do anything to help mitigate the effects of the plants we have now, but at least it won’t get any worse.

Luminant and the CSAPR

I have not followed the dustup between energy producer Luminant and the EPA very closely. What I know is that like most other disputes between those who want cleaner air here in Texas and those who don’t is that someone in the latter group is complaining about a new federal regulation that will force them to clean up their act a bit. (It’s always a federal regulation, because our state never makes them do anything it doesn’t have to make them do.) Fuelfix summarized the situation last month:

Texas’ largest energy producer, Dallas-based Luminant, has launched an online campaign against a new federal rule that the company says will force the closing of units at one of its coal-fired power plants and three nearby mines.

Luminant’s new website, reconsidertherule.com, takes aim at the Cross-State Air Pollution Rule, which requires aging power plants in 27 states to install modern pollution controls to sharply cut emissions of sulfur dioxide and nitrogen oxide by Jan. 1. The company filed a federal lawsuit Monday against the Environmental Protection Agency to block the rule, saying the deadline is impossible to meet.

The EPA, to its credit, pushed back aggressively against Luminant’s allegations, which you can see in that post. I still wanted to know more, so I turned to Jennifer Powis of the Sierra Club and asked her to write something for me about this that I could run here. This is what she sent me:

Texas Can Do Better

Let’s start focusing on the road ahead instead of the road behind

Every time a new environmental rule comes down, industry proclaims the sky is falling, and that compliance will be too expensive. Yet, all of our major environmental standards—the Clean Air Act, the Clean Water Act, the Endangered Species Act to name a few—are roughly over 30 years old and all the while, the United States has seen clear economic growth and a cleaner, safer, healthier environment for workers and citizens alike.

The Cross State Air Pollution Rule (CSAPR, pronounced “Casper” even though the acronym is missing a few letters) is no different but here, only Luminant, Texas’s largest power provider, is crying and carrying on as if one rule would be decisive for any regulated business. In truth, as Tom Sanzillo’s recent op-ed in the Houston Chronicle pointed out, poor financial choices, made worse by lower natural gas prices, and rising competition from renewables, made business tough for Luminant long before any new air quality rule was finalized.

CSAPR closes loopholes, allowing coal plants to meet similar air quality standards as other regulated industries

The Rule affects 27 states and creates a cap and trade system for pollutants primarily responsible for the formation of ozone. Ozone, as every Houstonian has dealt with and knows, is smog and has been scientifically linked to premature death, lung damage, and aggravation of asthma or other respiratory conditions. But because the rule is a cap and trade system, any polluting entity can continue to pollute at the same levels as it does today, as long as that same entity purchases pollution allowances on the open market. It’s a sort of pay to play, recognizing that a business can be in the driver’s seat, determining how best to improve air quality within its own fleet. For this rule, every power provider in the state has known something like this was coming since 2005, when then-President George Bush’s administration promulgated a similar transport rule across state borders.

Why should Houston care?

Nearly 500 industrial plants in the Houston/Galveston/Brazoria area, 120 in the Beaumont/Port Arthur area, and 342 in the Dallas/Ft. Worth area have had to install and operate air pollution control systems because those areas fail to meet basic public health safety limits for pollution – the areas are all in non-attainment. But Luminant has saved hundreds of millions of dollars by not installing air pollution controls compared to the more than 900 other industrial plants that have done their part in cleaning up dirty smoke stacks and attempting to clean up Texas’s awful air quality.

Realize the three old Luminant coal plants (Big Brown, Monticello, and Martin Lake) are the top 3 industrial polluters in Texas among nearly 2,000 industrial plants. They are exceptionally dirty plants:1

Combined they emit 25.5% of state industrial air pollution
Combined they emit 33.8% of state industrial SO2 air pollution
Combined they emit 11.4% of state industrial PM10 air pollution
Combined they emit 10% of state industrial NOx air pollution
Combined they emit 37.6% of state industrial CO air pollution

Comparing Luminant’s big dirty three coal plants only to other coal plants, however, shows an even more harrowing tale. Luminant’s Big Brown, Monticello, and Martin Lake are:

46.8% of all Texas coal plant emissions (19 existing coal plants)
41.5% of all Texas coal plant SO2 emissions
36.0% of all Texas coal plant PM10 emissions
30.6% of all Texas coal plant NOx emissions
71.7% of all Texas coal plant CO emissions

You can see why only Luminant has reached far and wide into the media, into state government, and into the courts in an effort to stop a rule that will drastically improve the lives of every day Texans.

It’s Time To Move Beyond Coal

Mayor Parker and Houston industry should fight to defend this rule and level the playing field. But unfortunately, while this rule will create real and substantive improvements in air quality — eliminating multiple non-attainment regions across the country — the Houston/Galveston/Brazoria non-attainment region will still have major air quality concerns after this rule is implemented. (See page 30 and 31.) And in truth, so will Texas.

But the path forward is a go local argument for the state. Texas leads the nation in wind production, has huge untapped solar and geothermal resources, and generally has the most underutilized natural gas capacity of any state in the nation. Instead of capitalizing on this potential, all of the state’s power is focused on overturning this rule. Unfortunately, what scores points in party circles doesn’t often make good policy.

Jen Powis is the state lead for the Sierra Club’s Beyond Coal campaign working to transition Texas’s electric system to cleaner alternatives. The campaign is currently working to stop the construction of seven proposed coal plants, and retire older facilities in order to make room for cleaner and greener systems.

1 All data is compiled from the self-reported emissions inventory in 2009 and maintained by the Texas Commission on Environmental Quality (TCEQ).

My sincere thanks to Jen Powis for writing that. The one thing I will add is that if you read that Tom Sanzillo op-ed, it references a report he wrote for the Sierra Club regarding Luminant’s finances. A little Googling led me to that here. It’s a bit technical for me, but the basic gist of it is that Luminant is way overleveraged; the op-ed summarizes it succinctly. The bottom line is that you should keep all this in mind when the pollution apologists complain about what that bad ol’ federal guvmint is making them do now.