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September 14, 1999

ON THE ENVIRONMENTAL FRONT

ADEM and Alabama Power: Hard NOx for Mobile's Lungs?

by Bill Patterson

One of the dirtiest power plants in the nation sits only a few miles from downtown Mobile. Yet during this past summer's Ozone Red Alerts, when Mobilians were urged not to mow their lawns or drive their cars, local officials never offered advice to the power company. The coal-burning Barry Steam Plant in Axis, owned by Alabama Power, is among the nation's top sources of nitrogen oxides (NOx), one of the pollutants that form ozone. Local residents might expect state regulators have good reason to make Alabama Power clean up. But in an interview last week, the general counsel for Alabama's environmental protection agency, ADEM, told the Harbinger that Alabama was a party in lawsuits against EPA, lawsuits that protect the right of Alabama Power to operate the Barry Plant as is.

In 1998 EPA adopted a rule, the NOx State Implementation Plan (NOx SIP), that required Alabama and twenty-one other states to impose new limits on NOx. The Barry Steam Plant, opened in 1951, would be hard hit by the new EPA rule. In 1997 the Barry plant ranked 28th in the U.S. among all power plants for NOx emissions. In the Clean Air Act of 1970, Congress exempted older power plants from the requirements of the law, bowing to the claims from utility industry lobbyists that the older plants would soon close. As of 1998, however, over 500 of these "grandfathered" power plants were still in operation, including the Barry plant.

Kimber Scavo, an official with EPA's Air Program, explained to the Harbinger last week how EPA intends to control ozone pollution. She said the agency would impose tighter limits on emissions of the gases that form ozone. She stated that in 1997 EPA announced it would revise its formula for ozone monitoring and impose new, and lower, maximum ozone concentrations. Scavo explained why the agency had done this: "Health studies showed particularly how damaging ozone was to children." These new standards are the cause of Mobile County's Red Alert days and its likely move from "attainment" to "nonattainment" status. While EPA intended to phase in the new standards over a period of years, it was immediately challenged in a lawsuit. In a decision on May 14, in the case American Trucking Association vs. EPA, a federal court ruled against the EPA's new criteria. Though EPA is appealing that decision, for now the agency cannot enforce the new ozone standards. According to Scavo, the appeal should be heard in November 1999.

Scavo also told the Harbinger that another element in the ozone problem is how one state's pollution affects other states. Regulators call this problem "transport." She explained that since 1994, a group of thirty-seven states has met to discuss transport and ozone. This group tried to come up with feasible and cost-effective ways to reduce the transport of pollutants such as Nox, and found that reducing power plant pollution was the most cost-effective way to reduce Nox transport. According to Scavo, limiting power plant emissions is particularly appropriate because, "EPA was seeing an increase in NOx emissions, up 44 percent since 1977 from power plants." EPA calculates that reducing NOx by tougher regulations for the power plants would cost about $1,500/ton of NOx removed compared with $2,000-$10,000/ton if states relied on regulation of other sources such as automobiles, small businesses and factories. EPA also calculates that if power companies lowered NOx pollution, and these utilities passed all the cost onto customers, the cost of electricity for the average customer would increase by less than $1 per month.

The principle method the EPA would use to limit NOx transport is NOx SIP. The plan intends to limit the transport of pollution by setting NOx "budgets," specific limits on NOx emissions for twenty-two states. EPA believes this would control the transport of NOx emissions across state lines, and its implementation would definitely affect Alabama, for the state ranks twelfth in the nation for NOx emissions. On May 25 a court halted EPA's efforts to put budgets on the twenty-two states covered under NOx SIP. In State of Michigan vs. EPA, the same court that ruled against EPA in the American Trucking case placed a partial stay on NOx SIP. Further court action in the NOx SIP lawsuit is expected this fall.

Alabama, at the request of ADEM, had joined this suit. The NOx SIP rule applied to twenty-two states, but only eight, including Alabama, sued to block it. On September 3 the Harbinger spoke with Tommy Bryant, general counsel for ADEM. According to Bryant, "EPA went about it the wrong way" in its plans to cut down on Alabama's NOx, and he asserted that EPA is wrong to set a budget figure for Alabama's NOx pollution. The Harbinger asked Bryant why, when ozone was a growing problem in Mobile, the state would sue to protect inefficient power plants. Bryant denied the state's action had any impact on local ozone: "The NOx SIP Call rule doesn't deal with ozone in Mobile, it deals with 'transport' to other states. They say that we are contributing to other states' ozone, that we are as responsible, say as Ohio." Bryant indicated that Alabama is a party to several other appeals of EPA actions, but he indicated he was not familiar with the details of these cases.

Alabama Power, owner of the Barry Steam plant in Axis, is a subsidiary of the Southern Company, the nation's largest utility corporation. Net earnings for the Southern Company in 1998 were $977 million. The corporation is very profitable, with an average annual return over the past decade of 17.3 percent, compared with 13.6 percent for the industry. A Southern Company document summed up the consequences of the new federal NOx limits: "The implementation of these rules could have a major impact upon the Southern Company from a capital expenditure standpoint, requiring major post combustion equipment expenditures and the potential for fuel switching."

The Southern Company intends to protect its coal-fired plants. The company is represented through the Utility Air Regulatory Group (UARG). A Southern Company document shows that UARG, together with several states and others, "have filed more than two dozen separate lawsuits" to challenge EPA for its rulemaking in NOx SIP as well as other air quality issues. Phone calls from the Harbinger to the Southern Company were not returned by press time.


[Notes: Pollution figures for power plants from Public Interest Research Group, Washington DC, June 1998. Financial information about Southern Company from its Annual Report for 1998.]


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