Utilities across the country are voluntarily shuttering coal-fired power plants in the face of eroding profitability and cheaper, cleaner alternatives.
Then there’s Rush Island.
Ameren Missouri kept the 1,242-megawatt coal plant open for more than a decade after EPA sued the utility over modifications that increased sulfur dioxide emissions. The plant was unplugged from the grid only last week, seven years after a federal judge ruled Ameren violated the Clean Air Act.
On its face, the outcome is a victory for EPA. But so far, Ameren has faced no significant consequences. Meanwhile, its customers, many of whom were exposed to years of excess pollution, remain on the hook to pay off the plant’s remaining debt.
The 13-year-old case reflects a few hard truths about the Clean Air Act and its enforcement, legal experts say, including the fact that one of the nation’s bedrock environmental laws isn’t meant to deliver relief for impacted communities.
“The Clean Air Act really doesn’t do that,” said Elizabeth Hubertz, director of the interdisciplinary environmental clinic at WashU Law in St. Louis. “It doesn’t make people whole. It stops them from doing things in the future.”
Hubertz also pointed to the long litigation process: EPA sued in 2011, and in 2017 a judge ruled that Ameren knew changes to the plant would increase air pollution. It took seven more years for the plant to close down.
“A lot of what’s broken is the federal litigation process,” she said. “This case took a long time to litigate, and when all the parties have money and resources, that’s often the case.”
It’s not surprising that St. Louis-based Ameren, which generated $7.5 billion in revenue last year, hasn’t faced significant penalties for violating the Clean Air Act, said Nathan Atkinson, an assistant professor at the University of Wisconsin-Madison Law School who studies corporate misconduct.
“It does seem to be that in a huge number of cases being [in] non-compliance seems, ex-post, profitable,” said Atkinson.
Atkinson published a study last year in the Yale Journal of Regulation that found that companies profit — even after paying fines — in more than one-third of Clean Air Act violation cases for stationary sources. The more significant the violation, the more beneficial it was for the polluter, according to the study.
That’s in part due to the time it takes to litigate cases and the fact that the penalties imposed are often a fraction of what’s allowed under the law.
Ameren officials declined to discuss the lawsuit over Rush Island; the court is still considering the remedy for the violations. Ameren opted to shut down the plant instead of investing $1 billion in pollution controls.
EPA and co-plaintiff Sierra Club also declined to discuss the ongoing litigation. But Gretchen Waddell Barwick, director of the environmental group’s Missouri chapter, said in a statement that utility executives “knew they were irreparably harming our region when they chose to illegally pollute the air we breathe.”
Negotiating a remedy
Rush Island, Ameren’s third-largest coal plant, came online in 1976, a year ahead of Clean Air Act amendments that introduced EPA’s New Source Review (NSR) program. The program requires power plants and factories to get preconstruction permits and install pollution controls for upgrades expected to lead to a significant increase in emissions.
U.S. District Judge Rodney Sippel of the Eastern District of Missouri ruled in 2017 that Ameren made modifications to the massive coal boilers at Rush Island in 2007 and 2010 that led to significant increases in SO2 emissions without a necessary permit.
Documents introduced during a two-week trial showed Ameren officials knew the changes would increase the plant’s output and emissions, yet the company chose not to seek a permit or install pollution controls.
In 2019, Sippel, a Clinton appointee, ordered Ameren to either shut down Rush Island or install scrubbers at the plant to reduce SO2 emissions. The judge also ordered the utility to install pollution controls at its largest coal plant, the 2,389-MW Labadie Energy Center, to repay what EPA described as the company’s “pollution debt” — years of excess SO2 emissions that impacted much of the eastern U.S.
While the 8th Circuit Court of Appeals upheld the order regarding Rush Island, it reversed Sippel’s ruling on Labadie, leading to years of continued legal squabbling between EPA and Ameren. The battle involves the appropriate remedy for the release of 275,000 excess tons of SO2. The gas, produced by burning coal, contributes to the formation of fine particles that can reach deep into the lungs, increasing the risk of heart and lung disease and premature death.
Ameren has repeatedly argued that shutting Rush Island early is mitigation enough, given that the plant was scheduled to retire in 2039. The utility says the plant’s early closure will avoid $28 billion in climate and other air pollution, offsetting the environmental and public health damage done over the previous decade.
It’s an argument the court has rejected three times.
In its most recent proposal to the court this spring, EPA said Ameren should be required to purchase 150 electric buses for St. Louis area school districts and 250 associated charging ports. It also wants Ameren to distribute 150,000 air filtration systems to St. Louis households and provide three years of replacement filters and maintenance, with prioritization given to lower income households.
EPA estimates that remedy would cost the company about $110 million — a fraction of the $545 million profit earned by Ameren Missouri last year.
Ameren has offered to instead purchase 20 electric school buses and 40 charging stations, while offering $100 vouchers to 97,000 St. Louis residents for air filtration devices or air filters. The utility said it would also agree to surrender 550,000 SO2 allowances.
As for the plant itself, it will be ultimately demolished, said Tim Lafser, Ameren’s vice president of power operations and engineering. Lafser said the utility has no immediate plans to replace Rush Island as Ameren currently has ample generating capacity to serve its 1.2 million customers.
What’s reasonable?
Utility customers will continue paying for the plant for the next 15 years, even though it is no longer operating. Earlier this year, the Missouri Public Service Commission gave Ameren approval to refinance $461 million of debt still owed on the plant.
In its June order, the Commission said refinancing the debt, a process known as securitization, would provide a benefit to customers in the form of lower interest costs, compared with paying off the plant under existing terms.
The PSC did not rule on whether the decision to modify the plant a decade and a half ago without needed permits was prudent or not.
To make its case for refinancing, Ameren brought in two former EPA officials, including attorney and former EPA assistant administrator Jeffrey Holmstead, to argue that the decisions to modify the plant without seeking necessary permits were “reasonable.”
The utility pointed to EPA’s pause in enforcement of the New Source Review (NSR) program during the George W. Bush administration. Ameren argued that the agency later did an “about-face” and started pursuing enforcement cases.
The Rush Island case reflects what some experts say is a key flaw in the Clean Air Act: It grandfathered in existing coal plants, giving utilities an incentive to keep them running rather than build new ones that would be subject to tougher regulations.
Congress reasoned at the time that older coal-fired power plants would be cleaned up over time as they were replaced or modified, which required NSR permits. But the reality wasn’t so clear cut. Utilities, such as Ameren in the case of Rush Island, challenged EPA’s assertions that work done to plants triggered the need for permits, leading to lengthy, complex court cases.
The issue was chronicled in the 2016 book, “Struggling for Air.” Cynthia Giles, a former EPA assistant administrator who returned to the agency as a senior adviser, also pointed to this history in her 2022 book, Next Generation Compliance.
Giles, who was with EPA’s Office of Enforcement when it sued Ameren for violations at Rush Island, noted in the book that the pollution controls required under the NSR program can cost $1 billion — and that penalties for a power plant or factory operator violating the Clean Air Act have paled in comparison.
Jack Lienke, an associate professor at the University of Connecticut Law School who is co-author of “Struggling for Air,” said the Clean Air Act has still produced many environmental and public health benefits, despite the law’s flaws and lengthy litigation.
“Excruciating suit by excruciating suit, EPA has forced these plants to either retire or install controls that like dramatically reduce their emissions,” he said. “And that is a victory for public health. I think it’s still worth celebrating that these suits were won. But I take the point that it’s cold comfort for the affected communities.”