Utility group bows to the inevitable, gets wish on ozone rule

By Amanda Reilly | 10/07/2015 01:06 PM EDT

There’s at least one industry sector that likes U.S. EPA’s new ozone standard: investor-owned utilities. Faced with the inevitability of tougher smog curbs, the Edison Electric Institute pushed the Obama administration in the days before a court-ordered deadline on a new Clean Air Act standard to pick 70 parts per billion.

In late September, the trade group representing investor-owned utilities attended two meetings with top White House and U.S. EPA officials. Its request: Set a new ozone standard at 70 parts per billion.

Six days later, the Obama administration unveiled its final new national ambient air quality standard at that level. With most stakeholders panning the decision, the Edison Electric Institute is among the few offering any sort of support for the agency’s choice of 70 ppb.

"EEI advocated throughout the rulemaking process that, should a new ozone standard be set, it should be at the top end of the proposed range at 70 parts-per-billion (ppb)," EEI President Tom Kuhn said in a statement. "While compliance challenges remain with the new standard at 70 ppb, EPA has recognized the serious implementation concerns raised by stakeholders of setting the standard below 70 ppb."


EPA last November had proposed to tighten the existing ozone standard of 75 ppb set in 2008 during the George W. Bush administration to between 65 and 70 ppb based on a review of public health science. The agency found that the 75 ppb limit was no longer adequate to protect the public as the Clean Air Act required.

What followed was an intense lobbying campaign involving dozens of stakeholders. Green groups called on EPA to set a new standard no higher than 60 ppb, while powerful industry and business groups urged EPA to retain the existing standard.

The Edison Electric Institute — which represents all U.S. investor-owned electric utilities — did not make anyone available for an interview. But in a review of publicly available documents and statements, the trade group appears to have accepted that a lower ozone standard was inevitable and so pushed for EPA to choose the upper end of its proposed range.

The institute, for example, told EPA in a March public comment that it did not believe EPA should lower the ozone standard. But EEI noted that, if EPA felt it necessary to revise the 2008 limit, the agency should choose 70 ppb.

"Any standard lower than 70 ppb would require significantly greater justification than EPA has provided in its proposal," the institute said.

EEI asked for more "relief mechanisms" to address background levels of ozone, as well as more guidance on how to handle permitting under the tighter standard.

Berkshire Hathaway Energy Co., an EEI member and the largest owner of rate-regulated renewable generation, made similar arguments in a comment to EPA.

In contrast, the Utility Air Regulatory Group, a voluntary group of electric generating companies, argued that the scientific evidence didn’t at all justify a new standard and that EPA should retain the 75 ppb limit. Several other power companies individually raised concerns about a tighter standard.

On Sept. 25, three representatives from EEI and two from San Juan Generating Station operator PNM Resources Inc. — another EEI member — met with the White House and EPA in back-to-back meetings, according to attendance records. Dan Utech, President Obama’s top climate adviser, attended the White House meeting, while EPA acting air chief Janet McCabe attended the one with the agency.

EEI and PNM representatives provided a handout at the EPA meeting titled "Reasons the agency should finalize an achievable level of 70 ppb," according to a document posted yesterday in the public docket.

"The lower the agency sets a new standard, the more it will increase permitting costs and delays while also requiring further regulation of the interstate ozone precursors from all sources," the handout says.

"A final ozone standard of no lower than 70 ppb — the top end of its proposed range — would both provide real environmental benefit," the memo continued, "and give states a reasonable path forward to implement the final standard."

The group said a standard lower than 70 ppb would complicate efforts for states to comply with the final Clean Power Plan, EPA’s plan for reducing carbon dioxide emissions from existing power plants. A lower standard would also make it difficult for high-elevation areas that experience high background ozone levels to comply, EEI said.

EEI said EPA should take a cue from its experience putting in place the 2010 sulfur dioxide standard, suggesting that the agency has had difficulty finalizing its list of areas that are out of compliance because its limit was too low.

EEI also argued that EPA had "ample support" for setting a 70 ppb standard because it was in the range that the agency’s science advisers recommended in June 2014.

Kuhn noted in his statement that the electric power sector has already made "great progress" reducing nitrogen oxides — a key component of ozone — as well as sulfur dioxide over the last two decades.

"EEI will continue to work with our members, the states, and affected customers to determine how compliance with the new ozone standard will impact the implementation of other major EPA regulations," Kuhn said.