Comments by Sue Jones, Energy Project Director
The Natural Resources Council of Maine appreciates DEP’s significant efforts in reviewing the comments submitted in the Chapter 145 rulemaking and in developing a proposal for your consideration today. With all due respect, however, the Council believes that DEP has not presented the best plan for the people of Maine. We believe DEP’s proposal is flawed and unworkable, and is significantly inferior to the original “no trading” proposal that this Board adopted in a preliminary vote last June. We have identified major flaws in DEP’s proposal and analysis which we believe should move the Board to reject DEP’s credit trading proposal and reaffirm your vote in support of full, on-site clean-up. Our concerns are as follows:
First: There is no assurance that the pollution credits which FPL would be allowed to purchase under this rule would result in any additional pollution reductions in the region beyond those already planned. Simply put, FPL would be able to purchase credits for emission reductions that Maine would otherwise obtain anyway for free. Moreover, there is no enforcement and oversight mechanism within this rule to document that the trade would actually result in new emission controls or would spur additional reductions at another facility.
Second: DEP’s proposal allows trades that might not result in any significant air quality benefits for Maine. It has been clearly shown that there are diminishing benefits to downwind areas the farther upwind a reduction is made. Benefits are reduced the farther downwind ozone travels, because ozone disperses over time and distance. Yet, this rule would allow emission trades as far away as the southwest corner of Connecticut. It would allow trades with Vermont, even though the prevailing winds from that state don’t normally hit Maine’s coastline where we need to see reductions. It would also allow trades downwind from Wyman Station in Maine. Allowing Wyman to purchase credits from facilities in Bangor, Houlton, or Presque Isle would do nothing to help clean up the air in York, Portland, or Acadia.
Third: DEP’s proposal could actually allow NOx pollution levels at Wyman Station to increase. There is nothing in this rule that would prevent Wyman Station from being operated at a higher capacity level, generating increased pollution from today’s levels. Indeed, there is nothing in this rule that would require FPL to install any add-on controls at Wyman Station. FPL has stated that it can bring its emissions down to 0.2 lbs./million Btu either through add-on control equipment, or through operational changes.
Fourth: DEP’s proposal simply accepts FPL’s inflated cost estimates for full on-site emission reductions, without doing an independent cost analysis of the company’s claims. Staff at the Environmental Protection Agency believe that FPL’s cost estimates may be exaggerated by as much as a factor of three. Specifically, EPA’s analysis suggests that selective catalytic reduction (SCR) technology could be installed at Wyman for $13 – $15 million, and not the $50 million claimed by the company. History has shown that industry almost always overestimates the costs of compliance. Installing SCR at Wyman would more than meet the NOx emission rate proposed by this rule — without needing a complex trading scheme with uncertain air quality benefits for Maine people.
Fifth: The proposed rule allows Wyman Station to generate high levels of pollution during peak ozone periods – at the “most inopportune times” for ozone generation – yet make trades for May or September offsets – which will give us no benefit. As DEP has correctly observed, Wyman Station historically operates during summer peaking periods. While the rule attempts to contain trades to the season in which the pollution is generated, because of daily and even hourly variability in ozone formation, there will be no “1-for-1” equivalency of the trade within the ozone season. This could result in increased daily emissions at Wyman with no offset made regionally. Permanent reduction on-site – for whenever Wyman operates – would prevent this discrepancy from happening.
Finally: DEP has proposed a complex and ambitious trading rule with many conditions, yet we have serious doubts about whether the Department has the resources or expertise to administer this program. DEP’s proposal involves a unique set of requirements that could require substantial oversight and monitoring, yet the Department has no staff experience overseeing a program like this. At the present time, DEP’s Air Bureau has substantial resource constraints and we question whether this approach to cleaning up Wyman Station, which creates a substantial, additional bureaucratic management burden, would be administered in a fashion to deliver the intended benefits.
In summary: While we recognize the substantial effort by DEP staff to come up with a proposal that some might observe as “splitting the difference” on the issue of Wyman Station clean-up requirements, we believe that the recommendation before you is seriously flawed. We see it as complex, unworkable, difficult to administer and most likely, difficult to enforce. We believe it is premised on exaggerated cost estimates from the owners of Wyman Station and it does not provide the assurances that you should expect: i.e., that pollution levels at Wyman will be reduced enough to help protect our environment and the health of Maine people.
Further, an observation: Some individuals who support FPL’s position recently have resorted to scare tactics about the California energy crisis, yet those claims are completely unfounded. First, it is important to note that Maine is a net energy exporter, generating 50% more power than we use, whereas California needs to import more than 20% of its power. And second, NOx trading markets in California have proven to be far more volatile than proponents had expected, and their failure to install controls such as SCR proved to be enormously expensive by helping to destabilize the market. Specifically, NOx credits have shot up to $45,000 per ton, whereas SCR installation costs remain stable around $2,000 per ton. If there is any lesson be taken from California, it is that installation of SCR and other add-on control technologies would have been vastly cheaper for California and its citizens, and the same could be true for Maine.
Lastly, one final note: Procedurally, the nature of DEP’s proposal denies Maine citizens adequate and proper due process. Today’s proposal is a marked change in policy direction as compared to the original rule proposed and from which a public hearing was held on January 6th, 2000. As heard at your meeting with the Natural Resources Committee of the Legislature yesterday, you expressed your commitment to an open process where citizens are offered the right to participate in decisions directly affecting them. We received a mere 7 days to respond to a proposed major, significant change in State air policy. A hearing should – and must – be granted before this Board considers any proposed trading program for Maine.
We urge the Board to reject the Department’s current recommendation and instead, reaffirm its position that Wyman Station meet the requirements of this rule through full on-site controls without the use of pollution credits.