Dec 8, 2006
Fact Sheet - Proposed Federal Plan
Revisions of Standards of Performance for New and Existing Stationary Sources; Electric Utility Steam Generating Units; Federal Plan Requirements for Clean Air Mercury Rule; and Revisions of Acid Rain Program Rules (SAN # 5094)

ACTION

On December 8, 2006, the U.S. Environmental Protection Agency (EPA) proposed a federal plan as a backstop to ensure that power plants affected by the Clean Air Mercury Rule (CAMR) reduce their mercury emissions on schedule.

CAMR, which the EPA issued in May 2005, established nationwide requirements to significantly reduce mercury emissions from coal-fired power plants.

CAMR affects the 48 contiguous states, Alaska, Hawaii, the District of Columbia, and two tribes, and requires state plan submissions by these jurisdictions, except for the two tribes. In CAMR, EPA established an optional power sector mercury emissions cap-and-trade program that states and tribes can join to achieve the required mercury emission reductions (or states/tribes can obtain the required reductions using a different method of their choosing). CAMR state plans were due to EPA by November 17, 2006. (Separate from today’s action, EPA issued a notice announcing the number of state plan submissions that met the deadline.)

The proposed CAMR federal plan would implement CAMR for power plants located in states or Indian Country where state or tribal plans have not been submitted or approved. For most jurisdictions, the federal plan may be an interim action because when a state or tribal plan is approved, the federal plan would no longer apply to power plants covered by that state or tribal plan.

The federal plan would establish a nationwide federal mercury emissions cap-and-trade program for mercury emissions from coal-fired power plants. The proposed federal program is the same as the CAMR model cap-and-trade program that states or tribes can choose to join to achieve the required reductions.

If a final CAMR federal plan is promulgated for any jurisdiction, the plan would not limit states or tribal flexibility in meeting their CAMR requirements. EPA intends to withdraw the federal plan for any state or tribe once that state’s or tribe’s own plan is approved.

CAMR will build on EPA’s Clean Air Interstate Rule (CAIR) to significantly reduce emissions from coal-fired power plants -- the largest remaining sources of mercury emissions in the country. When fully implemented, these rules will reduce utility emissions of mercury from 48 tons a year to 15 tons, a reduction of nearly 70 percent from 1999 emission levels. EPA estimates that the reductions of mercury contained in the coal used by power plants (a common measurement technique states use to describe program effectiveness) will be above 80 percent.

This action also proposes minor amendments to the CAMR model cap-and-trade program and the Acid Rain Program.

EPA will accept public comment for 60 days following publication of this proposal in the Federal Register and will hold a public hearing on the proposal (see below).

The Proposed CAMR Federal Plan

The proposed CAMR federal plan would require coal-fired power plants to participate in a nationwide mercury emissions cap-and-trade program to reduce emissions. Participation in the proposed cap-and-trade program would be mandatory for all power plants covered by a CAMR federal plan.

Emissions cap-and-trade programs are a proven method for achieving highly costeffective emission reductions while providing regulated sources with flexibility in adopting compliance strategies. The proposed federal cap-and-trade program would be integrated with the EPA-administered CAMR state and tribal cap-and-trade programs that states and tribes may choose to adopt to meet their emission reduction obligations under CAMR.

EPA would not implement the federal plan emission reduction requirements for more than one year after the November 2006 plan submission deadline, allowing states and tribes adequate time to develop their plans. Also, EPA will withdraw a federal plan for any state or tribe once that state’s or tribe’s plan for meeting CAMR requirements is in place.

Background on CAMR

On May 18, 2005, EPA finalized CAMR, establishing standards of performance limiting mercury emissions from new and existing coal-fired power plants and creating a marketbased emissions cap-and-trade program that reduces nationwide utility emissions of mercury in two distinct phases.

The first phase CAMR cap, commencing in 2010, is 38 tons. Emissions will be reduced by taking advantage of co-benefit reductions – that is, mercury reductions achieved by reducing sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions under CAIR. Due to CAMR’s banking provisions, which provide incentive for early emission reductions, EPA projects that mercury emissions from coal-fired units will be lower than the CAMR cap in 2010. The second phase cap commences in 2018 and will reduce mercury emissions to 15 tons upon full implementation.

New coal-fired power plants (“new” means construction starting on or after January 30, 2004) will have to meet new source performance standards (NSPS) in addition to being subject to the CAMR emission caps.

CAMR sets emission reduction requirements for each state, the District of Columbia, and Indian Country, by distributing the nationwide emissions caps among the states and Indian Country.

CAMR provides an optional nationwide emissions cap-and-trade program based on the successful Acid Rain and NOx Budget Trading programs as a method to implement the necessary reductions. States and tribes may choose to join the nationwide cap-and-trade program or achieve the required reductions through another method.

States with new and existing coal-fired power plants are required (and tribes may choose) to submit plans to EPA that implement and enforce the standards of performance.

PUBLIC HEARING AND PUBLIC COMMENT ON THE PROPOSAL

This proposed rule will be open for public comment for 60 days after it is published in the Federal Register.

A public hearing will be held in Washington, DC prior to the end of the public comment period. EPA will publish a separate Federal Register notice announcing the date, location, and time for the public hearing, and will announce the hearing on the Web site www.epa.gov/camr.

FOR MORE INFORMATION

To download the proposed CAMR federal plan and related information, go to the following address: www.epa.gov/camr

For more information, call Meg Victor at EPA’s Office of Atmospheric Programs, 202-343-9193

Submit your comments, identified by Docket ID Number EPA-HQ-OAR-2006-0905, by one of the following methods:
- Federal Rulemaking Portal: www.regulations.gov. Follow the on-line instructions for submitting comments.
- Email: A-AND-R-Docket@epa.gov
- Mail: Air Docket, ATTN: Docket Number EPA-HQ-OAR-2006-0905, Environmental Protection Agency, Mail Code: 6102T, 1200 Pennsylvania Ave., NW, Washington, DC 20460
- Hand Delivery: EPA Docket Center, 1301 Constitution Avenue, NW, Room 3334, Washington, DC. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of boxed information.