Oklahoma officials and the state's two largest utility companies are looking for answers after the U.S. Environmental Protection Agency on Monday rejected the state's plan to reduce emissions that affect visibility at federal wildlife areas.
The result could be a hefty increase in electric rates if utilities are forced to install expensive scrubbers to their oldest power plants. An industrial consumers group in November estimated Oklahoma Gas and Electric Co. customers could see their rates rise more than 15 percent.
The EPA on Monday proposed its own plan to reduce emissions of sulfur dioxide by about 95 percent over the next three years at three coal-fired power plants in Oklahoma. The plants have helped power the state since the late 1970s.
“The steps we are taking to address the sulfur pollution from the oldest coal power plants will improve air quality for generations to come,” EPA Regional Administrator Al Armendariz said. “Everyone must continue to take efforts to reduce pollution, use cleaner sources of energy, and preserve our national wildlife areas.”
The decision was greeted with disappointment by state officials, who had proposed a plan giving utility companies the flexibility to avoid installing costly air scrubbers at their coal plants.
“We believed that the State Implementation Plan provided the best opportunity to meet the long-term goal of the regional haze provisions of the Clean Air Act while mitigating its impacts on economic growth,” Department of Environmental Quality Executive Director Steve Thompson said. “We are disappointed that it has been rejected.
There will be a 60-day public comment period after the EPA plan is published in the Federal Register. The agency will hold a public hearing on the plan April 13 in Oklahoma City.
The EPA plan is aimed at reducing emissions at two OG&E plants and one operated by Tulsa's Public Service Co. of Oklahoma. Those plants account for more than a third of the state's sulfur dioxide pollution from industrial and utility sources, according to the agency.
The environmental agency's plan also allows those companies to switch to natural gas for power generation, but not as gradually as the state had proposed.
OG&E spokesman Brian Alford said the company would prefer to change to gas — which costs more than twice as much as coal — over a longer period of time.
“We'd like the ability to evaluate other upcoming rules and alternatives that will provide the best solution to address the environmental issues and consider the magnitude of cost increases to customers' bills,” he said. “We have serious concerns about the significant increase to customers' bills resulting from the short time frame proposed by the EPA.”
OG&E has estimated installing scrubbers at its coal plants in Red Rock and Muskogee could cost as much as $1.5 billion, plus another $150 million a year for operations and maintenance.
PSO officials estimated it would cost about $800 million for scrubbers at its plant northeast of Tulsa. Bud Ground, the company's manager of governmental and environmental affairs, said the EPA's timetable for cutting emissions is “unreasonable.”
Ground said further study of the EPA's 122-page proposal will help state officials decide how to proceed.
“We think they're wrong, but we don't know just yet what their assumptions were to get to that point,” he said.
Attorney General Scott Pruitt said he is willing to litigate the issue, if necessary.
“Let the EPA be put on notice, as attorney general, I plan to do all that I can to protect and preserve the state's authority and responsibility under the Clean Air Act to craft and implement solutions for our state,” Pruitt said.
Sen. Jim Inhofe, R-Tulsa, condemned the EPA plan on Monday, as well.
“State officials in Oklahoma did the right thing: They worked with state utilities to devise a plan that will continue progress in cleaning the air while ensuring affordable, reliable electricity for consumers,” Inhofe said. “But that was too much for the Obama EPA, which rejected the Oklahoma-led plan in favor of their preferred scheme to put Washington bureaucrats in charge and, ultimately, to make fossil-fuel-based electricity more expensive for consumers.”