Oklahoma Labor Commissioner Mark Costello is questioning whether state environmental officials properly approved a settlement that would allow electric utility Public Service Co. of Oklahoma to phase out its coal units to comply with federal visibility regulations.
Costello sent a letter to Secretary of State Chris Benge last week contending the Department of Environmental Quality didn’t follow the state’s Administrative Procedures Act on a settlement to comply with regional haze regulations.
“DEQ’s failure to submit its revised (regional haze state implementation plan) to the honorable Governor Fallin and the Oklahoma Legislature for review and approval before implementation has created a fatal error, which is irreparable at this late date,” Costello wrote in the July 8 letter.
PSO, state officials and the Sierra Club agreed to a settlement in 2012 that would phase out the utility’s last two coal units at its Northeastern Station plant near Oologah. The utility plans to stop one coal unit in 2016 and install some additional emissions controls on the other coal unit before decommissioning it by 2026. PSO estimates the settlement could cost $350 million, much of which would be passed on to ratepayers starting in 2016. Rates could rise at least 11 percent.
Costello said if DEQ improperly put in place the revised state implementation plan, the state might have to follow a costlier federal plan for regional haze. Oklahoma Gas and Electric Co. faces compliance under the federal plan for regional haze after unsuccessfully fighting it in the courts along with Oklahoma Attorney General Scott Pruitt.
DEQ spokeswoman Erin Hatfield said the agency is reviewing Costello’s letter.
“The process followed to develop the regional haze state implementation plan is appropriate and in line with the process utilized to develop prior SIPs (state implementation plans),” Hatfield said in an email. “During the development of the regional haze SIP, there were several opportunities for public comment.”
In an interview, Costello said he raised concerns about the settlement last year, mostly because of its effects on ratepayers, wage earners and small businesses.
“I don’t relish the idea of being the skunk at the picnic,” Costello said. “I believe the rules were abrogated and legislators were not given the regulations under the law. We can’t just pick and choose what parts of the law to follow. We can’t have a cafeteria-style rule of law.”
PSO spokesman Stan Whiteford said the settlement was an Oklahoma solution to regional haze mandates and other federal environmental regulations. The utility plans to replace the coal generation with natural gas and supplement it with wind generation.
“We believe DEQ will be able to show how they adhered to the process,” Whiteford said. “We’re disappointed Commissioner Costello would want to derail this settlement developed by Oklahomans and supported by Oklahomans. It’s not a federally originated plan.”
Tyler Powell, deputy secretary of energy and environment, said Secretary Michael Teague remains supportive of PSO’s regional haze settlement, which was developed with the help of Teague’s predecessors, Michael Ming and Gary Sherrer. Powell said the secretary’s office is waiting for Benge to make a determination on whether the state’s Administrative Procedures Act was followed.
Officials with Benge’s office did not return phone calls Tuesday.
The Environmental Protection Agency gave its final approval to PSO’s regional haze environmental compliance plan in February.