A bureaucratic fight over how an environmental settlement with Public Service Co. of Oklahoma was implemented could affect consumers.
On one side is Labor Commissioner Mark Costello, who said PSO’s plan to phase out its coal units at Northeastern Station near Oologah wasn’t implemented properly by the Department of Environmental Quality.
In July, Costello asked Secretary of State Chris Benge to determine if DEQ followed the state’s Administrative Procedures Act. Costello said the agency didn’t submit the plan to the Legislature and Gov. Mary Fallin for their review and approval.
Costello said if the plan wasn’t implemented properly, PSO might have to follow a costlier federal plan to control power plant emissions affecting visibility at national parks and wilderness areas.
To meet federal regional haze requirements, PSO plans to phase out one coal unit at Northeastern in 2016 and install some emissions-control devices on the other coal unit before retiring it by 2026. The plan could cost an estimated $350 million, with customer rates expected to rise more than 11 percent starting in 2016.
PSO representatives said they disagree with Costello’s interpretation and believe DEQ acted appropriately.
DEQ Executive Director Scott Thompson sent a 16-page letter to Benge detailing the agency’s implementation process. He said confusion may have arisen because the PSO settlement amended a previous state implementation plan.
“The term (state implementation plan) is not as simple as it appears,” Thompson wrote. “A SIP is more than a list of enforceable rules or regulations.”
Thompson said a state implementation plan is a “complicated combination” of many parts developed over several years, including rules and statutes, administrative orders and permits, air quality analyses and monitoring networks.
Most of the revised state implementation plan for PSO isn’t considered rule making under the Administrative Procedures Act, Thompson said. The parts that concern rules were implemented properly, and subjecting the whole process to a rule making for approval by the Legislature would “substantially slow down the permitting process,” he wrote.
Thompson said Kansas and Louisiana use a similar process as Oklahoma to meet Environmental Protection Agency requirements for state implementation plans. DEQ and EPA had several opportunities for the public to comment on the plan, but nobody expressed concerns similar to those in Costello’s letter, he said.
“A decision in favor of the position advocated in the letter could jeopardize many aspects of the state implemented air quality program and this uncertainty could be considered a disincentive for locating and operating a business in Oklahoma that is subject to federal (Clean Air Act) requirements,” Thompson wrote.
DEQ spokeswoman Erin Hatfield said the agency doesn’t plan any other actions on the matter unless Benge wants to follow up. Liz McNeill, the Labor Department’s spokeswoman, said Costello is awaiting Benge’s decision.
Benge said much of the disagreement stems from the different interpretations of an agency rule and an order.
“A lot of these discussions get in the weeds real quick,” Benge said. “There’s a lot of research and internal discussions ongoing.”
Meanwhile, Oklahoma Gas and Electric Co. faces compliance under a federal plan for regional haze after unsuccessfully fighting it in the courts along with Oklahoma Attorney General Scott Pruitt.
OG&E applied to the Oklahoma Corporation Commission in July to recover up to $1.1 billion from ratepayers for its environmental compliance plan and replacement of its Mustang natural gas power plant. The plan could raise residential rates 15 percent by 2019.