State, U.S. Energy and Environmental Policies In Focus

Federal and state regulators recently updated Connecticut manufacturers and other businesses about changes—and pending legal challenges—to energy and environmental policies that impact their operations and their bottom line. The officials spoke at the fall meeting of CBIA’s Environmental Policies Council in Hamden.

Gina McCarthy [pictured above], assistant administrator of the U.S. Environmental Protection Agency’s (EPA) Office of Air and Radiation, outlined developments in her agency’s Mercury and Air Toxics Standards (MATS) Rule, Cross-State Air Pollution Rule (CSAPR), and Greenhouse Gas Rule.

Mercury standards

Issued in December 2011to facilitate the transition to a cleaner, more efficient electric power system, the MATSRule prescribes standards under the Clean Air Act to control mercury emissions from power plants—collectively among the largest sources of such pollution in the U.S.

Sophisticated technologies to reduce mercury emissions have been around for 30 years, said McCarthy, but many utilities in southern and Midwestern states that have been around for 70 years—“our legacy fleet,” she called them—have been slow to adopt these existing tools.

“EPA decided it was time for these older power plants to invest, upgrade, and innovate the way New England states had been for decades,” she said. The challenge, however, was that affected power plants had only three years to come into compliance. McCarthy described the three-year timeline as “ambitious,” acknowledging business leaders’ concerns that it threatened to increase electricity costs and impact energy reliability.

To address those concerns, utilities were granted some flexibility in implementing mercury-reducing technologies. They could apply for a one-year extension to install the necessary controls, and in some cases, a fifth-year extension could be granted to allow them to come into compliance without dramatically raising energy costs or compromising reliability.

Winds of change

The Cross-State Air Pollution Rule (CSAPR)was EPA’s second attempt to address the interstate transport of nitrogen oxides and sulfur dioxide emitted by power plants in upwind states such as Ohio and Pennsylvania. These and other air pollutants that contribute to the creation of ground-level ozone travel downwind and significantly impair the ability of Northeastern states such as Connecticut to comply with air quality standards under the Clean Air Act. (EPA recently determined that Connecticut does not similarly contribute to air quality problems in states downwind of us.)

In many cases, McCarthy, noted, southern and Midwestern power plants have increased the height of their smoke stacksin an effort to disperse pollution and decrease the impact on local communities. But because taller smokestacks release air pollutants high into the atmosphere, where wind currents are faster, the pollution they emit travels hundreds of miles to other states.

“We are like the tailpipe of the U.S.,” she said, noting that the problem of air pollution transport from upwind to downwind states has not been sufficiently addressed despite the Clean Air Interstate Rule, or “good neighbor” obligation, which requires upwind reductions sufficient to allow downwind states to be within their air quality standards.

Legal challenges have frustrated her agency’s ability to address the air pollution transport problems—but she’s not giving up.

“We have an obligation to New England to do better,” she said.

Makes good sense

McCarthy also talked about how maintaining an efficiently operated and diverse fuel supply makes good economic sense and addresses environmental concerns. She offered the example of the Natural Gas STAR Program, a voluntary partnership that encourages oil and natural gas companies to improve operational efficiency and reduce emissions of methane, a potent greenhouse gas that is emitted in the fracturing process used to access natural gas.

Methane, she noted, happens to be a commodity the regulated community can capture and sell. In fact, new technologies are allowing companies to capture methane released through the natural gas extraction process (known as fracking) and sell it as a commodity.

Moving forward with improving our environment while improving our economy, McCarthy added, “It’s not so much about what you mandate, it’s increasingly more about what you incentivize.”

‘Process rethink’

Macky McCleary, deputy commissioner of the Connecticut Department of Energy and Environmental Protection (DEEP), shared his agency’s major state environmental policy initiatives for 2013. McCleary came to DEEP one year ago and brings a wealth of experience in helping organizations efficiently achieve their goals.

DEEP, he said, will continue to streamline remediation programs; upgrade its information systems and technology; improve customer experiences; reduce application wait times; and increase efficiency, flexibility, and responsiveness. The agency’s approach, he noted, has been to move away from a command-and-control style, providing penalty relief and compliance assistance, especially to smaller businesses struggling to keep up with complex and myriad environmental rules.

“As we modernize our regulatory environment, business support and buy-in are critical, and we are starting to have it. So many of our businesses share environmental protection as a core value,” and the continued leaning of DEEP, its “process rethink,” and its pursuit of market-based approaches have resulted in higher ratings of business leaders’ interactions with the agency, he said.

Indeed, in a survey CBIA conducted last month, business leaders’ ratings of DEEP’s customer service have improved significantly since McCleary and DEEP Commissioner Dan Esty took over in 2011.

“You really have made a tremendous difference in the last two years, with reduced permitting times and increased responsiveness,” an audience member noted. “So many of the folks at DEEP now ‘get it.’”

“These are folks who are fighting really hard for Connecticut and New England,” said Eric Brown, CBIA associate counsel and director of energy and environmental policy.

“Both Gina and Macky understand that the interests of our environment and our economy are closely linked, and that policies and practices must be aligned with these interests, or both will suffer.”