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Utility Eyes Security Exemption for EPA Rule Utility Eyes Security Exemption for EPA Rule

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Energy Week 2012

ENERGY

Utility Eyes Security Exemption for EPA Rule

HOUSTON — A major utility is considering asking the Obama administration to invoke a rarely used statutory tool that grants companies more time to comply with clean-air rules if the country’s national security is at risk.

Thomas Farrell, CEO of Virginia-based Dominion, told National Journal on the sidelines of a major energy conference here that it is planning on retiring a coal-fired plant in Virginia to comply with Environmental Protection Agency clean-air rules, primarily the recently finalized mercury standards for power plants.

 

The Clean Air Act gives companies three years to comply with that rule, and EPA Administrator Lisa Jackson has said that many companies would be able to easily get one more year to comply, which is allowed by the law.

A rarely — if ever — used provision in the Clean Air Act would allow President Obama to issue an executive order that exempts a company from any EPA rule for at least two years “if the President determines that the technology to implement such standard is not available and that it is in the national security interests of the United States to do so,” as the law states. This provision also states that the exemption “may be extended for 1 or more additional periods.”

The Dominion plant that Farrell is referring to, the Chesapeake Energy Center on the Virginia coast, provides power to a large military base. The reasoning to invoke the national-security exemption is this: The compliance time frame for the mercury rule (and potentially other EPA clean-air rules) could force some power plants to shut down, triggering brownouts and blackouts. There could be shortages in areas with military bases, such as in Virginia, making it a national-security issue.

 

“It serves the southeast part of our state where the world’s largest naval base is,” Farrell said. The plant is six miles from the naval station at Norfolk, Va., which is described on its website as “the largest naval complex in the world.”

Farrell, who is also chairman of the main utility trade group, the Edison Electric Institute, said no decision has been made and won’t be until more schedules are confirmed and decisions are made at the state level for other regulatory processes.

“We may be able to get all the work done with the replacement facility, including pipeline construction and new transmission lines, in four years,” Farrell said. “It’s [also] possible we may have to seek a national-security exemption.”

Industry sources said that the Clean Air Act provision has never been used. A Dominion spokesman declined to comment on whether  the company had ever sought a national-security exemption.

 

Dominion is planning on retiring the Chesapeake plant and replacing it with a natural-gas plant that can more easily comply with EPA's rules. Natural gas burns with 50 percent fewer carbon emissions than coal, which is the most prevalent form of electricity in the country -- but also the dirtiest.

While EPA was promulgating its mercury rule for power plants last year, EEI submitted comments to the agency that urged Obama to invoke the national-security exemption.

When EPA finalized the rule in December, it did not mention anything about Obama issuing such an executive order, although that does not preclude Obama from doing so if he finds it necessary.

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