Midwestern Companies, Trade Groups Sue to Review Trump Rule Limiting Cross-State Pollution

Association of polluting industries, Midwest Ozone Group, renews opposition to EPA rule limiting how upwind states, like Indiana, contribute to pollution in neighboring states.
July 13, 2021

A group representing dozens of polluting industries in the Midwest has filed a lawsuit asking a federal court to review a rule update limiting how much ozone pollution states can contribute to downwind states.

The Midwest Ozone Group, which includes some of the heaviest polluters in the state of Indiana, is asking the U.S. Court of Appeals for the District of Columbia Circuit to review the Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, a court-mandated Trump-era rule that tightened restrictions on emissions of nitrogen oxides, the group of gases that cause acid rain and toxic ozone, for Indiana and 11 other states.

The EPA estimated the revised rule would prevent hundreds of thousands of people from developing asthma symptoms, prevent hundreds of emergency room visits from becoming necessary and avoid tens of thousands of missed school days.

But companies in the group say the controls needed to improve air quality could cost them thousands of dollars per ton of nitrogen oxides reduced and could lead to an unstable electricity supply.

In 2019, the D.C. Circuit ruled that a previous version of the rule allowed the U.S. Environmental Protection Agency to let states dodge emissions requirements, leading to pollution from those states crossing into neighboring states and causing them to fail to meet national air quality standards.

The court ordered the EPA to revise the rule. The Trump EPA submitted a proposed revision October 2020, which was finalized by the Biden administration in March 2021.

The revised rule, among other restrictions, requires power plants in Indiana and those 11 other states to reduce emissions of nitrogen oxides, gases that cause acid rain and create toxic ozone when they mix with volatile organic compounds in the atmosphere.

The plants will also be required to install or upgrade nitrogen oxide combustion controls in time for the 2022 ozone season, which runs from March 1 through October 31.

The members of the Midwest Ozone Group, which include Indiana Michigan Power, Duke Energy, Citizens Energy Group and the members of the Indiana Energy Association, stand to lose tens of millions of dollars implementing the new control requirements.

In comments submitted to the EPA, the group said it opposed the rule because of various factors, like gaps in information in the real effect of emissions on downwind states and a lack of cost-effective emissions controls, and a shortened comment period.

The group particularly questions the validity of the data produced by air monitors in Connecticut that played an important role in the court case that forced the EPA to revisit the rule.

“[T]here are serious questions about whether there is any significant contribution by upwind states to downwind nonattainment or maintenance monitors in the East,” the group wrote. “[E]ven if there were such significant contribution, EPA has incorrectly and illegally sought to impose controls on upwind [electric generating units] rather than to address the local sources in the vicinity of the Connecticut monitors that EPA recognizes are the cause of any residual air quality concerns that exist with respect to those monitors.”

Duke Energy, Ohio Valley Electric Corp., Indiana Michigan Power and other facilities owned by MOG members are responsible for the emissions of tens of thousands of tons of nitrogen oxides.

Individual MOG members argued that the mobile sources of pollution, like vehicles, were mostly responsible for the emission of ozone precursors, and imposing strict emissions restrictions on electric generating units would threaten electric reliability.

Duke Energy, which owns multiple fossil fuel and renewable energy plants in Indiana, said the installation of significant upgrades to certain emissions reductions systems would not be possible in the time between the rule finalization and the start of the ozone season.

Ohio Valley Electric Corp., which owns Clifty Creek Generating Station in Jefferson County through its subsidiary, the Indiana Kentucky Electric Corp., argued that the EPA mistakenly presumed that further optimization of some emissions reductions system was possible. The company argued that air pollution would have less effect on downwind states if future air quality standards become more stringent.

Indiana Michigan Power’s parent company, American Electric Power, said the rule introduced a dramatic change in the way retired coal-fired units are treated. Instead of allowing retiring plants to pollute until their final day of operation, the contested rule requires that emissions from retiring plants be entirely eliminated. That shrinks a state’s yearly ozone budget, or the amount of nitrogen oxide emissions allowed by the EPA.

AEP said Indiana would be “particularly adversely impacted” by the regulation. The company claimed the rule would result in a 4.6-terawatt hour reduction in energy production in Indiana, or enough energy to power the entire U.S. for about a year and a half, between 2023 and 2024.

“The changed policy affecting unit retirements means that existing units will not be able to ‘make up’ the generation formerly supplied by other covered units, particularly in the later years of the program. In fact, sufficient resources may not be available unless currently planned projects receive timely and complete approvals. Eliminating those emissions from the program has dramatic adverse impacts on states where multiple unit retirements occur simultaneously,” the company wrote in comments to the EPA.

The Midwest Ozone Group previously sued to stop the implementation of the Cross-State Air Pollution Rule Update remanded in 2019, saying the rule was unconstitutional, exceeded the EPA’s authority and was an “abuse of discretion.”

Midwestern Companies, Trade Groups Sue to Review Trump Rule Limiting Cross-State Pollution