Late in the day on Friday, November 16, 2012, the Environmental Protection Agency (“EPA”) issued a proposal to reconsider maximum achievable control technology standards for hazardous air pollutant emissions from new electric generating units (referred to as “UMACT”). EPA’s previously-issued standards for new units, promulgated as a part of EPA’s Mercury and Air Toxics Standards rule, had been criticized by a coalition of new unit developers as unattainable. One of the new unit developers asked EPA to reconsider the standards, as did the trade association of pollution control equipment vendors, which also told EPA that its members could not issue guarantees that the standards could be met.

The new unit developers also appealed the standards to the United States Court of Appeals for the D.C. Circuit, and the Court agreed to expedite the appeal. Shortly before EPA’s brief was due in September, the Agency announced that it had decided to reconsider the standards, and the litigation was placed on hold. The day after the election, EPA transmitted the proposed reconsidered standards to the Office of Management and Budget (“OMB”) and asked OMB to expedite interagency review, which it did. EPA says it intends to finalize the reconsidered standards by March 2013.

EPA proposed new standards for (a) particulate matter (“PM”), hydrogen chloride (“HCl”) and mercury (HG) for new coal units, (b) PM, HCl and HG for new units using lignite, (c) PM, HCl and HG for new integrated gasification combined cycle units, (d) PM standards for new petcoke units, and (e) PM standards for new oil-fired units. EPA cited its failure to utilize all relevant data in the original rulemaking, among other factors, as its reasons to reconsider the standards. EPA says that, under the reconsidered standards, new units will still have to utilize the most stringent control technologies to meet the standards as EPA had contemplated under the original rule. EPA also proposed to reconsider monitoring requirements for PM and certain start up and shutdown provisions.

Although at least one of the new unit developers publically indicated that the reconsidered standards are now attainable, the timing of the reconsideration remains a concern for the development of new coal units. Under EPA’s proposed greenhouse gas (“GHG”) new source performance standards (“NSPS”) for new coal units, new units that have PSD preconstruction permits must commence construction by April 12, 2013 or become subject to the proposed GHG NSPS of 1000 lbs. CO2/MWh. Because a coal unit can only meet that standard by utilizing carbon capture and storage (CCS) technology, and because such technology is not feasible for new units, these developers may face the loss of their projects if they do not commence construction by April 12, 2013. They have indicated concern to EPA that they have not heretofore been able to commence construction because the UMACT standards as originally promulgated were unattainable and that issuance of the reconsidered UMACT standards in March may be too late to commence construction by April 12. They have also asked EPA to either eliminate or extend the April 12 deadline when EPA finalizes the final GHG NSPS. EPA has given no signal since the election as to when it intends to finalize the GHG NSPS or whether the final rule will be changed from the proposed rule.