Cleaning Fayette the 'Flex' Way

Austin Energy and the Lower Colorado River Authority recently announced plans to spend $130 million over the next decade to reduce air pollution from the Fayette power plant near La Grange -- one of four major sources of electricity for Austin, and the only one that burns coal. Henry Eby, senior regulatory analyst with the LCRA, says renovations and repairs at Fayette will cut emissions of sulfur dioxide by 90%, nitrogen oxide by 50% and mercury by 30% -- numbers that please local environmentalists. Repairs and improvements scheduled for the 20-year-old plant include new scrubbers on two of its three stacks (the third already has a scrubber) and boiler maintenance.

Instead of applying to the U.S. Environmental Protection Agency for a standard Clean Air Act permit to perform the renovations, Austin Energy and the LCRA are soliciting the Texas Natural Resource Conservation Commission for a "flex" permit, based on regulations implemented in June of 1995 to help aging oil refineries meet pollution standards. Creative minds at the LCRA who studied the flexible permit regulations -- one of George W. Bush's first moves as governor -- concluded that any emissions source could use them. Eby says flex permit regulations have never been used like this. "It's very innovative," he said. "It's precedent-setting."

While the environmental community has praised the plan, Dr. Neil Carman of the Sierra Club's Lonestar Chapter notes that Fayette's co-owners are, "in a way, biting a smaller bullet in order to avoid a bigger bullet." By seeking the flex permit, Austin Energy and the LCRA are avoiding a set of rules in the Clean Air Act known as "new source review," written to address the issue of aging power plants with outdated pollution controls. New source review requires a utility embarking on any significant modification of a plant to add state-of-the-art pollution controls, which are expensive and often require the plant to be shut down for a time. Utility executives complain that routine maintenance can "trigger" new source review, raising the cost of getting a plant back online from millions of dollars to hundreds of millions. The improvements planned at Fayette, said Carman, would normally meet the EPA's definition of a major modification and trigger new source review, requiring changes at Fayette not currently contemplated.

Eby says new source review's uncertain status drove Austin Energy and the LCRA to consider a process designed to coddle grandfathered polluters. Last month the EPA announced plans to change the way new source review is triggered from an emissions standard to a cost standard. Independent Vermont Sen. Jim Jeffords, who chairs the Environment and Public Works Committee, called the proposed reform "the biggest rollback in the history of the Clean Air Act"; under the proposal, he asserts, only half as many plants would be required to clean their emissions. It will take 18 to 36 months for the new standards to be finalized.

The LCRA and Austin Energy "wanted that assurance and certainty that we could do what we need to do to our units and comply with the spirit of the law, the letter of the law," said Eby. "At the end of the day, we're gonna have one of the cleanest coal plants in the country."