Durango’s wholesale electric supplier went to court Friday to challenge new federal limits on air pollution, which it says could contribute to rate increases for consumers in 2013.
Tri-State Generation and Transmission Association, which generates 65 percent of its power from coal, filed one of the 30 petitions asking the U.S. Court of Appeals in Washington, D.C., to review the Mercury and Air Toxics Standards.
More than 20 years in the making, the standards represent the first time the federal government has enforced limits on mercury, arsenic and other gases and particles released by the burning of fossil fuels, but Jim Van Someren, spokesman for Tri-State, believes the standards are a “prime example” of unnecessary regulation.
“It is implemented to specifically regulate mercury, but its primary effect is going after other emissions other than mercury, which are already regulated under the Clean Air Act and other rules,” Van Someren said.
“We question these regulations that are constantly coming at us, where the cost actually outweighs the benefit,” Van Someren said. “These overreaching regulations impact our ability to deliver affordable electricity.”
Proponents of the standards say they are necessary to protect public health and accuse Tri-State of blowing money on litigation rather than spending money to do the right thing.
Tri-State and others argue that the rules will effectively prohibit the construction of new coal plants.
The lawsuit also quotes the trade association for pollution control equipment as no longer guaranteeing its equipment performance because of the stringency of the requirements set by the U.S. Environmental Protection Agency.
The U.S. Court of Appeal is expected to discuss how to proceed with the lawsuit, but not make a ruling on the merits of the case.
Britt Bassett, a Durango representative to the board of directors for La Plata Electric Association, which distributes Tri-State’s power in La Plata and Archuleta counties, believes Tri-State is wasting its time and its consumers’ money.
“As was shown by the Acid Rain and Ozone Hole mitigation programs, government regulations are needed as the industry will not clean itself up,” Bassett said. “Similar successful programs have shown us that the coal industry was wrong as usual with their ominous warnings of catastrophe from blackouts and rate hikes as we take steps to clean up our environment.
“Tri-State should not be an advocate for continuing to disperse known harmful pollutants. They are not a for-profit corporation, so have no reason to put profits ahead of health. Tri-State should not waste our money on years of litigation, but should join with the majority of other utilities and stop whining and get to work.”
Tri-State is owned by LPEA and 43 other cooperatives in the four states: Colorado, Nebraska, Wyoming and New Mexico. (It did not rename itself after it merged with a New Mexico company in 2000.)
Lisa Jackson, the director of the EPA, has said the standards will save thousands of lives, and the economic and health benefits will outweigh the estimated $9.6 billion cost of the regulations.
The EPA also disputes that the regulations will negatively affect energy rates. Its economic models predict the “standards will result in relatively small changes in the average retail price of electricity (approximately 3 percent), primarily due to increased demand for natural gas, keeping electricity prices below 1990 levels,” said Ernesta Jones, an EPA spokeswoman.
Because of the market, Van Someren said Tri-State will probably take advantage of natural gas, but Tri-State will continue to rely on coal to the “best of our ability as well.”
Because Tri-State owns coal mines, it is insulated from the impact of rising prices for coal, Van Someren said. But the rising prices for diesel fuel and the cost of regulations are making it more expensive to extract and burn the coal.
Tri-State’s decision on whether to raise wholesale prices wouldn’t be made until later this summer. LPEA would then have to decide whether to absorb a price increase or pass it onto its consumers.
Tri-State defends its environmental record, noting that it is diversifying with renewable energy “at a pace that makes sense both operationally and financially. Our portfolio continues to be adjusted and balanced,” Van Someren said.
As far as pollution, Tri-State officials said they have made strides in reducing emissions. Its Nucla plant in western Colorado has the lowest mercury emissions of any coal-fired plant in the country.
The Sierra Club, however, has made an issue of Tri-State’s Craig Station coal burning plant in northern Colorado. The station released 130 pounds of mercury into the atmosphere in 2005 and 48 pounds in 2010, according to the Sierra Club’s review of Tri-State’s regulatory filings.
Van Someren said Tri-State’s calculations of its emissions have been lower the Sierra Club. He said the state categorizes Craig Station as a “low emitter.”
But just one teaspoon of mercury spilling into a lake is enough to contaminate the fish, said Bryce Carter of the Sierra Club’s Beyond Coal campaign. Mercury is a potent neurotoxin that harms developing brains of young children and fetuses.
Carter noted other power companies have made adjustments long ago to prepare for the new standards. “They saw the writing on the wall,” Carter said.