The Nickel Report

On March 2, the U.S. Environmental Protection Agency’s (EPA’s) final effluent limitations guidelines (ELG) Deadline Extensions Rule for the steam electric power generating industry went into effect. The final rule includes extending the notice of planned participation (NOPP) and zero-discharge compliance deadlines, adding a new transfer provision to allow facilities to switch between compliance alternatives, and authorizing state permitting agencies to include alternative applicability dates based on site-specific factors. The final rule provides greater flexibility for electric generating units (EGUs) to meet ELG compliance deadlines, respond to unexpected market changes and supply chain uncertainty, and switch between compliance alternatives.

In addition to the final ELG Deadline Extensions Rule, EPA has indicated its intent to conduct supplemental rulemaking to address the underlying requirements in the 2024 ELG Rule. In accordance with these efforts, on March 9, EPA sent a new rulemaking proposal to the White House Office of Management and Budget (OMB) to address the unmanaged combustion residual leachate (UCRL) provisions in the 2024 Rule.

Background

The Clean Water Act (CWA) prohibits the unauthorized discharge of any pollutant to waters of the United States (WOTUS). Dischargers can obtain authorization to discharge limited pollutants through a National Pollutant Discharge Elimination System (NPDES) permit. An NPDES permit limits the amount of pollutants that can be discharged based on water quality standards and technology-based limits. Technology-based limits are set in accordance with ELGs promulgated by EPA. The 59 industries for which EPA has promulgated ELGs include the steam electric power generating industry (e.g., coal-fired power plants). EPA previously promulgated final regulations revising these ELGs in 2015, 2020, and 2024. The 2024 Rule included new limits for combustion residual leachate, including unmanaged combustion residual leachate.

Key Elements of EPA’s Final ELG Deadline Extensions Rule

The final rule includes provisions to extend NOPP and zero-discharge compliance deadlines, allow transfers between zero-discharge and 2034 cessation subcategory compliance regimes, require alternative applicability dates, allow late NOPP submissions, and clarify the must-run provision.

Extension of NOPP Submission Deadline

The final rule extends the deadline to submit an NOPP for the 2034 cessation subcategory by six years from December 31, 2025, to December 31, 2031. According to EPA, this deadline will give the owner or operator of an EGU more time to decide whether to participate in the 2034 cessation subcategory, which allows units that plan to retire by 2034 to continue operating based on limits set by EPA in 2020, provided those units comply with certain requirements set forth in the 2024 Rule.

Extension of Zero-Discharge Compliance Deadline

EPA extends the zero-discharge compliance deadlines for flue gas desulfurization wastewater (FGDW), bottom ash transport water (BATW), and combustion residual leachate (CRL) effluents by five years. In the 2024 Rule, zero-discharge requirements must be met as soon as possible but “no later than” December 31, 2029. The final rule extends the “no later than” deadline to December 31, 2034. EPA cites three primary reasons for this revision. First, the 2029 deadline may not be feasible due to potential unavailability of control technologies or their component parts. Second, extending the deadline will allow facilities that recently invested to comply with the 2020 Rule more time to amortize technology costs, which could make it more economically feasible to comply with the 2024 Rule. Third, the deadline facilitates the ability to transfer out of the 2034 cessation subcategory and continue to generate electricity to satisfy national energy needs.

New Transfer Provision

EPA’s rule establishes new transfer provisions to increase flexibility in the face of unexpected operational changes. Specifically, the rule allows transfers between zero-discharge requirements and the 2034 cessation subcategory compliance tracks. Under this provision, facilities would be able to transfer, in either direction, up until the December 31, 2034, deadline.

Alternative Applicability Date and Late NOPP

EPA adds a requirement that permitting authorities must extend applicability dates under the 2020 or 2024 ELG rules when an unexpected and uncontrollable circumstance occurs. In particular, EPA requires permitting authorities to establish an alternative applicability date where a facility 1) transfers between limitations or no longer plans to permanently cease coal combustion due to an unexpected change in regional capacity markets or local demand, 2) faces unexpected supply chain issues, or 3) faces any other circumstance that requires additional time and is wholly outside both the facility’s control and the facility’s ability to plan. This requirement would allow an alternative applicability date and associated milestones to be included in the permit, despite existing regulatory requirements.

Additionally, EPA adds a provision that would allow a permitting authority to accept a late NOPP submission if the facility experiences one of the circumstances listed in the previous paragraph.

According to the regulatory text, a plant wishing to make use of the alternative applicability date provision must submit an initial request letter and regular progress reports to its permitting authority. The initial request letter must include the circumstance under which the facility is requesting alternative applicability timing. The letter must also include detailed engineering dependency charts that would allow the permitting authority to establish an alternative applicability date and, where appropriate, associated schedule of milestones, in the permit, as well as determine the frequency of regular progress reports. Furthermore, according to EPA, the engineering dependency charts should identify contingencies, especially for uncertain or critical path steps, so that any associated schedule can be sufficiently flexible to avoid the potential for permit modifications.

Clarifications to Must-Run Provision

EPA clarifies a number of aspects of the 2024 Rule’s “must-run” provision. For example, the “must-run” provision is intended to cover any reliability must-run agreement or similar order, including FERC’s acceptance of a reliability must-run agreement. Also, an EGU’s certification to cease coal combustion followed by a Balancing Authority’s projection that it will cause a resource adequacy shortfall constitutes a qualifying event under the must-run provision.

Supplemental Rulemaking to Address the 2024 Rule

EPA’s final Deadline Extensions Rule does not alter the underlying zero-discharger determinations established in the 2024 Rule. Instead, the agency chose to extend compliance deadlines in response to current energy reliability and supply chain challenges. However, EPA has stated that it intends to further evaluate new information, especially data and comments submitted during the rulemaking process, and determine if reconsideration of the 2024 requirements is appropriate.

EPA is conducting supplemental rulemaking to address the UCRL provisions in the 2024 ELG Rule. It has indicated in statements that it is undertaking a rulemaking to potentially revise the UCRL limits and intends to propose these revisions in the first half of 2026 and finalize any appropriate revisions before the end of 2026. In line with this timeline, and as noted above, OMB received EPA’s UCRL proposal on Monday, March 9. EPA has also indicated that it is considering whether to undertake additional rulemaking to revisit other aspects of the 2024 Rule, including the underlying technology bases, pollutant loadings, environmental impacts, and zero-discharge limitations for FGDW, BATW, and CRL.

EPA emphasizes that the Deadline Extensions Rule is meant to provide time to thoroughly review new input on the costs, economic achievability, and energy impacts of the zero-discharge standards. Given EPA’s “ongoing reconsideration” of the zero-discharge limits, EPA’s implementation memorandum, issued with the Deadline Extensions Rule, recommends that new permits (or permit modifications) contain a reopener clause, in accordance with 40 C.F.R. § 122.62(a)(7) and 124.5.