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How to rack up $100 million in Clean Air Act fines

PGE's Boardman power plant has been accused of operating in violation of the Clean Air Act since 1998.

PGE's Boardman power plant has been accused of operating in violation of the Clean Air Act since 1998.

Did anyone else’s jaw drop when they heard the potential fines for the Portland General Electric’s alleged Clean Air Act violation at the Boardman coal-fired power plant?

If you check the fine print, the maximum penalties for the violation are somewhere between $25,000 and $37,500 a day - because the caps have gone up over the 12 years in question.

Add it all up, and PGE could be facing more than $100 million in Clean Air Act fines. Yikes.

Why so steep?

Edward Kowalski, director of the office of compliance and enforcement for EPA in Seattle, explained that the pollution controls that his agency says should have been installed at the Boardman plant would have reduced sulfur dioxide emissions by 70 to 90 percent. And, he said, the maximum penalties – set to recoup the economic benefits of NOT installing the controls and discourage facilities from skirting the rules – won’t necessarily be imposed.

He also explained the logic behind his agency’s recent violation notice to PGE. It starts with the Clean Air Act, which ultimately aims to reduce air pollution by getting power plants to install pollution control devices. But the controls are pricey, he said, so the law didn’t mandate that all power plants install them right away.

“The way they wrote the Clean Air Act and the scope of provisions for implementing it, companies are required to install new control devices as they make modifications at their facilities. Instead of requiring them to do it when the law was passed, it says if you’re going to be making modifications to your plant, that’s a good time to install new pollution control devices. Certain modifications trigger that requirement.”

Did the 1998 and 2004 modifications to the Boardman plant trigger that requirement? That’s where PGE and the EPA disagree.

As I reported earlier, the company is arguing the EPA is wrong, and that the Boardman plant has not been operating in violation of the Clean Air Act since 1998. PGE spokesman Steve Corson said the company did what it considered to be “maintenance” on its boiler.

“It basically allowed the boiler to perform to its design specifications,” he said. “It didn’t change emissions significantly. It may have made the boilers more efficient, but these would not be what we would consider major modifications.”

Corson said it’s hard to say what pollution controls would have been required had the company decided to go that route when it modified its boiler. However, a pollution “scrubber” that removes pollutants before they are released from the plant, currently costs nearly $300 million, he said. There is a cheaper alternative for removing sulfur dioxide that costs $23 million to install but also raises the plant’s operating costs for a full price tag of around $100 million.

PGE knows these prices well because of the ongoing discussion with Oregon Department of Environmental Quality on how the Boardman plant is going to meet new pollution rules under the Regional Haze Plan.

That plan has launched discussions of what the future of the Boardman plant will look like.

The Sierra Club has been on PGE’s case about air pollution at Boardman for awhile now, and wants to see the plant shut down by 2015. The environmental group filed a lawsuit that included the exact issue EPA is cracking down on, but Kowalski said the lawsuit is not what triggered the Boardman enforcement action. In fact, the coal-fired power plant industry has been a national enforcement priority.

“We have recognized this as a national problem and we’ve focused on these kinds of facilities,” Kowalski said. “Part of that process involves sending an information request to the facility to provide us with historical information about modifications. Unless the facilities have come forward, it’s only through the process of gathering and analyzing that information that these determinations can be made.”

I’m waiting for a call back from Oregon Department of Environmental Quality to learn more about what role the state is supposed to play in checking up on the Boardman plant. In general, Kowalski said, the state is supposed to implement the Clean Air Act. But he said it is not unusual that DEQ would take PGE at its word that the facility upgrades would not trigger requirement for installing new pollution controls.

Air pollution Boardman power plant Clean Air Act Environmental Protection Agency Portland General Electric

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