By Eileen O'Grady
HOUSTON (Reuters) - Small changes made to a federal smog pollution rule last week have not allayed fears of Texas regulators who worry the new rule could lead to increased rolling blackouts, Donna Nelson, chairman of the Texas Public Utility Commission said on Thursday.
Texas is among 15 states challenging a January deadline for implementation of the Environmental Protection Agency's Cross State Air Pollution Rule (CSAPR) which sets stricter limits on sulfur dioxide (SO2) and nitrogen oxide emissions from power plants in order to protect the health of residents in states downwind from the emissions.
"They did not alter the January 1 implementation date," Nelson said. "They did not revise their model based on the errors we reported to them."
In a meeting last month with high-ranking EPA officials, Texas officials noted several factual errors the EPA relied on to calculate the impact of the Cross State rule on SO2 emissions in Texas, Nelson said.
The EPA overstated the amount of Texas generation available in future years by more than 10,000 megawatts, Nelson said, by including plants that are already retired and failing to adjust the state's wind generating fleet to account for wind's intermittent nature.
"It's disappointing that none of that was reflected in the changes," said Nelson during a public meeting. "We were told nothing was off the table," leading Texas officials to believe they might have a chance to respond to issues seen in ERCOT, the state's primary grid.
ERCOT has warned that stricter SO2 limits will force coal-fired plants to shut or operate fewer hours each year, increasing the likelihood of blackouts in the state which operates as a stand-alone grid with little ability to import power from other states.
Luminant, Texas largest power generating company, notified ERCOT that it will suspend operations at two coal units, totaling 1,200 megawatts, at the end of the year to comply with the rule.
NRG Energy Inc, Texas' No. 2 generator, does not expect to shut plants or cut jobs due to the rule.
EPA's proposed changes to CSAPR would result in the government issuing about 1 to 2 percent more credits, which could result in 1.3 percent more emissions.
ERCOT officials expect to tell the PUC what the EPA tweaks will mean for each power plant by the end of October.
On the legal front, Texas is suing the EPA over the eleventh-hour inclusion of the state under an annual SO2 limit in the final rule issued in July. Texas had not been included under the agency's draft rule.
The Louisiana Department of Environmental Quality (DEQ) said changes in the final rule that reduced Louisiana's cap for NOx emissions by 36 percent were done "without any opportunity for DEQ to review or comment on the final version," the agency said in a statement.
Other states challenging the Cross State rule in federal appeals court include Kansas, Nebraska, Alabama, Florida, Oklahoma, South Carolina, Virginia, Georgia, Indiana, Michigan, Mississippi, Ohio and Wisconsin.
(Editing by Marguerita Choy)