Last Friday, the Environmental Protection Agency ran roughshod over New Mexico officials and imposed nearly $340 million in unjustified costs on PNM customers – in blatant disregard of its own rules.
At issue is a provision of the Clean Air Act, known as “Regional Haze.”
Unlike other parts of the act, which are meant to protect public health, the Regional Haze provision is an aesthetic regulation, intended to improve the view at national parks.
Under New Mexico law, the state cannot impose Regional Haze emissions controls that are more stringent than what the federal government requires. In 2005, the EPA published Regional Haze guidelines that established recommended emissions controls to comply with the visibility regulation.
These recommendations are known as “presumptive limits.”
On June 2, the state Environmental Improvement Board unanimously approved a Regional Haze plan that would meet the EPA’s “presumptive limits” by spending $34 million to retrofit the San Juan Generating Station, a coal-fired power plant 15 miles west of Farmington.
Despite comporting with both federal guidelines and state law, these controls weren’t good enough for the EPA.
Perhaps this has something to do with President Barack Obama’s campaign promise to “bankrupt” the American coal industry.
Whatever its rationale, the EPA imposed Regional Haze retrofits at San Juan that would cost New Mexico ratepayers $370 million – a nearly tenfold increase over those approved by New Mexico officials.
And what does this huge sum buy? Not much.
Based on peer-reviewed research, there is a 35 percent chance that the visibility “benefit” of the EPA’s preferred controls could be perceptible by the general population on the seventh-worst visibility day of the year at Mesa Verde, the national park closest to the San Juan Generating Station.
In other words, most people won’t even notice the difference wrought by the EPA’s ultra-expensive controls.
But New Mexicans certainly will notice the difference in their utility bills!
PNM estimates that the EIB-proposed controls would result in a rate increase of $12 a year, while the EPA-proposed controls would increase rates by $82 a year – almost seven times more.
In these tough economic times, New Mexicans should not be forced to pay hundreds of millions of dollars in exchange for imperceptible benefits.
If the administration of Gov. Susana Martinez were to mount a legal challenge against the EPA, it would have a strong case, thanks to the unique discretion afforded states in deciding how to protect visibility under the Clean Air Act.
According to the EPA’s own Regional Haze guidelines, “Congress evinced a special concerning with insuring that states would be the decision-makers.”
Last Friday, the EPA ignored its own guidance by imposing a visibility plan over the objection of the state.
New Mexico should sue to remind the EPA of its own rules.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute, a free-market think tank in Washington, D.C.