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PSNH: EPA Permit Deeply Flawed

PSNH Files Response to EPA Draft Permit for Merrimack Station


MANCHESTER, N.H., February 29, 2012 – Public Service of New Hampshire (PSNH), joined by energy companies and trade associations from around the country, has filed its response to the U.S. Environmental Protection Agency's (EPA) reissuance of a permit for the company's Merrimack Station power plant in Bow, NH. The EPA issued a Draft National Pollutant Discharge Elimination System (NPDES) Permit for the facility on September 30, 2011, more than fourteen years after PSNH filed for a renewal of its existing permit. The EPA draft permit addresses three significant areas—Clean Water Act Sections 316(a) and 316(b) and water discharges from Merrimack Station's Clean Air Project. 

"After a complete analysis of the draft permit, it's clear the EPA's conclusions are arbitrary and the development of this permit was deeply flawed," said Gary Long, PSNH President & Chief Operating Officer. "PSNH has a strong record of being a responsible environmental steward, and we are proud of our accomplishments, specifically at Merrimack Station. 

In its February 28th response to the EPA, PSNH highlights several significant flaws with the draft permit: 

(1) The EPA used a flawed and illogical baseline of data for measuring how Merrimack Station has impacted the river. 

In its filing, PSNH states that the EPA's use of a fish population baseline from more than 40 years ago lacks any logical basis and undermines the permit's conclusions. "The EPA chose to use as its baseline a time when the Merrimack River was heavily polluted and home to more pollution tolerant fish species than today," said Long. "Today the Merrimack River is cleaner than ever and is home to a vibrant, diverse, and healthy fish population, in addition to being a place that supports recreational activities like fishing and boating." PSNH notes that the Merrimack River's fish population near its Merrimack Generating Station is virtually identical to the fish population north of the Garvins Falls Dam—a location just 2½ miles north of the plant which is unaffected by the Station's operations. 

(2) The EPA's draft permit arbitrarily mandates costly technological solutions that are not justified by scientific data. 

In its draft permit, the EPA mandates the installation of a closed-cycle cooling system at Merrimack Station at a cost of $111.8 million, a sum which EPA expects customers to pay. In its filing, PSNH states that the EPA's estimated cost to install this system at Merrimack Station is low and wholly disproportionate to any expected environmental benefits. "Our analysis concludes that the EPA is essentially asking customers to pay $1000 in costs for every $1 of environmental benefit," said Long. "A 1000 to 1 cost to benefit ratio is 200 times greater than accepted ratios included in other EPA regulations. We believe it's outrageous to ask customers to pay these exorbitant costs, especially given that there is little, if any, resulting benefit." PSNH's filing notes that in addition to being incredibly costly, the EPA's mandates are unnecessary given the excellent health of the Merrimack River today, a fact which is backed up by four decades of scientific data provided by Normandeau Associates, PSNH's environmental consultant. 

(3) The EPA's draft permit is speculative and based on yet to be finalized regulations.   

The EPA is required to issue new national regulations for section 316(b) of the Clean Water Act by July 27, 2012. "It's puzzling why after nearly 15 years of waiting, the EPA is choosing now to issue this permit rather than wait for the new national standards, set to be released this summer," said Long. "By not waiting for the new standards and instead relying on their sole discretion to draft this permit, the EPA's conclusions are arbitrary and put New Hampshire citizens at risk to bear costs that may not be required anywhere else in the country." 

(4) The EPA has mandated use of a costly biological treatment of the plant's Clean Air Project waste stream that is unnecessary and cannot meet permit requirements. 

The draft permit requires PSNH to install on Merrimack Station's Scrubber (mercury and sulfur emissions reduction system) a biological wastewater treatment system modeled on installations at two Duke Energy plants in North Carolina. Surprisingly, those existing systems are incapable of meeting the stringent limits EPA included in PSNH's permit. In fact, given the same limits proposed for Merrimack Station, the Duke plants would have violated the limits more than 450 times during the previous three years. 

"This biological treatment is not necessary at Merrimack Station due to the comprehensive treatment systems that are already in place," said Long. "I am dismayed that EPA would require installation of a $20+ million system that cannot meet the very limits EPA has set." 

(5) The EPA failed to properly analyze the costs of the mandates it included in its draft permit.   

Federal law requires that the EPA consider the costs of its permit requirements. In the draft permit, EPA failed to perform the required cost-benefit analyses, stating such an undertaking would be difficult, time-consuming, controversial and expensive. Instead, EPA merely declared that its permit requirements were "affordable" and that it expects that PSNH will recover the costs through increased electricity rates. "EPA's actions would require well over $100 million in additional costs to be paid by the citizens of New Hampshire," noted Long. "After taking more than 14 years to act on our renewal application, it is unconscionable for the federal government to complain that the necessary cost-benefit studies are too 'time-consuming' and 'expensive' to prepare." 

Also filing comments challenging EPA's actions are Duke Power, the Electric Power Research Institute, and the Utility Water Act Group—an association of 184 individual energy companies and three national trade associations of energy companies: the Edison Electric Institute, the National Rural Electric Cooperative Association, and the American Public Power Association. 

The EPA is expected to review and address all comments before issuing a final permit. 

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PSNH is New Hampshire's largest electric utility, generating and distributing clean electricity for more than 500,000 homes and businesses in an environmentally friendly manner.