A reality check for haze rule

The haze was thick at Colstrip last week when I visited, but it wasn't because of the 2,200-megawatt coal-burning facility there.

It was because of forest fires. The Rosebud Complex, a group of nearby fires which started August 1, was finally contained two weeks later. This came on the heels of the Ash Creek fire, which burned from late June to mid-July.

In all, these fires burned 421,000 acres, destroying everything from ranchland in Tongue River and Rosebud country to timber in the Custer National Forest whose sale had been held up by an environmental lawsuit.

Those fires released an enormous quantity of particulate matter, which causes the hazy conditions that Montanans east of the Continental Divide have been experiencing this month. Based on a white paper developed for the Environmental Protection Agency (EPA), you can calculate that nearly 18,000 tons of particulate matter were released by the fires of southeastern Montana.

The Colstrip generating facility? It releases about 500 tons of particulate matter annually.

To put it another way, Colstrip has caused less haze during its decades of operations than these fires have in a single season.

This fact makes the Montana Regional Haze Rule, which the EPA's administrator Lisa Jackson signed off on this past Tuesday, all the more ironic. The rule addresses industrial sources of emissions like coal, cement, and aluminum plants. Yet the biggest contributor to haze in Montana isn't man. It's Mother Nature.

It's unlikely the EPA's new rule will do much about haze at all. Take Colstrip as an example. The rule requires an upgrade that, over 20 years, will cost $377 million in initial capital and annual operating costs. In exchange for that sum of money, visibility will improve—slightly. The biggest improvement will occur at the Theodore Roosevelt National Park, where visibility will improve by 0.501 deciviews, according to the EPA's rule. (One deciview is roughly the minimum threshold at which the human eye can perceive a difference in visibility between more and less hazy conditions.)

So is the $377 million worth a gain in visibility that is not even perceptible?

Montana ratepayers will not immediately be on the hook for that money, because NorthWestern Energy does not own anything but a piece of Colstrip Unit 4, which is not subject (at this time) to the EPA rule. But the rule does raise the cost of producing electricity at Colstrip Units 1 and 2, which are jointly owned by PPL-Montana, which sells power to NorthWestern, and Puget Sound Energy, a Washington utility.

Using publicly available data that Puget files with the Federal Energy Regulatory Commission, I calculate that the cost of producing electricity at Colstrip will increase 19.6 percent if one factors in both the capital and annual operating costs associated with complying with the Regional Haze Rule.

Colstrip is already uneconomical to run during certain months of the spring when water run-off and heavy wind produces electricity from hydroelectric dams and wind farms that have a next-to-zero cost of production. With the added cost of regulatory compliance, Colstrip's cost of production would have exceeded the average price of power available for purchase on the open market for roughly an additional five months from March 2011 to July 2012. Those conditions usually mean a plant shutdown.

Basic market economics—low natural gas prices and the economic recession—might be a bitter pill to swallow, but they are irrepressible in the end when it comes to making go or no-go decisions on power plants. But the 400 workers at the Rosebud coal mine and the hundreds more employed at the Colstrip plant itself are right to be furious at the imposition of EPA rules which accomplish little, and are not even oriented toward public health benefits, even while potentially costing them their jobs.

All energy production is ugly. Coal plants emit mercury and particulate matter. Wind farms threaten birds and bats. Natural gas plants are needed to back up that wind when it unexpectedly stops blowing, and the lifeblood of those gas plants involves fracking. We weigh energy's trade-offs all the time. It was right to reduce mercury emissions, even if it increased the cost of power. But does this rule, which seems to accomplish so little and in spite of all the haze we see from forest fires, really seem to suggest that we have our priorities straight?