Colorado Air Quality Plan Approval Updates
Summary
The Environmental Protection Agency (EPA) is approving elements of state implementation plan (SIP) revisions submitted by the State of Colorado on July 27, 2020, March 22, 2021, and June 26, 2023, to meet certain Clean Air Act (CAA) requirements related to the Denver Metro/North Front Range (DMNFR) area's classification as Marginal nonattainment for the 2015 8-hour ozone national ambient air quality standards (NAAQS). The revisions contain a base year emissions inventory for the nonattainment area and certify that the State's existing Air Pollutant Emission Notice (APEN) program for stationary sources fulfills the CAA's emission statement rule requirement. The revisions also include a new requirement for annual certification of APEN reported emissions for certain stationary sources. Unrelated to Colorado's Marginal ozone nonattainment obligations, the EPA is also approving the State's revisions to Regulation Number 3 concerning an update to the date of incorporation by reference of global warming potentials used in the computation of the carbon dioxide equivalent for comparing emissions from various greenhouse gases (GHGs). The EPA is taking this action pursuant to the CAA.
Compliance Requirements
- #1
Submit a 2017 base year emissions inventory for the Denver Metro/North Front Range (DMNFR) area; Certify that the Air Pollutant Emission Notice (APEN) reporting program fulfills the CAA's emission statement rule requirement; Implement annual certification of APEN reported emissions for certain stationary sources; Update the date of incorporation by reference of global warming potentials used in computation of carbon dioxide equivalent; Revise computation of the mass of carbon dioxide equivalent for comparing emissions from various greenhouse gases
Market Impacts
New annual certification requirement for APEN reported emissions for certain stationary sources in the DMNFR ozone nonattainment area, creating compliance obligations and potential market opportunities for environmental consulting and verification services; Updates to Regulation Number 3 incorporating current global warming potentials for carbon dioxide equivalent computations, requiring recalibration of GHG reporting systems and potential software updates; Maintenance of Marginal nonattainment classification for 2015 8-hour ozone standards creates additional regulatory hurdles for new or expanding stationary sources in the DMNFR area
Validated Company Impacts
Talen Energy Corp
Talen Energy operates power generation facilities that are stationary sources subject to air quality regulations, including emission reporting requirements. The rule's requirements for annual certification of APEN reported emissions and updates to greenhouse gas computation methods directly apply to their operations in Colorado. The rule focuses on air quality compliance and greenhouse gas reporting requirements for stationary sources in Colorado, while the company's disclosed risks center on weather impacts, electricity market operations, financial hedging, and PJM capacity penalties with minimal regulatory compliance risks identified. There is no meaningful overlap between the rule's environmental compliance obligations and the company's specific risk profile.
XCEL ENERGY INC
Xcel Energy operates Public Service Company of Colorado (PSCo), which includes electricity generation facilities that qualify as stationary sources subject to APEN reporting requirements in the Denver Metro/North Front Range ozone nonattainment area. The company's Colorado operations would be directly affected by the annual certification requirements for emissions reporting and potential GHG computation updates under Regulation Number 3. The federal rule focuses exclusively on air quality compliance, emissions reporting, and greenhouse gas regulations in Colorado, while the company's only disclosed risk factor is cybersecurity incidents. There is no overlap between the environmental regulatory requirements and the company's technology cybersecurity risk profile.