HELENA — A subcommittee of the legislative Environmental Quality Council on Tuesday heard more than three hours of testimony on the state's handling of an air-quality permit for a coal-fired power plant proposed near Great Falls.

While the committee's chairman said the panel has no interest in intervening in the state's recent decision to require plant developer Southern Montana Electric Generation & Transmission to implement more stringent pollution controls, there appeared to be interest by some in the audience to try to reign in the regulatory process.

The Agency Oversight Committee, chaired by Sen. Jim Shockley, R-Victor, questioned officials from the DEQ, SME and the Board of Environmental Review, among others, about a recent board order that required the plant developer to do an additional study of emissions-control technology for particulate matter 2.5 microns in size or smaller, known as PM2.5.

No other facility in the country has been required to use technology to specially control particulate smaller than 2.5 microns, according to DEQ officials.

Critics of the board's decision say it came too late and doesn't give SME ample time to meet the air-quality permit's deadline. The Highwood Generating Station's air-quality permit, which was issued 13 months ago, gives the company 18 months to begin construction. The permit expires Nov. 30.

The committee heard testimony from all sides of the issue, but took no official action Tuesday.

"The order stands. We're not going to get involved in the decision between the Board of Environmental Review and the district courts," Shockley said. "We'll make a recommendation to the EQC."

Shockley said the subcommittee will meet again July 14 to discuss what those recommendations might be.

"We can't interfere with what's already happened. We want to see what can be done going forward," he said.

Some possible future legislative recommendations might include:

Modifying the DEQ's permitting rules to allow for a stay of the permit's deadline until appeals are resolved;

 

 

Expediting the Board of Environmental Review's appeal review timeline; and

 

 

Modifying the law so that permit appeals are made directly to District Court rather than the board.

 

Officials from SME and the power plant's supporters argued that the board's PM2.5 ruling sends a message to industry that Montana's regulatory system is too burdensome. They said the uncertainty surrounding the state's regulatory permitting process is driving up costs and discouraging investors and suppliers from doing business with companies, such as SME, that want to develop Montana's vast energy resources.

However, Anne Hedges of the Montana Environmental Information Center, said it's not state regulation but a change in national attitudes toward coal that will ultimately cause the demise of the Highwood Generating Station.

"If anybody thinks that this decision is going to stop this plant, I'd say that you haven't been reading the paper," Hedges testified. "I believe there are so many other issues that will eventually lead to the demise of this plant, and this is not one of them. This is clearly a victory for public health, but it is not going to stop this plant."

Hedges said that financial problems, zoning lawsuits, escalating costs of construction and uncertainty about the future of federal carbon regulation present far greater hurdles for coal plants in Montana — and throughout the country.

"This decision by BER is a good step forward for public health, but it is not going to be anything but a small bump in the road to the development of this plant," Hedges said.

Sen. Keith Bales, R-Otter, also testified at the hearing. Earlier this year, Bales submitted two bill draft requests to the state Legislative Services Division. One proposed bill would revise laws governing the Board of Environmental Review, and the other would eliminate the board altogether.

Bales said the board's permitting process that allows for appeals by groups such as the Montana Environmental Information Center is a major reason SME and other companies face such high hurdles in Montana.

"The reason that financing is not available is because of the uncertainty and the questions that have been brought into play by the actions of the BER pertaining to this air-quality permit," Bales said. "What you have here is a situation in which the permit will remain in limbo, cannot get financing and cannot commence construction until after the permit expires. That's wrong."

The full legislative Environmental Quality Council will hear recommendations by from the oversight committee at its July 14 meeting.