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Federal Government Won't Pursue NSR Case Against Duke Energy

The federal government last week decided not to seek a U.S. Supreme Court review of lower court rulings involving Duke Energy and whether it violated New Source Review (NSR) rules regarding certain modifications to its power plants. The company is "very pleased" with the news, Duke spokesperson Randy Wheeless said.

He noted that the federal government had a deadline of last week to file an appeal with the U.S. high court to hear a lower court ruling in the matter "and they basically allowed that deadline to pass." He said that the government for "all intents and purposes has given up on this case."

Wheeless said that Duke "always thought we had a strong case. We've won at the district level and at the appeals court level and we felt we could win at a higher court as well."

In December 2000, the U.S. Environmental Protection Agency (EPA) filed suit against Duke, alleging numerous violations of the Clean Air Act's NSR rules. At issue was routine maintenance, repair and replacement work performed at eight coal-fired power plants between 1988 and 2000. The plants are operated by Duke Power, Duke's franchised electric utility.

In August 2003, U.S. Middle District Court of North Carolina trial Judge Frank Bullock issued an opinion on the case after both parties had filed various motions for summary judgment. While the judge denied requests for summary judgment, he defined the legal standards for applying NSR rules to maintenance, repair or replacement projects. Bullock's findings were consistent with Duke's understanding of the NSR program, the utility said.

More recently, a Fourth Circuit Court of Appeals ruling issued this summer involving Duke Energy was hailed by power producers as eviscerating the legal basis for a 1999 NSR enforcement initiative. The Electric Reliability Coordinating Council said the case marked the first time a court of appeals had reached the merits in one of the NSR cases filed by the Clinton Administration in 1999.

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