Environmentalists notched another victory over older coal-fired generating facilities last Monday when the U.S. Supreme Court refused to hear an appeal of a lower court decision that would require power plants making modifications to bring their entire facility up to new air pollution standards. The action by the highest court is the latest in a nearly 15-year-long battle by major electric utilities to escape installing expensive pollution control equipment when modifying existing plants.

It was the second decisive action by the highest court on the question of New Source Review (NSR) rules issued by the Environmental Protection Agency (EPA) in the last month. In its unanimous opinion in Environmental Defense v. Duke Energy Corp., in early April the Supreme Court overturned a lower court’s ruling that had held that Duke did not violate clean air laws when it failed to obtain an NSR permit before modernizing eight coal-fired power plants in North and South Carolina (see NGI, April 9). Duke has said it will continue to plead its case in the lower courts.

In last week’s decision the court simply refused to hear a plea by the EPA to overturn a decision by the U.S. Court of Appeals for the District of Columbia Circuit, which vacated EPA’s “equipment replacement” rule related to physical changes at power plants and other large industrial operations. The EPA rule promulgated by the Bush administration that was vacated had amended a “Routine Maintenance, Repair and Replacement Exclusion” from NSR requirements to say that the NSR requirements only applied to “major” physical power plant changes. The court did not find any “major” stipulation in the law passed by the Congress.

Under Section 111(a)(4) of the Clean Air Act, sources that undergo “any physical change” that increases emissions are required to undergo the NSR permitting process. The exclusion has historically provided only that routine maintenance, repair and replacement do not constitute changes triggering NSR, the circuit court noted.

Also, Congress defined “modification” in terms of emission increases, but the EPA’s rule would allow equipment replacements resulting in non-de minimis emission increases to avoid NSR, the D.C. appeals court said in vacating the rule.

Enforcing the Clean Air Act Amendments of 1990, the EPA first cracked down on emissions from existing power generation plants under the Democratic Clinton administration, and then revised its stance under the Bush administration. The early EPA directive said companies making modifications to their generating plants would have to get an NSR permit and bring the entire plant up to new pollution control standards. A number of plants, mainly coal-fired, belonging to major utilities were cited for violating the rule and the Justice Department started prosecuting those companies.

In 2002, the EPA rule was changed to limit the reach of the NSR rule to include only major plant modifications. Environmental organizations and states suffering environmental damage, particularly from older coal-fired plants, have fought the more restrictive interpretation in the courts.

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