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Note: Special Reports are updated periodically here; but are
updated and reported on
Updated: April 2 , 2007 Click Here
for details on WIMS Information Service Products Duke Energy Supreme Court & Related NSR Activities Important Links
Questions Presented:
WIMS Articles
High Court Rules In Environmental Defense v. Duke
Energy - Apr 2: Justice Souter
delivered the opinion for the court's near unanimous
decision. Only Justice Thomas delivered a concurring
in part opinion. In
its summary of its opinion, the High Court said, "In
the 1970s, Congress added two air pollution control
schemes to the Clean Air Act: New Source Performance
Standards (NSPS) and Prevention of Significant
Deterioration (PSD), each of them covering modified,
as well as new, stationary sources of air pollution.
The NSPS provisions define the term "modification,"
42 U. S. C. §7411(a)(4), while the PSD provisions
use that word 'as defined in' NSPS, §7479(2)(C). The
Court of Appeals concluded that the statute requires
the Environmental Protection Agency (EPA) to conform
its PSD regulations on 'modification' to their NSPS
counterparts, and that EPA’s 1980 PSD regulations
can be given this conforming construction. We hold
that the Court of Appeals’s reading of the 1980 PSD
regulations, intended to align them with NSPS, was
inconsistent with their terms and effectively
invalidated them; any such result must be shown to
comport with the Act’s restrictions on judicial
review of EPA regulations for validity."
The
case involves U.S. EPA lawsuit brought against Duke
Energy Corp. for failing to upgrade pollution
controls when undertaking major renovations at eight
coal-fired power plants. The questions presented in
the case were: (1.) Whether the Fourth Circuit's
decision [U.S. v. Duke Energy Corp, June
15, 2005, Case No. 04-1763, See WIMS 6/16/05]
violated Section 307(b) of the Act, which provides
that national Clean Air Act regulations are subject
to challenge "only" in the D.C. Circuit by petition
for review filed within 60 days of their
promulgation, and "shall not be subject to judicial
review" in enforcement proceedings, 42 U .S.C.
7607(b); and, (2. ) Whether the Act's definition of
"modification," which turns on whether there is an
"increase" in emissions and which applies to both
the NSPS and PSD programs, rendered unlawful EPA's
longstanding regulatory test defining PSD
"increases" by reference to actual, annual
emissions.
Justice Thomas issued a concurring in part separate
opinion indicating, "I join all but Part III–A of
the Court’s opinion. I write separately to note my
disagreement with the dicta in that portion of the
opinion, which states that the statutory
cross-reference does not mandate a singular
regulatory construction."
Environmental Defense President Fred Krupp issued a
statement saying, "...the Court ruled that
industrial smokestacks and power plants must meet
today's cost-effective pollution control standards
when facilities are refurbished. This is a huge win
for clean air. The Court ruled unanimously that
companies have to use the latest cost effective
technology to reduce pollution when they upgrade
their plants. This is not a legal abstraction -- it
means we'll have cleaner air and less childhood
asthma. We're very proud of our work in this case --
it's going to make a real difference in people's
lives."
Access the complete opinion and syllabus (click
here). Access the statement from
Environmental Defense (click
here). Access the
WIMS Special Report On The
Duke Energy
Supreme Court Case for background and additional
information (click
here). [*Air]
Hearing On NSR Debottlenecking, Aggregation & Project
Netting - Nov 2: U.S. EPA will hold a public
hearing Monday, November 6, 2006 on proposed changes
to simplify the process owners and operators of
existing facilities must follow when determining
whether plans to modify their facility would trigger
New Source Review (NSR) requirements. EPA proposed the
changes, known as "aggregation and debottlenecking,"
on September 8, 2006, and it was published in the
Federal Register on September 14, 2006 [71 FR
54235-54252]. The hearing will be at EPA's offices in
Research Triangle Park, N.C., at 109 T.W. Alexander
Drive. The hearing will be in Building C, Classroom
C112. Because this is a Federal facility, speakers
should be prepared to show photo ID to enter the EPA
campus and buildings.
Access
an EPA announcement (click
here). To pre-register contact Pam Long,
Phone: 919-541-0641; or Email (click
here). Access an EPA release on the
proposal (click
here). Access the proposed rule in the
Federal Register (click
here). Access a fact sheet and commenting
procedures (click
here). Access a Qualitative Environmental
Analysis (click
here). Access the 2002 report to the
President (click
here). [*Air]
Environmental Defense v. Duke Energy Corp. Oral Arguments
- Nov 1, 2006: The United States Supreme Court heard oral
arguments in a case that could force many aging industrial
polluters to install up-to-date air pollution controls
under the Clean Air Act's "New Source Review" provisions.
The case -- Environmental Defense v. Duke Energy Corp.
(Case No.05-848) -- involves U.S. EPA lawsuit brought against
Duke Energy Corp. for failing to upgrade pollution
controls when undertaking major renovations at eight
coal-fired power plants. Throughout the oral arguments the
Justices intervened extensively with questions and
comments of the attorneys.
The
questions presented in the case are: (1.) Whether the
Fourth Circuit's decision [U.S. v. Duke Energy Corp,
June 15, 2005, Case No. 04-1763, See WIMS 6/16/05]
violated Section 307(b) of the Act, which provides that
national Clean Air Act regulations are subject to
challenge "only" in the D.C. Circuit by petition for
review filed within 60 days of their promulgation, and
"shall not be subject to judicial review" in enforcement
proceedings, 42 U .S.C. 7607(b); and, (2. ) Whether the
Act's definition of "modification," which turns on whether
there is an "increase" in emissions and which applies to
both the NSPS and PSD programs, rendered unlawful EPA's
longstanding regulatory test defining PSD "increases" by
reference to actual, annual emissions.
The Fourth
Circuit Appeals Court affirmed the district court
judgment; however it said for "somewhat different reasons
than those relied on by the district court." In further
explanation the Appeals Court said, "This case involves
two different, but complementary provisions of the Act:
the New Source Performance Standards ("NSPS") provisions,
42 U.S.C. § 7411, and the Prevention of Significant
Deterioration ("PSD") provisions, 42 U.S.C. §§ 7470-92...
NSPS centers on technological controls at an individual
pollution-emitting apparatus, PSD fixes on the actual
emissions from a site." [PSD exists primarily to prevent
significant deterioration of ambient air quality in areas
meeting clean air standards, while NSPS requires new
sources to implement particular technologies to limit
their own emissions.]
The Fourth
Circuit concluded, "Congress mandated that the PSD statute
incorporate the NSPS statutory definition of
'modification.' No one disputes that prior to enactment of
the PSD statute, the EPA promulgated NSPS regulations that
define the term "modification" so that only a project that
increases a plant’s hourly rate of emissions
constitutes a 'modification.' The EPA must, therefore,
interpret its PSD regulations defining "modification"
congruently... EPA retains its authority to amend and
revise this and other regulations... As long as Congress
mandates that 'modification' be defined identically in the
NSPS and PSD statutes, however, EPA must interpret that
term in a consistent manner in the NSPS and PSD
regulations."
Environmental Defense, in its oral argument to the Supreme
Court said, "The Clean Air Act requires that the owner of
a major emitting facility obtain a prevention of
significant deterioration permit before engaging in a
modification, which is defined to include any physical
change that increases the amount of any pollutant emitted
by such source. Since 1980, EPA's PSD regulations have
measured such increases in terms of actual emissions in
tons per year."
U.S. EPA,
in its oral argument said, "The court of appeals exceeded
its jurisdiction and misconstrued the Clean Air Act in
holding that EPA was required to define the determine
'modification' identically for the separate NSPS and PSD
programs, and on the jurisdictional point I'd like to
address the whipsaw question, because in fact it's quite
clear that there's no whipsaw issue here for a number of
reasons..."
Duke
Energy, in its oral argument said, "...it seems to me it
is very clear that the understanding of everyone in the
industry, outside the industry, from 1980, candidly well
beyond 1988 all the way up to 1999, was that these
regulations didn't apply under any circumstances in the
absence of an increase in the capacity. And you had to
demonstrate that there would be an increase in the hourly
rate of the emissions... To confirm precisely that
interpretation. That's exactly why GE went to Mr. Reich
and asked for a determination of applicability, and was
told categorically PSD applicability is determined by
evaluating any change in emissions rates caused by the
conversion."
Amici Supporting
Petitioners (Environmental Defense) include: State
and Territorial Air Pollution Program Administrators (STAPPA)
and the Association of Local Air Pollution Control
Officials (ALAPCO);
The states of NY, CA,
CT, DL, IL, IA, ME, MD, MS, MN, NH, NM, OR, RI, VT and
PA; Additional states of NJ, AZ, KY, MI, WA, and DC.;
various law professors; and the National Parks
Conservation Association and Our Children's Earth
Foundation. Amici Supporting Respondent (Duke
Energy) include:
American
Electric Power Company, Inc., Edison Electric Institute,
Southern Company,
and Utility Air Regulatory Group;
the Manufacturers Association Work Group including --
Alliance of
Automobile Manufacturers; American Chemistry Council;
American Forest & Paper Association; American Gas
Association; American Petroleum Institute; Council of
Industrial Boiler Owners; Interstate Natural Gas
Association of America; National Association of
Manufacturers; Chamber of Commerce of the United States
of America; National Petrochemical & Refiners
Association; National Oilseed Processors Association;
Corn Refiners Association; and the National Cotton
Council of America; and the
Washington Legal
Foundation.
Access
the complete 67-page transcript of the oral arguments
and extensive inquiries by the Justices (click
here). Access the Brief for Petitioners
Environmental Defense et al. (click
here). Access the Brief for United States as
Respondent in Support of Petitioners (click
here). Access the Brief for Respondent Duke
Energy Corp. (click
here). Access the Reply Brief of Petitioners
Environmental Defense et al.
(click
here).
Access the Fourth Circuit, U.S. v. Duke Energy Corp,
June 15, 2005, Case No. 04-1763 opinion (click
here). Access links to briefs of all Amici in
the case on the FindLaw website (click
here). [*Air]
NAM/Industry File Brief In Duke Energy NSR Supreme
Court Case - Sep 15, 2006: The National
Association of Manufacturers (NAM) is joining
several other business groups in an amicus brief
urging the U.S. Supreme Court to uphold a lower
court ruling in an important case related to U.S.
EPA's New Source Review (NSR) regulations [See WIMS
8/18/06 & 5/16/06]. The case, Environmental
Defense v. Duke Energy Corp., focuses on
whether routine maintenance procedures at existing
power plants and industrial facilities, which NAM
says are sometimes described as “tweaks,” constitute
“modifications” under the Clean Air Act and
therefore subject them to EPA’s NSR permitting
process which typically takes more than a year.
Environmental groups engaged in this legal action
have challenged a ruling by the Fourth Circuit Court
of Appeals.
NAM’s Vice President for Litigation, Quentin Riegel
said, “Such an interpretation, favored by
environmental groups, would expand the scope of the
program and impede the ability of manufacturers to
innovate and of electric utilities to respond to
growing consumer and industry demands for energy.”
Adopting the environmental groups’ view “could be
devastating to American industry,” the NAM brief
said, “because activities that are and have been
common industrial practice could be viewed as having
triggered the requirement for sources to obtain NSR
permits, even though no ‘modification’ of their
permitted operations has occurred. Affirming the
decision of the Court of Appeals would categorically
clarify that such commonplace projects are not
subject to NSR.”
Access a NAM release (click
here). Access the NAM/Industry amicus brief
(click
here, posted soon). Access the complete
Fourth Circuit opinion (click
here). Access the recent related Seventh
Circuit opinion in USA v. Cinergy Corp (click
here). [*Air]
USA v. Cinergy
Corp. - Aug 17, 2006: In the U.S.
Court of Appeals, Seventh Circuit, Case No.
06-1224.
U.S. EPA sued the owner of a number of
coal-fired electric power plants claiming that
the owner (Cinergy) had violated section
165(a) of the Clean Air Act, 42 U.S.C. §
7475(a), by physically modifying the plants
without first obtaining from EPA a permit that
the Agency contends is required by EPA
regulation 40 C.F.R. § 52.21 for the type of
modification that Cinergy made.
The modifications produced increases in the
nitrogen oxides and sulfur dioxide annually
emitted by the plants. The Appeals Court
notes, "If the EPA prevails in the suit,
Cinergy will be
required to retrofit the plants with costly
pollution-control equipment (best available
control technology). Cinergy argues that the
regulation does not require modifications that
do not increase the
hourly
rate at which a
plant emits pollutants, even if the
modifications increase the
annual
rate. The EPA
argues that Cinergy is misreading the
regulation. The district judge agreed with the
EPA but authorized Cinergy to take an
interlocutory appeal from his ruling, and the
Seventh Circuit consented to
take the appeal.
The Seventh Circuit said, "Cinergy’s suggested interpretation, besides not conforming well to the language of the regulation, would if adopted give a company that had a choice between making a physical modification that increased the hourly emissions rate and one that enabled an increase in the number of hours of operation an incentive to make the latter change even if that would produce a higher annual level of emissions, because it would elude the permit requirement. Cinergy’s interpretation would also distort the choice between rebuilding an old plant and replacing it with a new one."
The Appeals Court indicates that Cinergy’s
argument was rejected by the D.C. Circuit in
New York v.
EPA, which upheld the EPA’s
interpretation
of the regulation.
But it was accepted by the
Fourth
Circuit in United
States v. Duke Energy Corp.,
411 F.3d
539, 546-51 (4th Cir. 2005), cert. granted,
126 S. Ct. 2019 (2006), creating a circuit
conflict which the Appeals Court says is the
reason "the Supreme Court
presumably granted
certiorari in the
Duke Energy
case to
resolve."
In its brief 9-page opinion, the Seventh
Circuit says in affirming the district courts
agreement with EPA's interpretation, "In so
ruling, the Fourth Circuit stepped out of
bounds, as we have said in describing
Cinergy’s argument. But in any event the
argument’s premise is incorrect...
The New Source Performance Standards and
Prevention of Significant Deterioration
provisions of the Clean Air Act are at one in
defining a modification as a physical change
in a plant that results in an increase in
emissions, but are silent on whether the
increase is in the hourly rate of emissions or
in some other rate. The task of deciding was
left to the EPA. There was nothing to require
that it flesh out the vague statutory meaning
in the identical way in different parts of the
Clean Air Act adopted years apart and
reflecting, to an extent anyway, different
philosophies of pollution control. Cinergy’s
other arguments are makeweights, and we
will not extend this opinion to discuss them."
Environmental Defense issued a release hailing the decision and said, "The ruling in the government’s 'new source review' enforcement case against Cinergy firmly and explicitly rejects the flawed Fourth Circuit opinion now pending appeal in the U.S. Supreme Court’s review of the case, Environmental Defense, et al. v. Duke Energy Corporation (No. 05-848). The case is being briefed this summer and the High Court just established November 1st as the oral argument date in the Duke case. A corporate merger of Duke and Cinergy was approved in April. This pivotal decision by one of the most influential federal court of appeals in the nation sends a powerful signal that it is time to address the serious human health and environmental impacts of coal-fired power plants. The court's strong, clear decision also puts its considerable weight behind a protective interpretation of the Clean Air Act's clean up requirements for coal plants at the same time that the Supreme Court is considering a major case presenting these very questions.” Access the complete opinion (click here). Access a release from Environmental Defense (click here). [*Air] Supreme Court Will Hear Duke Energy NSR Case - May 15, 2006: The U.S. Supreme Court granted the environmental organization, Environmental Defense, its request to review the merits of the Fourth Circuit’s June 2005 decision (Case No. 04-1763) [See WIMS 6/16/06] which the groups says weakens the Clean Air Act’s “new source review” (NSR) rules. The Court’s review of the case, Environmental Defense, et al. v. Duke Energy Corporation (Supreme Court No. 05-848), represents only the third environmental law case in 35 years to be taken up by the high Court where environmental groups alone sought review. The “new source review” program requires industrial facilities to modernize air pollution controls when they expand operations and increase pollution. It has been the subject of repeated, controversial rollbacks by the Bush administration. Most recently, on March 17, 2006, the Federal court of appeals in Washington, D.C. overturned U.S. EPA exemptions to the new source review program that the court ascribed to EPA’s flawed “Humpty Dumpty” world-view.
Environmental Defense
asked the High Court to review the
case after the Federal government
sharply reversed course by declining
to further pursue its Clean Air Act
enforcement matter against Duke
Energy, opposed the group's request
for review by the High Court, and
embarked on a national rulemaking
initiative to codify the flawed Fourth
Circuit exemptions. Environmental
Defense and two co-petitioners
presented two issues to the high
Court: (1) Whether the Fourth Circuit
impermissibly allowed Duke Energy to
collaterally attack the legality of
national rules that may be reviewed
solely in the U.S. Court of Appeal in
Washington, D.C.; and (2)
Whether the Clean Air Act requires EPA
to interpret the term “modification”
in the new source review program to
encompass changes that result in an
actual overall increases in air
pollution.
Access a release from Environmental Defense (click here). Access the complete Fourth Circuit opinion (click here). [*Air]
Reactions To New Source Review
Court Ruling - Jun 24, 2006:
New York Attorney General Eliot Spitzer,
one of 14 states and the District of
Columbia that sued U.S. EPA over its New
Source Review program, hailed the
Appeals Court decision Federal court
decision in a key clean air case. In a
release Spitzer indicated the Court
rejected much of EPA's "attempt to
weaken federal air pollution rules. The
court also rejected all industry
arguments that air pollution control
requirements should be weakened even
beyond the lax standards the EPA had
adopted." Spitzer indicated, "This is a
victory for clean air and for
accountability. Today’s court decision
fully upholds the basis of all of our
enforcement cases against coal-fired
power plants -- that plant modifications
that increase air pollution must be
accompanied by the installation of
pollution controls on smokestacks."
Environmental
organizations including Natural
Resources Defense Council (NRDC),
American Lung Association, Environmental
Defense, Sierra Club and nine other
groups, represented by Earthjustice, the
Clean Air Task Force and NRDC issued a
release saying, the Appeals Court
"struck down key provisions of a 2002
Environmental Protection Agency
regulation that weakened air pollution
control requirements for thousands of
coal-fired power plants, oil refineries
and factories. The U.S. Court of Appeals
for the D.C. Circuit also rejected a
central argument that industry
defendants have used in ongoing Clean
Air Act enforcement suits. The
invalidated agency rules -- and rejected
industry position -- would have allowed
facility owners to avoid installing air
pollution control equipment when
undertaking plant construction that
increases soot-, smog-, and acid
rain-forming emissions... The court
rejected industry's claim that only
increases in facilities' capacity to
pollute -- the most they could pollute
-- as opposed to increases in actual
pollution, trigger cleanup requirements
under the Clean Air Act...
Unfortunately, the court also upheld
certain parts of the 2002 rule,
including a provision that allows
facilities to increase pollution and
avoid installing control equipment as
long as emissions do not exceed the
highest levels from the preceding
decade."
In a
communications with WIMS, Frank Maisano,
spokesperson for the Electric
Reliability Coordinating Council (ERCC) said,
"The DC Circuit decision is a remarkable
victory for industry. The Court upheld
most aspects of the 2002 NSR rule.
Moreover, having been informed of the
Duke Energy decision [See WIMS 6/16/05],
the DC Circuit specifically declined to
address that decision, leaving it in
place as the controlling precedent as to
the meaning of the modification rule in
the enforcement initiative. Finally, It
extols the virtues of the market-based
approach versus the past command and
control approaches that focus on heavy
regulatory hands. FYI, the key sentence
is on page 26 --'We express no opinion
as to whether Congress intended to
require that EPA use identical
regulatory definitions of modification
across the NSPS and NSR programs,'
citing Duke Energy." In its official
statement ERCC said, "Today, the DC
Circuit has made clear that the vast
majority of reforms contained in the
first phase of the Administration's NSR
reform efforts are fully consistent with
law and precedent. The court also asked
that certain minor parts of the rule
receive additional attention from EPA
before implementation."
The National Petrochemical & Refiners
Association (NPRA) issued a release
saying, "Overall, we are pleased with
today’s DC Court of Appeals decision.
The court affirmed the use of the past
actual-to-projected actual emissions
test, the use of a 10-year look back for
selecting a two-year baseline, and the
use of plantwide applicability limits.
These NSR reform rules allow refineries
to proceed with pollution-preventing
activities, and installation of new
technology that helps reduce emissions.
These reforms also consider industry
plant operations as a whole, an
important step to more efficient
environmental regulation. The result
should be a more effective Clean Air
program."
The Clear the
Air (CTA) National Campaign Against
Dirty Air, a joint project of the Clean
Air Task Force, The National
Environmental Trust and the U.S. PIRG
Education Fund issued a statement and
citations from the case saying, "The
court rejected key parts of the energy
industry's plan to gut America's air
quality protections. The Bush
administration was found guilty of
illegally watering down key protections
that require old, dirty power plants and
other industry polluters to meet modern
pollution control standards. The power
companies wanted to subject our health
to an absurd set of hypotheticals, but
the court said today that pollution is
pollution. EPA had ignored the law and
was willing to let their industry
friends underestimate their actual
pollution so they could avoid the common
sense requirement to install pollution
controls."
Access the New York State release (click
here). Access an Earthjustice
release (click
here). Access the ERCC website
where a release should be posted soon (click
here). Access
the NPRA statement (click
here). Access the complete Duke
Energy opinion (click
here).
Access the CTA release (click
here). [*Air]
NAM Says Duke Energy Decision Is Victory For Business - Jun 16, 2006: The National Association of Manufacturers (NAM) applauded the U.S. Court of Appeals, Fourth Circuit "for vindicating utility Duke Energy" after it was sued by U.S. EPA for making unauthorized upgrades on eight plants that provide electricity in North Carolina and South Carolina [See WIMS 6/16/05]. The decision centered on enforcement of New Source Review, a controversial EPA program that NAM says has often caused power plants to shut down rather than be modernized. NAM said, “This is a significant victory for any business that generates emissions regulated by the Clean Air Act. It’s a reaffirmation that the government may not harass power providers under the banner of NSR. Environmental laws must be enforced fairly and consistently.” The NAM and other business organizations filed a brief last year in support of Duke Power, arguing that New Source Review permit requirements are only required when facilities are physically changed or modified to create increased emissions per hour. Access the statement (click here). [*Air] U.S. v. Duke Energy Corp - Jun 15, 2006: In the U.S. Court of Appeals, Fourth Circuit, Case No. 04-1763. An important case that affects the U.S. EPA clean air enforcement strategy regarding modification and expansion of older coal-fired power plants. The case involved many northeastern states and environmental groups supporting the EPA position that upgrades constitute modifications and therefore the requirement for new, modern air pollution controls.
The United
States brought this enforcement action
against Duke Energy Corporation, which
provides North Carolina and South
Carolina with electricity generated from
eight plants located throughout the two
states. The United States maintained
that Duke Energy on numerous occasions
modified these plants without first
obtaining appropriate permits in
violation of the Clean Air Act. 42 U.S.C.
§§ 7401 et seq.
(2000). The
district court granted summary judgment
to Duke Energy. See United
States v. Duke Energy Corp.,
278 F. Supp. 2d 619 (M.D.N.C. 2003). The
Appeals Court affirmed the district
court judgment; however it said for
"somewhat different
reasons than those
relied on by the district court."
In further explanation the Appeals Court
said, "This case involves two different,
but complementary provisions of the Act:
the New Source Performance Standards ("NSPS")
provisions, 42 U.S.C. § 7411, and the
Prevention of Significant Deterioration
("PSD") provisions, 42 U.S.C. §§
7470-92...
NSPS centers on technological controls
at an individual pollution-emitting
apparatus, PSD fixes on the actual
emissions from a site." [PSD
exists primarily to prevent significant
deterioration of ambient air quality in
areas meeting clean air standards,
while NSPS
requires new sources to implement
particular technologies to limit their
own emissions.]
In December 2000, at the direction of
the Administrator of the EPA, the
Attorney General brought this
enforcement action against Duke Energy,
alleging that the life-extension
projects violated,
inter alia,
the Clean Air Act’s PSD provisions.
Because the Duke Energy projects enable
the units to operate for more hours each
day, they will lead to an
increase in actual
yearly emissions.
Duke Energy countered that its projects
do not constitute "modifications"
subject to PSD because they did not
increase the units’ levels of emissions.
The company maintains that, under the
PSD program, a net emissions increase
will result only if there is an increase
in the hourly rate of emissions.
Because none
of its projects increased a unit’s
hourly capacity to emit pollution (but
increased only the number of hours the
unit could operate), the projects did
not increase emissions from pre-project
levels, and so, according to Duke
Energy, it did not have to obtain
permits.
The district court agreed with Duke
Energy. It held that a modification
subject to PSD exists only if there is a
post-project increase in
the hourly rate of
emissions from a unit.
The district court determined that an
emissions increase traceable to
increased hours of operation cannot
trigger the
PSD provisions
because an increase in hours is not a
physical change. The Appeals Court
reasoned under a Chevron analysis
[case law regarding an Agency's
authority to interpret regulation] that,
"Congress
expressly
defined 'modification' in the NSPS
provisions of the Clean Air Act, 42
U.S.C. § 7411(a), and then expressly
directed that the PSD provisions of the
Act employ this same definition."
Therefore, under Chevron, "EPA
cannot interpret
'modification' under the PSD
inconsistently with the way it
interprets that term under the NSPS."
The Appeals Court concludes:
"Congress mandated that the PSD statute
incorporate the NSPS statutory
definition of 'modification.' No one
disputes that prior to enactment of the
PSD statute, the EPA promulgated NSPS
regulations that define the term
"modification" so that only a project
that increases a plant’s hourly
rate of emissions constitutes a
'modification.' The EPA must, therefore,
interpret its PSD regulations defining
"modification" congruently... EPA
retains its authority to amend and
revise this and other regulations... As
long as Congress mandates that
'modification' be defined identically in
the NSPS and PSD statutes, however, EPA
must interpret that term in a consistent
manner in the NSPS and PSD regulations."
Access the
complete opinion (click
here). Access links to the
latest media coverage (click
here). [*Air]
State of New York v. U.S. EPA - Mar 17, 2006: In the U.S. Court of Appeals, D.C. Circuit, Case No. 03-1380, consolidated with Nos. 03-1381, 03-1383, 03-1390, 03-1402, 03-1453, 03-1454, 04-1029, 04-1035, 04-1064, 05-1234, 05-1287. In New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005) (“New York I”), the court addressed the first of two rules promulgated by the Environmental Protection Agency providing ways for stationary sources of air pollution to avoid triggering New Source Review (NSR). The court upheld in part and vacated in part the first rule. Id. at 10-11. This case addresses the second rule, the Equipment Replacement Provision (ERP), which amends the Routine Maintenance, Repair, and Replacement Exclusion (RMRR) from NSR requirements. Under 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 that routine maintenance, repair, and replacement do not constitute changes triggering NSR. The ERP both defined and expanded that exclusion. EPA explained: "[The] rule states categorically that the replacement of components with identical or functionally equivalent components that do not exceed 20% of the replacement value of the process unit and does not change its basic design parameters is not a change and is within the RMRR exclusion." Equipment Replacement Provision of the Routine Maintenance, Repair and Replacement Exclusion, 68 Fed. Reg. 61,248, 61,270 (Oct. 27, 2003) (Final Rule); see also 70 Fed. Reg. 33,838 (June 10, 2005)(Reconsideration). Hence, the ERP would allow sources to avoid NSR when replacing equipment under the twenty-percent cap notwithstanding a resulting increase in emissions. The court stayed the effective date of the ERP on December 24, 2003. The Appeals Court vacated the ERP saying that "it is contrary to the plain language of section 111(a)(4) of the Act." The Appeals Court further explains that it vacated the ERP because it violates section 111(a)(4) in two respects: "First, Congress’s use of the word 'any' in defining a 'modification' means that all types of 'physical changes' are covered. Although the phrase 'physical change' is susceptible to multiple meanings, the word 'any' makes clear that activities within each of the common meanings of the phrase are subject to NSR when the activity results in an emission increase. As Congress limited the broad meaning of 'any physical change,' directing that only changes that increase emissions will trigger NSR, no other limitation (other than to avoid absurd results) can be implied. The definition of 'modification,' therefore, does not include only physical changes that are costly or major. Second, Congress defined 'modification' in terms of emission increases, but the ERP would allow equipment replacements resulting in non-de minimis emission increases to avoid NSR."
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