Duke Energy contends that the US Supreme Court need not review an appellate court's ruling that allowed the company to avoid meeting Clean Air Act requirements for upgraded coal-fired units. The utility plans to make that argument to the high court.

The Charlotte, North Carolina, company is preparing to file a brief in the next several weeks in response to the petition for a writ of certiorari submitted to the court by two environmental groups, according to Duke Energy spokesman Peter Sheffield.

"Both the US District Court and the 4th Circuit Court of Appeals heard all the relevant arguments and considered all the appropriate evidence before reaching similar conclusions and ruling in Duke's favor," said Sheffield. "We don't believe the Supreme Court needs to review this case, and apparently the government, which initially brought this action against our company and yet decided not to pursue a petition for a writ of certiorari, agrees."

But environmental groups, dissatisfied with the 4th Circuit's decision in favor of Duke Energy, petitioned the Supreme Court Dec 28 to settle key issues regarding the ruling and how the Environmental Protection Agency carries out the New Source Review requirements of the Clean Air Act.

The North Carolina Sierra Club, Environmental Defense, and North Carolina Public Interest Research Group raised questions of whether the 4th Circuit's ruling violated the Clean Air Act. The law places national Clean Air Act regulations under the jurisdiction of the U.S. Court of Appeals for the District of Columbia Circuit.

"The 4th Circuit's disregard for the bar on collateral attack on EPA regulations will harm the various interests - from EPA to state air administrators, to environmental groups to business competitors - who should be able to rely on adherence by litigants and courts to the exclusive mechanisms provided for in CAA Section 307(b)," the groups said in their petition.

The groups also asked whether the law's definition of "modification," which would trigger NSR requirements, makes unlawful EPA's "longstanding regulatory test" to determine actual annual emission increases.

The 4th Circuit in June told EPA it must apply the same definition of "modification" that set off NSR requirements under its Clean Air Act programs of "prevention of significant deterioration" and "new source performance standards." Further, the 4th Circuit - the highest court to weigh in on EPA's NSR lawsuits against utilities - said Congress mandated that the PSD statute incorporate the NSPS definition, which says that a "modification" takes place when a coal-fired unit undergoes a project that increases its hourly rate of emissions.

But the environmentalists said in doing so, the court "set aside as contrary to statute" the EPA's 25-year-old regulatory test for determining emissions increases.

Utility interests dismissed the groups' concerns as "swimming against the tide of reasonable environmental policy and legal interpretation," said Scott Segal, who heads a lobby of utilities with coal-fired generation known as the Electric Reliability Coordinating Council. He added that EPA itself did not seek an appeal of the case to the Supreme Court.

"While the environmentalist petition comes as no surprise, if it were successful, it would set back emissions control, electric reliability and workplace safety," he said.

EPA has so far declined to comment on the petition to the Supreme Court. In announcing that it would not pursue its own petition last November, the agency said the US Solicitor General decided that the case does not present the "compelling reasons" required under the Supreme Court's rules for filing a petition for a writ of certiorari.

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