(EnergyBiz Insider - Mar. 24, 2006)
 

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March 24, 2006

The Clean Air Act is shining in the eyes of the environmental community. A federal appeals court has struck down the Bush administration's efforts to revise the law to allow modifications to older coal fired plants without installing new pollution controls. Green groups call it a victory for public health but the White House and business organizations counter that the decision diminishes environmental progress.

Ken Silverstein EnergyBiz Insider Editor-in-Chief

It's been a heated debate. And it's really about whether older coal fired plants should be shut down or whether they should be modified to allow them to produce more power. When the original 1970 Clean Air Act passed, it was thought that many existing coal plants would close after reaching the end of their useful economic lives, and few suspected they would extend into a new century. As such, those plants were granted "routine maintenance" exemptions from the act.

Several cities and states -- mostly in the West and Northeast -- have complained that the plant operators used the 'routine maintenance' exemption to make 'major modifications.' That led to lawsuits. At issue is what constitutes a modification and what constitutes routine maintenance. The administration tried to clarify the ruling to mean that power plants could avoid installing new pollution controls if they modernized less than 20 percent of their operations.

A three-judge panel from the U.S. Court of Appeals for the District of Columbia ruled that only Congress has the authority to change the law to allow the older power plants to make modifications without installing the most modern pollution control equipment. In writing the unanimous opinion, Judge Judith Rogers said that the U.S. Environmental Protection Agency under the Bush administration had a skewed view:

"EPA's approach would ostensibly require that the definition of 'modification' include a phrase such as 'regardless of size, cost, frequency, effect,' or other distinguishing characteristic," Rogers wrote. "We decline to adopt such a world-view."

In the late 1990s, the Clinton administration filed suit against 51 separate sites, alleging that utilities violated the New Source Review (NSR) provisions of the Clean Air Act by making modifications without installing new pollution equipment. Those suits are unaffected by the appeals court ruling. In 2003 and under Bush, the EPA rewrote the NSR laws in an effort to avoid future litigation and to maximize coal generation capacity. The NSR provision affects 17,000 U.S. industrial plants that include about 600 coal-fired power facilities.

Strong Views

The lawsuit to overturn the Bush administration's NSR policy was filed by California, Connecticut, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont and Wisconsin.

Environmentalists have been vocal in their opposition to the NSR changes and worked diligently to get the courts to block the measure. They point to studies that link pollution from coal-fired plants to as many as 20,000 premature deaths in the United States.

New York Attorney General Elliot Spitzer led the court fight to block NSR changes. Before the 2003 revisions, Congress, in originally establishing the program, recognized that the best time to install new controls was when a power plant was being built or modified, he said. Congress also exempted old plants from installing pollution controls because such plants would soon reach the end of their useful lives.

Bill Becker, executive director of the independent State and Territorial Air Pollution Program Administrators, applauds the ruling. He adds that if a 1,000 megawatt plant had spent $250 million over five years performing 'routine maintenance,' it would have likely produced more power -- and more pollution -- without installing modern controls.

"This is an extraordinarily significant decision -- a decision for good government," adds Frank O'Donnell, executive director of the Clean Air Trust.

President Bush has long been of the view that the nation needs the additional generation capacity and the restoration of the older coal-fired power plants is an effective source. By loosening the NSR restrictions, he said plant operators would be more inclined to revamp their plants -- adding the needed pollution controls -- without fear of being sued. The administration calls the appeals court ruling "disappointing" and says that it is currently in the process of deciding its next move -- whether or not to appeal the decision to the U.S. Supreme Court.

Some experts from Harvard University and the environmental think tank Resources for the Future agree with Bush's policy, saying that a restrictive approach to NSR is "excessively costly and environmentally counterproductive."

Scott Segal, with the Electric Reliability Coordinating Council that represents coal generators, adds that power companies have complied with clean air laws and the result has produced better air quality over the last 30 years. The proposed changes were the next evolution in regulation, he says, noting that the latest decision by the appeals court negates those efforts. "Improving power plant efficiency in ways that old-style, litigation-heavy approaches cannot do is the best way to accelerate this trend."

The decision to upend the Bush administration's revision of clean air policies won't likely end the debate. New attempts to both strengthen and weaken current rules will continue to unfold while the courts weigh in on litigation brought forth during the Clinton years. For now, though, utilities must comply with the laws as written, which proponents of them say have worked to cut pollution levels.

Republished with permission from CyberTech, Inc. EnergyBiz Insider is published three days a week by Energy Central. For more information about Energy Central, or to subscribe to EnergyBiz Insider, other e-newsletters and EnergyBiz magazine, please go to http://www.energycentral.com/.

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