US EPA asks Supreme Court to review lower court order on NSR rule

Washington (Platts)--27Nov2006

The Bush administration on Monday asked the US Supreme Court to review a
lower court ruling that struck down a New Source Review rule that was strongly
supported by the power sector.

NSR, which is part of the Clean Air Act, requires electricity generators
to install new pollution-control equipment whenever they undertaking "major"
modifications.

The Environmental Protection Agency's October 2003 rule would have
exempted power plants from NSR requirements if the cost of their modifications
did not exceed 20% of the "replacement value" of brand-new units. EPA argued
that such modifications were "routine maintenance" activities that should not
trigger NSR.

But a host of states and environmental groups, led by New York, sued EPA,
arguing that the rule would allow power plants to radically increase their
emissions. EPA was barred from implementing the rule when the US Court of
Appeals for the District of Columbia Circuit issued a stay in December 2003.

The court ruled then that the states and environmental groups would
likely prevail on the merits of their lawsuit, and that EPA's rule could cause
"irreparable harm" if it went into effect. In March, a three-judge panel of
the same court overturned the rule.

A Department of Justice spokeswoman said the White House believes
reinstating the rule would "protect the environment while providing additional
regulatory certainty for our nation's industries."

"The Bush administration proposed [the rule] to encourage needed upgrades
and maintenance projects that would improve the safety, reliability and
efficiency of plants across the country," the spokeswoman said in an
interview.

In the 26-page filing submitted to the high court, DOJ said the rule is
needed to "ease compliance by regulated entities, lighten administrative
burdens on state and federal enforcement agencies, and, ultimately, encourage
investment in newer, more efficient, and cleaner [electricity-generating]
facilities."

--Brian Hansen, brian_hansen@platts.com

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