Old proposal comes back in new form of hourly emissions rule

Washington (Platts)--26Apr2007

The Environmental Protection Agency Wednesday proposed an industry-backed
emissions rule for electric utilities that a host of states and environmental
groups say conflicts with a Supreme Court decision handed down earlier this
month.

The proposed rule and the Supreme Court decision both pertain to the federal
New Source Review program, a part of the Clean Air Act that requires
electricity generators to install new pollution controls when they undertake
plant modifications that result in an increase in emissions.

The proposal hits coal-fired plants especially hard because many are older
facilities and when they are upgraded or modified, the NSR rule comes into
play. Utilities could be forced to upgrade their pollution control systems
during any modification. Under the proposed rule, EPA would measure emissions
at an hourly rate, which could allow longer operating times, instead of the
annual emissions basis that environmental groups and some states favor.

The Bush administration's new proposal, based on one EPA first unveiled in
October 2005, would allow utilities to sidestep NSR if their post-modification
emissions did not increase on an hourly basis, a less rigorous standard than
the annual NSR emissions test Congress established in 1977.

EPA based its proposed hourly emissions test rule, in large part, on a 2005
decision by the 4th US Circuit Court of Appeals in a case involving Duke
Energy. The Supreme Court struck down that ruling on April 2, agreeing with
environmental groups that the appeals court should have used an annual
emissions test to judge the legality of Duke's power-plant modifications (PCT
4/3).

But EPA on Tuesday proposed a newly modified version of its Duke-based hourly
emissions test NSR rule. The agency said in a statement that the latest
version utilizes slightly different emissions-testing procedures than did the
October 2005 model.

EPA said the proposed NSR rule would have "very little effect on air quality"
because of the effectiveness of other federal emissions regulations that the
agency has promulgated for the power sector.