Leslie Sue Ritts, Ritts Law Group, PLLC
Washington, DC
October 11, 2011
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Why We Hate NSR
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EPA NSR Investigations and Enforcement
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Sierra Club National Beyond Coal Campaign
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NSR Regulatory or Legislative Relief
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Add Additional Topics?
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As Justice Souter observed for the U.S. Supreme Court, “While it
would be bold to try to synthesize (NSR ) in a concise paragraph,
three points are relatively clear about the (NSR) regime –
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(a) The Act defines modification of a stationary source of a
pollutant as a physical change to it, or a change in the method of
its operation, that increases the amount of a pollutant
discharged or emits a new one.
(b) EPA’s NSPS regulations require a source to use the best
available pollution-limiting technology only when a modification
would increase the rate of discharge of pollutants measured in
kilograms per hour.
(c) EPA’s 1980 PSD regulations require a permit for a
modification (with the same statutory definition) only when it is a
major one and only when it would increase the actual annual
emission of a pollutant above the actual average for the two
prior years.”
EDF v. Duke Energy (2007)
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(10) NSR affects new sources and projects at existing plants.
(9) NSR requires a “pre-construction” permit and it can take 5 years to get
one.
(8) There are myriad opportunities for EPA, the public, or national NGOs to
oppose a project once a a state issues a proposed draft permit.
There’s a NYPIRG book about how to do it that EPA paid for.
(7) To get a permit, operators have to install BACT or LAER on new
equipment which often “kills” proposed projects still on the drawing
table.
(6) EPA and the States can’t figure out who is in charge of permitting and
BACT determinations.
(5) It is almost impossible to permit a coal-burning plant any more.
(4) Title V permits offer interested parties the opportunity to collaterally
attack whether a plant should have gotten an NSR permit 10 years
ago.
(3) The U.S. Treasury receives many millions in civil penalties from NSR
enforcement settlements.
(2) Sometimes you have to settle enforcement actions even though no NSR
violations occurred just to move forward.
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Mayor Blumberg just gave the Sierra Club
another $50 million to sue utilities for
historic NSR violations as part of Sierra
Club’s “Beyond Coal” Campaign.
http://beyondcoal.org/
http://www.sierraclub.org/sierra/200903/king
coal.aspx
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The Federal Code
Thirty years of NSR Determinations
Additional Random EPA Guidance Not All of
Which is Published in Any One Place
The Separation Between the Offices of Air and
Enforcement and Compliance at EPA
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Since 1979 Congress has conducted oversight of
the NSR program periodically but has refused to
amend the program:
◦ When it overhauled the Clean Air Act in 1990, Chairman
Dingell refused to touch PSD or NSR; but Congress did
add citizen suit provisions to allow members of the
public to pursue plants for alleged NSR violations
◦ Several opportunities over the last decade to weigh in on
EPA’s enforcement of the program, particularly with
regard to agency “flip flops” on importance guidance like
what the exclusion for routine maintenance is ---◦ Several efforts to grant companies “amnesty” for past
violation and put them on a “glide path” for new
controls.
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U.S. EPA has been filing Clean Air Act enforcement actions since 1999 against electric
utilities and other industries.
◦ Original enforcement policies were driven by a desire for NOx reduction without
rulemaking.
◦ While hugely significant in terms of manpower, NSR enforcement has led to more
emission reductions than regulations at many facilities. 177,000 tons per year in
combined NOx and SO2 reductions from cases in which the companies have settled,
plus an additional 591,000 tons per year in combined NOx and SO2 reductions from
companies that have reached and publicly announced an agreement in principle with
the government. $ 52.4 million spent for environmental mitigation projects for cases
settled or that have publicly announced agreements in principle.
http://www.epa.gov/compliance/civil/caa/caaenfenvresults.html#stationary
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Having sued most of the investor-owned utilities and several large public systems and
co-ops, EPA began investigating municipally-operated utilities and electric “co-ops” in
2009.
◦ The Region 5 NSR Enforcement Initiative Involves 58 municipally owned utilities.
◦ EPA Headquarters has essentially wrested “decision-making” from Region al Counsel
Sierra Club also has a national coal campaign that is designed to use the threat of NSR
enforcement as a means of getting utilities to reduce burning coal.
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Sierra Club, Wild Earth Guardians, State Public
Interest Research Groups, Bucket Brigade, GASP,
Tulane University.
Active in Nearly Every State
◦ Frequently Involve University Activists such as University
of Wisconsin Plants, Iowa State University at Ames,
University of Minnesota, Purdue
◦ Pursued as (1) State Open Records Investigations and/or
(2) Opposition to Title V Permit Revisions and Renewals
and/or in PSC/ PUC proceedings.
◦ Sierra Club “ Victories” Updated Periodically
http://www.sierraclub.org/environmentallaw/coal/victories.aspx
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SC Claims to Have Stopped 150 new coal projects since 2008.
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Federal Courts Uphold WEPCO and 2002 NSR
Reforms, But
◦ Held that NSR exclusions for Pollution Control
Projects and Clean units are illegal because they
could result in “increases” in regulated air
pollutants New York v. EPA I (D.C. Cir.)
◦ Hold RMRR Exclusion based on 20% Cost Test is
patently illegal. New York v. EPA II D.C. Cir.)
◦ Ten different Circuits in the United States, Ten
different takes on NSR applicability, Statutes of
Limitation Applicable to NSR Enforcement, NSR
Emission Increase Test, Etc.
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Detroit Edison – No violation until NSR significance levels violated under “Projected
Actual Emission (PAE) emission increase methodology: United States v. DTE Energy Co.,
E.D. Mich., No. 10-13101, 8/23/11).
Cinergy –7th Circuit reverses W.D. Ind. on SJ in Oct. 2010 holding that (1) EPA experts
improperly calculated emissions increases assuming plants were base-load plants and
(2) EPA-approved Indiana SIP emission increase test (an increase in hourly emissions
rate) trumps federal rules. Calling EPA’s approval of the SIP a “blunder,” the Court said
that EPA must live with it.
http://www.lawandenvironment.com/uploads/file/Cinergy%20October%202010.pdf
Alabama Power – J. Hopkins dismisses decade long suit against Alabama Power holding
on S.J. no admissible evidence of violation tossing expert witness testimony . Civil Action
No. 2:01-CV-152-VEH (S.D. Al. March 14, 2011). Case is on appeal in 5th Circuit.
United States v. Midwest Generation LLC, N.D. Ill. Civil Action No. 09-cv-5277, (N.D. Ill.
3/16/11) holding on SJ that Midwest Gen did not violate PSD.
Sierra Club v. Otter Tail (S.Dak. 2010) Statute of Limitations Bars Sierra Club Action for
Civil Penalties And Injunctive Relief; but see Sierra Club v . Dairyland Cooperative (W.
D.Wis. 2010) holding that federal statute of limitations does not bar complaint for civil
penalties or injunctive relief.
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TVA 2011: In decade-long case, FCA between
EPA and TVA secures injunctive relief that is
estimated to cost from $3 to $5 billion;
provides $350 million in environmental
projects, and a $10 million civil penalty to
EPA and States.
Emission Reductions from 2008 Baseline:
◦ For NOx, a reduction of at least 115,977 tons per
year (69 percent reduction)
◦ For SO2, a reduction of at least 225,757 tons per
year (67 percent reduction)
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Northern Indiana Public Service Co. (NIPSCO) has signed a
settlement agreement in which it has agreed to invest
approximately $600 million in pollution controls, 9.5 million on
environmental mitigation projects and pay a civil penalty of $3.5
million.
Hoosier Energy Rural Electric Cooperative, Inc. agreed to pay a
civil penalty of $950,000 and install and upgrade pollution
control technology at its two Indiana coal-fired power plants at a
cost of $300-500 million with $5 million in SEPS.
◦ Install and operate a reagent injection system to control sulfuric acid mist
emissions, and achieve an emission rate of 0.007 lb/mmBTU
◦ Upgrade the existing SCRs at Merom to achieve and maintain an emission
rate of 0.080 lb/mmBTU
◦ Install and continuously operate SNCR at the two Ratts units
◦ Upgrade the existing FGDs at Merom to a design removal efficiency of 98
percent
◦ Surrender any “excess” allowances
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Section 114 Letters Initiating Investigation of
58 Municipalities
Two-Three Notices of Violations
No Judicial Complaints
Settlement with One Wisconsin Utility Facing
Bankruptcy?
Several Investigations Involve Municipalities
That Are Being Investigated or Have Settled
With Sierra Club
EPA Changing Tone of Negotiations?
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EPA Will Not Fix NSR under the Obama
Administration
Congress Will Not Fix NSR in the First Session of
the 112th Congress
Confusion in Courts Will Continue Until Supreme
Court Steps In (perhaps first on 8th Circuit and 6th
Circuit disagreement on State of Limitations
issue).
Municipal utilities that burn coal, and the
communities that they serve, are at peril from
NSR and related Clean Air Act regulations
intended to eliminate the use of coal.
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