Rough Weather for NSR Reforms

• By Angela Neville
• Jun 01, 2003

The U.S. Environmental Protection Agency (EPA) appears to be battening down its hatches to deal with the storm of controversy that has been generated in response to the recently proposed changes the agency wants to make to its New Source Review (NSR) program. While business groups representing industry and power plants solidly support the proposed reforms to this program that regulates air emissions from industrial sources, several groups representing state and local air pollution regulators and environmental groups are blasting EPA and arguing that the proposal would create large loopholes that would allow huge pollution increases.

In 1977, Congress added the NSR program into the Clean Air Act. It requires that a source of pollution, such as an industrial plant, install the best air pollution control equipment when it is built or when it makes major modifications. Critics of the program have long argued that it was unnecessarily complicated and burdensome for both the regulated entities and the state and local agencies that are responsible for implementing it. According to EPA representatives, for quite some time the agency has been exploring options to simplify the program, reduce the length of the review process and remove any barriers the program may pose to innovation and improved energy efficiency.

On December 31, 2002, EPA published a proposal that allows an exemption from NSR for projects that are routine maintenance, such as the replacement of worn parts. The proposed rule states that any project below a certain cost threshold -- possibly as much as 20 percent of the replacement cost of an electric generating unit -- would qualify as routine maintenance and not be subject to NSR regulations. 

The comment period for the proposal ended May 2, 2003, after five public hearings on it were held on March 31 around the country. On May 1, various environmental groups delivered to EPA more than 225,000 comments from people voicing their opposition to the proposal. Other opponents to the proposal included the State and Territorial Air Pollution Program Administrators (STAPPA) and the Association of Local Air Pollution Control Officials (ALAPCO), who submitted comments stating that the proposed changes to the NSR program "would allow capital projects that cause significant increases in actual emissions to be undertaken without any requirements for the application of modern control technology."

Other feedback filed with EPA on May 1 included a letter put together by 311 public interest groups from 47 states that pointed to a recent study by the Clean Air Trust concerning the proposed change. The analysis states that the enactment of the proposed rule would result in seven million more tons of sulfur dioxide emissions and 2.4 million more tons of nitrogen oxides being emitted versus the level of emissions that would occur if all U.S. plants were required to install air pollution controls by 2020.

In contrast to such critics of the proposal, Scott Segal, director of the Electric Reliability Coordinating Council, a group of six electric utilities, stated he strongly supports the proposed NSR changes. He said the current NSR rule discourages utilities from undertaking necessary projects because NSR compliance is time-consuming and costly.

In our cover story "The Winds of Change," (p. 30) author Robert P. Newman of EA Engineering, Science and Technology Inc. focuses on the new changes to the NSR that already went into effect in March 2003. These new NSR regulations pertain to plantwide applicability limits, pollution control and prevention projects, "clean unit" status and emission calculation test methodology. He also covers EPA's recent proposal pertaining to routine maintenance.

At press time, EPA is considering all these disparate viewpoints before it makes a determination whether to pass a new law changing the interpretation under NSR of routine maintenance. If EPA does enact this proposal, it undoubtedly will set off a gale force reaction from certain stakeholders who will respond with a torrent of lawsuits.

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This article originally appeared in the 06/01/2003 issue of Environmental Protection.