EPA's Proposal Would Provide Power Plants More Flexibility Under NSR

On April 25, EPA announced a proposal to provide coal-burning power plants more flexibility to expand and modernize without triggering emission-reduction requirements under the New Source Review (NSR) program.

The proposal comes weeks after the U.S. Supreme Court rejected a narrow test of similar rules (Environmental Defense vs. Duke Energy Corp., No. 05-848). Environmental groups contend that the agency's proposal adopts the very same utility industry position that the Supreme Court justices rejected.

"This move by EPA represents defiance of the Supreme Court decision and a rush to reward dirty coal-fired power plant lawbreakers," said John Walke, clean air program director of the Natural Resources Defense Council (NRDC). "EPA's action will result in more air pollution while trampling on the law and damaging public health."

NSR is a preconstruction permitting program that maintains air quality while providing for economic growth. These goals are achieved through installation of state-of-the-art control technology at new plants and at existing plants that undergo a major modification.

The proposal involves the emissions test used to determine if NSR permitting program would apply when an existing power plant makes a physical or operational change. For existing major stationary sources, there is a two-step test to determine whether the modification is subject to preconstruction permit review. The first step is whether there is a physical change or change in the method of operation. The second step is whether there is an emissions increase. The current NSR program measures an emissions increase by comparing actual annual emissions to projected annual emissions.

On Oct. 20, 2005, EPA proposed to replace the annual emissions increase test with an hourly emissions test. EPA stated that its proposed revisions were in response to a decision of the U.S. Court of Appeals for the Fourth Circuit in United States vs. Duke Energy Corp.. The appeals court held that EPA must read the 1980 Prevention of Significant Deterioration (PSD) regulations to contain an hourly test, consistent with the New Source Performance Standards (NSPS) regulations.

On April 2, 2007, the U.S. Supreme Court vacated that decision, finding that such a reading of the 1980 PSD regulations, intended to align them with NSPS, was "inconsistent with their terms and effectively invalidated them." EPA defended its new proposal by stating that the nation's high court indicated that the agency may be able to revise the regulations to contain such a test when the agency has a rational reason for doing so.

EPA's latest proposal includes a new option under which the current annual emissions increase test that is presently used is retained and applied in those situations where an EGU's hourly emissions would increase.

For more information on NSR and the EPA's latest proposal, visit http://www.epa.gov/nsr. For more information on the Duke decision, see "Nation's High Court Rules on Global Warming, New Source Review Cases," an article in the April 2007 archives of http://www.eponline.com.

This article originally appeared in the 04/01/2007 issue of Environmental Protection.

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