Clean Air Issues: New Source Review (1-25-05)
November 22, 2002, the Environmental Protection Agency (EPA)
announced changes to the New Source Review (NSR) program. The new NSR regulations
increase the ease with which older generating plants can upgrade and expand. Some
believe that the current NSR procedures have acted to discourage companies from
doing even routine maintenance because of the regulation processes. Environmentalists
have voiced disapproval of the changes to the new NSR, pointing out that it will
hinder air quality and may undercut enforcement actions currently waiting in the
court system that the EPA has taken against power companies. They are also uneasy
about increasing industry autonomy, allowing industry to make structural changes
without checking the environmental impact.
Legislation is expected to be introduced and considered
by the 109th Congress in the near future. Please check back soon for
The Clean Air Act's (CAA) New Source Review (NSR) requirements
have been a major source of contention in recent years, leading to a revision
of the rules and numerous lawsuits between industry, the Environmental Protection
Agency (EPA), and several states. NSR requires
industry to install modern pollution control equipment when a power plant is built
or when it makes a major modifications to existing sources.
stems from the definition of "modification" in the NSR language. Industry
generally claims most of its changes are "routine maintenance" rather
than a modification, and therefore not applicable to the NSR process. In the 1990's,
the EPA began reviewing industry records to determine if their changes were indeed
routine. Consequently, the EPA and the Department of Justice have filed suits
against 14 electric companies since 1999, claiming major modifications were made
in absence of NSR and without installing the best available pollution controls.
Of these suits, 13 were filed during the Clinton administration.
of President Bush's energy plan in May 2001 prompted a review of NSR rules by
the EPA. The review was completed in June 2002 and followed by the EPA enacting
four new rules
and proposing one new rule on November 22, 2002. The proposed rule has gained
the most attention by redefining routine maintenance as any upgrade costing less
than 20% of the total cost of the entire unit. The EPA hails the changes, saying
they streamline the regulatory process by removing barriers standing in the way
of energy efficiency and pollution control projects. Environmentalists, along
with key Democrats and a number of states, see the changes as providing a loophole
allowing older facilities to make use of this "routine maintenance"
for years and years, extending the life of facilities that should be shut down
and replaced with newer, safer, technologically superior plants.
New York Attorney General Eliot Spitzer led nine Northeastern states - New York,
Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode
Island, and Vermont in a challenge to the revised NSR rules in the U.S. Court
of Appeals for the District of Columbia. On March 6, 2003, the judge denied the
petition to delay the NSR rules' immediate implementation in several states and
local air districts. Spitzer vowed to appeal.
In an initial victory for environmentalists and Spitzer, the EPA
announced on June 30, 2004 that it would reconsider some of the reforms
made to NSR. Although the EPA said it was not planning to change the
reforms, they opened a 60-day public comment period before issuing
a final decision after 180 days.
For additional information see
AGI's Update on Clean Air Issues from
the 108th Congress and the Congressional Research Service report
provided by the National Library for the Environment.
Sources: Environmental Protection Agency, E&E News, Greenwire, Thomas
website, The Washington Post, The New York Times, the Los Angeles Times, USA Today
and hearing testimony.
Contributed by Emily M. Lehr, AGI Government Affairs
Staff, David Millar 2004 AGI/AAPG Fall Intern.
Background section includes material from AGI's Update
on the Clean Air Act for the 108th Congress.
Please send any comments or requests
for information to AGI Government Affairs
Last updated on January 25, 2005.