Legal Action Against Duke Energy
Background
In the 1990s the Environmental Protection Agency found that many plants "grandfathered" from Clean Air Act requirements, including eight Duke Energy facilities, were violating the Clean Air Act by making major investments to extend the lives and restore old power plants without installing the required pollution control equipment and thereby enabling the emissions of hundreds of tons of pollution.
In December, 2000, EPA filed suit against Duke Energy for 29 illegal modifications made between 1988 and 2000 at eight of its coal fired plants, including the Belews Creek, Buck, Cliffside, Dan River, CG Allen, Marshall and Riverbend plants in North Carolina and the W.S. Lee plant in South Carolina. SELC, on behalf of Environmental Defense, Sierra Club and the NC Public Interest Research Group joined EPA in its lawsuit to force Duke to follow the law and to close the loophole of grandfathered power plants. EPA has filed similar cases against utilities in the South and Midwest. So far, Duke Energy is the only such enforcement case to be heard by a federal court.
Under the New Source Review program, if a power plant is modified and pollution increases as a result of that modification, the plant must install the best available pollution control equipment. However, facilities are allowed to perform routine maintenance without risking their grandfathered status. Two key issues in the Duke Energy case involve 1). what defines "routine maintenance" and is therefore exempt from New Source Review requirements and 2). how to measure pollution increases to determine if modifications result in an increase in pollution, triggering New Source Review and requiring stricter pollution controls.
Routine Maintenance
Since the mid-1980s, many utilities developed and implemented self-proclaimed "life extension projects," designed to restore the capacity of an extend the lives of their grandfathered plants. At the same time, they have attempted to retain the grandfathered status of these plants by claiming these investments - sometimes costing millions of dollars - amount to mere routine maintenance rather than the plant modifications that would trigger New Source Review and require strict pollution controls. Their argument is that routine maintenance is defined by any modification that is "routine" by the standards of other facilities in the same industry, regardless of how infrequently the modification normally occurs. By this standard, replacing an engine of a car would be considered "routine maintenance" because, other cars - or at least one car- have had their engine replaced.
EPA and SELC argue that projects should only be considered "routine maintenance" when they are routinely done throughout the life of an individual unit. Repairs and replacements that are designed to extend the life of the plant or restore a dangerously degraded plant to design capacity, are major modifications and should be required to install modern pollution controls. The US Court of Appeals for the Fourth Circuit did not rule on this provision of the case, leaving the "routine maintenance" provision undefined.
Measurement of Emissions
Under New Source Review, a utility must install modern pollution controls whenever modifications are made that result in an increase in emissions. Since most equipment replacements and upgrades are designed to improve a plant's efficiency, allowing it to operate longer hours, these modifications can result in an increase in total annual pollution. EPA and SELC contend that actual annual pollution increases are the trigger for determining whether the facility is required to install modern pollution controls.
Industry argues for emissions to be measured on an hourly basis. Such a measurement allows plants to make modifications that result in a substantial increase in annual pollution while avoiding installing pollution controls, as long as the hourly rate of emissions doesn't increase.
Unfortunately, human health is not measured by the hour and the effects of power plant pollution do not disappear after sixty minutes. The true test of a projects impact on air quality is its actual annual emissions, expressed in tons per year. Unfortunately, on June 15, 2005, the Fourth Circuit Court of Appeals rejected that test, failing to protect the health of millions of Southerners in the meantime. Nine days later, the D.C. Circuit Court of Appeals, which has primary jurisdiction to resolve Clean Air Act rule challenges, upheld an actual annual test for NSR. SELC and EPA have therefore requested that the Fourth Circuit rehear the case.
