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Supreme Court rules against Duke, affirms EPA on NSR |
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The Supreme Court unanimously backed federal regulators' efforts today to force the installation of pollution control equipment on aging coal-fired power plants, ruling against Duke Energy in a Clean Air Act appeal.
The justices vacated a 4th U.S. Circuit Court of Appeals' ruling that found Duke Energy did not violate the air pollution law when it upgraded coal-fired power plants during the 1980s and 1990s.
Writing for the court, Justice David Souter called the 4th Circuit interpretation of the law "too far a stretch" and remanded the ruling to the lower court for reconsideration. Justice Clarence Thomas filed a separate concurring opinion.
At issue in Environmental Defense Fund v. Duke Energy Corp., is whether Duke had violated the prevention of significant deterioration (PSD) clause of the Clean Air Act and as such allowed significant increases in air pollution from coal-fired power plants in North Carolina and South Carolina.
The Supreme Court said the 4th Circuit decision "amounted to the invalidation of the PSD regulations, which must comport with the Clean Air Act's limits on judicial review of EPA regulations for validity."
The decision upholds legal claims by U.S. EPA that Duke failed to obtain proper permits before undertaking the work and that the upgrades resulted in more pollution being emitted to the air.
Lawyers for Duke were still reviewing the ruling this morning. A spokesman said the North Carolina utility would issue a statement later today.
Vickie Patton, Environmental Defense's lead attorney on the case, said she was still reviewing the decision, but said she felt "very good" about the apparent outcome. Environmental Defense had asked the Supreme Court to review the 4th Circuit's opinion after the Bush administration bypassed its chance to appeal.
Frank O'Donnell, head of the Washington-based nonprofit Clean Air Watch, characterized the ruling in an e-mail as "a victory for good government, and a big defeat for the electric power industry."
Industry group disappointed
Duke was one of a number of coal-fired utilities sued by the Clinton administration during the late 1990s on grounds they had significantly modified aging coal plants to increase their efficiency and production rates but skipped out on federal requirements, known as "New Source Review," to reduce air pollution.
While some utilities opted to settle with EPA, Duke and several other companies vigorously denied any wrongdoing and claimed that EPA had used a skewed test to determine compliance with the law. Duke argued and won lower court decisions affirming its position that NSR should only be triggered if a plant's hourly emissions rate increased.
EPA, by contrast, argued that its use of an annual emissions test was the proper vehicle to determine compliance. Duke did not dispute that annual emissions of nitrogen oxides, sulfur dioxide and other pollutants had gone up after the modifications were made. Rather, lawyers argued this occurred only because they were allowed to run their coal-fired units longer without interruption.
In today's ruling, the Supreme Court endorsed neither argument, but held the ambiguity in the language allows EPA to interpret PSD as it sees fit. "The PSD regulations clearly do not define a 'major modification' in terms of an increase in the 'hourly emissions rate,'" the court wrote.
"On its face," the ruling continued, "the definitional section specifies no [emissions] rate at all, hourly or annually, merely requiring a 'physical change in or change in the method of operation of a major stationary source that would result in significant net emissions increase of any' regulated pollutant."
Scott Segal, a senior lobbyist for the electric power sector and director of the Electric Reliability Coordinating Council, expressed disappointment with the ruling, saying "the court missed an opportunity to once and for all clarify the New Source Review program."
But Segal expressed optimism that Duke would emerge victorious as facts are revisited by the 4th U.S. Circuit Court of Appeals in Richmond. In particular, he said the high court ruling does not address outstanding questions about whether the work done at Duke's plants was "routine maintenance" or whether EPA provided adequate notice to utilities of a change in its interpretation of NSR that resulted in the enforcement campaign.
"There's still a lot more work to be done to determine if NSR was correctly applied," Segal said.
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