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New Source Review

EPA Drops NRS Hourly Rule Change Proposal

Dec 2008 - - The Environmental Protection Agency (EPA) abruptly dropped the rulemaking for New Source Review (NSR), claiming they wanted to abide by an administration order against "midnight regulations." They also concluded that the incoming Obama administration would just reverse the rule. The rule would have changed monitoring from an 8 hour period to a one hour period. Opponents felt that the change would allow for more pollutants and proponents felt that an hourly standard was a better measure of a plant's real output. The 8 hour period is a more stringent standard.

Regardless, NSR is ineffective because it leads to litigation and political manipulation instead of appropriate retrofits for power plants. Now the litigation process will continue unless President Elect Barack Obama proposes an equilavent of the Clear Skies Initiative, which he voted against when it came before the Senate Environment and Public Works Committee in 2005. The bill died in committee.

 

Court Rejects EPA NSR Position in Alabama Case

July 2008 - - Ours worst fears have come true in regards to New Source Review (NSR) gridlock and the failure of Congress to pass the Clear Skies Initiatives (CSI) in 2004. Instead of the contentious NSR, which has only produced litigation instead of pollution mitigation, we would have the equivalent of the Clean Air Interstate Rule (CAIR) and Clean Air Mercury Rule (CAMR)--both 'get-around-Congressional regulations--have been overruled by the courts.In the decade-long, ongoing battle over the New Source Review program, industry won another significant victory over EPA. The North District of Alabama handed power companies and their customers another significant victory in the NSR enforcement dispute. The court rejected EPA approach to whether a repair or replacement project is "routine" (and thus not subject to NSR) must be determined by reference to similar projects "at the unit."

The court held that "routine" must be judged "with reference to the industry as a whole, not just the particular.unit at issue." This holding reaffirms an earlier ruling of this court, as well as decisions by district courts in North Carolina and Kentucky. Each of these courts has rejected the government's position on "routine" and confirmed industry's position that routine must be evaluated with reference to the projects conducted by the industry as a whole. The Alabama court also took note of "EPA's different statements about what kind or type of work at plants in the industry.was [routine] and what was not."The court went on to say in the ruling that "using a plant specific test for activities that occurred as far back as 1985, when it was patently obvious what [Alabama Power] was doing, and the EPA said and did nothing.strikes the court as a 'gotcha' test."

The court also emphasized that, in order to prevail in this dispute, "EPA will have to prove that there was a physical change that resulted in a net emissions increase." In the recent Cinergy case involving similar facts, a jury found that the government had failed to meet this burden of proving an emissions increase from virtually all the projects at issue, including so-called "life extension" projects. The combination of Cinergy's rejection of the government's position on emissions increase, and the rejection of the government's "routine" standard by the Alabama court and other courts, raises serious questions about the viability of EPA's enforcement cases.

Ohio Edison Settles

March 18, 2005 -- The Department of Justice and the Environmental Protection Agency today settled a case alleging that Ohio Edison Company, a subsidiary of FirstEnergy Corp., violated the New Source Review (NSR) provisions of the Clean Air Act at the W.H. Sammis Station, a coal-fired power plant in Stratton, Ohio.  The states of New York, New Jersey and Connecticut, who are co-plaintiffs in the government's lawsuit, also join the settlement. The consent decree agreed to by Ohio Edison will reduce emissions of harmful sulfur dioxide (SO2) and nitrogen oxides(NOx) from the Sammis plant, as well as from other Ohio Edison and FirstEnergy coal-fired power plants, by over 212,000 tons per year.  The pollution controls and other measures required by the consent decree are expected to cost approximately $1.1 billion.

The settlement resolves a lawsuit filed in 1999 as part of a federal government initiative, joined by the states of New York, New Jersey and Connecticut, to bring operators of coal-fired power plants into compliance with the NSR provisions of the Clean Air Act.  The Sammis Station is one of the largest sources of air pollution in the nation, emitting a total of tons of SO2 and NOx in 2003.  After a four-week trial in 2003 the U.S. District Court for the Southern District of Ohioagreed with the government that there were NSR violations at the Sammis plant.  The court had not yet held the second trial needed to determine what pollution controls, penalty and other remedies would be required for these violations.  The settlement resolves the remedy phase of this litigation, thereby averting a trial.

Sulfur dioxides and nitrogen oxides cause severe respiratory problems and contribute to childhood asthma.  These pollutants are also significant contributors to acid rain, smog and haze, which impair visibility in national parks.  Emissions from power plants are carried significant distances downwind, causing air quality problems in other states to which the polluted air is carried.

The Consent Decree will reduce SO2 and emissions from the Sammis Station by a total of 134,500 tons of SO2 and 28,567 tons of  NOx per year. Pollution controls will be installed at all seven of the Sammis steam-generating units, and a plant-wide cap will be imposed on and emissions.  The two largest units, which account for over half the plant's pollutant emissions, will receive state-of-the-art pollution controls known as flue gas desulfurization devices (scrubbers), which reduce SO2 emissions by at least 95 percent, and selective catalytic reduction (SCR) devices, which reduce NOx emissions by at least 90 percent.  Pollution controls will be installed between 2005 and 2010. The final plant-wide caps and emission reduction levels will be achieved in 2012.

Ohio Edison and FirstEnergy will provide over 49,000 tons per year of additional reductions in SO2 and NOx emissions from three other power plants:  the Burger plant in Belmont County, Ohio; the Mansfield plant in Beaver County, Pa.; and the Eastlake plant in Eastlake, Ohio.  These additional reductions will be achieved by upgrading existing pollution controls or installing new pollution controls at these plants. These additional reductions will bring the total SO2 and emission reductions under the Consent Decree to over 212,000 tons per year by 2012.

This is the ninth settlement that the federal government has entered into to address Clean Air Act NSR violations by coal-fired power plants. The combined effect of the settlements achieved to date will be to reduce emissions of harmful pollutants by over 940,000 tons each year through the installation and operation of about $5.5 billion worth of pollution controls.  In terms of both the amount of the pollution reductions and cost, this settlement is the second largest of the power plant NSR settlements to date.  The $8.5 million civil penalty imposed is the second largest penalty against a power plant.

The $25 million amount for mitigation projects, to compensate for the harmful effects of Ohio Edison's past violations, is the largest mitigation project commitment in any of the United States' NSR settlements with utilities to date.  Ohio Edison will fund $14.4 million in renewable energy development projects, specifically wind power projects in Pennsylvania, New Jersey or western New York.  The wind power generated will displace an equivalent amount of coal-fired power and thereby further reduce emissions from coal-fired plants.  Ohio Edison may propose, alternatively, to fund new projects to generate electricity from landfill gas in New York, New Jersey or Connecticut.

Ohio Edison also will provide a total of $10 million to the states of New York, New Jersey and Connecticut to perform environmentally beneficial projects related to air pollution in those states.  The specific projects will be determined by the states after the consent decree is entered.  Allegheny County will receive $400,000 to install a solar power project at one of the County's municipal buildings.  Ohio Edison also will provide $215,000 to the National Park Service for an environmentally beneficial project related to air pollution in Shenandoah National Park, a Clean Air Act "Class I area" that has been adversely impacted by emissions from Sammis and other power plants.

The proposed Consent Decree will be lodged with the United StatesDistrict Court in Columbus, Ohio, for a thirty-day public commentperiod.

Source: EPA

Dynergy Settles

Dynergy, which bought Illinois Power, which was bought by Ameren Settles with EPA over NSR

IMarch 2005 -- llinois Power Co. will install $545 million in pollution controls at five coal-fired power plants and pay a $9 million fine to settle a federal lawsuit alleging Clean Air Act violations. The U.S. Environmental Protection Agency is requiring Dynegy Corporation to install equipment to cut pollution at its coal-fired plants in the Midwest. Dynegy was sued in connection with its operating unit Illinois Power, which it sold to St. Louis, Missouri-based Ameren Corporation in 2004. Five other plants that Dynegy still owns are subject to the agreement.

The $9 million fine is to settle the case against its Baldwin Station plant in Baldwin, Illinois, which will switch to low-sulfur coal and will invest in scrubbers and filters until 2012. The agreement is among Dynergy, the Justice Department, the Environmental Protection Agency and Illinois. The $9 million civil penalty is  the highest so far under the NSR program.. Dynegy has agreed to spend $15 million in other projects to reduce mercury pollution, protect land around St. Louis and along the Illinois River, conserve energy in city buildings, and reduce diesel emissions at truck stops.

The settlement, filed in federal district court in East St. Louis, involves violations of the Clean Air Act's 1977 "new source review" programi. When the original 1970 Clean Air Act passed, it was thought that many existing coal plants would shut down after they reached the end of their useful economic lives, and few suspected they would extend into a new century. The old plants were granted “routine maintenance” exemptions from the act. The Bush administration is continuing with the 51 New Source Review lawsuits initiated by the Clinton administration. The suits now pending are over the definition of “routine maintenance.”

NSR requires companies to seek a permit when expanding or modifying, and to install more pollution controls when pollution is significantly increased. NSR proponents assert that utilities have hidden behind that exemption in an effort to boost the total output of those coal-fired plants—something that requires an investment in new pollution technologies. The current settlements are therefore less about the payment of penalties than just enforcing the intent of the Clean Air Act, which advocates believe would work well if adequately implemented.

Source: EPA

NSR and Other Utilities

The utilities listed below have agreed with the EPA to make changes rather than go to trial:

  • Tampa Electric,
  • Dominion Resources,
  • PSEG,
  • Southern Indiana Gas and Electric and
  • Wisconsin Electric

Utilities being sued under the New Source Review provisions are weighing the cost of fighting versus the price of settling. Unfortunately, fossil fuel power plants causie 62 percent of emissions that cause acid rain. They also cause 21 percent of the smog. New Source Review affects 17,000 U.S. industrial plants that include almost 600 coal-fired power facilities.

Some utilities are negotiating while others refuse to settle.

Utility

Status and Plans

FirstEnergy Lost a critical court case that concluded the company violated the New Source Review and it is now in settlement talks with federal regulators.
Tennessee Valley Authority Plans to spend $6 billion by 2010 to comply with the Clean Air Act. By 2010.
Kentucky Power Petitioned a federal court to dismiss the suit filed against it. The EPA opposed the motion.
Duke Energy EPA has backed off of NSR challenge.

Sources: EPA, various accounts, UtiliPoint