Air Quality War Looms Among the States

Published August 1, 2004

Since enactment of the federal Clean Air Act (CAA) in 1970, the federal government has played the dominant role in the nation’s air quality policy. Two recent actions by northeastern states, however, are challenging federal oversight and raising the specter of clean air warfare among the states.

Regional Pressure on Federal Standards

The Ozone Transport Commission (OTC), representing Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia, was created under the 1990 CAA amendments to address ozone in the northeast and mid-Atlantic regions. The OTC’s regional focus represents a break from the one-size-fits-all national approach of many other CAA programs.

An OTC draft plan for an NOx cap-and-trade system was expanded by EPA and became the NOx SIP (nitrogen oxide state implementation plan) Call, a new measure that requires a 60 percent reduction in summertime emissions of nitrogen oxides, a smog precursor, across a 21-state region encompassing the OTC states and upwind areas. The NOx SIP Call, which applies to all coal-fired power plants in the region, began to take effect in June.

A host of other CAA provisions should reduce NOx as well as volatile organic compounds (VOCs, another smog precursor). For example, stringent new vehicle standards will require substantial emissions reductions by all types of on-road vehicles, as well as cleaner fuels. Those provisions are beginning to be phased in this year and will lead to continued declines in motor vehicle pollution for decades to come as the fleet turns over to these cars and trucks.

The CAA’s regional haze rule will require additional industrial emissions reductions. The Environmental Protection Agency (EPA) also has proposed a Clean Air Interstate Rule, which if enacted would require further reductions of power plant NOx and sulfur oxides (SOx) emissions.

Rather than allow these rules to take effect and measure their costs and benefits, OTC adopted on June 9 a resolution committing itself to even further emissions reductions, claiming they are necessary to protect public health. Some observers suggest OTC has no intention of acting on its resolution, but is merely engaging in a negotiating tactic to get EPA to tighten its own targets and timetables under the Clean Air Interstate Rule.

Suing West Virginia Power Plants

Still more troubling to non-OTC states is a lawsuit launched by the attorneys general of Connecticut, New Jersey, New York, and Pennsylvania against power plants in West Virginia operating in accordance with West Virginia state government standards. The four plaintiff states allege Allegheny Energy is violating the CAA’s New Source Review program at several of its West Virginia power plants.

New Source Review has long been controversial because it has been difficult for regulated entities to know when its costly provisions apply and what it requires. Routine maintenance, repairs, and replacements at a power plant are exempted, while major modifications are not. The distinctions have never been clear.

In the Allegheny Energy case, the four attorneys general claim the West Virginia power plants undertook major modifications without complying with New Source Review’s extensive permitting requirements. Allegheny Energy argues it was merely conducting routine maintenance, repairs, and replacements, and thus was not subject to New Source Review.

Political Overtones

Several northeastern attorneys general, all Democrats, have sued the Bush administration over its effort to streamline the New Source Review program. New York Attorney General Elliott Spitzer has called the Bush proposal “an attack on the Clean Air Act.” The changes to New Source Review have become a focal point for the administration’s critics, even though the administration’s reforms are as likely to reduce emissions as to allow them to increase.

Dubious scientific claims are also at the center of the case against the West Virginia power plants. The attorneys general claim alleged violations at these West Virginia power plants have caused additional pollution to reach their states. Granted, some pollution from West Virginia is carried by the prevailing winds into these four downwind states, but there is considerable debate over the amount of long-range transport, especially over distances exceeding 150 miles. Nor is it clear that pollution at these plants has actually increased during the time in which the alleged violations occurred. West Virginia and other upwind states argue the northeastern states overstate the contribution of such transported pollution to the region’s air quality problems.

Ultimately, success by the OTC or the four attorneys general will cost the energy-using public. In Wisconsin, for example, We Energies is planning a 10 percent rate hike by 2005, made necessary in large part to settle New Source Review litigation and install new equipment to comply with stringent interpretation of the rule.

Regarding the litigation in the northeast, Scott Segal, director of the Electric Reliability Coordinating Council, which represents coal-fired power plants, warned consumers will be hurt by “regulatory or litigation tactics to push for actions well beyond what is necessary for protection of human health and the environment.”

Ben Lieberman is director of air quality policy and associate counsel at the Competitive Enterprise Institute. His email address is [email protected].

For more information …

visit the Web sites of the Competitive Enterprise Institute,; Electric Reliability Coordinating Council,; and Ozone Transport Commission (OTC),