Appeals Court Puts New Source Review Reforms on Hold

Published February 1, 2004

The U.S. Court of Appeals for the District of Columbia Circuit has temporarily halted implementation of President George W. Bush’s reforms to the New Source Review (NSR) provisions of the Clean Air Act. The reforms, announced August 27 by the U.S. Environmental Protection Agency (EPA), clarify when the federal government expects power plants to purchase and install new anti-pollution technology when performing routine maintenance.

The reforms include several new regulatory guidances. Most significantly, power plants would be required to purchase and install the most advanced anti-pollution technology when they replace equipment that costs at least 20 percent of the plant’s essential production equipment.

“There was a need to make changes in the rules to keep up with how business has changed over the past 25 years,” William Harnett, director of EPA’s New Source Review enforcement program, said in defense of the reforms. “The rules … will lead to greater environmental benefit.”

The new rules were welcomed by power companies that previously had little way of knowing when their maintenance efforts would trigger the requirement to install new anti-pollution equipment. But environmental activist groups oppose the reforms, arguing EPA is wrong in concluding the changes will reduce pollution.

Government officials in 14 states–California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New Mexico, Pennsylvania, Rhode Island, Vermont, and Wisconsin–filed the suit challenging the reforms. Eleven others–Alabama, Alaska, Arkansas, Indiana, Kansas, Nebraska, North Dakota, South Carolina, South Dakota, Utah, and Virginia– registered their support of EPA and the NSR reforms.

By granting a motion for temporary injunction filed by New York Attorney General Eliot Spitzer, the court concluded NSR reform opponents had a “likelihood of success” in their legal challenge to implementation of the NSR reforms, and that “irreparable harm” was likely to occur if EPA enacted the reforms prior to a court decision on their legality.

“The decision by the D.C. Circuit Court is one of the most important environmental victories in many years,” said Spitzer. “The importance of this ruling cannot be overstated. Not only does it freeze the regulation, but the court has also signaled that it may throw out the entire regulation after further review.”

The court indicated in its December 26 ruling that it would expedite its review of the case.

Scott Segal, director of the Electric Reliability Coordinating Council, observed that the state attorneys general appear more interested in scoring political points against President Bush than in ensuring common-sense rules regarding air pollution.

“Nationwide, more governors and attorneys general do support clarification,” Segal said. “The northeast attorneys general reflect a minority opinion, unfortunately demonstrating their desire to address economic competitive concerns rather than environmental protection.”

Segal expressed confidence the Bush administration’s position would ultimately be validated, either by the D.C. Circuit Court or the United States Supreme Court.

“The rule was based upon a substantial agency record with analysis, public hearings, and hundreds of thousands of rulemaking comments,” Segal said. “We expect the rule will soon be back on course.”

James M. Taylor is managing editor of Environment & Climate News. His email address is [email protected].