AIR QUALITY AND ELECTRICITY: ENFORCING NEW SOURCE REVIEW (CRS Report for Congress)
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| Release Date |
Jan. 31, 2000 |
| Report Number |
RL30432 |
| Report Type |
Report |
| Authors |
Larry B. Parker and John E. Blodgett, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
Summary:
On November 3, 1999, the Justice Department filed seven lawsuits against electric utilities in the Midwest and South charging them with violations of the New Source Review (NSR) requirements of the Clean Air Act (CAA). In addition, the Environmental Protection Agency (EPA) issued an administrative order against the Tennessee Valley Authority (TVA), alleging similar violations. Through a "preconstruction" permitting process, NSR is designed to ensure that newly constructed facilities, or substantially modified existing facilities, do not result in violation of applicable air quality standards.
The suits represent a continuing effort by EPA to reduce pollution from existing sources, particularly coal-fired electric generating facilities. The primary pollutants of concern have been nitrogen oxides (NOx), and sulfur dioxide (SO2). The question the EPA lawsuits raise is whether the specified facilities have engaged in rehabilitation actions that represent "major modifications" of the plants, in which case the CAA would require the installation of best available pollution control equipment. The crucial definition of "major modification" derives from an EPA ruling that a life extension project by Wisconsin Electric Power Company (WEPCO) triggered NSR requirements. Since 1992, after considerable litigation and congressional debate, the "test" to determine the applicability of NSR compares whether a facility's projected actual emissions after the modification are more than its actual emissions before the modification. Utilities argue that the "modifications" that EPA cites in the suits were just routine maintenance, which do not trigger NSR.
NSR is an attractive enforcement tool because EPA can ask the court to impose substantial monetary penalties, and to require a violating source to install best available control technology. Thus EPA states that these facilities could be required to reduce their emissions of sulfur dioxide and nitrogen oxides by 85 to 95%.
Because the CAA is a complex piece of legislation built up over time, however, the reductions that might result from successful prosecution of the NSR suits may not be completely realized. In the case of SO2, any reduction achieved under NSR would interact with a cap on emissions set under title IV of the CAA; because of the system of tradable allowances established under title IV, reductions from NSR compliance might be shifted to unaffected facilities. The situation with respect to NOx is also confused, largely because of inconsistencies in EPA's new and existing source NOx regulations as a result of a partial remand of regulations by a court.
By seeking to enforce NSR requirements, EPA exploits an existing authority that holds the potential for reducing emissions. EPA clearly believes that some sources have been evading NSR requirements. However, the action appears to raise the classic enforcement issue: will the outcome be reduced emissions, or just costly litigation? The suits expose the complex interactions of NSR with other provisions of the CAA â complexities that might compromise air pollution reductions sought through the NSR suits. Knowledge gained through 30 years of CAA implementation suggests options for updating the Act's approach to regulating the utility industry's emissions; however, many of these require Congressional action to amend the Act.
