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Bar Journal - December 1, 2001

Transboundary Air Pollution: Enforcing the Clean Air Act

By:
I. INTRODUCTION

Interstate transport of air pollutants from midwestern power plants is a persistent problem for New Hampshire and the Northeastern region. Prevailing winds carry millions of tons of smog and acid rain-producing power plant emissions to our region, causing serious human health and environmental damage. Despite significant reductions in harmful emissions over the past few decades, New Hampshire and other Northeastern states continue to suffer from the effects of long-range transport of air pollution. As a result, New Hampshire has taken an active role in rulemaking, litigation and legislative initiatives to address transboundary air pollution.

One of the most significant and complex initiatives arises from governmental oversight of a program called "new source review." The Clean Air Act ("Act") and implementing federal regulations set strict pollution limitations on new electrical generating units. However, older power plants were initially "grandfathered" so that expensive pollution control equipment would not have to be installed on units with limited life expectancy. Of course, if the plants were upgraded, the Act required modern pollution controls to be added at the same time. Both new and modified generating units have to undergo "new source review" to determine if they increase emissions that require additional pollution controls. However, recent governmental investigations show that some utilities have not complied with this requirement.

In an unprecedented partnership, the federal government and eight Northeastern states, including New Hampshire, have joined in a lawsuit against one of the largest producers of electricity in the nation for illegal upgrades to eleven of its midwestern coal-fired power plants. The upgrades were made without notice to regulators and without application for approval under the new source review program. Most importantly, the upgrades extended the useful lives of older, more polluting power generation facilities and resulted in increased emissions, which hamper the efforts of Northeastern states to reduce transboundary impacts. Although the suit is still in its early stages, the critical issue that will determine the outcome of the case is whether the upgrades qualify for a federal exemption for "routine maintenance," as claimed by the utility, or whether constructing the modifications without permits or emission controls violated the Act’s new source review program.

Given changing political winds and the uncertainties of litigation, it remains to be seen whether the Act’s original intent – replacement of older, more polluting facilities with cleaner technology as electrical generating units reach the end of their useful lives – will be carried out. However, unless new source review is both enforced and enhanced, New Hampshire and other Northeastern states will continue to suffer the ill effects of illegal transboundary air pollution.

The statements and recommendations contained in this article are those of the author and are not necessarily the views of the state, the New Hampshire Attorney General’s Office or the attorneys general of any other jurisdiction.

II. AIR POLLUTION IMPACTS IN THE NORTHEAST

Many of New Hampshire’s air quality problems, such as smog, acid rain and haze, are largely attributable to long-range transport of pollution emitted upwind. Transport of ozone (the chief component of urban smog) and fine particulate, and deposition of acid and mercury, are serious health and environmental issues in this state. Haze also reduces visibility, negatively impacting the state’s tourism economy.1 

Emissions of nitrogen oxides ("NOx"), sulfur dioxide ("SO2"), fine particulate and mercury from midwestern coal-fired power plants, especially those located in Ohio, Virginia, West Virginia and Indiana, are transported long distances to New Hampshire and the rest of the Northeast. Because prevailing winds are from the west, particularly in the summertime, emissions from midwestern utilities and other industries travel eastward, undergoing chemical transformations that worsen the effects on human health and the environment in the Northeast. The fact that many power plants utilize extremely high stacks to reduce localized pollution impacts serves to increase the long-range mobility of their emissions, exacerbating problems for Northeastern states. 2 

A. Ground Level Ozone

Ground level ozone or "smog" is formed by a chemical reaction between NOx and volatile organic compounds in the presence of heat and sunlight. Ozone causes premature deaths and serious respiratory problems in humans, with documented reductions in lung function of healthy adults in New Hampshire. Ozone also compromises plant growth and reproduction and reduces agricultural and forest yields. The effects on forest productivity and the accompanying economic impacts on New Hampshire’s natural resource and recreational industries are significant.

Because large amounts of volatile organic compounds are emitted by vegetation, emissions of NOx are the primary controllable cause of elevated ozone concentrations and power plants are a primary source of NOx emissions. Recognizing these facts, New Hampshire reduced its own in-state power plant NOx emissions by roughly 68.5 percent between 1990 and 1999, but upwind power plant emissions continue to impact the state.4 

B. Acid Deposition

Acid rain or, more accurately, acid deposition, occurs when emissions of NOx and SO2 react in the atmosphere with water, oxygen and oxidants to form various acidic compounds, including sulfuric acid and nitric acid. These compounds then fall to earth either in wet form, as rain, snow or fog, or in dry form as fine particulate matter. Acid deposition levels in the Northeast are among the highest in the nation.

While many believe that the acid rain provisions of the 1990 amendments to the Act solved this problem, recent research from the Hubbard Brook Experimental Forest in New Hampshire and other study sites in the Northeast confirms that acid deposition is still a significant problem. Although sulfur emissions that contribute to acid deposition have declined, nitrogen oxide emissions have not changed substantially region-wide and have actually increased in some areas. Research shows that the ability of some ecosystems to neutralize acid deposition has diminished over time, delaying the recovery of forests, lakes and streams. Moreover, while the Act has improved air quality somewhat, the emissions reductions mandated in 1990 are not likely to bring about full ecosystem recovery in sensitive areas of the Northeast.6 

New Hampshire’s lakes and ponds are extremely vulnerable to acid deposition because of their low acid neutralizing capability. Eighty-five percent (85%) of the State’s lakes and ninety-five percent (95%) of the remote (mostly high elevation) ponds are highly sensitive to acidification. Nearly half of New Hampshire’s lakes have been acidified and, as a result of their low buffering capacity, many have been acidified to the point where they are unable to support most species of naturally producing fish populations.7 

Similarly, New Hampshire’s high elevation forests suffer crown damage and death, as the higher elevations experience roughly twice the acid deposition rate measured in lower elevations due to the acidic fog and clouds that typically envelope the higher elevations. Acid deposition also mobilizes and removes calcium from the soil. Levels of calcium – an element essential to the survival and growth of trees – in the soil have been measurably dropping over the years, with a concomitant drop in tree growth rates and decreased resistance to stress and disease. Thus, the state’s northern forests face a serious threat to survival from year-round assaults by high acid levels in snow, rain and fog.

New Hampshire’s two statutorily-designated wilderness areas, the Great Gulf and Presidential Range-Dry River Wilderness Areas, have been seriously damaged by acid, sulfur and nitrogen deposition. Both areas have suffered from impaired visibility and destruction of and reduced productivity in forests, vegetation and wildlife. Several water bodies are classified as "red line," or critical, in terms of their ability to recover from the damage caused by acid precipitation.9 

C. Mercury Deposition

Mercury is known to be a toxic, persistent and bioaccumulative pollutant with a wide range of human health and ecosystem impacts. Mercury deposition levels in the Northeast are among the highest in the nation. More than half of mercury deposition in the Northeast is attributable to emissions from upwind and global sources. Mercury concentrations in rain along the coast of New Hampshire are up to four times the U.S. Environmental Protection Agency ("EPA") standard for aquatic life and wildlife. In addition, acid deposition leaches mercury from the soil into lakes and streams, contaminating the food chain.10

Because electric power plants are responsible for most of the air-borne mercury transported to the Northeast, these emissions could be substantially reduced by installation of existing controls for NOx, SO2 and particulate matter, such as acid gas scrubbers, electro-static precipitators and selective catalytic reduction. These technologies have been shown to diminish mercury emissions.11

D. Fine Particulate Matter

In the Northeast, SO2 is principally responsible for formation of fine particulate matter in the atmosphere. NOx also contributes to secondary particulate formation. Fine particulate is a significant public health concern because it is inhaled into the deepest recesses of the lungs, exacerbating or triggering pulmonary and cardiac disease.12 It is estimated that 67 premature deaths and 1,540 asthma attacks occur annually in New Hampshire due to fine particulate from the nation’s coal-burning plants.13 As a result, airborne particulate matter is ranked as the second highest environmental risk for New Hampshire.14 Thus, substantial reductions in SO2 and NOx emissions are necessary to reduce the risks associated with fine particulate.

III. LEGAL TOOLS TO ADDRESS INTERSTATE AIR POLLUTION

The Act was adopted to "speed up, expand and intensify the war against air pollution in the United States with a view to assuring that the air we breathe throughout the Nation is wholesome once again."15 Congress provided a number of tools to both federal and state regulators to achieve this goal and, in particular, to address interstate air pollution. New Hampshire has actively participated in the following initiatives to address this problem.

A. National Ambient Air Quality Standard for Ozone

The most significant regulatory tool for controlling exposure to ozone is federal promulgation of national ambient air quality standards, or "NAAQS" under Section 109 of the Act."16 NAAQS are established both to protect against the short-term acute effects of exposure to an air pollutant and to protect against the long-term chronic effects of such exposure. These standards set the bar from which industrial and other emission controls are gauged.

In response to increasing health concerns about exposure to ground level ozone, the EPA adopted a more stringent ozone NAAQS in July 1997. The new standard, which reflects greater concern for lower, more chronic levels of ozone in the atmosphere, reduces the current threshold of 125 parts per billion (ppb) over a one-hour period to 85 ppb over an eight-hour period.17

Although New Hampshire and other Northeastern states supported promulgation of the new standard, industry and other private interest groups appealed EPA's action to the United States Court of Appeals for the District of Columbia Circuit. Despite New Hampshire’s and other Northeastern states’ support of the new standard throughout the litigation, implementation of the new standard was delayed because, initially, the D.C. Circuit ruled in favor of the industry petitioners and struck down the new standard as being violative of the nondelegation doctrine.18

The United States Supreme Court recently reversed that ruling and remanded to the D.C. Circuit for further review,19 setting the stage for enforcement of the new standard. New Hampshire and other Northeastern states have continued to participate in this high-stakes litigation to protect the public from both short and long term exposure to ozone.

B. Ozone Transport

With regard to ozone transport, Congress recognized that migration of ozone and its precursors made it difficult for downwind states to meet NAAQS:

Because ozone is not a local phenomenon, but is formed and transported over hundreds of miles and several days, localized control strategies will not be effective in reducing ozone levels.20

Upwind power plants make it difficult, if not impossible, for many Northeastern states to attain and maintain federal ozone standards, as local controls do not reduce the transport of power plant emissions into this region. For example, ozone levels in Rhode Island, Connecticut, New Jersey and Maryland would still exceed the federal ozone standard even if all man made emission sources in those states were eliminated.21 EPA’s new, more stringent 8-hour ozone standard will make ozone transport even more critical for states that are having difficulty attaining or maintaining NAAQS due to pollution transport.

Although New Hampshire currently complies with the old one-hour ozone standard, ozone transport will materially affect the state’s ability to demonstrate compliance with the new eight-hour standard, depending on the outcome of the other federal and state actions that are summarized below.

1. OTAG and NOx SIP Call

Section 176A(a) of the Act provides for creation of interstate transport regions where the transport of air pollutants from one or more states contributes significantly to a violation of a NAAQS in other states.22 Section 176(b) provides for creation of a transport commission for the purpose of assessing the degree of interstate transport of pollutants and recommending mitigation strategies to EPA.23 New Hampshire was an active participant in the Ozone Transport Assessment Group ("OTAG"), and its participation culminated in issuance of final recommendations to EPA in 1997. The OTAG report included findings on contributions from upwind power plant sources and recommendations that EPA take action to significantly reduce NOx emissions.24

As a result of the OTAG recommendation, EPA promulgated a rule in October 1998, commonly known as the "NOx SIP Call."25 Because EPA is required under section 110 of the Act to notify states of inadequacies in their current state implementation plans ("SIPs") for demonstrating compliance with the Act and to establish deadlines for submitting necessary revisions, the NOx SIP Call required twenty two states and the District of Columbia to submit proposed revisions to their ozone SIPs for the purpose of reducing NOx emissions—principally but not exclusively from utilities and other major sources—that affected downwind states in contravention of the Act.

Industry and several state petitioners immediately challenged the NOx SIP Call rule, with New Hampshire and other Northeastern states intervening and actively participating in support of the EPA action.26 Although the petitioners obtained a temporary stay of the EPA deadline for submitting SIP revisions, on March 3, 2000, the Court of Appeals for the District of Columbia Circuit issued a ruling that upheld the NOx SIP Call in most respects.27 Although further appeals are pending, the Court’s subsequent order amending the deadline for full implementation of NOx SIP revisions from May 1, 2003 to May 31, 200428 will likely have negative implications on Northeastern states’ ability to attain and maintain ozone NAAQS.

2. Section 126 Petitions

New Hampshire has also actively participated in federal proceedings and litigation under section 126 of the Act. Section 126 provides a mechanism whereby downwind states may petition the EPA to directly regulate specific upwind sources of pollution. Under section 126(b), a downwind state "may petition the Administrator for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation" of section 110(a)(2)(D).29 Section 110 (a)(2)(D) of the Act requires states to prohibit emissions within the state in amounts that will "contribute significantly to nonattainment in, or interfere with maintenance by, any other State" of the NAAQS.30

In August 1997, New Hampshire and seven other Northeastern states submitted petitions to EPA to force midwestern states to reduce their NOx emissions under section 126 of the Act. The petitioning states sought to have EPA implement direct federal regulation of stationary sources in upwind states, primarily electric generating facilities and fossil-fuel fired industrial boilers and turbines, that were contributing significantly to nonattainment of the ozone NAAQS in the downwind states.31 Although EPA initially postponed making any section 126 findings pending resolution of the NOx SIP Call process, in January 2000, EPA made the requested findings of significant contribution and granted relevant portions of several of the petitions.32 The Northeastern states supported EPA’s action throughout the inevitable appeals and, on May 15, 2001, the D.C. Circuit upheld most aspects of the rule, remanding several minor findings to EPA to allow the agency to properly justify them.33

As important as this victory is for the downwind states in light of the Act’s requirement that the affected sources cease operating if they do not install required controls, there is no precedent to implementation of the section 126 provision and enforcement of its terms may require additional action by the Northeastern states.

3. States’ Lawsuit to Enforce New Source Review

Because states can utilize the Act’s citizen suit provisions against specific air emissions sources,34 eight Northeastern states have challenged specific projects undertaken by a midwestern utility in violation of the Act’s new source review provisions and prevention of significant deterioration programs. Besides violating the Act and creating an unfair economic advantage, the effect of these projects has been to keep newer, cleaner units out of the market place so that older plants continue to dominate electrical generation and emissions. The legal basis for the lawsuit follows.

a. New Source Review and Prevention of Significant Deterioration

The new source review and prevention of significant deterioration programs are intended to ensure that increased pollution from the construction of new or modified emission sources be both minimized and consistent with air quality planning requirements. Generally, the new source review program requires sources to obtain permits before undertaking construction that would increase emissions and requires installation of state-of-the-art controls to limit or eliminate those increases.35 The prevention of significant deterioration program, which governs most of New Hampshire and other areas attaining national air quality standards, prohibits the construction or modification of a major source of emissions without a permit and without installation of controls that would prevent the significant deterioration of air quality.36

There is an important reason why the triggers for both new source review and PSD permitting requirements apply to both new and modified facilities. In order to ease the initial burden of complying with the strict new requirements of the Act, Congress "grandfathered" existing pollution sources, such as the large coal-fired power plants that would have to be retrofitted with pollution control equipment. At the time, Congress expected that these older, uncontrolled units would be shut down and replaced over time with new clean, state-of-the-art plants that fully complied with the Act. Thus, the Clean Air Act was crafted in such a way as to reduce power plant emissions over time as older plants reached the end of their useful lives and were replaced with newer, cleaner technology. However, if the older units underwent any "modification," they were expected to incorporate the required controls.

Unfortunately, most of these older plants have continued to operate beyond their anticipated useful lives, despite Congressional intent and despite their lower generation efficiencies. One reason for this is industry’s abuse of an exemption established by EPA for "routine maintenance."

b. "Routine Maintenance" Exemption

New source review applies to modifications of existing plants, as well as construction of new plants. The Act defines "modification" as "any physical change or change in the method of operation" that increases the amount of an air pollutant emitted by the source.37 Courts have interpreted the term "modification" broadly and have refused to limit its application to changes exceeding a certain magnitude.38

Nonetheless, EPA recognized that this sweeping definition could have nonsensical results if carried to an extreme. For example, even repair or replacement of a single leaky pipe or a change in the way that pipe is utilized could trigger new source review.39 Therefore, since 1977, federal regulations have exempted "routine maintenance, repair and replacement" from the definition of modification.40 The scope of this exemption is subject to the judicial caveat that EPA’s authority to exempt is limited to "de minimis" activity.41

Similarly, under the prevention of significant deterioration program, EPA’s regulations require sources to obtain a preconstruction new source review permit only if the physical changes result in a "significant net emissions increase" – increases above an established de minimis level – and are not physical changes characterized as "routine maintenance, repair and replacement."42 For non-exempt modifications, permits must require, among other things, installation of the best available control technology for each pollutant regulated under the Act.43

EPA historically has analyzed and applied the "routine maintenance" exemption by using a common sense test that assesses four primary factors: (1) the nature and extent; (2) purposes; (3) frequency; and (4) cost of the proposed work.44 The agency’s approach was upheld in 1990 by the United States Court of Appeals for the Seventh Circuit in the seminal case Wisconsin Electric Power Co. v. Reilly ("WEPCO")45 and continues to be applied today.

The WEPCO case involved replacement of a sixty-foot steam drums and air heaters, as well as renovation of major mechanical and electrical auxiliary systems. The Seventh Circuit agreed with EPA that the project did not fit within the "routine maintenance" exemption. First, WEPCO’s project involved replacement of very large parts – sixty-foot steam drums and air heaters at four units – during successive ninth-month outages. Second, WEPCO’s own documents indicated that WEPCO did not regard this repair and replacement project to be ordinary or routine. 46 Third, extending the life expectancy of the unit by replacing components with a long useful life could not be considered "routine":

"WEPCO reasons that. . . any replacement project will presumably extend the life of a facility . . . While it is certainly true that the repair of deteriorated equipment will contribute to the useful life of any facility, it does not necessarily follow that the repairs in question would extend the life expectancy of the facility. 47

Thus, the court flatly rejected WEPCO’s argument that any "replacement" project should be considered "routine maintenance" and noted that doing so would result in "open[ing] vistas of indefinite immunity from the provisions of NSPS and PSD". 48

More recently, EPA’s Environmental Appeals Board ("EAB")4 9 rejected arguments that major life extension projects by the government’s own power plants, owned and operated by the Tennessee Valley Authority ("TVA"), were exempt merely because they were undertaken elsewhere in the industry.50 The EAB found that TVA’s projects involved major boiler components, took years to plan and execute, requiring lengthy plant shut downs, and that the purpose of the projects was to extend unit life by as much as twenty years.51 The EAB also found that the projects were typically uncommon, had generally never been performed during the life of the unit and cost more that $2.5 million. According to the EAB, accepting TVA’s view that basing the routine maintenance exemption primarily upon whether the project reflected industry practice would "allow TVA to rebuild an entire facility without triggering [new source review] so long as it did so in increments that can be identified elsewhere in the industry . . .," which would be at odds with the structure and purpose of the Clean Air Act. 52

c. American Electric Power’s Life Extension Program

Government investigations conducted during the 1990’s revealed that a number of midwestern and southern power producers had made substantial upgrades to aging coal-fired plants without seeking new source review permits from permitting authorities and without installing necessary emission controls. One of the power producers, American Electric Power Service Corporation and its subsidiaries ("AEP"), is alleged to have implemented major "life extension" programs at eleven of its mid-western plants, which not only increased capacity and emissions at those plants, but also extended their useful economic life. Because the improvements did not fall within the narrow confines of the routine maintenance exemption, the United States and the states of New Hampshire, New York, Massachusetts, Vermont, Connecticut, Rhode Island, New Jersey, and Maryland filed suit against AEP in the United States District Court for the Southern District of Ohio. The cases have been consolidated for review, along with separate suits filed by several environmental groups.53

Although discovery is ongoing, the governments believe that AEP’s own documents will show that it undertook a systematic program to essentially rebuild aging coal-fired power plants. While AEP claims that the improvements fall within the "routine maintenance" exemption, many of the challenged modifications are large-scale capital projects under which AEP replaced entire systems at a number of its plants located in Virginia, Ohio, Indiana and West Virginia.54 The projects replaced outmoded or deteriorated equipment with upgraded or redesigned components to enable increases in electrical generation from the units.

A full discussion of the enormous size of several of these projects is not possible, in light of AEP’s claim that all documents containing details on the projects are confidential. However, because the projects replaced major utility boiler components, required millions of dollars in capital expenditures and were undertaken after maintenance became ineffective, the plaintiffs expect to demonstrate that the none of the modifications qualify for the "routine maintenance" exemption under EPA’s longstanding interpretation and applicable case law.55

These allegedly illegal modifications to AEP’s plants also were made without notification to permitting authorities. Because permits were not sought from EPA or the host states, emissions calculations were not made by AEP to determine the extent to which the modifications would increase levels of NOx, SO2 and other regulated pollutants. By hiding behind the "routine maintenance" exemption, AEP has avoided creating the very information that would result in triggering emission reduction requirements under the Act. Nonetheless, government experts expect to demonstrate at trial that every modification alleged in the complaints resulted in significant emissions increases. A ruling on this central legal issue will not likely occur for some time, further delaying installation of scrubbers, selective catalytic reactors and other control technologies that would address the illegal emissions of SO2, NOx and other pollutants.

IV. THE FUTURE OF NEW SOURCE REVIEW

A. Federal Reform

While new source review is an emerging area of the law, recent federal reform efforts have created more uncertainty on whether the program and the litigation it has spawned will be enhanced or undermined.

First, the National Energy Policy Report issued in May 2001 recommends that the President request the Department of Justice to review the legal basis for the new source review enforcement cases.56 The recommendation was made in the context of the federal administration’s increasing concern about energy supplies in the wake of California’s "energy crisis." Although the review has not affected federal prosecution of the AEP case, less vigorous federal prosecution of new source review violations could undermine the effectiveness of the program and the pending enforcement litigation.

Second, EPA has initiated a regulatory review of the entire new source review program and its impact on investment in new utility and refinery generation capacity, energy efficiency and environmental protection. EPA’s report on the new source review program is expected to be released before the end of the year and, in the meantime, recent EPA testimony forecasts that it will recommend significant reforms.57

In particular, in July 2001, EPA Administrator Christine Todd Whitman testified before the Senate Environment and Public Works Committee that the agency was in the process of drafting a different approach for power plants to curb their emissions. Characterized as an approach that could provide significant regulatory relief for utilities, it would require generating plants to stay below national targets for NOx, SO2 and mercury emissions.58

While this approach is potentially a good one, it should not be adopted on the basis of erroneous assumptions – that new source review prevents utilities from taking necessary safety and reliability maintenance actions or inhibits construction of new power plants.

1. Safety and Reliability

In contrast to industry claims, new source review does not prevent utilities from taking necessary safety and reliability maintenance actions. A company can carryout any project, short of full unit reconstruction, simply by committing to limit its future emissions so that a large actual emission increase does not occur. In addition, EPA’s rules for electric utilities contain generous baselines for exempting projects from new source review and prevention of significant deterioration even if they are not routine maintenance.59 Companies with projects that may increase actual emissions have always been encouraged to consult with permitting authorities on whether the projects are exempt. While utilities have claimed that the program prevents them performing necessary maintenance, it is notable that the pending new source review enforcement action is based upon modifications for which AEP failed to provide notice or seek applicability determinations from the permitting authorities.60

2. Clean Power

An underlying and erroneous assumption of the federal new source review reform effort is that emission control under new source review is inconsistent with the nation’s energy goals. Interestingly, the driving force behind new source review – to reduce pollution by increasing efficiency – also increases energy availability and affordability. Installation of required controls will ultimately result in lower electricity bills, due to replacement of old coal-fired plants with more efficient, state-of-the-art plants, fueled in many cases by natural gas, a significantly cleaner fuel.

New Hampshire has proven that new source review does not prevent construction of new power sources. New Hampshire is more than doubling its electrical generating capacity through construction of two, new source review-compliant, combined-cycle natural gas fired power plants. These plants will be at least twice as efficient as existing coal-fired plants and, by mid-2002, New Hampshire will export as much electricity as it uses.61

B. Recommendations for Future Legislation

Imposing multi-pollutant emission limits upon power plants, as EPA apparently intends to accomplish through proposed changes to current legislation and regulations, has tremendous potential as a comprehensive approach to reducing power plant emissions, but only so long as several specific criteria are met.

First, such proposed legislation should comprise adoption and enforcement of market-based "cap and trade" limitations for multiple pollutants, including at least SO2 and NOx, and potentially carbon dioxide, mercury and fine particulate matter.

Second, initial caps should be set at levels that would ensure equivalent or greater emission reductions than the current new source review program. In addition, the caps should decline over time to ensure even further reductions.

Third, the level of the caps should be set without consideration of projected growth. Because the existing new source review program requires sources to offset emissions increases, the caps need to be set low enough to meet projected new source reductions.

Fourth, flexibility and cost effectiveness should be built into the program through trading mechanisms, which would allow caps to be established at significantly lower levels. In some cases, it may be appropriate to limit individual sources to certain emission levels for specific pollutants.

Finally, new source review reform and proposed legislation to accomplish that reform must not abrogate any of the existing authority of states to undertake steps to provide cleaner air.

V. CONCLUSION

New Hampshire has taken an active role in curbing upwind power plant emissions through a number of regulatory, legislative and enforcement initiatives, including state enforcement action against specific upwind power plants. Correcting past violations of the Act’s new source review requirements and strict enforcement of the existing program has brought the state into a complex and emerging area of the law, in partnership with the federal government and other Northeastern states. Whether the effort to enforce new source review against upwind polluters ultimately achieves the emission reductions required under the Act remains to be seen. At the same time, federal reforms to new source review should be crafted to mandate significant reductions in harmful emissions, while preserving states’ authority to protect their citizens from transboundary air pollution.

ENDNOTES

1. New Hampshire Department of Environmental Services, "New Hampshire Clean Power Strategy," January 2001(Draft)(hereinafter "Clean Power Strategy").
2. See United States of America and State of New York, et al. v. American Electric Power Service Corporation., Civil Action No. C2-99-1182 (S.D. Ohio), Plaintiffs Amended Complaint, (hereinafter "Amended Complaint").
3. Clean Power Strategy, at 22-23.
4. Id. at 25-27.
5. Id. at 8-17.
6. See Hubbard Brook Research Foundation, "Acid Rain Revisted" (2001).
7. See Affidavit of Robert Estabrook, New Hampshire Department of Environmental Services, June 10, 1998, filed in New Hampshire, et. al v. Browner, Civil Action No. 97-CV-1028 (N.D.N.Y.) (secondary sulfur dioxide standards).
8. Clean Power Strategy, at 8-17.
9. Clean Power Strategy; U.S. Dept. Agriculture, Forest Service, "Screening Procedure to Evaluate Effects of Air Pollution on Eastern Region Wilderness Cited as Class I Air Quality Areas," September 1991. The Clean Air Act affords special protection to these and other "Class I wilderness areas. 42 U.S.C. §7491.
10. Clean Power Strategy, at 29-35; U.S. E.P.A., "Mercury Study Report to Congress," December 1997.
11. Clean Power Strategy, at 20-21.
12. Clean Power Strategy, at 18-21.
13 Abt Associates, "Clear the Air’s National Campaign Against Dirty Power", Health Impacts Analysis, Oct. 17, 2000.
14. N.H. Comparative Risk Project, Report of Ranked Environmental Risks in New Hampshire, May 1, 1997.
15. H.R. Rep. No. 91-1146, at 1 (1970), reprinted in 1970 U.S.C.C.A.N. 5356.
16. Section 109 of the Clean Air Act requires EPA to promulgate primary and secondary National Ambient Air Quality Standards (NAAGS) for "criteria pollutants," pollutants for which detailed air quality analyses have been prepared by EPA. 42 U.S.C. § 7409. Air quality criteria documents have been prepared, and NAAQS developed, for six pollutants: sulfur dioxide (SO2), ozone, carbon monoxide (CO), particulate matter (PM-10, particulate matter under ten microns nominal diameter), nitrogen oxides (NOx), and lead. 40 C.F.R. pt. 50.
17. Fed. Reg. 38,856 (July 18, 1997).
18. American Trucking Ass’ns v. EPA, 175 F3d. 1027, modified on reh'g on other grounds, 195 F.3d 4 (D.C. Cir. 1999), cert. granted, 120 S.Ct. 2003 and 2193 (2000).
19. Whitman v. American Trucking Ass’n, 121 S.Ct. 903 (2001).
20. S. Rep. No. 101-228, reprinted in 1990 U.S. CODE CONG. & ADMIN NEWS at 3389, 3399.
21. Amended Complaint, 7.
22. 42 U.S.C. § 2176A(a).
23. 42 U.S.C. § 2176A(b).
24. "Report of the Ozone Transport Assessment Group to U.S. E.P.A." (1997).
25. See Finding of Significant Contribution and Rulemaking for Certain States in Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone, 63 Fed. Reg. 57,356 (October 1998).
26. See Michigan v. EPA, No. 98-1497 (D.C. Cir.).
27. See Michigan v. EPA, 213 F. 3d 663 (D.C. Cir. 2000).
28. Michigan v. EPA, No. 98-1497, 2000 WL 1341477 (D.C. Cir. Aug 30, 2000) (order denying motion to stay mandate pending petition for certiorari).
29. 42 U.S.C. § 7426 (b)
30. 42 U.S.C. § 7410 (a)(2)(D)(i)(1)
31. 63 Fed. Reg. 24,058 et. seq. (1998).
32. See Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport, 65 Fed. Reg. 2674 (January 18, 2000).
33. See Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir. 2001).
34. 42 U.S.C. § 7604 (a),(c).
35. 42 U.S.C. § 7411(a)(2); 40 C.F.R. Part 60, Subpart Da, §§ 60.40a-49a.
36. 42 U.S.C. § 7475(a); 40 C.F.R. § 52.21(b)(2)(iii).
37. 42 U.S.C. § 7411(a)(2), (4); see also 40 C.F. R. §§ 51.165a)(1)(v.)(A), 51.166(b)(2)(i).
38. See Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979).
39. See 57 Fed. Reg. 32, 314, 32, 316 (July 21, 1992) ("the definition of physical or operational change in section 111(a)(4) could, standing alone, encompass the most mundane activities at an industrial facility.")
40. 40 C.F.R. § 52.21(b)(2)(iii)(a).
41. Alabama Power Co. v. Costle, 636 F.2d 323, 400 (D.C. Cir. 1979).
42. 40 C.F.R. § 51.166(b)(2)(III)(a).
43. 42 U.S.C. § 7475(a)(4). Best available control technology is an emissions limitation based on the maximum degree of reduction achievable for such facility through application of production processes or available methods, systems and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of each pollutant. See 40 C.F.R. § 51.166(b)(12).
44. See e.g., Memorandum from Don R. Clay, EPA Acting Assistant Administrator for Air & Radiation, to David A. Lee, Air & Radiation Division, EPA region V, September 9, 1988 ("Clay Memo")
45. 893 F.2d 901 (7th Cir. 1990).
46. Clay Memo, 3-4; 893 F.2d 901, 909-911 (7th Cir. 1990).
47. 893 F.2d 901, 912 (7th Cir. 1990).
48. Id. at 909
49. The EAB is a panel of administrative judges appointed by the Administrator of EPA, which operates independently of agency offices.
50. Tenn. Valley Auth., 9 E.A.D. CAA Docket No. 00-6 (U.S. Envtl. Prot. Agency September 15, 2000)("EAB Final Order").
51. EAB Final Order, 65-68.
52. Id. at 50, 52. The EAB Final Order is currently under review by the U.S. Court of Appeals for the Eleventh Circuit.
53. United States v. American Electric Power Service Corp., et al (and consolidated cases State of New York, et al and Ohio Citizen Action, et al v. American Electric Power Service Corp.), Nos. C2-99-1182 and C2-99-1250 (S.D. Ohio). Section 304 of the Act requires that a citizens’ suit be filed in the district where the facility is located. 42 U.S.C. § 7604(c).
54. See id., Plaintiffs’ Motion for Partial Summary Judgment that AEP’s Modifications of its Coal-Fired Generating Units Do No Qualify For the Routine Maintenance, Repair and Replacement Regulatory Exemption, and Memorandum in Support Thereof, February 22, 2001. AEP also claims that the "ground rules" for the new source review have changed. However, as mentioned above, EPA has consistently construed the "routine maintenance" exemption as a narrow one. The government’s position has consistently been that projects that increase a deteriorated unit’s ability to produce electricity from conditions that existed prior to the change cannot be classified as "routine."
55. Id.
56. National Energy Policy Report (May 2001).
57. Testimony of EPA Administrator Christine Todd Whitman before the Committee on Environment and Public Works, United States Senate, July 26, 2001.
58. Id.
59. See 40 C.F.R. Part 60.
60. See Amended Complaint.
61. Clean Power Strategy, at 4; New Hampshire Department of Environmental Services, Air Resources Division, Comments and Questions on the EPA’s NSR 90-day Review Background Paper, July 17, 2001.

The Author

Attorney Maureen D. Smith, Senior Assistant Attorney General, Environmental Protection Bureau, Attorney General’s Office, Concord, New Hampshire.

 

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