Supreme Court refuses to hear NSR case

April 30 -- The U.S. Supreme Court handed a defeat to the Environmental Protection Agency and electric utilities on April 30 by refusing to hear arguments in a new source review case dealing with the definition of routine maintenance.

Operators of coal-fired electric power plants hoped to convince the Supreme Court to overturn a March 2006 decision by the U.S. Court of Appeals for the District of Columbia. The appeals court had overturned an EPA change to the NSR portion of the Clean Air Act that would have made it easier for coal-burning power plants to replace equipment without installing costly new air emission controls. The change would have established a cost threshold below which activities at power plants would not be subject to NSR, provided the changes involved replacement of "functionally equivalent" equipment.

The Supreme Court´s decision allows the appeals court decision to stand, which led environmental advocates to proclaim victory.

"We are grateful, but not surprised, that the Supreme Court has once again reminded EPA that the Clean Air Act says what it means and means what it says -- significant renovations at old dirty power plants cannot avoid requirements to apply pollution controls," said Ann Weeks, legal director of the Clean Air Task Force.

Spokesmen for the electric generating industry also said they were not surprised by the decision, but they remain optimistic. They said a recent Supreme Court decision in the Duke Energy case that also dealt with new source review clears the way for additional reforms to the program that would benefit the electric industry.

"Our hope now is that EPA will finalize its emissions increase rule," said Dan Riedinger, a spokesman for the Edison Electric Institute, which represents U.S. shareholder-owned electric utilities. "The court recently recognized the agency´s authority to take this step, which will help provide much-needed clarity as to how new source review requirements are to be implemented by power companies."

Clarifications to the NSR program would help utilities decrease emissions further by encouraging plant improvements that increase efficiency and reduce emissions, Riedinger said.

However, environmentalists disagree, saying the changes being prepared by the EPA would create additional loopholes designed to exempt aging power plants and other industrial facilities from installing the most modern and effective air emission reduction equipment.