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Friday, October 01, 2004

New Source Review rule hinders enforcement

According to key enforcement officials, the NSR rule change is so dramatic that it has impacted OECA’s ongoing litigation, out-of-court settlements, and new enforcement actions against coal-fired electric utilities. This is because, even though a court in December 2003 issued a stay delaying implementation of the NSR rule, OECA’s ability to obtain appropriate controls through settlements or court-imposed remedies has been weakened. Three of nine utilities in ongoing active litigation with EPA have asserted that enforcement actions should cease or be significantly reduced based on the contention that the maintenance activities in question would no longer be considered a violation under the 2003 NSR rule. Similarly, soon after the NSR rule was made public on August 27, 2003, a major utility ceased negotiations with EPA. Agency officials attributed it to the announcement of the rule as well as an adverse court ruling in an ongoing NSR enforcement case against a coal-fired utility. Similar to their views on the NSR rule change’s impact on NSR enforcement, Agency officials did not agree on the extent to which the NSR rule change, as opposed to the adverse court ruling, impacted these negotiations.

No new enforcement actions have been taken against coal-fired utilities alleged to have violated the old NSR rule due to the new rule’s adverse impact on OECA’s leverage in settlements or court remedies. If the October 2003 rule is eventually implemented as promulgated, OECA officials estimate that, of the utilities alleged to have violated NSR in the past, only five smaller utilities, emitting a relatively small amount of SO2 and NOX, would still be in violation of NSR. All of OECA’s other cases would be in compliance with NSR under the 20-percent threshold and thus the installation of lower emitting controls made more difficult, whether in settlements or by way of injunctive relief in court. As a result, nearly all of the projected emission reductions of 1.75 million tons of SO2 and 629,000 tons of NOX would not be realized under NSR enforcement efforts.