EPA’s New Regulatory Policy: Two Steps Back

June 16, 2012

As many as 600 operating power plants in the United States are between thirty and fifty years old and are up to ten times dirtier than new power plants built today. Many of the technologies that remove pollution and increase operating efficiencies have been available for decades, but power plants have been slow to adapt. The New Source Review (“NSR”) provisions of the Clean Air Act (“CAA”) lie at the heart of the continued existence of these grandfathered plants. While the main goal of Congress in promulgating the CAA was to improve air quality, it also sought to avoid imposing the heavy burden polluters would face if they were forced to immediately install new equipment. Consequently, the NSR program requires owners and operators of plants to install emission controls only when the source undergoes a “modification,” a physical change accompanied by an emissions increase. As all plants eventually updated their facilities or shut down, Congress felt confident that this regime would assure “attainment of pollution control by a fixed date.”
In August 2003, the administration adopted changes to these regulations that will affect more than 17,000 coal-fired power plants in the United States. The new rule will exempt grandfathered power plants from this core requirement of the CAA. Under the new rule, if the cost of a modification to a plant is below twenty percent of the unit’s value, the plant will be exempt from installing the requisite pollution control technology. According to administration officials, the new rule will allow plants to modernize more easily and lead to greater efficiency without increasing pollution. Mr. Jeffrey Holmstead, the administrator of the Office of Air and Radiation in the Environmental Protection Agency (“EPA”), testified to the Senate that the changes are environmentally neutral and would not adversely affect public health. Many environmentalists and state officials, however, are outraged at what they perceive to be a gutting of the CAA. Twelve states, led by New York Attorney Gen. Eliot Spitzer, are challenging the new regulations in court. On December 25, 2003, the U.S. Court of Appeals for the District of Columbia granted an emergency motion for stay that barred the new rules from taking effect pending the outcome of litigation.
This comment argues that the new rule undermines the regulatory scheme envisioned by Congress in promulgating the CAA and should be invalidated by the D.C. Circuit under the Supreme Court’s decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.