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Press Release: In 'Major Defeat' for EPA and Industry, Circuit Court Strikes Down Loophole for Power Plants
by Eric Schaeffer
Court Assails "Humpty Dumpty" Logic of Polluter-Friendly EPA Rule
Mar 20, 2006

Click here to download file. (doc)

WASHINGTON, D.C.//March 18, 2006//The following statement was issued today by Environmental Integrity Project (EIP) Director Eric Schaeffer:

"On March 17, 2006, the D.C. Circuit Court of Appeals struck down the Bush Administration's so-called 'Equipment Replacement Rule' allowing power companies to make major physical changes to the oldest, dirtiest coal-fired power plants without having to install pollution controls. The decision is a victory for the environment and the public health, and a major defeat for the energy lobbyists who have called the shots in Washington for the last five years. Attorney General Elliot Spitzer and his allies among states and public interest groups deserve credit for bringing the lawsuit that led to this landmark result.

The decision also restores to life the many enforcement actions abandoned by the federal government, in anticipation of the polluter friendly rule that was vacated today. EPA and the Justice Department can now get back to work enforcing the law as it is written, and not as it is dreamed of by ideologues and industry lobbyists."

Schaeffer noted that the language of the court's decision leaves no room for doubt as to its meaning. The opinion declares that the rule is illegal under the Clean Air Act, and cannot be rescued by EPA:

"We now vacate the ERP [Equipment Replacement Rule] because it is contrary to the plain language of section 111(a)(4) of the Act." (page 6)

"EPA offers no reason to conclude that the structure of the Act supports the conclusion that 'any physical change' does not means what it says ... Although EPA might prefer market-based methods of controlling pollution, Congress has chosen a different course with NSR." (page 19)

The words in the law mean what they say:

"[T]his court has construed the definition of 'modification' broadly. In Alabama Power, the court explained that 'the term "modification"... is nowhere limited to physical changes exceeding a certain magnitude.'" (page 12)

As the court notes, the EPA/industry interpretation relied on "Humpty Dumpty" logic:

"EPA's approach would ostensibly require that the definition of 'modification' include a phrase such as 'regardless of size, cost, frequency, effect,' or other distinguishing characteristic. Only in a Humpty Dumpty world would Congress be required to use superfluous words while an agency could ignore an expansive word that Congress did use. We decline to adopt such a world-view." (page 14)

EPA's interpretation would increase pollution:

"EPA's interpretation would produce a 'strange'... result: a law intended to limit increases in air pollution would allow sources operating below applicable emission limits to increase significantly the pollution they emit without government review." (page 12)

BACKGROUND

The Clean Air Act requires "grandfathered" power plants to apply for permits and install modern pollution controls if those plants are physically modified in a way that significantly increases pollution. On October 17, 2003, the Bush Administration enacted a rule that that would have exempted most physical modifications from these "New Source Review" requirements, even if they increased pollution by thousands of tons a year.

In brief, the rule exempted any physical changes to replace "identical or functionally equivalent" components, for any project that did not exceed 20 percent of the value of the entire plant. This provision effectively allowed the replacement of an entire plant, through a series of exempt "routine repairs," without ever having to upgrade pollution controls. While EPA had exempted routine repairs in the past, the term had previously been narrowly defined to encompass small, inexpensive projects.

Coal-fired power plants are the source of two thirds of the sulfur dioxide emissions, and nearly one fourth of the nitrogen oxide emissions released in the US. These pollutants contribute to acid rain, but also form fine particles that EPA estimates triggers hundreds of thousands of asthma attacks and more than 20,000 premature deaths from heart disease every year. Most of the pollution responsible for these health effects comes from grandfathered plants that are exempt from modern pollution controls, until they are physically modified in a way that increases pollution.

New York Attorney General Elliot Spitzer and a coalition of states and environmental groups immediately took EPA to court to challenge the rule. In December of 2003, the DC Circuit prohibited EPA from implementing the rule until it could determine whether its provision violated the Clean Air Act. But last year, EPA announced it would stop enforcing the NSR rules still on the books, in light of its intention to adopt more lenient standards. On March 17, 2006, the Court "vacated," or struck down, the regulation.

Click here to read the full text of the decision.

ABOUT EIP

The Environmental Integrity Project (http://www.environmentalintegrity.org) is a non-profit and non-partisan organization dedicated to stronger enforcement of existing federal and state anti-pollution laws, and to the prevention of political interference with those laws. EIP's research and reports shed light on how enforcement and rulemaking affect public health. EIP also works closely with communities seeking enforcement of environmental laws.

CONTACT: Eric Schaeffer, (202) 263-4440 or eschaeffer@environmentalintegrity.org.