US Justice Department will prosecute new source review cases

By the OGJ Online Staff

HOUSTON, Jan. 15, 2002 — The US Justice Department Tuesday said it will continue to prosecute seven lawsuits filed by the Clinton administration against utilities that allegedly violated clear air laws by expanding capacity at coal-fired units without installing pollution control equipment.

The lawsuits were filed in 1999. After President George W. Bush was elected, Vice-Pres. Dick Cheney’s National Energy Policy Development Group asked the Justice Department to review the cases. The Justice Department said it found the US Environmental Protection Agency’s “new source review” (NSR) enforcement actions against certain facilities, including power plants and oil refineries, consistent with the Clean Air Act (CAA) and that ongoing prosecutions will proceed.

The Department takes seriously its obligation to enforce laws protecting the US environment, said Atty. Gen. John Ashcroft. “Ensuring cleaner air for the health and well-being of all Americans is critically important.”

Under the NSR program, facilities that construct new, or modify existing, sources of pollution are required to obtain a permit and install pollution control devices. The Justice Department is pursuing enforcement actions on behalf of EPA against companies alleged to have made NSR-triggering modifications to their facilities. Controversy surrounds the interpretation of the word “modification.”

The Justice Department concluded EPA has a reasonable basis for arguing that the enforcement actions are consistent with both the Clean Air Act and the Administrative Procedure Act. First, it said the EPA’s belief that the defendants have “modified” their facilities, and thus are subject to NSR is reasonable. Courts generally defer to agency interpretations of ambiguous statutory terms, such as “modification,” Justice said.

Electric utilities argued the EPA interpretation of major modification was unlawful. They also asserted EPA changed its interpretation of what constitutes routine maintenance not subject to new source review. Existing plants were not required to retrofit with pollution controls under the 1977 CAA amendments.

In 1977, Congress amended the CAA to establish the new source review program. EPA has yet to issue rules detailing what it considers routine and exempt from the new source review process. In late 1996, EPA began investigating suspected new source review violations by the electric power industry.

The Justice Department filed the lawsuits in 1999 based on referrals from EPA. The lawsuit against Tampa Electric Co. was settled. The remaining suits are in varying stages of litigation or settlement talks. Justice said it will continue to negotiate with the various defendants.

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