EPA considers “off-ramp” for New Source Review compliance

Pam Boschee

News Editor

After snagging seven electric utilities last November for alleged noncompliance with New Source Review (NSR) regulations and drawing fire for its interpretation of “routine plant maintenance,” the Environmental Protection Agency (EPA) is considering a regulatory “off-ramp.”

Quin Shea, Edison Electric Institute`s (EEI) senior director for environmental activities, described the off-ramp concept in a recent interview with EL&P. He said, “We`ve got the core NSR program. EPA wants to package it with an alternative that would allow companies-if they were amenable to agreeing to very specific NOx and SOx emission reduction targets in specified time frames-to try to give them some regulatory certainty, which would mean flexibility. They`ll then potentially have the flexibility to make so-called routine maintenance and repair changes without the threat of the agency looking at them for a set number of years.”

EPA held a public meeting on January 13 to discuss alternative approaches for compliance with pending revisions to NSR requirements to be finalized later this year. Shea represented EEI and listed the following attendees, among others:

– The Clean Energy Group, made up of northeastern utilities with mostly gas-fired generation;

– Natural Resources Defense Council and eight to 10 other environmental groups;

– Federal land managers, such as fish & wildlife, park services;

– Several northeast states; and

– Several public interest groups.

Several groups submitted proposals to EPA for consideration in advance of the public meeting. The Clean Energy Group (CEG) offered a voluntary national cap and trade program to control SO2, CO, particulates, NOx, mercury and CO2. CEG wrote, “These cap-and-trade programs would provide participating companies with a set of emission targets that would not change for a period of 15 years, unless further reductions are needed to attain and maintain health based standards.”

Hunton & Williams` Henry Nickel, representing the Utility Air Regulatory Group, wrote, “The current NSR program is incredibly complex and is characterized by misunderstandings by all as to its applicability. The EPA proposals to change the NSR program, in our view, will aggravate, not alleviate this situation. If adopted, the revised rules will lead to litigation and to a chilling effect on programs by all of industry to improve the efficiency and reliability of existing facilities. We need to take this opportunity to develop an alternative to a program that all believe is `broken.`”

Rep. David McIntosh (R-Ind.), chairman of the Subcommittee on National Economic Growth, Natural Resources and Regulatory Affairs voiced his protest regarding any consideration of control of CO2 emissions. He wrote, “I regard this EPA initiative as a clear violation of the Knollenberg funding restriction. Neither the Clean Air Act (CAA) nor the United Nations Framework Convention on Climate Change authorizes EPA to establish a cap and trade program to control emissions of carbon dioxide. The only possible legal authority for such a program is Article 17 of the non-ratified Kyoto Protocol.”

The Knollenberg Amendment, authored by Rep. Joseph Knollenberg (R-Mich.), stipulates that no funds may be used “for the purpose of implementation, or in preparation for implementation of the Kyoto Protocol.”

Clearly, the debates and protests will continue. As in previous EPA controversies, such as those surrounding standards for national particulate matter, the nondelegation doctrine serves as an umbrella under which regulatory and legislative actions must be examined. This doctrine holds that certain issues are too important for Congress to delegate to administrative agencies. According to the U.S. Constitution, governing is to be done by Congress, not by agencies such as EPA. Congress may delegate rulemaking to an agency, but the agency must then be precise in its interpretation of its limits of authority.

A remark made by Shea highlighted this issue. He said, “No matter what would be agreed to hypothetically in the context of NSR reform debate, the so-called off-ramp, no matter what was agreed to by these stakeholders-in no way would that be binding on the key body that really matters in this, and that would be Congress. At some point Congress may speak to CO2 and Congress may speak again to mercury. Congress may speak to NSR reform in any CAA revisions that occur in the next several years. The agency [EPA] cannot guarantee the certainty that he [Robert Perciasepe, EPA assistant administrator for Air and Radiation] was trying to guarantee.”

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