U.S. Supreme Court to Hear Duke Energy Air Pollution Case
WASHINGTON, DC , May 16, 2006 (ENS) - The U.S. Supreme Court Monday agreed to hear an air pollution case against Duke Energy regarding the Clean Air Act's new source review requirements. Established in 1977, these rules require power plants and factories to modernize air pollution controls when they install new sources of power that increase emissions.
The Supreme Court's review of the case, Environmental Defense, et al. v. Duke Energy Corporation (No. 05-848), represents only the third environmental law case in 35 years to be taken up by the high court where environmental groups alone sought review.
The case arose in 2000, when the U.S. Environmental Protection Agency filed a Clean Air Act enforcement action against Duke Energy in federal district court in North Carolina.
Duke's Lee Steam Station, one of the power plants at issue in the case, is a three-unit coal-fired generating facility located on the Saluda River in Anderson County, South Carolina. (Photo courtesy Duke Energy )
The Southern Environmental Law Center, representing Environmental Defense, Sierra Club and Environment North Carolina, joined the U.S. EPA in prosecuting the matter. They alleged the electric utility expanded operations at eight power plants in North Carolina and South Carolina resulting in increases in air pollution without updating pollution controls.The federal district court for the middle district of North Carolina granted summary judgment for Duke Energy and a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit unanimously affirmed the lower court's ruling on June 15, 2005.
Nine days later, the U.S. Court of Appeals in Washington, DC reached a contrary result in reviewing industry challenges to national new source review (NSR) rules.
The Fourth Circuit subsequently denied the U.S. EPA's and Environmental Defense's request for rehearing.
In March, U.S. Solicitor General Paul Clement and other Justice Department officials attempted to persuade the Supreme Court not to hear this case, siding with the Fourth Circuit Court's ruling and claiming there was no 'square conflict among the courts of appeals.'
Blan Holman, senior attorney with the Southern Environmental Law Center, said, 'This is a significant case, with implications for pending New Source Review enforcement actions in Alabama and elsewhere, and also for the administration's ongoing attempts to weaken the permitting program through rulemaking.'
Blan Holman is a senior attorney with the Southern Environmental Law Center. (Photo courtesy SELC )
The Southern Environmental Law Center explains that in 1984, Duke Energy shut down Unit 4 of its Buck power plant in Rowan County, North Carolina, citing its age and condition, and saying the unit could not operate without total rehabilitation. By 1995, Duke had reversed course, and spent $17.7 million - seven times the original cost of the unit - to make the unit operational and extend its life by 20 years.Duke calls this overhaul 'routine maintenance' which does not fall under the new source review requirements.
When Congress amended the Clean Air Act in 1977, many old, coal-fired plants, such as the Buck plant and others operated by Duke Energy, were exempt from new rules requiring the installation of modern pollution controls when making modifications that result in increased emissions.
The plaintiffs argue that by granting these plants 'grandfathered' status, Congress envisioned that the utilities would either retire their biggest polluting plants or, if they refurbished those plants, meet modern pollution standards.
Duke Energy made the modifications between 1988 and 2000 at eight plants in North and South Carolina, including Belews Creek, Buck, Cliffside, Dan River, CG Allen, Marshall and Riverbend plants in North Carolina and the W.S. Lee plant in South Carolina.
Some of these units are located in areas that are in violation of federal EPA health standards for ozone, soot, or both, to which power plant emissions contribute.
Buck Steam Station is a four-unit coal-fired generating station located on the Yadkin River in North Carolina. Switched on in 1926, it was named for the company's co-founder James Buchanan 'Buck' Duke. (Photo courtesy Duke Energy )
In 2000 the EPA filed suit against Duke Energy for exploiting the company's grandfathered status and making 29 modifications to the eight coal-fired power plants in the Carolinas, emitting millions of tons of pollution in the process.Through their lawsuit, the EPA and the plaintiff groups seek to close the loophole of grandfathered power plants.
“We're very pleased that the Court agreed to review the Duke Energy decision, which rests on a flawed interpretation of the Clean Air Act, and which industry has been citing in numerous other cases in an effort to undermine essential pollution controls applicable to some of the nation's largest sources of air pollution,' said Sean Donahue, lead attorney in the case for Environmental Defense.
The co-petitioners presented two issues to the Supreme Court:
- Whether the Fourth Circuit impermissibly allowed Duke Energy to collaterally attack the legality of national rules that may be reviewed solely in the U.S. Court of Appeal in Washington, DC.
- Whether the Clean Air Act requires EPA to interpret the term “modification” in the new source review program to encompass changes that result in an actual overall increases in air pollution.
At issue in this second question is what test federal and state regulators can use to enforce the new source review provisions. The Clinton administration used the standard of a cumulative measure of pollutants released annually in prosecuting power plants for violations.
Duke attorneys convinced the 4th Circuit that the Clean Air Act only allows violations to be based on a facility's hourly emission rate.
The plaintiffs' allegations may fail if the utility's interpretation is adopted by the Supreme Court.
The case will be added to the Supreme Court's fall calendar, which is scheduled to begin October 2. An opinion is expected within a year after oral arguments are heard.
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