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New Source Review: EPA Proposes New Definition of Emissions Increase for Electric Generating Units

Beveridge & Diamond, P.C., April 26, 2007

The Environmental Protection Agency has proposed a change to the emissions increase test used to determine if the New Source Review (“NSR”) permitting program would apply when an existing power plant makes a physical or operational change.  The Supplemental Notice of Proposed Rulemaking (SNPR) builds on an October 20, 2005 proposal in which EPA proposed to replace the current annual emissions increase test (tons/year) with a test based on changes in the hourly rate of emissions (lbs/hr).  Today’s SNPR revises the October 2005 proposal to offer for public comment a new and preferred emissions test option.  In the October 2005 proposal, EPA had proposed to remove the annual emissions increase test and subject electric generating units to NSR only in the event of an increase in the hourly rate of emissions.  By contrast, in today’s proposal, EPA proposes to retain the annual emission increase test but apply it only where an electric generating unit’s hourly emission rate would increase.  That is, under today’s proposal, as long as a physical or operational change to an electric generating unit would not increase the unit’s hourly emissions rate, NSR would not apply.  If the unit’s hourly emissions rate were to increase, however, then the current annual emissions test would apply, and the unit would be subject to NSR if the projected annual emissions after the change show an increase above threshold levels.

Today’s SNPR comes less than a month after the Supreme Court considered the appropriateness of using an hourly emissions test under the NSR permitting program.  In United States v. Duke Energy Co., decided on April 2, 2007, the Court vacated a decision in the U.S. Court of Appeals for the Fourth Circuit, which had held that EPA must apply an hourly emissions rate test under the NSR program.  The Court found no basis for using the hourly rate test in EPA’s current NSR regulations; the regulations provided only for an annual emissions test, according to the Court.  The October 2005 proposal, including its update issued today, would revise those regulations to allow a threshold  hourly emissions rate test for physical and operational changes at power plants.

For more information, please contact David Friedland at dfriedland@bdlaw.com, Laura McAfee at lmcafee@bdlaw.com, or Amy Lincoln at alincoln@bdlaw.com.

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