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Clean Air Act: Supreme Court Declines Certiorari in ERP Case

Beveridge & Diamond, P.C., May 1, 2007

On April 30, 2007, the Supreme Court rejected petitions from the U.S. Environmental Protection Agency and a coalition of major power providers, asking the Court to overturn a decision of the United States Court of Appeals for the District of Columbia that invalidated EPA’s 2002 “Equipment Replacement Provision” (“ERP”) rule.  EPA v. New York, et al., 443 F.3d 880 (D.C. Cir. 2006) (“New York II”).

The ERP rule was part of a broader EPA initiative to revise and streamline the Clean Air Act’s New Source Review permitting program.  The ERP established a bright line test that would allow industry to more easily determine whether equipment replacements triggered major New Source Review (“NSR”).  Under the ERP, a facility could spend up to 20% of the replacement cost of a process unit to replace worn components with like-kind or similar parts without triggering NSR permitting.  In 2006, the D.C. Circuit vacated the rule, finding that the Clean Air Act contemplates NSR permitting for “any” physical change, not just those that are costly or major.  443 F.3d at 890. 

The Supreme Court’s denial of certiorari means that the D.C. Circuit’s decision will remain the last word on this issue – for the time being, at least.  In the meantime, EPA continues to move forward on other revisions to the NSR program.  See New Source Review: EPA Proposes New Definition of Emissions Increase for Electric Generating Units.”

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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