Legal Action Against Alabama Power
Background
In the 1990s the Environmental Protection Agency found that many plants "grandfathered" from Clean Air Act requirements, including five Alabama Power facilities, were violating the Clean Air Act by making major investments to extend the lives of their power plants without installing the required pollution control equipment and thereby illegally emitting millions of tons of pollution.
In November, 1999 EPA filed suit against Alabama Power over modifications to units at five plants, including Barry, Gaston, Gorgas, Greene County, and Miller, without installing appropriate pollution control technology to control emissions of nitrogen oxides ("NOx"), sulfur dioxide ("SO2"), and particulate matter ("PM") and, with respect to all but one of the foregoing plants, without first obtaining appropriate permits authorizing the construction, as required by the Act. SELC, on behalf of the Alabama Environmental Council joined forces with EPA to force Alabama Power to follow the law and to close the loophole of grandfathered power plants.
Under the New Source Review program, if a power plant is modified and pollution increases as a result of that modification, the plant must install the best available pollution control equipment. However, facilities are allowed to perform routine maintenance without risking their grandfathered status. Two key issues in the Alabama Power case involve 1). what defines "routine maintenance" and is therefore exempt from New Source Review requirements and 2). how to measure pollution increases to determine if modifications result in an increase in pollution, triggering New Source Review and requiring stricter pollution controls.
Unfortunately, in June, 2005 US District Court for the Northern District of Alabama ruled in favor of industry largely based on what the court felt were "inconsistent positions EPA has taken on core application of the NSR Rules" and therefore refusing to defer to EPA's interpretations of its own regulations.
Routine Maintenance
Since the mid-1980s, many utilities have developed and implemented self-proclaimed "life extension projects," designed to extend the lives of their grandfathered plants. At the same time, they have attempted to retain the grandfathered status of these plants by claiming these investments -- often costing tens of millions of dollars -- amount to mere routine maintenance not the plant modifications that would trigger New Source Review and require strict pollution controls. Their argument is that routine maintenance is defined by any modification that is "routine" by the standards of other facilities in the same industry, regardless of how infrequently the modification normally occurs. By this standard, replacing an engine of a car would be considered "routine maintenance" because, at times, some cars need new engines.
EPA argues that modifications should only be considered "routine maintenance" when they are typically done for that kind of unit. Repairs and replacements that are designed to extend the life of the plant are major modifications and should be required to install modern pollution controls.
The Court held that "routine maintenance" is defined by what is routine in the industry.
Measurement of Emissions
Under New Source Review, a utility must install modern pollution controls whenever modifications are made that result in an increase in emissions. Since most equipment replacements and upgrades are designed to improve a plant's efficiency, allowing it to operate longer hours, these modifications will result in an increase in total pollution. EPA contended that this total pollution increase should result in the facility being required to install modern pollution controls.
Industry argued for emissions to be measured on an hourly basis. Such a measurement allows plants to make modifications that result in a substantial increase in pollution while avoiding installing pollution controls, as long as the hourly rate of emissions doesn't increase.
The Court held that an hourly emissions test should be applied to determine a net emissions increase.
