New Source Review
Encyclopedia
The New Source Review, is a permitting
process created by the US Congress in 1977 as part of a series of amendments
to the Clean Air Act
. The NSR process requires industry to undergo an Environmental Protection Agency
pre-construction review for environmental controls if they propose either building new facilities or any modifications to existing facilities that would create a “significant increase” of a regulated pollutant. The legislation allowed “routine scheduled maintenance” to not be covered in the NSR process. Since the terms “significant increase” and “routine scheduled maintenance” were never precisely defined in legislation, they have become a source of contention in many lawsuits filed by the EPA, public interest groups, and utilities.
(WEPCo) submitted an NSR inquiry to the EPA for improvements at its Port Washington plant
. The improvements included the replacement and repair of aging equipment including steam turbine generators
, major boiler components and significant amounts of asbestos remediation. WEPCo initially believed that the plant, built in 1932, would not be subject to the NSR requirements and would instead fall under “routine maintenance, repair, and replacement”. The EPA, however, ruled that the improvements would extend the life of the plant, and constitute a long term and significant increase in the facilities emissions, prompting WEPCo to sue the EPA in federal court.
In 1991 the Seventh Circuit Court of Appeals found that the EPA had improperly interpreted the NSR and ruled that work that "does not 'change or alter' the design or nature of the facility”, would render the facility exempt from the NSR rules. Rather, it merely allows the facility to operate again as it had before the specific equipment deteriorated." The appeals court also ruled that WEPCo would not emit any more pollutants after the improvements, and agreed with WEPCo that its emissions would actually decrease and that the EPA had miscalculated its estimation of the plants emissions. However the court did agree with the EPA that the repairs and modifications to the plant did not constitute “routine maintenance” After the WEPCo ruling, the EPA continued to take a case by case approach to NSR’s at facilities built before 1977, viewing the court's ruling as applying to the power sector specifically and not to all similar NSR applications in general.
based Duke Energy
made twenty nine modifications and upgrades to several of its coal-generated units. These modifications, like the ones at WEPCo, had no impact on unit emission and were designed to replace or upgrade older equipment. Duke did not apply for or obtain permits from the EPA for this work, and were sued. The EPA argued that the modifications and upgrades could significantly increase the dispatch capacity of the units, and allow them to operate at higher outputs for longer periods of time, placing Duke in excess of the EPA’s Prevention of Significant Deterioration (PSD), requiring an automatic NSR.
Duke Energy initially prevailed in both the trial as well as the appeal in front of the Fourth Circuit Court of Appeals, when they ruled that the EPA’s rulings were inconsistent with prior decisions and that the EPA’s previous interpretation of the NSR would also have to be applied to its application of its PSD rule.. The EPA, along with the North Carolina Sierra Club
appealed the decision to the Supreme Court
, which in a unanimous decision, overturned the Fourth Circuit’s decision. The Court ruled the term “modification” did not have the same meaning in the PSD and NSPS provisions.
Construction permit
A construction permit or building permit is a permit required in most jurisdictions for new construction, or adding on to pre-existing structures, and in some cases for major renovations. Generally, the new construction must be inspected during construction and after completion to ensure compliance...
process created by the US Congress in 1977 as part of a series of amendments
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
to the Clean Air Act
Clean Air Act
A Clean Air Act is one of a number of pieces of legislation relating to the reduction of airborne contaminants, smog and air pollution in general. The use by governments to enforce clean air standards has contributed to an improvement in human health and longer life spans...
. The NSR process requires industry to undergo an Environmental Protection Agency
United States Environmental Protection Agency
The U.S. Environmental Protection Agency is an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress...
pre-construction review for environmental controls if they propose either building new facilities or any modifications to existing facilities that would create a “significant increase” of a regulated pollutant. The legislation allowed “routine scheduled maintenance” to not be covered in the NSR process. Since the terms “significant increase” and “routine scheduled maintenance” were never precisely defined in legislation, they have become a source of contention in many lawsuits filed by the EPA, public interest groups, and utilities.
Wisconsin Energy Corporation Lawsuit
In 1988 the Wisconsin Energy CorporationWisconsin Energy Corporation
Wisconsin Energy Corporation , based in Milwaukee, Wisconsin serves more than 1.1 million electric customers in Wisconsin and Michigan's Upper Peninsula and more than 1 million natural gas customers in Wisconsin through its utility subsidiary, We Energies...
(WEPCo) submitted an NSR inquiry to the EPA for improvements at its Port Washington plant
Port Washington, Wisconsin
Port Washington is the county seat of Ozaukee County in the U.S. state of Wisconsin. The city is about 25 miles north of Milwaukee and 110 miles north of Chicago. In the 2000 census Port Washington had a population of 10,467...
. The improvements included the replacement and repair of aging equipment including steam turbine generators
Steam turbine
A steam turbine is a mechanical device that extracts thermal energy from pressurized steam, and converts it into rotary motion. Its modern manifestation was invented by Sir Charles Parsons in 1884....
, major boiler components and significant amounts of asbestos remediation. WEPCo initially believed that the plant, built in 1932, would not be subject to the NSR requirements and would instead fall under “routine maintenance, repair, and replacement”. The EPA, however, ruled that the improvements would extend the life of the plant, and constitute a long term and significant increase in the facilities emissions, prompting WEPCo to sue the EPA in federal court.
In 1991 the Seventh Circuit Court of Appeals found that the EPA had improperly interpreted the NSR and ruled that work that "does not 'change or alter' the design or nature of the facility”, would render the facility exempt from the NSR rules. Rather, it merely allows the facility to operate again as it had before the specific equipment deteriorated." The appeals court also ruled that WEPCo would not emit any more pollutants after the improvements, and agreed with WEPCo that its emissions would actually decrease and that the EPA had miscalculated its estimation of the plants emissions. However the court did agree with the EPA that the repairs and modifications to the plant did not constitute “routine maintenance” After the WEPCo ruling, the EPA continued to take a case by case approach to NSR’s at facilities built before 1977, viewing the court's ruling as applying to the power sector specifically and not to all similar NSR applications in general.
Duke Energy
Between 1998 and 2000, CharlotteCharlotte, North Carolina
Charlotte is the largest city in the U.S. state of North Carolina and the seat of Mecklenburg County. In 2010, Charlotte's population according to the US Census Bureau was 731,424, making it the 17th largest city in the United States based on population. The Charlotte metropolitan area had a 2009...
based Duke Energy
Duke Energy
Duke Energy , headquartered in Charlotte, North Carolina, is an energy company with assets in the United States, Canada and Latin America.-Overview:...
made twenty nine modifications and upgrades to several of its coal-generated units. These modifications, like the ones at WEPCo, had no impact on unit emission and were designed to replace or upgrade older equipment. Duke did not apply for or obtain permits from the EPA for this work, and were sued. The EPA argued that the modifications and upgrades could significantly increase the dispatch capacity of the units, and allow them to operate at higher outputs for longer periods of time, placing Duke in excess of the EPA’s Prevention of Significant Deterioration (PSD), requiring an automatic NSR.
Duke Energy initially prevailed in both the trial as well as the appeal in front of the Fourth Circuit Court of Appeals, when they ruled that the EPA’s rulings were inconsistent with prior decisions and that the EPA’s previous interpretation of the NSR would also have to be applied to its application of its PSD rule.. The EPA, along with the North Carolina Sierra Club
Sierra Club
The Sierra Club is the oldest, largest, and most influential grassroots environmental organization in the United States. It was founded on May 28, 1892, in San Francisco, California, by the conservationist and preservationist John Muir, who became its first president...
appealed the decision to the Supreme Court
Supreme court
A supreme court is the highest court within the hierarchy of many legal jurisdictions. Other descriptions for such courts include court of last resort, instance court, judgment court, high court, or apex court...
, which in a unanimous decision, overturned the Fourth Circuit’s decision. The Court ruled the term “modification” did not have the same meaning in the PSD and NSPS provisions.