What Happened When One Company Lowered Its Costs and Improved the Environment? Government Fines.
The EPA and Department of Justice brought the suit against Duke Energy in 2000 arguing that the company failed to comply with the Clean Air Act when the company modified 13 coal-fired units in North Carolina.
At issue is the New Source Review (NSR), one of the 1977 Clean Air Act amendments. Power plants must meet certain air quality standards, and companies must follow Prevention of Significant Deterioration (PSD) rules to demonstrate that the construction and operation of new projects and major modifications will not increase emissions above a specified threshold.
Therefore, if a company wants to make plant modifications that improves the power plant’s efficiency, it will trigger New Source Review and the EPA will regulate the plant to meet the most recent emissions standards.
However, what constitutes a significant modification is subjective under the rules. The amendment excludes routine maintenance, repair, and replacement, but what falls under the definition of significant modification remains murky, despite multiple administrative attempts to clarify the meaning. The lack of clarification also forces companies into years, if not decades, of litigation over NSR violations. Such is the most recent case with Duke Energy.
Companies could be allocating resources to invest in new equipment and provide jobs that benefit energy consumers, but instead have to waste resources fighting ridiculously long and unnecessary lawsuits. Even though companies argue in court they complied with the law, the result will be a settlement where the federal government hands down millions of dollars in fines, and forces the closure of power plants, killing jobs in the process.
The EPA and Department of Justice brought the suit against Duke Energy in 2000 arguing that the company failed to comply with the Clean Air Act when the company modified 13 coal-fired units in North Carolina.
At issue is the New Source Review (NSR), one of the 1977 Clean Air Act amendments. Power plants must meet certain air quality standards, and companies must follow Prevention of Significant Deterioration (PSD) rules to demonstrate that the construction and operation of new projects and major modifications will not increase emissions above a specified threshold.
Therefore, if a company wants to make plant modifications that improves the power plant’s efficiency, it will trigger New Source Review and the EPA will regulate the plant to meet the most recent emissions standards.
However, what constitutes a significant modification is subjective under the rules. The amendment excludes routine maintenance, repair, and replacement, but what falls under the definition of significant modification remains murky, despite multiple administrative attempts to clarify the meaning. The lack of clarification also forces companies into years, if not decades, of litigation over NSR violations. Such is the most recent case with Duke Energy.
Companies could be allocating resources to invest in new equipment and provide jobs that benefit energy consumers, but instead have to waste resources fighting ridiculously long and unnecessary lawsuits. Even though companies argue in court they complied with the law, the result will be a settlement where the federal government hands down millions of dollars in fines, and forces the closure of power plants, killing jobs in the process.