Brian Fredieu

November 14, 2006

U.S. Supreme Court on November 1st questioned attorneys representing Duke Energy Corp. and Environmental Defense over whether Duke's changes to plants were "major modifications" as defined by the federal Environmental Protection Agency.

The arguments today come from a Fourth Circuit lawsuit that claimed upgrades at Duke's eight coal-fired plants should have opened a review of pollution control systems and possibly forced them to add expensive anti-pollution devices. The Court of Appeals for the Fourth Circuit found that Congress mandated the Prevention of Significant Deterioration (PSD) definition of "modification" be exactly like the New Source Performance Standard (NSPS) definition of "modification." Therefore the EPA was prevented from interpreting "modification" under PSD inconsistently from the definition in NSPS. The Fourth Circuit held that, under this proper reading, Duke's project did not require permits.

The U.S. Supreme Court granted the Writ of Certiorari on May 15, 2006. The Questions Presented in the case are:

1. Whether the Fourth Circuit's decision violated Section 307(b) of the Act, which provides that national Clean Air Act regulations are subject to challenge "only" in the D.C. Circuit by petition for review filed within 60 days of their promulgation, and "shall not be subject to judicial review" in enforcement proceedings, 42 U .S.C. 7607(b); and

2. Whether the Act's definition of "modification," which turns on whether there is an "increase" in emissions and which applies to both the NSPS and PSD programs, rendered unlawful EPA's longstanding regulatory test defining PSD "increases" by reference to actual, annual emissions.

Environmental Defense argued that the Fourth Circuit did not have jurisdiction to decide this case, and that jurisdiction is statutorily delegated to the D.C. Circuit. Secondly, Environmental Defense says that the EPA's reference to modifications under PSD should be interpreted in accordance with the EPA's regulations, rather than with the narrow, hourly focus set forth by Duke. Duke argued that the upgrades it made were not subject to the CAA or the PSD permitting requirements. Furthermore, Duke argued that the EPA's regulatory interpretations of the PSD requirements do not fit with the CAA. Duke states that this clearly establishes that plants only need to receive EPA permission for projects that will increase the hourly rate of emissions.

For additional information see:

Clean Air Act definition of "major modification", http://www.lawmemo.com

/sct/05/Environmental (last visited Nov. 2, 2006).

United States v. Duke Energy Corp., 411 F.3d 539 (4th Cir. 2005).

Oral Argument Transcript, http://www.supremecourtus.gov/oral_arguments

/argument_transcripts.html.