Amanda Mott

April 13, 2007

On April 2, the Supreme Court unanimous decision in Environmental Defense v. Duke Energy Corp., interpreted the Clean Air Act (CAA) to require most old industrial facilities and power plants to install best available control technology (BACT) to limit air pollution emissions. This decision mostly affects the many coal-fired power plants that predate the CAA and have been allowed to continue to operate without BACT even after substantial retrofits that do not increase capacity but extend annual operation hours.

North Carolina-based Duke Energy is one of the nation's largest power companies. In 1985, Duke began to expand operations at eight of its coal-fired plants, which discharge approximately 1.6 million tons of sulfur dioxide annually into the air. In 2000, the U.S. government (Department of Justice suing on behalf of the EPA) charged that Duke evaded the New Source Review (NSR) provision of the CAA during the expansion by failing to update pollution controls. These provisions, implemented by the Environmental Protection Agency (EPA) in 1980, require that utilities install BACT whenever increased emissions result from modifications of old plants.

The issue in this case was how those emissions are measured: (1) emission rates on an hourly basis (Duke's position), or (2) actual net emission increases on an annual basis (Environmental Defense's position). The difference is between capacity and actual emissions. A plant with better parts can run more hours and more days, so although on an hourly basis there may be no increase, a refurbished plant could emit much more per year. The decision, incredibly important for human health and air quality, determines whether facilities, when modifying, must install BACT.

In 2003, the federal district court ruled in favor of Duke. That same year the Bush administration, in a move that would radically increase air pollution, relaxed the NSR regulations when it determined that if a plant upgrade was less than twenty percent of the total cost of replacing the facility plants did not have to install BACT. In 2005, the Fourth Circuit Court of Appeals affirmed district court decision, but on different grounds. Nine days later, the D.C. Circuit, the court with exclusive jurisdiction to interpret the CAA, decided a different case regarding a similar matter and its decision directly conflicted with the district court's analysis. The Fourth Circuit refused to re-hear the Duke case despite the conflict between the circuits.

After this series of litigation, the EPA reversed course and adopted the hourly rate test by rule. Most suspect the change in course was due to the political priorities of the Bush Administration. Without support from the EPA or the Bush Administration, the Department of Justice decided to not pursue an appeal to the Supreme Court. Fortunately, the Environmental Defense and other environmental groups were able to overcome the long odds of obtaining a grant of certiorari from the Supreme Court without DOJ support.

Although the case will continue in lower courts, U.S. citizens can now breathe easier.

Sources:

Environmental Defense v. Duke Energy Corp., 549 U.S. ___ (2007), available at http://www.supremecourtus.gov/opinions/06pdf/05-848.pdf.

John H. Stam, Supreme Court Ruling in Duke Energy Case Overturns Attempt to ‘Interpret' Regulations, 38 Env't Rep 14, Apr. 6, 2007, http://ehscenter.bna.com/PIC2/ehs.nsf/id/BNAP-6ZZFJB.

Environmental Defense, A Supreme Day for Clean Air in America, Apr. 2, 2007, http://www.environmentaldefense.org/pressrelease.cfm?ContentID=6148.

Environmental Defense, Court Rules 9-0 for Environmental Defense, Apr. 2, 2007, http://www.environmentaldefense.org/article.cfm?contentID=5569.

The Institute for Southern Studies, Supreme Court gets Clean Air Case against Duke Energy, Nov. 1, 2006, http://southernstudies.org/facingsouth/2006/11/supreme-court-gets-clean-air-case.asp.

Environmental Defense, Time Line: Pivotal Clean Air Case, Oct. 30, 2006, http://www.environmentaldefense.org/article.cfm?contentID=5568.