U.S. EPA's new enforcement policy for power plant air pollution seems simple enough: Only electric utilities that violate the Bush administration's regulatory interpretations of the Clean Air Act will be prosecuted.
But the approach that EPA Administrator Stephen Johnson outlined last month has not settled the emissions debate that has been raging since the end of the Clinton administration. Instead, the new policy faces many of the same political challenges, as well as a potential longshot attack in the courts.
EPA Deputy Administrator Marcus Peacock formally spelled out Johnson's plans in a memo sent Oct. 13 to EPA regional leaders and state environmental commissioners. The memo, for the first time in the Bush administration, explained on paper that the government's new enforcement policy should reflect all three of Bush's major regulatory changes to the New Source Review program.
The new enforcement strategy sets out criteria that must be met before the government swings its litigation hammer. A power plant must be in violation of a series of EPA regulations, including one proposal that was blocked from implementation in December 2003 by a federal appeals court, and another standard that has just entered the public comment and review stage.
Since Johnson announced the shift, environmentalists have been pressing EPA for clarification on the full extent of the enforcement office's new direction. John Walke, a senior attorney at the Natural Resources Defense Council, said EPA officials would not provide complete answers about its policy during a briefing last month. He said his question about whether all three NSR regulations were covered by the strategy remained unanswered until an EPA spokeswoman confirmed the new policy's reach last week to Greenwire.
NRDC is not ready to spell out in detail how it plans to respond to the new enforcement changes, though Walke did leave open the prospect of filing court motions in the coming months to address some of his concerns. Walke, as well as former EPA enforcement official Bruce Buckheit, said in interviews that EPA may be on shaky legal ground in adopting the new policy considering it is tied to one rule still under court challenge and another that has not gone through a complete administrative vetting.
Contempt of court?
The two EPA rules in question include the agency's controversial change to the definition of what constitutes a routine equipment replacement at a power plant, and the newest proposed standard that bases NSR on a plant's hourly emission rates as opposed to a cumulative measure of pollutants released annually. Bush's EPA equipment replacement rule, published in the fall of 2003, gives industry a 20 percent spending threshold before maintenance work could be subject to a potential violation. The hourly emission rate test was just published last week in proposed form in the Federal Register.
Critics are questioning the two NSR rules' place in the enforcement guidelines because of their murky legal and administrative status. New York Attorney General Eliot Spitzer (D), lead plaintiff in court proceedings against the NSR equipment replacement rule change, convinced the U.S. Circuit Court of Appeals for the District of Columbia in December 2003 that it should immediately block the standards.
Spitzer's plea demonstrated the "irreparable harm and likelihood of success" of his case once it advances on its merits, the court found. From a legal standpoint, little has changed since Spitzer won the court stay. The case is now in the briefing stage, with EPA due to file a reply brief by Nov. 17. States and environmentalists must answer in mid-December, and oral arguments are scheduled for Feb. 8.
Both Walke and Buckheit stopped short of claiming EPA may be in contempt-of-court for enacting the equipment replacement rule through their enforcement policy, though both were open to discussing the merits of the argument. Others tracking the NSR debate said the questions raised by Walke and Buckheit may not be clearly settled.
"It's a pretty funny line that they are dancing around," a Senate Democratic aide said of EPA. "They're using a rule that has been called into question as a filter for an action they bring in the enforcement arena. It's certainly disrespectful of the court. It certainly isn't what you want to see from people who care about going about the process in an orderly way."
Kevin Gaynor, an industry attorney who represented Southern Indiana Gas & Electric Co. in a Clinton-era NSR lawsuit, said the court's stay on one rule, as well as the preliminary nature of the NSR hourly emission test, should have no influence on EPA's role in setting enforcement priorities. "The court can not force them to bring an enforcement case," Gaynor said. "That's a matter of prosecutor discretion. There could be 100 reasons why they don't bring an enforcement case."
Spitzer policy adviser Judith Enck said yesterday the state was not planning to press the issues in court. "It's kind of a political zig zag," Enck said. "But we're not prepared to say that it trumps a court stay."
In a prepared statement, EPA spokeswoman Eryn Witcher on Friday said the administration was within its legal bounds to shift its enforcement direction and resources. Administrative procedures, she added, do not apply to internal enforcement resource decisions.
"The agency has discretion to adjust enforcement policies and resource allocations," Witcher said. "The adjustment process is ongoing and reflects the agency's judgment as to the best use of its resources."
Enforcement timeline
Johnson's decision to line up a firm enforcement policy reflects one of the administration's boldest moves to date on NSR.
In November 2003, then-EPA enforcement chief J.P. Suarez tried to establish a similar policy when he told senior agency regulators that the administration would require case-by-case reviews for all pending and unfiled NSR investigations to see if they square with the new 20 percent interpretation (Greenwire, Nov. 5, 2003).
But Spitzer's success in blocking the NSR equipment replacement rules trumped the agency's plans, and then-EPA Administrator Mike Leavitt announced plans in January 2004 to reverse course. Leavitt told reporters that he would return to the more stringent reading of the federal law that was used by the Clinton administration to launch a major litigation front against coal-fired utilities (Greenwire, Jan. 22, 2004).
But EPA's actions did not reflect Leavitt's stated policy. The agency filed only one enforcement charge, a suit in federal court against Eastern Kentucky Power Cooperative that some say is broad enough that NSR criteria does not matter. Presented in the summer of 2004 with a leaked memo that showed EPA staff had been investigating some 22 other electric utilities, Leavitt and then Justice Department Assistant Attorney General Tom Sansonetti said resource constraints were the main reason the administration was holding back in filing additional suits.
Both Leavitt and Sansonetti have since moved on to other jobs. In the meantime, EPA has implemented a cap-and-trade rule for Eastern power plants that the agency has turned to as its main defense for changing the NSR program. The Clean Air Interstate Rule (CAIR), as well as a separate plan designed to clean up pollution in national parks, will make deep cuts in power plant emissions of nitrogen oxides, sulfur dioxide, mercury and other pollutants, EPA said.
Buckheit, who took an early retirement from EPA in late 2003 because of its handling of the NSR issue, said the new enforcement announcement is the latest step in industry's attempt to kill the program. "They keep having to do things to reassure the base," he said.
In that context, EPA's enforcement changes are significant because they tell industry what line they can cross -- at least for the remainder of the Bush administration. "What it really is is announcing to the world how they intend to proceed," said an industry attorney involved in the NSR debate. "It's their current intention. You can take it to the bank, as long as you have the same president."
Click here for the Peacock memo.
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