U.S. Supreme Court historic ruling signals clean-up of dirtiest coal-fired power plants

In a unanimous ruling with major implications for public health, the U.S. Supreme Court today upheld a core Clean Air Act program designed to clean up the nation's dirtiest coal-fired power plants, the single largest source of harmful soot and smog, as well as being a major source of global warming emissions. It was the first shot of today's historic one-two punch for clean air delivered by the Court, which also ruled that the U.S. Environmental Protection Agency has the authority to regulate carbon dioxide, the principle greenhouse gas contributing to global warming.

The justices vacated a Fourth Circuit Court of Appeals decision that had derailed major Clean Air Act enforcement cases against Duke Energy and other utilities. The Court overturned the appellate court's 2005 test for measuring emission when overhauled coal-fired power plants become "new" sources that must get air pollution controls or shut down.

"Today's decision against Duke Energy upholds the integrity of the Clean Air Act in the face of government rollbacks and industry noncompliance and delay," said Blan Holman, Senior Attorney with the Southern Environmental Law Center (SELC). "It is the major tipping point in the campaign to clean up or replace the nation's dirtiest coal-fired power plants."

The Court's second major ruling today came in a case by a coalition of states and environmental groups (Massachusetts v. EPA), which sought to compel the government to control carbon dioxide emissions. While the Duke Energy decision does not directly address carbon dioxide emissions, it nevertheless has major implications for global warming.

"The biggest first step in addressing global warming is replacing America's fleet of old coal-burning power plants," Holman said. "The Duke Energy decision sets the stage for retiring this outdated technology."

In a 9-0 ruling, the Supreme Court held that the Fourth Circuit overstepped its bounds by striking down the clean air regulations that environmental groups and EPA sought to enforce. The regulations are part of the Clean Air Act's New Source Review (NSR) program, which requires the largest polluters to install modern pollution controls when overhauling facilities in a way that results in increased emissions.

Beginning in 1999, EPA filed suit against 13 of the nation's largest utilities for violations at 51 plants operating throughout the South and Midwest, contending that the utilities had substantially overhauled their power plants over the years without installing the required contemporary pollution controls. Conservationists and public health advocates were concerned that the NSR enforcement cases would be pushed weakly by the Bush Administration, which came into office with intentions to weaken the program. In 2001, SELC intervened in the Duke Energy case on behalf of Environmental Defense, Sierra Club and Environment North Carolina. After the adverse appeals court ruling, SELC and the conservation groups won Supreme Court review despite EPA's opposition.

The case concerns multi-million-dollar renovations Duke Energy made from 1988 to 2000 at seven power plants in North Carolina and one in South Carolina. Duke Energy called its projects "modernizations," yet avoided installing controls that are proven to cut emissions of sulfur dioxide and nitrogen oxides by as much as 90 percent, as well as reduce mercury pollution. Duke Energy's overhauls increased its annual emissions over what was possible before refurbishment. Duke Energy
claimed, however, that the projects did not trigger NSR because they did not increase hourly emission rates, an argument the Court explicitly rejected. Because an overhauled plant can operate for more hours per year, annual emissions can increase substantially even if hourly rate remains the same.

The Fourth Circuit concluded Duke Energy's hourly rate test was required by statute, even though this would allow utilities to avoid NSR clean up for renovated facilities Today, the Supreme Court rejected that statutory reading, finding that an annual test is required. The case now goes back to the Fourth Circuit to apply the annual emissions test.

Today's ruling reverberates far beyond the Duke Energy case and will impact numerous pending and forthcoming NSR enforcement cases across the nation. Emissions from coal-fired power plants subject to pending NSR suits totaled 1.6 million tons per year of SO2 in 2005. Sulfur dioxide has been shown to cause premature death and exacerbate asthma and other cardiopulmonary disease. It is also the major source of acid rain

The Supreme Court decision presents an opportunity for Congress to prevent further delays by passing clear legislation requiring utilities to address global warming and clean up polluting power plants, said Holman. "This case provides proof of the dangers of 'grandfathering' old polluters," he said. "Almost two generations of Americans have had to breathe pollution that could have, should have been cleaned up long ago. But industry chose to spend hundreds of millions to prop up dirty plants instead of building cleaner ones."

The Duke Energy plants in question are Belews Creek, Buck, Cliffside, Dan River, CG Allen, Marshall and Riverbend plants in North Carolina and the W.S. Lee plant in South Carolina. Despite a North Carolina law that will eventually clean up some of Duke Energy's units at ratepayer expense, Duke Energy has announced no plans to clean up its remaining units at issue in the lawsuit.