By Brett Rosenberg
January 12, 2004

The U.S. Court of Appeals, District of Columbia Circuit, has blocked a major Bush Administration effort at reforming an important element of the federal Clean Air Act.

New Source Review (NSR) regulations, which were finalized last fall and scheduled for implementation beginning January 2, would potentially have allowed thousands of older power plants and other industrial facilities to make extensive upgrades without implementing additional pollution control technology. The Appeals Court, however, ruled for the plaintiffs in the case, composed of 14 states and several environmental groups. A number of cities, including, New York, San Francisco, Washington and several Connecticut municipalities also supported litigation on behalf of New York Attorney General Eliot Spitzer, who initiated the lawsuit against the EPA. In its decision, the court declared that the plaintiffs "demonstrated the irreparable harm and likelihood of success," therefore meeting the legal threshold required to prevent a regulation from taking effect.

Under the EPA's revised NSR provisions, industrial facilities would be allowed to spend up to 20 percent of the replacement costs of production equipment on unit upgrades and remain exempt from installing new pollution controls. Previously, NSR regulations required industries to install pollution control devises such as scrubbers or electrostatic precipitators when undertaking anything beyond "routine maintenance," but did not clearly specify the degree of routine maintenance that would trigger the NSR process.

New Source Review provisions have been among the most divisive of the Clean Air Act, largely due to ambiguity in defining what constitutes routine maintenance. Initially developed as a means of bringing old plants up to date with the current best available pollution control technology rather than shut them down entirely, NSR has instead been at the root of dozens of lawsuits, often with contradictory results.

The EPA and several industrial sectors have cited the new regulations as rational and cost-effective means of determining when to install new anti-pollution equipment on older facilities. EPA says the new rules will encourage more efficient, reliable and safe operations. Meanwhile, much of the environmental community has assailed the EPA's decision as favorable to industry interests, allowing more hazardous air pollutants from outdated equipment and removing incentives for pollution reduction. The court, in its decision, has indicated that it will move to review the case on an expedited schedule, possibly beginning oral arguments in late 2004.