US Court Hands EPA a Win in Utility Emission Case

US Court Hands EPA a Win in Utility Emission Case

PlanetArk US

21st August 2006

WASHINGTON - A federal court has ruled that a big US utility must install costly pollution-reduction equipment at its aging coal-powered electric plants if it expands them, handing a victory to the US government in a case that could shape an upcoming Supreme Court ruling.

The three-member 7th Circuit Court of Appeals in Chicago on Thursday ruled that Cinergy must install emission curbs at its coal-powered plants in the Midwest if it expands them to prolong their operating lives.

The Environmental Protection Agency had sued the utility, to force it to apply for an expansion permit, which would trigger emission-reduction measures.

In a bevy of cases, US utilities are testing how far they can go to expand aging plants without triggering a section of the Clean Air Act known as "New Source Review."

Cinergy, which was bought by Duke Energy Corp. in April, argued that it could expand its plants without triggering regulations as long as the modifications did not increase hourly emissions.

The court disagreed and said Cinergy's interpretation could "open a loophole that would allow pollution to soar unregulated" because annual emissions could rise even as hourly rates stayed level.

The Bush administration has proposed a similar test for measuring if plant modifications should trigger New Source Review requirements going forward, but the Supreme Court is reviewing the rules in a case brought against Duke Energy.

The high court will hear arguments in the case on Nov. 1. "We're hopeful that the Supreme Court's review will help to eliminate the confusion that exists in various jurisdictions on these issues," said Peter Sheffield, a Duke Energy spokesman.

Duke will spend about US$2.4 billion on pollution-reduction equipment through 2008, regardless of the outcome of the case, Sheffield said.

Environmental groups said the administration plan, if finalized, means US utilities can spew more nitrogen oxides and sulfur dioxide - precursors of acid rain and smog linked to respiratory diseases like asthma.

REUTERS NEWS SERVICE