Sierra Club : Court of Appeals Reaffirms Clean Air Act Requirements In DTE Case

Detroit, MI - Yesterday, a federal appellate court ruled that the U.S. Environmental Protection Agency had the legal authority to bring an enforcement action against DTE Energy when the company failed to apply for a New Source Review (NSR) permit under the Clean Air Act. This ruling has important implications for the NSR program nationwide.

This is the second time the U.S. Court of Appeals for the Sixth Circuit has ruled on this case affirming that the U.S. Environmental Protection Agency (EPA) can bring such an enforcement action based on projected increases of emissions, whether or not emissions actually increase after the project.

The NSR provision requires a utility to determine whether an upgrade to an existing source of air pollution qualifies as a 'major modification' that will significantly increase emissions, bringing older plants under modern pollution-control requirements. DTE undertook a $65 million overhaul of part of the state's largest coal-fired power plant, claiming it was not a 'major modification' by excluding all projected increases of emissions as attributable to future demand growth - a claim completely unsupported by the utility (which actually saw demand decrease in the projected time period).

DTE also claimed the overhaul fell under 'routine maintenance, repair, and replacement activities,' a designation that, if accurate, would also exempt the projects from triggering the review and a new permit. Those claims allowed DTE to complete the three-month overhaul without first installing modern pollution control measures, which the EPA would have otherwise have required.

EPA challenged both the 'routine maintenance' designation and the exclusion for 'demand growth' of all the projected increase in emissions. On behalf of Sierra Club, Earthjustice intervened in the case. This is the second time the case has gone to the Sixth Circuit, and the second time it has been remanded back to the district court affirming that EPA has a responsibility to engage in a substantive evaluation of pre-construction projections.

As Circuit Judge Martha Craig Daughtrey wrote in yesterday's opinion, 'Apparently, it is necessary to reiterate that the applicability of NSR must be determined before construction commences and that liability can attach if an operator proceeds to construction without complying with the preconstruction requirements in the regulations.'

IN RESPONSE,

'DTE was found pulling one over on their customers, state regulators, and federal agency. This reason this finding is so big is because it sets a precedent across the country,' said Regina Strong, Director of The Sierra Club's Beyond Coal Campaign in Michigan.'This loophole of classifying a project as maintenance of a polluting plant instead of as a project making a plant much bigger, and therefore increasing the pollution that dirty plant exposes us all to, is what the EPA came in to advocate. What we all found out is that the court used common sense where DTE failed to.'

'This ruling has important consequences for the New Source Review program going forward,' said Earthjustice attorney Mary Whittle.'The court found that the EPA can challenge a company's preconstruction projections and confirmed that the applicability of New Source Review must be determined beforeconstruction begins. Post-construction emissions data can't prevent the EPA from challenging a company's failure to comply with the law's preconstruction requirements.'