U.S. Supreme Court to Hear Duke Energy Air Pollution Case

WASHINGTON, DC, May 16, 2006 (ENS) - The U.S. Supreme Court Monday agreed to hear an air pollution case against Duke Energy regarding the Clean Air Act’s new source review requirements. Established in 1977, these rules require power plants and factories to modernize air pollution controls when they install new sources of power that increase emissions.

The Supreme Court’s review of the case, Environmental Defense, et al. v. Duke Energy Corporation (No. 05-848), represents only the third environmental law case in 35 years to be taken up by the high court where environmental groups alone sought review.

The case arose in 2000, when the U.S. Environmental Protection Agency filed a Clean Air Act enforcement action against Duke Energy in federal district court in North Carolina.

Duke's Lee Steam Station, one of the power plants at issue in the case, is a three-unit coal-fired generating facility located on the Saluda River in Anderson County, South Carolina. (Photo courtesy Duke Energy)

The federal district court for the middle district of North Carolina granted summary judgment for Duke Energy and a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit unanimously affirmed the lower court’s ruling on June 15, 2005.

Nine days later, the U.S. Court of Appeals in Washington, DC reached a contrary result in reviewing industry challenges to national new source review (NSR) rules.

The Fourth Circuit subsequently denied the U.S. EPA's and Environmental Defense’s request for rehearing.

In March, U.S. Solicitor General Paul Clement and other Justice Department officials attempted to persuade the Supreme Court not to hear this case, siding with the Fourth Circuit Court's ruling and claiming there was no "square conflict among the courts of appeals."

Blan Holman, senior attorney with the Southern Environmental Law Center, said, "This is a significant case, with implications for pending New Source Review enforcement actions in Alabama and elsewhere, and also for the administration's ongoing attempts to weaken the permitting program through rulemaking."

Blan Holman is a senior attorney with the Southern Environmental Law Center. (Photo courtesy SELC)

Duke calls this overhaul "routine maintenance" which does not fall under the new source review requirements.

When Congress amended the Clean Air Act in 1977, many old, coal-fired plants, such as the Buck plant and others operated by Duke Energy, were exempt from new rules requiring the installation of modern pollution controls when making modifications that result in increased emissions.

The plaintiffs argue that by granting these plants "grandfathered" status, Congress envisioned that the utilities would either retire their biggest polluting plants or, if they refurbished those plants, meet modern pollution standards.

Duke Energy made the modifications between 1988 and 2000 at eight plants in North and South Carolina, including Belews Creek, Buck, Cliffside, Dan River, CG Allen, Marshall and Riverbend plants in North Carolina and the W.S. Lee plant in South Carolina.

Some of these units are located in areas that are in violation of federal EPA health standards for ozone, soot, or both, to which power plant emissions contribute.

Buck Steam Station is a four-unit coal-fired generating station located on the Yadkin River in North Carolina. Switched on in 1926, it was named for the company’s co-founder James Buchanan "Buck" Duke. (Photo courtesy Duke Energy)

Through their lawsuit, the EPA and the plaintiff groups seek to close the loophole of grandfathered power plants.

“We're very pleased that the Court agreed to review the Duke Energy decision, which rests on a flawed interpretation of the Clean Air Act, and which industry has been citing in numerous other cases in an effort to undermine essential pollution controls applicable to some of the nation's largest sources of air pollution," said Sean Donahue, lead attorney in the case for Environmental Defense.

The co-petitioners presented two issues to the Supreme Court: