New Source Review Déjà Vu

The Environmental Protection Agency's (EPA) New Source Review (NSR) reforms suffered a major setback when a federal appeals court overturned the agency's expanded routine maintenance exemption. With this court decision, operators of coal-fired power plants remain subject to the same NSR applicability test that was in place when the Clinton administration first initiated the NSR enforcement initiative. The current policy landscape will continue to discourage upgrades and efficiency improvements to the existing fleet. But even with the setback, not all is lost for EPA. The agency has successfully implemented some of its NSR reforms and recently proposed additional changes to the program.

*EPA's routine maintenance exemption is vacated by a federal appeals court. The US Circuit Court of Appeals for the District of Columbia rejected the central component to the Bush administration's 2002 and 2003 NSR reform rules.
* New NSR emissions test proposal seeks to provide similar flexibility as intended in the routine maintenance exemption. EPA proposed a new rule that loosens the emissions test for projects that do not qualify for the routine maintenance, repair, and replacement exemption.
* New Plantwide Applicability Limit (PAL) provisions offer some flexibility to power plant operators. EPA's PAL provisions have been upheld by the court and offer power plant owners significant flexibility to make operational changes if the operators are willing to accept a firm cap on emissions.

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