It appears that the new rule has satisfied neither industry, environmentalists nor the general public.  AAEA will continue to push for scrubbers on older plants (25 years and older). We will also continue to push the nuclear industry and the administration to support the building of new nuclear power plants to back-out old nukes and NSR regulated plants.  We do not believe that the new rule(s) will reduce litigation.  Our discussions with utility executives indicate that they want definitive rules that will decrease litigation.  They will not make concrete business plans (and multi-billion dollar pollution control decisions) with moving targets that do no reduce litigation.  AAEA opposes the rule changes because neither industry nor environmental organizations will cooperate to assure the success of the regulations, assuring aggressive litigation instead of emission reductions.  The Clear Skies Initiative is the logical solution because everyone agrees that the Acid Rain Program works.

On July 23, 1996 the EPA published proposed revisions to the federal Prevention of Significant Deterioration (PSD) and nonattainment New Source Review (NSR) rules. The EPA states that "the proposed changes are intended to reduce costs and regulatory burdens for permit applicants, while still ensuring that emissions from new or modifying major stationary sources of air pollution will not interfere with the efforts to attain and maintain the nation's air quality standards and goals." They further state that "if adopted, the proposed reforms will significantly reduce the number and types of activities at sources that would otherwise be subject to major NSR under the existing NSR program regulations, including the new and revised requirements imposed by the 1990 Amendments." According to an EPA study, the proposed revisions would exclude an estimated 50 percent of sources that might otherwise be subject to major NSR. The information contained in this guidance document will likely require significant revision upon the promulgation of the proposed PSD and NSR revisions, depending upon the final version of the revised rules.

Under the changes promulgated under 40 CFR parts 51 and 52, "major modification" is defined as any physical change in or change in the method of operation of a major stationary source that would result in: (1) a significant emissions increase of a regulated NSR pollutant; and (2) a significant net emissions increase of that pollutant from the major stationary source.  Owners/operators of major stationary sources are required to obtain a major NSR permit prior to beginning actual construction of a modification that meets this definition.  The regulations exclude certain activities from the definition of "major modification." One such exclusion is for RMRR activities.  The regulations do not define this term.

Older power plants, which are forbidden from performing anything other than "routine maintenance" without installing expensive new pollution controls, can implement a wide range of safety or efficiency improvements, provided they stay within a yearly spending cap set by the government. The cap could be as much as 20 percent of the facility's replacement cost.

EPA is promulgating another rule whereby plants can replace existing equipment, such as turbine blades and shafts, with "functionally equivalent" new equipment without violating the law -- provided the work is not considered part of a major expansion or renovation. A hearing on this proposal will be scheduled only if there is a request for one. If requested (and it will be requested), a hearing will be held in Research Triangle in North Carolina. To submit or view public comments, go to the EPA Docket.

Update: EPA approved regulations on August 27, 2003 that makes it possible for thousands of aging coal-fired power plants, oil refineries and factories to upgrade their facilities -- and extend their operational lives -- without having to install anti-pollution equipment previously required under the Clean Air Act that would cost utilities and others hundreds of millions -- if not billions -- of dollars.

The new rule, signed by Acting Environmental Protection Agency  Administrator Marianne L. Horinko, applies to about 17,000 plants and facilities, including about 540 older coal-fired plants that produce half the country's electricity.  Under the new rule, older plants could avoid installing pollution-control equipment when they replace items such as a turbine or boiler, provided the cost does not exceed 20 percent of the replacement value of the entire unit. The plant would have to replace the equipment with an identical unit or the "functional equivalent," and the plant still must comply with the overall pollution permit limits and other state and federal programs for pollutants.  A typical power plant has more than one boiler, generator, turbine and other equipment. In the case of a 1,500-megawatt plant with two 750-megawatt units that cost $1 billion to replace, each could be upgraded $200 million at a time. 
    
The New Source Review enforcement program generated dozens of state and federal lawsuits against 51 power plants during the Clinton administration. New York and 13 other northeastern and midwestern states that have challenged a separate rule change that would ease clean air enforcement action in other industrial sectors.  They will probably oppose this rule as well.

The Clean Air Act requires new plants and utilities to install the best available pollution-control technology. However, plants and refineries built before 1970 are exempt from having to install modern "scrubbers" unless they undertake extensive and costly improvements that boost power production and pollution. Industry officials believe the distinction between "routine maintenance" and more substantial improvements is too vague. Congress put the Clean Air Act's "new source review" program into law in 1977.  EPA has not had much success in enforcing the maintenance provision.