December 25, 2003

Court Blocks U.S. Effort to Relax Pollution Rule


WASHINGTON, Dec. 24 A federal appeals court on Wednesday at least temporarily blocked a Bush administration rule, due to take effect on Friday, that would have relaxed existing regulations and so allowed hundreds of aging power and industrial plants to make upgrades without installing modern pollution controls.

The order, by a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit, indicates that the court has substantial doubt about the White House's claims that it has authority to modify the Clean Air Act by regulation and that its changes would not hurt the environment.

In staying the new regulation, the court said it would expedite a case brought against the rule by 14 states, among them New York, New Jersey and Connecticut, as well as several cities and environmental groups; it will then hear the case on its merits.

The ruling on Wednesday essentially places a burden on the administration to justify a regulatory change that it has been unable to accomplish through the legislative process. That change had been expected to help utilities, refiners and other industries, which had long complained about the government's environmental enforcement actions, to avoid installing billions of dollars' worth of pollution controls.

Scott Segal, a lobbyist with the Electric Reliability Coordinating Council, an industry group founded largely to advance the regulatory change, described the ruling as a setback, and added, "This stay motion and litigation undermine certainty for consumers and the regulated community."

The Environmental Protection Agency, which had proposed the new rule, said in a statement that it was "disappointed with the court's decision" and that neither the regulation nor the court's stay of it would have much effect on emissions.

But plaintiffs were buoyant.

"This is an enormously important victory that halts the Bush administration efforts to eviscerate the Clean Air Act," said Eliot Spitzer, attorney general of New York. "Piece by piece, the Bush administration has been undercutting meaningful enforcement of the Clean Air Act. The D.C. court has said it can do so no longer."

"Not only does it freeze the regulation," Mr. Spitzer said of the ruling, "but the court has also signaled that it may throw out the entire regulation after further review."

Indeed, to win a stay, plaintiffs must typically demonstrate not only a likelihood of irreparable harm if a proposed action is allowed to proceed, but also a likelihood of success once the case is heard on the merits. The order issued by the appeals court said these plaintiffs had met the two criteria.

The members of the three-judge panel were Harry T. Edwards, Judith W. Rogers and David S. Tatel. All were appointed by Democratic presidents but have voted many times to uphold other actions of the Bush administration.

The fight currently being waged deals with an issue called "new source review," and its roots can be traced back three decades, to adoption of the Clean Air Act.

When the law was enacted, it exempted from its requirements for modern, expensive pollution controls those plants that were already in operation. Lawmakers assumed that these "grandfathered" plants would be replaced over time by new ones.

Instead of building new plants, though, some utilities upgraded the existing ones, avoiding the costs of the emissions controls while adding to capacity, and to pollution.

In response, Congress modified the law, requiring that upgrades were to be considered "new sources" of pollution and thus subject to the control requirements. Industry subsequently objected that what environmentalists and government frequently considered upgrades were in fact nothing more than routine maintenance, which the requirements did not cover.

The battle has raged ever since, with industry claiming "maintenance," and states and environmentalists protesting that it is "upgrades."

Under the relaxed rule that the court stayed on Wednesday, companies would have been allowed to replace aging equipment with its "functional equivalent" without taking on the expensive pollution-reducing requirements. The rule would also have exempted projects in which replacement costs were less than 20 percent of the plant's value.

The rule grew out of a recommendation by Vice President Dick Cheney's energy task force, which urged the administration two years ago to study industry complaints about federal enforcement actions.

Environmentalists have been particularly critical of this regulation, one of the administration's most significant environmental initiatives, saying that it would fail to reduce emissions of sulfur dioxide and nitrogen oxides fast enough, and undermine environmental lawsuits and investigations undertaken against dozens of plants.

Indeed, after the administration made the rule final in October, E.P.A. officials announced that they would drop enforcement actions, some dating from the Clinton administration, involving past violations of the Clean Air Act attributed to some 50 power plants.

In maintaining on Wednesday that neither the regulation nor the court's stay of it would have much effect on emissions, the E.P.A. pointed to a separate proposal, introduced by the administration this month, that it said would reduce pollution substantially. Many environmentalists have agreed with that claim.

That proposal, adopted from the president's Clear Skies Initiative, is called the Interstate Air Quality rule. It would create a market-based program to reduce sulfur dioxide and nitrogen oxides in about 30 states in the East. Administration officials say this would help bring nearly every county into compliance with the Clean Air Act.

With an estimated cost to industry of more than $5 billion a year, the proposal is one of the most expensive ever advanced by the E.P.A., and could bring some of the greatest health and environmental benefits.

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