Legal victories for cleaner power

Under the Walker Bush administration, the federal Environmental Protection Agency (EPA) weakened power-plant emission standards by allowing more renovations at older plants without satisfying standards. However, it also continued some enforcement actions that were started during the Clinton administration, only to be blocked by adverse rulings from southern federal court jurisdictions. Those misfortunes ended with a unanimous Supreme Court decision April 2, 2007, in Environmental Defense v. Duke Energy, reversing lower court rulings. Most issues now fall back to review by the EPA. On April 24, 2007, EPA moved to undercut the Supreme Court decision by further weakening its power-plant standards, changing the criterion for enforcement from annual to hourly emissions.

Large power-plant operators have taken notice. In another of the Clinton administration cases, United States v. American Electric Power (AEP), a settlement was announced October 8, 2007, one day before a scheduled district court hearing related to the trial held in July, 2005. Choosing to settle the case rather than risk a verdict that might have cost it more, AEP of Columbus, OH, the largest U.S. operator of coal-fired power-plants, agreed to spend an estimated $4.6 billion on plant upgrades to cut emissions. When the legal complaint was filed in 1999 AEP stated, "This lawsuit is just another political effort...totally without merit." The EPA complaint said AEP violated emission standards at 30 of its 46 coal-fired units.

Under terms of the settlement, AEP is to reduce nitrogen oxide emissions by 69 percent (to 72,000 tons per year) by 2016 and to reduce sulfur dioxide emissions by 79 percent (to 174,000 tons per year) by 2018. A statement from the U.S. Department of Justice estimated annual benefits at $32 billion per year saved in health-related costs associated with respiratory and cardiopulmonary illnesses. EPA assistant administrator Granta Nakayama said air pollution reductions from the settlement substantially exceed those from all EPA enforcement actions in the previous three years. The 1967 federal Air Quality Act, now called the Clean Air Act, authorizes penalties up to $27,500 per plant per day for violations.

The AEP consent decree sets total annual emission limits for the 46 AEP generating units in Ohio, West Virginia, Indiana, Kentucky and Virginia. It also sets individual unit operating limits for nitrogen oxides and sulfur dioxide, both 0.10 pounds per million BTU heat input. By comparison, EPA operating limits for new generating plants are 0.11 pounds nitrogen oxides and 0.15 pounds sulfur dioxide per million BTU heat input. New generating plants, however, are also subject to performance limits based on amounts of electricity generated and to limits for other pollutants, including mercury and soot. Lack of performance limits in the AEP settlement might encourage AEP to continue using inefficient technology, but AEP has announced plans to upgrade some steam turbines to improve efficiency.

The lawsuits filed during the Clinton administration, mostly in November, 1999, were the first enforcement actions since 1977 Clean Air Act amendments requiring plants undergoing renovation to meet emission standards. Many plants were upgraded incrementally without meeting standards. Lawsuits against Cinergy, Teco (Tampa Electric), Vectren (Southern Indiana Gas & Electric), Dynegy (Illinois Power), FirstEnergy (Ohio Edison) and American Electric Power have been settled with terms requiring major pollution reductions and payments of fines. However, Cinergy, now a subsidiary of Duke Energy, backed away from its negotiated settlement and then lost in a district court trial and a 2006 appeals court ruling.

Clinton administration enforcement actions without lawsuits have been similarly settled by PSEG Fossil, Dominion (Virginia Electric Power) and Wisconsin Electric. A private lawsuit filed in December, 2001, against Alcoa, operator of a power plant in Rockdale, TX, was later joined by EPA and similarly settled. Clinton administration lawsuits remain outstanding involving Duke Energy (Duke Power, Cinergy) and Southern (Alabama Power, Georgia Power). Like AEP, the firms can conclude settlements with EPA or take their chances in a judicial environment that has swung against them.

As a measure of their effectiveness, all Clean Air Act settlements to date combined are estimated to reduce U.S. sulfur dioxide emissions by about 1.64 million tons per year, of which almost half comes from the recent AEP settlement. That is 10.0 percent of the U.S. total emissions in 2000, estimated by EPA at 16.35 million tons per year. By 2005 total U.S. sulfur dioxide emissions had dropped by 1.72 million tons per year. Only a small part the 10.5 percent reduction represents early, direct effects of Clean Air Act settlements, which are now spread over a period of 18 years.

If estimates of health benefits in the AEP case are correct, the federal government could probably have saved enough money in Medicare costs to pay for the pollution control improvements many times over. Studies began to show evidence of environmental and health impacts from power-plant pollution in the 1960s. From early concerns over Midwest power-plant pollution to remediation of the AEP plants will have taken more than fifty years.