EPA Joins Settlement of Lawsuit but Adds a Waiver
Action Against Polluting Utility Is Ruled Out Until 2018

By Juliet Eilperin
Washington Post Staff Writer
Thursday, October 11, 2007

Although the Environmental Protection Agency joined in a legal settlement this week to force the largest power-plant pollution cleanup in U.S. history, the Bush administration signaled in the agreement that it has no intention of taking enforcement actions against the utility for the same kind of Clean Air Act violations in the future.

The language of the settlement indicates that the administration has not wavered in its distaste for a Clinton-era policy of using the law to force power plants to upgrade their pollution controls whenever they significantly update or expand a plant. That marks a significant victory for the power industry, which has strenuously opposed the "New Source Review," saying that it penalizes them for efficiency improvements that ultimately benefit consumers and the environment.

"That is something that we fought to get in the settlement that was very important to us," said American Electric Power spokesman Pat D. Hemlepp, whose company settled with the EPA and other groups on Tuesday. "There are a lot of things we can do . . . to improve the efficiency of our plants."

Buried in paragraph 133 of the consent decree, in which the utility agreed to install $4.6 billion in pollution-control measures at 16 existing plants and pay $75 million in penalties, is a section that assures AEP that the government will not pursue any action stemming from the "modification" of these plants between now and Dec. 31, 2018. The EPA has inserted similar language in other settlements.

That section addresses the most controversial element in the administration's air policy: determining when utilities must install new pollution controls. The AEP case -- which started in 1999 -- centers on whether the utility had adequately updated its aging plants with new pollution-control technology when it modified them, an issue that falls under the New Source Review rule. Under Tuesday's settlement, the utility has agreed to install controls on the 16 plants it has expanded over the years, which will effectively remove 1.6 million tons of pollution from the air annually by 2018.

The administration has repeatedly questioned the value of enforcing the current rules, and the settlement guarantees that AEP will not face federal prosecution if its activities over the next decade trigger this sort of federal review.

Although the nine state attorneys general and 13 environmental advocacy groups that are party to the lawsuit praised the administration for Tuesday's settlement, they explicitly rejected this prosecutorial amnesty in the consent decree: Paragraph 140 says these parties "do not release any claims under the Clean Air Act and its implementing regulations." That means they could again sue the utility over violations of the law.

By inserting the amnesty clause, federal officials "have written in the ability for AEP to violate [the law] in those plants for the next 10 years," said Natural Resources Defense Council senior attorney John Walke, whose group is part of the lawsuit. "It just shows the Bush administration is of two minds when it comes to enforcing the Clean Air Act."

The battle over the New Source Review is not over: About half a dozen similar cases are still pending in court, and the administration is preparing to finalize a rule that will exempt plants from installing new pollution controls as long as their hourly rate of emissions does not increase as a result of any plant upgrade.

That follows an Oct. 5, 2005, memo in which EPA Deputy Administrator Marcus C. Peacock said that, because the administration had adopted newer regulations that would reduce utility emissions by nearly 70 percent in the eastern part of the United States, the agency would pursue only cases involving violations of regulations it had proposed as a replacement for the New Source Review, which is still on the books. Some of the administration's proposals have been overturned in court, and others have not been implemented.

"These rulemakings, particularly CAIR, will reduce power plant emissions deeper, faster, and more efficiently than would be achieved by continuing costly and uncertain litigation in case-by-case enforcement actions of existing . . . regulations," Peacock wrote, referring to the Clean Air Interstate Rule.

In an interview, William Harnett, director of the EPA's air quality policy division, said the agency still wants utilities to "live by the rules." But he added: "At the same time, we want to improve the program and make these operations better to get the environmental benefits everyone wants from them."

Since the October 2005 memo, the administration has pursued three lawsuits against utilities over what would be violations of its still pending proposal.

And both Scott H. Segal, a lobbyist for utility and coal companies, and Frank O'Donnell, who heads the advocacy group Clean Air Watch, said in interviews that this week's court deal does not mean that the legal fight over air policy is over.

"Seven or eight years ago, the U.S. electric industry was frantically on the run because federal enforcers were going after them at every turn," O'Donnell said. "Then the Bush administration called off the dogs."

Staff writer Steven Mufson contributed to this report.

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