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Environmental Defense v. Duke Energy Research Paper

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Updated: Sep 25th, 2021

Summary of Relevant Facts

Nearly fifty percent of electricity produced in the United States emanates from thermal power plants which uses coal as its fuel. Under the Clean Air Act (CAA), the largest old coal based electricity manufacturers are permitted to emit pollutants in larger levels than newly established manufacturing units provided they never embarked on modification. In the last three decades, some of these manufacturing units modified their facilities and hence, they lost the exemptions under CAA. Aggrieved on losing of their exempted status, these older manufacturing units approached the courts for redressal of their grievances.

In 2000, U.S government started to initiate actions against those coal-based power manufacturers who had not initiated on repairing and making improvements of their units under CAA’s New Source Review (NSR).

In Environmental Defense v Duke Energy Corporation case, the Supreme Court was approached to define the modification under CAA. The government’s effort to initiate a wider range of environmental safeguards would be hampered if the Court arrives a verdict on the merits. Likewise, if the Court wishes to peruse the “modification” criteria as urged by industry, it’s verdict will largely undermine the country’s air quality standards. Thus, Supreme Court was in a delicate position to find an amicable solution to the issue.

In 2000, the Environment Protection Agency (EPA) initiated action against 32 coal-based power utilities asserting that they had engaged in unauthorized modifications. Eight such complaints were initiated against Duke Energy Corporation (DEC). EPA alleged that DEC engaged in 29 Plant modification or improvement programs that were carried out between 1998 and 2000. However, the respondent asserted that there were no improvement or modification but they had carried out only routine repairs and maintenance and replacement initiatives.

Duke Energy also argued that since there was no increase in its utility’s emission per hour, it did not come under within the EPA’s description of “modification.”

On the other hand, EPA demanded partial summary judgment as to the appropriate method for deciding whether a modification had been perused or not. EPA averred that the appropriate strategy was the “actual-to-projected-actual test “and the change in annual aggregate emission should be taken into account rather than on hourly basis. EPA also claimed that Duke Energy infringed the provisions of PSA by having carried out the work without prior approval or permit.

According to New Source Performance Standards (NSPS) which explain “modification” as any change that increases the quantum of pollutant discharged or discharges a new one. Under PSD provision, prior approval is needed before the construction of a “major emitting facility.” Notwithstanding the definitional uniqueness, the EPA regulations construed “modification” in one manner for NSPS but altogether in a different way for PSD.

It is to be noted that NSPS regulations specify a modification as one which would enhance the discharge of pollutants assessed in kilograms per hour1 whereas PSD regulations specify that modification as one which would enhance the actual emission per annum of a pollutant above the real average for the past two previous years.2

In the meanwhile, the petitioner mediated as plaintiffs and initiated a complaint leveling on identical infringements since Bush administration refused to apply to the Supreme Court for certiorari.

Duke Energy sought for summary judgment, declaring, among other things, that none of its utilities carried out a “key modification” demanding a permit from PSD since none enhanced hourly emission rates.

In agreement, the District Court granted summary judgment for respondents on all PSD assertion. It was also confirmed by the Fourth Circuit which reasoned that Congress’s intention to foster similar statutory definitions of “modification” in the Act’s of PSD and NSPS provisions positively authorized that this terminology be construed similarly in the rules propagated under these provisions.

The Supreme Court allowed petition for certiorari by the petitioner to find out whether the Fourth Circuit overacted in its jurisdictional authority by deliberating an issue meant for D.C Circuit and to decide on the question of regulatory construction facing the Fourth Circuit.

Supreme Court has been approached for its view on the following questions:

  • Whether the Fourth Circuit Court decision amounted an infringement of Section 307 (b) of the Act 42 U.S.C 7607 (b) which stipulates that national CAA rules are subject to confront only in the D.C Circuit and “ can not be offered to judicial review” especially in enforcement actions.
  • Whether annual or hourly emission rate have to be taken into consideration for deciding the meaning of ‘modification’ under the Act.

It was argued by Duke Energy that it was upheld by the Fourth Circuit Court its stand that the terminology ‘modification’ had to construed by EPA the same style in both the programs so that the statues were in synchronization with Congress’ objective.

However, Justice David Souter, Supreme Court, allied with EPA and held that “codes of statutory interpretation are not so strict” an illustrated terminology in the same statute may take a new avatar and demand for embedded tactics.

On the another issue , the Supreme Court held that whether an emission standard based on hourly basis was the proper yardstick to decide if a modification at a power utility prompts the requirement to apply for a permit.

The plaintiffs argued that EPA was at liberty to decide if a plant had passed through a key renovation or modification under the PSD plan by gauging the real discharge of pollutants made by it annually rather than on hourly basis. This is being employed as a litmus test for the new source plan. The respondent argued that none of the modifications at its plants enhanced the emission rate on hourly basis and observed that EPA should employ these standards to measure the quantum of emission of pollutants. However, Supreme Court viewed this divergence as the “crux of the litigation.”

Supreme Court however vacated the decision by the federal district court in North Carolina and on appeal before the Fourth Circuit of Appeals.

It was held by the Supreme Court that the Fourth Circuit’s construction of the PSD regulations in an attempt to match them with their NSPS equivalents on “modification” resulting in the annulment of PSD regulations, which must solace with the limits specified by CAA on judicial review of EPA regulations for validity.

The Supreme Court, in a unanimous ruling, held that Duke Energy had infringed the provisions of CAA and asked the company to defend itself in the lower court on charges that it infringed clean-air laws when it enhanced its generating capacity of its several power manufacturing units without receiving approval from EPA.

The Supreme Court decision is viewed as a triumph for environmental groups struggling to minimize emissions from age-old, unsafe power plants in U.S.A.

The Supreme Court left undecided many questions in writ of certiorari thereby leaving the lower courts to resolve, together with whether the alterations made by Duke Energy in its plants are subject to the rigid rules.

The Supreme Court also viewed that Duke Energy can also push its case in the lower court as regards to whether EPA attempted in ex post facto transform its style that it perused for two decades under the agenda.

Issue(s) of Law: “Whether [insert issue(s) of law]?”

The main issue of the law is the interpretation of provision of statues. It was opined by the Supreme Court that the Fourth Circuit’s construction of the PSD regulations in an attempt to match them with their NSPS equivalents on “modification” resulting in the annulment of PSD regulations, which must solace with the limits specified by CAA on judicial review of EPA regulations for validity. It was further held that “codes of statutory interpretation are not so strict” an illustrated terminology in the same statute may take a new avatar and demand for embedded tactics.

Summary Explanation of Court’s Reasoning

The Supreme Court, in a unanimous ruling, held that Duke Energy had infringed the provisions of CAA and asked the company to defend itself in the lower court on charges that it infringed clean-air laws when it enhanced its generating capacity of its several power manufacturing units without receiving approval from EPA.

Significance of Case to Public Affairs

The Coal based power plants in U.S.A is now under obligation to reduce their emission of air pollutants at an agreed rate. Further ,coal-based power manufacturers who had not initiated on repairing and making improvements of their units under CAA’s New Source Review (NSR), had to modify their utility so as to adhere the new pollutant emission norms under CAA guidelines and any failure on the part of power plants as regards to modification of power plants will be having serious consequences. The Supreme Court decision is viewed as a triumph for environmental groups struggling to minimize emissions from age-old, unsafe power plants in U.S.A.

This decision will make all coal-based power plants in U.S.A to reduce their emission level and to make the environment more eco friendly.

References

Beware the Eco-Industrial Complex. 2007. The Washington Times, A17. Greens All Talk, No Action on Global-Warming Cuts. The Washington Times, A01.

Peters J. Duke Energy DUK. Morningstar Dividend Investor [serial on the Internet]. (2008); 4(9): 15. Available from: Business Source Complete.

Right Climate Choice. 2007. The Washington Times, A14.

Senate Panel Presses EPA; Senses Inaction over Clean Air. 2007. The Washington Times, C08.

Stephanie I.Cohen, EPA wins case on power-plant pollution, Market Watch, (4) 2007.

Supreme Court of the United States, Environmental Defense Et Al v Duke Energy Corp. et al. Web.

Survey: Support for Duke Energy Coal Project is Weak. Coal Age [serial on the Internet]. (2008); 113(6): 18. Available from: Business Source Complete.

Thomas Gremillion, Environmental Defense v. Duke Energy Corporation, Harvard Environment Law Review, Vol 31 (2007).

Footnotes

  1. 40 CFR §6O.14 (a).
  2. §51.166(b) (21) (ii).
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