EPA nears power plant, refinery clean air overhaul

The plan, which has been the target of intense lobbying by environmental groups and electric utilities, was to be released possibly as early as last week, a government official told Reuters. The Environmental Protection Agency (EPA) has been working on an overhaul of the Clean Air Act\'s so-called New Source Review rules. The rules, which were strictly enforced by the Clinton administration, require power plants and refineries to install expensive pollution control equipment when significant modifications or repairs are made to the facilities. The industry and the Bush administration claim the regulations prevent more refineries and power plants from being built or expanded, which in turn reduces available energy supplies. Green groups see the White House efforts as a rollback of the 1970 Clean Air Act, fearing a package of loopholes to allow utilities to pollute more with fewer penalties. The relaxed regulations will make it \"easier for old, dirty power plants to increase pollution without any accountability,\" said Vickie Patton, an attorney with Environmental Defense. HIGH-POWERED LOBBYISTS Utilities have complained that current requirements are too strict and discourage routine maintenance on their plants, which could make it tough to keep up with growing demand for power. \"The best way to protect the environment is by protecting energy efficiency. The most effective environmental control is to get more electricity out of less coal,\" said Scott Segal, a spokesman for the Electric Reliability Coordinating Council. The council is a lobbying group that includes FirstEnergy Corp, Southern Cos and Duke Energy Corp. They are among the firms sued by the Clinton administration for failing to install new controls when plants were expanded or modified. Utilities have hired several powerful political operatives to argue their case, including former Republican National Committee chairman Haley Barbour and former Montana governor Marc Racicot, new chairman of the Republican National Committee. \"You cannot achieve energy efficiency goals without engaging in routine maintenance of the sort the current NSR interpretation would stop,\" said Segal. But John Walke, a former EPA official and lawyer with the Natural Resources Defense Council, said the air pollution rules do not distinguish between unit expansions and routine maintenance. \"There is no mention of routine maintenance in the statute,\" Walke said. \"The Clean Air Act regulates any physical change in a plant that increases emissions significantly.\" Utilities are pushing for changes because they want to \"increase pollution by very significant amounts and not clean it up,\" he said. As part of its national energy plan released in May, the White House ordered the EPA to look into the regulations\' impact on investment in new utility and refinery generation capacity, energy efficiency and environmental protection. An EPA spokesman said the new proposal would be ready soon. \"EPA is working to complete the report to the president on the potential impact of the New Source Review program,\" the agency spokesman said, noting ongoing discussions. PLANNED CHANGES According to environmental and congressional sources familiar with the new rules, the administration\'s plan includes: * Clean Unit Test - This would allow plants to set an emissions trigger amount, above which they would be required to install pollution equipment. The amount could be based on the two highest pollution output years in a 10-year period, or the two highest plant utilization rates over the period, sources said. * Investment Test - Clean Air Act compliance would be triggered only if a plant makes upgrades above a certain monetary limit. The limit could be a percentage of a plant\'s capital cost - say 8 percent of a $1 billion refinery, or a set dollar amount, sources said. The White House\'s planned changes have triggered complaints from Northeast states who say they were left out of the regulation-writing process. In a letter to Vice President Dick Cheney this week, the attorneys general for New York, Connecticut and Massachusetts this week said they have \"been locked out of this process,\" even though their states have been \"hard hit by the devastating impacts of air pollution.\" Story by Chris Baltimore and Tom Doggett REUTERS NEWS SERVICE