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Subject: EPA Will Ease Coal Plant Rules
Incentives to Replace Pollution Lawsuits
By Eric Pianin and Dan Morgan
Washington Post Staff Writers
Monday, March 18, 2002; Page A01
The Environmental Protection Agency will begin announcing in the next
several weeks rule changes aimed at discouraging new government lawsuits
against operators of aging coal-fired power plants in favor of incentives
for voluntary reductions in toxic emissions, according to EPA officials.
After nearly a year of intense internal debate, the Bush administration has
decided to formally alter a clean-air enforcement initiative begun under
President Bill Clinton in 1999 that spawned dozens of lawsuits against some
of the nation's worst polluting power plants, agency and White House
officials said.
Currently, older power plants that expand or significantly modify their
operations can be sued for violating the Clean Air Act unless they agree to
install costly anti-pollution equipment.
The new rules would seek reduced emissions without threatening legal action
in most cases. Instead, the administration wants to encourage the plants to
take voluntary steps to reduce emissions, and is seeking legislation to
force cuts in pollution at plants that don't voluntarily cooperate, said
sources familiar with the administration's plans.
The changes could go a long way to resolving the concerns of major energy
companies, which argued that the Clinton approach was overly litigious and
economically burdensome. Some of the country's biggest energy companies,
including Atlanta-based Southern Co., have poured millions of dollars into
Republican political campaigns and launched a major lobbying effort to stop
the costly lawsuits.
But the policy shift will almost certainly anger environmentalists and
officials of several northeastern states concerned about airborne pollution
from the aging plants. The shift would also leave in limbo dozens of
lawsuits brought by the Clinton Justice Department under the Clean Air Act.
White House and Justice Department officials say they will continue to
pursue the lawsuits filed in 1999 but clearly indicated a lack of
enthusiasm.
"The [earlier] enforcement actions have created a realm of ambiguity that
makes it difficult for these folks in the utility industry to make decisions
on long-term capital investments," a senior White House official said.
Environmental activists said the Bush administration posture is discouraging
settlements that could result in stepped-up efforts to limit toxic
emissions. Already, they noted, two major utilities were on the verge of
agreements to pay fines and install costly anti-pollution equipment before
the regulatory ground began to shift in the Bush administration.
"We need some serious muscle out of EPA to settle these cases," said Jane
Kochersperger, field coordinator for Clean Air Task Force, an environmental
group. "We're looking at roughly 30,000 premature deaths per year related to
old coal-fired power plants."
On environmental and energy matters, the public has focused largely on Enron
Corp.'s collapse, proposed arctic oil drilling and Vice President Cheney's
energy task force. But the stakes, in many respects, are higher on the
question of how the Bush administration interprets the Clean Air Act.
A strict interpretation could cost utilities tens of billions of dollars to
repair aging plants. Utility executives say that could ruin their companies.
But health and environmental groups say pollution from the plants, if
unchecked, could raise asthma and lung cancer death rates across the
country.
The issue also has enormous political implications. Bush campaigned on a
pledge to boost coal production as one way to address long-term energy
needs, and took office indebted to the electoral votes of three major
coal-producing swing states -- Kentucky, Tennessee and West Virginia -- that
could suffer economically from tough emission rules.
Instead of litigation, Bush is promoting a clean air initiative, dubbed
"Clear Skies," that mandates public and private efforts to reduce emissions
of sulfur dioxide, nitrogen oxide and mercury by more than two-thirds of
current levels, according to the administration. However, Senate Environment
and Public Works Committee Chairman James M. Jeffords (I-Vt.) said the plan
doesn't go far enough and is promoting a more aggressive proposal that
includes reductions in carbon emissions.
Administration officials say they are trying to balance the need to protect
both the environment and the economy. EPA Administrator Christine Todd
Whitman, a former New Jersey governor who once backed the lawsuits against
power plants, recently told a congressional committee: "We are not making
the kinds of advances we need to make" by suing utilities.
Energy giants, including Southern Co., have poured millions of dollars into
Republican political campaigns and a massive lobbying effort to stop the
costly lawsuits filed during Clinton's term. The chief lobbyist for a group
of utilities is former Republican National Committee chairman Haley Barbour.
Southern Co., a principal member of this group, contributed $540,000 to GOP
organizations during the 2000 election.
Thomas R. Kuhn, president of Edison Electric Institute, the utilities' trade
association, was a college classmate of Bush's and helped raise hundreds of
thousands of dollars for the president's 2000 election. Kuhn attended three
of the eight meetings that Deputy Energy Secretary Francis S. Blake held
with outside groups to discuss how the administration would proceed on
enforcement, according to a department document.
Meanwhile, environmental groups including the Natural Resources Defense
Council, U.S. Public Interest Research Group, Sierra Club and National
Environmental Trust have waged a media campaign to discredit the
administration's planned policy shift.
The controversy dates to the enactment of the 1977 Clean Air Act. The bill
exempted dozens of coal-fired plants and refineries from tough new pollution
controls, but made clear they could not perform major modifications to
extend their lives or hours of operation. Because such changes could
increase harmful emissions, they would trigger "New Source Review" -- a
federal inspection that could require appropriate pollution controls as a
condition for continued operation.
But when federal officials searched state regulators' records in the 1990s,
they found hundreds of instances of plants performing what seemed major
reconstruction without obtaining necessary permits.
The Clinton administration's lawsuits cited a major health risk from 7
million tons of sulfur and nitrogen emissions. Reducing the pollution has
become a top priority of eastern mayors and governors, who face their own
federal deadlines for reducing ozone and smog caused in part by particles
from the midwestern plants.
Of the 51 power plants cited by EPA, 29 were owned by three companies:
American Electric Power, a multistate utility based in Columbus, Ohio;
Southern Co., which serves a region from Georgia to Mississippi; and the
Tennessee Valley Authority, the government's own sprawling seven-state
utility set up during the New Deal.
In the waning weeks of the Clinton administration, Virginia Electric & Power
Co. and Cinergy Corp. of Cincinnati agreed in principle to pay fines and
spend $1.9 billion installing pollution-control equipment at aging coal
plants.
Cinergy and its affiliates agreed in principle to lower sulfur dioxide
emissions by 35 percent by 2013, install new scrubbers and replace some coal
burners with cleaner, gas-fired ones. In return, it could modify its plants
as long as it stuck to the new emissions caps.
But the negotiations ground to a halt when Bush became president and ordered
a review of the lawsuits. Last May, Cheney's energy task force ordered a
90-day interagency review of New Source Review to see whether the policy
should be altered to reduce future litigation -- and whether some existing
cases should be dropped. The Justice Department announced in January that it
would continue the lawsuits filed during the Clinton administration. But
today, negotiations with Cinergy and VEPCO, once expected to take as little
as three months to complete, drag on.
Eric V. Schaeffer, who resigned this month as head of EPA's Office of
Regulatory Enforcement, said Cinergy officials were simply making the best
of a bad situation. He said, "They put their tons of pollution on the table,
they shook hands with us," and then the regulatory landscape changed.
© 2002 The Washington Post Company
*** NOTICE: In accordance with Title 17 U.S.C.
Section 107, this material is distributed without
profit to those who have expressed a prior
interest in receiving the included information for
research and educational purposes.
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