The Changing Face of Federal NSR

January 16, 2007
Client Alert Newsletter Forecast 2007

The federal New Source Review ("NSR") program imposes standards on the construction of any major stationary source or major modification of an existing source. NSR is implemented directly by most states, including Pennsylvania, New Jersey, and Delaware, for criteria pollutants for which the region is in "attainment" of the applicable ambient air quality standard. For "nonattainment" areas, states typically devise their own programs under minimum federal standards. All three branches of government may influence the shape of NSR in 2007.

First, the U.S. Supreme Court is evaluating the appropriate NSR standard for determining emission increases. To resolve a federal appellate court split, the Supreme Court will determine whether an emission increase should be evaluated based upon changes in annual or hourly emission rates. At the same time, the U. S. Environmental Protection Agency ("EPA") is drafting a regulation answering this question by establishing an hourly emission rate standard, at least for electric generating units. EPA is also proposing to limit when a modification triggers NSR because it "debottlenecks" operations and downstream emissions. EPA this year will also respond to a D.C. Circuit Court decision invalidating EPA's program to transition from the prior one-hour ozone ambient air quality standard to the newer, more stringent eight-hour standard. Finally, the new Democratic Congress is scrutinizing EPA's actions implementing the Clean Air Act, and has proposed several bills to roll back prior EPA regulations and policies, and prevent new programs, that some believe undermine the goals of NSR.