Last week, Judge Larry McKinney issued an order requiring to shut down three coal-fired generating units at its Wabash Station facility by no later than September 30, 2009. The decision actually struck me as a thoughtful analysis of injunctive relief issues in a situation where a violation of NSR regulations had already been proven. Although the decision has gotten most press for the order shutting down the units, it covers a number of issues important to injunctive relief situations, and there are some nuggets which are potentially useful to generators; it is not a one-sided decision. Here are some highlights:
The shut-down order – although significant, is not as earth-shattering as it seems. Cinergy gave the judge little choice by testifying that it would not be economic to install pollution controls on the units, given their age and size. The fight was thus about when, not whether, the units would be shut down. The judge was clearly annoyed that, following the liability finding, Cinergy had seemingly taken no action to plan for a shut-down. The judge, in response to reliability concerns, did allow the units to operate through the summer of 2009.
Irreparable harm discussion – a few noteworthy aspects here
The court relied on modeling which demonstrated that Wabash emissions contributed to PM2.5 levels downwind
The court noted that contributions of “just a few tenths of a ug“ can be significant when an area is on the border between compliance and noncompliance.
The court rejected the plaintiffs’ argument that acid deposition and mercury emissions from Wabash had caused irreparable harm, concluding “that Plaintiffs did not provide sufficient nexus between the relevant excess emissions and the negative … effects.
In a win for generators, the court rejected the plaintiffs’ position that BACT for NOx emissions in 1989 was SCR technology. This is an important issue, because EPA and the states will sometimes try to take the position that unproven technologies are nonetheless BACT. The decision squarely rejects that argument.
Surrender of SO2 allowances. The court required Cinergy to surrender SO2 allowances equal to the excess emissions from the May 2008 jury verdict to the time the units are shut-down. However, it is important to note that the Plaintiffs had requested that the court order Cinergy to install BACT on larger units at the Station that had not violated NSR rules. The court rejected that argument, noting that the Plaintiffs’ proposal “does not bear an equitable relationship to the degree and kind of harm it is intended to remedy …. Imposition of such a remedy is punitive in nature.”
In sum, although the decision is important, it is not surprising in context. Indeed, the finding on BACT, which was favorable to Cinergy, may have the most precedential significance.