NSR Enforcement Lives On (For Now) — A Split Decision for Ameren

The 8th Circuit Court of Appeals has largely affirmed a District Court order finding that Ameren Missouri violated the NSR provisions of the Clean Air Act in making major modifications to its Rush Island facility.  The Appeals Court did reject the District Court’s requirement that Ameren Missouri make improvements at its nearby Labadie facility that was not in violation of the CAA.

I have three thoughts about the decision.

First, the liability finding was pretty much plain vanilla.  I will note, however, that the combination of the decision here and the 3rd Circuit decision in United States v. EME Homer City Generation results in a strong incentive for owners of power plants concerned about NSR liability to sell them quickly, since the courts have clearly landed on an interpretation of the CAA under which former owners are not subject to liability, while current owners (if they were owners at the time of a modification), remain liable.

Second, the 8th Circuit affirmed the injunctive relief imposed by the District Court with respect to the Rush Island facility, but not the requirement imposed by the District Court to reduce emissions at the Ameren Labadie facility to make up for the excess emissions from Rush Island.  When the District Court decision was issued, I praised its carefully crafted injunction and predicted it would survive appeal.

Shows what I know!

I still think that the District Court got it right.  As the 8th Circuit noted (italics in original):

a district court “has the authority to order [a defendant] to take appropriate actions that remedy, mitigate and offset harms to the public and the environment caused by the [defendant’s] proven violations of the CAA.” … [T]he Clean Air Act, 42 U.S.C. § 7413(b), expressly provides for injunctive relief to redress violations of the Act.”

The Court then notes that the Labadie plant didn’t violate the CAA.  However, while the violations occurred at Rush Island, it wasn’t “Rush Island” that violated the CAA.  It was Ameren Missouri that violated the CAA.  There’s nothing in the CAA that precludes the imposition of injunctive relief against a violator with respect to operations separate from those where the violation occurred, as long as they are narrowly tailored to remedying the harm from the violations that did occur.  Here, the District Court made fully supportable findings that the injunctive relief at Labadie would mitigate and offset harms to the public and the environment caused by Ameren Missouri’s proven violations of the CAA.  That should have been enough.

Finally, I have previously described NSR as the most successful program that shouldn’t exist.  I still believe that.  Now, however, as climate change pushes government to adopt programs that will ultimately result in the closure of fossil plants, the NSR program itself is going to become a fossil – or at least extinct.

And that will be a good outcome.

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