United States Department of Justice 

Office of Legal Policy 

NEW SOURCE REVIEW:

AN ANALYSIS OF THE CONSISTENCY OF

ENFORCEMENT ACTIONS WITH THE CLEAN

AIR ACT AND IMPLEMENTING REGULATIONS

JANUARY 2002 
Table of Contents

Executive Summary ........................................................... i

Frequently Used Abbreviations ............................................... vii

I. Introduction ........................................................... 1

II. Background ........................................................... 5

A. History of the Clean Air Act and Implementing Regulations ................ 5

B. Previous Enforcement Actions ...................................... 11

C. Settlement Negotiations and Agreements to Date ........................ 19

D. EPA Guidance on New Source Review ................................ 20

III. Analysis .............................................................. 24

A. Did EPA Reinterpret Its Implementing Regulations in Violation of the APA? . 26

B. Is EPA’s Interpretation of the Applicable New Source Review Regulations

Lawful? ........................................................ 34

IV. Conclusion ........................................................... 39

Appendix I

Table of Ongoing New Source Review Enforcement Actions Against Coal-Fired Power

Plants ................................................................ 41

Appendix II 

Table of Additional New Source Review Enforcement Actions ................... 43

Appendix III 

Table of Complaints in Power Plant Cases: Major Modifications ................. 44
Executive Summary 

The Clean Air Act Amendments of 1970 required major stationary sources of air pollution 

to install devices to reduce pollution. Sources existing at the time were not required to retrofit 

pollution controls, but would be required to install such controls if and when they modified their 

facilities. In 1977, Congress amended the Clean Air Act to establish the new source review program, 

which requires preconstruction review and a permitfor almost anymajor new source ormodification 

of an existing source of air pollution. 

The current controversy over the new source review program centers on what constitutes a 

“modification.” If a facility’s construction project is a modification, then it is subject to the new 

source review process and the requirement that pollution controls be installed. If the project is not 

a modification, then there is no need for a permit or new pollution controls. The Clean Air Act 

defines “modification” to be “any physical change in, or change in the method of operation of, a 

stationary source which increases the amount of any air pollutant emitted by such source or which 

results in the emission of any air pollution not previously emitted.”1 

Between 1975 and 1980, the Environmental Protection Agency (“EPA”) promulgated 

regulations which elaborate on the meaning of “modification” under the Clean Air Act. Together, 

the various statutory and regulatory requirements provide that physical changes that constitute 

routine maintenance, repair, or replacement are not modifications subject to the new source review 

permitting process. In addition, even physical changes considered to be modifications do not trigger 

new source review requirements if they do not result in a significant emissions increase. 

1 42 U.S.C. § 7411(a)(4) (1994). 

i 
To date, EPA has not promulgated any regulations detailing what types of activities it 

considers routine and therefore exempt from the new source review process. EPA gave some 

guidance in a preamble to a 1992 rulemaking, where the agency stated that its previous regulations 

had defined modification to include “common-sense exclusions from the ‘physical or operational 

change’ component of the definition.”2 In 1994, EPA staff circulated a proposal that would have 

equated “routine” with “minor” modifications, but this language was not formally promulgated in 

subsequent rulemakings.3 

EPA’s effortsto enforce the new source review provisions over the past two decadesfocused 

primarily on facilities outside of the electric utility industry. The principal action related to power 

plants involved a 1988 request by the Wisconsin Electric Power Company (“WEPCO”), which 

operated a coal-fired steam generating plant, for an “applicability determination” regarding whether 

its proposed physical changes would constitute “modifications.” EPA concluded that the proposed 

construction, which included repairs and replacements of equipment, was not “routine” and therefore 

triggered new source review. In ruling on WEPCO’s subsequent petition for review, the Seventh 

Circuit upheld EPA’s interpretation and application of the routine maintenance exception.4 

Until recently, EPA had not filed any enforcement actions relating to alleged violations of 

the new source review requirements arising out of modifications to plants in the electric utility 

2 57 Fed. Reg. 32,314, 32,316 (July 21, 1992). Further, in the preamble to a 1992 final rulemaking relating to 

electric utility steam generators, EPA stated that it “has always recognized that Congress obviously did not intend to make 

every activity at a source subject to new source requirements.” In that rulemaking, EPA recognized that a broad definition 

of modification “could, standing alone, encompass the most mundane activities at an industrial facility (even the repair or 

replacement of a single leaky pipe, or a change in the way that pipe is utilized).” Id. 3 As discussed in Section II.D of this report, EPA issued several “applicability determinations” requested by industry 

members. Most recently, in May 2000 (subsequent to the filing of the pending new source review actions), EPA issued an 

applicability determination to Detroit Edison in which it applied its test and concluded that the proposed changes were not 

routine repair or replacement. See Letter from EPA Region V Administrator to Detriot Edison (May 23, 2000). 4 See Wisconsin Electric Power Company v. Reilly, 893 F.2d 901 (7th Cir. 1990). 

ii 
industry.5 Nor did many electric utilities request that EPA determine whether the new source review 

rules applied to their proposed projects. In late 1996, EPA began to investigate suspected new 

source review violations in the coal-fired electric utility industry. After receiving and analyzing 

information on modification history and emissions increases from numerous companies, in 1999 

EPA sent a number of referrals to the Department of Justice (the “Department”) for civil 

enforcement actions against those companies, alleging widespread violations of the new source 

review provisions and related requirements of the Clean Air Act.6 The Department filed seven 

actions against various coal-fired electric utilities in 1999 and an additional action in 2000. One of 

the actions has settled;7 the others are in varying stages of litigation and/or settlement negotiations. 

The defendants vigorously contest these cases, arguing in part that EPA is impermissibly attempting 

to effect a change through litigation in what the defendants regard as the agency’s long-standing 

policy of not enforcing the new source review requirements against similar projects in the industry. 

In May 2001, the National Energy Policy Development Group recommended that the 

AttorneyGeneral “review existing enforcement actionsregardingNew SourceReview to ensure that 

the enforcement actions are consistent with the Clean Air Act and its regulations.”8 The Department 

has reviewed the applicable law, agency action, and representative pleadings filed in the pending 

5 During the late 1980s and early 1990s, EPA did seek to enforce in court the new source review provisions of the 

Clean Air Act with respect to certain wood-products industry participants. Similarly, EPA issued several applicability 

determinations with respect to proposed modifications of existing facilities under the Clean Air Act in other industries. In 

the mid-1990s EPA staff also issued two letters relating to new source review issues. See Letter from Mary D. Nichols, 

Assistant Administrator for Air and Radiation, U.S. EPA, to William R. Lewis, partner, Morgan, Lewis and Bockius at 19 

(May 31, 1995); Letter from John Seitz, Director, U.S. EPA, Office of Air Quality Planning and Standards to the Hon. Robert 

C. Byrd, U.S. Senate (Jan. 26, 1996). 6 The Department also is pursuing, or has recently settled, other enforcement actions against facilities in the refinery, 

wood-products, mini-steel, food manufacturing, and chemical processing industries. 7 United States v. Tampa Elec. Co., No. 99-2524, CIV-T-23F (M.D. Fla., filed Nov. 3, 1999). 

8 REPORT OF THE NATIONAL ENERGY POLICY DEVELOPMENT GROUP, ch.7, at 14 (2001). 

iii 
cases and hereby reports that EPA reasonably may conclude that the enforcement actions are 

consistent with the Clean Air Act and its regulations. 

Thisreport’s ultimate conclusion isinformed byseveralsubsidiarydeterminations. First, the 

report focuses principally on enforcement actions against coal-fired power plants, because defendants 

in other industries generally have not alleged that EPA’s actions are inconsistent with the Clean Air 

Act. Second, in matters where, as here, the Department is not the agency authorized by Congress 

to administer a statute, the authority to make policy determinations and promulgate statutory or 

regulatory interpretations rests primarily with the responsible agency—here, the EPA. The present 

review therefore does not extend to the policy considerations underlying EPA’sinterpretation of the 

Clean Air Act and its regulations or EPA’s current enforcement strategy. Third, in order not to 

compromise the Department’s advocacy role in the pending enforcement actions, the level of 

scrutiny applied to EPA’s views is a modest one: Our task is to decide whether the agency’s 

enforcement policy judgments are supported by a reasonable basis in fact and law. We have no 

occasion to consider whether a different set of policy judgments made by EPA likewise would be 

reasonably supported in fact and in law. Accordingly, this report neither constitutes nor modifies 

a position advanced by the United States in litigation, and no part of this report may be relied on by 

parties in new source review enforcement actions to support any positions advanced in litigation. 

In reviewing the new source review actions against electric utilities, the Department focused 

on two questions. First, does filing the new source review enforcement actions constitute a 

substantive change in EPA’s interpretation of the Clean Air Act and its regulations that would 

require notice and comment rulemaking under the Administrative Procedure Act? Second, 

notwithstanding the want of notice and comment, is EPA’sinterpretation ofthe routine maintenance 

iv 
exception reasonable in light oftheClean AirAct, itsimplementing regulations, and other previously 

issued guidance? 

With respect to the first question, the Department concludes that the existing new source 

review actions do not constitute an impermissible reinterpretation of the Clean Air Act and its 

regulations such as to require notice and comment rulemaking. EPA has a reasonable argument 

under existing law that enforcement of the new source review provisions in these cases does not 

amount to an interpretation of the regulations that departs from a prior authoritative interpretation. 

Although the parties to the actions vigorously dispute the proper characterization of EPA’s history 

of enforcing the new source review provisions, there is a reasonable basis for EPA’s claim that it has 

not issued any authoritative interpretation which is at odds with the arguments it presents in the 

pending litigation. For these reasons, EPA reasonably may distinguish the pending actions from 

existing caselaw holding that subsequent agency action—such as the issuance of a formal guidance 

interpreting a regulation—effected an amendment to a regulation which required notice and 

comment rulemaking.9 

With respect to the second question, the Department concludes that EPA’s interpretation of 

the Clean Air Act, asreflected in the existing regulations defining “modification,” would be entitled 

to deference under Chevron, U.S.A., Inc. v. NRDC;

10 and that its interpretation of the regulations’ 

routine maintenance exception as not extending to the projects undertaken by the industry 

defendants, would be entitled to deference under Bowles v. Seminole Rock & Sand Co.11 At 

minimum, the plain language of the regulations affords EPA the discretion to assert in the 

9 See Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir. 2000). 10 467 U.S. 837 (1984). 11 325 U.S. 410 (1945).

v 
enforcement actions that a particular plant modification is “major,” or encompasses more than 

“routine maintenance.” 

In light of this review’s conclusions, the Department’s Environment and Natural Resources 

Division (“ENRD”) will continue, as it has during the pendency of this review, to prosecute 

vigorously the EPA’s civil actions to enforce the new source review provisions. And it will 

continue, as it has during the pendency of this review, to pursue talks to settle those actions where 

appropriate on mutually acceptable terms. Because the existing enforcement actions are supported 

by a reasonable basisin law and fact, any decision to withdraw, terminate, or otherwise circumscribe 

them would rest in the discretion of ENRD, which must assess the relative strengths and weaknesses 

of a given case. 

vi 
Frequently Used Abbreviations 

AAR Association of American Railroads 

APA Administrative Procedure Act 

CAA Clean Air Act 

ENRD Environment and Natural Resources Division 

EPA Environmental Protection Agency 

FERC Federal Energy Regulatory Commission 

FRA Federal Railroad Administration 

NAAQS National Ambient Air Quality Standards 

NSPS New Source Performance Standards 

NSR New Source Review 

PSD Prevention of Significant Deterioration 

TECO Tampa Electric Company 

TRAC Telecommunications Research Action Center 

TVA Tennessee Valley Authority 

VEPCO Virginia Electric Power Company 

WEPCO Wisconsin Electric Power Company 

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I. Introduction 

In May 2001, the National Energy Policy Development Group (“NEPDG”) directed that the 

Attorney General “review existing enforcement actions regarding new source review to ensure that 

the enforcement actions are consistent with the Clean Air Act and its regulations.”12 Many of those 

actions, brought by the Department of Justice (“Department”) at the behest of the Environmental 

Protection Agency (“EPA”), allege that construction projects undertaken by various regulated entities 

constitute “major modifications” within the meaning of the Clean Air Act (“CAA”), and therefore 

are subject to the requirements of the new source review program. Pursuant to the NEPDG’s 

directive, the Department hasreviewed the enforcement actionsit currently is pursuing, and submits 

its conclusions in this report. 

The new source review program involves enforcement actions against a number of facilities 

in a number of industries. The Department currently is pursuing, or recently has settled, actions 

against facilities in the coal-fired power plant, refinery, wood-products, mini-steel, foodmanufacturing, and chemical-processing industries. For the most part, the defendants in these cases 

do not argue that EPA’s enforcement actions are inconsistent with the CAA or its implementing 

regulations. Rather, they dispute a number of essentially factual propositions, including whether the 

enforcement actions were brought within the applicable statute oflimitations, whethertheirfacilities 

withheld information from inspectors, and whether theirfacilities emitted more pollutantsthan their 

permits authorized. In fact, a number of parties settled soon after the enforcement actions were filed, 

and raised neither legal nor factual defenses to EPA’s allegations. 

12 REPORT OF THE NATIONAL ENERGY POLICY DEVELOPMENT GROUP, ch.7, at 14 (2001). 

1 
The electric utility defendants, by contrast, assert that EPA’s enforcement actions are 

inconsistent with the CAA and its regulations. These defendants claim that EPA’s interpretation of 

“major modification” is unlawful, and that the Administrative Procedure Act (“APA”) required the 

agency to engage in notice and comment rulemaking before initiating its enforcement actions. 

Because the NEPDG directed the Department to evaluate the enforcement actions for consistency 

with the CAA and its regulations, and because defendants in other industries do not address that 

issue, this report emphasizes EPA’s efforts to apply the Act to coal-fired power plants. 

This report expresses no view on whether, as a policy matter, EPA’s decision to enforce the 

CAA against the regulated entities was appropriate. Rather, the Department’s role in this review of 

the existing enforcement actions is much more limited: determining whether the Department may 

properly advance in court EPA’s views as being consistent with the CAA and applicable 

regulations.13 The underlying question is, therefore, under what circumstances will the Department 

advance a federal agency’s enforcement actions before the courts? 

In resolving that question, the Department is “faced with conflicting demands.”14 As a 1982 

memorandum from the Office of Legal Counsel explains, the Department “must serve the interests 

of the ‘client’ agency as well as the broader interests of the United States as a whole.”15 On the one 

hand, the Department has an obligation to advance EPA’s litigation position deriving from its status 

as the Executive’s litigator,16 and to honor specific commitments made in formal arrangements with 

13 No part of this report or the analysis or conclusions set forth herein, may be relied on by any party to any new 

source review enforcement action as support for any position advanced in litigation. 14 The Attorney General’s Role as Chief Litigator for the United States, 6 Op. Off. Legal Counsel 47, 62 (1982). 15 Id. 16 See 28 U.S.C. § 516 (1994). 

2 
that agency.17 Moreover, the Attorney General “will generally defer to the policy judgments of the 

client agency,” because it has been entrusted by Congress with administering the substantive 

statute.18 

On the other hand, the Department is “obligated to represent the broader interests of the 

Executive” — for instance, by coordinating litigation activities among various “client” agencies.19 

Independently, as governmental actors and officers of the court, Department lawyers have a duty to 

act in accordance with the laws and Constitution of the United States. And the Department 

traditionally has maintained an independent role in setting litigation strategy or making tactical 

judgments for any given case.20 

The Department thus may face conflicting demands when it has “supervisory authority,”21 

by virtue of its independent litigating authority, with respect to the client agencies. Although EPA 

has concurrent litigating authority under the CAA, holding the power to litigate independently if the 

Department declines to represent it,22 the Department remains subject to conflicting demands here. 

That isso because, even when the Department’slitigating powers are supplemented by those wielded 

by an agency, it retains its unique obligation of representing the Executive’s overall interests. 

17 See 42 U.S.C. § 7605(a) (1994); Memorandum of Understanding Between Department of Justice and 

Environmental Protection Agency, 42 Fed. Reg. 48,942 (Sept. 26, 1977). 18 The Attorney General’s Role, 6 Op. Off. Legal Counsel at 54-55; see also Memorandum of Understanding, 42 

Fed. Reg. at 48,943 (“In conducting litigation for the Administrator, the Attorney General shall defer to the Administrator’s 

interpretation of scientific and technical matters.”). 19 The Attorney General’s Role, 6 Op. Off. Legal Counsel at 54. 

20 Id. at 55. 21 Id. at 47 & n.1. 

22 See 42 U.S.C. § 7605(a) (providing that “attorneys appointed by [EPA’s] Administrator shall appear and 

represent him” unless “the Attorney General notifies the Administrator that he will appear in such action”); Memorandum 

of Understanding, 42 Fed. Reg. at 48,942 (explaining that “the Agency may be represented by its own attorneys” if the 

Attorney General “decline[s] to represent the Agency in particular civil actions”). 

3 
Moreover, as a practical matter, we are aware of no instance in which EPA independently has 

brought an enforcement action after the Department declined to do so. 

The decision whether to advance a federal agency’s enforcement actions thus involves a 

careful evaluation of several potentially conflicting considerations, including deference to the 

agency’s policy views and an important measure of independent legal judgment. In carrying out the 

NEPDG’s directive “to ensure that the enforcement actions are consistent with theClean Air Act and 

its regulations,”23 the Department has engaged in the sort of analysis which it typically brings to bear 

in evaluating any enforcement action. That is, the Department has carefully and closely re-evaluated 

whether the current enforcement actions are indeed reasonably supported in fact and in law to 

warrant continued prosecution. In light of this limited standard of review, the Department is agnostic 

on whether EPA’s enforcement actions are wise as a matter of policy; it asks only whether there is 

a reasonable basis in law and fact to support the agency’s views and positions. 

This report concludes that EPA may reasonably argue that the new source review 

enforcement actions against coal-fired power plants are consistent with the CAA, as well as with the 

APA. First, EPA’s alleged past failure to bring enforcement actions may not be an “authoritative” 

interpretation of the CAA and its implementing regulations. The APA therefore may not require the 

agency to have engaged in notice and comment rulemaking before initiating its enforcement actions. 

Second, EPA’s announced interpretation of “modification”—that the projects undertaken by the 

electric utility industry trigger new source review permitting requirements—is a reasonable one, 

given that the agency is entitled to deference on the meaning of the CAA and its regulations.24 This 

23 REPORT OF THE NATIONAL ENERGY POLICY DEVELOPMENT GROUP, ch.7, at 14 (2001). 24 The electric utility defendants have challenged EPA’s enforcement actions on other grounds. For example, they 

argue that certain claims for relief are time-barred by the applicable statute of limitations, and that the agency has failed to 

(continued...) 

4 
report devotes less attention to EPA’s enforcement actions in other industries, in which the 

defendants generally do not allege that the actions are inconsistent with the CAA, and which 

therefore are not implicated by the NEPDG’s charge. 

Part II of this report provides an overview of the CAA, relevant regulations, and EPA’s past 

enforcement activities thereunder. Part III contains the Department’s analysis. It consists of two 

subsections that correspond to the two principal legal issues: first, whether EPA was required to 

promulgate a formal rule before initiating its enforcement actions; and second, whether the EPA’s 

interpretation is consistent with the CAA and its implementing regulations. Part IV concludes the 

Department’s analysis of the pending new source review enforcement actions. 

II. Background 

A. History of the Clean Air Act and Implementing Regulations 

Congress first addressed the problem of air pollution in the CAA of 1963, which funded 

research into air quality. In 1967, Congress passed the Air Quality Control Act, which established 

both Air Quality Control regions and a system for defining Ambient Air Quality Standards so states 

can set limits on the emission of certain air pollutants. Prior to the enactment of the CAA of 1970, 

however, air pollution generally was regulated by state or local government. 

With the CAA of 1970, the federal government took a more active role in controlling air 

pollution. The CAA, which regulates air emissions from area, stationary, and mobile sources, 

authorized the EPA to establish National Ambient Air Quality Standards (“NAAQS”). The CAA’s 

goal was for all states to meet these standards by 1975. In order to achieve this goal, the Act 

24(...continued) 

provide the industry with fair notice of the conduct required by the applicable new source review regulations. Because these 

defenses do not allege that EPA acted outside the scope of the CAA and its regulations, this report does not address them. 

5 
required, among other things, certain types of facilities to conform to “New Source Performance 

Standards” (“NSPS”). The NSPS provisions require major stationary sources of air pollution to 

install pollution controls based on the “bestsystem of emission reduction which (taking into account 

the cost of achieving such reduction and any nonair [sic] quality health and environmental impact 

and energy requirements) the Administrator determines has been adequately demonstrated.”25 

The new requirements did not apply to existing sources of air pollution. Such existing 

sources, however, would be required to install pollution controls in the event they were modified.26 

(The scope of what constitutes a “modification,” thus requiring pollution controls, is the crux of this 

review and is discussed in greater detail below.) Older sources were exempted because it was 

thought to be more efficient to add new pollution controls at the time of construction activity, rather 

than requiring all sources to be retrofitted with pollution controls immediately.27 In addition, 

Congress presumed that many of the existing plants would soon be retired and replaced by new 

plants subject to the permitting requirements.28 

EPA’s NSPS regulations, first issued in 1971, identified the industries that were the most 

significant sources of air pollution in the country, including fossil-fuel fired steam generators in the 

energy sector.29 The regulations specified emission limits or “standards of performance” that the 

25 42 U.S.C. § 7411(a)(1) (1994). 

26 See id. § 7411(a)(2). Pursuant to this provision, “[t]he term ‘new source’ means any stationary source, the 

construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) 

prescribing a standard of performance under this section which will be applicable to such source.” 27 See H.R. REP. NO. 95-294, at 185-86 (1977), reprinted in 1977 U.S.C.C.A.N. 1077, 1264-65 (“Building control 

technology into new plants at time of construction will plainly be less costly than requiring retrofit when pollution ceilings 

are reached. For example, testimony from the electric utility industry indicates that it costs about 25 percent less to purchase 

and install flue gas desulfurization technology on a new plant than it would cost to retrofit that plant subsequently . . . . For 

some of the older and smaller sources, it is not physically or economically feasible to retrofit sulfur oxide control 

technology.”). 28 See, e.g., id. 29 See 36 Fed. Reg. 24,876 (Dec. 23, 1971). 

6 
regulated sources must achieve, based on the available technology, cost, and other criteria described 

above. The rules applied to all sources constructed or modified after the effective date of the 

regulations. 

In 1977, Congress amended the CAA and set new deadlines for attaining NAAQS. The 1977 

amendments also established the new source review program, which requires a preconstruction 

review and the issuance of a permit for the construction of any new “major emitting facility,” or for 

the modification of an existing facility. The new source review program comprises two parts: 

1) Prevention of Significant Deterioration (“PSD”) provisions for areas that are meeting NAAQS 

or are unclassifiable due to the absence of sufficient data (referred to as “attainment areas”),30 and 

2) Nonattainment new source review provisions for areas that are not meeting air quality standards 

(referred to as “nonattainment areas”). Congress stated that the purpose of the PSD provisions was 

“to insure that economic growth will occur in a manner consistent with the preservation of the 

existing clean air resources” and “to assure that any decision to permit increased air pollution . . . is 

made only after careful evaluation of all the consequences of such a decision and after adequate 

procedural opportunities for informed public participation in the decisionmaking process.”31 

The new source review program is designed to prevent modified or new facilities from 

causing increased emissions that could cause or contribute to violations of applicable air quality 

standards. In order to receive a construction permit, the facility must show that the project would 

30 The first PSD regulations actually preceded the 1977 amendments. Following the ruling in Sierra Club v. 

Ruckleshaus, 344 F. Supp. 253 (D.D.C. 1972), aff’d per curiam, 2 Envtl. L. Rep. 20,656 (D.C. Cir. 1972), aff’d by an equally 

divided court sub nom. Fri v. Sierra Club, 412 U.S. 541 (1973), that EPA’s regulations implementing the 1970 amendments 

failed to make adequate provisions to prevent the deterioration of air quality in areas of the country that had attained the 

NAAQS, EPA issued regulations requiring states to include PSD provisions in their State Implementation Plans. 39 Fed. Reg. 

31,000 (1974). 31 42 U.S.C. § 7470(3), (5) (1994). 

7 
not result in a violation of a NAAQS or of any applicable PSD regulations in local or downwind 

areas currently in compliance with NAAQS. (These permitting requirements vary depending on 

whether the facility is located in an attainment or nonattainment area for a particular pollutant.) The 

basic PSD provision is set forth in Section 165 of the Clean Air Act: 

No major emitting facility on which construction is commenced after 

August 7, 1977, may be constructed in any area to which this part 

applies unless [inter alia] a permit has been issued for such proposed 

facility in accordance with this part setting forth emission limitations 

for such facility which conform to the requirements of this part . . . 

[and] the proposed facility is subject to the best available control 

technology for each pollutant subject to regulation under this chapter 

emitted from, or which results from, such facility.32 

CAA § 169(2)33 defines “construction” to include “modification.” The term “modification” 

in turn is defined as “any physical change in, or change in the method of operation of, a stationary 

source which increases the amount of any air pollutant emitted by such source or which results in 

the emission of any air pollutant not previously emitted.”34 In 1975, EPA promulgated a rule that 

announced a two-prong test governing whether a modification has occurred. First, the facility must 

have made a “physical change.” Second, the physical change must have resulted in an increase in 

air pollution.35 EPA first issued regulations implementing the statutory PSD provisions in 1978.36 

While the PSD statutory definition of “modification” applied to “any physical change . . . which 

increases the amount of any air pollutant,” the PSD regulations limited application of the PSD 

32 Id. § 7475(a). 33 Id. § 7479(2)(C). 34 Id. § 7411(a)(4). 35 See 40 Fed. Reg. 58,416, 58,418 (Dec. 16, 1975). 36 See 43 Fed. Reg. 26,380, 26,403 (June 19, 1978).

8 
requirements to “major modifications,” i.e., those resulting in a “significant net emissions 

increase.”37 

EPA consistently has recognized that Congress never meant to subject all construction 

projects to new source review. In 1975, EPA promulgated a rule exempting various types of projects 

from new source review under the NSPS regulations. For example, “[m]aintenance, repair, and 

replacement which the Administrator determines to be routine for a source category” are not 

considered to be review-triggering modifications.38 The agency added regulations providing a 

similar exception to the PSD rules in 1978.39 Explaining the purpose behind these exceptions, the 

preamble of a 1992 final rulemaking stated that “EPA has always recognized that Congress 

obviously did not intend to make every activity at a source subject to new source requirements.”40 

EPA’s preamble also warned that a broad definition of modification “could, standing alone, 

encompass the most mundane activities at an industrial facility (even the repair or replacement of 

a single leaky pipe, or a change in the way that pipe is utilized),” and stated that the agency’s 

understanding of “modification” permits “common-sense exclusions from the ‘physical or 

operational change’ component of the definition.”41 

37 40 C.F.R. § 52.21(b)(2)(i) (2001) (emphasis added). That regulation provides in relevant part that: 

Major modification means any physical change in or change in the method of operation 

of a major stationary source that would result in a significant net emissions increase of 

any pollutant subject to regulation under the Act. 

The significance levels specified by the regulations are slightly different for the criteria pollutants, e.g., 40 tons per year for 

nitrogen oxides (NOx) and sulfur dioxide (SO2 ), 25 tons per year for particulate matter. See id. § 52.21(b)(23)(i). 38 40 C.F.R. § 60.14(e). That regulation provides, in pertinent part, that: 

The following shall not, by themselves, be considered modifications under this part: 

(1) Maintenance, repair, and replacement which the Administrator determines to be 

routine for a source category . . . . 39 See id. § 52.21(b)(2)(iii). That regulation provides in relevant part: 

A physical change or change in the method of operation shall not include: (a) Routine 

maintenance, repair and replacement . . . . 

40 57 Fed. Reg. 32,314, 32,316 (July 21, 1992). 41 Id. 

9 
The CAA of 1977 also established a program for major emitting facilities located in 

nonattainment areas of the country (known as the “nonattainment NSR” program).42 The 

nonattainment NSR requirements parallel the PSD requirements described above, but require more 

stringent pollution controls for major emitting facilities in nonattainment areas.43 In 1980, EPA 

promulgated regulations to implement the nonattainment NSR requirements regarding major 

modifications.44 These regulations also provided an exception for “routine maintenance, repair, and 

replacement.”45 

EPA has not promulgated any regulations specifying what types of projects should be 

considered routine, and therefore exempt from the new source review process. In 1994, EPA staff 

circulated an informal draft proposal that would have equated “routine” with “minor” 

modifications.46 This draft stated that “routine activities would generally include . . . minor 

maintenance orrepair of parts or components and the replacement ofminor parts or components with 

identical or functionally equivalent items.”47 Industry participants, however, apparently objected to 

this suggested definition, and EPA chose not to propose this language in any subsequent 

rulemakings. 

B. Previous Enforcement Actions 

42 See 42 U.S.C. §§ 7501-15 (1994). 43 See generally 40 C.F.R. § 52.24 (2001). 44 See 45 Fed. Reg. 52,676, 52,747 (Aug. 7, 1980). 45 40 C.F.R. § 52.24(f)(5) (2001). This regulation states, in pertinent part:

Major modification means any physical change in or change in the method of operation 

of a major stationary source that would result in a significant net emissions increase of 

any pollutant subject to regulation under the Act. . . . A physical change or change in 

the method of operation shall not include: (a) Routine maintenance, repair, and 

replacement . . . . 46 See NEW SOURCE REVIEW REFORM 106-09 (EPA, Preliminary Staff Draft 1994). 47 Id. 

10 
TheCAA’s basic enforcement provisions are found in section 113,48 which providesfor both 

administrative and judicial enforcement proceedings. EPA has the authority to issue administrative 

compliance and penalty orders for violations of, among other things, the CAA, its implementing 

regulations, or a permit. In addition, EPA can seek injunctive relief and civil monetary penalties by 

referring matters to the Department for filing in the appropriate U.S. District Court. Courts may 

impose penalties of up to $27,500 per day for each violation. CAA § 113(e) specifies the criteria 

to be used byEPA and the courtsin determining the appropriate amounts of penalties, including “the 

economic benefit of noncompliance, and the seriousness of the violation.”49 

EPA’s enforcement of the new source review program through judicial proceedings began 

in the late 1980s. The earliest cases involved violations at individual facilities. For example, an 

enforcement action was filed against the Louisiana Pacific Co., which constructed a new woodproducts manufacturing facility, because it neither applied for a PSD permit nor installed pollution 

control technology. In United States v. Louisiana-Pacific Corp.,

50 the court ruled that the company 

had violated the applicable PSD requirements. 

EPA then investigated other wood-products manufacturers and concluded that some had 

committed similar PSD violations. As a result, enforcement actions were brought and settlements 

were reached that required multiple facilities owned and operated by Louisiana Pacific, Georgia 

Pacific, and Willamette Industries to obtain PSD permits and install pollution controls in 1993,51 

48 See 42 U.S.C. § 7413 (1994). 49 Id. § 7413(e)(1). 50 682 F. Supp. 1141 (D. Colo. 1988). 51 See United States v. Louisiana Pacific, No. CV 93-0869 (W.D. La. 1993).

11 
1996,52 and in 2000.53 Further, in 2000, EPA issued a Notice of Violation for alleged new source 

review violations to Boise Cascade, and entered into settlement negotiations. 

The seminal decision on the issue of PSD applicability to modifications by electric utilities, 

however, is the Seventh Circuit’s 1990 ruling in Wisconsin Electric Power Company v. Reilly 

(“WEPCO”).54 The WEPCO petitioners challenged the EPA’s position that modifications intended 

to restore lost capacity at a coal-fired steam generating facility triggered new permitting 

requirements. The company wanted to renovate the plant so it could operate beyond its planned 

retirement date of 1992.55 To that end, the company needed to repair or replace the turbinegenerators, boilers,rearsteam drums, air heaters, mechanical and electrical auxiliaries, and common 

plant support facilities. To make these repairs, the facility would have to take various units out of 

service for nine-month periods.56 The court found that EPA was not arbitrary and capricious in 

considering the cost, magnitude, frequency, and nature of these repairs and upheld EPA’s 

determination that these changes were not routine.57 

One of the key disagreements between EPA and certain electric utilities relates to the 

agency’s enforcement of the CAA between the time of the WEPCO decision and the filing of the 

recent enforcement actions in 1999. In the early 1990s, EPA began to evaluate sources of significant 

pollution in a number of major industrial sectors. The EPA issued “Sector Notebooks” describing 

52 See United States v. Georgia Pacific, 960 F. Supp. 298 (N.D. Ga. 1996). 53 See United States v. Willamette, No. CV 00-1001 HA (D. Or. 2001). 54 893 F.2d 901 (7th Cir. 1990). 55 See id. at 906. 56 See id. at 906-08. 57 See id. at 913.

12 
these industries and their various sources of pollution. In particular, Sector Notebooks were issued 

for the refinery industry in 1995 and for the fossil-fuel fired electric generating industry in 1997.58 

In the mid- to late 1990s, EPA began investigations of several industrial sectors that were 

emitting high levels of pollution and that were suspected of possible new source review violations. 

These investigations focused on coal-fired power plants, refineries, steel mini-mills, wood products 

manufacturers, and pulp and paper manufacturers. As a result of these investigations, a number of 

referrals for judicial enforcement action were sent to the Department for consideration. 

EPA began its investigation of the coal-fired electric utility industry in 1996. The agency 

sent information requests under CAA § 11459 to a number of utilities, particularly in the Midwest 

and Southeast, seeking access to the power plants’ facilities and their documents. EPA believed that 

the documents were necessary to ascertain the facilities’ modification histories and to provide 

information that would allow EPA to conduct an emission increase analysis. After considering the 

utilities’ records, EPA concluded that a large number of facilities had made modifications that 

triggered the new source review permit and pollution control requirements, but had failed to seek 

PSD permits or install pollution controls. EPA notified the companies and asked them to enter into 

settlements to cure these violations without litigation. The facilities, however, strongly disputed 

EPA’s allegations. 

Beginning in 1999, EPA sent a number of referrals to the Department for civil judicial 

enforcement action against the owners and operators of some of the largest coal-fired power plants 

in the country, alleging widespread violations of new source review, NSPS, and “minor source” 

58 These notebooks are available via the internet at http://es.epa.gov/oeca/sector. 59 42 U.S.C. § 7414 (1994). 

13 
permitting and pollution control requirements. EPA had made no referrals pertaining to the electric 

utility industry prior to that time. The Department’s Environmental and Natural Resources Division 

(“ENRD”) reviewed and evaluated the information provided by EPA, conducted legal research into 

the basis for the proposed allegations, consulted with EPA and independent experts regarding the 

proposed legal and factual allegations, and concluded that the referrals should be filed as 

enforcement actions. 

After ENRD’s review, the Department in November 1999 filed seven enforcement actions 

in U.S. District Courts against: 1) American Electric Power Co. (S.D. Ohio); 2) Ohio Edison and 

First Energy (S.D. Ohio); 3) Cinergy Corp. (S.D. Ind.); 4) Southern Indiana Gas & Electric Co. 

(S.D. Ill.); 5) Illinois Power Co. (S.D. Ind.); 6) Southern Company affiliates including Alabama 

Power Co. and Georgia Power Co. (N.D. Ga.); and 7) Tampa Electric Co. (M.D. Fla.). The 

complaints alleged that defendants made major modifications to their coal-fired power plants without 

applying for required new source review permits and installing required pollution controls. The 

complaints alleged violations at more than 25 power plants located in Ohio, Indiana, Illinois, West 

Virginia, Georgia, Alabama, and Florida. The complaints seek both injunctive relief and civil 

monetary penalties. The injunctive relief sought would require the facilities to remedy alleged past 

new source review violations by installing appropriate pollution control technology and by applying 

for permits. 

Due to an adverse jurisdictional decision, Alabama Power Co. was dismissed from the case 

brought against subsidiaries of the Southern Company in United States v. Alabama Power Co. (now 

14
known as United States v. Georgia Power).60 The United States refiled against Alabama Power in 

the Northern District of Alabama in January 2001.61 Of the seven judicial enforcement actions filed 

in November 1999, one has been settled (United States v. Tampa Electric Co.),62 and six are still 

pending. An agreement in principle has been reached in United States v. Cinergy Corp.,

63 but, since 

a final settlement has not been reached, that case is still pending. 

Finally, on December 22, 2000, the Department, on behalf of the EPA, filed a lawsuit against 

Duke Energy in the United States District Court for the Middle District of North Carolina. The 

complaint charged that Duke Energy made major modifications to its coal-fired power plants in the 

Carolinas without applying for permits or installing the necessary emissions-control equipment. 

Additional EPA referrals for judicial action against other companies and facilities have been 

submitted to the Department, but no further actions have been filed to date. 

In November of 1999, EPA’s Regional Administrator for Region IV issued an Administrative 

Compliance Order to the Tennessee Valley Authority (“TVA”) alleging multiple new source review 

and other CAA violations at nine of TVA’s eleven coal-fired power plants located in Kentucky, 

Tennessee, and Alabama. TVA strongly opposed the Administrative Compliance Order and 

requested that EPA reconsider the order. The two agencies negotiated unsuccessfully for almost nine 

months in an attempt to reach an administrative settlement of EPA’s claims. 

On May4, 2000, the Administrator granted TVA’s request for administrative reconsideration, 

and referred the matter to EPA’s Environmental Appeals Board (the “Board”). After a limited period 

of information sharing and informal discovery, a one-week evidentiary hearing on TVA’s alleged 

60 No. 1:99-CV-2859-JEC (N.D. Ga. amended complaint filed May 14, 2001) 61 No. CV-01-B-0152-S (N.D. Ala. filed Jan. 16, 2001). 62 No. 99-2524 CIV-T-23F (M.D. Fla. filed Nov. 3, 1999). 63 No. IP99-1693 C-Y/G (S.D. Ind. amended complaint filed Mar. 1, 2000).

15 
CAA violations was held before an EPA administrative law judge in August of 2000. The hearing 

consisted of cross-examination of several witnesses, pre- and post-hearing briefing, and document 

submissions. The record of that proceeding then was submitted to the Board for a decision upon 

reconsideration. On September 15, 2000, the Board issued a written decision finding that TVA had 

made many “major modifications” to its power plants in violation of new source review and NSPS 

permit requirements. The Board’s decision addressed the defenses raised by TVA, reviewed the 

applicable case law, and ruled, inter alia, that none of TVA’s fourteen projects qualified for the 

“routine maintenance” exception from new source review and NSPS applicability. The Board also 

vacated 13 violations alleged in the Administrative Compliance Order as to which it found EPA 

either abandoned or failed to carry its burden of proof, and denied EPA some of the relief it sought. 

TVA on May 4, 2000 filed a petition to review the Administrative Compliance Order in the 

Eleventh Circuit. Four other industry parties, three of whom—Alabama Power Company, Duke 

EnergyCorporation, and GeorgiaPower—have been sued bythe United States as part ofthe ongoing 

new source review enforcement initiative, joined TVA either by separate petition or intervention. 

The Department filed a motion to dismiss all of the petitions based on, among other grounds, the 

lack of a justiciable case or controversy between two federal agencies. The parties completed 

briefing on the petitions challenging the Administrative Compliance Order in October of 2000. 

Following theBoard’s decision that TVA hadmade “major modifications” to its plants, TVA 

and three of the four industry petitioners challenging the Administrative Compliance Order filed 

additional petitions to review the decision in the Eleventh Circuit. The new petitions were 

consolidated with the petitions challenging the Administrative Compliance Order. The Justice 

16
Department re-asserted most of its jurisdictional claims and briefing on the merits was completed 

in March 2001. 

On January 8, 2002, the Eleventh Circuit issued a decision denying the Department’s motion 

to dismiss the petitions for review.64 “While a number of EPA’s challenges present complex and 

close questions,”65 it concluded that the EPA-TVA intrabranch controversy is justiciable; that TVA 

wields independent litigating authority; that the Environmental Appeals Board’s decision is a 

reviewable final agency action; and that the private petitioners have standing to sue. The court has 

yet to rule on the merits of the petitions.66 

There are now a total of eight pending enforcement actions against the owners and operators 

of coal-fired utilities for new source review, NSPS, and minor source violations—plus the action 

filed by TVA and the industry parties. The list of cases, and the status of each, are detailed in 

Appendix I (Table of Ongoing New Source Review Enforcement Actions). 

In addition to the ongoing enforcement actions against the coal-fired power plants, the United 

States also has litigated new source review claims against other types of facilities. In the mid-1990s, 

EPA began its Petroleum Refinery Initiative. After EPA publicly announced its concern that 

widespread non-compliance existed in the refinery industry, several large refiners responded with 

expressions of willingness to negotiate settlements without litigation. From this general outreach 

emerged seven company-wide settlements with Koch Petroleum Corp., BP Exploration & Oil Co., 

Motiva/Equilon/Shell, Marathon Ashland Petroleum LLC, Conoco, Inc., Navajo Refining Co., and 

Montana Refining Co., which cumulatively cover 32 refineries and 31% of the nation’s domestic 

64 TVA v. EPA, No. 00-12310, 2002 WL 21785 (11th Cir. Jan 8, 2002). 

65 Id. at *1. 66 See id. at *22 (indicating that, by separate order, “oral argument will be scheduled on the merits involved in this 

appeal”). 

17 
refining capacity (5,243,000 barrels per day). Settlement discussions continue with several other 

refiners. 

In the same time frame, the Department commenced civil judicial actions against two 

refiners, United States v. Murphy Oil Co.,

67 and United States v. Clark Refining and Marketing.68 

These two actions allege, in part, that the companies violated the PSD provisions of the CAA by 

modifying units at their refineries and causing significant increases in emissions of NOx or SO2 

without obtaining the necessary permits and installing the appropriate pollution controls. 

In Murphy OilCo., involving a refinery in Superior, Wisconsin, the United States alleged not 

only Clear Air Act claims but also claims arising under the Clean Water Act and the Resource 

Conservation andRecoveryAct. The new source review component of the case involved allegations 

that Murphy twice modified emission units at the refinery without securing an appropriate permit 

or installing controls, and that Murphy withheld material information from the State of Wisconsin’s 

permitting authorities when it sought state approval for one of the modifications. Following a trial 

in June 2001, the court ruled that Murphy Oil violated the new source review provisions. 

In Clark Refining and Marketing, the United States alleged new source review violations at 

a Hartford, Illinois, facility, arising from a major “turnaround” at the refinery’s fluid catalytic 

cracking unit. The case was settled recently just prior to trial, and a consent decree has been lodged 

with the court pursuant to which, among other things, the refinery will install a wet gas scrubber on 

the fluid catalytic cracking unit, pay a civil penalty, and provide other relief that will reduce NOx 

and particulate matter emissions. 

67 No. 00-C-0409-C (W.D. Wis. 2000). 68 No. 99-87 (S.D. Ill. 1999). 

18 
The United States is not currently litigating any multi-facility refinery cases. EPA has 

transmitted several referrals to the Department, but these have not yet been approved for filing. 

Finally, the Department has brought other new source review enforcement actions against 

other companies and industries, including both single-facility and multiple-facility actions. 

Appendix II (Table of Additional New Source Review Enforcement Actions) summarizes these 

actions. 

C. Settlement Negotiations and Agreements to Date 

The United States has entered into one final consent decree and two agreements in principle 

to settle claims against three utilities operating coal-fired electric power plants. The consent decree 

in United States v. Tampa ElectricCompany (“TECO”) was lodged in February 2000.69 Agreements 

in principle with Virginia Electric Power (“VEPCO”), a subsidiary of Dominion Resources, and 

Cinergy were announced on November 15, 2000, and December 22, 2000, respectively. The United 

States had not filed a civil action against VEPCO. Cinergy, however, was one of the original seven 

utilities against which the United States filed suit in November 1999. By agreement of the parties, 

the text of the agreements has not been released. Negotiations over the terms and language of final 

consent decrees with both parties continue. In addition to these three parties, the Department and 

EPA have been engaged in continuing discussions to varying degrees with several other utilities. 

The keyelements ofthe agreements announced with VEPCOand Cinergy are the companies’ 

agreement to install and operate pollution controls for SO2 and NOx on significant portions of their 

69 See No. 99-2524 CIV-T-23F (M.D. Fla. filed Nov. 3, 1999). The TECO decree has been amended to 

accommodate some limited concerns the company expressed over the application of certain scheduling provisions, and over 

a prohibition on its securing power from other sources on a spot basis, unless TECO could be sure that those sources were 

subject to the same emission controls as it is. The United States agreed to some modifications of scheduling provisions, and 

also agreed to delete the prohibition on TECO securing power on a spot basis from “uncontrolled” sources because of the 

recognition that, in practice, the actual generating source of electricity purchased on a grid cannot be precisely identified. 

19 
entire coal-fired generating system pursuant to negotiated schedules that extend through 2012. In 

exchange, the companies will receive covenants not to sue from the United States under the new 

source review and related NSPS provisions of the CAA. These covenants not to sue are intended 

to resolve claims based on alleged past violations of law and also will extend forward for the life of 

the consent decree (which typically would last until 2015). The effect of the future covenant not to 

sue would be to provide regulatory certainty—a “safe harbor”—to the companies, while they are 

subject to and in compliance with the consent decree. This safe harbor will permit the companies 

to modify their plants without concern over further new source review enforcement actions. The 

settlements attempt to balance the significant emission reductions to be achieved against the 

flexibility and certainty provided by the covenant not to sue. 

D. EPA Guidance on New Source Review 

EPA has provided no formal guidance on when a project will be considered “routine 

maintenance” that is exempt from new source review requirements, but it has issued several 

applicability determinations to members of the electric utility industry and in other industries. An 

applicability determination is an advance ruling on whether a source’s proposed changes would be 

subject to new source review requirements.70 For instance, EPA issued an applicability 

determination to the Wisconsin Electric Power Company in 1988. That document, which later 

formed the basis of the Seventh Circuit’s WEPCO decision, established a five-part test for 

determining, on a case-by-case basis, whether a proposed project would be considered routine: the 

1) nature, 2) extent, 3) purpose, 4) frequency, and 5) cost of the work, as well as any other relevant 

70 See 40 C.F.R. § 60.5 (2001). 

20
factors.71 In upholding this test, the WEPCO court condensed EPA’s five factors into four by 

combining the nature and extent-of-the-project factors.72 To date, the Seventh Circuit is the only 

court to examine in depth EPA’s interpretation of the routine maintenance exception. 

EPA issued another applicability determination to an electric utility in August 1996, when 

it responded to a request from the Sunflower Electric Power Corporation regarding its plan to 

upgrade a turbine. The Agency noted that the proposed changes were not routine maintenance since 

they incorporated redesigned and upgraded turbine blades. On May 23, 2000, EPA issued an 

applicabilitydetermination to DetroitEdison, in which it applied the WEPCO test and concluded that 

the utility’s proposed changes did not qualify for the routine maintenance exemption.73 Because this 

letter post-datesthe filing of the recent new source review enforcement actions, it may not be helpful 

in determining EPA’s historical interpretation of “modification.” 

As noted above, disagreements over the meaning of “major modification” generally are 

confined to the electric utility industry. But EPA has issued several applicability determinations to 

71 See Memorandum from Don R. Clay, Acting Assistant Administrator for Air and Radiation, U.S. EPA, to David 

A. Kee, Air and Radiation Division, EPA Region V, at 3 (Sept. 9, 1988). 72 See Wisconsin Electric Power Company v. Reilly, 893 F.2d 901, 910-11 (7th Cir. 1990). 73 See Letter from the EPA Region V Administrator to Detroit Edison (May 23, 2000). The Detroit Edison 

applicability determination also discussed 24 specific facts relevant to whether the proposed project was a new source review 

triggering “modification.” They are: 1) repair/replacement enhances efficiency; 2) repair/replacement involves improved 

designs/materials; 3) repair/replacement combines several projects that, individually, would be routine, but become nonroutine when combined; 4) few units in the industry have undertaken the repair/replacement; 5) a typical facility performs 

the repair/replacement infrequently; 6) affected unit has performed the repair/replacement infrequently at its facility; 

7) absolute cost of the repair/replacement is high: i.e., EPA has rejected a project that cost less in absolute terms, in this or 

another industrial category; 8) the relative cost of the repair/replacement is high in comparison to the cost of a brand new 

facility; 9) the relative cost of the proposed replacement is high in comparison to the cost of a typical identical replacement 

of a worn part; 10) the cost of the project is heavily capitalized; 11) repair/replacement improves the facility beyond its prechange (i.e., deteriorated) condition; 12) repair/replacement makes the unit more attractive to run from an economic 

standpoint; 13) repair/replacement increases the capacity of the unit; 14) repair/replacement is made to major components; 

15) goal of project is “life-extension;” 16)repair/replacement involves a net addition of parts; 17)repair/replacementrequires 

the pre-approval of state commission; 18) source characterizes repair/replacement as non-routine in internal reports or other 

documents; 19) repair/replacement requires unit shutdown; 20) repair/replacement requires materials from off-site; 21) facility 

replaces entire emissions unit; 22) change requires “significant” time to accomplish; 23) replacement is at unit nearing end 

of useful life; and 24) repair/replacement allows for less frequent maintenance. 

21 
companies in other industries, addressing whether certain physical changes would trigger new source 

review. For example, in August 1975, the Weyerhaeuser Company requested an applicability 

determination regarding its plan to install pressure parts in boilers at its Oregon pulp mill. EPA 

reviewed these proposed changes and found that they were not routine because the additional parts 

would increase the superheater surface of each boiler. Also, in 1987, the Cyprus Casa Grande 

Corporation requested an applicability determination regarding efforts to make a shut-down copper 

processing facility operational. Although EPA found that certain aspects of this rehabilitation would 

be considered routine if performed while the facility were operational, the repairs when viewed as 

a whole would not. The industry defendants and EPA dispute whether these applicability 

determinations are relevant to the agency’s historical understanding of the routine maintenance 

exception. But because this report focuses on enforcement actions against coal-fired power plants, 

the Department does not find it necessary to address this disagreement. 

Industry points to several informal documents that it claims shed light on EPA’s 

interpretation of the routine maintenance exception. For instance, although not issued by EPA, the 

General Accounting Office (“GAO”) released a report addressing, in part, the WEPCO decision’s 

impact on power plants’ willingness to undertake life extension projects. GAO reported that 

“[a]ccording to EPA policy officials, WEPCO’s life extension project is not typical of the majority 

of utilities’ life extension projects, and concerns that the agency will broadly apply the ruling it 

applied to the WEPCO’s project are unfounded.”74 EPA disputes the significance of GAO’s report, 

74 GENERAL ACCOUNTING OFFICE, PUB. NO. GAO/RCED90200, ELECTRICITY SUPPLY: OLDER PLANTS IMPACT ON 

RELIABILITY AND AIR QUALITY 65, at 3031 (1990). 

22 
arguing that it is not a statement or position by EPA and that it does not specifically address the 

routine maintenance exemption. 

Next, industry cites a May 31, 1995, letter from Mary D. Nichols, EPA Assistant 

Administrator for Air Programs, to William R. Lewis, which states that “EPA believes that the 

routine maintenance exclusion already included in the existing NSR regulations also has the effect 

of excluding ‘routine restoration.’”75 EPA denies that the Nichols letter is relevant, arguing that it 

is not an authoritative statement of the agency’s interpretation, and that in any event it does not 

suggest a broad scope to the exemption. 

Industry also relies on a 1996 letter in which EPA responded to a query from Senator Robert 

Byrd concerning an EPA proposal for a revised NSPS for boilers. The letter states : 

To date, no existing unit has become subject to the utilityNSPS under 

either the modification or reconstruction provision. Since it is 

anticipated that no existing utility will become subject to the revision 

due to being modified or reconstructed, as defined under the general 

provisions, no change to the applicability of the revision is currently 

planned for this rulemaking.76 

For its part, EPA claims that the Byrd letter is irrelevant, since it does not even mention the routine 

maintenance exemption. 

III. Analysis 

“New source review” is the process by which the construction of large, new sources of air 

pollution and modifications to large, existing sources are subject to preconstruction review and 

permitting. The National Energy Policy Development Group (“NEPDG”) directed the Attorney 

75 Letter from Mary D. Nichols, Assistant Administrator for Air and Radiation, U.S. EPA, to William R. Lewis, 

partner, Morgan, Lewis and Bockius at 19 (May 31, 1995). 76 Letter from John Seitz, Dir., EPA, OAQPS to the Hon. Robert C. Byrd, U.S. Senate (Jan. 26, 1996). 

23 
General to “review existing enforcement actions regarding New Source Review to ensure that the 

enforcement actions are consistent with the Clean Air Act and its regulations.”77 A number of those 

actions were brought in 1999 followingEPA’sinvestigation ofseveral coal-fired electric utilitiesfor 

allegedlymakingmajor modificationsto their plants without installing appropriate pollution control 

equipment. EPA also has brought enforcement actions against members of the refinery, woodproducts, mini-steel, food-manufacturing, and chemical-processing industries. 

With respect to the electric utility enforcement actions, this report asks two questions. First, 

did filing the actions, which allege that the contested projects are subject to new source review 

permitting requirements, constitute a substantive change in EPA’s interpretation of the CAA and its 

regulations that would require APA-compliant notice and comment rulemaking? Second, 

notwithstanding the absence of notice and comment rulemaking, is EPA’s interpretation of the 

routine maintenance exception reasonable in light of the CAA, its other implementing regulations, 

and previously issued guidance? 

As previously explained, the Department’s role in this report in answering both questions is 

limited to determining whether EPA’s position is supported by a reasonable basis in law and fact. 

The Department recognizes that the pending litigation involves many case-specific issues that go 

beyond the scope of these two questions, and which may or may not be dispositive of the matters in 

contention in these cases. This review does not undertake to analyze the full spectrum of those 

issues. Instead, it focuses on these two key controversies which, in the Department’s view, control 

whether the government properly may continue to pursue these actions. 

77 REPORT OF THE NATIONAL ENERGY POLICY DEVELOPMENT GROUP, ch.7, at 14 (2001). 

24 
This report emphasizes EPA’s enforcement actions against coal-fired power plants because 

actions in other industries are not implicated by the NEPDG’s charge. The defendants in those cases 

generally do not argue that EPA’s interpretation of the CAA is inconsistent with the statute’s 

requirements. Rather, they advance a number of essentially factual arguments, including whether 

an enforcement action was time-barred by the statute of limitations,78 whether a facility withheld 

information from inspectors,79 and whether a facility emitted more pollutants than its permit 

authorized.80 In fact, several of these actions settled days after EPA filed its initial complaint, with 

the facilities raising no defense to the agency’s allegations.81 The Department’s report therefore 

centers on electric utilityenforcement actions, which have generated claimsthat the agency’s actions 

are inconsistent with the CAA and its regulations. 

A. Did EPA Reinterpret Its Implementing Regulations in Violation of the APA? 

As a general matter, the APA requires administrative agencies to engage in notice and 

comment rulemaking when they wish to impose new substantive regulatory requirements.82 It does 

not, however, by its terms require notice and comment procedures for the promulgation of 

“interpretative” rules.83 The Department concludes that there is a reasonable basis to argue that 

EPA’s new source review enforcement actions do not constitute a departure from a prior 

authoritative interpretation of “routine maintenance,” and that notice and comment rulemaking 

therefore was not necessary. 

78 See, e.g., United States v. Westavco Corp., Civil Action No. MJG-00-2602 (D. Md. 2001). 79 See, e.g., United States v. Brotech Corp., Civil Action No. 00-2428 (E.D. Pa. 2000). 80 See, e.g., United States v. Gallatin Steel Co., Civil Action No. 99-30 (E.D. Ky. 1999). 81 See, e.g., United States v. Nucor Corp., Civil Action No. 4-00:3945-24 (D.S.C. 2000); United States v. Cenco 

Ref. Co., No. CV 01-00512 AHM (AIJx) (C.D. Cal. 2001). 82 See 5 U.S.C. § 553 (1994); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 417 (1971); Home Box 

Office v. FCC, 567 F.2d 9, 35 (D.C. Cir. 1977). 83 See 5 U.S.C. § 553(b)(3)(A). 

25 
The essence ofindustry’s APAargument is that EPA was required to announce its underlying 

interpretation of “routine maintenance” through notice and comment rulemaking before initiating 

the enforcement actions. A similar claim was raised, but was not addressed by the court, in New 

York State Electric & Gas Corp. v. FERC.84 In that case, a utility believed that it was being 

overcharged by the companies from which it was purchasing electricity. It therefore petitioned 

FERC for a declaration that the rates were unlawful. The electricity vendors intervened and argued, 

as the industry defendants do now, that “any revision of the implementing regulations would have 

to be done through rulemaking, not in the course of an enforcement action.”85 The D.C. Circuit did 

not reach the intervenors’ argument that notice and comment rulemaking was necessary; it instead 

concluded that it lacked jurisdiction to review FERC’s decision.86 

Industry and EPA in the enforcement actions under review vigorously dispute the meaning 

of prior cases analyzing the circumstances under which agency actions reflect a substantive 

interpretation or policy determination that can only be changed through notice and comment 

rulemaking. The Department concludes that the applicable caselaw does not preclude EPA from 

asserting that it has not through its past actions articulated an interpretation of “routine maintenance” 

that is inconsistent with the interpretation underlying the existing enforcement actions, and that can 

only be changed through APA procedures.87 These cases reasonably can be read to support the 

proposition that the APA’s notice and comment requirement is not implicated unless a prior 

84 117 F.3d 1473 (D.C. Cir. 1997). 85 Id. at 1475. 86 See id. at 1477. 87 This portion of the report relies principally on D.C. Circuit decisions for two reasons. First, these are the cases 

the industry defendants cite in their briefs, and second, other courts do not appear to have considered the issue. 

26 
interpretation of a substantive regulatory standard, which the agency now seeks to change, 

represented the agency’s “authoritative,”88 “definitive,”89 or “official”90 view. 

In Appalachian Power Co. v. EPA,

91 the D.C. Circuit struck down EPA’s attempt to 

substantively change its CAA Title V permitting program—specifically, to expand a regulation’s 

definition of “periodic monitoring”—by issuing a guidance. EPA failed to demonstrate that either 

the controlling regulation, or its accompanying commentary at the time it was issued, had the broad 

scope now reflected in the guidance.92 The guidance therefore would have “in effect amended” the 

agency’s regulations, which “cannot legally [be done] without complying with the rulemaking 

procedures required by [the Clean Air Act].”93 The court rejected EPA’s argument that its 

interpretation was not a change but was within the scope of its regulations.94 “In fact,” the court 

pointed out, “EPA’s promise in the 1992 rulemaking—that if federal standards were found to be 

inadequate in terms of monitoring it would open rulemaking proceedings—is flatly against EPA’s 

current position.”95 

88 Alaska Professional Hunters Assoc., Inc. v. FAA, 177 F.3d 1030, 1035 (D.C. Cir. 1999); Paralyzed Veterans v. 

D.C. Arena L.P., 117 F.3d 579, 586 (D.C. Cir. 1997); cf. United States v. Mead Corp., 121 S. Ct. 2164, 2177 (2001) (Scalia., 

J., dissenting) (arguing that “a reasonable agency application of an ambiguous statutory provision” should be sustained “so 

long as it represent[s] the agency’s authoritative interpretation”). 89 Ass’n of American Railroads v. Dep’t of Transportation, 198 F.3d 944, 948, 949, 950 (D.C. Cir 1999). 90 Id. at 947 (quoting Alaska Professional Hunters, 177 F.3d at 1032). 91 208 F.3d 1015 (D.C. Cir. 2000). 92 See id. at 1026. The court also found that the guidance failed to address adequately other aspects of the 

controlling regulation. The regulation uses the phrases “periodic monitoring,” “periodic testing,” and “instrumental or 

noninstrumental monitoring.” The guidance issued by the EPA appeared to assume that these three phrases had the same 

meaning. The guidance, however, does not address why the regulation used three different phrases when one phrase would 

have been sufficient if that was the original intention. Id. at 1027. 93 Id. at 1028. 94 Id. at 1027. 95 Id. at 1026. 

27 
Similarly, in Alaska Professional Hunters Association, Inc. v. Federal Aviation 

Administration,

96 the agency “through its Alaska region, consistently advised guide pilots that they 

were not governed by regulations dealing with commercial pilots.”97 The FAA subsequently decided 

that in the future the Alaskan pilots should be treated the same as commercial operators or air 

carriers.98 The D.C. Circuit held that the FAA should have submitted its new policy to notice and 

comment rulemaking, because its prior advice to the pilots was “an authoritative departmental 

interpretation” of its substantive regulation, “an administrative common law applicable to Alaskan 

guide pilots.”99 According to the court, “FAA’s current doubts about the wisdom of the regulatory 

system followed in Alaska for more than thirty years does not justify disregarding the requisite 

procedures for changing that system.”100 

While the D.C. Circuit has faulted agencies for failing to engage in notice and comment 

rulemaking, it also has held that agencies were notrequired to have followed APA procedures before 

adopting an interpretation. For instance, in Association of American Railroads v. Department of 

Transportation,

101 the Federal Railroad Administration (“FRA”) issued a bulletin interpreting a 

safety regulation. The Association of American Railroads (“AAR”) alleged “that this bulletin 

abruptly departed from the agency’s previous interpretation of the regulation and that it therefore 

required notice and comment rulemaking.”102 Reviewing the “random and conflicting agency letters 

96 177 F.3d 1030 (D.C. Cir. 1999). 97 Id. at 1031. 98 See id. at 1033. 99 Id. at 1035. 100 Id. 101 198 F.3d 944 (D.C. Cir. 1999). 102 Id. at 945. 

28 
and other documents,” the court found “no evidence of a definitive agency interpretation that could 

be changed only through notice and comment.”103 

The American Railroads court distinguished Alaska Professional Hunters, where “all 

agree[d] that FAA personnel in Alaska consistently followed the interpretation in official advice to 

guides and guide services for approximately thirty years.”104 In American Railroads, by contrast, the 

court found “nothing in [the materials before it,] individually or taken together, that comes even 

close to the definitive interpretation that triggered notice and comment rulemaking in Alaska 

Professional Hunters.”105 A contrary holding, moreover, could produce untoward consequences: 

If as the AAR urges, the record in this case reflects a definitive 

interpretation . . . it would mean that an agency’s initial, often chaotic 

process of considering an unresolved issue could prematurely freeze 

its thinking into a position that it would then be unable to change 

without formal rulemaking.106 

The court in Hudson v. Federal Aviation Administration107 also distinguished the Alaska 

Professional Hunters line of cases because Hudson did not “involve the interpretation of a 

regulation.”108 

In the instant case there is no dispute as to the regulation’s meaning. 

The regulation states that where the Administrator finds that a 

combination of analysis and testing provides data equivalent to an 

actual evacuation, the former may be used in place of the latter. 

Whether this test is met requires a factual determination [emphasis 

added] by the FAA, and clearly, as methods of analysis and other 

considerations develop over time, the FAA’s response to the test can 

also. In 1989 the FAA did not believe that analysis would provide 

equivalent data when seating capacity changed over five percent, but 

103 Id. 104 Id. at 947 (quoting Alaska Professional Hunters, 177 F.3d at 1032). 105 Id. at 948. 106 Id. at 950. 107 192 F.3d 1031 (D.C. Cir. 1999). 108 Id. at 1036.

29 
in 1998, spurred on by injuries to demonstration participants, it 

reviewed its policy and concluded that the situation had changed such 

that analysis and testing were now sufficient. This is not a different 

interpretation of the regulation, just an application of the regulation 

to a changed situation which calls for a different policy.109 

This caselaw provides a reasonable basisfor EPA’s argument that it need not have submitted 

its interpretation of “routine maintenance” to notice and comment rulemaking, unless the agency 

previously had articulated a different interpretation of an “authoritative,” “definitive,” or “official” 

pronouncement. Moreover, EPA may reasonably argue that its putative failure to enforce the CAA 

in the electric utility industry prior to the present litigation lacks this requisite character of an 

authoritative pronouncement. Unlike the case in Alaska Professional Hunters, where the FAA 

provided guide pilots with an “authoritative departmental interpretation” of commercial pilot 

regulations,110 the electric utilities here cite little more than EPA’s asserted failure to act as evidence 

of the agency’s prior interpretation. Instead, the new source review enforcement actions more 

closely resemble American Railroads. In the same way that the FRA’s “random and conflicting 

agency letters and other documents” did not purport to establish “a definitive agency interpretation” 

of the safety regulation,111 EPA did not expressly articulate a contrary prior understanding of the 

routine maintenance exception “in official advice” to the electric utilities.112 

Even assuming that EPA’s failure to file enforcement actions can constitute an 

“authoritative,” “definitive,” or “official” policy pronouncement, the agency reasonably denies, as 

a factual matter, that it declined to enforce the CAA against the electric power industry before 1999. 

Before initiating the present enforcement actions, EPA engaged in a number of activities—such as 

109 Id. (citation omitted). 110 Alaska Professional Hunters, 177 F.3d at 1035. 111 American Railroads, 198 F.2d at 945. 112 Id. at 947.

30 
issuing applicability determinations, releasing informal letters, publishing “sector notebooks,” and 

investigating suspected CAA violators—on the basis of which a court could conclude that the 

agency’s interpretation of “routine” modifications has remained reasonably consistent. 

The industry claims that EPA had knowledge of, and declined to apply the CAA to, other 

modifications performed by utilities during the relevant period—the so-called “life extension” 

projects. It concludes that EPA therefore must have viewed those modifications as “routine” ones 

to which the CAA’s permitting requirements do not apply. For its part, the agency argues that its 

announced understanding of which “modifications” trigger new source review permitting 

requirements has been constant throughout the 1990s, and that it had no knowledge that plants were 

undertaking “major modifications.” 

Even taking into account industry’sfactual claims, the Department cannotsay that the record 

bears no other interpretation. EPA engaged in a number of other actions a court might reasonably 

view as evidence that EPA has not reinterpreted the routine maintenance exception. As discussed 

above, EPA pursued new source review enforcement actions in the wood-products industry. It then 

expanded its investigations to include other industries with significant emissions, including coalfired power plants. In late 1996, EPA began investigating various utilities to discover if a similar 

problem existed. While EPA might have acted more expeditiously, and with more clarity, a court 

reasonably could conclude that the agency did not, before it filed enforcement actions in 1999, 

maintain a different interpretation of the routine maintenance exception for the electric utility 

industry. 

The proposition that EPA was not required to engage in notice and comment rulemaking 

draws additional support from analogous lines of caselaw. For example, EPA’s alleged 

31
nonenforcement of the CAA arguably did not constitute an authoritative interpretation because, 

pursuant to Heckler v. Chaney,

113 agencies have broad discretion to decide whether or not to bring 

enforcement actions. Indeed, an agency’s discretion not to enforce might be safeguarded by the 

Constitution. As the D.C. Circuit recently explained, because the executive branch holds “the 

prerogative to decline to enforce a law, or to enforce a law in a particular way,” “Chaney’s 

recognition that the courts must not require agencies to initiate enforcement actions may well be a 

requirement of the . . . Constitution.”114 By declining to bring enforcement actions against electric 

utilities, EPA may not have been articulating a definitive interpretation of the CAA; it simply may 

have been exercising its constitutional prerogative not to act. More specifically, EPA’s putative 

failure to enforce the CAA in the electric utility industry may represent, not an authoritative 

interpretation, but simply the agency’s judgment that, in light of other pending enforcement 

litigation, it lacked the resources to pursue new source review violations. 

Further, the Department recognizes that EPA’s position—that its putative inaction is not 

authoritative policy—may prevent the adoption of a contrary rule that would create perverse 

incentives. If an agency’s practice of not enforcing a given law constitutes an authoritative 

interpretation, it will always have an incentive to enforce to the utmost bounds of the law. 

Otherwise, it risks being locked in to a particular interpretation by its forbearance.115 The incentive 

to enforce would have the effect, not just of calcifying agency enforcement policy, but of subjecting 

covered entities to pervasive enforcement actions. 

113 470 U.S. 821 (1985). 114 Baltimore Gas & Elec. Co. v. FERC, 252 F.3d 456, 459 (D.C. Cir. 2001). 115 Cf. American Railroads, 198 F.3d at 950.

32 
The apparent direction of caselaw—that agency inaction does not constitute an authoritative 

interpretation—does not appear to be undermined by Telecommunications Research & Action Center 

v. FCC.

116 In that case, the D.C. Circuit held that an agency’s “unreasonable delay” in resolving 

pending adjudications could be deemed a “final agency action” that conferred jurisdiction on the 

federal courts.117 TRAC deals with a narrow question of administrative law—the scope of the 

judiciary’s power under the APA to review “final agency action”—and courts do not appear to have 

extended more broadly its condemnation of agency inaction. The Department’s research disclosed 

no case in which a court read TRAC to require an agency to undertake a notice and comment 

rulemaking before abandoning an alleged practice of nonenforcement. Indeed, the Department has 

found no case holding that agency inaction amounts to an authoritative interpretation that can only 

be changed by following APA procedures. 

The Department therefore concludes that there is a reasonable basis for EPA’s position that 

filing the existing enforcement actions was not an interpretive change that could be adopted only 

after engaging in notice and comment rulemaking. Instead, the cases reasonably can be read to 

suggest that agency nonenforcement is not an “authoritative,” “definitive,” or “official” policy. 

Given the state of the law, the Department believes that it is not unreasonable to argue that EPA’s 

asserted failure to enforce the CAA does not amount to an authoritative interpretation of “routine” 

modifications that could only be abandoned through APA procedures. 

B. Is EPA’s Interpretation of the Applicable New Source Review Regulations 

Lawful? 

116 750 F.2d 70 (D.C. Cir. 1984). 117 Id. at 79-81. 

33 
This review of EPA’s enforcement actions seeks to determine whether the agency’s 

interpretation of “modification”—specifically, that the types of changes the industry defendants have 

made to their electric plants are “modifications” that require new source review—is consistent with 

the CAA and its implementing regulations. Reasonable arguments support EPA’s interpretation of 

“modification,” especially given that an agency’s interpretation of its own regulations are afforded 

considerable deference. (The agency’s interpretation of the CAA itself—that new source review is 

necessary only for “major modifications”—has not been challenged by the electric industry.) 

Because a reasonable case can be made for the agency’s understanding of “modification,” the 

Department is justified in continuing to pursue EPA’s enforcement actions before the judiciary. 

The CAA broadly defines “modification” as “any physical change in, or change in the method 

of operation of, a stationary source which increases the amount of any air pollutant emitted by such 

source or which results in the emission of any air pollutant not previously emitted.”118 In other 

words, under the statute, a project is a new-source-review-triggering “modification” if it involves 

(1) any physical change that (2) causes an increase in air pollution. EPA’s new source review 

regulations contain a somewhat narrower definition. According to the agency, new source review 

is necessary only for “major modifications”; i.e., physical changes that produce a “significant net 

emissions increase.”119 

EPA has not promulgated a regulation reflecting in any greater detail its current view of what 

constitutes a “major modification.” Rather, EPA’s interpretation was articulated in a series of case118 42 U.S.C. § 7411(a) (1994). 119 40 C.F.R.§ 52.21(b)(2)(i) (2001); see also id. § 52.24(f)(5)(iii)(a) (excepting “routine maintenance, repair, and 

replacement” from new source review requirements); id. § 60.14(e)(1) explaining that “[m]aintenance, repair, and 

replacement which the Administrator determines to be routine for a source category” are not considered to be 

“modifications”). 

34 
specific pronouncements. They include: (1) an applicability determination in the electric industry 

that later formed the basis of the WEPCO case, and the Sunflower and Detroit Edison applicability 

determinations discussed above; (2) applicability determinations in the wood-products, copperprocessing, and other industries; (3) by initiating the present enforcement actions. (The parties 

disputewhether otherEPA-issued documents—(4) an applicability determination to DetroitEdison, 

sent after EPA initiated the present enforcement actions; (5) a letter to William Lewis, a private 

attorney; and (6) a letter to Senator Robert Byrd—reflect the agency’s interpretation of “routine” 

modifications.)120 

Chevron, U.S.A., Inc. v. NRDC121 obliges courts to defer to an agency’s reasonable 

construction of an ambiguous statute it is charged with administering. In two recent cases, United 

States v. Mead Corp.122 and Christensen v. Harris County,

123 the Supreme Court refused to afford 

Chevron deference to a Customs Service tariff classification ruling or an agency opinion letter, 

reasoning that such informal pronouncements do not “carry the force of law.” Agency positions that 

do not receive Chevron deference nonetheless are entitled to “respect proportional to [their] ‘power 

to persuade,’” based on factors such as agency expertise.124 

However, these principles may not apply to an agency’s interpretation of its own 

regulations.125 As a general matter, agencies deserve the utmost deference when interpreting 

regulations that they have promulgated. Under so-called Seminole Rock deference, such views are 

120 See supra Part II.D. 121 467 U.S. 837 (1984). 122 121 S. Ct. 2164, 2168 (2001). 123 529 U.S. 576, 587 (2000). 124 Mead, 121 S. Ct. at 2175-76 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). 125 See generally Scott H. Angstreich, Shoring Up Chevron: A Defense of Seminole Rock Deference to Agency 

Regulatory Interpretations, 34 U.C. DAVIS L. REV. 49 (2000). 

35 
“controlling unless plainly erroneous or inconsistent with the regulation.”126 The D.C. Circuit 

recently concluded that “agency interpretations that lack the force of law” do not deserve deference 

“when they interpret ambiguous statutes, but they do receive deference . . . when interpreting 

ambiguous regulations.”127 While an informal document setting forth an agency’s interpretation of 

an ambiguous statute normally will not merit full deference, an informal document that clarifies the 

meaning of an ambiguous regulation may. Indeed, in Christensen itself, the Court arguably 

reaffirmed that Seminole Rock applies where an agencyseeksto interpret an ambiguousregulation.128 

At least two of the pronouncements by which EPA has interpreted its own regulations—the 

WEPCO applicability determination and by commencing the present enforcement actions—may be 

entitled to judicial deference. The WEPCO applicability determination sets forth a five-factor test 

governingwhether construction shall be deemed “routine” within themeaning ofEPA’sregulations: 

the (1) nature; (2) extent; (3) purpose; (4) frequency; and (5) cost of the work, as well as any other 

relevant factors.129 As in the case of opinion letters and tariff classification rulings, applicability 

determinations may lack “the force of law”—no court appears ever to have considered the 

question—and courts might not defer to any statutory interpretations contained therein. But because 

theWEPCOapplicabilitydetermination interpretsEPAregulations, the agency’s views nevertheless 

could be entitled to deference. 

Similarly, deference may be due to the understanding EPA evinced by initiating an 

enforcement action. An interpretation announced as an agency’s litigation position ordinarily 

126 Auer v. Robbins, 519 U.S. 452, 461 (1997) (citing Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 

(1945)). 127 Akzo Nobel Salt, Inc. v. Fed. Mine Safety & Health Review Comm’n, 212 F.3d 1301, 1304 (D.C. Cir. 2000). 128 See Christensen, 529 U.S. at 588. 129 See Memorandum from Don R. Clay, Acting Assistant Administrator for Air and Radiation, U.S. EPA, to David 

A. Kee, Air and Radiation Division, EPA Region V, at 3 (Sept. 9, 1988). 

36 
commands no deference,130 but this general rule does not appear to apply to a litigation stance in 

which an agency seeks to clarify the meaning of its own regulations. A recent D.C. Circuit case 

suggests that such views deserve deference so long as (1) “there is no basis to suspect that the 

agency’s position represents anything less than its considered judgment”; and (2) there are “no past 

practices or pronouncements that are inconsistent with the [agency’s] current interpretation.”131 

A reasonable argument can be made that EPA’s litigation position is entitled to deference 

under these principles. First, there is no reason to believe that the views EPA advances in the 

pending actions do not reflect the agency’s “considered judgment.” On the contrary, the agency 

expressly avows that it understands “modification” to encompass the construction the utilities have 

performed.132 

Second, EPA can reasonably argue that its past practices and pronouncements are not 

inconsistent with the interpretation advanced in the pending enforcement actions. As discussed in 

PartIII.Aabove, the industryand the agencysharplydisagree on whetherEPA’s current enforcement 

actions represent a shift in policy. The utilities maintain that EPA declined to enforce the CAA 

against the electric power industry before 1999, while the agency submits that its CAA enforcement 

never lapsed. Deciding between these two differing characterizations is ultimately a task for the 

courts adjudicating the matter; but for the limited purposes of this review, it is sufficient that the 

record reasonably supports EPA’s account. 

130 See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 213 (1988) (“Deference to what appears to be nothing 

more than an agency’s convenient litigating position would be entirely inappropriate.”). 131 Bigelow v. Dep’t of Defense, 217 F.3d 875, 878 (D.C. Cir. 2000). 132 See Brief for Respondent, United States Environmental Protection Agency, TVA v. Whitman at 55-73. 

37 
When interpreting regulations, agencies receive deference only when the regulations are 

ambiguous.133 EPA argues that, especially in light of the Seventh Circuit’s WEPCO decision, its 

regulations unambiguously state that the industry’s projects do not qualify for the routine 

maintenance exception. But even if a court did find the regulations to be ambiguous, it would defer 

to EPA’s efforts to assign meaning to them through particular enforcement actions. 

Under such deference, a court will uphold EPA’s construction so long as it is not “plainly 

erroneous or inconsistent with the regulation.”134 EPA’s understanding of “modification” reasonably 

clears this hurdle. The agency’s regulations do not expressly foreclose its interpretation; they do not 

contain a definition of “routine maintenance” that EPA now seeks to shirk. Even taking the reading 

least favorable to EPA, the regulations are silent on the meaning of this and other critical terms. 

Because EPA’s regulations do not clearly preclude its understanding, a fortiori a reasonable 

argument can be made that the agency’s interpretation is not inconsistent with them. 

Finally, setting aside the question of deference, EPA’s regulations may specifically assign 

the agency broad discretion to determine whether a given project is eligible for the routine 

maintenance exception. The NSPS regulations—although not the PSD or nonattainment NSR 

regulations—state that “[m]aintenance,repair, and replacement which theAdministrator determines 

to be routine for a source category” will not be considered new source review triggering 

modifications.135 Therefore, when EPA determined that certain projects were not routine, it arguably 

was not violating its regulations, but rather exercising the discretion granted by its regulations. 

133 See Christensen, 529 U.S. at 588; see also Auer, 519 U.S. at 461 (cautioning that an agency’s interpretation may 

not be “inconsistent with the regulation” (citation omitted)). 134 Auer, 519 U.S. at 461 (citations omitted). 135 40 C.F.R. § 60.14(e) (2001) (emphasis added). 

38 
In short, EPA’s construction of the CAA and its implementing regulations may be entitled 

to deference. Courts normally defer to an agency’s interpretation of an ambiguity in its own 

regulations, even when that view is articulated in a pronouncement that does not “carry the force of 

law.” And EPA’s regulations may give the agency the discretion to determine that a particular 

project is “major,” or encompasses more than “routine maintenance.” EPA therefore has a 

reasonable basis for concluding that its interpretation of “modification” is consistent with the CAA 

and its regulations, and that new source review requirements extend to the types of construction in 

which the industry defendants engaged. 

IV. Conclusion 

The Department’s analysis of the new source review enforcement actions is limited to the 

issue of whether they are consistent with the Clean Air Act and its implementing regulations. This 

report does not attempt to address whether the Department or the EPA could have chosen other 

methods of achieving reductions in air pollution emissions. In addition, the review leaves untouched 

any policy implications the new source review enforcement actions may have on the national energy 

policy of the United States. 

Within thislimited scope, the Department concludesthat EPA may reasonably argue that the 

enforcement actions are consistent with the Clean Air Act and its regulations, as well as the 

Administrative Procedure Act. The ultimate resolution of the issues raised by the pending litigation 

remains to be made by the appropriate courts, and this review is not intended to affect the positions 

taken in, or the disposition of, these cases. 

In light of this review’s conclusions, the Department’s Environment and Natural Resources 

Division will continue, as it has during the pendency of this review, to prosecute vigorously the 

39
EPA’s civil actions to enforce the new source review provisions. And it will continue, as it has 

during the pendency of this review, to pursue talks to settle those actions where appropriate on 

mutually acceptable terms. Because the existing enforcement actions are supported by a reasonable 

basis in law and fact, any decision to withdraw, terminate, or otherwise circumscribe them would 

constitute policy determinations as to Clean Air Act enforcement strategy or regulatory 

interpretation—determinations that properly rest with EPA, the agency charged by statute with the 

responsibility to make such decisions. 

40
Appendix I 

Table of Ongoing New Source Review Enforcement Actions Against Coal-Fired Power Plants 

CASE COURT STATUS 

U.S. v. Illinois Power Co. and 

Dynegy Midwest Generation Inc. 

S.D. Ill. In fact discovery; liability trial set for February 2003. 

U.S. v. Southern Indiana Gas & 

Electric Co. 

S.D. Ind. In discovery; liability trial set for October 2002. 

U.S. v. Cinergy Corp. S.D. Ind. Stayed for settlement negotiations based on agreementin-principle. 

U.S. and States of New York, New 

Jersey, Connecticut, 

Massachusetts, Vermont, New 

Hampshire, Rhode Island and 

Maryland v. American Electric 

Power Service Corp. et al (“AEP”), 

consolidated with Ohio Citizens 

Action, et al. v. American Electric 

Power Service Corp. et al. 

S.D. Ohio In discovery; no trial schedule currently set. The States of 

New York, New Jersey, Connecticut, Vermont, New 

Hampshire, Massachusetts, Rhode Island and Maryland 

are plaintiff-interveners. The Natural Resources Defense 

Council and the Clean Air Task Force, representing a 

number of citizen groups, filed actions against AEP and its 

affiliates in the U.S. District Court for the Southern District 

of Ohio alleging the same or similar violations that are 

alleged in the United States’ Complaint. The Court 

consolidated the citizen groups’ action with the action by 

the United States and the intervening States. 

U.S. and States of New York, New 

Jersey and Connecticut v. Ohio 

Edison Co. et al. 

S.D. Ohio In discovery; liability trial set for November 2002. The 

States of New York, New Jersey and Connecticut are 

plaintiff-interveners. 

U.S. v. Georgia Power Co. and 

Savannah Electric & Power Co. 

N.D. Ga. Stayed pending resolution of defense motion to stay until 

the Eleventh Circuit issues a ruling in TVA v. EPA. 

Four citizens’ groups represented by the Southern 

Environmental Law Center (Physicians for Social 

Responsibility, Campaign for a Prosperous Georgia, U.S. 

Public Interest Research Group, and Alabama 

Environmental Council) were granted leave to intervene as 

plaintiffs. 

U.S. v. Alabama Power Co. N.D. Ala Stayed pending resolution of defense motion to stay until 

the Eleventh Circuit issues a ruling in TVA v. EPA. 

The Alabama Environmental Council was granted leave to 

intervene as a plaintiff. 

U.S. v. Duke Energy Corp. M.D.N.C. In discovery; liability trial September 2003. 

The North Carolina Sierra Club, North Carolina Public 

Interest Research Group Citizen Lobby/Education Fund, 

and Environmental Defense, represented by the Southern 

Environmental Law Center, have filed a Motion to 

Intervene as plaintiffs. 

41
CASE COURT STATUS 

TVA, et al. v. Whitman 11th Cir. Court ruled on January 8, 2002 that it has jurisdiction to 

address merits; merits briefing completed; no date set yet 

for oral argument. 

42
Appendix II 

Table of Additional New Source Review Enforcement Actions as of January, 2002 (Industries Other 

Than Refineries and Coal-Fired Power Plants) 

CASE COURT STATUS 

U.S. v. Cenco Refining C.D. Cal. • Industry: Oil refining 

• Construction or modification involved: reactivation of 

dormant refinery 

• Filed and settled 2001 

U.S. v. Westvaco D. Md. • Industry: pulp and paper 

• Construction or modification involved: expansion of 

pulp mill, digester, rebuild of steam turbine and paper 

machines 

• Complaint filed in 2000; in discovery 

U.S. v. Goelitz Candy E.D. Cal. • Industry: Food (candy) manufacturing 

• Construction or modification involved: expansion of 

manufacturing facility 

• Complaint filed in 2000; in litigation 

U.S. v. Nucor Corporation D.S.C. • Industry: Mini-steel 

• Construction or modification involved: modifications of 

electric arc and reheat furnaces 

• Complaint and Consent Decree for nationwide 

settlement reached 2000, entered 2001 

U.S. v. Arkansas Steel E.D. Ark. • Industry: Mini-steel 

• Construction or modification involved: modifications of 

electric arc and reheat furnaces 

• Complaint and Stipulation of Settlement filed 2001 

U.S. v. Gallatin E.D. Ky. • Industry: Mini-steel 

• Construction or modification involved: construction of 

a mini-steel mill (electric arc furnace) without a PSD 

permit 

• Complaint was filed in 1999; settled 

U.S. v. Coastal Lumber N.D. Fla. • Industry: wood products 

• Construction or modification involved: construction of 

new boilers and dryers, modifications to temperature 

controls 

• Complaint filed 2001; in litigation 

U.S. v. Brotech Corp. E.D. Pa. • Industry: chemical processing 

• Construction or modification involved: process 

equipment 

• Complaint filed May 10, 2000; in litigation 

43
Appendix III 

Table of Complaints in Power Plant Cases: Major Modifications 

CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. v. 

Alabama 

Power Co. 

Barry (1) installation of a new design spiral fin 

economizer in Unit 5 in 1993; (2) installation of new 

primary superheater top and intermediate bundle in 

Unit 1 in 1994; and (3) installation of a new 

reheater section in Unit 2 in 1997. 

Violation of PSD 

requirements. 

U.S. v. 

Alabama 

Power Co. 

Gaston (1) replacement of the front reheater for Unit 5 in 

1991. 

Violation of PSD 

requirements. 

U.S. v. 

Alabama 

Power Co. 

Gorgas (1) a balance draft conversion of Unit 10 in 1985; 

(2) installation of a new design spiral fin 

economizer in Unit 10 in 1994; and (3) installation 

of redesigned air heaters in Unit 10 in 1994. 

Violation of PSD 

requirements. 

U.S. v. 

Alabama 

Power Co. 

Greene (1) replacement of the primary reheater for Unit 2 in 

1989. 

Violation of PSD 

requirements. 

U.S. v. 

Alabama 

Power Co. 

Miller (1) construction of Miller Unit 3 on or after June 1, 

1975; and (2) construction of Miller Unit 4 on or 

after June 1, 1975. 

Violation of PSD 

requirements. 

U.S. v. Cinergy 

Corp., PSI 

Energy, Inc., 

and Cincinnati 

Gas & Electric 

Co. 

Cayuga (1) replacement of the Unit 1 and Unit 2 forced 

draft fans in 1988 and 1990, respectively; (2) 

replacement of the Unit 1 and Unit 2 boiler reheater 

front pendants in 1995 and 1994, respectively; (3) 

replacement of the Unit 1 high pressure heater in 

1995; (4) replacement of the Unit 1 boiler lower 

slope tubes in 1996; and (5) replacement of the 

upper section of the economizer at Unit 1 and Unit 

2 in 1985 and 1984, respectively. 

Violation of PSD 

requirements. 

U.S. v. Cinergy 

Corp., PSI 

Energy, Inc., 

and Cincinnati 

Gas & Electric 

Co. 

Gallagher (1) replacement of the Unit 1 radiant superheater 

tubes in 1992; (2) replacement of the Unit 1 boiler 

high temperature superheater section in 1994; (3) 

installation of the Unit 2 high temperature pendent 

sections in 1986; (4) replacement of the Unit 2 

radiant superheater tubes in 1992; (5) retubing the 

Unit 2 condenser with titanium tubing in 1990; (6) 

installation of the Unit 3 high temperature 

superheater pendant sections in 1987; and (7) 

installation of the Unit 4 high temperature 

superheater outer pendant sections in 1986. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

44
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. v. Cinergy 

Corp., PSI 

Energy, Inc., 

and Cincinnati 

Gas & Electric 

Co. 

Wabash 

River 

(1) replacement of the Unit 1 intermediate and 

finishing superheater sections and upper reheater 

sections in 1989; (2) replacement of the Unit 1 and 

Unit 2 front wall radiant superheater tubes in 1989; 

(3) replacement of the Unit 2 high temperature 

finishing superheater and upper reheater 

assemblies in 1992; (4) replacement of the Unit 2 

reheater and superheater outlet sections in 1997; 

(5) replacement of the Unit 3 finishing superheater, 

intermediate superheater, radiant superheater, and 

lower reheater tube bundles in 1989; (6) 

replacement of the Unit 4 radiant superheater front 

wall in 1991; (7) replacement of the Unit 4 finishing 

superheater tubes in 1995; (8) replacement of the 

Unit 4 outlet reheater tube assemblies in 1996; (9) 

replacement of the Unit 5 upper economizer boiler 

tube hangers and hanger rods, repair of boiler 

structure, and realignment of steam headers in 

1990; (10) installation of stainless-steel-tubed 

feedwater heaters in Unit 6 in 1987; (11) 

replacement of the Unit 6 induced draft fan wheels 

in 1989; and (12) replacement of the Unit 6 bottom 

ash hopper in 1994. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. v. Cinergy 

Corp., PSI 

Energy, Inc., 

and Cincinnati 

Gas & Electric 

Co. 

Beckjord (1) replacement of the superheater, economizer, 

reheater header, wall tubes, and coal bunker on 

Unit 1 in 1987; (2) replacement of the furnace wall 

tubes, superheater, reheater header, and coal 

bunker on Unit 2 in 1987; (3) replacement of the 

superheater and reheater on Unit 3 in 1985; (4) 

replacement of the waterwall tubing, superheater, 

turbine blades, and other turbine equipment on Unit 

4 in 1989; (5) replacement of the economizer, high 

temperature reheater, and condenser tubing on 

Unit 5 in 1991; and (6) replacement of the 

condenser tubing and turbine blades on Unit 6 in 

1995. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. v. Georgia 

Power Co., 

Savannah 

Electric and 

Power Co. 

Bowen (1) installation of a new economizer in Unit 2 in 

1992. 

Violation of PSD 

requirements. 

U.S. v. Georgia 

Power Co., 

Savannah 

Electric and 

Power Co. 

Scherer (1) construction of Scherer Unit 3 on or after June 

1, 1975; and (2) construction of Scherer Unit 4 on 

or after June 1, 1975. 

Violation of PSD 

requirements. 

U.S. v. Georgia 

Power Co., 

Savannah 

Electric and 

Power Co. 

Kraft (1) balanced draft conversion of Unit 3 in 1985. Violation of PSD 

requirements. 

45
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. v. Illinois 

Power Co. 

Baldwin 

Station 

(1) replacement of a cold end air heater section for 

Unit 1 by replacing all air heater tubes in 1986 and 

1990; (2) replacement of 14 cyclones and front and 

rear furnace walls, among other things, at Unit 1 in 

1992; (3) replacement of a cold-end air heater 

section at Unit 2 by replacing all air heater tubes in 

1988 and 1991; (4) replacement of the entire boiler 

floor at Unit 2 in 1991, including the inlet headers, 

floor tubing, and the lower 3 feet of the front and 

rear walls; (5) complete change-out of the 

economizer at Unit 3 in 1982; (6) replacement of 

the Unit 3 reheater in 1994; and (7) the addition of 

20,000 square of feet of secondary superheater 

surface at Unit 3 in 1994. 

Violation of PSD 

requirements. 

U.S. v. Ohio 

Edison Co., 

Pennsylvania 

Power Co. 

Sammis 

Station 

(1) replacement of the reheater, furnace ash 

hopper boiler tubes, and secondary superheater 

outlet header of Sammis Unit 1 in 1993; (2) 

replacement of the reheater, furnace ash hopper 

boiler tubes, and secondary superheater outlet 

header of Sammis Unit 2 in 1991; (3) replacement 

of the reheater, furnace ash hopper boiler tubes, 

secondary superheater outlet header, front wall 

south cell boiler tubes, radiant downflow tubes, and 

furnace south sidewall tubes of Sammis Unit 3 in 

1992; (4) replacement of the furnace ash hopper 

boiler tubes, waterwall tubes, superheater third 

pass outlet header, and superheater control 

condenser tubes of Sammis Unit 4 in 1990; (5) 

replacement of the vertical tube furnace with a 

spiral tube furnace on Sammis Unit 5 in 1984; (6) 

replacement of the economizer, secondary 

superheater outlet pendant, and reheater outlet 

bank of Sammis Unit 5 in 1990; (7) replacement of 

the horizontal reheater and economizer of Sammis 

Unit 6 in 1987; (8) replacement of the burners, front 

and rear waterwall tubes, reheater riser and 

pendant tubes, first through third pass mix area 

walls, and coal pulverizer pipes of Sammis Unit 6 in 

1992; (9) replacement of the coal pulverizers of 

Sammis Unit 6 in 1998; (10) replacement of the 

economizer, horizontal reheater, reheater riser 

tubes, turbine rotors, and front ash hopper tubes of 

Sammis Unit 7 in 1989; and (11) replacement of 

the waterwall panels of Sammis Unit 7 in 1991. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. v. 

Southern 

Indiana Gas 

and Electric 

Co. 

Culley 

Station 

(1) replacement of numerous components of Unit 3 

in 1997, including, replacing all tubes in the 

secondary superheater outlet bank, replacing the 

reheater outlet bank and overhauling the Unit 3 

turbine generator, exciter, boiler feed pump turbine 

and boiler feed pump; (2) the replacement of the 

Unit 3 economizer bank in 1994; (3) installation of a 

new economizer for Unit 1 in 1991; and (4) the 

installation of a new outlet section for the 

secondary superheater for Unit 2 in 1992. 

Violation of PSD 

requirements. 

46
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Tanners 

Creek 

(1) replacement during or about 1988 of the outlet 

bank and outlet tube assemblies for the reheater, 

the primary superheater outlet tube assemblies, 

outlet headers, and vestibule casing for Unit 3; (2) 

the replacement of eleven cyclone furnaces during 

or about 1987; (3) the replacement during or about 

1992 of the Unit 4 tubular air heater; (4) the 

replacement during or about 1989 of the furnace 

arch and floor tubes for Unit 4; and (5) the 

replacement during or about 1995 of the primary 

furnace floor and side wall tube panels for Unit 4. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Cardinal 

Plant 

(1) replacement of all five pulverizers at Unit 1 and 

the addition of ten burners constructed on the front 

and rear walls of the primary furnace from 

approximately 1980 through 1981; (2) removal of 

the horizontal primary superheater from Unit 1 and 

the addition of wingwalls and replacement of a 

redesigned horizontal reheater constructed from 

approximately 1980 through 1981; (3) replacement 

of a redesigned economizer for Unit 1in 

approximately 1989; (4) replacement of all five 

pulverizers at Unit 2 and the addition of ten burners 

constructed on the front and rear walls of the 

primary furnace from approximately 1979 through 

1980; (5) removal of the horizontal primary 

superheater from Unit 2 and the addition of 

wingwalls and the replacement of a redesigned 

horizontal reheater from approximately 1980 

through 1981; (6) replacement of a redesigned 

economizer for Unit 2 in approximately 1990; and 

(7) replacement of most or all of the components of 

the lower primary furnaces for Units 1 and 2 from 

about 1992 through 1993. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Conesville (1) replacement of 4 cyclones, primary burners, 

and re-entrant throats at Units 1and 2 during 

approximately 1987; (2) replacement of furnace 

floor tubing at Units 1 and 2 during approximately 

1990 and 1989; (3) replacement of the economizer 

bank at Unit 3 during approximately 1988; and (4) 

replacement of secondary superheater outlet head 

at Unit 3 during approximately 1993. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

47
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Muskingum 

River 

(1) replacement, during approximately 1987 

through 1989, of 10 substantially redesigned 

cyclone furnaces, primary burners, and related 

equipment, constructed at Units 3 and 4; (2) 

replacement, during approximately 1988, of the 

roof tubing at Units 1, 2, 3, and 4; (3) replacement, 

during approximately 1988, of the inlet and outlet 

tube assemblies for the secondary superheaters at 

Units 1 and 2; (4) replacement from approximately 

1980 through 1981 of the secondary superheater 

outlets, reheat inlets, intermediate and outlet 

platens, for Units 3 and 4; (5) replacement of all 

five pulverizers at Unit 5 and the addition of ten 

burners constructed on the front and rear walls of 

the primary furnace from approximately 1979 

through 1980; (6) removal of the primary 

superheater from Unit 5 and the installation of 

wingwalls and the replacement of a redesigned 

horizontal reheater from approximately 1980 

through 1981; (7) redesign and replacement during 

or about 1985 of an upgraded economizer for Unit 

5; and (8) removal and replacement of the lower 

furnace tubes for Unit 5 in about 1992. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

John E. 

Amos 

(1) replacement of the economizer and increase 

the surface support system and retube the main 

condenser at Unit 1 in approximately 1989; (2) 

replacement of the low pressure reheat outlet bank 

and header and the heat recovery area rear wall at 

Unit 2 in approximately 1994; and (3) retubing of 

the main condenser at Unit 3 in approximately 

1995. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Kammer (1) replacement of the furnace floor tubing in Units 

1, 2 and 3 during approximately 1992 and 1993; 

and (2) replacement of the secondary superheat 

outlet bank and the reheat outlet banks at Unit 2 

during approximately 1999. 

Violation of PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Kanawha 

River 

(1) retubing the main condenser at Unit 1 in 

approximately 1991. 

Violation of 

Nonattainment NSR 

requirements and PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Mitchell (1) replacement of the low pressure reheat outlet 

banks on both Units 1 and 2 from approximately 

1992 through 1993; (2) conversion and redesign of 

the #15 MBF pulverizer to an MPS-89 pulverizer on 

Unit 1 from approximately 1990 through 1991; (3) 

replacement of front screen tubes on Unit 1 in 

approximately 1997; (4) replacement of tubes in 

the main condensers in Unit 2 in approximately 

1989; and (5) installation of a redesigned 

economizer on Units 1 and 2 from approximately 

1987 through 1988. 

Violation of PSD 

requirements. 

48
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Philip Sporn (1) replacement of the lower waterwall headers in 

the rear and side wall in Unit 1 in approximately 

1990; (2) replacement of the rear and side wall 

lower furnace headers on Units 2, 3, and 4 from 

approximately 1990 through 1991; (3) replacement 

of all tubes in the main condensers in Units 1, 2, 

and 4 from approximately 1990 through 1991; (4) 

replacement of the primary and reheat and 

superheater outlet banks and outlet headers in Unit 

4 during approximately 1990; (5) replacement of all 

lower furnace tubes and related components in 

Unit 5 in approximately 1993; (6) replacement of 

upper three banks of the first reheater and first 

reheater inlet header in Unit 5 in approximately 

1990 and 1991; and (7) retubing of the low 

pressure, high pressure and auxiliary condensers 

in Unit 5 during approximately 1992 and 1993. 

Violation of PSD 

requirements. 

U.S. and State 

of New York v. 

American 

Electric Power 

Service Corp., 

et al. 

Clinch River (1) replacement of the primary, secondary and 

reheat superheater banks and headers at Units 1, 

2 and 3 between approximately 1994 and 1996. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

CG Allen 

Steam Plant 

(1) major boiler and turbine overhaul for Unit 5 in 

2000; (2) replacement of the economizer in the 

superheat and reheat furnaces for Unit 5 in 1996; 

(3) replacement of both banks of the economizer 

and the superheat header and crossover tubing for 

Unit 4 in 1996; (4) major boiler and turbine 

overhaul for Unit 4 in 1998; (5) replacement and 

redesign of major components of the boiler for Unit 

2 in 1988; (6) replacement and redesign of major 

components of the boiler for Unit 1in 1989; and (7) 

replacement of pendant superheater assemblies, 

replacement of cross-over tubes with two steam 

lines, and installation of a redesigned superheat 

header for Unit 3 in 1994. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

Belews 

Creek 

(1) replacement and redesign of both banks of the 

economizer, and replacement of the horizontal 

reheater for Unit 2 in 1999; (2) redesign and 

replacement of the pendant reheater section for 

Unit 2 in 1996; and (3) redesigning and replacing 

both banks of economizers, replacement of the 

horizontal reheater for Unit 1 in 2000. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

Buck (1) redesign and replacement of the pendant 

heater section, and resulted in the refurbishment of 

the Unit for Unit 5 in 1991; (2) refurbishment of Unit 

4 in 1994; (3) replacement of tubing, and 

replacement of the backpass with redesigned 

components for Unit 3 in 1994; and (4) 

replacement of the reheater pendants, superheat 

and reheat crossover tubes, replacement of 

crossover supports, and waterwall tubes for Unit 6 

in 1990. 

Violation of PSD 

requirements. 

49
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

U.S. v. Duke 

Energy Co. 

Marshall (1) replacement of horizontal reheater and other 

boiler components for Unit 4 in 1990; 

(2) replacement of reheat assemblies, the ignition 

system, superheat outlet expansion loops, and 

superheat platen outlet expansion loops for Unit 3 

in 1999; (3) replacement of the waterwall, 

replacement of the lower economizer and other 

boiler work for Unit 2 in 1989; (4) replacement of 

primary superheater convection pass front wall and 

other work at Unit 2 in 1996; and (5) replacement 

of all superheater front steam cooled wall tubes, 

replacement of the lower economizer bank, 

replacement of significant portions of the waterwall, 

and replacement of the oil ignition system for Unit 1 

in 1992. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

Cliffside (1) refurbishment of Unit 2 in 1993; 

(2) refurbishment of the Unit, including but not 

limited to replacement of tubes, replacement and 

redesign of the back pass, and replacement and 

redesign of the ignition system for Unit 3 in 1990; 

(3) replacement of tubing, replacement of upper 

economizer banks and pendant superheater 

assemblies, turbine rehabilitation, and a fuel 

system upgrade for Unit 4 in 1990; (4) redesign 

and replacement of the Unit 5 economizer, and 

other work, in 1992 and 1995; and (5) replacement 

of economizer banks, replacement of the burner 

panels, and replacement of pendant reheater tubes 

for Unit 1 in 1993. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

Dan River (1) replacement and redesign of tubing, 

replacement and redesign of the backpass, and 

replacement of the boiler ignition system for Unit 3 

in 1988. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

W.S. Lee (1) removal and redesign of the platen superheater, 

replacement of waterwall tubes, replacement of 

reheat elements, superheat cross over tubes, and 

of the economizer for Unit 3 in 1990. 

Violation of PSD 

requirements. 

U.S. v. Duke 

Energy Co. 

Riverbend (1) replacement or refurbishment of the steam 

drum, economizer, waterwalls, superheater, and 

reheater for Unit 4 in 1990; (2) replacement or 

redesign of the economizer, waterwall, 

superheater, and reheater for Unit 6 in 1991; and 

(3) replacement or redesign of the economizer, 

waterwall, superheater, and reheater for Unit 7 in 

1992. 

Violation of PSD 

requirements. 

Environmental 

Appeals Board 

TVA Decision 

Paradise (1) replace of the cyclones, lower furnace walls, 

and floor in 1985. 

Violations of PSD and 

NSPS requirements. 

Environmental 

Appeals Board 

TVA Decision 

Colbert (1) rehabilitation and modification of boiler, turbine, 

and controls in 1982. 

Violations of PSD and 

NSPS requirements. 

50
CASE PLANT MAJOR MODIFICATIONS COMMENTS 

Environmental 

Appeals Board 

TVA Decision 

Allen (1) replacement of the reheater in 1991-92 Violation of PSD 

requirements. 

Environmental 

Appeals Board 

TVA Decision 

John Sevier (1) replacement of all waterwall and burner wall 

tubes, and of superheater in 1988 

Violation of PSD 

requirements. 

Environmental 

Appeals Board 

TVA Decision 

Cumberland (1) replacement of front and rear secondary superheater outlet headers and of the inlet terminal 

tubes and main steam piping tee in 1993. 

Violation of PSD 

requirements. 

Environmental 

Appeals Board 

TVA Decision 

Bull Run (1) replacement of the secondary superheater 

outlet pendant elements and of all economizer 

elements in the “A” and “B” furnace in 1987. 

Violation of PSD 

requirements. 

Environmental 

Appeals Board 

TVA Decision 

Kingston (1) replaced all reheater and superheater 

intermediate pendant elements as well as 

superheater and reheater waterwalls in 1989-1990 

at Units 6 and 8 

Violation of PSD 

requirements. 

Environmental 

Appeals Board 

TVA Decision 

Shawnee (1) replaced secondary reheater and superheater 

intermediate pendant elements and crossover 

elements in 1989-90 at Units 1 and 4 

Violation of PSD 

requirements. 

51