NCDENR to file suit against EPA over air quality regulations

N.C. Department of Environment and Natural Resources files suit against the EPA over air quality regulations

RALEIGH – The N.C. Department of Environment and Natural Resources has filed a lawsuit challenging how the Environmental Protection Agency plans to regulate particulate matter, a plan that would largely ignore the historic gains that North Carolina has made in reducing air pollution since the state’s law known as the Clean Smokestacks Act was passed in 2002.

“We recognized more than a decade ago that we needed to do something about air pollution in North Carolina, and we have made great strides that put us well ahead of other states,” said Sheila Holman, director of the N.C. Division of Air Quality. “All we ask the EPA to do is recognize North Carolina’s unique position and reward what we have done instead of putting us at an economic disadvantage compared to states that have done less.”

The Clean Smokestacks Act obligated the state’s largest utilities to reduce substantially nitrogen and sulfur emissions from coal-fired power plants. Under the law, power plants were to reduce their nitrogen oxide emissions by 77 percent by 2009 and sulfur dioxide emissions by 73 percent by 2013. All targets were met ahead of schedule by retrofitting older plants with emission controls and building new, cleaner plants. The utilities spent more than $2.8 billion on the modernization program, and their customers pay higher power bills now and will for years to come due to the upgrades.

DENR’s lawsuit challenges parts of the EPA’s PM2.5 Increment Rule, which required states to adopt regulations satisfying the new increment requirements for particulate matter smaller than 2.5 microns. EPA’s rule treats PM2.5 as a new pollutant, setting a baseline year of 2010 instead of retaining the 1975 baseline date used in previous particulate matter regulations. The baseline date is an important part of the regulatory program because it defines the baseline above which future growth is limited by what is called the increment. States can require reductions in emissions after the baseline date in order to expand the increment, thus allowing for increased economic development.

In January 2013, a federal court struck down two of EPA’s PM2.5 rules. One of those rules was remanded because the court found that PM2.5 is not a new pollutant under the Clean Air Act but rather a continuation of PM10 (the earlier regulatory scheme for controlling particulate matter that set 1975 as the baseline year).

North Carolina regulators in the N.C. Division of Air Quality and the Environmental Management Commission, or EMC, were wary of promulgating rules that were inconsistent with the court decision. Regulators hoped to see the EPA amend the PM2.5 Increment Rule consistent with the court ruling to redefine the baseline date to 1975.

DENR Secretary John Skvarla wrote EPA Administrator Gina McCarthy a letter on Aug. 22, 2013, asking for guidance on the issue. He cited the state’s “exceptional record as a leader in the fight for clean air and responsible economic development,” and expressed concern that the 2010 baseline “could place our state at a significant economic disadvantage simply because North Carolina required emission reductions earlier than other states.”

In October, the EPA reiterated its commitment to the 2010 baseline date. In response, DENR took three actions in the last three months of 2013:
1. DENR submitted a state PM2.5 increment rule, passed by the EMC, to the EPA for approval. This state rule includes a 1975 baseline date consistent with the January court decision;
2. DENR filed a petition for reconsideration asking the EPA to reconsider the baseline date in light of the January court decision; and
3. DENR filed suit against the EPA for continuing to insist on a 2010 baseline year in the face of the court decision.

If EPA either approves DENR’s state PM2.5 increment rule or grants DENR’s petition for reconsideration, the lawsuit against EPA may not be necessary.