The Actual to Projected Future Actual Test: When Does EPA Get to Review Generators’ Projections?

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On Thursday, in United States v. DTE Energy Company, the 6th Circuit Court of Appeals revived EPA’s enforcement action against DTE energy for alleged NSR violations at DTE’s Monroe Power Plant.  As the dissent notes, it may be a hollow victory. 

The facts trace a familiar NSR enforcement case trajectory.  In 2010, DTE commenced a $65 million maintenance project at Monroe, involving tubing, the economizer, and reheater piping, among other elements of plant equipment.  Under EPA’s NSR regulations, DTE had determined, once demand growth was excluded, that there was “no reasonable possibility that the project will result in a significant emissions increase.”  Thus, the project could proceed without preconstruction review under NSR.

Two months after construction started, EPA learned of the project.  It disagreed with DTE’s projections and brought enforcement action.  The District Court dismissed, ruling that EPA could not second-guess a facility owner’s projections.  A divided 6th Circuit disagreed.  To the Court, the case wasn’t that complicated.  DTE acknowledged that, if it had failed to provide projections at all, then it would be subject to enforcement action.  The Court asked why, if the absence of projection was subject to enforcement, development of a flawed projection would not also be subject to enforcement.

EPA’s enforcement powers must also extend to ensuring that operators follow the requirements in making those projections.  EPA must be able to prevent construction if an operator, for example, uses an improper baseline period or uses the wrong number to determine whether a projected emissions increase is significant.

I don’t actually see this case as seriously jeopardizing facility operators.  They still get to make the projections.  In a case such as this one, they have no obligation to obtain regulatory approval of the projection prior to construction.  They may also demonstrate, following construction, that one year of actual data confirms the absence of a significant increase.  In fact, in DTE Energy, the record apparently contained data demonstrating that there was not an increase in actual emissions.  This led the dissent to wonder what the point of the remand would be.  To me, it merely indicates that the decision was a probably correct advisory opinion that might not have any actual impact in the case of the Monroe plant.