Dive Brief:

• The Administrator of the Environmental Protection Agency last week directed staff to effectively abandon a key enforcement procedure under the agency's rules for new or reconstructed power plants. 
• In a Dec. 7 memo, Administrator Scott Pruitt said the EPA will no longer "second guess" companies' estimates of future pollution levels under its New Source Review (NSR) regulations before they retrofit a plant. Pruitt wrote the move would diminish regulatory uncertainty, while environmentalists say it amounts to a pollution pass for generators. 
• DTE Energy previously challenged pre-construction permits under NSR for the retrofit of a Michigan coal plant, but was twice rebuffed by court rulings. The Supreme Court on Dec. 11 denied to hear that case. 

Dive Insight:

EPA's New Source Review rules govern the construction of new or significantly retrofitted power plants. Under the rules, power plants making major upgrades must estimate their emissions levels based on their design improvements. 

In the past, EPA would review these pre-construction plans and challenge them if it felt companies were not assessing emissions properly. Often, these challenges involved expected market demand for a generator's electricity after retrofits, notes Carol McCabe of Manko Gold Katcher & Fox.

DTE challenged the NSR, arguing that upgrades to its 3,300 MW coal plant were routine maintenance and not a "major modification" that required NSR action. But the U.S. Court of Appeals for the Sixth Circuit twice upheld the EPA's interpretation, allowing NSR to be used. 

Pruitt, however, wrote in his memo that the case had created uncertainty in how NSR is administered, and so EPA would alter how it handles pre-construction permits under the rule. 

"[W]hen a source owner or operator performs a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations, and follows the applicable recordkeeping and notification requirements in the regulations, that owner or operator has met the pre-project source obligations of the regulations unless there is clear error," Pruitt wrote.

"The EPA does not intend to substitute its judgment for that of the owner or operator by 'second-guessing' the owner or operator's emissions projections," he added. 

Environmentalists decried the ruling, concerned that generators may estimate unrealistic levels of emissions after upgrades, allowing them to get away with higher levels of pollution.

"The practical implications are that coal-burning power plants get away with massive emission increases that they falsely project and the EPA ignores," John Walke, clean air director at the Natural Resources Defense Council told E&E News. 

The change in enforcement policy comes weeks after the swearing-in of a new EPA air chief, Bill Wherum, the Hill notes. The agency told the outlet that Wherum recused himself from the NSR decision because his former law firm, Hunton & Williams, represents DTE in its legal case.