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Position | Background | Issue | Impact
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| Position: |
| Flexible regulations with clear requirements are a fundamental necessity for making plant operating decisions in the manufacturing and electric sectors. The Environmental Protection Agency (EPA) is engaged in a rulemaking process to bring clarity and commonsense to new source review (NSR) regulations so that plant managers may make repair, maintenance, and operating decisions with a firm understanding of the program's requirements. NMA supports that rulemaking process and opposes an NSR rider on the VA, HUD and Independent Agencies appropriations bill. |
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| Background: |
| The New Source Review (NSR) program was incorporated into the Clean Air Act as part of the 1977 Amendments. The program was designed to improve air quality in areas with air quality problems. The program has become increasingly complex over time, as EPA has issued 4,000 pages of guidance and policy interpretations. The Clinton Administration set out to fix the program, formally proposing reforms in 1996 and holding extensive meetings. In 2001, the National Energy Policy Report recommended that EPA review the NSR program and report to the President the impact of the regulations on new utility and refinery generation capacity, energy efficiency, and environmental protection. EPA conducted an exhaustive review that included meeting with more than 100 environmental and consumer groups and public officials, and evaluating more than 130,000 written comments. The report found that the NSR program impedes investment in capacity, as well as in energy efficiency. Investment is hindered by regulatory uncertainty and the inflexibility stemming from the program's complexity, as well as the added costs and delays caused by the NSR process itself - triggering NSR can add more than a year and $1 million to the cost of a single minor project. Due to these barriers, many companies have delayed or abandoned attempts to modernize their facilities.
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Issue: |
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The NSR program affects over 22,000 industrial facilities across the nation, including coal-fired power plants and smelters. In June 2002, EPA announced plans to finalize four reforms substantially similar to those developed during the Clinton Administration that went through the full notice and comment process and were formally proposed, but never finalized. These reforms: 1) encourage pollution control and prevention projects; 2) provide flexibility to operate on a plantwide basis (PALs); 3) give units with state of the art controls operational flexibility; and 4) calculate emissions increases based on actual emissions. Additionally, EPA announced it will propose a rule seeking public comment on what qualifies as "routine maintenance" and other issues. Some Senators are proposing an environmental rider to the appropriations bill restricting the ability of EPA to proceed with its rulemaking processes. |
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Impact: |
| The proposed rider is premature because the four reforms by the Clinton Administration received bipartisan support and the three reforms that EPA plans to propose still must go through the formal notice and comment procedure required by the Administrative Procedures Act. The reforms should help promote safer, cleaner, and more efficient power plants and smelters. Conversely, the rider would discourage investments in new and cleaner technologies. It also would increase the risk of power outages due to plants that are not properly maintained to avoid triggering NSR.
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