As the article below discusses in more detail, EPA has announced it will delay any recommendations on New Source Review reform until September, when it releases a more complete package of Clean Air/Multipollutant reform legislation.  NSR/multipollutant issues will be in the forefront in September, with the release of EPA's plan and congressional consideration of these issues in hearings and "stakeholder" meetings.   Enron will remain closely involved in these efforts -- we have been invited to participate in Senate Environment Committee stakeholder meetings on the topic, and we are in close contact with EPA and the White House as they develop their plan.

Consideration of these issues in a larger "package" will present an opportunity for reform not only for limited segments of the power sector, but for all sources -- existing and new.   NSR reform will always be criticized by environmentalists, but adding NSR to the debate with multipollutant emission reductions could open avenues for some interesting deals to be cut over NSR revisions and various pollutant cap levels.

Jeffrey Keeler
Director, Environmental Strategies
Enron
CT Office - (203) 245-0828
Washington DC office - (202) 466-9157
Cell Phone (203) 464-1541


Fearing Backlash, EPA To Package NSR Study As Part Of Utility Emissions Reduction Plan

Fearing a backlash of criticism, EPA Administrator Christine Todd Whitman has announced that the agency is delaying release of its long-awaited study on its new source review (NSR) program so that it can package the study as part of the Bush administration's proposed "three-pollutant" emissions reduction plan for power plants, which is scheduled for release next month.

Whitman's Aug. 14 announcement, which came following consultations with President Bush, came just three days before
EPA was scheduled to release the results of its 90-day review of NSR, the Clean Air Act program that requires facilities to obtain permits when installing new or modified emissions sources.

"Our review of the NSR regulation is part of our larger effort to craft a new, comprehensive strategy to combat air pollution, and I am not prepared to come to any conclusions about one isolated issue before we finish work on our entire proposal," Whitman said.

In recent weeks, administration officials have faced a slew of criticism from state attorney generals, environmentalists and other critics who have charged that the review would recommend scaling back the program and allow the Bush administration to "pardon" polluters.

Whitman has previously said that the administration's proposal to limit emissions of sulfur dioxide (SO2), nitrogen oxide (NOx) and mercury would set sufficiently strict limits to make NSR and other Clean Air Act requirements unnecessary.

Whitman pointed to a recent National Governors Association policy calling for NSR reform as justification for the administration's forthcoming effort.  "This bipartisan action by the nation's governors provides a firm foundation for consensus and action this fall on this major environmental goal of the administration," she said.

However, Whitman's announcement drew strong criticism from environmentalists, who charged that the administration was seeking to hide the NSR reforms in its overall emissions reduction plan. "The administration should not expect that it can hide the roll-back of these important clean air protections into an emissions reduction package. That would be as obvious as putting a cheap frame on an ugly picture," according to the environmental group Clear the Air.

The group said the NSR program was "safe for now," adding that the Bush administration should acknowledge that a host of favorable comments submitted to EPA as part of the review should force the agency to admit that the NSR program is an essential element of the Clean Air Act.

Excerpt from EPA Press Release U.S. Environmental Protection Agency (EPA) Administrator Christie Whitman announced today that EPA will propose a comprehensive strategy to significantly reduce air pollution and protect public health that will be released in September. EPA will incorporate its review of the New Source Review (NSR) program into this comprehensive strategy, and as a result, will not release its NSR report this week. Whitman spoke with President Bush today about this important proposal.

Our top priority is protecting public health and the environment, and we are in the final stages of developing a comprehensive strategy that will allow us to take the next step forward into a new generation of air pollution controls for the 21st century," Whitman said. "This fall, we will put forward an ambitious proposal that will reduce air pollution from power plants significantly more than the existing system. Subsequently, we will release the NSR report called for by the National Energy Policy."

EPA and the White House are working to finalize the details of an ambitious legislative proposal that will set strict limits on utility emissions of the three major air pollutants that affect public health - nitrogen oxides (NOx), sulfur dioxide (SO2), and mercury - through the use of an innovative and effective market-based approach. In addition, the air pollution reduction strategy will address concerns about the NSR program's effect on energy efficiency and capacity.

The Administration's proposal will maintain stringent health-based standards and establish firm, mandatory caps on levels of pollution, while providing industry with the flexibility to find the most cost-effective means of meeting those standards. This approach would also significantly reduce the administrative burden on state and federal environmental agencies, allowing them to devote limited resources to other programs.