Environmental groups have filed an administrative challenge to a state permit issued to Duke Energy Corporation for a proposed $2.4 billion expansion of its Cliffside, N.C., coal-fired power plant. The contested case petition, filed on March 27, alleges that the North Carolina Division of Air Quality’s (NCDAQ) permit violates state and federal clean air standards for a list of air pollutants, including carbon dioxide (CO2).

Southern Environmental Law Center (SELC), which brought the petition on behalf of a number of federal and regional environmental groups, argues that the Clean Air Act’s (CAA) Prevention of Significant Deterioration (PSD) provisions require NCDAQ to apply the Best Available Control Technology (BACT) for carbon dioxide. SELC grounds its argument in the premise that CO2 is “subject to regulation” under the CAA — a premise that is not accepted by the Environmental Protection Agency (EPA) and is currently being litigated before the EPA’s Environmental Appeals Board in the In re Deseret Power Electric Cooperative case.

The petition states that because CO2 is regulated under the acid rain program, it falls within the definition of a regulated pollutant. Furthermore, SELC argues, the CAA requires regulation of “air pollutants” from new stationary sources (such as power plants) and motor vehicles where the pollutant may endanger human health and welfare. Based on the Supreme Court’s findings in Massachusetts v. EPA, EPA is obligated to regulate CO2 if the agency makes such an endangerment finding. Although the EPA has not yet made such a finding, SELC alleges that based on the “extensive body of science documenting the serious impacts of global warming pollution,” the failure to make such a finding would be “factually and legally indefensible.” Because the existing science requires an endangerment finding, and upon such an endangerment finding the EPA is obligated to regulate CO2, SELC argues that CO2 is “unquestionably a pollutant subject to regulation” under the CAA.

SELC’s argument may put the cart before the horse — EPA has signaled that it does not intend to begin the formal rulemaking process until after a period of public comment and review on the endangerment issue — but the argument is preserved should the appeal drag out until EPA makes a final determination. In the meantime, it is likely that cases like this one will hinge on the EAB’s decision, and subsequent appeals, in the Deseret Power case.

Interestingly, Duke Energy did include a “Carbon Mitigation Plan” that NCDAQ appended to the permit. The plan proposed by Duke Energy would require the utility to make the new Cliffside unit carbon neutral by 2018 and to retire 800 megawatts of its older units at other coal-fired power plants. SELC called the plan a “welcome first step” but rejected it as “so riddled with caveats and qualifications as to be unenforceable . . .”

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