The EPA’s most recent permit approval for construction of a coal-fired power plant is being challenged on climate change grounds. In the third challenge of its kind, opponents of a proposed 1,500-megawatt power plant on Navajo land in northwest New Mexico appealed the EPA’s decision to the Environmental Appeals Board (“EAB”) on grounds the permit violates Clean Air Act (”CAA”) standards for a number of pollutants, including CO2. The EAB heard oral arguments in two similar challenges and a decision in the precedent-setting In re Deseret Power case is expected from the EAB any day.

The CAA Prevention of Significant Deterioration (“PSD”) permit for the plant was issued after supporters of the facility filed suit arguing that EPA failed to act within the statutory 12-month window. The $3 billion project, which is financed by Sithe Global Power subsidiary Desert Rock Energy Company and the Navajo-owned Diné Power authority, has been held up since 2003. The proposal is opposed by environmental groups and New Mexico Governor Bill Richardson, who indicated that the state will join in the EAB appeal.

The appeal alleges that the EPA failed to analyze the impact of the plant on greenhouse gases or to require appropriate pollution control technologies. The EPA has consistently argued that CO2 is not subject to permitting restrictions until the agency makes an endangerment finding, which the agency is now considering as part of an Advanced Notice of Proposed Rulemaking. The EAB will rule on the legality of EPA’s argument in the In re Deseret Power decision, which is expected to have a widespread effect on pending challenges to coal-fired power plants.

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