Court Upholds Wisconsin New Source Review Reforms

The Seventh Circuit Court of Appeals has upheld Wisconsin’s adoption of U.S. EPA’s Clean Air Act New Source Review (NSR) reforms. In 2006, Wisconsin adopted and incorporated the federal NSR reforms into its state implementation plan, which EPA approved in 2008. Shortly thereafter, environmental groups submitted to EPA a petition to reconsider its approval of Wisconsin’s NSR reforms. In January 2010, EPA denied the petition. The groups then filed petitions in the Seventh Circuit, seeking judicial review of EPA’s denial of their petition for reconsideration.

The three elements of the NSR reforms at issue were:
1. The use of the “actual-to-projected future actual” test to determine whether a stationary source modification will cause an increase in emissions that is large enough to trigger Prevention of Significant Deterioration (PSD) or Non-Attainment Area NSR permitting obligations.
2. A rule allowing permit applicants to select any 24-month consecutive period out of the last ten years of emissions data to establish a facility’s baseline emissions.
3. A rule allowing the use of a plantwide applicability limitation (PAL).

Throughout the case, environmental groups argued that these three elements could result in an overall increase in emissions from stationary sources in Wisconsin, contrary to anti-backsliding prohibitions in the Clean Air Act. The Seventh Circuit rejected these arguments in favor of the air modeling EPA conducted to provide technical support for its NSR reforms. However, the court did note that, at some point, air modeling will need to be replaced with actual data to demonstrate whether NSR reforms are or are not causing an increase in emissions. Also, EPA’s approval of Wisconsin’s NSR reforms does not relieve the state of its obligations to prevent emissions increases.

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