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Melissa Horne

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Melissa helps industrial and utility clients understand and navigate complex environmental requirements, with a focus on real-world implications for their business. She focuses her practice heavily on Clean Air Act and climate change issues, and advises clients on environmental justice and ESG matters.

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The Federal Energy Regulatory Commission (FERC) has issued an order proposing a $15 million civil penalty in response to the failure of a licensee to respond to FERC dam safety orders in the wake of the failure of the Edenville dam and downstream FERC-licensed Sanford Dam (Project No. 2785) in Michigan in May 2020 (see June 1, 2020 edition of the WER).  The December 9, 2020 Order to Show Cause and Notice of Proposed Penalty followed months of FERC orders and directives to the licensee related to the catastrophic failure of the two dams, which resulted in the evacuation of 10,000 people, an estimated $190 million in economic damages to local residents, and $55 million in response costs, prompting Governor Gretchen Whitmer to request a disaster declaration from the federal government.

The U.S. Environmental Protection Agency (EPA) has announced its decision to retain the current National Ambient Air Quality Standards (NAAQS) for fine particulate matter (PM2.5) and ozone (O3) under the Clean Air Act. However, the new Biden EPA is all but certain to reevaluate the standards and likely to reach different conclusions.

PM2.5 is a mixture of small liquid or solid particles found in the air that are less than 2.5 micrometers (μm) in aerodynamic diameter. O3 is a reactive gas that is formed through chemical reactions of nitrogen oxides and volatile organic compounds in the atmosphere. Under the CAA, EPA must ensure the ambient standards for both pollutants are established at a level “requisite to protect the public health” with “an adequate margin of safety,” and EPA must review the NAAQS every five years to determine whether the standards should be retained or revised.

The U.S. Environmental Protection Agency (EPA or Agency) issued final regulations governing cost-benefit analyses for Clean Air Act (CAA) rulemakings on December 23, 2020. The rule, titled “Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process,” imposes certain requirements on the Benefit-Cost Analysis (BCA) that EPA must conduct for “significant” CAA regulations and requires EPA to consider that analysis when promulgating the regulations, unless otherwise prohibited by law. The rule seeks to force EPA to focus more on the direct benefits of a rule rather than justifying a rule based on the indirect benefits, as EPA has done with certain controversial rules in the past. However, the rule is unlikely to survive long or have much effect under the Biden administration.

On December 23, the U.S. Environmental Protection Agency (EPA) published its annual civil monetary penalty adjustments in the Federal Register. The Federal Civil Penalties Inflation Adjustment Act of 2015 requires federal agencies to make annual inflation adjustments to federal statutory civil penalty amounts. The annual inflation adjustments are based on a cost-of-living multiplier determined by changes to the Consumer Price Index. This year’s inflation multiplier is 1.01182.

On October 29, EPA published a proposed revision to its Cross State Air Pollution Rule (CSAPR) Update in response to the remand of the rule by the D.C. Circuit. The CSAPR Update was promulgated under the Clean Air Act’s “Good Neighbor” provision, which requires states to ensure that pollution from sources within their borders does not significantly contribute to the ability of downwind states to attain or maintain the National Ambient Air Quality Standards (NAAQS). Under the Good Neighbor provision, if a State Implementation Plan (SIP) does not adequately address the interstate transport of pollutants, EPA must step in and issue its own rules through a Federal Implementation Plan (FIP). EPA issued the CSAPR Update in 2016, imposing FIPs on 22 states requiring ozone season NOx reductions from electric generating units (EGUs) to address the 2008 ozone NAAQS. In the 2018 CSAPR Closeout, EPA determined that no further emission reductions were required for all but two of the states covered by the CSAPR Update.

On October 1, 2020, the Environmental Protection Agency (“EPA”) issued its final rule allowing for a source classified as a “major source” of hazardous air pollutants (“HAP”) under section 112(a) of the Clean Air Act to reclassify as an “area source.”  A “major source” emits or has the “potential to emit” 10 tons per year or more of a single HAP or 25 tons per year or more of a combination of HAP.  The EPA had long-followed the “once-in-always-in” policy, under which a facility that qualified as a major source of HAPs as of the “first substantive compliance date” of the applicable Maximum Achievable Control Technology (“MACT”) standard was permanently subject to that standard, even if the source was later able to reduce its emissions below major source applicability thresholds.  With the final rule, branded as the “Major MACT to Area” (“MM2A”), EPA codified the withdrawal of the “once-in-always” policy and provided the requirements that apply to major sources choosing to reclassify, including reclassification that occurs after the first substantive compliance date of an applicable MACT standard.

State strategies for regulating air emissions during periods of startup, shutdown, and malfunction (SSM) have been a controversial topic in recent years. Air emissions can be higher during periods of SSM because emitting units are not in steady-state operation and some pollution control devices cannot be operated effectively or safely during such events. Since most air emission limitations are not crafted to cover periods when emission units are not operating normally, many states have adopted regulations in their Clean Air Act-required State Implementation Plans (SIPs) to provide compliance flexibility for sources during periods of SSM. These regulations typically take the form of either automatic or discretionary exemptions for emissions that exceed otherwise applicable limitations, or affirmative defenses to liability or penalties for violations asserted by enforcement authorities or private citizens.

Under the Clean Air Act, a facility that emits air pollutants may not be constructed unless an air permit has been issued to the facility.  For decades, EPA has interpreted the statute to prohibit almost any construction or modification activities until a permitting authority issues a final permit.  But on March 25, 2020, EPA proposed new guidance to clarify that, according regulations adopted 40 years ago, the only construction prohibited prior to issuance of an air permit is construction on the emitting unit itself.

As the coronavirus (COVID-19) outbreak continues across the U.S., it is important for companies to proactively address the potential disruptions to their compliance programs. Environmental compliance is often a boots-on-the-ground activity; but what happens when those boots are at home, can’t travel as needed, or can’t observe operations at the plant level?  Unprecedented staffing and operational issues associated with the coronavirus pandemic have the potential to cause significant gaps in environmental compliance programs. Staying ahead of those gaps is key to weathering these compliance challenges. Below we discuss some recommended strategies to maintain compliance.

On March 9, 2020, EPA published its final “risk and technology review” for the standards it adopted in 2004 to regulate emissions of hazardous air pollutant (HAP) from natural gas-fired combustion turbines. Like most other such reviews, EPA confirmed that the risks presented by HAP emissions from the source category are acceptable with an ample margin of safety. EPA also concluded that there are no new cost-effective controls for reducing those emissions.