Ryan Whaley Coldiron Shandy

In 1970, Congress directed EPA to devise national standards limiting various pollutants, such as sulfur dioxide. Seven years later, Congress added the Prevention of Significant Deterioration (“PSD”) program so that air quality would not get worse in places that had already satisfied the minimum standards.

The PSD program essentially provides that no one can construct or modify a major emitting facility – like a power plant – until a “PSD permit” for the facility has been granted. In turn, the permitting agency – which is sometimes a state agency and sometimes the EPA – cannot issue a PSD permit unless it is satisfied that the facility will use the “best available control technology” (“BACT”) to control emissions that can cause air pollution, and until the agency sets limits on those emissions from the facility.

This setup begs the question: Does the PSD program only prohibit construction or modification of a facility without a PSD permit and BACT to control emissions, or does the PSD program also impose ongoing operational requirements to use BACT and limit emissions?

In Sierra Club v. Otter Tail Power Company, No. 09-2862 (8th Cir. Aug. 12, 2010), the power company modified its coal-fired power plant in South Dakota several times in the late 1990s and in 2001 without first getting a PSD permit. In 2008 – seven years after the power company started the most recent modification – Sierra Club sued the power company for violating the Clean Air Act by modifying the power plant and then running it without getting a PSD permit.

The power company countered by arguing that Sierra Club’s lawsuit came too late under federal law. According to the power company, the five-year time limit generally allowed for filing a federal lawsuit – the Clean Air Act does not have its own cutoff for lawsuits by citizen groups – started running as soon as the power company made a modification to its power plant. Sierra Club disagreed, arguing that the PSD program creates an ongoing duty that the power company violated every day that it operated the power plant without getting a PSD permit.

The federal district court judge in South Dakota agreed with the power company. When Sierra Club appealed, the Eighth Circuit Court of Appeals agreed with the district court and held that the PSD program does not impose ongoing operational requirements. According to the court, although the power company was required to apply for a PSD permit so that it could be issued emission limits and determine BACT, “by failing to apply for PSD permits in the first place, it does not continue to do so by failing to comply with a hypothetical set of operational parameters that would have been developed through the permitting process.”

The question whether the PSD program creates an ongoing operational requirement might not be resolved yet. The federal courts are arguably split on the issue, so it might ultimately be headed for the United States Supreme Court for the highest court’s decision.

The Eighth Circuit’s opinion can be found here: http://www.ca8.uscourts.gov/opndir/10/08/092862P.pdf.