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Connecticut, New Jersey, New York and the United States recently won a lawsuit in federal court over applicability of the federal Clean Air Act (the "Act"), 42 U.S.C. §§ 7401 et seq., to an old coal-fired electric generating facility operated by Ohio Edison Company ("Ohio Edison"). United States of America v. Ohio Edison Company, No. 2:99-CV-1181, 2003 U.S. Dist. LEXIS 13799 (S.D. Ohio Aug. 7, 2003). Among other things, the Act requires installation of pollution control devices on major stationary sources of air pollution constructed or modified after promulgation of regulations implementing the Act. 42 U.S.C. § 7411(a). Ohio Edison’s W.H. Sammis Station plant in Ohio (the "Sammis Plant") was constructed before passage of the Act and would therefore not be subject to the Act’s requirement for installation of pollution control devices unless subsequently "modified." Under applicable regulations, modification does not include "routine maintenance, repair and replacement." See 40 C.F.R. § 52.21(b)(2)(iii)(a). At issue in the case was whether eleven construction projects undertaken on seven electric generating units at the Sammis Plant constituted "routine maintenance, repair and replacement." The court determined that the projects did not constitute "routine maintenance, repair and replacement" and that the requirements of the Act do apply to the Sammis Plant. In making its determination, the court focused on whether the changes made to the Sammis Plant were "routine." Following the Environmental Protection Administration’s ("EPA") own four-part test, the court considered (1) the nature and extent of the activity, (2) the purpose of the activity, (3) the frequency of the activity, and (4) the cost of the activity. Regarding the nature and extent of the activity, the court found that the projects involved replacement or upgrade of major boiler components. The court found that the purpose of the activity was to increase the availability and reliability of the electric generating units and extend the life of each unit approximately thirty years. Regarding frequency, the court found that the component and equipment replacements had, in almost all cases, never been performed on the units before and, given the purpose of extending unit life thirty years, were unlikely to be made more than once or twice in a unit’s lifetime. The court found that the cost of each of the eleven projects ranged from $1 million to $33 million, and totaled $136.4 million. Under these facts, the court held that the projects could not be considered "routine maintenance, repair and replacement." The court rejected Ohio Edison’s argument that whether an activity is routine should be evaluated in light of the types of activities performed in the industry as a whole. Instead, the court approved of the EPA’s approach, which takes industry practice into account only with respect to consideration of the frequency of the activity. Even with respect to frequency, the court found industry practice to be a less important consideration than the frequency with which the activity has been performed on the particular unit in question. The court has deferred consideration of penalties and injunctive relief to a separate, remedy phase trial to commence in March of 2004. The court’s opinion indicates that the remedy phase will involve a broader, equitable analysis, taking into account, among other things, economic impact, employment consequences, and inconsistencies in the EPA’s application and enforcement of the Act over the years.
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