Prevention of Significant Deterioration (PSD)

Prevention of Significant Deterioration (PSD) has been an ongoing issue for Dakota Resource Council’s Clean Electricity Task Force for several years.

What is PSD?

The portion of the Clean Air Act at issue is Prevention of Significant Deterioration (PSD). Passed in the 1977 Clean Air Act Amendments, PSD was meant to prevent industry from filling up areas in compliance with National Ambient Air Quality Standards with pollution from new sources. It sets incremental caps on how much pollution concentrations can increase. In Class I areas, such as national parks and wilderness areas, these incremental caps are obviously more restrictive than in Class II areas.

PSD is an underutilized tool in the clean air toolbox. No states except North Dakota have done comprehensive PSD modeling. Results in North Dakota suggest that PSD violations in Class I areas are probably common in many areas, especially in the West.

The Environmental Protection Agency (EPA) could and should focus on PSD modeling in the permitting of new power plants, and also use PSD violations as a basis to call for State Implementation Plan revisions. Focus on PSD modeling in permitting would undoubtedly disclose many violations, slow down many coal-fired projects and force more serious consideration of renewable alternatives. Also, using PSD violations to initiate the SIP process would force the clean-up of older coal-fired power plants “grandfathered” under the Clean Air Act, such as North Dakota’s Leland Olds Station Unit I, which has no scrubbers as of yet and emits about 20,000 tons of sulfur dioxide per year. In some cases, utilities may find plant closure and switching to renewable alternatives to be the most cost-effective route. Since many clean air areas are also high wind areas, the West’s fledgling wind energy industry stands to benefit from the PSD strategy.

As with New Source Review, we can expect coal interests to lobby hard for both administrative rules and new legislation to nullify PSD at the federal level. However, since North Dakota is where the PSD battle has been joined, the outcome here is of signal importance for the broader fate of PSD as an enforcement mechanism. Reportedly, Utah coal interests and state officials are have borrowed methodologies designed in North Dakota in an attempt to eliminate potential PSD problems.

ND History

North Dakota did PSD modeling in 1999 in connection with a permit application from Minnkota Power Cooperative to upgrade its Milton R. Young Station near Center, North Dakota. The modeling showed numerous sulfur dioxide violations in Class I areas. (Affected Class I areas are Theodore Roosevelt National Park, wilderness areas of Lostwood Wildlife Refuge (North Dakota) and Medicine Lake Wildlife Refuge (Montana) and Fort Peck Reservation, (Montana) which exercised its option to become a Class I area some years back.

The state spent the next five years conspiring with industry to make the violations go away by making a number of changes to the modeling inputs and procedures. On its 14th try it succeeded.

EPA figured out what was going on, did its own modeling in 2001 with some concessions to the state, but still found major violations, and rejected North Dakota’s modeling plan.

In 2001 EPA also made its first agreement with North Dakota to enter into a process to resolve their differences over PSD. The latest step in this process was a February 2004 Memorandum of Understanding (MOU), which opens the door to a number of practices that undercut the effectiveness of PSD. These include adjusting the computer modeling results to conform to monitoring data and setting up what amounts to an entirely new set of increment caps nearly three times as lenient as those embodied in the law.

The MOU also had its intended effect of helping derail DRC’s initial PSD lawsuit, filed September 30, 2003. The suit argued that EPA had failed to call for a SIP revision after finding North Dakota in violation. In an April 2, 2004 ruling, the U. S. District Court in Denver agreed with EPA that it had never made an official finding that North Dakota was in violation of PSD standards for sulfur dioxide—even though EPA’s Region VIII had earlier rejected North Dakota’s modeling methodology and had repeatedly warned the state that it had many PSD exceedances. Thankfully, the court’s decision dealt only with procedural issues.

Meanwhile, the MOU itself drew fire from EPA air quality modelers in nine of the 10 EPA regions. The modelers issued a strongly-worded letter in late April protesting the MOU. Addressed to two high EPA officials, Bill Harnett, Director of the Information Transfer and Program Integration Division, and Peter Tsirigotis, Director of the Emissions, Monitoring and Analysis Division, the letter specified six ways in which the MOU incorporated “substantial changes from past air quality modeling guidance (40 CFR Part 51, Appendix W) and accepted methods, and could set a precedent for analyses in other Regions.” The letter gained national attention through articles in the Los Angeles Times and specialty publications, as well as a June 9 National Public Radio broadcast.

On April 26, 2004 DRC filed a petition with the U. S. 8th District Court to review the MOU on the basis that it appeared to be a final agency decision but was neither noticed in the Federal Register nor opened to public comment. The result was that the EPA admitted that the MOU does not represent a final agency decision and cannot be used as a basis for similar agreements in other states.

DRC’s goal remains to gain through the courts a EPA-approved State Implementation Plans (SIP) and significant sulfur dioxide emissions reductions in North Dakota. In July of 2004, DRC filed a second legal petition with EPA to issue a SIP. Beyond that, DRC has worked with attorneys and a consultant to develop a graphics presentation that can be used to illustrate the extent of SO2 pollution in the state’s Class I areas. The report has been completed and will be reviewed and the author came to North Dakota to run through the graphics presentation.

On February 9, 2006, attorney for DRC filed a suit against EPA for failure to act on our 2004 petition. EPA claimed that it had the discretion to act or not to act, and the suit was dismissed.

In June of 2007, EPA published a notice in the Federal Register of its intent to adopt the North Dakota modeling methods., Federal Register, Volume 72, Number 108, June 6, 2007].</ref> DRC submitted comments opposing the adoption along with Environmental Defense, National Parks Conservation Association, Natural Resources Defense Council, Sierra Club, Chesapeake Bay Foundation, Californians for Western Wilderness, Dacotah Chapter of Sierra Club, Minnesota Center for Environmental Advocacy, Plains Justice, Western Organization of Resource Councils, Wilderness Workshop, Wyoming Outdoor Council and Earthjustice. To date, (January 2008) there has been no word from EPA as to the status of the pending adoption.

DRC received news on Wednesday December 10, 2008 that the Bush Administration gave up on trying to change the PSD rules. Apparently it ran out of time to accomplish the changes. This is very good news, however, ND is still using the flawed methods. With a new administration in Washington, D.C., we may be more successful in challenging the state when new opportunities arise.

The outcome of this controversy will be far-reaching, affecting:

• Air quality in our national parks and other protected lands;
• Timely clean-up of the nation’s aging fleet of coal-fired power plants; and
• Development of vast wind energy resources in the Great Plains and Intermountain West.

The public’s interest in this controversy so far is represented almost entirely by Dakota Resource Council.

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