EPA Is Lax on Coal Power Rule, Report Says

The Environmental Protection Agency’s inspector general accused the agency Thursday of inadequately enforcing a law that would require major reductions in harmful air pollutants from coal-fired power plants.

EPA Inspector General Nikki L. Tinsley said in a report that the Bush administration’s “dramatic” change to the “new-source review” rule had hindered litigation, out-of-court settlements and new enforcement actions against the utilities. The change “has seriously undermined EPA’s ability to effectively enforce long-standing [new-source review] requirements,” her report said.

Top EPA officials replied that the report “misleads the public” because it ignored the administration’s proposal to reduce power-plant emissions through a market-based program. That approach, which has not been enacted, eventually would result in deeper pollution reduction than the enforcement actions, the officials said.

The nation’s 1,032 coal-fired power generators produce almost 60% of its sulfur dioxide and nearly 20% of its nitrogen oxide emissions -- pollutants that cause chronic and acute respiratory ailments and premature death. Reducing these pollutants, which would cost billions of dollars, has been the subject of bitter political debate for decades.

The new-source review provision of the Clean Air Act requires older plants to install modern pollution controls when they make major modifications to their plants. The administration’s policy, which has been temporarily blocked by the courts, would allow utilities to make changes that cost as much as 20% of the replacement cost of the generating unit without installing new pollution controls.

Tinsley’s report aligned her with a large group of critics of the administration’s policy. But her criticisms were particularly stinging because they came from inside the agency after interviews with many of the EPA officials involved in the enforcement actions.

The report focused on enforcement actions and lawsuits, launched under the Clinton administration, against power plants for violating new-source review.

Settlements with seven companies have required owners to install pollution control devices over 10 years that will reduce annual emissions of sulfur dioxide and nitrogen oxide by 650,000 tons annually, according to the report. Existing enforcement actions, if pursued vigorously, could cut sulfur dioxide and nitrogen oxide by 2.4 millions tons, according to the report, which was conducted in response to congressional requests.

Administration officials told Congress that their new policy would not undermine the existing cases, emphasizing that changes would not be retroactive.

But the inspector general’s report said the administration’s policy changes had “seriously hampered” those cases, deterring companies from continuing settlement talks with the agency, undermining the agency’s legal arguments in the cases that had reached court, and discouraging the agency from filing more cases.

The report stated that in January, the EPA’s assistant administrator for enforcement and compliance assurance -- its top enforcement official -- told the office of the inspector general that expanding the threshold for modifications to 20% without new pollution controls would “eviscerate the air enforcement program.” The assistant administrator said he had shared his opinion with others in the agency. The report did not name the official, but J. P. Suarez resigned from that job in January.

Three of the nine utilities undergoing litigation have argued that the actions they are being sued for would not violate the new rule, and therefore the agency should drop the cases or the courts should reduce their remedies, according to the report. Soon after the 20% threshold was made public in August 2003, a major utility, which was not named in the report, stopped settlement negotiations with the EPA.

No new enforcement efforts were launched between November 2003 and June 2004 unless the 20% rule was violated.

The report recommended that the EPA’s acting top enforcement official, Thomas V. Skinner, vigorously pursue the ongoing court cases and settlement negotiations and identify any additional coal-fired power plants that violated the old rule.

The EPA announced in June that it was reassessing the 20% threshold and a few other aspects of the rule. However, EPA spokeswoman Cynthia Bergman said the agency was confident that the courts would uphold the agency’s original rule.

She refused to say whether the agency would alter the 20% threshold. Though she did not say the agency would ignore all of the inspector general’s suggestions, Bergman was dismissive of the report.

“We disagree with the premise of their report and that they completely ignored other actions we’re taking to reduce air pollution,” Bergman said of the inspector general’s office.

Environmentalists and their supporters in Congress applauded the findings.

“This report confirms that top political officials at the agency charged with protecting public health had to have known that they were letting power plants off the hook for pollution that shortens lives and triggers asthma attacks,” said John Walke, director of the clean air project at the Natural Resources Defense Council, a national environmental group.

“This report is further evidence that the Bush administration has been trying to gut the enforcement of the Clean Air Act since coming into office,” said Sen. James M. Jeffords (I-Vt.).

Some representatives of the utility industry accused Tinsley of straying from her mission for political reasons.

“I think the inspector general has overstepped her responsibility” by making judgments on policy decisions, said Ed Krenik, a former EPA associate administrator who advises a group of utilities with coal-fired power plants.