On April 2, 2007, the Supreme Court ruled unanimously that the definition of the word “modification” can be interpreted in different ways by the EPA under separate Clean Air Act enforcement regulations with different ways of implementation. It overturned a Fourth Circuit ruling that required EPA to conform the interpretation of “modification” in regulations for the Prevention of Significant Deterioration (PSD) to the interpretation of that word under the New Source Performance Standards (NSPS) regulations.
The NSPS regulations apply when a stationary source is modified so that its hourly emissions rate increases. The PSD regulations require a permit when a modification of a stationary source is a major one and only when it would increase the actual annual emission of a pollutant above the actual average for the two prior years.
The Supreme Court upheld EPA’s decision to impose permit requirements under the 1980 PSD regulations that may apply even though a change to a major stationary source does not increase an emitting unit's hourly emissions rate. It ruled that an enforcement court may not implicitly invalidate the 1980 PSD regulations unless it is shown that review of the underlying issue could not have been obtained in accordance with the normal Clean Air Act judicial review procedures.
In terms of impact, this ruling is limited to an interpretation of the 1980 PSD rules, which have since been amended in 2002. In the rule amendments, EPA clearly indicated that it would use for the future an annual emissions test for PSD and provided specific standards that govern application of that test. Thus, the potential scope of impact for this ruling is limited to enforcement for actions that may have occurred under the prior version of EPA's rules.
The NSR Manufacturers Roundtable, including the NAM, participated in this case in the Fourth Circuit and in the Supreme Court.