On September 30, 2019, the United States District Court for the Eastern District of Missouri, Eastern Division, issued an Opinion and Order setting forth the remedy required for Ameren Missouri’s violation of the Clean Air Act’s Prevention of Significant Deterioration (“PSD”) program. United States v. Ameren Missouri, No. 4:11-CV-77, Rec. Doc. 1122 (E.D. Mo. Sep. 30, 2019). Through the enforcement action, the EPA alleged that certain work done at Ameren’s Rush Island coal-fired power plant in 2007 and 2010 required a PSD permit and the installation of Best Available Control Technology (“BACT”) to control sulfur dioxide (“SO2”). The EPA further alleged that the failure of Ameren to apply for such a permit and install BACT resulted in substantial excess emissions from the Rush Island facility. The case had been bifurcated into separate liability and remedy phases, with the court finding that Ameren was liable for the alleged PSD violations on January 23, 2017. The most recent ruling focused on the remedy for such violations.

In addition to various ancillary factual, procedural, and legal determinations, the court focused on evaluating BACT for SO2 emissions. The court applied the traditional five-step analysis to determine BACT,[1] “the maximum degree of reduction of [SO2]…which the permitting authority, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such facility.” Slip opinion, p. 28 (citing 42 U.S.C. § 7479(3)). Characterizing the BACT analysis as a “top-down” evaluation, the court determined that, if the option providing the highest level of control was “achievable” after considering the energy, environmental, and economic impacts related to that option, the analysis stops and that control is BACT. Id. at p. 30.

The court noted that there was no dispute concerning the first three steps of the analysis: identification of control options, elimination of technically infeasible options, and ranking of options by effectiveness.  The controversy concerned step 4 of the BACT process: evaluation of alternatives considering energy, environmental and economic factors. Ameren rejected wet Flue Gas Desulfurization (“FGD”) because it was not as cost effective as another control option. While the court noted that cost is a consideration in the process, the court’s interpretation of the process was that the BACT analysis “is not a search for the most cost-effective controls; nor is it a cost-benefit analysis.” Id. at p. 31. In reaching this interpretation, the court relied heavily on a statement in the EPA’s Draft NSR Workshop Manual that, for similar sources, it is presumed that cost and other impacts borne by one source may be borne by another. Id. Accordingly, the court found that an available technology is BACT unless it is rejected as being economically infeasible or is rejected due to adverse energy or environmental impacts. Id. at pp. 56-57, p.156,

Applying this approach, the court determined generally that some form of FGD scrubber (either wet or dry) is BACT for SO2 emissions based largely on the use of FGD scrubbers at other coal-fired power plants. Specific to the Rush Island facility, the court held that wet FGD scrubbers should have been installed as BACT for SO2 emissions. Id. at pp. 57 & 59-60. In so holding, the court rejected reliance on the incremental cost-effectiveness of two competing control technologies, a comparison of cost in dollars per ton of emission reductions of each technology, stating that incremental cost-effectiveness should only be considered when competing technologies have similar levels of effectiveness. Id. at pp. 41-42 & 44-45. Instead, the court focused on whether Ameren was capable of incurring the cost of the most effective control, wet FGD. Id. at pp. 55-56 & 62, ¶ 223 (“With respect to economic impacts, Ameren does not dispute that it can afford FGDs at Rush Island, and it presented no evidence that installing FGDs would otherwise impose an undue financial burden on the company.”) (see also pp. 109-13 analyzing Ameren’s financial resources and ability to obtain financing). Accordingly, the court ordered Ameren to apply for a PSD permit which proposes wet FGD as BACT for SO2 emissions.

The court further determined that Ameren’s failure to install scrubbers at Rush Island resulted in 162,000 tons of excess SO2 emissions through the end of 2016, continuing at a rate of approximately 16,000 tons per year until scrubbers are installed. Id. p. 58. To address these excess emissions, the court ordered Ameren to install a different control technology, dry sorbent injection (“DSI”), at a separate, nearby facility not subject to the lawsuit to reduce SO2 emissions from that facility. The court held that it had authority to reach beyond the Rush Island facility at issue because, under the CAA, it had the “authority to order a full and complete remedy for the harm caused by Ameren’s violations, and in doing so may go beyond what is necessary for compliance with the statute at Rush Island.” Id. at p. 149 (internal citations omitted). Because the installation of DSI at another facility in the same general area would benefit the impacted population by reducing SO2, the court found this remedy to be narrowly tailored to the harm suffered. Id. at p. 150. Further, the court found that this additional requirement was not an impermissible penalty because it required “emissions reductions up to, but not surpassing, the excess emissions from Rush Island.” Id. at p. 151.

[1] The five steps applied by the court include (1) identifying all available control technologies for reducing the target pollutant; (2) eliminating those which are not technically feasible; (3) ranking the technically feasible technologies in order of effectiveness at reducing emissions; (4) evaluating the technologies based on energy, environmental, and economic impacts and other costs to determine the most effective technology that is achievable; and (5) selecting an emission limit based on how the technology has performed at other sources. Id. at pp. 29-30.