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2 April 2007 -- Duke Energy said it would continue to defend itself in the lower courts after the U.S. Supreme Court ruled in a case involving New Source Review.
The justices ruled against Duke Energy Corp. in a lawsuit brought by the Clinton administration, part of an enforcement effort targeting more than a dozen utilities.
The justices ruled that the 4th U.S. Circuit Court of Appeals in Richmond, Va., overstepped its authority by implicitly invalidating Environmental Protection Agency regulations in a way that favored Duke. The case now returns to the lower courts.
The federal enforcement program is aimed at reducing power plant emissions of nitrogen oxide and sulfur dioxide.
Duke Energy said it will continue to defend itself in the New Source Review or "NSR" case in the lower courts .
Duke said the Supreme Court's opinion overturned rulings rendered unanimously by the U.S. District Court and the 4th Circuit Court of Appeals that found an hourly emissions standard is appropriate when applying NSR standards. The lower courts ruled that work commonly done to maintain and increase the efficiency at Duke Energy's Carolinas coal plants from 1988 to 1999 did not increase the plant's hourly emissions and therefore should not be subject to NSR review.
Duke Energy in a statement said the U.S. Supreme Court considered only whether an hourly emissions standard was appropriate to use when triggering NSR and did not review what constitutes routine repair and replacement activities under NSR.
"We are disappointed the Supreme Court overturned the lower court rulings in our favor on this matter," said Marc Manly, Duke Energy group executive and chief legal officer. "We continue to believe we have solid defenses against the government's claims and will show in the lower courts that our power plant projects were not subject to NSR."
The Supreme Court case stems from an effort that began in 1999, when the EPA filed a number of enforcement actions across the industry and re- interpreted NSR rules to eliminate the trigger as to what constitutes a "major modification" at a power plant. The EPA contended that NSR can be triggered by common projects that maintain a facility's operating capabilities but which do not increase the facility's emission rate.
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