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GAO Supports Public Citizen Report that EPA Staff Feared New Clean Air Rule Would Undercut Enforcement

Oct. 22, 2003

GAO Supports Public Citizen Report that EPA Staff Feared New Clean Air Rule Would Undercut Enforcement


Three Senators Call for Investigation into “New Source Review” Rulemaking

WASHINGTON, D.C.—The General Accounting Office (GAO) today issued a report that confirms Public Citizen’s findings that U.S. Environmental Protection Agency (EPA) enforcement staffers warned Bush EPA political appointees that revisions to an important clean air regulation would undermine government lawsuits aimed at cleaning up coal-fired plants – contrary to assurances that one EPA appointee made to Congress.

Three senators responded to the GAO report by demanding that the EPA Inspector General investigate the testimony made to their committees and EPA actions that led to development of a rule that weakens clean air requirements for electric utilities. The demand came from U.S. Sens. Jim Jeffords (I-Vt.) and Joe Lieberman (D-Conn.) of the Senate Environment and Public Works Committee, and Patrick Leahy (D-Vt.), of the Senate Judiciary Committee. Jeffords and Leahy are ranking members of those committees.

If the Inspector General’s evaluation shows that the EPA made untrue statements to Congress, the Department of Justice has an obligation to enforce the law,” said Public Citizen President Joan Claybrook. “This is the only way to discourage this kind of rogue behavior.”

On Oct. 10, Public Citizen reported that Jeffrey Holmstead, a Bush appointee serving as EPA’s assistant administrator for Air and Radiation, told the two U.S. Senate committees that the agency’s enforcement staff had concluded that existing lawsuits against electric utilities would not be jeopardized by proposed changes to the New Source Review (NSR) rule. That rule requires power plants and industrial facilities undergoing major modifications to install modern air pollution controls. As internal EPA documents and statements from two former EPA enforcement officials proved, however, the staff had informed Holmstead and then-EPA Administrator Christine Todd Whitman that the proposed NSR rule seriously endangered pending enforcement cases.

The GAO report issued today concluded that, “In response to the proposed rule, the [EPA enforcement] staff determined that the revisions EPA was considering could adversely affect the cases.”

A document recently obtained by Public Citizen confirms that six weeks before Holmstead testified, he was warned by the head of the EPA enforcement office that “there are a number of proposals for New Source Review reform that could undermine current enforcement activities.”

“The Bush administration twisted a key policy assessment in order to weaken rules governing an industry whose members contributed millions of dollars to George W. Bush’s 2000 election campaign,” said Frank Clemente, director of Public Citizen’s Congress Watch. “The fact that electric utilities got the rule they wanted is simply a payback – just like their representation on the Department of Energy’s transition team and the free access they had to Vice President Cheney’s secret energy task force.”

Such access resulted in an NSR rule, finalized in August 2003, that had no relationship to recommendations made by EPA career staffers. The GAO report found that EPA enforcement staff had concluded that 95 to 98 percent of the modifications to coal plants at issue in the enforcement cases – modifications the EPA and the Department of Justice had determined years earlier were clear-cut violations of the Clean Air Act – would be exempt from NSR if the rule excluded modifications below a certain cost threshold. Despite this analysis, top EPA officials set the threshold at 10 to 20 times the level cited by the staff.

The GAO report said that concerns among EPA staff about the fate of existing lawsuits stemmed from a fear that the new NSR rule “could affect judges’ decisions on remedies in these cases, especially regarding installation of pollution controls, affecting expected emission reductions” – reductions that could cut power plant emissions by 50 percent annually, according to EPA estimates.

The states and companies facing these enforcement actions include: Alabama: Southern Co. (also has TVA plants); Florida: Tampa Electric Co. (Tampa); Georgia: Southern Co. (Atlanta); Indiana: Vectren/Southern Indiana (Evansville); Illinois: Dynegy (Houston) and Illinois Power (Decatur); Kentucky: TVA; New Jersey: PSEG (Newark); North Carolina: Duke Energy Corp. (Charlotte); Ohio: American Electric Power (Columbus), Cinergy (Cincinnati) and First Energy (Akron); South Carolina: Duke Power; Tennessee: TVA (Knoxville); Virginia: Dominion Virginia Power (Richmond); West Virginia: American Electric Power; and Wisconsin: Wisconsin Electric (Milwaukee).

Click here to read Public Citizen’s Oct. 10 report, EPA’s Smoke Screen: How Deception of Congress, Campaign Contributions and Political Connections Gutted a Key Clean Air Rule.