New Source Review

Schiff Hardin has significant, ongoing experience with the Clean Air Act's "New Source Review" programs, including the federal Prevention of Significant Deterioration and Non-Attainment New Source Review programs and the so-called “minor” new source review programs.

Businesses face complex applicability and implementation questions muddied by inconsistencies in the relevant statutory and regulatory provisions as well as a host of agency "guidance," court decisions, applicability determinations and recent rulemaking activities. Significant enforcement efforts by U.S. Environmental Protection Agency (EPA) and other plaintiffs in the last several years have raised the visibility of the programs and raised the stakes for businesses because the ramifications of non-compliance may include penalties, requirements to retrofit expensive pollution controls, and the elimination of allowance trading options. Given the complex, evolving New Source Review landscape, Schiff Hardin's comprehensive experience can guide you through the complexities.

Numerous clients have benefited from our understanding of and experience working with the key applicability, implementation and enforcement aspects of these programs. Our wide range of in-depth experience includes:

Defending companies against New Source Review enforcement actions by federal and state agencies and citizen groups.
- Our significant New Source Review enforcement action experience includes the defense of two Illinois electric companies in an enforcement action that alleged several "modifications" across multiple operating units over a span of more than ten years, allegedly triggering the modification provisions of both the New Source Review and New Source Performance Standard programs.
- We defended the companies through a complex web of discovery and motions over several years, including obtaining a favorable ruling on the applicability of the statute of limitations.
- The matter culminated in a month-long trial, which included issues such as whether the projects were "routine" and whether the projects in questions were or should have been expected to cause an increase in emissions.
- So far, this is the only utility New Source Review enforcement case to be fully tried on liability issues, including presenting an affirmative response to the government’s theories on such major issues as "routine" and the methodology for determining emission increases. The matter settled after trial but before decision by the court.
Counseling clients on program applicability with respect to true "new" sources, physical and operational changes — potential "modifications" — at existing facilities and restarts of existing facilities that have been shutdown for varying periods of time, including methods by which applicability can be avoided, such as by the use of synthetic minor permits, emission netting and emission change assessments.
Developing of protocols and strategies to screen projects for and to train employees concerning potential New Source Review applicability.
Developing of programs to implement the so-called 2002 "reform" rules, including emission projections, submissions and assessments related to changes at existing facilities. These projections and assessments typically are complex and require an in-depth understanding of the relevant regulatory requirements and the current and expected operations of the facility in question, including coordination with the client’s financial, operational and environmental personnel and consultants.
Seeking and obtaining "non-applicability" determinations from regulatory agencies, including one for the restart of a facility that had not operated for over two years.
Obtaining construction permits for "modification" activities and counseling clients concerning compliance with related substantive requirements, including identification of controls and activities that constitute "Best Available Control Technology" and compliance with emission offset requirements.
Assisting companies with responses to information requests from regulatory agencies targeting potential "modification" activities at existing facilities, including implementing appropriate timelines for and limitations on the scope of responses and ensuring the protection of confidential information.
Negotiating settlements of New Source Review enforcement actions.
Assisting clients concerning New Source Review issues that may arise in connection with Title V operating permits, such as the implementation of consent decree conditions and the possible inclusion of New Source Review compliance schedules in such operating permits. Our client assistance in this area has included responding to state and citizen group objections to Title V permits based upon alleged failures to include required compliance schedules and appealing Title V permits that improperly implement the terms of a New Source Review consent decree.
Drafting corporate transaction documents involving existing facilities to effectively allocate New Source Review responsibilities, and counseling clients concerning the allocation of such responsibilities under historic contracts.

New Source Review comprises a set of complex programs that are challenging to understand and implement and impose potentially significant costs if triggered or violated. Steering an appropriate course through the complex applicability and implementation issues under these programs requires experience and intimate knowledge of the regulations and various ongoing developments impacting the programs, such as key decisions in pending enforcement cases and ongoing rulemaking developments. Schiff Hardin has that critical experience and knowledge.