An electric utility was alleged by U.S. Environmental Protection
Agency (EPA) to have made major modifications to its facility,
resulting in excess emissions, without complying with Clean Air Act
(CAA) permitting requirements. Fortunately, the utility succeeded
in obtaining insurance coverage for the costs of defending
EPA's claims. In light of EPA's continued enforcement
priority focus on CAA New Source Review claims against utilities,
this available insurance back-stop should be welcome news for the
regulated community.
The Big Cajun II coal-fired electric steam generating plant
operated by Louisiana Generating, a subsidiary of NRG Energy,
received notices of violation (NOVs) from EPA in 2005 and 2006. The
EPA lawsuit was filed in February 2009, and Louisiana DEQ
intervened. The EPA lawsuit alleged that "major
modifications" were performed requiring a prevention of
significant deterioration (PSD) air permit, and also that the plant
modifications failed to limit
