Wabash Cannonball: 7th Circuit Opinion Limits Long-standing EPA Method for Calculating Emission Increases

In an Oct. 12, 2010, decision, the 7th Circuit Court of Appeals ruled inadmissible EPA testimony calculating emissions increases as a result of equipment replacement projects, and reversed a jury verdict against Cinergy for alleged New Source Review (NSR) violations at its Wabash, Ind., power plant. U.S. v. Cinergy Corporation, ___F3rd. ___, 2010 LEXIS 20994 (7th Cir. 2010). This decision undermines EPA's long-standing approach to NSR enforcement against non-baseload power plants, and may provide a basis to challenge EPA's overall methodology for predicting emissions increases at other types of facilities.

The case grew out of an NSR enforcement action brought by EPA against a number of Cinergy facilities in 1999. (Cinergy was acquired by Duke Energy in 2006.) EPA alleged that Cinergy and its predecessor companies performed numerous equipment replacement projects at their facilities resulting in increased emissions, and that these projects were therefore modifications