NCPA - National Center for Policy Analysis

Revised New Source Review Will Help Clean-Air Efforts

October 13, 2003

The aim of President Bush's new source review program is to speed up the modernization of older utilities with newer, cleaner and more fuel-efficient technology. Under the 1977 Clean Air Act's new source review provisions, older utilities and industrial facilities that weren't required to install state-of-the-art pollution reduction equipment were required to install the best available pollution reduction devices if they expanded or substantially modified their power plants.

Older power plants were allowed to perform periodic maintenance, repairs and upgrades without having to file paperwork for or undergo a new source review. However, as the National Academy of Public Administration has noted, regulators were given little guidance concerning what counts as routine maintenance as opposed to a substantial modification or expansion.

As a result, a review is lengthy and the results are unpredictable, making it nearly impossible for industrial facilities to change operations quickly.

  • Although the Environmental Protection Agency lists more than 20,000 facilities potentially subject to new source review, fewer than 250 new source review applications have been filed each year.
  • Plant managers have perverse incentives to keep repairing outdated, dirtier and less efficient units rather than upgrading them or replacing them with newer, cleaner and more fuel-efficient technologies.

The revisions to new source review -- several developed under the Clinton administration -- are intended to provide clear standards for determining whether a particular alteration requires a new source review.

An array of clean air regulations in the coming years will require power plants to make substantial emission reductions regardless of new source review. The reforms simply give companies the flexibility they need to meet those goals in the most cost-effective and competitive manner possible.

Source: Sterling Burnett (NCPA senior fellow), "Is clean-air plan a step back?: NO," Dallas Morning News, October 13, 2003.


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