Startup, Shutdown, Malfunction Update - August 8, 2017
In an order issued on June 26, 2017, the Supreme Court denied certiorari without comment in a suit seeking to overturn an Obama administration policy that eliminated the Startup, Shutdown, Malfunction (SSM) exemption. This policy allowed exemptions for emissions in excess of permitted limits during SSM periods. There has been ongoing litigation over the SSM exemption for several years. In 2008, the D.C. Circuit ruled in Sierra Club v. EPA that there can be no blanket exemptions for periods of SSM. Then, in 2014, the D.C. Circuit held in Natural Resources Defense Council v. EPA that EPA has no authority to create an affirmative defense for companies that violate permit limits during periods of SSM. As a result of these decisions, the Obama administration began to eliminate all SSM blanket exemptions and affirmative defenses. Currently, EPA is employing case-by-case enforcement discretion to determine whether to bring an enforcement action against a source that violates a permit limit during an SSM period.
This denial leaves another D.C. Circuit case, Florida Electric Power Coordinating Group, Inc., et al v. EPA, et al, as the lead case in the consolidated litigation testing EPA’s SSM policy. This case involves a challenge by a number of industrial groups and states to EPA’s state implementation plan (SIP) call rule. This rule required 36 states to remove SSM exemptions from their state SIPs. The Obama administration argued this rule was necessary to comply with the 2008 and 2014 D.C. Circuit decisions. However, the rule’s challengers argue EPA went too far in extending these holdings to state SIPs. This litigation is currently on hold as President Trump’s EPA is reviewing the state SIP call rule.