Following a bench trial, a federal district court in the Sixth Circuit decided that the replacement of the economizer and superheater sections at a coal-fired power plant fell within the routine maintenance, repair, and replacement (RMRR) exception to PSD regulations. The decision creates a split of authority within the Sixth Circuit.
The district court in Nat’l Parks Conservation Assn v. TVA considered four factors commonly used to determine whether a project qualifies under the RMRR exception: (1) the nature and extent of the projects; (2) the purpose of the projects; (3) the frequency of the projects; and (4) the cost of the projects. The court concluded that the replacements were not extraordinary, despite the size of the projects, because other previous projects at the plant were similar in scope and cost. Furthermore, the court determined that the purpose of the projects was to reduce the number of forced outages, a common maintenance objective. Although the projects extended the life of some components of the facility by 20 years, the court ruled that the life extension was incidental to the primary purpose of the projects. The court also pointed to the routine nature of such replacements in the power plant industry even though the specific projects occurred only once at an individual facility. Finally, although the projects cost several million dollars each and were identified as capital expenditures instead of maintenance expenditures for accounting purposes, the court determined that it was a small fraction of TVA’s budget and that the costs were not uncommonly high for that facility.
While the decision is a district court decision in the Sixth Circuit, it may have a significant impact on NSR/PSD litigation. Unlike other decisions that included only a cursory analysis of facts, the TVA decision follows a full bench trial that thoroughly analyzed all facts in the case. Thus, other district courts may find it persuasive, and the decision may impair EPA’s and citizen groups’ abilities to succeed in NSR enforcement litigation when a power plant can demonstrate RMRR facts.