In 1999, the US Department of Justice (DOJ), acting on behalf of the Environmental Protection Agency (EPA), filed suit against seven coal-fired electric generating utilities, alleging that they had undertaken various actions at their facilities that violated the New Source Review (NSR) regulations of the Clean Air Act. The largest of the DOJ’s NSR suits was filed against American Electric Power (AEP). The government initially alleged that AEP failed to comply with the NSR provisions by undertaking 160 projects at 11 power plants in Indiana, Ohio, Virginia, and West Virginia.
NERA was retained to prepare and present an analysis of whether projects completed by the Defendant, AEP Companies, should have been anticipated to cause a significant emissions increase and to analyze the methodology and conclusions reached by Plaintiff’s experts. The NERA team compiled the data necessary to conduct an emissions increase analysis for the numerous alleged projects that occurred between 1975 and 2001. The emissions increase analysis used the 1992 WEPCO Rule’s actual-to-future-actual test and implemented the regulatory direction to exclude the emissions the unit was capable of accommodating in the baseline period.
Based on the results of the analysis, NERA prepared an expert report describing the construct of the emissions increase analysis and conclusions based on the results, as well as a rebuttal of the DOJ’s experts’ emission increase approach. NERA’s results showed that, for the vast majority of projects, AEP should not have anticipated that the projects would cause a significant increase in emissions.
The liability phase of the AEP case was heard in July 2005 in the US District Court for the Southern District of Ohio by Judge Edmund Sargus, Jr. In October 2007, AEP reached a settlement agreement with the US EPA.