FEDERAL COURT AFFIRMS LOWER COURT DECISION OKAYING POLLUTION INCREASES AT EIGHT DUKE ENERGY POWER PLANTS

Ruling Avoids Key 'Routine Maintenance' Issue; Does Not Fully Adopt Industry Position on Pollution Increases

WASHINGTON (June 16, 2005) -- Late yesterday, a U.S. Court of Appeals upheld a lower court ruling that Duke Energy did not violate the Clean Air Act when eight of its power plants increased emissions without installing modern pollution controls. The federal court ruled that only increases in the hourly emissions rate would trigger new control requirements under the new source review provision of the law. The plaintiffs in the case, the Environmental Protection Agency and several public health organizations, had argued that the requirement is triggered when a plant construction project increases annual emissions by, for instance, enabling the plant to operate more hours each year.

The court that issued the ruling, the U.S. Court of Appeals for the Fourth Circuit, oversees federal trial courts in five southern states: Maryland, West Virginia, Virginia, North Carolina and South Carolina. The U.S. District Court for the Middle District of North Carolina issued the original ruling.

"We disagree with the court's view that power plants can boost their pollution dramatically and get away with it," said John Walke, director of the Clean Air Program at NRDC (Natural Resources Defense Council). "Federal court decisions in similar cases in the Midwest contradict this ruling and will not be affected by it. We are confident that future decisions will agree with the Midwest rulings and protect public health."

Although the court ruled for Duke Energy, it did not adopt the company's position that only an increase in a plant's maximum hourly capacity to pollute requires cleanup. That interpretation would have allowed even more massive increases in actual pollution to escape control.

Duke Energy also had argued that EPA's "routine maintenance" exemption from the Clean Air Act's pollution control requirement was broad enough to cover even once-in-a-lifetime refurbishments like the ones the company had undertaken at its plants. The court did not rule on this issue, and therefore did not adopt the company's controversial interpretation.