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Bench Report: Top Ten Legal Decisions of 2010

2010 Law & Lawyers Report

Fortnightly Magazine - November 2010

Plans to Reduce interstate Transport of Fine Particulate Matter and Ozone, EPA R.I.N. 2060-AP50, issued July 6, 2010, 75 Fed. Reg. 45,210, Aug. 2, 2010.)

 

8. Violator Beware

Violations aren’t “criminalized” under FERC’s new penalty guidelines, but nor are they entirely “civil.”

Civil penalties of up to $1 million per day are nothing to sneeze at. Yet, after taking comments on a policy statement released in March, the FERC issued revised penalty guidelines in mid-September, emphasizing that it will enforce penalties based on the same factors it has always used to focus on the seriousness of a given violation: that is, the pecuniary loss or gain, the harm and risk of harm, and intent.

Also, by patterning its penalty guidelines on federal sentencing guidelines, FERC insists that it will be able to consider many of the same culpability factors it has always considered, including prior violations, involvement by senior management, efforts at compliance, self-reporting, and cooperation.

Nevertheless, FERC says that in assessing penalties for reliability violations, it will no longer attempt to assess the monetary value of resulting losses of load, but instead will measure the seriousness of a given reliability violation based upon the quantity of load lost, in megawatt-hours.

For misrepresentations or false statements, FERC will find violations only for intentional acts, or acts carried out with a reckless disregard for truth.

The modified penalty guidelines will apply to all future violations and any pending investigation where FERC’s enforcement staff hasn’t entered into settlement negotiations.  (Enforcement of Statutes, Orders, Rules and Regulations, Docket No. PL10-4, Sept. 17, 2010, 132 FERC ¶61,216.)

9. Greenhouse Two-Step

EPA’s “Tailoring Rule” Begins GHG Control with the Biggest Emitter s.

In an odd twist, the EPA says its greenhouse gas (GHG) “Tailoring” rule, issued in May, represents regulatory relief for small-scale emitters that otherwise would be forced to comply, rather than a regulatory burden for larger-volume GHG emissions sources.

In other words, the final rule tailors the requirements of  Clean Air Act  permitting programs to limit the number of facilities that otherwise would be covered.

Without such tailoring, says EPA, the New Source Review (NSR) Prevention of Significant Deterioration (PSD) and Title V requirements that would apply as of Jan. 2, 2011—as triggered by emissions rates at the 100 or 250 ton-per-year levels stated in the  Clean Air Act —would simply overwhelm the resources of permitting authorities and severely impair the functioning of the programs. Thus, the EPA has designed a two-step phase-in program.

In Step One, covering Jan. 2 through June 30, 2011, NSR PSD permitting for greenhouse gas emissions will be triggered only by those newly constructed or modified sources that post significant increases in emissions of a pollutant other than GHGs. For instance, if a project exceeds a PSD threshold for NO x or SO 2 emissions, then it also will trigger the GHG permitting process.

In Step Two, covering the two-year period July 1, 2011 to June 30, 2013, the EPA will apply NSR PSD permitting requirements to actual GHG emitters—new construction projects that emit GHG emissions of at least