Wisconsin Electric Power Co. v. Reilly

Under the Clean Air Act (CAA), Congress required the Environmental Protection Agency (EPA) to regulate the emission of air pollutants from new sources by implementing new-source performance standards (NSPS). These NSPS addressed hourly emission rates and applied them to the construction of new sources and the modification of existing facilities that created new or increased pollution. Congress and the EPA defined “modification” to be any physical change in a stationary source that increases the amount of any air pollutant emitted. An emissions increase occurred if emission levels were higher after the modification compared to baseline emissions before the modification. Baseline emissions were to be calculated based on a test conducted under conditions representative of the performance of the facility. Wisconsin Electric Power Company (WEPCO) (plaintiff) operated an electric power plant north of Milwaukee that consisted of five coal-fired steam-generating units. WEPCO determined that components of the five units were severely deteriorating and needed extensive repairs and component replacements to operate at full capacity. The proposed renovation project included taking the units out of service to replace large steel drums, air heaters, and other parts. As required by state law, WEPCO submitted the renovation project proposal to the Wisconsin Public Service Commission. The commission consulted the Wisconsin Department of Natural Resources, which then consulted the EPA. WEPCO provided the EPA with preliminary baseline-emissions figures from 1978 to 1987. The EPA concluded that the project would subject the plant to NSPS regulatory requirements because it constituted a modification and that there would be an increase in emissions from a 1987 baseline for two units. WEPCO appealed the EPA’s determination and alleged the EPA misconstrued the CAA and its own regulations by determining that the project was not routine and by calculating baseline emissions based on 1987 instead of a representative year.