Regulation and EPA and Emissions and Regulation and Air Quality and Environment and Utilities

Duke Energy wins verdict reversal in clean-air case

October 13, 2010

Duke Energy Corp., the owner of utilities in the U.S. Midwest and Southeast, won reversal of a jury verdict finding that three of its coal-fired power generators in Indiana were violating the federal Clean Air Act.

A federal jury in Indianapolis decided in 2008 that renovations at the plant operated by Duke’s Cinergy unit near the Wabash River were so extensive as to fall under the U.S. Environmental Protection Agency’s New Source Review regulations, requiring installation of the best available technology for controlling smog- and acid rain-causing pollutants.

The renovations complied with Indiana’s plan for implementing the federal Clean Air Act, a three-judge panel of the U.S. Court of Appeals in Chicago said in Tuesday’s ruling. The state’s plan, approved by the EPA in 1982, was still in effect when Cinergy started the work in 1989, the court said.

“The Clean Air Act does not authorize the imposition of sanctions for conduct that complies with a state implementation plan that the EPA has approved,” U.S. Circuit Judge Richard Posner said in the 12-page decision. “The blunder was unfortunate but the agency must live with it.”

The appeals court also said that U.S. District Judge Larry J. McKinney, who had presided over the trial in Indianapolis, had improperly admitted expert testimony proffered by the EPA.

Charlotte, N.C.-based Duke has said the work at the plants constituted routine maintenance and that federal regulations weren’t violated.

“We’re reviewing the decision,” Wyn Hornbuckle, a spokesman for the U.S. Justice Department, said.

Cinergy Corp., which operated the Wabash plant near Terre Haute, was acquired by Duke in 2006. Citing an increase in sulfur dioxide emissions, McKinney last year ordered the units to be shut down because of the violations.

“This vindication is certainly a win for our customers and company and will allow us to utilize the investment that’s been made in the Wabash station to meet the energy needs of the region in a cost-effective manner,” Tim Pettit, a spokesman for Duke, said in an e-mailed statement.

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