Advisories & Insights

Power companies to spend $29 million to protect air quality on Northern Cheyenne Tribal Reservation

March, 2007

In an example of Indian tribes' increasing influence on development on and off the reservation,[i] proponents of a Montana coal-fired power plant recently agreed to spend approximately $29 million on upgrades to reduce emissions and improve visibility and air quality on the Northern Cheyenne Reservation.[ii] Under the terms of a consent decree filed March 19, 2007 in United States v. PPL Montana, LLC,[iii] project proponent PPL Montana agreed to reduce nitrogen oxide emissions by 55%, or more than 14,000 tons per year - one of the largest emission reductions ever agreed to in EPA's Region 8.

The PSD Permit Condition 7

The case involved the Colstrip plant, the second largest coal-fired power plant west of the Mississippi River.[iv] The plant operates under the terms of a September, 1979 Clean Air Act ("CAA") Prevention of Significant Deterioration ("PSD") permit issued to Montana Power, PPL Montana's predecessor. Shortly before the permit was issued, the Northern Cheyenne Tribe redesignated its reservation as a Class I attainment area, giving the reservation's air quality the level of protection afforded national parks and wilderness areas.[v] The terms of the Colstrip permit reflect the outcome of a CAA dispute resolution process, initiated by the Northern Cheyenne Tribe following the redesignation of its reservation to Class I.[vi]

Condition 7, initially proposed by the Tribe, required Montana Power to control nitrogen oxide ("NO_x") emissions when EPA promulgated requirements for best available retrofit technology ("BART"). In particular, Condition 7 required that, upon EPA's promulgation of BART requirements for NO_x control, Montana Power would review Colstrip Units 3 and 4 for implementation of BART for NO_x control, and submit its analysis to EPA for review and approval.[vii] Failure to implement those control measures would constitute a violation of the PSD permit.[viii]

"Best Available Retrofit Technology"

EPA promulgated its BART regulations the following year, in December, 1980.[ix] Under the BART regulations, facilities emitting pollutants that contribute to visibility degradation must install the best emission controls available as part of state strategies for reducing regional haze. The BART requirement applies to facilities built between 1962 and 1977 that have the potential to emit more than 250 tons a year of visibility-impairing pollution.[x] Under the regulations, states were required to develop and submit state implementation plans that identified facilities subject to BART that were causing or contributing to visibility impairment, and perform a BART analysis to identify what additional air pollution control technologies would be required to reduce the existing visibility impairment.[xi]

The Compliance Order

According to EPA, its promulgation of the BART regulations triggered Montana Power's obligation to perform a BART analysis of Units 3 and 4.[xii] Neither Montana Power, nor PPL Montana after it acquired the Colstrip power plant, submitted a BART analysis of Units 3 and 4 to EPA for review and approval under Condition 7 of its PSD permit.

On December 16, 2003, EPA issued a compliance order to PPL Montana ordering it to comply with all requirements of Condition 7 of its PSD permit.[xiii] In response, PPL Montana asserted (and continues to assert) that its obligation to review Colstrip Units 3 and 4 for implementation of BART for NO_x control, and submit its analysis to EPA for review and approval, has never been triggered.[xiv]

EPA agreed to stay the effectiveness of its compliance order pending settlement negotiations.[xv] Those negotiations have now concluded, with the filing of a consent decree, in which the Northern Cheyenne Tribe intervened.

The Consent Decree

Under the terms of the consent decree, without admitting noncompliance with its PSD permit or violation of the CAA, PPL Montana will agree not to exceed certain NO_x emission limits and to install digital controls, low nitrogen-oxide burners, and overfire air systems to meet those emission limits. PPL Montana will also pay a $50,000 civil penalty, and fund with a payment of $100,000 a project to increase the residential energy efficiency of tribal members' homes.[xvi] PPL Montana must have its NO_x emission controls installed and operating on Unit 3 by July 1, 2007 and by July 1, 2009 for Unit 4, or face additional stipulated penalties.[xvii]

Conclusion

In commenting on the settlement, EPA's Region 8 Regional Administrator, Robert E. Roberts, called it "a great example of what [can be accomplished] when a Tribe, federal agencies and electric utility companies all work together toward a common goal."[xviii] The increasingly sophisticated role tribes play in resource use and development on and off the reservation makes it especially important to understand their rights and capabilities in any development that affects tribal interests.

For more information about this case, or environmental matters affecting tribes, contact Connie Sue Martin.