This case addressed the Clean Air Act (CAA) and two of its programs, Prevention of Significant Deterioration (PSD) and New Source Performance Standard (NSPS).

The Environmental Defense Fund (EDF) is a nonprofit organization that works to reduce threats to the earth's environment that impact the climate, ocean, and ecosystems.

[1] Duke Energy Corporation is a large-scale power company and utility in the United States that supplies and delivers electricity to nearly 7.4 million customers, covering a 50,000 square mile service territory.

The company's electricity generation portfolio is composed predominantly of natural gas, nuclear, oil, and coal-fired power, as well as some renewable energy.

Objective of the regulation is to "protect human health, welfare and the environment by maintaining and improving the quality of the air through the development of standards".

If there is a "modification," a physical change in the source's method of operation would increase the emission rate of pollution expressed in kilograms per hour (kg/h).

The PSD is part of the New Source Review program and was added to the CAA in 1977 with the goal of not allowing the good air to deteriorate, since it is only required for areas of attainment.

"[6] In 1988, Duke Energy Corporation began a series of improvements to its eight power plants in order to modernize its facilities, taking twelve years to complete.

[9] On December 22, 2000, the EPA filed suit against Duke Energy Corporation in District Court, for the 29 alterations to their power plants that had been performed.

Duke argued that their improvements did not fall within the scope of the PSD program because the power plants' hourly emissions rate would not be altered.

Environmental Defense, on the other hand, believed that by improving the plants, Duke would be able to run for longer hours, causing the "total annual emissions" to increase.

[8] Environmental Defense argued that Duke Energy had violated the CAA under PSD by failing to receive permits to conduct modifications to their power plants.

Duke argued that if the Fourth Circuit could not interpret regulations in this manner, it would present "serious constitutional questions regarding the availability of judicial review" by keeping courts from carrying out their duty to assert the law.

The court also acknowledged that this flexibility does not allow the EPA "unbridled discretion" to interpret the Clean Air Act amendments freely.

Duke's failure to obtain a PSD permit before performing its modifications represented an ongoing violation for statute of limitations purposes.

Because of this, the District Court held that there had been no net increase of emission and Duke had not violated the PSD regulation and so, had not needed to acquire a permit for a major modification.

[6] Rowan Companies Inc. v. United States is a related case in that it also concerns interpreting the same single term in two different regulations.

The Court concluded that "EPA's construction need do no more than fall within the limits of what is reasonable, as set by the Act's common definition.

The decision shows that the Supreme Court is more likely to interpret environmental laws in line with the legislation's objective rather than following the order of constricted rules of "statutory construction".