Appalachian Power Co. v. E.P.A.

• Decision Date: 13 February 1998
• Docket Number: 97-1091,Nos. 96-1497,s. 96-1497
• Citation: 135 F.3d 791
• Parties: , 328 U.S.App.D.C. 379, 28 Envtl. L. Rep. 20,521 APPALACHIAN POWER COMPANY, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent, Public Service Electric & Gas Company, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 791

135 F.3d 791

46 ERC 1001, 328 U.S.App.D.C. 379, 28

Envtl. L. Rep. 20,521

APPALACHIAN POWER COMPANY, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent Public Service Electric & Gas Company, et al., Intervenors.

Nos. 96-1497, 97-1091.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 6, 1997.

Decided Feb. 13, 1998.

On Petitions for Review of an Order of the Environmental Protection Agency.

F. William Brownell, Washington, DC, argued the cause for petitioners Appalachian Power Company, et al., with whom Henry V. Nickel and Craig S. Harrison, Washington, DC, were on the briefs.

Thomas Sayre Llewellyn, Washington, DC, argued the cause for petitioner Arizona Public Service Company, with whom George Y. Sugiyama, Washington, DC, and Michael B. Wood, Phoenix, AZ, were on the briefs. Munford P. Hall II, Washington, DC, entered an appearance.

Scott J. Jordan and Wendy L. Blake, Attorneys, United States Department of Justice, Washington, DC, argued the cause for respondent, with whom Lois J. Schiffer, Assistant Attorney General, Washington, DC, and Dwight C. Alpern, Attorney, Environmental Protection Agency, were on the brief.

Richard E. Ayres, Washington, DC, John H. Sharp, and John H. Cheatham III were on the brief for intervenor Natural Gas Supply Association, et al.

Harold P. Quinn, Jr., Washington, DC, was on the brief for intervenor National Mining Association.

Andrew J. Gershon and J. Jared Snyder, Assistant Attorneys General, State of New York, New York City, Brian J. Comerford, Assistant Attorney General, State of Connecticut, Farmington, CT, Edward G. Bohlen, Assistant Attorney General, Commonwealth of Massachusetts, Boston, MA, Jeffrey A. Meyers, Assistant Attorney General, State of New Hampshire, Concord, NH, and David Rocchio, Assistant Attorney General, State of Vermont, Montpelier, VT, were on the brief for amici curiae New York, Connecticut, Massachusetts, New Hampshire, and Vermont. Lisa M. Burianek, Assistant Attorney General, State of New York, Albany, NY, entered an appearance.

Before: WALD, HENDERSON, and GARLAND, Circuit Judges.

Opinion for the Court filed PER CURIAM.

PER CURIAM ¹:

This case revisits Title IV of the Clean Air Act ("the Act"), which, inter alia, directs the Environmental Protection Agency ("EPA") to promulgate limits on the emission of nitrogen oxides from various electric utility boilers. In Alabama Power Co. v. EPA, 40 F.3d 450 (D.C.Cir.1994), we invalidated the first set of these emission limits as exceeding EPA's statutory authority. ² We are now presented with a challenge by a number of electric utilities and industry groups ³ to the next group of nitrogen oxides emission limits promulgated under the Act: a more stringent revision of the first set of emission limits and a new set of emission limits for a second group of boilers. This time, we uphold the bulk of the challenged rule, concluding that EPA has not exceeded its authority and cognizant of the deference due to an agency dealing with largely scientific and technical matters. We vacate, however, the portion of the final rule that reclassifies certain retrofitted cell burner boilers as wall-fired boilers and remand it to EPA for reconsideration or a more adequate justification.

I. BACKGROUND

Among the 1990 amendments to the Clean Air Act, 42 U.S.C. § 7401 et seq. (1994), was Title IV, which was designed to reduce the adverse effects of acid deposition (more commonly known as "acid rain") from the atmosphere by limiting the allowable emissions of sulfur dioxide (SO sub2 ) and nitrogen oxides (NO subx ), two principal sources of acidic compounds. See 42 U.S.C. § 7651 (1994) (congressional findings and purposes). Electric utilities such as Appalachian Power contribute to NO subx emissions through the burning of coal, which releases nitric oxide (NO) that reacts with elements in the air to form nitrogen dioxide (NO sub2 ) and other harmful pollutants. In 1990, electric utility emissions constituted approximately 32 percent of total annual NO subx emissions. See Acid Rain Program; Nitrogen Oxides Emission Reduction Program, 61 Fed.Reg. 67,112, 67,112 (1996). In order to encourage a reduction in NO subx emissions, Title IV directs EPA to set NO subx emission limits for two groups of coal-fired electric utility boilers and divides those boilers into two additional groups for the purpose of setting compliance deadlines. A boiler therefore may be a "Group 1 boiler" ⁴ or a "Group 2 boiler," ⁵ depending on its type, and may be a "Phase I boiler" or a "Phase II boiler," depending on when it is subject to emissions limitations. ⁶ There are both Group 1 boilers and Group 2 boilers in each of the compliance phases.

One method of reducing NO subx emissions is to retrofit coal-fired boilers with an emission control device. For Group 1 boilers, such a device commonly consists of what is termed "low NO subx burner technology," which, as we noted in Alabama Power, is an emission control method that limits the amount of oxygen available to react with the nitrogen in the coal and thus reduces the amount of nitrogen oxides formed. Alabama Power, 40 F.3d at 452 n. 3. The emissions from Group 2 boilers are more difficult to reduce, and thus Group 2 boilers are retrofitted with a greater variety of emission controls, including selective catalytic reduction, ⁷ selective non-catalytic reduction, ⁸ gas reburning, ⁹ and plug-in and non-plug-in retrofits. ¹⁰ Each control method can achieve varying levels of NO subx emissions reduction.

As we noted in Alabama Power, Congress intended in enacting Title IV "to tie the obligation of utilities to meet the NO subx emission limit to the use of low NO subx burners." Alabama Power, 40 F.3d at 455. To this end, section 407(b)(1) requires that the Group 1 limits be set at a maximum of 0.45 pounds per million British thermal units ("lb/mmBtu") for tangentially fired boilers and 0.50 lb/mmBtu for dry bottom wall-fired boilers, unless EPA finds that these rates cannot be achieved using "low NO subx burner technology," a term not explicitly defined in the statute. The limits, which were to be set by May 15, 1992, would then apply to Group 1, Phase I boilers starting on January 1, 1995. 42 U.S.C. § 7651f(b)(1). EPA was permitted to revise the Group 1 limits by January 1, 1997, to apply to Phase II boilers if it determined that "more effective low NO subx burner technology [was] available." 42 U.S.C. § 7651f(b)(2). ¹¹ If no such revision were undertaken by January 1, 1997, the limits established for the Group 1, Phase I boilers were to go into effect for the Group 1, Phase II boilers. EPA was also required to set by January 1, 1997, the NO subx emission limits for Group 2 boilers. These limits were to be based "on the degree of reduction achievable through the retrofit application of the best system of continuous emission reduction, taking into account available technology, costs and energy and environmental impacts; and which is comparable to the costs of nitrogen oxide controls" set for the Group 1, Phase I boilers. 42 U.S.C. § 7651f(b)(2).

On March 22, 1994, well past its statutory deadline, EPA promulgated the Group 1, Phase I emission limits. See Acid Rain Program; Nitrogen Oxides Emission Reduction Program, 59 Fed.Reg. 13,538 (1994). The final rule defined "low NO subx burner technology" to include overfire air, another emission control method, as well as low NO subx burners themselves. ¹² We invalidated the rule as inconsistent with EPA's statutory directive, holding that the term "low NO subx burner technology" was an "unambiguous reference to low NO subx burners" that did not permit EPA to include additional control methods. Alabama Power, 40 F.3d at 455. EPA subsequently revised the 1994 regulations on April 13, 1995, to eliminate references to overfire air and established limits of 0.45 lb/mmBtu for tangentially fired boilers and 0.50 lb/mmBtu for wall-fired boilers, limits identical to those provided for in the statute. See 60 Fed.Reg. at 18,763; 42 U.S.C. § 7651f(b)(1). To account for the delay in promulgation, the compliance date for Group 1, Phase I boilers was moved to January 1, 1996. 60 Fed.Reg. at 18,763.

The rule at issue here, issued on December 19, 1996, promulgates the next set of emission limits under the statutory scheme: the revised NO subx emission limits for Group 1, Phase II boilers as well as the NO subx emission limits for Group 2 boilers. 61 Fed.Reg. at 67,112. EPA revised the Group 1 limits after determining, as required by section 407(b)(2), that boilers with low NO subx burners were achieving lower emission levels than the limits promulgated in 1995 and therefore that more effective low NO subx burner technology was available. (This determination was the result of a regression analysis in which EPA constructed equations capturing the reduction achieved by Group 1, Phase I boilers and applied these equations to the uncontrolled emission rates of Group 1, Phase II boilers.) In establishing the Group 2 emission limits, EPA interpreted its statutory directive to require a comparison of the cost-effectiveness of Group 2 controls and low NO subx burner technology and thus promulgated emission limits for Group 2 boilers based on control technologies that were shown to be as cost-effective in reducing NO subx emissions as low NO subx burner technology. In addition, relying on section 407(a), which states that a boiler becomes an "affected unit" for purposes of the NO subx emission limits at the same time it becomes an affected unit for purposes of the SO sub2 emission limits (established elsewhere in Title IV), EPA set January 1, 2000, as the date by which compliance with the new limits must be achieved. ¹³ Finally, EPA determined that certain retrofitted cell burner boilers should be reclassified from Group 2 to Group 1, thereby subjecting them to the stricter emission limits applicable to the latter group.

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