249 F.3d 1032 (D.C. Cir. 2001), 99-1200, Appalachian Power Co. v. Environmental Protection Agency

Docket Nº:99-1200 Consolidated with 99-1205, 99-1206, 99-1246, 99-1266, 99-1285, 99-1289, 99-1291, 99-1292, 99-1293, 99-1295, 99-1299, 99-1300, 99-1301, 99-1303, 99-1304, 99-1306, 99-1307, 00-1013, 00-1021, 00-1022, 00-1024, 00-1038, 00-1042, 00-1050, 00-1071, 00-1074, 00-1077, 00-1083, 00-1087, 00-1088, 00-1096, 00-1097, 00-1098, 00-1099, 00-1102, 00-1103,
Citation:249 F.3d 1032
Party Name:Appalachian Power Company, et al., Petitioners v. Environmental Protection Agency, Respondent Commonwealth of Pennsylvania, Department of Environmental Protection, et al., Intervenors
Case Date:May 15, 2001
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 1032

249 F.3d 1032 (D.C. Cir. 2001)

Appalachian Power Company, et al., Petitioners

v.

Environmental Protection Agency, Respondent

Commonwealth of Pennsylvania, Department of Environmental Protection, et al., Intervenors

No. 99-1200 Consolidated with 99-1205, 99-1206, 99-1246, 99-1266, 99-1285, 99-1289, 99-1291, 99-1292, 99-1293, 99-1295, 99-1299, 99-1300, 99-1301, 99-1303, 99-1304, 99-1306, 99-1307, 00-1013, 00-1021, 00-1022, 00-1024, 00-1038, 00-1042, 00-1050, 00-1071, 00-1074, 00-1077, 00-1083, 00-1087, 00-1088, 00-1096, 00-1097, 00-1098, 00-1099, 00-1102, 00-1103, 00-1105, 00-1106, 00-1107, 00-1108, 00-1109, 00-1110, 00-1113, 00-1114, 00-1119, 00-1122, 00-1123, 00-1125, 00-1128

United States Court of Appeals, District of Columbia Circuit

May 15, 2001

Argued December 15, 2000

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[Copyrighted Material Omitted]

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On Petitions for Review of Orders of the Environmental Protection Agency

Norman W. Fichthorn, James C. Gulick, Special Deputy Attorney General, State of North Carolina, Lisa M. Jaeger, Brian J. Renaud and Anthony C. Sullivan argued the issues for petitioners. Counsel appearing with them on the briefs were Andrea Bear Field, Mel S. Schulze, James D. Elliott, Allison D. Wood, Grant Crandall, Eugene M. Trisko, Jeff F. Cherry, Kathy G. Beckett, Scott D. Goldman, David M. Flannery, Jeffrey J. Lettrich, Gale R. Lea, Charles S. Carter, Deborah Ann Hotel, Theodore L. Garrett, Michael D. Hockley, Terry W. Schackmann, Robert M. Sussman, Claudia M. O'Brien, Scott H. Segal, Charles E. Dunn, Rhonda Lee Ross, Robert L. Brubaker, Andrew S. Bergman, Alan H. McConnell, Kurt E. Blase, J. Jeffrey McNealey, Michael F. Easley, Attorney General, Grayson G. Kelley, Senior

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Deputy Attorney General, Thomas J. Ziko and J. Allen Jernigan, Special Deputy Attorneys General, Marc D. Bernstein, Assistant Attorney General, State of North Carolina, James M. Hauck, Gordon Alphonso, Stuart Pierson, Geoffrey K. Barnes, Scott T. Kragie, Lisa G. Dowden, Matthew W. Ward, Kathy G. Beckett, Scott Goldman, Eliot Spitzer, Attorney General, Peter H. Schiff, Senior Counsel, J. Jared Snyder and Michael J. Myers, Assistant Attorneys General, State of New York, Thomas F. Reilly, Attorney General, William L. Pardee, Assistant Attorney General, Commonwealth of Massachusetts, M. Dukes Pepper, Jr., Commonwealth of Pennsylvania, Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, Alan F. Hoffman, Assistant Attorney General, State of Michigan, John G. Horne, II, Jack B. Bates, Susan Rose Green, Commonwealth of Kentucky, Betty D. Montgomery, Attorney General, Bryan F. Zima, Assistant Attorney General, State of Ohio, Mark L. Earley, Attorney General, Steward T. Leeth, Assistant Attorney General, Commonwealth of Virginia, Karen M. Freeman-Wilson, Attorney General, Steven D. Griffin, Deputy Attorney General, State of Indiana, Thomas H. Zerbe, Office of Legal Services, State of West Virginia, Bill Pryor, Attorney General, Prudence A. Cash-Brown, Assistant Attorney General, State of Alabama. Thomas Y. Au and Gene E. Godley entered appearances.

David J. Kaplan, Norman L. Rave, Jr. and Scott Williams, Attorneys, U.S. Department of Justice, argued the cause for respondents. With them on the briefs were Lois J. Schiffer, Assistant Attorney General, Alexandra Teitz, Howard Hoffman and Dwight C. Alpern, Attorneys, U.S. Environmental Protection Agency. Christopher S. Vaden, Attorney, entered an appearance.

William L. Pardee, Assistant Attorney General, Commonwealth of Massachusetts, argued the cause for intervenors Commonwealth of Massachusetts, et al. and amicus curiae State of New Jersey. With him on the briefs were Thomas F. Reilly, Attorney General, Commonwealth of Massachusetts, Eliot Spitzer, Attorney General, J. Jared Snyder, Assistant Attorney General, State of New York, Richard Blumenthal, Attorney General, Richard F. Webb, Assistant Attorney General, State of Connecticut, M. Dukes Pepper, Jr., Commonwealth of Pennsylvania, Philip McLaughlin, Attorney General, Maureen D. Smith, Assistant Attorney General, State of New Hampshire, William H. Sorrell, Attorney General, Dianne H. Sanford, Assistant Attorney General, State of Vermont, Sheldon Whitehouse, Attorney General, Tricia Jedele, Assistant Attorney General, State of Rhode Island, John J. Farmer, Jr., Attorney General, Howard Geduldig, Deputy Attorney General, State of New Jersey. Roger L. Chaffe, Senior Assistant Attorney General, Commonwealth of Virginia, and Ronald A. Shems, Assistant Attorney General, State of Vermont, entered appearances.

Andrea Bear Field, Norman W. Fichthorn and Mel S. Schulze appeared on the brief of Appalachian Power Company, et al. as intervenors.

David W. Marshall, Ann Brewster Weeks and David G. Hawkins appeared on the brief of intervenors Natural Resources Defense Council, et al. Raissa Griffin entered an appearance.

David P. Novello was on the brief of the Electric Generator intervenors.

Before: Williams, Ginsburg and Sentelle, Circuit Judges.

Opinion for the Court filed Per Curiam.[*]

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PER CURIAM.

TABLE OF CONTENTS I. BACKGROUND ..............................................................1036 A. Statutory Framework .................................................1037 B. The NOx SIP Call ....................................................1037 C. The Original Section 126 Rule-Conditional Findings ..................1038 D. Revised Section 126 Rule-Final Findings .............................1039 II. COMMON AND GENERAL ISSUES ...............................................1040 A. Scrivener's Error ...................................................1040 B. The NOx SIP Call and § 126 .....................................1044 C. Significant Contribution ............................................1048 D. Emission Limitation Determinations ..................................1051 1. Standard of Review ...............................................1051 2. The Integrated Planning Model ....................................1052 3. EGU Growth Factors ...............................................1053 4. Non-EGU Budget Determinations ....................................1055 5. Local Regulation and Permit Trading ..............................1055 E. Regulation of "Future" Sources ......................................1056 F. The Dorris Report ...................................................1058 III. NON-ELECTRIC GENERATING UNIT ISSUES ....................................1060 A. Alleged Budget Allocation Errors ....................................1060 B. Treatment of Cogenerators ...........................................1061 C. Source-Specific Issues ..............................................1063 1. AK Steel Corporation .............................................1063 2. New Boston Coke Corporation ......................................1064 IV. FACILITY-SPECIFIC ISSUES ................................................1064 A. Midland Cogeneration Venture .........................................1065 B. Indiana Municipal Power Agency .......................................1065 V. PITTSBURGH ..............................................................1066 VI. CONCLUSION ..............................................................1067 In response to petitions from several northeastern states that alleged that nitrogen oxide emitted in neighboring states was harming their local air quality, the Environmental Protection Agency promulgated a rule that requires many NOx emitting facilities in several midwestern and southeastern states to conform to emission limits set by the EPA and to participate in an emissions trading program. Numerous petitioners challenge the rule as inconsistent with the Clean Air Act, arbitrary and capricious, and technically deficient. We uphold most aspects of the rule but remand several particulars to the Agency for reconsideration.

I. BACKGROUND

On January 18, 2000, the Environmental Protection Agency ("EPA") issued its final rule to control emissions of nitrogen oxide ("NOx") under section 126 of the Clean Air Act ("CAA"). 42 U.S.C. § 7426. Under certain conditions, NOx combines with hydrocarbons in the atmosphere to create ozone, commonly known as "smog." In the January rule, the EPA made final its findings that stationary sources of NOx

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emissions in twelve upwind states and the District of Columbia contribute significantly to ozone nonattainment in northeastern states. This finding triggers direct federal regulation of stationary sources of NOx in the upwind states. The rule further established a "cap and trade" system for NOx emissions within each upwind jurisdiction. Covered sources must obtain NOx emission allowances to cover their emissions, adopt additional emission controls, or cease operations. Numerous petitions for review challenge various aspects of the rule.

A. Statutory Framework

Under the Clean Air Act, the EPA promulgates national ambient air quality standards ("NAAQS") for criteria air pollutants, including tropospheric ozone. See 42 U.S.C. § 7409. The EPA then designates those areas of the United States that fail to meet the various NAAQS. 42 U.S.C. § 7407(d). States, in turn, are required to adopt state implementation plans ("SIPs") providing for the attainment of the NAAQS. 42 U.S.C. § 7410. The SIPs are submitted to the EPA for approval, and may be revised at the EPA's insistence if found to be inadequate to ensure maintenance of the NAAQS or public health. States that fail to comply with these requirements are subject to various sanctions and the imposition of a Federal Implementation Plan ("FIP"). 42 U.S.C. § 7509.

Much air pollution is a local or regional problem. Some pollution, however, is caused or augmented by emissions from other states. Emissions from "upwind" regions may pollute "downwind" regions. Several provisions of the CAA are designed...

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