WildEarth Guardians v. U.S. Envtl. Prot. Agency

• Decision Date: 23 July 2013
• Docket Number: No. 11–9559.,11–9559.
• Citation: 728 F.3d 1075
• Parties: WILDEARTH GUARDIANS, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Lisa Jackson, Administrator, U.S. EPA, Respondents. Public Service Company of Colorado, d/b/a Xcel Energy, Inc., Intervenor.
• Court: U.S. Court of Appeals — Tenth Circuit

728 F.3d 1075

WILDEARTH GUARDIANS, Petitioner,

v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Lisa Jackson, Administrator, U.S. EPA, Respondents.Public Service Company of Colorado, d/b/a Xcel Energy, Inc., Intervenor.

No. 11–9559.

United States Court of Appeals, Tenth Circuit.

July 23, 2013.

Ashley D. Wilmes of WildEarth Guardians, Boulder, CO, for Petitioner.

Christina L. Richmond, United States Department of Justice, Environmental Defense Section, Washington D.C. (Elyana Sutin, U.S. EPA, Region 8, Office of Regional Counsel, and Richard Vetter, U.S. EPA, Office of General Counsel, of counsel; Ignacia S. Moreno, Assistant Attorney General, Environmental and Natural Resources Division, with her on the briefs) for Respondents.

A. Kent Mayo (Michael Heister with him on the brief) of Baker Botts L.L.P., Washington, D.C., for Intervenor.

Before O'BRIEN, McKAY, and TYMKOVICH, Circuit Judges.

McKAY, Circuit Judge.

Petitioner WildEarth Guardians seeks review of an order of the Environmental Protection Agency denying in part Petitioner's petition for an objection to a Title V operating permit issued by the Colorado Department of Public Health and Environment (CDPHE) to Intervenor Public Service Company of Colorado, d/b/a Xcel Energy, for its coal-fired power station located in Morgan County, Colorado. In its petition for an objection, Petitioner argued, among other things, that the permit needed to include a plan to bring the power station into compliance with the Clean Air Act's Prevention of Significant Deterioration requirements. Petitioner contended these PSD requirements, which apply to the construction or “major modification” of a stationary source of air pollution, 40 C.F.R. § 51.166(a)(7)(ii), had been triggered when the station underwent major modifications in 1994, 1997, and possibly other years. For support, Petitioner relied in part on a Notice of Violation issued to Intervenor by the EPA in 2002. However, the EPA denied Petitioner's petition for an objection on this ground, holding that the NOV was insufficient to demonstrate noncompliance with the Clean Air Act and that Petitioner's additional evidence also failed to demonstrate a violation. The EPA further held the state agency had adequately responded to Petitioner's comments regarding the PSD requirements before it issued the permit. The EPA thus denied the petition for an objection on this ground as well. Petitioner now seeks review of the EPA's denial of the petition on these two grounds.¹

I.

Under Title V of the Clean Air Act, a “major source” of air pollution, such as the power station at issue in this case, must obtain an operating permit from the applicable state agency. See42 U.S.C. § 7661a. After providing the public with an opportunity to comment on a proposed permit, the state agency submits the permit to the EPA, which has 45 days to review it. See Sierra Club v. U.S. EPA, 557 F.3d 401, 403 (6th Cir.2009) (citing 42 U.S.C. §§ 7661a(b)(6), 7661d(b)(1)). If the EPA does not file a written objection during this time period, “any person may petition the Administrator within 60 days after the expiration of the 45–day review period.” 42 U.S.C. § 7661d(b)(2). “The petition shall be based only on objections to the permit that were raised with reasonable specificity during the public comment period provided by the permitting agency....” Id. The EPA has 60 days to respond to the petition, and “shall issue an objection within such period if the petitioner demonstrates to the [agency] that the permit is not in compliance with the requirements of [the Clean Air Act], including the requirements of the applicable [state] implementation plan.” Id. “Any denial of such petition shall be subject to judicial review under section 7607 of this title.” Id.

In 2009, the applicable state agency in this case, CDPHE, published a proposed renewal permit for Intervenor's Pawnee power station in Morgan County, Colorado. Petitioner submitted comments on the proposed permit. Among other things, Petitioner raised a concern regarding the proposed permit's alleged failure to include a plan to bring the power station into compliance with the Clean Air Act's PSD requirements, as implemented in the Colorado State Implementation Plan. Petitioner contended these PSD requirements were triggered when the power station “underwent major modifications in 1994 and 1997 without obtaining the required PSD permit.” (J.A. at 2.) For support, Petitioner relied on a Notice of Violation the EPA issued to Intervenor in 2002, which included the following allegations:

11. Xcel has made “major modifications” of the Pawnee and Comanche Stations as defined by both 40 CFR § 52.21 and Colorado SIP Rules....

i) The major modifications at its Pawnee Station include but are not limited to the following physical or operational changes, alone or in combination: a reheater redesign and replacement in 1994, and a redesign and upgrade of the condenser tubes in 1997 to regain lost generation due to condenser tube failures.

....

12. Each of the modifications resulted in a net significant increase in emissions for SO2, NOx, and/or PM as defined by 40 CFR §§ 52.21(b)(3) and (23) and Colorado SIP Rules....

For each of the modifications identified in 11 above, Xcel did not obtain a PSD permit pursuant to 40 CFR § 52.21 and Colorado SIP Rules....

....

17. Therefore, Xcel violated and continues to violate Clean Air Act, Part C: Prevention of Significant Deterioration of Air Quality (“PSD”), 42 U.S.C. §§ 7470 to 7492, and the permitting requirements of Colorado Air Quality Control Commission Regulation No. 3, Part B, IV.D.3 and 40 C.F.R.[ ] § 52.21, by constructing and operating modifications at the Pawnee Station ... without the necessary permits and by constructing and operating without the application of BACT required by the Colorado SIP.

(J.A. at 173–74.)

Petitioner contended this Notice of Violation demonstrated the Pawnee power station was not in compliance with PSD requirements, and thus the Title V Permit needed to include a PSD compliance plan. Petitioner argued “[t]he 2002 NOV is sufficient to demonstrate noncompliance with PSD for the purposes of a Title V Permit,” relying for support on a Second Circuit case that found a state agency notice of violation sufficient to demonstrate noncompliance under Title V. (J.A. at 2 (citing N.Y. Pub. Interest Research Grp. v. Johnson, 427 F.3d 172 (2d Cir.2005)).)

Petitioner further argued that even if the NOV was insufficient on its own to demonstrate noncompliance with established PSD requirements, other documents helped demonstrate that Intervenor made major modifications at the Pawnee power station, thus triggering PSD requirements. For support, Petitioner submitted the following: (1) an Xcel Capital Project Summary Sheet stating “[t]he top bank plus all 256 reheater assemblies in the two middle banks will be replaced during the planned ten-week outage in 1994” (J.A. at 177); (2) a document stating that $4.5 million in emergency funding was allocated for new condenser tubes to be installed in early 1997 (J.A. at 183); (3) a document showing planned outages for “major turbine overhaul (720 hours or longer)” in late 1994 and early 1997, plus a planned outage for a “major boiler overhaul (720 hours or longer)” in 1998 (J.A. at 179 (capitalization standardized)); (4) documents reflecting limited or zero hours of operation for certain months in late 1994 and early 1997 (J.A. at 181, 187); (5) another document showing planned outages for a “major turbine overhaul (720 hours or longer)” in 1989 and a “major boiler overhaul (720 hours or longer)” in 1990 (J.A. at 189 (capitalization standardized)); and (6) a document showing a planned outage for a “major boiler overhaul (720 hours or longer)” in 2000 (J.A. at 191 (capitalization standardized)). Petitioner contended these documents demonstrated that major modifications occurred at the Pawnee station during the 1990s. Petitioner further argued these modifications “clearly resulted in significant emissions increases,” based on a table showing annual emissions at the Pawnee station from 1995 through 2007. (J.A. at 4–5.) Petitioner argued the documents at least raised a “valid suspicion of noncompliance with PSD,” giving the state agency “a minimum responsibility to respond.” (J.A. at 5.)

In response, CDPHE stated it considered the NOV to be “only an allegation of a violation and not a determination that violations actually occurred.” (J.A. at 17.) CDPHE also noted that Intervenor and the EPA had disagreed as to whether a major modification had occurred, and the EPA had not initiated any related enforcement action since issuing the NOV seven years previously. Citing for support to an EPA order and a Colorado state court case, CDPHE concluded that the NOV alone did not demonstrate noncompliance with PSD. As for the other documents submitted by Petitioner, CDPHE concluded that these documents did not prove a major modification had occurred. The mere fact that the word “major” was used in the phrases “major turbine overhaul” and “major boiler overhaul” did not demonstrate that “major modifications” had occurred for purposes of PSD requirements. (J.A. at 21.) “A major modification is a physical change or change in the method of operation, or addition to, a major stationary source that would result in a significant net emissions increase using the actual to potential test.” (J.A. at 21.) Moreover, CDPHE noted that “routine maintenance, repair and replacement” is not considered to be a modification for purposes of this definition, and the fact that turbine and boiler overhauls “have occurred frequently over the time periods addressed in the exhibits support[s] the inference that these activities are routine.” (J.A. at 21.) CDPHE thus concluded that Petitioner had not shown the PSD requirements had been triggered.

After making certain other revisions not relevant to this appeal, CDPHE submitted the proposed final...