Util. Air Regulatory Grp. v. Envtl. Prot. Agency

• Decision Date: 20 March 2018
• Docket Number: C/w 12-1343, 12-1344, 12-1425, 12-1480, 13-1003, 13-1045, 13-1129, 13-1178, 13-1179, 13-1180,No. 12-1342,12-1342
• Citation: 885 F.3d 714
• Parties: UTILITY AIR REGULATORY GROUP, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent National Parks Conservation Association, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

885 F.3d 714

UTILITY AIR REGULATORY GROUP, Petitioner

v.ENVIRONMENTAL PROTECTION AGENCY, Respondent

National Parks Conservation Association, et al., Intervenors.

No. 12-1342

C/w 12-1343, 12-1344, 12-1425, 12-1480, 13-1003, 13-1045, 13-1129, 13-1178, 13-1179, 13-1180

United States Court of Appeals, District of Columbia Circuit.

Argued November 16, 2017

Decided March 20, 2018

Charles McPhedran argued the cause for Conservation Group petitioners. With him on the briefs were David S. Baron and Timothy D. Ballo. Thomas Cmar and Abigail M. Dillen entered appearances.

Norman W. Fichthorn, Aaron M. Flynn, Ken Paxton, Attorney General, Office of the Attorney General for the State of Texas, Priscilla M. Hubenak, Assistant Attorney General, Herman Robinson, Donald Trahan, Dwana King, Jackie Marve, Spencer Bowman, P. Stephen Gidiere, III, Thomas L. Casey, III, David W. Mitchell, C. Frederick Beckner, III, Stephanie Z. Moore, and Daniel J. Kelly were on the joint briefs for State and Industry petitioners. Courtney Burdette, Charlotte Goudeau, Peter D. Keisler, Elliott B. Vega, Mark L. Walters, Timothy K. Webster, and Kathy M. Wright entered appearances.

Norman L. Rave, Jr., Attorney, U.S. Department of Justice, argued the cause and filed the brief for respondent. David A. Carson, Senior Counsel, Jessica O’Donnell and Martin F. McDermott, Attorneys, entered appearances.

Charles McPhedran argued the cause for Conservation Group intervenor–respondents. With him on the briefs were David S. Baron and Timothy D. Ballo. Thomas Cmar and Abigail M. Dillen entered appearances.

Norman W. Fichthorn, Aaron M. Flynn, Curtis T. Hill, Jr., Attorney General, Office of the Attorney General for the State of Indiana, Thomas M. Fisher, Solicitor General, Margaret Claiborne Campbell, Hahnah Williams, Renee Cipriano, J. Michael Showalter, David M. Flannery, Kathy G. Beckett, Edward L. Kropp, P. Stephen Gidiere, III, Thomas L. Casey, III, David W. Mitchell, C. Frederick Beckner, III, Stephanie Z. Moore, and Daniel J. Kelly were on the brief for State and Industry intervenor–respondents. Peter D. Keisler, Byron W. Kirkpatrick, and Timothy K. Webster entered appearances.

Before: Griffith and Pillard, Circuit Judges, and Williams, Senior Circuit Judge.

Williams, Senior Circuit Judge:

On June 7, 2012 the Environmental Protection Agency issued another rule in a long succession of actions implementing Congress’s effort to restore air quality and visibility in certain national parks and wilderness areas ("Class I areas") to what they would be under natural conditions. Regional Haze: Revisions to Provisions Governing Alternatives to Source-Specific Best Available Retrofit Technology (BART) Determinations, Limited SIP Disapprovals, and Federal Implementation Plans, 77 Fed. Reg. 33,642 (June 7, 2012) ("Final Rule "). In the rule, EPA took a step in the implementation of its Cross-State Air Pollution Rule, 76 Fed. Reg. 48,208 (Aug. 8, 2011) ("CSAPR") (pronounced by counsel as if the S and the A were reversed, making it approximately "CASPER"). Specifically it amended its Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations, 70 Fed. Reg. 39,104 (July 6, 2005) ("Regional Haze Rule"), to specify that CSAPR’s requirements were stringent and effective enough for it to serve as a better-than-BART alternative for states participating in CSAPR, thus excusing states from compliance with BART itself. 40 C.F.R. § 51.308(e)(2), (e)(4). In the Final Rule EPA also disapproved portions of certain State Implementation Plans ("SIPs") designed to achieve reasonable progress under the Regional Haze Rule because those plans relied on a soon-to-be-defunct predecessor of CSAPR, the Clean Air Interstate Rule, 70 Fed. Reg. 25,162 (May 12, 2005) ("CAIR"). Instead, EPA promulgated Federal Implementation Plans to address haze levels in the disapproved states until those states could submit approvable SIPs that relied on CSAPR (if those states were among those eligible to rely on CSAPR) or otherwise demonstrated a local alternative better than BART. 77 Fed. Reg. at 33,653 –54.

The National Parks Conservation Association and the Sierra Club ("conservation petitioners") challenge the portion of the Final Rule allowing states to treat CSAPR compliance as a better-than-BART alternative. Multiple power companies and the Utility Air Regulatory Group, as well as the State of Texas and the Louisiana Department of Environmental Quality ("state and industry petitioners") challenge EPA’s disapproval of SIPs relying on CAIR as a better-than-BART alternative.

Except to the extent that the challenges are moot, we affirm EPA’s actions.

* * *

The Regional Haze Rule requires states to impose best available retrofit technology ("BART") on certain stationary pollution sources—usually electric generation plants—installed before August 1977. 40 C.F.R. §§ 51.301, 51.308(e)(1)(ii). The Rule allows states to pursue alternative approaches, including EPA-approved regional approaches to capping and trading emissions, to reduce haze if those approaches meet EPA’s regulatory definition of being "better-than-BART." 40 C.F.R. § 51.308(e)(2) ; see Center for Energy and Economic Development v. EPA , 398 F.3d 653, 660 (D.C. Cir. 2005) (" CEED ") (affirming EPA’s discretion to approve regional alternatives to BART so long as the discretion is "rationally exercise[d]"). In Utility Air Regulatory Group v. EPA , 471 F.3d 1333, 1335 (D.C. Cir. 2006) (" UARG I "), we affirmed EPA’s finding that states could rely on CAIR as a better-than-BART alternative against certain challenges raised by industry and environmental petitioners. But in response to a set of separate petitions by several states and electric utilities we later found "more than several fatal flaws" in CAIR itself, and because EPA had "adopted the rule as one, integral action," we vacated and remanded the rule in its entirety. North Carolina v. EPA , 531 F.3d 896, 901 (D.C. Cir. 2008) (" North Carolina I "). On rehearing, we remanded CAIR to EPA without vacatur, convinced that, "notwithstanding the relative flaws of CAIR, allowing CAIR to remain in effect until it is replaced by a rule consistent with our opinion would at least temporarily preserve the environmental values covered by CAIR." North Carolina v. EPA , 550 F.3d 1176, 1178 (D.C. Cir. 2008) (" North Carolina II "). To replace CAIR, EPA crafted and promulgated CSAPR, a revised regional sulfur dioxide and nitrogen oxide emissions cap and trading program. 76 Fed. Reg. at 48,208. In a later rulemaking, EPA determined, as it had for CAIR, that CSAPR is an adequate better-than-BART alternative for participating states. Final Rule , 77 Fed. Reg. at 33,642.

We review EPA’s action to determine if it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," or "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." The standard we apply is the same under the judicial review provision of the Clean Air Act, 42 U.S.C. § 7607(d)(9), as under the Administrative Procedure Act, 5 U.S.C. § 706(2). Motor Vehicle Manufacturers Ass’n v. EPA , 768 F.2d 385, 389 n.6 (D.C. Cir. 1985).

* * *

We take the conservation petitioners’ arguments first. The parties now agree that their first main challenge—that our remand invalidating certain state emissions budges in EME Homer City Generation, L.P. v. EPA , 795 F.3d 118 (D.C. Cir. 2015), undercut the factual basis for EPA’s finding that CSAPR is better than BART—is moot. EPA has conducted a fresh analysis of the better-than-BART issue in light of EME Homer City and concluded that its changes to CSAPR in response to the remand do not affect its determination that CSAPR is a better-than-BART regional alternative. See 82 Fed. Reg. 45,481, 45,490 –94 (Sept. 29, 2017). Although the petitioners may challenge that finding in the future, they do not challenge it here, and we do not consider it further.

The petitioners argue next that EPA should not have relied on a "generic" "presumptive BART" for modeling its comparison to CSAPR but should have determined BART for each individual source, using the five-factor analysis that states must use when they make BART determinations for a source once it has been determined to be "BART-eligible" (the term used in this field for sources subject to BART). See UARG I , 471 F.3d at 1335–36 (quoting 40 C.F.R. § 51.308(e)(1)(ii) ).

A BART benchmark for purposes of calculating better-than-BART is usually based on "a determination of BART for each source subject to BART and covered by the [BART] alternative program." 40 C.F.R. § 51.308(e)(2)(i)(C). But when the alternative "has been designed to meet a requirement other than BART"—such as CSAPR’s sulfur dioxide and nitrogen oxide emissions cap and trading program—then EPA or a state "may determine the [BART benchmark] based on both source-specific and category-wide information , as appropriate." Id. (emphasis added). EPA’s presumptive BART is one type of category-wide information. In the rulemaking under review here EPA stated that it had adhered to the view that presumptive BART is "reasonable and appropriate for use in assessing regional emissions reductions from the BART scenario ... since 2005," when the category-wide information rule was first promulgated. Final Rule , 77 Fed. Reg. 33,649 –50 (citing 71 Fed. Reg. 60,612, 60,619 (Oct. 13, 2006) ).

We think the attack on EPA’s use of presumptive BART, authorized by 40 C.F.R. § 51.308(e)(2)(i)(C), is jurisdictionally foreclosed by the 60-day filing window provided by the Clean Air Act, 42 U.S.C. § 7607(b)(1). The conservation petitioners resist that view, arguing that EPA did not invoke that regulation, but as we have seen, it did just that in its cross-reference to 71 Fed. Reg. at 60,619, which uses the same language. Compare § 51.308(e)(2)(i)(C) (authorizing reliance on category-wide information where the alternative measure "has been designed to...