89 F.3d 858 (D.C. Cir. 1996), 93-1325, Texas Mun. Power Agency v. E.P.A.

Docket Nº:93-1325, 93-1334 to 93-1336 and 93-1349.
Citation:89 F.3d 858
Case Date:July 23, 1996
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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89 F.3d 858 (D.C. Cir. 1996)

26 Envtl.




Nos. 93-1325, 93-1334 to 93-1336 and 93-1349.

United States Court of Appeals, District of Columbia Circuit

July 23, 1996

Argued April 25, 1996.

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On Petitions for Review of Orders of the Environmental Protection Agency.

Lambeth Townsend argued the cause and filed the briefs, Austin, TX, for petitioner Texas Municipal Power Agency.

David R. Straus argued the cause, Washington, DC, for petitioners American Municipal Power Ohio, Inc., et al. With him on the briefs were Daniel I. Davidson and Scott H. Straus, Washington, DC.

William F. Hanrahan argued the cause and filed the briefs, Washington, DC, for petitioners Nebraska Public Power District, et al.

Alice L. Mattice and Ronald M. Spritzer, Attorneys, United States Department of Justice, argued the causes, Washington, DC, for respondent. With them on the brief was Lois J. Schiffer, Assistant Attorney General, Washington, DC. Cannon M. Tolbert, pro hac vice, Washington, DC, entered an appearance.

Before: SILBERMAN, WILLIAMS and SENTELLE, Circuit Judges.


I. Introduction

With its 1990 amendments to the Clean Air Act (the "Act"), Congress established a program for addressing acid rain, for the first time seeking to cut air pollution by means of marketable permits. See 42 U.S.C. §§ 7651-7651%io; see generally Indianapolis Power & Light Co. v. U.S. EPA, 58 F.3d 643 (D.C.Cir.1995). The basic idea of such a regulatory device is that if polluters for which cutbacks are relatively costly can buy pollution entitlements from ones for which cutbacks are relatively cheap, the nation can achieve a much greater overall cutback for a given expenditure of resources (or achieve a given cutback for a lower expenditure).

We deal here with a necessary aspect of any such program--the allocation of initial entitlements. Congress intended that for "Phase II" of the general emissions trading scheme (Phase I targeted specific heavy polluters), entitlements would add up to emissions of 8.95 million tons of sulphur dioxide (SO sub2 ) per year by affected utilities, 10 million tons below 1980 levels. See 42 U.S.C. § 7651b(a)(1) (basic allowances of 8.9 million tons); id. at § 7651d(a)(3) (providing for an additional 50,000 tons). It charged the Environmental Protection Agency ("EPA") with allocating these entitlements among 2,200 electricity plants throughout the country. In most cases, the EPA was to calculate the allowance by multiplying the unit's "baseline"--i.e., the average of the annual amount of fossil fuel it consumed during 1985, 1986, and 1987--by the lesser of (1) a plant's actual emissions rate (usually for 1985), or (2) the regulatory ceiling on that rate. 41 U.S.C. §§ 7651a, 7651d. To accomplish this, the EPA was to construct what it calls a "National Allowance Database" or "NADB" of fuel consumption ("baseline") data and emissions data using existing government data sources. The "baseline" data was to be drawn from reports by plants on a standard Department of Energy form, known as Energy Information Administration ("EIA") Form 767. 42 U.S.C. § 7651a(4)(A). If a unit did not file an EIA form during the relevant period, the baseline fuel consumption was to be the level specified for the unit in the 1985 National Acid Precipitation Assessment Program ("NAPAP") Emissions Inventory, Version 2, National Utility Reference File ("NURF") or in a corrected database established by EPA. Id.; Brief of Respondent at 8-9 & n.5. Actual 1985 emissions rates--distinct from "baseline" or fuel consumption rates--were to be the emissions rates reported in NURF. 42 U.S.C. § 7651a(16). Once the allowances determined by the formula were aggregated for the 2,200 units in question, they could then be reduced across the board so that they would add up to only the permissible 8.95 million tons per year.

The petitioners here are utilities asserting that they were shortchanged in the allocation process in the following ways. (1) American Municipal Power-Ohio, Inc. ("AMP-Ohio")

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asserts that EPA was unjustified in using the average sulphur content of fuel burned by Ohio utilities in 1985 in calculating the actual 1985 SO sub2 emission rates for AMP-Ohio's Gorsuch plant. EPA says that in doing so it was bending over backwards on AMP-Ohio's behalf, as the latter had failed to provide proper data for the Gorsuch plant and could have been denied any allocation for the plant. (2) Indiana Municipal Power Association ("IMPA") and Wyandotte Municipal Service Commission ("Wyandotte") own units that started operation between October 1, 1990 and December 31, 1992. Because they failed to submit data about these plants in accordance with statutory and administrative deadlines (as read by the EPA), the EPA denied the owners any entitlements for these plants. (3) Texas Municipal Power Authority ("TMPA") contends that the EPA misinterpreteds 402(4)(A) of the Act, 42 U.S.C. § 7651a(4)(A), which tells the EPA how to treat plant outages, and as a result wrongly denied TMPA an adjustment in its fuel consumption in the measuring period for a 33-day shutdown caused by mechanical difficulties. (4) Nebraska Public Power District, Southwestern Public Service Company and Arco Coal Company (collectively, "NPPD") say that the EPA misconstrued § 402(18) of the Act, 42 U.S.C. § 7651a(18), which governs the conversion of disparate emissions limitations rates into annualized limits on emissions of pounds of SO sub2 per million British thermal units ("mmBtu") (a measure of the heat content of the fossil fuel consumed). According to NPPD, the statute calls for no conversion at all when the pre-existing limitation is expressed in pounds per million Btu, without an express statement of the time period over which it is to be measured.

Before we reach the merits, we must consider two preliminary issues. First, we raised on our own the question whether 42 U.S.C. § 7607(b)(1), which allocates petitions for review of certain "locally or regionally applicable" actions of the EPA to "the appropriate circuit" (conceived in geographic terms), is jurisdictional or merely a matter of venue. Second, the EPA asserts that § 402(4)(C) of the Act, 42 U.S.C. § 7651a(4)(C), barring judicial review of certain "corrections" in the process by which the EPA transforms material from various databases into final allocations, precludes our consideration of the first three claims.

We conclude that § 7607(b)(1) is a matter of venue, not jurisdiction; since EPA raised no objection, the provision is no bar to our review. We also find that § 402(4)(C) does not preclude review of any of the petitioners' claims. Finally, on the merits, we reject each of those claims.

II. Reviewability

EPA contends that we cannot review the so-called database challenges of AMP-Ohio, IMPA and Wyandotte, and TMPA under § 402(4)(C)'s preclusion of judicial review clause. Section 402(4)(C) provides:

The Administrator shall, upon application or on his own motion, by December 31, 1991, supplement data needed in support of this subchapter and correct any factual errors in data from which affected ... units' baselines or actual 1985 emission rates have been calculated. Corrected data shall be used for purposes of issuing allowances under the subchapter. Such corrections shall not be subject to judicial review, nor shall the failure of the Administrator to correct an alleged factual error in such reports be subject to judicial review.

42 U.S.C. § 7651a(4)(C) (1994). It is argued that this language, read in light of the statutory scheme and objectives and the legislative history, overcomes the presumption in favor of reviewability of agency action and precludes any challenge to a database allocation. See Block v. Community Nutrition Inst., 467 U.S. 340, 345, 349, 104 S.Ct. 2450, 2453-54, 2455-56, 81 L.Ed.2d 270 (1984).

Petitioners claim, however, that § 402(4)(C)'s scope is narrow. Its language precludes review only of changes to the NURF-NAPAP data, not the NADB. Since the language refers to "data from which" baselines or actual emission rates are calculated--the NURF-NAPAP--and allows corrections "in such reports," it does not extend to the NADB or the emissions allowances. And it only bars review of "corrections" of data, not "additions" to data. Here, there

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were no data in the historical data sets for EPA to correct. In a similar vein, TMPA argues that § 402(4)(C) bars review only of the original determination of the baseline emission rates, not of subsequent "adjustments" to established baselines pursuant to § 402(4)(A), under which it requested a change; the two actions are distinct, as are the statutory sections. 1 And if subsection (C)'s preclusion of review already applied, subsection (A)'s language giving the Administrator "sole discretion" to exclude shutdown periods from the baseline calculation would be superfluous.

EPA argues, instead, that § 402(4)(C) includes changes to both the previously-filed NURF-NAPAP data and the NADB. The section refers to "[c]orrected data ... used for purposes of issuing allowances," which must mean, according to EPA, the NADB. Moreover, the "data" referred to logically must include the NADB; since the NADB is composed of and calculated from the NURF-NAPAP data, a change in the latter necessarily requires a change in the former. The provision's subsequent reference to "such reports" therefore includes the NADB. EPA also claims that an "addition" to an incomplete data set is a "correction" of that data set. Or, at minimum, it is a "supplement" to that data, and § 402(4)(C) expressly includes any...

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