Appalachian Power Co. v. Envt'l Protection Agency
| Decision Date | 08 June 2001 |
| Docket Number | No. 99-1268,99-1268 |
| Citation | 251 F.3d 1026 |
| Parties | (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 Consolidated with 99-1270, 99-1274, 99-1276, 99-1277, 99-1279, 99-1280, 99-1281, 99-1286, 99-1287, 00-1169, 00-1187, 00-1189, 00-1190, 00-1191, 00-1192, 00-1194 |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
[Copyrighted Material Omitted]
On Petitions for Review of an Order of the Environmental Protection Agency
Norman W. Fichthorn argued the cause for the Industry Petitioners on the Electric Generating Facility Issues. With him on the briefs were Andrea Bear Field, James D. Elliott, Mel S. Schulze, David M. Flannery, Kathy G. Beckett, Gale R. Lea, Scott D. Goldman, and Jeff F. Cherry. Kyle W. Danish entered an appearance.
Marc D. Bernstein, Assistant Attorney General, State of North Carolina, argued the cause for the Petitioning States. With him on the briefs were Michael F. Easley, Attorney General, James C. Gulick and J. Allen Jernigan, Special Deputy Attorneys General, James P. Longest, Jr. and Amy R. Gillespie, Assistant Attorneys General, Betty D. Montgomery, Attorney General, State of Ohio, Bryan F. Zima, Assistant Attorney General, Bill Pryor, Attorney General, State of Alabama, Tommy E. Bryan and Prudence A. Cash-Brown, Assistant Attorneys General, Jennifer Granholm, Attorney General, State of Michigan, Alan F. Hoffman, Assistant Attorney General, Charles M. Condon, Attorney General, State of South Carolina, Samuel L. Finklea and Thomas G. Eppink, Attorneys, Mark L. Earley, Attorney General, Commonwealth of Virginia, Roger L. Chaffe, Senior Assistant Attorney General, Stewart T. Leeth, Assistant Attorney General, and Thomas H. Zerbe, Senior Counsel, State of West Virginia.
Theodore L. Garrett argued the cause for the Split State Petitioners Kansas City Power & Light Company, et al. With him on the briefs were Michael D. Hockley and Terry W. Schackman.
Scott H. Segal argued the cause for the Non-Electric Generating/Industrial Petitioners. With him on the briefs were Lisa M. Jaeger, Charles S. Carter, Deborah Ann Hotel, Kathy G. Beckett and Scott Goldman.
Andrew J. Doyle, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Lois J. Schiffer, Assistant Attorney General, and Sara Schneeberg, Attorney, U.S. Environmental Protection Agency.
Robert A. Reiley and M. Dukes Pepper, Jr. were on the brief of Intervenor Commonwealth of Pennsylvania. Thomas Y. Au entered an appearance.
Before: Edwards, Chief Judge, Williams and Sentelle, Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
This case involves multiple challenges to "Technical Amendments" to the "NOx SIP Call" rulemaking at issue in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, 121 S.Ct. 1225 (2001). At issue here are revisions to the database used to establish state "budgets" for emissions of nitrogen oxide ("NOx") which are regulated by the Environmental Protection Agency ("EPA") under the Clean Air Act ("CAA"). Petitioners include upwind states subject to the NOx SIP Call and industries located therein. The Commonwealth of Pennsylvania intervenes in support of the EPA.
We hold that petitioners' challenges to the EPA's growth factors are neither time-barred nor estopped by principles of res judicata. On the merits, we remand the EPA's growth factors for electric generating units for the same reasons as in Appalachian Power Co. v. EPA, Nos. 99-1200, et al. (May 15, 2001). The remaining claims in the various petitions for review are denied with two exceptions. We remand the EPA's source definitions pending completion of further rulemakings in accordance with Michigan, and remand and vacate the NOx emission budget for the state of Missouri as the EPA continues to include portions of the state for which no significant contribution findings have been made.
In October 1998, the EPA issued the "NOx SIP Call"--a final rule under CAA section 110(k)(5), 42 U.S.C. 7410(k)(5), requiring 22 states and the District of Columbia ("upwind states") to revise their State Implementation Plans ("SIPs") to impose additional controls on NOx emissions. See Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone, 63 Fed. Reg. 57,356 (Oct. 27, 1998) ("NOx SIP Call"). The EPA concluded that emissions from the upwind states "contribute significantly" to ozone nonattainment in downwind states, in violation of CAA section 110(a)(2)(D)(i). 42 U.S.C. 7410(a)(2)(D)(i). Under the SIP Call, upwind states are required to reduce NOx emissions by the amount accomplishable by "highly cost-effective controls," defined as those controls capable of removing NOx at a cost of $2,000 or less per ton.
Under the NOx SIP Call, each upwind state must limit its summertime NOx emissions to a statewide emission "budget" for the year 2007. "The budgets represent the amount of allowable NOx emissions remaining after a covered state prohibits the NOx amount contributing significantly to downwind nonattainment." Michigan, 213 F.3d at 686. Specifically, the NOx state budgets represent the EPA's projection for what NOx emissions in 2007 would be for each state were "highly cost-effective controls" implemented. Under the NOx SIP Call, states have substantial flexibility in selecting combinations of emission control measures to meet their respective budgets, so long as they do so by the regulatory deadline.
In setting the NOx budgets, the EPA relied upon emission inventory data collected by the Ozone Transport Assessment Group, a working group comprised of federal, state, industry, and environmental group representatives. See Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport, 64 Fed. Reg. 28,250, 28,253 (May 25, 1999); Michigan, 213 F.3d at 672. The EPA divided each state's NOx emissions according to five source types or "sectors": electric generating units ("EGUs"), non-EGU stationary sources (such as industrial boilers), area sources (smaller stationary sources), highway mobile sources, and nonroad mobile sources. The EPA calculated 2007 budget allocations for each sector. Under the NOx SIP Call, the EPA assumed that emission reductions would occur primarily in the EGU and non-EGU sectors, representatives of which are petitioners here. In developing their SIPs, however, states are free to achieve emission reductions from other sources, so long as the SIP provides for attainment of the requisite emission reduction level.
To calculate the EGU emission budgets, the EPA obtained source-specific "utilization" (heat-input) data for either 1995 or 1996. To this baseline, the EPA applied "growth factors" derived from growth projections for the years 2001 through 2010 generated by the "Integrated Planning Model" ("IPM"), a widely used utility planning model. Even though the EPA had 2007 utilization projections from the IPM, the EPA instead opted to apply the 2001-2010 growth factors to project growth over the 1996-2007 period in each state. The resulting 2007 emission projections were then reduced based on the EPA's estimate of the amount of emission reductions that could be achieved through "highly cost-effective" means. The resulting 2007 budgets are at issue in this case.
On March 3, 2000 this Court upheld the bulk of the EPA's NOx SIP Call. See Michigan, 213 F.3d 663. Relevant to this case, we specifically upheld the EPA's ability to set statespecific NOx budgets. At the same time, this Court remanded the regulatory definition of EGU because the EPA failed to provide an adequate explanation. This Court also partially vacated and remanded the SIP call as it applied to Missouri because the EPA included portions of Missouri in the SIP call with no evidence that these areas contributed to downwind nonattainment.
At the same time that it promulgated the NOx SIP Call, the EPA also proposed a Federal Implementation Plan ("FIP") that would impose direct emission controls on EGUs and non-EGUs in any state that failed to implement an adequate SIP by the regulatory deadline--May 31, 2004. In January 2000, the EPA also mandated specific NOx emission controls on EGUs and non-EGUs in upwind states in response to petitions filed by eight Northeastern states under section 126 of the CAA. 42 U.S.C. 7426. Both the FIP and the section 126 rule seek NOx reductions in accordance with the NOx budgets established for the NOx SIP Call, as amended by the rules challenged in this case. Earlier this year, this Court upheld the EPA's section 126 rule in most respects, though some portions of that rule relevant to this case were remanded to the EPA for additional consideration. See Appalachian Power Co. v. EPA, Nos. 99-1200, et al. (May 15, 2001).
In the final SIP Call rule promulgated on October 27, 1998, the EPA reopened public comment on the accuracy of data upon which the emission inventories and budgets were based. See NOx SIP Call, 63 Fed. Reg. at 57,427. On December 24, the EPA extended the comment period "for emission inventory revisions to 2007 baseline sub-inventory information used to establish each State's budget in the NOx SIP Call," and further explained that it was seeking comment on the relevant data and assumptions so the agency could correct errors and update information used to compute the 2007 budgets. See Correction and Clarification to the Finding of Significant Contribution and Rulemaking for Purposes of Reducing Regional Transport of Ozone, 63 Fed. Reg. 71,220 (Dec. 24, 1998) ("SIP Call Correction"). The EPA also announced that it would...
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