Genon Mid-Atlantic, LLC v. Md. Dep't of the Env't

• Citation: 241 A.3d 40,248 Md.App. 253
• Decision Date: 28 October 2020
• Docket Number: No. 883, 884 and 885, Sept. Term, 2019,883, 884 and 885, Sept. Term, 2019
• Parties: GENON MID-ATLANTIC, LLC, et al. v. MARYLAND DEPARTMENT OF THE ENVIRONMENT, et al.
• Court: Court of Special Appeals of Maryland

248 Md.App. 253

241 A.3d 40

GENON MID-ATLANTIC, LLC, et al.

v.MARYLAND DEPARTMENT OF THE ENVIRONMENT, et al.

No. 883, 884 and 885, Sept. Term, 2019

Court of Special Appeals of Maryland.

October 28, 2020

Argued by Kevin P. Holewinski (Kamaile A. N. Turcan, Daniella A. Einik, Jones Day, Washington, D. C.), Leah Kelly, Senior Attorney (Sylvia Lam, Environmental Integrity Project, Washington, D.C.), on the briefs, for Appellant.

Argued by Michael F. Strange (Brian E. Frosh, Attorney General, Baltimore, MD) for Appellee.

Nazarian, Reed, Keith R. Truffer (Specially Assigned), JJ.

CONSOLIDATED CASES

Nazarian, J. "The rabbit-hole went straight on like a tunnel for some way, and then dipped suddenly down, so suddenly that Alice had not a moment to think about stopping herself before she found herself falling down a very deep well."¹

GenOn Mid-Atlantic, LLC, NRG Chalk Point, LLC, and GenOn Chalk Point, LLC (collectively "GenOn") operate three coal-powered steam electric generating power plants in Maryland. Burning coal produces pollutants, and GenOn needs a permit for each plant from the Maryland Department of the Environment (the "Department") to discharge pollutants into Maryland's waters. GenOn applied for renewed permits to replace permits that were expiring. The Department analyzed the applications under existing federal environmental regulations and issued permits that, everyone agrees, comply with these regulations in force at the time of issuance.

Why, then, are we here? Well, the federal regulations in place at the time the permits were issued were promulgated by the United States Environmental Protection Agency ("EPA") during an earlier presidential administration, and the current EPA had expressed an intention to revisit the applicable federal regulation (and, to acknowledge the elephant in the room, loosen them). At the time the case arose, the EPA had not actually begun the rulemaking process that is required to act on that intention, but GenOn asked the Department to issue permits with terms that reflected the (later, hypothetical) compliance deadlines at which the EPA had hinted but, again, had not yet begun the process of adopting.² After the Department issued permits consistent with the regulations existing at the time, GenOn sought judicial review in the circuit courts of the plants’ respective counties, and contended that each permit was arbitrary and capricious because the Department did not await or anticipate the not-yet-revised regulations or give GenOn additional opportunities to show they couldn't comply with the deadlines in the existing regulations. The courts affirmed the Department's permitting decisions, GenOn appeals, we consolidated the appeals, and we affirm.

I. BACKGROUND

A. Statutory Framework.

Generally speaking, the federal Clean Water Act ("the Act") prohibits the "discharge of any pollutant by any person" into our "navigable waters." 33 U.S.C. §§ 1311(a), 1362(7), (12) (2018) ; see Md. Dept. of Env't v. Anacostia Riverkeeper , 447 Md. 88, 96, 134 A.3d 892 (2016). Some businesses, like GenOn's coal-powered plants, seek authority from the EPA to discharge pollutants into the water. See Md. Dept. of Env't v. Cnty. Comm'rs of Carroll Cnty. , 465 Md. 169, 184–85, 214 A.3d 61 (2019). Through the National Pollution Discharge Elimination System ("NPDES"), the EPA is authorized to issue (or to delegate to state environmental agencies to issue) discharge permits. But that authority, once granted, isn't unfettered—the permits contain restrictions "on the type and quantity of pollutants that can be released" in order to serve the purpose of the Act. Anacostia Riverkeeper , 447 Md. at 96, 134 A.3d 892 (quoting S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe , 541 U.S. 95, 102, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004) ); see 33 U.S.C. § 1342 (2018).

The EPA has the power to delegate its permitting authority to a state so long as the state establishes "a parallel permitting program" as required under the Act. Carroll Cnty. , 465 Md. at 185, 214 A.3d 61 ; see 33 U.S.C. § 1342(b). The EPA has done this in Maryland, and the permitting authority is the Department. Anacostia Riverkeeper , 447 Md. at 96, 134 A.3d 892 ; see Md. Code (1987, 2014 Repl. Vol.), § 9-253 of the Environment Article ("EN"); see COMAR 26.08.04.01. Permits are valid for fixed periods of five years or less, subject to renewal. 33 U.S.C. § 1342(b)(1)(B) ; EN § 9-328(b). The Act also contains an "anti-backsliding" prohibition that forbids later permits from containing more lenient conditions than their predecessors. 33 U.S.C. § 1342(o) ; see Carroll Cnty. , 465 Md. at 185, 214 A.3d 61.

The Act defines "water quality standards" that set limits on the concentration of pollutants in water for public use. Carroll Cnty. , 465 Md. at 186, 214 A.3d 61 ; see 33 U.S.C. § 1313(c)(2)(A) (2018). To achieve the Act's water quality standards, permits place restrictions on pollutants. "Effluent limitation[s]" are "any restriction established by a State or the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged ... into navigable waters ...."

33 U.S.C. § 1362(11). The Department incorporates effluent limitation guidelines ("ELGs") into the permits it issues. See 40 C.F.R. § 125.3 (2019). ELGs, in turn, address different classes of pollutants. 33 U.S.C. § 1314(b). Instead of targeting the quantity of pollutants pushed into our waters by dischargers, ELGs focus on the technology the discharger uses to clean the types of pollutants discharged into the environment. Id.

GenOn's coal-fired power plants produce two types of pollutants that are at issue here: flue gas desulfurization ("FGD") wastewater and bottom ash transport water. Coal-fired power generating units produce flue gas, which contains "large quantities of particulate matter, sulfur dioxide, and nitrogen oxides," that would be released into the atmosphere unless they were cleaned first. Effluent Limitations Guidelines and Standards for the Steam Electric Power, 80 Fed. Reg. 67,838, 67,846 (Nov. 3, 2015) (codified at 40 C.F.R. pt. 423). The units are equipped with air pollution control systems that clean the air and remove sulfur dioxide. However, FGD systems produce wastewater that contains pollutants, including "chemical precipitation, biological treatment, and evaporation." Effluent Limitations Guidelines, 80 Fed. Reg. at 67,846. Bottom ash transport water contains heavy ash particles that fall to the bottom of coal-fired furnaces. Normally, the bottom ash is cooled in a water-filled hopper that produces two byproducts, the ash itself and the transport water. Id. Technology exists for bottom ash to be cleaned and produce zero discharge. Id.

The relevant ELGs require GenOn to use the highest standard of technology it can reasonably acquire, the "best available technology" ("BAT"), to limit the environmental impact of pollutants. The EPA (or here, the Department) determines the BAT for a particular industry by assessing a number of factors:

Factors relating to the assessment of best available technology shall take into account the age of equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, the cost of achieving such effluent reduction, non-water quality environmental impact (including energy requirements), and such other factors as the [Department] deems appropriate.

33 U.S.C. § 1314(b)(2)(B) (2018). The BAT standard is "more stringent" than others, and "reflect[s] the intention of Congress to use the latest scientific research and technology in setting effluent limits, pushing industries toward the goal of zero discharge as quickly as possible." Kennecott v. EPA , 780 F.2d 445, 448 (4th Cir. 1985).

B. The EPA Remarks On Steam-Powered Electric Plants.

On November 3, 2015, the EPA issued a final rule establishing the ELGs for coal-burning steam plants such as GenOn's (the "2015 Final Rule"). Effluent Limitations Guidelines, 80 Fed. Reg. at 67,838. In its preamble, the Rule states that "[s]team electric power plants contribute the greatest amount of all toxic pollutants discharged to surface waters by industrial categories regulated under the Act." Id. Citing the health risks to minority and low-income communities housed near these plants, the EPA stated that the 2015 Final Rule was intended to "establish[ ] the first nationally applicable limits on the amount of toxic metals and other harmful pollutants that steam electric power plants are allowed to discharge in several of their largest sources of wastewater." Id. The 2015 Final Rule imposed stricter limitations on FGD wastewater and required the elimination of pollutants from bottom ash transport water. Effluent Limitations Guidelines, 80 Fed. Reg. at 67,894 –96 (listing new standards for mercury, selenium, arsenic, and total dissolved solids in the discharge of FGD wastewater and allowing "no discharge of pollutants in bottom ash transport water").

The 2015 Final Rule was challenged, ultimately unsuccessfully, in cases consolidated in the United States Court of Appeals for the Fifth Circuit. See Clean Water Action v. EPA , 936 F.3d 308 (5th Cir. 2019). On April 25, 2017, the EPA (now under a new administration) announced in a letter that it planned to reconsider the 2015 Final Rule, and it postponed the effective date of the 2015 Final Rule "pending judicial review" before the Fifth Circuit.

Postponement of Certain Compliance Dates, 82 Fed. Reg. 19,005 (Apr. 25, 2017) (codified at 40 C.F.R. pt. 423). A few months later, on September 18, 2017, the EPA issued a final rule lifting the stay and postponing the compliance dates for some types of wastewater (the "2017 Postponement Rule"). Postponement of Certain Compliance Dates, 82 Fed. Reg. 43,494 –500 (Sept. 18, 2017) (codified at 40 C.F.R. pt. 423). But 40 C.F.R. § 423.13, which contains the relevant deadlines for...