Northern Plains Resource Council v. U.S. E.P.A.

• Decision Date: 26 May 1981
• Docket Number: No. 79-7618,79-7618
• Citation: 645 F.2d 1349
• Parties: , 11 Envtl. L. Rep. 20,635 NORTHERN PLAINS RESOURCE COUNCIL, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. The Montana Power Company, the Washington Water Power Company, Puget Sound Power and Light Company, Portland General Electric Company, and Pacific Power and Light Company, Intervenors.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1349

645 F.2d 1349

16 ERC 1790, 11 Envtl. L. Rep. 20,635

NORTHERN PLAINS RESOURCE COUNCIL, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent The Montana Power Company, the Washington Water Power Company, Puget Sound Power and Light Company Portland General Electric Company, and Pacific Power and Light Company, Intervenors.

No. 79-7618.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 19, 1980.

Decided May 26, 1981.

James A. Patten, Billings, Mont., for petitioner.

Elizabeth Stein, Washington, D. C., for respondent.

Appeal from a decision by the Environmental Protection Agency.

Before TANG, SCHROEDER and NELSON, Circuit Judges.

NELSON, Circuit Judge:

Petitioner, Northern Plains Resource Council (the "Council"), ¹ seeks a review of the U.S. Environmental Protection Agency's ("EPA") decision ² conditionally granting a "prevention of significant deterioration of air quality" (PSD) permit, as required by the Clean Air Act ³ and by EPA regulations, ⁴ to a consortium of investor-owned utilities (the "Consortium") ⁵ for two coal-fired electric power plants under construction at Colstrip, Montana ("Colstrip Units Nos. 3 and 4"). Two rather technical issues are raised: ⁶

The first is whether the EPA's approval of the Consortium's permit application is improper because the Colstrip Units will not utilize the "best available control technology" (hereinafter BACT) as required by Section 165(a)(4) of the Act, 42 U.S.C. § 7475(a)(4), and the EPA's regulations, 40 CFR § 52.21(j)(2) (1980). Two sub-issues are raised by the Council in its challenge to EPA's acceptance of the Colstrip plan as BACT. First, the Council argues that, because the projected emissions of particulates exceed the applicable 1978 new source performance standards (NSPS), EPA has violated the dictates of § 165(a) (3)(C) of the Act which requires that BACT must not result in emissions in excess of any applicable standard of performance under the Act.

EPA's response is that the plant would meet the 1971 NSPS standards, and that these are the applicable standards. We conclude that the appropriate standard is the 1971 standard.

The other BACT sub-issue is whether, because more sophisticated techniques (i.e. the "baghouse") exist, acceptance of the Colstrip plan as BACT was without rational basis. The statute provides that BACT is to be determined on a case-by-case basis, taking into account energy, environmental, and economic impacts. See 42 U.S.C. § 7479(3). Given the constraints in this case, including the need to protect the Class I SO 2 increment on the nearby reservation, the EPA's action was not irrational.

The second major issue raised by the Council is a challenge to EPA's refusal to validate its air dispersion model with monitoring data proffered by the Council. ⁷ Because the data was collected on low terrain, it has no relevance to the model used by the EPA to project SO 2 emissions on high terrain, the only area where projections approached the relevant PSD increments. Although the monitored readings differed from those the model would have predicted, the Council does not show that the EPA's actions were arbitrary and capricious or that the agency ignored a significant threat to the relevant PSD increment, given the lower projected SO 2 concentrations on low terrain.

We therefore affirm the EPA.

I. BACKGROUND

A. Facts Relating To The Colstrip Units

Colstrip Units Nos. 3 and 4 are part of a complex of four power plants, the first two of which were completed in 1976. ⁸ Plans to build Units Nos. 3 and 4 were formalized in 1973. On January 25, 1974, the Consortium entered into a contract for the construction of two steam generators for Colstrip Units Nos. 3 and 4. Other additional significant preliminary steps for construction of the units were taken in 1974. ⁹ Thereafter, however, the Consortium ran into significant delays in obtaining three of the requisite state and federal permits.

Originally, the Consortium took the position that it was not required to obtain a PSD permit under the EPA's 1974 PSD regulations because the Colstrip Units fell within the grandfather provision, having commenced construction prior to June 1, 1975. That position was initially upheld by the district court in Montana Power Co. v. EPA, 429 F.Supp. 683, 703 (D.Mont.1977). Nevertheless, on July 1, 1976, under protest and reserving its rights, the Consortium applied for a PSD permit. Thereafter, the 1977 amendments to the Act were enacted. The EPA held that the statutory PSD program clearly required that the Consortium obtain a PSD permit. 42 Fed. Reg. 60784-86 (1977). This court agreed, reversing the district court's ruling and upholding the EPA's subsequent determination. Montana Power Co. v. EPA, 608 F.2d 334, 357-58 (9th Cir. 1979).

During this period, on August 5, 1976, the Northern Cheyenne Tribe, whose reservation is in the vicinity of the Colstrip plants, announced its intention to redesignate its reservation from Class II to Class I. See 42 U.S.C. §§ 7472, 7474. The Consortium's PSD permit application was held in abeyance by the EPA pending the outcome of the redesignation process. On August 5, 1977, the redesignation was approved. 42 On November 14, 1977, the Consortium petitioned the EPA for reconsideration. Although initially issuing a public notice of its proposed approval of the permit, on June 12, 1978, the EPA reversed itself and denied the permit after holding public hearings on the matter and conducting further analyses. The Consortium then modified its plans for the pollution abatement system at Colstrip Units Nos. 3 and 4, and on February 15, 1979 submitted a revised application. ¹² The EPA issued a public notice of its proposed approval of the revised PSD permit application. At the hearings on the proposed permit, the Council proffered materials purportedly demonstrating that the revised plans did not incorporate the best available control technology and that the air dispersion model used in the validation process was inaccurate. After considering the information presented at the hearings, the EPA issued the PSD permit on September 11, 1979, subject to several conditions. ¹³ This petition challenging that decision followed.

                Fed. Reg. 40695 (1977).  10 The Consortium's PSD permit was denied on September 30, 1977, because the EPA's air quality modeling indicated that the newly applicable Class I sulfur dioxide increments on the Northern Cheyenne Reservation would be violated by Colstrip Units Nos. 3 and 4.  11
                

II. DISCUSSION

A. Do The Colstrip Units Employ The Best Available Control Technology As Required By Section 165(a)(4) Of The Act?

The Council raises two arguments in support of its position that the Colstrip Units do not utilize the requisite BACT. First, it asserts that the pollution control system at Colstrip Units Nos. 3 and 4, which were approved by the EPA, will permit a particulate emission rate which exceeds the standard allowed by the applicable NSPS. This initial argument is based on the premise that the 1978 NSPS regulations for fossil-fuel-fired generating units, 40 CFR §§ 60.40a-60.49a (1980), are controlling in the present situation rather than the 1971 NSPS regulations, 40 CFR §§ 60.40-60.46 (1980). Second, the Council argues that the EPA in its approval process improperly ignored the existence of new and improved abatement technology, for removing particulate matter. The abatement technology, which the Council urges should be employed, is a "baghouse control system". ¹⁴

1. The Relationship Between The NSPS Regulations And The PSD Program

The statutory PSD program provides, inter alia, that no construction on a major emitting facility may be commenced after August 7, 1977 in an area designated under the PSD classification system unless:

the owner or operator of such facility demonstrates that emissions from construction or operation of such facility will not cause, or contribute to, air pollution in excess of (C) any other applicable emission standard or standard of performance under this (Act.) (Emphasis added.)

Section 165(a)(3) of the Act, 42 U.S.C. § 7475(a)(3). The EPA would clearly be acting contrary to the statutory PSD program Likewise, Section 165(a)(4) of the Act, 42 U.S.C. § 7475(a)(4), requires the proposed facility to be subject to the best available control technology for each pollutant subject to regulation under the Act. Under the statutory definition of the term "best available control technology", it is stated that:

in issuing a PSD permit to a facility which would produce emissions in excess of an applicable new source performance standard.

In no event shall application of "best available control technology" result in emissions of any pollutants which will exceed the emissions allowed by any applicable standard established pursuant to section 7411 (which defines the standards of performance for new stationary sources) of this title.

Section 169(3) of the Act, 42 U.S.C. § 7479(3). ¹⁵ Thus, the grant of a PSD permit to a facility that violated applicable NSPS regulations would be contrary to that statutory directive as well.

From the materials presented to this court, it appears that the Colstrip Units Nos. 3 and 4 will fail to meet the 1978 NSPS emission standards for particulate matter and nitrogen oxides, but they do satisfy the 1971 NSPS regulations. ¹⁶ The issue then is which set of NSPS regulations is applicable to the Colstrip Units.

The two regulations involved herein are mutually exclusive. As stated in 40 CFR § 60.40(e) (1980), "(a)ny facility covered under Subpart Da (the 1978 NSPS regulations) is not covered under this Subpart (the 1971 NSPS regulations)." As noted in the Act, the applicability of the various regulations rests on whether construction or modification of the affected facility began after the publication of the regulations or, if earlier, the proposed regulations. Sections 111(a)(2) and (b)(6) of the Act, 42...