Pennsylvania v. Allegheny Energy, Inc.
| Decision Date | 06 February 2014 |
| Docket Number | Civil Action No. 05-885 |
| Parties | Commonwealth of Pennsylvania, Department of Environmental Protection, State of Connecticut, State of Maryland, State of New Jersey, and State of New York, Plaintiffs, v. Allegheny Energy, Inc., Allegheny Energy Service Corp., Allegheny Energy Supply Co., LLC, Monongahela Power Co., The Potomac Edison Co., and West Penn Power Co., Defendants. |
| Court | U.S. District Court — Western District of Pennsylvania |
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This matter is before the court following a bench trial. Plaintiffs Commonwealth of Pennsylvania, Department of Environmental Protection ("Pennsylvania DEP"), and the States of Connecticut, Maryland, New Jersey, and New York (together with Pennsylvania DEP, collectively "plaintiffs") seek relief under (1) Part C of Title I of the Clean Air Act ("CAA"), 42 U.S.C. §§ 7404-7479; (2) the new source performance standards ("NSPS") of the CAA, 42 U.S.C. § 7411; and (3) Title V of the CAA, 42 U.S.C. §§ 7661-7661f. Plaintiffs allege that defendants Allegheny Energy, Inc., Allegheny Energy Service Corporation, Allegheny Energy Supply Company, LLC, Monongahela Power Company, the Potomac Edison Company and West Penn Power Company (collectively "Allegheny" or "defendants") violated the CAA by (1) modifying and operating major emitting facilities without obtaining permits and without abiding by emissions limitations required under the preventionof significant deterioration ("PSD") provisions of the CAA; (2) reconstructing and operating two units at a major emitting facility without limiting emissions as required by the NSPS of the CAA; and (3) operating a major emitting facility without obtaining permits as required by Title V of the CAA.
Plaintiff Pennsylvania DEP also brings claims pursuant to the Pennsylvania Air Pollution Control Act ("APCA"), 35 PA. STAT. §§ 4001-4015. Pennsylvania DEP alleges that Allegheny: (1) failed to abide by the emissions limitations required by the PSD provisions under Pennsylvania law, 25 PA. CODE §§ 127.81-.83; (2) failed to abide by the emissions limitations in Pennsylvania nonattainment new source review provisions ("nonattainment NSR"), 25 PA. CODE §§ 127.201-.218; (3) failed to abide by the emissions limitations required under the NSPS provision of Pennsylvania law, 25 PA. CODE §§ 122.1-.3; (4) failed to obtain pre-construction approval for its projects, including the use of the best available technology ("BAT") standards for its facilities as required by law, 25 PA. CODE §§ 127.11-.51; and (5) failed to obtain Title V operating permits as required by law, 25 PA. CODE §§ 127.401-.464.
Specifically, the projects at issue are (1) the replacement of the boilers of Units 1 and 2 of the Armstrong Plant located in Washington Township, Armstrong County, Pennsylvania ("Armstrong"); (2) replacement of portions, including but not limited to the secondary superheater outlet headers, the reheater, and the lower slope tube panels, of Units 1, 2, and 3 at the Hatfield's Ferry Plant located in Green County, Pennsylvania ("Hatfield"); and (3) replacement of the lower slope tube panels at Unit 3 of the Mitchell Plant located in Courtney, Washington County, Pennsylvania ("Mitchell"), as they relate to the emission of nitrogen oxides ("NOx").
Plaintiffs seek a permanent injunction and civil penalties. The court must decide four preliminary issues: (1) whether certain trial exhibits are admissible; (2) whether the closure of the plants at issue renders the injunctive relief claims moot; (3) whether plaintiffs established that the statute of limitations should be equitably tolled; and (4) whether the court has jurisdiction over plaintiffs' Title V claims. The courtmust decide three substantive questions: (1) whether any of the projects violated the PSD provisions of the CAA (counts 1, 7, 15, 17, 19, and 23); (2) whether the Armstrong projects were reconstructions which triggered the NSPS of the CAA (counts 4 and 10); and (3) whether Allegheny violated parallel provisions of Pennsylvania law (counts 2, 3, 5, 6, 8, 9, 11, 12, 16, 18, 20, and 24).1
This court has subject-matter jurisdiction over the claims in this case pursuant to 42 U.S.C. § 7604(a) and 28 U.S.C. § 1331. The relief requested is authorized pursuant to 42 U.S.C. § 7604 and 28 U.S.C. §§ 2201 and 2202. Venue lies in the United States District Court for the Western District of Pennsylvania pursuant to 42 U.S.C. § 7604(c) and 28 U.S.C. § 1391(b) and (c) because the plants at issue are located in this district.
This matter was bifurcated between liability and damages. A bench trial on liability was held before Chief Judge Gary L. Lancaster from September 13 through September 23, 2010. Chief Judge Lancaster passed away on April 24, 2013. This matter was then reassigned to the undersigned judge. The parties agreed to stand on the record at the status conference held July 11, 2013. The credibility of all the witnesses that testified was assessed based upon the review of the record.
The court considered the evidence adduced at trial, the law applicable to this case, and the submissions of the parties, including extensive proposed findings of fact and conclusions of law and supplemental briefing on developments that occurred post trial. Set forth below are the court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. Because the court finds (1) the PSD claims at Armstrong are moot with respect to injunctive relief and time barred with respect to damages; (2) this court lacks subject-matter jurisdiction over the Title V claims; (3) the projects at Hatfield and Mitchell were routinemaintenance, repair, and replacement; and (4) the projects at Armstrong were not reconstructions or otherwise subject to new source regulations; all as described below, the court finds that defendants are not liable to plaintiffs on any claim.
Set forth below are the court's findings of fact with respect to the parties, the operation of coal-fired power plants, and those facts relevant to the determination whether the projects at issue were "major modifications," which triggered the PSD requirements, or were "routine maintenance, repair and replacement." 40 C.F.R. § 52.21(b)(2)(i), (iii)(a). As a result of the findings of fact with respect to whether the projects at issue were "major modifications," the court does not need to reach the emissions issue and, therefore, makes no findings of fact on that issue. Also set forth below are findings of fact regarding whether plaintiffs' Armstrong projects violated the NSPS of the CAA and facts related to whether the statute of limitations should be equitably tolled.
1. Defendant Allegheny Energy, Inc., is a public utility holding company that owns the five other corporate defendants in this action: Allegheny Energy Service Corporation; Allegheny Energy Supply Company, Monongahela Power Company, The Potomac Edison Company, and West Penn Power Company. (Joint Stipulations—Liability Phase ¶ 1, ECF No. 430 [hereinafter "JS"].)
2. In September 1997, Allegheny Power System, Inc., changed its name to Allegheny Energy. (Pls.' Proposed Findings of Fact ¶ 2, ECF No. 462 [hereinafter "PPF"]; Defs.' Proposed Findings of Fact App. 1, ¶ 1, ECF No. 470 [hereinafter "DPF"].)
3. At the times in issue, Allegheny Energy, Inc., owned all or substantially all of Allegheny Energy Service Corporation, Allegheny Energy Supply Company, Monongahela Power Company, The Potomac Edison Company, and West Penn Power Company or their corporate predecessors. (PPF ¶ 3; DPF App. 1, ¶ 3.)
4. Each defendant is a "person" as that term is defined in 42 U.S.C. § 7602(e). (JS ¶ 3.)
5. This litigation concerns three coal-fired electricity generating stations operated by Allegheny: Armstrong, Hatfield, and Mitchell. (JS ¶ 4.)
6. Each of those power stations is, and was at the time of the projects at issue in this case, a "major emitting facility," as that term is defined in 42 U.S.C. § 7479(1); a "major stationary source" as that term is defined in 40 C.F.R. § 52.21(b)(1)(i)(b) and 25 PA. CODE § 127.83; a "major NOx emitting facility" as that term is defined in 25 PA. CODE § 121.1; and a "major facility" for sulfur dioxide ("SO2"), as that term is defined in 25 PA. CODE § 121.1. (JS ¶ 5.)
7. On or about May 20, 2004, the Attorneys General of New York, Connecticut, and New Jersey and the Chief Counsel of Pennsylvania DEP sent a notice of intent to sue to defendants. (JS ¶ 71.)
8. On or about September 8, 2004, the Attorney General of Maryland sent a notice of intent to sue defendants. (JS ¶ 72.)
9. On or about August 3, 2005, the Attorneys General of New York, Connecticut, Maryland, and New Jersey and the Chief Counsel of Pennsylvania DEP sent a notice of intent to sue to defendants for additional violations under the CAA. Among other things, this notice described the NSPS, BAT, and Title V operating permit claims that plaintiffs assert in this action. (JS ¶ 73.)
10. Each notice was served by certified mail on the U.S. Environmental Protection Agency ("EPA") Administrator, the EPA Regional Administrator for the EPA Region in which the plants are located, the Governor of Pennsylvania, and defendants. (JS ¶ 74.)
11. More than sixty days elapsed between the 2004 notices and the filing of plaintiffs' original complaint in this action, in which plaintiffs' pleaded the claims identified in the 2004 notices. (JS ¶ 75.)
12. More than sixty days elapsed between the 2005 notice and the filing of plaintiffs' first amended complaint in this action, in which plaintiffs' pleaded the additional claims identified in the 2005 notice. (JS ¶ 76.)
13. A coal-fired power plant burns coal in a boiler to heat water that turns into steam and spins a turbine connected to a generator to produce electricity. (Trial Tr. day 1, 44:1-5, Sept. 13, 2010, ECF...
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