Public Serv. Co v. U.S. EPA, 99-9542

• Decision Date: 29 August 2000
• Docket Number: No. 99-9542,99-9542
• Citation: 225 F.3d 1144
• Parties: (10th Cir. 2000) PUBLIC SERVICE COMPANY OF COLORADO, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, COLORADO INDEPENDENT ENERGY, Amicus Curiae
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1144

225 F.3d 1144 (10th Cir. 2000)

PUBLIC SERVICE COMPANY OF COLORADO, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, COLORADO INDEPENDENT ENERGY, Amicus Curiae.

No. 99-9542

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

August 29, 2000

Appeal from Administrative Determination of the United States Environmental Protection Agency (EPA No. 8P-AR)

James A. Holtkamp, LeBoeuf, Lamb, Greene & MacRae, L.L.P., Salt Lake City, Utah, (Gary E. Parish, LeBoeuf, Lamb, Greene & MacRae, L.L.P., Denver, Colorado and Frank Prager, Associate General Counsel, New Century Energies, Denver, Colorado, with him on the briefs), for Petitioner.

Daniel W. Pinkston, Senior Trial Attorney, (Lois J. Schiffer, Assistant Attorney General, Denver, Colorado, Teresa Lukas, Of Counsel, Office of Regional Counsel, U.S. Environmental Protection Agency, Denver, Colorado and M. Lea Anderson Of Counsel, Office of General Counsel, U.S. Environmental Protection Agency, Washington, D.C., with him on the briefs), Environment and Natural Resources Division, U.S. Department of Justice, Denver, Colorado, for Respondent.

Jeffrey G. Pearson, Kelly, Haglund, Garnsey & Kahn, LLC, Denver, Colorado, filed an amicus curiae brief for Colorado Independent Energy Association.

Before BRORBY, McKAY, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

I. INTRODUCTION

The Environmental Protection Agency ("EPA") issued two letters opining that a proposed new power plant and an existing plant owned by Public Service Company of Colorado ("PSCo") will constitute a "single source" of air emissions for purposes of air emissions permitting. Pursuant to 42 U.S.C. § 7607(b), PSCo brought this appeal to challenge the EPA's determination. The EPA then moved this court to dismiss PSCo's appeal for lack of subject matter jurisdiction, arguing the opinion letters do not constitute "final action" as required by § 7607(b). This court grants the EPA's motion and dismisses the appeal.¹

II. BACKGROUND

Under the federal Clean Air Act, any major emitting facility, which includes stationary sources of air pollutants, located in an area of the country which has already achieved the national ambient air quality standards must obtain a prevention of serious deterioration ("PSD") permit prior to beginning initial construction or making certain modifications to an existing facility. See 42 U.S.C. §§ 7471; 7407(d)(1)(A)(ii); 7475(a)(1); 7410(a)(2)(C), (D); 7479(1), (2)(C); 7411(a)(2), (3), (4). Pursuant to rules and regulations promulgated by the EPA, the state of Colorado, rather than the EPA itself, is the permitting authority for almost all stationary sources within Colorado. See 40 C.F.R. §§ 52.02, 52.320; 51 Fed. Reg. 31,125 (1986). The Colorado Department of Public Health and Environment ("CDPHE") has thus promulgated its own regulations governing the applicability and requirements for a PSD permit. See Colorado Air Quality Control Commission ("CAQCC") Regulation No. 3, Parts A & B.

In November of 1998, KN Power Company ("KN Power") applied to the CDPHE for a PSD permit for the construction of a new power-generating plant (the "Front Range facility") in Fort Lupton, Colorado. The Front Range facility was to be constructed by Front Range Energy Associates, LLC ("Front Range"), a joint venture formed by two companies, Quixx Mountain Holdings, LLC ("Quixx") and FR Holdings, LLC. Quixx is a subsidiary of Quixx Corporation, which is a subsidiary of New Century Energies, Inc. ("New Century") and FR Holdings is a subsidiary of KN Power.

In April of 1999, PSCo, which owns and operates an existing power generating facility also in Fort Lupton (the "PSCo facility"), entered into a power-supply agreement (the "Agreement") with Front Range. Pursuant to the Agreement, Front Range would construct and operate the Front Range facility near the PSCo facility and PSCo would purchase the entire electric power and energy output from the Front Range facility. Moreover, the Front Range facility would be interconnected with the PSCo electric system. PSCo, like Quixx, is a subsidiary of New Century.

Also in April, KN Power withdrew its PSD permit application and instead applied for a "minor source permit," ostensibly because the Front Range facility would operate only during peak electricity demand periods and thus emit less than 250 tons of nitrogen dioxide and carbon monoxide per year. See 42 U.S.C. § 7479(1) (providing that certain types of stationary sources lacking the potential to emit 250 tons or more per year of an air pollutant do not qualify as "major emitting facilities"). After reviewing the minor source permit application and the attendant files, the CDPHE became concerned that the Front Range facility and the PSCo facility were, in part, under common ownership and that the two facilities would be co-managed. The CDPHE, therefore, questioned whether the Front Range facility would merely be a modification to the existing PSCo facility such that together they would actually constitute a single stationary source or major emitting facility, thus requiring a PSD permit prior to construction. See id. §§ 7479(2)(C), 7411(a)(2), (4); 40 C.F.R. § 51.166(b)(2)(i), (23)(i); 51.166(i)-(r).

Under both federal and Colorado law, if the new Front Range facility and the existing PSCo facility (1) belong to the same industrial grouping, (2) are located on contiguous or adjacent property, and (3) are under common control, they constitute a single stationary source. See 42 U.S.C. § 7411(a)(3); 40 C.F.R. § 51.166(b)(6); CAQCC Regulation No. 3 Part A § I.B.59. If the two facilities constitute a single stationary source, construction of the Front Range facility would therefore be deemed a major modification to an existing major emitting facility, triggering the PSD permit requirement. See 40 C.F.R. § 51.166(b)(2)(i), (23)(i); id. § 51.166(i)-(r). The CDPHE indicated that the two facilities "clearly" met the first two elements of the definition of a single stationary source and it was unsure as to whether the third element of common control was also present. The CDPHE thus solicited the EPA's opinion about whether the two facilities would constitute a single source.

On October 1, 1999, in response to the CDPHE's inquiry, the EPA sent a letter to the CDPHE "outlin[ing] [its] views" on whether the proposed Front Range facility and the existing PSCo facility would constitute a single source. The letter stated, "it is our interpretation of the PSD regulations that the [Front Range facility] and existing PSCo generating facility constitute a single source" and that the Front Range facility, "if constructed as proposed, would be a major modification of this major source and therefore, is subject to the requirement to obtain a PSD permit . . . ." In the letter, the EPA reasoned that both the control vested in PSCo over the Front Range facility by the power supply agreement and New Century's common ownership interests in both facilities demonstrated common control over the two facilities. After PSCo requested the EPA to reconsider its determination, the EPA sent a second letter on November 12, 1999 to the Associate General Counsel for New Century briefly reconfirming its earlier opinion. To this date, the CDPHE has neither granted nor denied the minor source permit.

III. DISCUSSION

In appealing the opinion rendered in the two EPA letters, PSCo contends this court has jurisdiction over that appeal pursuant to 42 U.S.C. § 7607(b). The parties agree that the relevant portion of § 7607(b) provides,

A petition for review of the [EPA] Administrator's action in approving or promulgating any implementation plan under section 7410 of this title or section 7411(d) of this title, any order under section 7411(j) of this title, under section 7412 of this title,[] under section 7419 of this title, or under section 7420 of this title, or his action under section 1857c-10(c)(2)(A), (B), or (C) of this title . . . or under regulations thereunder, or revising regulations for enhanced monitoring and compliance certification programs under section 7414(a)(3) of this title, or any other final action of the Administrator under this chapter (including any denial or disapproval by the Administrator under subchapter I of this chapter) which is locally or regionally applicable may be filed only in the United States Court of Appeals for the appropriate circuit.

Id. § 7607(b)(1) (emphasis added). On EPA's motion to dismiss, the question before this court is whether the two EPA letters constitute "final action" within the meaning of § 7607(b)(1).

In Harrison v. PPG Industries, Inc., the United States Supreme Court considered the meaning of the words "any other final action" within § 7607(b)(1). See 446 U.S. 578, 586 (1980). The parties in Harrison, however, agreed that the challenged EPA action constituted "'final action' as that term is understood in the context of the Administrative Procedure Act [("APA")] and other provisions of federal law." Id. The Court, therefore, was left to construe only the words "any other." See id. at 586-94. The holding in Harrison that § 7607(b)(1) conferred jurisdiction on the court of appeals over the challenged EPA action is thus inapposite to the instant case. Nonetheless, the Court's acceptance of the parties' agreement that the challenged action was a "final action" within the meaning of the APA counsels this court to look to interpretations of the term "final action" under the APA when construing that same term under § 7607(b)(1).² See id. at 586.

In resolving whether a particular agency action is final under the APA, this court recently stated, "we look to whether [the action's] impact is direct and immediate, whether the action marks the consummation of the agency's decisionmaking process, and whether the action is one by which rights or obligations have been determined, or from which legal consequences will flow." Colorado Farm Bureau Fed'n v. United States...