Sierra Club v. Portland General Elec. Co.

• Decision Date: 30 September 2009
• Docket Number: Civil No. 08-1136-HA.
• Parties: SIERRA CLUB, a non-profit corporation; Northwest Environmental Defense Center, a non-profit corporation; Columbia Gorge, a non-profit corporation; Columbia Riverkeeper, a non-profit corporation; and Hellscanyon Preservation Council, a non-profit corporation, Plaintiffs, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation, Defendant.
• Court: U.S. District Court — District of Oregon

663 F.Supp.2d 983

SIERRA CLUB, a non-profit corporation; Northwest Environmental Defense Center, a non-profit corporation; Columbia Gorge, a non-profit corporation; Columbia Riverkeeper, a non-profit corporation; and Hellscanyon Preservation Council, a non-profit corporation, Plaintiffs, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation, Defendant.

Civil No. 08-1136-HA.

United States District Court, D. Oregon.

September 30, 2009.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Aubrey E. Baldwin, Allison Michelle Laplante, Thomas Charles Buchele, Portland, OR, for Plaintiffs.

David H. Griggs, Martin C. Dolan, Dolan Griggs, LLP, Portland, OR, David A. Savage, Kevin Collins, Baker Botts LLP, Austin, TX, Kent Mayo, William M. Bumpers, Baker Botts LLP, Washington, DC, for Defendant.

OPINION AND ORDER

HAGGERTY, District Judge:

Plaintiffs Sierra Club, Northwest Environmental Defense Center, Friends of the Columbia Gorge, Columbia Riverkeeper, and Hells Canyon Preservation Council (hereinafter plaintiffs or Sierra Club) filed suit against defendant Portland General Electric Company (defendant or PGE) seeking civil penalties and injunctive relief for alleged violations of the Clean Air Act (CAA or Act), 42 U.S.C. § § 7401-7671q, and certain Oregon Department of Environmental Quality (ODEQ) regulations. Defendant moves to dismiss plaintiffs' first, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, and twelfth claims for relief pursuant to Federal Rule of Civil Procedure 12(b)(6). The State of Oregon, acting as amicus curiae, has also filed a brief with the court. Oral argument was held on September 10, 2009. For the following reasons, defendant's Motion to Dismiss [21] is GRANTED IN PART and DENIED IN PART.

STANDARD

When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must determine whether the plaintiff has made factual allegations that are "enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Fed.R.Civ.P. 12(b)(6). Dismissal under Rule 12(b)(6) "can be based on the lack of a cognizable legal theory or absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988). The reviewing court must treat all facts alleged in the complaint as true, and resolve all doubts in favor of the nonmoving party. NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.1986); Experimental Eng'g, Inc. v. United Tech. Corp., 614 F.2d 1244, 1245 (9th Cir.1980).

BACKGROUND

Plaintiffs are non-profit environmental organizations. Plaintiffs allege that PGE constructed, modified, and currently operates the coal-fired steam generating Boardman Electric Generating Station (Boardman or the Plant) in Morrow County, Oregon, in violation of the CAA and ODEQ regulations.¹ Plaintiffs bring this action pursuant to the CAA's citizen suit provision. 42 U.S.C. § 7604. Plaintiffs assert that Boardman is the single largest source of harmful air pollution in Oregon and that it lacks pollution control technologies that are required by law, and which, if implemented, would reduce Boardman's emissions levels drastically.

A. Overview of the Clean Air Act Regulatory Framework

1. The Clean Air Act

The CAA of 1970 was enacted "to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of the population." 42 U.S.C. § 7401(b)(1). The Act requires the United States Environmental Protection Agency (EPA) to establish national ambient air quality standards (NAAQS) for six criteria pollutants that EPA has determined may cause or contribute to air pollution reasonably anticipated to endanger public health or welfare. 42 U.S.C. §§ 7408(a), 7409(a). The Act requires the division of states into air quality planning areas, which are then designated as "in attainment," "nonattainment," or "unclassifiable" due to insufficient information with respect to each pollutant, depending on each area's air quality. Great Basin Mine Watch v. U.S. EPA, 401 F.3d 1094, 1096 (9th Cir.2005). Under the CAA's scheme of "cooperative federalism," states may implement many of the Act's provisions, and each state is required to submit a state implementation plan (SIP) to EPA for approval. A SIP must meet certain minimum standards set forth by the CAA and EPA regulations before being approved. 42 U.S.C. § 7410(a)(1), (a)(2)(A), (k)(1).

2. New Source Performance Standards

The 1970 Act directed EPA to promulgate technology-based air emissions standards applicable to particular categories of facilities that are newly constructed, reconstructed, or have undergone modification which results in an increase in the amount of any air pollutant emitted by the facility. 42 U.S.C. § 7411; 40 C.F.R. § 60.14. The parties dispute which new source performance standards (NSPS) apply to the Plant. PGE contends that Boardman is subject to, and in compliance with, 40 C.F.R. Part 60, Subpart D, which applies to fossil-fuel-fired steam generating units for which construction commenced after August 17, 1971. Sierra Club contends that Boardman is additionally subject to 40 C.F.R. Part 60, Subpart D, which applies to similar units for which construction, modification, or reconstruction is commenced after September 18, 1978. 40 C.F.R. § 60.40Da(a).

3. Prevention of Significant Deterioration

The prevention of significant deterioration (PSD) program governs sources located in regions that are in attainment with NAAQS or where there is insufficient information to evaluate whether the standards have been met. 42 U.S.C. §§ 7470-92.² The PSD program is designed to promote the protection of air quality in attainment areas, as well as economic growth that is consistent with the preservation of air quality. 42 U.S.C. § 7470.

A central feature of the PSD program is the requirement that proposed new major emitting facilities, or existing major emitting facilities for which modifications are proposed, obtain a permit and approval prior to construction. 42 U.S.C. § 7475. The term "modification" is defined as: "any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted." 42 U.S.C. §§ 7479(2)(C), 7411(a)(4).

The PSD program includes requirements that the proposed facility demonstrate "that emissions from construction or operation of such facility will not cause, or contribute to" inordinate increases of any pollutant or an exceedance of NAAQS, and that the facility utilize best available control technology (BACT) for each regulated pollutant. 42 U.S.C. § 7475. A PSD permit sets forth emissions limitations for a facility and requires the operator to engage in ongoing monitoring "to determine the effect which emissions" have on air quality in affected areas. Id.

The PSD program currently utilizes both the 1974 PSD regulations promulgated by EPA and the superseding 1977 Amendments to the CAA.³ Neither 1974 PSD regulations nor the 1977 PSD Amendments apply to plants that "commenced" construction prior to specified dates. Such plants are instead "grandfathered" past the PSD program unless and until the plant is modified within the meaning of the Act. Under EPA's 1974 PSD regulations, facilities that commenced construction before June 1, 1975, were not required to obtain a PSD permit. Under the 1977 PSD Amendments, facilities that commenced construction before August 17, 1977, were not required to obtain a PSD permit. 39 Fed. Reg. at 42,516; 42 U.S.C. § 7475(a).

The 1974 PSD regulations and 1977 PSD Amendments define "commence" similarly. A facility is determined to have commenced construction with either the initiation of actual construction, or upon entering into a contractual obligation for the construction of the facility. 39 Fed. Reg. at 42,516; 42 U.S.C. § 7479(2)(A).

4. Oregon's PSD Program

Each state's SIP must contain "emission limitations ... to prevent significant deterioration of air quality in each region" designated as "in attainment" or as "unclassifiable" with applicable NAAQS. 42 U.S.C. § 7471. Oregon has primary responsibility for keeping its air quality in compliance with federal standards pursuant to its SIP. Oregon's PSD program was first approved by EPA on November 5, 1981. 46 Fed. Reg. 54939 (Nov. 5, 1981).⁴ Before Oregon's PSD program received approval, the federally administered program was administered in Oregon.

Under Oregon's SIP, regulated sources are assigned a Plant Site Emission Limit (PSEL) for each air pollutant emitted. Or. Admin. R.(OAR) 340-224-0020(89). Oregon's PSD program applies to the construction of a "federal major source" and to "major modifications" of a federal major source. OAR 340-224-0020(66). Before the owner or operator commences construction of a major source or a major modification of such a source, the owner or operator must obtain a Standard Air Contaminant Discharge Permit (ACDP). OAR 340-224-0010(2); OAR 340-216-0025; OAR 340-028-1900(1) (1997). An ACDP is a PSD permit in Oregon.

Under Oregon's SIP, a modification is considered "major" if it is a "physical change or change of operation of a source that results" in an "increase in the PSEL by an amount equal to or more than the significant emission rate over the netting basis," and if the "accumulation of physical changes and changes of operation since baseline would result in a significant emission rate increase." OAR 340-224-0020(66)(a),(b). However, major modification is defined differently for "new or modified major sources that were permitted to construct and operate after the baseline period [1977-78] and were not subject to New Source Review." OAR 340-224-0020(66)(c). For such plants, modifications are considered "major" if ...