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Media Alerts - National Parks Conservation Association v. Environmental Protection Agency - Third Circuit
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October 1, 2015
  National Parks Conservation Association v. Environmental Protection Agency - Third Circuit
Headline: EPA Failed to Explain How It Reached Conclusions Regarding Pennsylvania's SIP Where Pennsylvania's SIP Was Flawed in Several Respects

Area of Law: Environmental law

Issue Presented: Under the Clean Air Act, should the EPA disapprove of a State Implementation Plan where it failed to identify all available retrofit control technologies, improperly concluded what the baseline level for certain emissions should be, used an improper metric in calculating the cost-effectiveness of additional pollution controls, and underestimated the visibility impact of each source of pollution by not considering the cumulative visibility impact?

Brief Summary: Pennsylvania submitted its regional haze State Implementation Plan ("SIP") to the United States Environmental Protection Agency ("EPA") pursuant to the Clean Air Act in December 2010. On July 13, 2012, the EPA finalized its limited approval of Pennsylvania's SIP after promulgating a Federal Implementation Plan ("FIP") for multiple states, including Pennsylvania, and replacing the "cap and trade" program with the Cross-State Air Pollution Rule ("Transportation Rule"). The Court found that the EPA failed to explain how it reached many of its conclusions regarding Pennsylvania's SIP, which itself failed to explain many of its conclusions. However, the Court agreed with Pennsylvania's alternative pollution control limits and evaluation of the cost-effectiveness of the pollution controls that were available for each BART-eligible source in its SIP.

Extended Summary: In December 2010, Pennsylvania submitted its regional haze State Implementation Plan ("SIP") to the United States Environmental Protection Agency ("EPA") pursuant to the Clean Air Act. The Clean Air Act aims to repair and prevent impairment of visibility in Class I areas, such as certain national parks and wilderness areas. Pennsylvania elected to treat thirty-four pollution sources as sources that are eligible for an emission limitation based on the degree of reduction that can be achieved through the best available retrofit technology ("BART"). These sources were BART-eligible. Pennsylvania also chose to follow the better-than-BART approach with respect to the eight fossil fuel electric generating stations that have a capacity of 750 megawatts or more because these stations participated in the "cap and trade" program, which Pennsylvania reasoned was better than BART at reducing emissions.

Pennsylvania could identify BART-eligible sources in its SIP in compliance with the Clean Air Act and the Regional Haze Rule. After Pennsylvania's SIP determined which sources were BART-eligible, it needed to determine which of these sources were subject to BART. A source was subject to BART if it emitted any air pollutant which may reasonably be anticipated to cause or contribute to any impairment of visibility in any mandatory Class I Federal area. If a source was subject to BART, Pennsylvania must have weighed five factors to determine the appropriate emission limitations. The EPA issued BART Guidelines to help states determine BART-eligible sources and the appropriate emission limitations. Use of the Guidelines was required for any fossil-fueled power plant with a total electricity generating capacity of 750 megawatts or more and advisory for smaller sources.

Furthermore, Pennsylvania could implement another program if it demonstrated that the other program was better-than-BART at reducing emissions. However, whichever approach Pennsylvania chose, it was required to submit a SIP to the EPA. The EPA was then obligated to determine whether the SIP met the requirements of the Clean Air Act. If Pennsylvania's SIP was insufficient, the EPA needed to enact its own Federal Implementation Plan ("FIP").

The EPA approved of Pennsylvania's SIP to the extent its BART analysis was compliant with the Clean Air Act and the regional haze regulations and disapproved of Pennsylvania's SIP to the extent that it relied on the "cap and trade" program. On June 7, 2012, the EPA promulgated an FIP for multiple states including Pennsylvania that replaced the "cap and trade" program with the Cross-State Air Pollution Rule ("Transportation Rule"). On July 13, 2012, the EPA finalized its limited approval of Pennsylvania's SIP. The EPA upheld its final rule on April 30, 2014 (the "Final Rule") after being challenged by the National Parks Conservation Association, Sierra Club, and Clean Air Council (collectively the "Conservation Groups").

The Conservation Groups sought the Court's review of the EPA's Final Rule on the basis that the EPA arbitrarily and capriciously approved Pennsylvania's SIP.

First, the Conservation Groups argued that the EPA should not have allowed Pennsylvania to rely on the Transport Rule for the sources with an electricity generating capacity of 750 megawatts or more in lieu of conducting a source-specific BART analysis. However, the Conservation Groups were attempting to use this appeal from the administrative proceedings that lead to the Final Rule under review to challenge decisions that the EPA reached in separate proceedings; the merits of the Transport Rule and Pennsylvania's reliance on it were addressed in the rule the EPA issued to many states prior to the Final Rule under review here. The Conservation Groups could not take this approach, and even if they could, the Clean Air Act mandates that the proper court to hear this sort of challenge would be the United States Court of Appeals for the District of Columbia Circuit.

Next, the Conservation Groups argued that Pennsylvania's source-specific BART analysis failed to comply with the Guidelines in many respects. By approving Pennsylvania's SIP despite these deficiencies, the EPA violated the Clean Air Act. In response to several of the Conservation Groups' arguments, the Court found that the EPA failed to explain how it reached many of its conclusions regarding Pennsylvania's SIP, and Pennsylvania's SIP itself failed to explain many of its conclusions. The Conservation Groups' arguments with which the Court agreed focused on the SIP's failure to identify all available retrofit control technologies, Pennsylvania's improper conclusion of what the baseline level for certain emissions should be, Pennsylvania's improper metric used in calculating the cost-effectiveness of additional pollution controls, and Pennsylvania's underestimated visibility impact of each source of pollution.

The Court found that Pennsylvania's SIP failed to identify or describe all the upgrades considered for BART-eligible sources or explain why these controls were rejected, thus the SIP failed to identify all available retrofit control technologies. The EPA also failed to explain how it evaluated Pennsylvania's analysis with so little information provided in the SIP.

The Court agreed that Pennsylvania improperly concluded what the baseline level for certain emissions should be because Pennsylvania did not express a reason for selecting the emission limit that it did. Further, the EPA arbitrarily approved Pennsylvania's BART analysis. The EPA argued that its approval of Pennsylvania's SIP was harmless error, but the EPA failed to justify its position in light of its obligation to disapprove of a SIP that does not comply with the Clean Air Act.
The Court also agreed that Pennsylvania used an improper metric to calculate the cost-effectiveness of additional pollution controls. The EPA concluded in its Final Rule that Pennsylvania's chosen metric was flawed but did not provide any meaningful explanation as to why the EPA ignored these flaws, which it conceded were present.

Lastly, the Court found that Pennsylvania underestimated the visibility impact of each source of pollution. Namely, Pennsylvania did not consider the cumulative visibility impact where its source-specific BART analysis required it to calculate the visibility improvement that could be achieved through the implementation of additional pollution controls. The EPA failed to articulate a satisfactory explanation for its decision to approve Pennsylvania's SIP despite the recognized flaws in its BART analysis and cost-effectiveness calculations.

However, the Court agreed with the EPA's arguments regarding alternative pollution control limits and Pennsylvania's evaluation of the cost-effectiveness of the pollution controls available for each BART-eligible source.

With regard to the issue of alternative pollution control limits, the Court found that the Guidelines did not require states to consider exact emission limits determined to be the best available control technology ("BACT") or lowest achievable emission rate ("LAER") but to consider the technologies used to achieve BACT and LAER. Furthermore, the Guidelines created a presumption that if a state relied on the maximum achievable control technology ("MACT"), its SIP satisfied the BART. However, the Guidelines did not require a state to rely on the MACT.

The Court also agreed that Pennsylvania's evaluation of the cost-effectiveness of the pollution controls available for each BART-eligible source was proper because nothing in the Clean Air Act required Pennsylvania to set a fixed threshold of cost-effectiveness.
To read the full opinion, please visit http://www2.ca3.uscourts.gov/opinarch/143147p.pdf

Panel (if known): Ambro, Vanaskie, and Shwartz, Circuit Judges.

Date of Argument: April 14, 2015

Date of Issued Opinion: September 29, 2015

Docket Number: No. 14-3147

Decided: 2014 Final Rule vacated to the extent it approved Pennsylvania's source-specific BART analysis and remanded to the EPA for further proceedings.

Case Alert Author: Sarah Adams

Counsel: David S. Baron, Esq., Charles McPhedran, Esq., counsel for Petitioners; Kate R. Bowers, Esq., Regina McCarthy, Esq., counsel for Respondent; Robert A. Reiley, Esq., Kristen M. Furlan, Esq., counsel for Intervenor Pennsylvania Department of Environmental Protection; Chet M. Thompson, Esq., Kristen L. Nathanson, Esq., counsel for Intervenor Homer City Generation LP.

Author of Opinion: Judge Vanaskie

Circuit: Third Circuit

Case Alert Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 10/01/2015 10:37 AM     3rd Circuit  

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