National Parks Conservation Ass’n v. U.S. Environmental Protection Agency, 788 F.3d 1134 (9th Cir. 2015)
In this case, PPL Montana and the National Parks Conservation Association (NPCA) challenged the United States Environmental Protection Agency’s (EPA) regional haze regulations under the Clean Air Act (CAA) for the state of Montana. PPL Montana, owners and operators of the Colstrip Steam Electric Generating Station (Colstrip) and the J.E. Corette Steam Electric Generating Station (Corette), petitioned for review of EPA’s Best Available Retrofit Technology (BART) determinations at Colstrip and Corette, arguing that the regulations were too strict. NPCA petitioned for review of the same determinations, but argued that the regulations did not do enough to remedy visibility impairment caused by regional haze. Thus, for different reasons, both PPL Montana and NPCA argued that the regulations for Colstrip and Corette were arbitrary and capricious. After consolidating the various petitions, the Ninth Circuit held that many of EPA’s regional haze regulations for Colstrip and Corette were arbitrary and capricious, and as such in violation of the CAA.
The CAA requires EPA to promulgate regulations to “assure . . . reasonable progress toward meeting the national goal” of regional haze reduction. The CAA gives states the option to submit to EPA a State Implementation Plan (SIP) setting forth emission limits and other measures necessary to make reasonable progress toward the national visibility goal. If a state chooses not to submit a SIP, the CAA requires EPA to produce a Federal Implementation Plan (FIP) for that state. All implementation plans must require installation of BART to reduce emissions from certain emission sources. Five statutory factors determine which type of emissions-reducing technology constitutes BART. The CAA requires EPA to explain the basis for its decisions, including underlying factual bases, methods of analysis, and legal and policy considerations. EPA must also respond to the comments and new data submitted during the comment period.
The State of Montana did not submit a SIP, so EPA published a proposed FIP requiring PPL Montana to take actions to reduce emissions of nitrogen oxide (NOX) and sulfur dioxide (SO2) at Colstrip and Corette. Both PPL Montana and NPCA commented on the Proposed FIP. EPA responded to the comments of petitioners, but its final FIP implemented the proposed FIP in almost all respects relevant to the appeal.
EPA concluded that the targeted reduction of NOX emissions at Colstrip Units 1 and 2 could be achieved by installing both separated overfire air (SOFA) and selective non catalytic reduction (SNCR) technologies.NPCA contended that EPA failed to justify its rejection of selective catalytic reduction (SCR)—a more aggressive technology than SNCR—in addition to SOFA.PPL Montana, on the other hand, contended that EPA failed to justify the need for SOFA and SNCR, rather than SOFA alone. EPA identified the costs of the various technologies for NOX reduction, but offered little reasoning for its selection of SOFA and SNCR together. The Ninth Circuit concluded that EPA’s BART determination for NOX emissions at Colstrip Units 1 and 2 was arbitrary and capricious because EPA did not provide a reasoned response to the petitioners’ comments. The Ninth Circuit explained that, while the CAA does not require EPA to justify its cost-effectiveness decisions with a bright-line rule, the law does require EPA to provide a reasoned explanation for why it exercised its discretion in a particular way.
Both petitioners disputed the rationality of EPA’s selection of a fourth scrubber as BART for SO2 emissions control at Colstrip Units 1 and 2 for essentially the same reasons they disputed EPA’s NOX BART determinations. The parties argued that EPA’s cost-effectiveness analysis with regard to SO2 again failed to explain what made the cost reasonable in light of potential visibility benefits. On this issue, the Ninth Circuit found that EPA thoroughly and rationally explained its response to NPCA’s objection. However, the court also determined that EPA’s response to PPL Montana did not adequately explain its rationale for its cost-effectiveness analysis and failed to explain why the benefits of a fourth scrubber justified its cost. Therefore, the court found that EPA’s requirement to install a fourth scrubber at Colstrip Units 1 and 2 was arbitrary and capricious.
PPL Montana and NPCA also argued that EPA’s BART determinations at Colstrip Units 1 and 2 were arbitrary and capricious because they were inconsistent with EPA’s Corette analysis. Corette did not require additional controls even though the cost and potential visibility impacts were similar. PPL Montana questioned why EPA required more of Colstrip 1 and 2 than Corette, while NPCA questioned why Corette was not held to the same standard as Colstrip 1 and 2. The Ninth Circuit agreed with both petitioners that the unexplained inconsistencies in EPA’s cost-effectiveness reasoning made EPA’s BART determination arbitrary and capricious.
PPL Montana further objected to EPA’s use of the CALPUFF visibility model in determining BART at Colstrip Units 1 and 2. CALPUFF is a model used to estimate an emissions source’s impact on visibility. PPL Montana claimed that because the maximum potential incremental visibility benefit of SNCR fell within CALPUFF’s margin of error, it could not be reasonably anticipated to improve visibility. EPA’s failure to adequately address PPL Montana’s concerns over CALPUFF’s utility further supported the Ninth Circuit’s conclusion that the requirement to install SNCR at Colstrip Units 1 and 2 was arbitrary and capricious.
PPL Montana also challenged the emissions limitations for Corette, asserting the CAA does not authorize EPA to impose emissions limits without determining BART. The court held that EPA sufficiently explained that, after it already found BART was in place at Corette, it could skip the remaining analyses, including the visibility analysis, and impose emissions limitations. The Ninth Circuit concluded that PPL Montana’s contention was, in fact, a challenge to the Regional Haze Rule, and thus not a proper challenge to Montana’s FIP. Additionally, PPL Montana and EPA disagreed on whether converting emissions limits to 30-day rolling averages would require EPA to raise the limits set forth in the Proposed Rule. The Ninth Circuit concluded that the complexity of the issue justified deference to EPA’s reasoned judgment.
Finally, NPCA argued that EPA’s decision not to require any additional emission reducing technology at Colstrip Units 3 and 4 was arbitrary and capricious and contrary to the CAA’s reasonable progress requirement. EPA replied that the visibility benefits from requiring SCR at Colstrip Units 3 and 4 were not sufficient and compared the potential benefits to another station where improvements were cost-justified. The Ninth Circuit held that EPA’s explanation was reasonable with respect to Colstrip Units 3 and 4 because the explanation provided NPCA with at least some broad metric for understanding which cost-per-ton ratios EPA will approve and which it will not.
In conclusion, the Ninth Circuit held that EPA did not offer a rational explanation in response to a number of the petitioners’ comments concerning regulations on Colstrip Units 1 and 2 and Corette. EPA’s responses in those instances were therefore arbitrary and capricious. PPL Montana showed that the requirement of additional technology at Colstrip Units 1 and 2 and to some extent Corette was arbitrary and capricious, while NPCA failed to show that the fourth scrubber at Colstrip Units 1 and 2 was necessary and also that additional technology was justified at Colstrip Units 3 and 4. The court granted in part and denied in part the petitions for review, vacated the portions of the Rule setting emissions limits at Colstrip Units 1 and 2 and Corette, and remanded to EPA for further proceedings.
- Petitioners included Montana Environmental Information Center and the Sierra Club.↵
- 42 U.S.C. §§ 7401–7671q (2012). The regional haze regulations are codified at 42 U.S.C. §§ 7491–7492 (2012).↵
- Id. § 7491(b)(2)(A).↵
- Id. § 7491(a)(4).↵
- Id. §§ 7410(a), 7491(b)(2).↵
- Id. § 7410(c)(1)(A).↵
- Id. § 7491(b)(2).↵
- The five factors are; “[T]he cost of compliance, the energy and non-air quality environmental impacts of compliance, any existing pollution control technology in use at the source, the remaining useful life of the [emission] source, and the degree of improvement in visibility which [is] anticipated.” Id. § 7491(g)(2).↵
- Id. § 7607(d)(6)(A).↵
- Id. § 7607(d)(6)(B).↵
- To reduce NOX, the Proposed Rule required PPL Montana to install two new technologies at Colstrip Units 1 and 2 of the four-unit Colstrip station. To reduce SO2, the Proposed Rule required PPL Montana to implement new technologies at Colstrip Units 1 and 2—lime injection and a fourth “scrubber.” At the Corette station, the Proposed Rule imposed 30-day average rolling emission limits of 0.40 lb/mmBtu for NOX and 0.70 lb/mmBtu for SO2 and required PPL Montana to achieve this by using its current technology.↵
- NPCA contended that EPA should have considered requiring installation of advanced scrubbers at Colstrip, not just the introduction of an additional scrubber. But EPA sufficiently explained that its “BART Guidelines recommend constructing a new system when a current control system achieves less than 50 percent removal efficiencies . . . and therefore EPA is not required to consider replacement technology.” Nat’l Parks Conservation Ass’n v. U.S. Envtl. Prot. Agency, 788 F.3d 1134, 1145 (9th Cir. 2015) (quotation marks and citations omitted).↵
- 40 C.F.R. pt. 51 app. Y § III.A.3.↵
- PPL Montana also objected to the application of CALPUFF to Colstrip and Corette because of their distance from Class I areas, contending that the model is inaccurate at such great distances. To this, EPA had a valid response.↵
- See 42 U.S.C. § 7491(g)(2) (2012).↵
- EPA contrasted this effectiveness with what was implemented in North Dakota at Antelope Valley Station, a location to which NPCA specifically urged comparison. The cost was much lower at that location relative to its reasonable progress.↵