Jul 30: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-60934. Petitions for Review of Orders of the Environmental Protection Agency. The Appeals Court explains that two sets of petitioners, hereinafter referred to as "Industry Petitioners" and "Environmental Petitioners," seek review of the United States Environmental Protection Agency's (EPA) final rule partially approving and partially disapproving the most recent revision to Texas's State Implementation Plan (SIP) submitted by the Texas Commission on Environmental Quality (TCEQ) pursuant to the Clean Air Act (CAA). The Industry Petitioners include Luminant Generation Co. LLC, Oak Grove Management Co. LLC, Big Brown Power Co. LLC, and Sandow Power Co. LLC. The Environmental Petitioners include Environmental Integrity Project, Sierra Club, Environment Texas Citizen Lobby, Inc., Citizens for Environmental Justice, Texas Environmental Justice Advocacy Services, Air Alliance Houston, and Community In-Power and Development Association.
The Appeals Court ruled in part that, "EPA in its partial disapproval of the SIP revision adheres to its past policy guidance. Moreover, the record indicates that the EPA's partial disapproval of the plan was the result of a formal and deliberative decision-making process. Therefore, we hold that the agency's action disapproving the portion of the SIP providing an affirmative defense for planned SSM activity is entitled to Chevron deference."
In summary, the Appeals Court concludes, "Because we find that the EPA did not act arbitrarily or capriciously, or contrary to law, or in excess of its statutory authority, in its partial approval and partial disapproval of Texas's SIP revision, we deny both petitions for review."
In its final rule which became effective on January 10, 2011, the EPA partially approved and partially disapproved the most recent revision to Texas's SIP which was submitted by the TCEQ in 2006. The portion of the SIP at issue creates an affirmative defense against civil penalties for excess emissions during both planned and unplanned startup, shutdown, and maintenance/malfunction (SSM) events. The EPA approved the portion of the SIP revision providing an affirmative defense against civil penalties for unplanned SSM events and disapproved the portion of the SIP revision providing an affirmative defense against civil penalties for planned SSM events.
Environmental Petitioners argue that the EPA's approval of the affirmative defense for unplanned SSM events is in excess of the agency's statutory authority and is not in accordance with the Act. Specifically, petitioners argue that the final rule conflicts with the plain language of the Act authorizing civil penalties in EPA and citizen suit enforcement actions, as well as the Act's requirement that the state permitting authority be able to assess civil penalties. Environmental Petitioners further argue that, even if the affirmative defense against civil penalties for excess emissions resulting from unplanned SSM activity is not contrary to the CAA, the EPA's approval was arbitrary and capricious. Finally, Environmental Petitioners argue that, in approving the affirmative defense for unplanned SSM activity, the EPA altered the meaning of the SIP as submitted by Texas. We address each of these
arguments in turn.
Industry Petitioners argue that the portion of the SIP revision containing the affirmative defense for planned SSM activity fully complies with the CAA and should have been approved by the EPA. They further argue that the EPA's partial disapproval of the SIP revision was arbitrary, capricious, and contrary to law. In the alternative, Industry Petitioners argue that the EPA should have severed and approved the affirmative defense for planned startup and shutdown activity, even if it disapproved the affirmative defense for planned maintenance activity. Industry Petitioners also request that approval of the SIP be backdated to June 30, 2006, so as to eliminate any gap between the expiration of the previous affirmative defense and the current affirmative defense.
The Appeals Court ruled in part that, "EPA in its partial disapproval of the SIP revision adheres to its past policy guidance. Moreover, the record indicates that the EPA's partial disapproval of the plan was the result of a formal and deliberative decision-making process. Therefore, we hold that the agency's action disapproving the portion of the SIP providing an affirmative defense for planned SSM activity is entitled to Chevron deference."
The Appeals Court also determined in part, ". . .we uphold the EPA's disapproval of the affirmative defense as it applies to planned startup and shutdown activity. Regardless of whether the activity at issue is planned maintenance or planned startup/shutdown, the improper cross-referencing in subsection (h) to subsection (c) leads to an overly-broad applicability of the defense. In addition, as stated, it is within the agency's discretion to exercise its partial approval and disapproval power with regard to SIP submittals."
Finally, the Appeals Court concludes, ". . .we conclude that the EPA did not act arbitrarily or capriciously, contrary to law, or in excess of its statutory authority, in its partial approval and partial disapproval of Texas's SIP revision. We therefore deny the petitions for review submitted by both Environmental Petitioners and Industry Petitioners."
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