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Appalachian Power Co. v. EPA

Citation: 28 ELR 20521
No. 96-1497, 135 F.3d 791/46 ERC 1001/(D.C. Cir., 02/13/1998)

The court upholds a U.S. Environmental Protection Agency (EPA) rule that revised and established nitrogen oxide (NOx) emission limits for Group 1, Phase II electric utility boilers as well as Group 2 boilers under Clean Air Act (CAA) Title IV. The court first holds that in revising the limits for the Group 1, Phase II boilers, EPA's interpretation of the phrase "more effective low NOx burner technology" to encompass improved performance of existing burners is reasonable. It is evident that Congress intended that low NOx burner technology serve as a benchmark for emission limits promulgated under Title IV, so to the extent that the rule derived from EPA's interpretation does not require technology beyond low NOx burners, that rule would not be inconsistent with the intent of the statute. EPA's interpretation is also consistent with CAA § 407's concern with achievability. It is a fair interpretation to read Congress' directive that more effective technology be available as authorizing more stringent limits only if those limits are achievable in practice. Moreover, the fact that Congress did not simply require a determination that "more effective low NOx burners" existed suggests that "more effective low NOx burner technology" refers to something beyond the burner hardware itself.

The court next holds that the analytical model used by EPA was not arbitrary and capricious. By including all the database criteria in the notice of proposed rulemaking that could possibly have been subject to adverse comment, EPA complied with its statutory directive to include the methodology used in obtaining the data. Moreover, the court can find no apparent defects in the database itself. EPA identified all likely candidates for the boiler database and was responsive to comments. In addition, the regression equations were constructed based on the data available or reasonably predictable at the time of the final rule; to require EPA to take into account variables for which no data existed would be to require that it engage in precisely the type of arbitrary rulemaking the CAA forbids. Moreover, the fact that uncertainty surrounding the data points exists is not sufficient to label EPA's model arbitrary and capricious. The fact that some individual boilers cannot currently meet the revised limits does not serve to invalidate the rule. Finally, EPA's failure to build a compliance margin into the limits themselves should not render them arbitrary and capricious. The court further holds that for EPA to justify its decision to revise the Group 1, Phase II emission limits in part by referring to environmental concerns was not arbitrary and capricious — indeed, it would have been arbitrary for EPA to offer no justification.

Next, the courtholds that in revising the emission limits for Group 2 boilers, EPA's interpretation of the phrase "comparable to the costs of" as contemplating a comparison of cost-effectiveness is reasonable. Although EPA's interpretation may not be required by the legislative history, it surely is consistent with and supported by it. The court also holds that EPA's methodology for setting the Group 2 emission limits is not arbitrary and capricious. The court finds none of the utility's challenges to the Group 2 emission limits persuasive and upholds the limits EPA established for boilers in that group.

The court next holds that the utility's argument regarding the compliance deadline during the comment period — in substance, if not in form, the same objection now raised — was sufficient to put EPA on notice of a challenge to its claim that it was bound by the statute in setting the compliance date for the Group 1, Phase II and Group 2 boilers at January 1, 2000. The court then holds that Congress did not intend to set a compliance date for these boilers, and further holds that EPA's resolution designating January 1, 2000, as the compliance date for both Group 1, Phase II boilers and all Group 2 boilers is reasonable. A compliance date of January 1, 2000, provides utilities with at least two years of lead time to prepare for compliance, a period at least twice as long as the preparation time for the 1995 emission limits.

Last, the court holds that EPA has not justified its classification of retrofitted cell burners as wall-fired boilers. The fact that no retrofitted cell burner can achieve the Group 1 emission limit using the only technology, Congress authorized for setting that limit — low NOx burner technology — is evidence that retrofitted cell burners are not the functional equivalent of wall-fired boilers, as measured by congressional concerns. Because EPA has not adequately justified its treatment of retrofitted cell burners as wall-fired boilers, the court remands the issue to the agency for reconsideration or a more adequate justification.

[A decision related to this litigation is published at 25 ELR 20166.]

Counsel for Petitioners
F. William Brownell
Hunton & Williams
2000 Pennsylvania Ave. NW, Ste. 9000, Washington DC 20006
(202) 955-1555

Counsel for Respondent
Scott J. Jordan
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Wald, Henderson, and Garland, JJ.