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Sierra Pac. Power Co. v. EPA

Citation: 11 ELR 20671
No. Nos. 79-7542, 80-7301, 647 F.2d 60/16 ERC 1313/(9th Cir., 06/05/1981)

The Ninth Circuit Court of Appeals rules that the Environmental Protection Agency (EPA) acted reasonably in determining that petitioners did not commence construction of Unit Two of Nevada's North Valmy coal-fired power plant prior to the effective date of EPA regulations requiring new pollution sources to comply with new source performance standards. Effective September 19, 1978, EPA adopted revised standards pursuant to § 111 of the Clean Air Act, which require installation of scrubbers on all coal-fired power plants above a certain size. Petitioners contended that although actual construction of the second unit of the power plant did not begin until 1979, they had "commenced construction" of Unit Two for purposes of § 111 because (1) EPA had issued a prevention of significant deterioration (PSD) permit for the entire project in April 1978 and (2) a construction permit had been issued for Unit One prior to September 19, 1978. The court upholds EPA's determination that because petitioner had not entered into either a binding construction contract or a continuous program of construction for Unit Two as of September 19, 1978, that unit was subject to the 1978 regulations. EPA may properly analyze the state of construction on only one unit of a two-unit project. Moreover, EPA did not abuse its discretion in requiring actual physical construction, rather than planning and design activity, as a test for determinating commencement of construction under § 111 of the Act. The court also rejects petitioners' contention that EPA improperly failed to consider lost investments in determining whether to apply the 1978 regulations.

Counsel for Petitioners
Thomas C. Watson
Crowell & Moring
1100 Connecticut Ave. NW, Washington DC 20036
(202) 452-5800

Paul L. Jauregui, General Counsel
Idaho Power Co., Box 70, Boise ID 83707
(208) 383-2200

John Madariaga
Sierra Pacific Power Co.
Box 10100, Reno NV 89502
(702) 789-4349

Counsel for Respondent
Angus C. Macbeth
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2744

Before DUNIWAY, Senior Circuit Judge, BOOCHEVER, Circuit Judge, and TAYLOR,* Senior District Judge.*