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Alabama Power Co. v. Costle

Citation: 10 ELR 20001
No. No. 78-1006, 636 F.2d 323/13 ERC 1993/(D.C. Cir., 12/14/1979) Modified

In three separately authored opinions, the court enlarges upon and modifies to some extent the rulings in its earlier per curiam decision, 9 ELR 20400, on the validity of various portions of the Environmental Protection Agency's (EPA's) regulations for the prevention of significant deterioration (PSD) of air quality in clean air areas pursuant to §§160-169 of the Clean Air Act, as amended in 1977. The per curiam opinion is superseded by this decision.

In his opinion for the court, Judge Leventhal concludes that the statutory language and purpose as well as the legislative history indicate that in determining whether a source has the potential to emit more than 100 tons of any air pollutant annually and is thus a major emitting facility subject to the PSD requirements of the Act under §169(1), EPA must take into account air pollution controls incorporated into the plant's design rather than looking to the source's uncontrolled emissions. EPA's exemption, on cost effectiveness grounds, of new facilities that emit less than 50 tons a year of any pollutant from the preconstruction review and permitting requirements of §165 exceeded the Agency's authority. Although this issue is academic given the court's conclusion thatt only sources emitting 100 tons annually with their pollution controls in operation are subject to the PSD requirements, the question is remanded to the Agency since it may wish to refashion rather than terminate the exemption. To provide guidance to EPA should it undertake such a task, the court identifies several principles which govern the existence of implicit Agency authority to adopt general exemptions from statutory requirements based upon administrative necessity or de minimis circumstances. EPA has authority under the Act to protect the PSD air quality increments by requiring that once it is determined an applicable increment is being violated, the relevant state implementation plan (SIP) must be revised to correct the violation. The Agency is not, however, authorized to dictate growth management policies for the consumption of allowable increments to the states. Relying on the plain meaning of §165 and the supporting legislative history, the court also rules that the PSD preconstruction review and permitting requirements apply only to major emitting facilities to be located in clean air areas. EPA's regulations extending these requirements to all sources, no matter where located, which have an impact upon any clean air area are therefore vacated. The court points out that EPA may under §§110, 114, and 126 require that SIPs contain provisions to prevent interstate pollution from sources in non-attainment areas from interfering with PSD requirements. EPA's partial exemption for sources of fugitive dust from the statutory permit requirements is vacated and remanded because it was based on a misreading of §302. Sectionn 165(e)(1) requires that preconstruction review include an analysis of each pollutant regulated under the Act, but monitoring is required only for particulates and sulfur dioxide to demonstrate that allowable increments will not be violated. EPA has not abused its discretion in omitting any requirements for postconstruction monitoring.

In his opinion for the court, Judge Robinson holds that EPA's definition of baseline concentrations in all clean air areas in terms of actual air quality as of August 7, 1977, the date the Clean Air Act amendments were enacted, is contrary to the express language of §169(4) and must be set aside. Baseline concentrations are instead to be determined as of the date upon which the first major emitting facility applies for a PSD permit in a particular area. EPA properly decided not to include additional emissions resulting from voluntary fuel switches by plants in operation and designed to accommodate the alternate fuel prior to January 6, 1975, the effective date of the Agency's original PSD regulations. The court upholds EPA's modeling regulations against a number of industry objections. The Agency also properly interpreted §123 as requiring emissions from all preexisting sources with tall stacks that were built after the effective date of the 1970 Clean Air Act to be modeled as though the stacks were only as tall as warranted by good engineering practice when ascertaining the emission limitations to be imposed on new facilities.

In his opinion for the court, Judge Wilkey concludes that the term "source" as used in the PSD provisions of the Act is governed by the definition provided in §111(a)(3) and rules that the more expansive definition included in the regulations must be refashioned. EPA's provision that an industrial unit located on contiguous or adjacent properties and under common ownership be considered a single source is permissible, however, because Congress clearly envisioned that an entire plant could be considered a source for PSD purposes. EPA also properly applied the PSD requirements to all sources with annual potential emissions of 250 tons of any pollutant regardless of physical size or production capacity since this provision is based on a reasonable interpretation of the language of §169(1) and has conclusive support in the legislative history. The PSD requirements apply to all modifications of major emitting facilities and EPA thus had no authority to limit PSD review to modifications which themselves produce emission increases of 100 or 250 tons annually. Affirming the use of the "bubble" concept in determining when industrial changes constitute a modification subject to the PSD requirements, the court approves EPA's partial exemption of physical or operational changes in a source that do not produce a net increase in the emission of any pollutant. This position is consistent with the congressional purpose underlying the PSD provisions and is distinguishable in several respects from the attempted application of the "bubble" invalidated in ASARCO v. EPA, 8 ELR 20164. PSD review is wholly inapplicable to contemporaneous changes within a source that do not result in a net emission increase and the Agency's attempt to subject such changes to the procedural PSD requirements is invalid. The PSD review and best available control technology (BACT) requirements of §165 apply to all pollutants subject to regulation under the Act rather than, as EPA contended, only those emitted in excess of the 100 or 250 tons per year thresholds. The Agency may, however, define a de minimis exemption on this point rationally designed to alleviate severe administrative burdens. The Agency properly defined BACT to include a visible emission standard. Finally, the courtrules that the time limits and special conditions imposed by EPA on the issuance of single comprehensive PSD permits for phased projects are reasonable and within the Agency's statutory authority.

Counsel for Industrial Petitioners
Henry V. Nickel, George C. Freeman, Jr., Michael B. Barr, Andrea S. Bear
Hunton & Williams
707 E. Main St., Richmond VA 23212
(804) 788-8200

Francis M. Shea, James R. Bieke, Richard T. Conway, William R. Galeota, Joseph C. Zengerle
Shea & Gardner
Walker Bldg., Washington DC 20005
(202) 737-1255

Counsel for Intervenors Sierra Club et al.
Peter J. Herzberg, James H. Cohen, H. Anthony Ruckel, Kristine L. Hall
Sierra Club Legal Defense Fund, Inc.
1424 K St. NW, Washington DC 20005
(202) 347-1770

Robert C. Rauch
Environmental Defense Fund, Inc.
1525 18th St. NW, Washington DC 20036
(202) 833-1484

Counsel for Respondents
James W. Moorman, Ass't Attorney General; Erica L. Dolgin, Sanford Sagalkin, Angus Macbeth, Elizabeth Stein, Earl Salo
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-4496

Joan Z. Bernstein, General Counsel; Peter H. Wyckoff, Jeffrey C. Smith, Lydia N. Wegman
Environmental Protection Agency, Washington DC 20460
(202) 755-2511

Before LEVENTHAL,* ROBINSON and WILKEY, Circuit Judges.