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Region 9 updates

Jun 29, 2017

Region 9 Regulatory Developments

On March 9, 2017, EPA proposed to approve revisions to the Arizona state implementation plan for portions related to the Arizona Department of Environmental Quality and Maricopa County Air Quality District.  82 Fed. Reg. 13084 (Mar. 9, 2017).  The proposed revision addresses EPA’s startup, shutdown or malfunction State Implementation Plan call issued on June 12, 2015.  80 Fed. Reg. 33839 (Jun. 12, 2015) (SSM SIP call).  In the SSM SIP call, EPA called on thirty-six states, including Arizona, to revise “substantially inadequate” provisions that granted sources an affirmative defense for excess emissions during startup, shutdown, and malfunction events.  Id. at 33840.  To replace these provisions, EPA allowed states to develop alternative emission limitations that apply during SSM events so long as those limitations are “continuous” and do not otherwise violate the CAA. Id. at 33913.  EPA also allowed states to develop revised SSM enforcement policies so long as those policies were specific enough to assure EPA of no adverse effects, provide adequate public process, and not effectively limit the ability of EPA or the citizenry to bring an enforcement action.  Id. at 33923.  In response to the SSM SIP call, Arizona proposed to remove the provisions altogether. 82 Fed. Reg. at 13085.  Comments on EPA’s proposal to approve Arizona’s revised plan closed on April 10, 2017, but EPA has not yet taken final action.  Id. at 13084.

Region 9 Litigation Developments

In companion cases, the Ninth Circuit recently denied petitions from the Hopi Tribe and various environmental groups challenging the approval of a Federal Implementation Plan for the Navajo Generating Station, a coal-fired power plant on the Navajo Nation Reservation in Arizona.  Yazzie v. U.S. Envtl. Prot. Agency, 851 F.3d 960 (9th Cir. 2017); Hopi Tribe v. U.S. Envtl. Prot. Agency, 851 F.3d 957 (9th Cir. 2017).  EPA issued the proposed FIP in February 2013 pursuant to its authority under the Tribal Authority Rule.  Yazzie, 851 F.3d at 967.  Under the Tribal Authority Rule, EPA has the authority to issue a FIP if the tribe does not timely issue a tribal implementation plan.  Id. at 966.  Initially, EPA proposed a Best Available Retrofit Technology (“BART”) determination and BART alternative.  Id. at 967.  Under the BART determination, “the Station would reduce its NOx emissions by nearly 80% within five years after the effective date of a final FIP, largely through the installation of both catalytic reduction and low NOx burners/separated over-fired air technologies.” Id. at 967 (citing 78 Fed. Reg. at 8,287-88). Under the BART alternative determination, “the FIP extended the deadlines for achieving NOx emission reductions to 2023” and gave an emission credit for early installation of low NOx burners/separated over-fired air technology. Id.  EPA received feedback from the Technical Working Group and issued a supplemental proposal in light of the feedback.  Id.  The supplemental proposal, a better than BART alternative, would require the station to cease conventional coal-fired power generation by 2044, impose a cap on total NOx emissions from 2009 to 2044, reduce overall generation, and incorporate an emission credit for early reductions.  Id.  In August 2014, EPA issued the final rule which was materially the same as the supplemental proposal. Id.

In the Hopi Tribe’s petition, the tribe asserted that EPA violated an alleged consultation duty by not including the tribe in its technical working group.  Hope Tribe, 851 F.3d at 960.  The tribe extrapolated this duty from the general trust relationship between the U.S. and Indian tribes.  Id.  The Ninth Circuit doubted the enforceability of any duty to consult on EPA’s part and found that, in any event, the tribe was adequately consulted throughout the process.  Id.  The tribe also contended that EPA failed to analyze all BART factors when developing the supplemental proposal.  Id.  The court held that EPA need not consider these factors when developing BART alternatives.  Id.

The environmental groups asserted error on four grounds.  Yazzie, 851 F.3d at 969-75.  First, the court rejected the petitioner’s complaint that EPA acted untimely, finding the CAA’s five-year BART deadline does not apply to better than BART alternatives.  Id. at 969.  Second, petitioners contended EPA violated 40 C.F.R. § 51.308(e)(2)(iii), which requires “all necessary emission reductions take place during the period of the first long-term strategy for regional haze.”  Id.  The court deferred to “EPA’s interpretation of its own regulation—that § 51.308(e)(2)(iii) does not apply to tribes because tribes are not subject to the underlying deadline for long-term strategies . . . .”  Id. at 970.  Next, petitioners challenged EPA’s determination that the supplemental proposal was better than BART.  Id. at 972.  EPA determined the proposal was better than BART because “the distribution of emissions [was] not substantially different than under BART, and the alternative measure [would] result in greater emission reductions.”   Id. at 973.  EPA argued the distribution of emissions language merely referred to the “geographic distribution of emissions” and not the temporal distribution, as petitioners contended.  Id.  The court deferred to EPA’s interpretation as a reasonable construction of its regulations.  Id.  The petitioners also argued the alternative did not actually increase emission reductions over BART.  Id. at 973-74.  EPA’s position was that the emission credit alone resulted in greater emission reductions.  Id. at 974.  The court agreed, finding “it was not unreasonable for the EPA to reward the Station through a credit for its early and voluntary installation of the low NOx burners/separated over-fired air technology, which resulted in real and early emission reductions.”  Id.  Lastly, the court deferred to EPA’s judgment in concluding BART analysis for PM was unnecessary. Id. at 975.

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