in the united states court of appeals for …2016/12/20 · in the united states court of appeals...

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

STATE OF TEXAS, et al., ) ) Petitioners, ) ) v. ) Case No. 16-60118 ) UNITED STATES ENVIRONMENTAL ) PROTECTION AGENCY and GINA ) McCARTHY, Administrator, United States ) Environmental Protection Agency, ) ) Respondents. )

PETITIONERS’ AND PETITIONER-INTERVENORS’ JOINT RESPONSE IN OPPOSITION TO EPA’S MOTION FOR PARTIAL VOLUNTARY REMAND AND PARTIAL LIFTING OF THE STAY

and

PETITIONERS’ AND PETITIONER-INTERVENORS’ JOINT CROSS-MOTION FOR SUMMARY VACATUR

and

PETITIONERS’ AND PETITIONER-INTERVENORS’ JOINT CROSS-MOTION TO ENFORCE AND CLARIFY THE COURT’S STAY ORDER

Case: 16-60118 Document: 00513803891 Page: 1 Date Filed: 12/19/2016

ii

CERTIFICATE OF INTERESTED PERSONS

The undersigned counsel of record certifies that the following listed persons

and entities as described in Fifth Circuit Rule 28.2.1 have an interest in the outcome

of this case. The representations are made so that the judges of this Court may

evaluate possible disqualification or recusal.

• Allison, Mark (Counsel for Petitioner Nucor Corporation)

• ANP ERCOT Acquisitions, LLC (Parent company of Petitioner Coleto Creek Power, LP)

• Baker Botts L.L.P. (Counsel for Petitioners Coleto Creek Power, NRG Texas Power LLC, and Southwest Public Service Company)

• Balanced Energy for Texas (Petitioner-Intervenor)

• Balch & Bingham LLP (Counsel for Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, Luminant Mining Company LLC, Big Brown Lignite Company LLC, and Luminant Big Brown Mining Company LLC)

• Bay City Chamber of Commerce & Agriculture (Petitioner-Intervenor)

• Baytown Chamber of Commerce (Petitioner-Intervenor)

• Beckner, C. Frederick III (Counsel for Petitioner-Intervenors Texas Association of Business et al.)

• Bennett, Lisa A. (Counsel for Petitioners State of Texas, Texas Commission on Environmental Quality, and the Public Utility Commission of Texas)

• Big Brown Lignite Company LLC (Petitioner that, as a result of a Chapter 11 financial restructuring process, has been merged into Luminant Mining Company LLC)

• Big Brown Power Company LLC (Petitioner)


iii

• Billings-Ray, Kellie E. (Counsel for Petitioners State of Texas, Texas Commission on Environmental Quality, and the Public Utility Commission of Texas)

• Bumpers, William M. (Counsel for Petitioner Southwestern Public Service Company)

• Carson, David Aiken (Counsel for Respondents)

• Cedar Park Chamber of Commerce (Petitioner-Intervenor)

• Clear Lake Chamber of Commerce (Petitioner-Intervenor)

• Coleto Creek Power, LP (Petitioner)

• Coleto GP, LLC (A general partner and an owner of Petitioner Coleto Creek Power, LP)

• Coleto LP, LLC (Parent company of Petitioner Coleto Creek Power, LP)

• Corpus Christi Chamber of Commerce (Petitioner-Intervenor)

• Cruden, John C., Assistant Attorney General, Environment and Natural Resources Division, U.S. Department of Justice (Counsel for Respondents)

• Chamber of Commerce of the United States of America (Petitioner-Intervenor)

• Chandrasekaran, Devi (Counsel for Petitioner NRG Texas Power LLC)

• Curry, Ron, Regional Administrator, United States Environmental Protection Agency, Region 6

• Electrabel S.A. (Parent company of Petitioner Coleto Creek Power, LP)

• Engie, S.A. (A publicly traded company with 10% or greater ownership interest in Petitioner Coleto Creek Power, LP)

• Fichthorn, Norman W. (Counsel for Petitioner Utility Air Regulatory Group)

• Flynn, Aaron M. (Counsel for Petitioner Utility Air Regulatory Group)

• Frisco Chamber of Commerce (Petitioner-Intervenor)


iv

• Garbow, Avi S. (General Counsel for Respondent United States Environmental Protection Agency)

• GDF SUEZ Energy North America, Inc. (Parent company of Petitioner Coleto Creek Power, LP)

• GDF SUEZ IP Luxembourg S.A.R.L. (Parent company of Petitioner Coleto Creek Power, LP)

• Genfina S.C.R.L. (An owner of parent company of Petitioner Coleto Creek Power, LP)

• Gerhart, Matthew (Counsel for Respondent-Intervenors)

• Gidiere, P. Stephen III (Counsel for Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, Luminant Mining Company LLC, Big Brown Lignite Company LLC, and Luminant Big Brown Mining Company LLC)

• Gilbert, Sheldon (Counsel for Petitioner-Intervenor the Chamber of Commerce of the United States of America)

• Grapevine Chamber of Commerce (Petitioner-Intervenor)

• Greater Angleton Chamber of Commerce (Petitioner-Intervenor)

• Greater Beaumont Chamber of Commerce (Petitioner-Intervenor)

• Greater Hewitt Chamber of Commerce (Petitioner-Intervenor)

• Greater Irving-Las Colinas Chamber of Commerce (Petitioner-Intervenor)

• Greater Waco Chamber of Commerce (Petitioner-Intervenor)

• Henderson Area Chamber of Commerce (Petitioner-Intervenor)

• Hunton & Williams LLP (Counsel for Petitioner Utility Air Regulatory Group)

• International Power America, Inc. (Parent company of Petitioner Coleto Creek Power, LP)


v

• International Power Ltd. (Parent company of Petitioner Coleto Creek Power, LP)

• International Power (Zebra) Limited (Parent company of Petitioner Coleto Creek Power, LP)

• IPA Holding, Inc. (Parent company of Petitioner Coleto Creek Power, LP)

• Jezouit, Debra J. (Counsel for Petitioner Southwestern Public Service Company)

• Kelly, Daniel J. (Counsel for Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, Luminant Mining Company LLC, Big Brown Lignite Company LLC, and Luminant Big Brown Mining Company LLC and Vice President & Associate General Counsel for Vistra Energy Corp.)

• Kuryla, Matthew Lynn (Counsel for NRG Texas Power LLC)

• Lake Houston Area Chamber of Commerce (Petitioner-Intervenor)

• Lehotsky, Steven (Counsel for Petitioner-Intervenor the Chamber of Commerce of the United States of America)

• Local Union 2337 of the International Brotherhood of Electrical Workers (Petitioner-Intervenor)

• Lubbock Chamber of Commerce (Petitioner-Intervenor)

• Luminant Big Brown Mining Company LLC (Petitioner that, as a result of a Chapter 11 financial restructuring process, has been merged into Luminant Mining Company LLC)

• Luminant Generation Company LLC (Petitioner)

• Luminant Mining Company LLC (Petitioner)

• Lynch, Loretta E., Attorney General, U.S. Department of Justice (Counsel for Respondents)

• Maghamfar, Dustin (Counsel for Respondents)


vi

• Martella, Roger R., Jr. (Counsel for Petitioner-Intervenors Texas Association of Business et al.)

• McCarthy, Gina, Administrator, United States Environmental Protection Agency (Respondent)

• McDonald, Derek Raymond (Counsel for Petitioner Coleto Creek Power, LP)

• Mineral Wells Chamber of Commerce (Petitioner-Intervenor)

• Mitchell, David W. (Counsel for Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, Luminant Mining Company LLC, Big Brown Lignite Company LLC, and Luminant Big Brown Mining Company LLC)

• Moore, Stephanie Zapata (Counsel for Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, Luminant Mining Company LLC, Big Brown Lignite Company LLC, and Luminant Big Brown Mining Company LLC and Executive Vice President & General Counsel for Vistra Energy Corp.)

• Nasi, Michael J. (Counsel for Petitioner-Intervenors Balanced Energy for Texas and Texas Mining and Reclamation Association)

• National Parks Conservation Association (Respondent-Intervenor)

• NRG Energy, Inc. (Parent company of Petitioner NRG Texas Power LLC)

• NRG Texas LLC (Parent company of Petitioner NRG Texas Power LLC)

• NRG Texas Power LLC (Petitioner)

• Nucor Corporation (Petitioner)

• Pinkston, Daniel (Counsel for Respondents)

• Port Arthur Chamber of Commerce (Petitioner-Intervenor)

• Public Utility Commission of Texas (Petitioner)

• Rockwall Area Chamber of Commerce (Petitioner-Intervenor)


vii

• Romo, Carlos Ricardo (Counsel for Petitioner Coleto Creek Power, LP)

• San Angelo Chamber of Commerce (Petitioner-Intervenor)

• Saxonhouse, Elana (Counsel for Respondent-Intervenor Sierra Club)

• Seha, Ann M. (Counsel for Petitioner Southwestern Public Service Company)

• Sidley Austin LLP (Counsel for Petitioner-Intervenors)

• Sierra Club (Respondent-Intervenor)

• Smith, Joshua (Counsel for Respondent-Intervenor Sierra Club)

• South Padre Island Chamber of Commerce (Petitioner-Intervenor)

• Southwestern Public Service Company (Petitioner)

• State of Texas (Petitioner)

• Streett, Aaron Michael (Counsel for Petitioner NRG Texas Power LLC)

• T. Rowe Price Associates, Inc. (An entity with 10% or greater ownership interest in NRG Energy, Inc.)

• T. Rowe Price Group, Inc. (Parent company of T. Rowe Price Associates, Inc.)

• Taggart, David Richard (Counsel for Petitioner Nucor Corporation)

• Taylor, Natalie J. (Counsel for Petitioner Nucor Corporation)

• Texas Association of Business (Petitioner-Intervenor)

• Texas City-La Marque Chamber of Commerce (Petitioner-Intervenor)

• Texas Commission on Environmental Quality (Petitioner)

• Texas Mining and Reclamation Association (Petitioner-Intervenor)

• Trisko, Eugene M. (Counsel for Petitioner-Intervenor Local Union 2337 of the International Brotherhood of Electrical Workers)

• Tyler Area Chamber of Commerce (Petitioner-Intervenor)


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• United States Environmental Protection Agency (Respondent)

• Utility Air Regulatory Group (Petitioner)

• Victoria Chamber of Commerce (Petitioner-Intervenor)

• Visser, Joel F. (Counsel for Petitioner-Intervenors Texas Association of Business et al.)

• Vistra Asset Company LLC (Parent company of Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, and Luminant Mining Company LLC)

• Vistra Energy Corp. (Parent company of Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, and Luminant Mining Company LLC)

• Vistra Intermediate Company LLC (Parent company of Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, and Luminant Mining Company LLC)

• Vistra Operations Company LLC (Parent company of Petitioners Luminant Generation Company LLC, Big Brown Power Company LLC, and Luminant Mining Company LLC)

• Walters, Mark L. (Counsel for Petitioner-Intervenors Balanced Energy for Texas and Texas Mining and Reclamation Association)

• Whittle, Mary (Counsel for Respondent-Intervenors)

• Xcel Energy Inc. (Parent company of Petitioner Southwestern Public Service Company)


ix

TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS ........................................................ ii TABLE OF CONTENTS .................................................................................................ix TABLE OF AUTHORITIES ...........................................................................................xi LIST OF EXHIBITS ....................................................................................................... xiii INTRODUCTION ............................................................................................................. 1 BACKGROUND .................................................................................................................. 5 ARGUMENT........................................................................................................................ 9

I. The Court Should Deny EPA’s Motion for Partial Voluntary Remand Without Vacatur ............................................................................... 9 A. Remand Without Vacatur Would Be Contrary to This

Court’s Precedent ................................................................................. 9

B. Remand Without Vacatur is Not Appropriate Because EPA Has Not Confessed Error ................................................................. 12

C. Remand Without Vacatur Would Not Promote Judicial

Efficiency ............................................................................................ 14

II. Petitioners and Petitioner-Intervenors Move the Court to Grant Summary Vacatur of the SIP Disapprovals and FIP in the Final Rule Based on the Four Legal Errors Identified in the Court’s Stay Order ...................................................................................................... 15

III. The Court Should Deny EPA’s Request to Partially Lift the

Court’s Stay of the Final Rule ...................................................................... 17

IV. Petitioners and Petitioner-Intervenors Move the Court to Clarify and Enforce the Court’s Stay Order ........................................................... 18

CONCLUSION ................................................................................................................. 20


x

CERTIFICATE OF COMPLIANCE .......................................................................... 25 CERTIFICATE OF SERVICE ..................................................................................... 26


xi

TABLE OF AUTHORITIES

Cases Page(s) Allied–Signal, Inc. v. United States Nuclear Regulatory Comm’n, 988 F.2d 146 (D.C.Cir.1993) ........................................................................................... 9 Am. Tel. & Tel. Co. v. FCC, 978 F.2d 727 (D.C. Cir. 1992) ....................................................................................... 15 Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028 (7th Cir. 1984) ....................................................................................... 18 B.J. Alan Co., Inc. v. ICC, 897 F.2d 561 (D.C. Cir. 1990) ................................................................................. 14, 15 Cal. Cmtys. Against Toxics v. EPA, 688 F.3d 989 (9th Cir. 2012) ......................................................................................... 13 Cent. & S.W. Servs., Inc. v. EPA, 220 F.3d 683 (5th Cir. 2000) ..................................................................................... 9, 11 Citizens Against Pellissippi Parkway Extension, Inc. v. Mineta, 375 F.3d 412 (6th Cir. 2004) ......................................................................................... 13 EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015) ....................................................................................... 11 Groendyke Transp., Inc. v. Davis, 406 F.2d 1158 (5th Cir. 1969) ....................................................................................... 16 Lamprecht v. FCC, 958 F.2d 382 (D.C. Cir. 1992) ....................................................................................... 13 Luminant Generation Co. v. EPA, 675 F.3d 917 (5th Cir. 2012) ................................................................................... 11, 13 Luminant Generation Co. LLC v. EPA, No. 10-60891 (5th Cir.) .................................................................................................. 19


xii

Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998) ............................................................................. 1, 13, 15 North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008) ..................................................................................... 12 OFC Comm Baseball v. Markell, 579 F.3d 293 (3rd Cir. 2009) ......................................................................................... 16 Permian Basin Petroleum Ass’n Chaves Cnty. v. Dep’t of the Interior, 2016 WL 4411550 (W.D. Tex. Feb. 29, 2016) ............................................................ 10 Texas v. EPA, 690 F.3d 670 (5th Cir. 2012) ......................................................................................... 11 Texas v. EPA, 829 F.3d 405 (5th Cir. 2016) .......................................................... 1, 5, 6, 10, 12, 17, 18 United States v. United Mine Workers of Am., 330 U.S. 258 (1947) .................................................................................................. 19, 20 Federal Statutes

5 U.S.C. §706(2) .................................................................................................................... 11 42 U.S.C. §7491(g)(1) ............................................................................................................. 7 42 U.S.C. §7491(g)(2) ............................................................................................................. 7 Federal Register

81 Fed. Reg. 296 (Jan. 5, 2016) ........................................................................ 5, 6, 8, 15, 19


xiii

LIST OF EXHIBITS Exhibit 1: Proposed Rule, Promulgation of Air Quality Implementation Plans; State

of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan (Dec. 9, 2016)

Exhibit 2: Final Rule, Protection of Visibility: Amendments to Requirements for

State Plans (Dec. 14, 2016) Exhibit 3: E-mail from David A. Carson, Department of Justice, to All Counsel

(Nov. 21, 2016) Exhibit 4: E-mail from David A. Carson, Department of Justice, to All Counsel

(Dec. 2, 2016)


1

INTRODUCTION

The Environmental Protection Agency’s (“EPA”) motion for partial voluntary

remand and partial lifting of the stay should be denied. EPA’s “last second motion to

remand” is an improper attempt to circumvent this Court’s prior rulings in this case

and “avoid judicial review” of its unlawful rule. Lutheran Church-Missouri Synod v. FCC,

141 F.3d 344, 349 (D.C. Cir. 1998) (denying remand motion).1

After extensive briefing and oral argument, and based on multiple fundamental

legal errors in EPA’s final regional haze rule for Texas and Oklahoma (“Final Rule”),

a Motions Panel of this Court held that “Petitioners have demonstrated a strong

likelihood of success in establishing that EPA acted arbitrarily, capriciously, and in

excess of its statutory authority when it disapproved the Texas and Oklahoma

implementation plans and imposed a federal implementation plan,” and thus the

Panel stayed the Final Rule. Texas v. EPA, 829 F.3d 405,435-36 (5th Cir. 2016) (“Stay

Order”). EPA’s response is neither to acquiesce to the Court’s conclusions about the

unlawfulness of the rule nor to defend the rule on the merits. Instead, strategically,

EPA seeks to avoid both by requesting a remand but leaving the Final Rule in place.

1 All Petitioners and Petitioner-Intervenors join in this response in opposition and the cross-motions contained herein, except for NRG Texas Power LLC, which takes no position on the pending motions. Respondents have stated that they wish to reserve their response until after reviewing the cross-motions as filed. Sierra Club/National Parks Conservation Association oppose the cross-motions.


2

The Court should not sanction EPA’s attempted end-run. The Panel’s

conclusions about the merits were correct. Petitioners contend that the unlawful

portions of EPA’s final rule must be vacated by the Court, not just remanded, and

that EPA must approve Texas’s SIP. Remand without vacatur is not appropriate

where the agency rule suffers from fundamental legal errors, as does the Final Rule

here. Further, because EPA has not confessed error—and, indeed, has expressed

strong disagreement with the Court’s rulings—there is no basis to believe, much less

be assured, that remand proceedings will take place within the limits of the legal

standards identified by the Court or result in any different outcome. EPA’s proposed

remand would only interpose further delay in the ultimate approval of Texas’s first

period plan, at a time when its 10-year duration is almost at an end.

Particularly troubling is that EPA’s “remand” appears designed to facilitate

EPA’s continued reliance on the Final Rule and its legal underpinnings to support

other rulemakings under the Regional Haze program notwithstanding that the Final

Rule is stayed. Since filing its motion for remand, and without awaiting the Court’s

disposition of that motion, EPA has issued two new rules under the Regional Haze

program that show clearly that EPA is not interested in reconsidering its position at

this time. In one of those new rules, which relies on the Best Available Retrofit

Technology (“BART”) provisions of the Regional Haze program, EPA imports

wholesale the record and rationale from the Final Rule, applies some of the same

statutory factors and analysis as in the Final Rule, and proposes to impose the same


3

costly emission controls as in the Final Rule.2 In the other, EPA openly disagrees

with this Court’s rulings and asserts they were “incorrect” and “mistaken[]” and that

the Court “misunderstand[s]” the regional haze rules.3 Clearly, EPA’s remand is not

intended to correct EPA’s errors but to shelter them from this Court’s review.

Thus, any remand must include vacatur of the illegal portions of EPA’s Final

Rule (those portions that disapprove Texas’s state implementation plan (“SIP”) and

promulgate a federal implementation plan (“FIP”)). In fact, EPA initially notified the

parties it intended to seek exactly that: “We intend to seek remand with vacatur of

EPA’s disapproval decisions and EPA’s FIP.” E-mail from David A. Carson,

Department of Justice, to All Counsel (Nov. 21, 2016) (emphasis added) (Exhibit 3).

“After further internal deliberations,” however, EPA changed course and informed

the parties that “EPA has determined to seek voluntary remand without requesting

vacatur of the final rule[.]” E-mail from David A. Carson, Department of Justice, to

All Counsel (Dec. 2, 2016) (emphasis added) (Exhibit 4). EPA’s initial intention to

seek vacatur was the correct one.4

2 Proposed Rule, Promulgation of Air Quality Implementation Plans; State of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan (Dec. 9, 2016) (“December 9 Proposed Rule”) (pre-publication version attached as Exhibit 1). 3 Final Rule, Protection of Visibility: Amendments to Requirements for State Plans at 37, 40, 42, 43 (Dec. 14, 2016) (“December 14 Final Rule”) (pre-publication version attached as Exhibit 2). 4 When EPA’s counsel consulted with Petitioners, it was unclear whether EPA would seek remand and vacatur by confessing error or without doing so; thus, Petitioners


4

While EPA’s motion ultimately did not seek vacatur on a voluntary basis, the

record is sufficiently developed for the Court to vacate the Final Rule’s illegal portions

on the merits. Given the extensive briefing and oral argument already conducted,

summary vacatur of the Final Rule’s SIP disapprovals and FIP would be an efficient

way to resolve this case. Accordingly, Petitioners request, via cross-motion infra, that

the Motions Panel vacate the SIP disapprovals and FIP in the Final Rule for the

reasons stated in the Court’s Stay Order. Should the Court determine summary

disposition is not appropriate, it should allow Petitioners to proceed with full merits

briefing.

Regardless, the Court should deny EPA’s request to partially lift the Court’s stay

of the Final Rule. EPA has not shown that a partial lifting of the stay is warranted.

Texas prepared and submitted its SIP to EPA as one integrated plan. Although

Petitioners are requesting vacatur of only the SIP disapprovals and FIP in the Final

Rule, continued stay of the entire rule is appropriate given EPA’s recent attempts to

selectively use certain portions of the Final Rule in other actions and the

consequences that could follow. Certainly, EPA has failed to show it will not use

portions of the Final Rule in this way were the Court to grant its motion.5

reserved their position on the motion until they could review it. Doc. 00513783027 at 2-3 (“EPA Mot.”). 5 Petitioners agree with EPA (EPA Mot. at 24) that, at a minimum, should the Court remand without vacatur, the Court should retain jurisdiction, maintain the stay of the


5

Additionally, given EPA’s recent attempts to work around the Court’s stay and

impose the same emission controls stayed by the Court using the same flawed analysis

under review here, Petitioners and Petitioner-Intervenors cross-move the Court to

clarify that the scope of its stay extends to all aspects of the Final Rule under review

here and that EPA may not, without violating the Court’s stay, utilize any aspect of

the Final Rule to impose the same or any other emission controls at facilities affected

by this litigation.

BACKGROUND

This case involves petitions for review of a final EPA rule that addresses

requirements of the Regional Haze program of the Clean Air Act (“CAA”) with

respect to the States of Texas and Oklahoma. 81 Fed. Reg. 296 (Jan. 5, 2016) (“Final

Rule”). EPA’s Final Rule approves limited portions of those states’ CAA SIPs,

disapproves certain portions of those SIPs, and imposes FIP provisions in the

disapproved provisions’ place. EPA’s FIP imposes stringent emission limitations on

fourteen electric generating units in Texas. The limits, according to EPA, would

require installation of new emission controls for sulfur dioxide (“SO2”) (called

“scrubbers”) on seven units and upgrading existing scrubbers on seven additional

units. The combined costs for the controls are approximately $2 billion. Texas, 829

F.3d at 416.

rule, and not dismiss the petitions for review, so the Court can review EPA’s action following remand.


6

Among the portions of the Texas SIP that EPA disapproved were those

addressing visibility in other states. EPA determined: “Because the Texas regional

haze SIP does not ensure that Texas emissions would not interfere with measures

required to be included in the SIP for any other state to protect visibility[,] … we are

taking final action to disapprove portions of the Texas SIP submittals that address

CAA provisions for prohibiting air pollutant emissions from interfering with

measures required to protect visibility in any other state for the 1997 PM2.5, 2006

PM2.5, 1997 ozone, 2008 ozone, 2010 NO2, and 2010 SO2 NAAQS [National Ambient

Air Quality Standards].” 81 Fed. Reg. at 302.

Following extensive briefing and oral argument, on July 15, 2016, this Court

issued a published opinion that (1) denied EPA’s motion to dismiss the petitions for

review filed in this Court or, in the alternative, to transfer those petitions to the U.S.

Court of Appeals for the D.C. Circuit, and (2) granted motions to stay the Final Rule

“in its entirety” pending judicial review “including the emissions control

requirements.” Texas, 829 F.3d at 424, 435-36. The Court concluded that Petitioners

were likely to succeed in establishing that EPA’s SIP disapprovals and FIP in the Final

Rule are unlawful for four separate reasons. Id. at 428-33.

The parties sought, and the Court granted, a 90-day stay of judicial proceedings

to allow settlement discussions, but those discussions did not resolve the case.

EPA filed its motion for partial voluntary remand on December 2, 2016.


7

A week later, EPA’s Region 6 Administrator signed a proposed Regional Haze

rule for Texas that would promulgate a new FIP subjecting most of the same Texas

units at issue in the Final Rule (and additional units) to the same emission controls

EPA imposed in the Final Rule.6 EPA’s new rule is based on the BART provision of

the Regional Haze program. BART is determined by looking at five statutory factors,

three of which are the same as factors used for “reasonable progress,” including “the

energy … impacts of compliance,” which the Court addressed in its Stay Order.

Compare 42 U.S.C. §7491(g)(1) (reasonable progress factors) with §7491(g)(2) (BART

factors). Indeed, in the new rule, EPA “incorporate[d] by reference and consider[s] to

be part of this rulemaking record” the technical and cost analyses and rationale

included in the administrative record for the Final Rule at issue in this case.

December 9 Proposed Rule at 17 n.24.

In the December 9 Proposed Rule, EPA says “the Fifth Circuit’s stay of our

previous action complicates next steps” and creates “uncertainties.” Id. at 19-20.

EPA nevertheless proceeds to propose a new FIP predicated on prior SIP

disapprovals that are presently stayed by this Court. Id. at 23 (“[B]eginning with our

6 December 9 Proposed Rule at 21 (“The BART FIP requires controls on many but not all of the sources that were controlled in our previous partial FIP for Texas Regional Haze. The EGU BART FIP also includes control requirements at some additional sources not controlled in our previous action on Texas Regional Haze.”).


8

January 5, 2016 disapproval of Texas SIP provisions regarding interstate visibility

transport, we obtained the authority and obligation to promulgate a FIP[.]”).7

EPA’s proposed new rule is even more costly than the Final Rule and would

require that fourteen Texas generating units install new scrubbers and four Texas

generating units upgrade existing scrubbers. Id. at 119. As to nine of these eighteen

units, the SO2 emission control requirements are the same emission control

requirements that are stayed pursuant to the Court’s Stay Order. Compare id. with 81

Fed. Reg. at 305 (Table 1).

On December 14, 2016, the EPA Administrator signed for publication yet

another regional haze rule, in which it expressed at length its disagreement with the

legal conclusions in this Court’s Stay Order. Although EPA claimed to be issuing new

regulations for the second regional haze planning period, EPA nevertheless

“explain[ed]” how this Court’s analysis “under the existing regulations” for “the first

implementation period” was “mistaken[]” and “incorrect for several reasons” and

that, in EPA’s view, “the Fifth Circuit appeared to misunderstand” the current

regulations. December 14 Final Rule at 38-43.

7 Specifically, EPA’s new FIP is based on EPA’s disapproval in the rule challenged here of “Texas’ interstate visibility transport” SIP for the following six NAAQS: “1997 8-hour ozone, 1997 PM2.5, 2006 PM2.5, 2008 8-hour ozone, 2010 1-hour NO2, and 2010 1-hour SO2.” December 9 Proposed Rule at 21.


9

ARGUMENT

I. The Court Should Deny EPA’s Motion for Partial Voluntary Remand Without Vacatur

EPA’s motion for partial voluntary remand without vacatur is not supported by

the law or the facts, and it should be denied. Under the circumstances here, remand

must be accompanied by vacatur of the illegal portions of the Final Rule.

A. Remand Without Vacatur Would Be Contrary to This Court’s Precedent

Under this Court’s precedent, remand without vacatur may be considered only

where two conditions are met: (1) when the agency would likely be able to

substantiate its original decision given the opportunity to do so; and (2) when vacating

the rule would be disruptive. See Cent. & S.W. Servs., Inc. v. EPA, 220 F.3d 683, 692

(5th Cir. 2000) (citing Radio–Television News Dirs. Ass’n v. FCC, 184 F.3d 872, 888 (D.C.

Cir. 1999); Allied–Signal, Inc. v. United States Nuclear Regulatory Comm’n, 988 F.2d 146,

1551 (D.C. Cir. 1993)). Neither condition is met here.

First, EPA cannot cure the defects underlying the Final Rule’s disapprovals and

FIP on remand merely by further substantiating its findings or developing the record.

Where there are serious and fundamental legal errors with the agency’s rule, as is the

case here, vacatur is the appropriate remedy. See Allied Signal, Inc., 988 F.2d at 150-51

(vacatur may be appropriate in light of “the seriousness of the [agency] order’s

deficiencies (and thus the extent of doubt whether the agency chose correctly)[.]”)

(quotation omitted)). This case is not the type of case where a remand is appropriate


10

for the agency to provide more “reasoned explanation” or a “new opportunity” for

public comment, as EPA claims. EPA Mot. at 19, 21; cf. Permian Basin Petroleum Ass’n

Chaves Cnty. v. Dep’t of the Interior, 2016 WL 4411550, at *3 (W.D. Tex. Feb. 29, 2016)

(“[T]he majority of the cases that held remand without vacatur was the appropriate

remedy were those where the court found that the agency’s only error was an

inadequate explanation for the basis of its action.”). The legal errors identified by the

Court in its Stay Order are not procedural in nature and do not involve a simple

failure by EPA to explain itself. Instead, they involve fundamental legal shortcomings

in the rule. These same fundamental errors were already identified to EPA in public

comments, and re-hashing them to a recalcitrant agency in a new round of comments,

as EPA requests, would be of no benefit.

A remand on EPA’s current terms would thus be futile. No amount of

additional comment by the public or explanation by EPA can make lawful a rule that

imposes the “source-specific” requirement that EPA imposed here, Texas, 829 F.3d at

427-28, or that requires emission controls that go into effect years after the planning

period for the current round of implementation plans, id. at 429. These actions by

EPA, which go to the very heart of the rule, are contrary to the statute and require

that the disapprovals and FIP in the Final Rule be vacated.

EPA does not cite a single example of this Court simply remanding a SIP

disapproval to EPA for further proceedings, much less remanding a disapproval that

this Court has found is likely unlawful. That is because this Court’s practice, in CAA


11

SIP cases like this one, is to vacate EPA rules that are determined to be unlawful. See,

e.g., Luminant Generation Co. v. EPA, 675 F.3d 917, 932-33 (5th Cir. 2012) (vacating

EPA’s disapproval of Texas’s pollution control permit program); Texas v. EPA, 690

F.3d 670, 686 (5th Cir. 2012) (vacating EPA’s disapproval of the Texas Flexible

Permit Program). That is what the Administrative Procedure Act (“APA”) provides.

See 5 U.S.C. §706(2) (reviewing court “shall hold unlawful and set aside” agency action

found to be arbitrary and capricious or contrary to law (emphasis added)). Thus, EPA

is wrong that, by requesting remand without vacatur, its motion seeks “the relief that

would ordinarily be ordered if the petition for review were granted.” EPA Mot. at 24.

To the contrary, Petitioners seek to have the unlawful portions of the Final Rule

vacated.

Second, vacating EPA’s SIP disapprovals and FIP would not be disruptive. The

Final Rule has not gone into effect, and thus there is no concern here about

disrupting an ongoing regulatory program, as in some cases. Cf. EME Homer City

Generation, L.P. v. EPA, 795 F.3d 118, 132 (D.C. Cir. 2015) (remanding without

vacatur to avoid disrupting emission-allowance markets). The Final Rule is stayed,

and thus nothing would change if the rule were vacated. Moreover, the Final Rule

applies to a limited number of Texas facilities, and is not a broadly-applicable

regulatory program. Thus, unlike in Central and Southwest Services, vacatur here would

not “be disruptive to … application of the Rule to other segments of the industry.”

220 F.3d at 692 n.6. Finally, there is no concern here that vacatur would impact


12

public health or cause environmental harm, as in some cases,8 because the Regional

Haze program is about visibility only and the visibility goals set by EPA are already

met. Texas, 829 F.3d at 415.

B. Remand Without Vacatur is Not Appropriate Because EPA Has Not Confessed Error

Remand without vacatur is particularly inappropriate here because EPA has not

conceded the correctness of the Court’s holdings about the likely legal errors in the

rule. Tellingly, EPA does not state that it intends to follow the Court’s rulings or that

it concedes the errors identified by the Court. Indeed, EPA expressly requests

remand “without confessing error.” EPA Mot. at 18. And while EPA in its motion

feigns that “it may reconsider [its] actions in light of the discussion regarding

likelihood of success on the merits set forth in the Court’s Order of July 15, 2016,”

EPA Mot. at 2, EPA has made clear in its new rules that it has no present intention of

actually doing so. See, e.g., December 9 Proposed Rule at 88-89 (contending that the

“energy impacts” statutory factor “does not dictate that we study grid reliability,” as

the Court’s Stay Order held); December 14 Final Rule at 38-46 (contending that the

Court’s Stay Order was “mistaken[]” and “incorrect”).

Thus, EPA’s motion is contrary to the case law, including case law that EPA

itself cites, in which remand is premised on the agency’s confession of error. See

8 See, e.g., North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008) (increased emissions potentially impacting environmental values).


13

Lutheran, 141 F.3d at 349 (denying motion to remand where, as here, agency “has not

confessed error”); Cal. Cmtys. Against Toxics v. EPA, 688 F.3d 989, 992 (9th Cir. 2012)

(granting remand without vacatur because “EPA has admitted that the reasoning

adopted for its final rule was flawed”); Citizens Against Pellissippi Parkway Extension. Inc.

v. Mineta, 375 F.3d 412, 416 (6th Cir. 2004) (“[W]hen an agency seeks a remand to

take further action consistent with correct legal standards, courts should permit such a

remand in the absence of apparent or clearly articulated countervailing reasons.”

(emphasis added)); see also Lamprecht v. FCC, 958 F.2d 382, 385 (D.C. Cir. 1992)

(granting motion to remand where agency “acknowledged that [its action was]

contrary to both the Communications Act and the Constitution”).

Because EPA has not confessed error, its motion should be denied. EPA

knows how to confess error in its SIP actions and has done so before this Court.9 It

should do so here. Until it does, there is simply no basis to believe (much less be

assured) that EPA would reach any different outcome on remand or produce a lawful

rule.10 Under these circumstances, if EPA would like a remand, the Court must also

vacate the unlawful SIP disapprovals and FIP.

9 Luminant, 675 F.3d at 925 (“The EPA concedes that it acted arbitrarily and capriciously by failing to supply any reason for its disapproval of §§116.610(a) and 116.610(b) and consents to vacatur.” (emphasis added)). 10 EPA wrongly claims that “all issues now pending in these petitions for review would be resolved” if the Court granted its motion. EPA Mot. at 2. To the contrary, nothing would be resolved were the Court simply to remand the rule to EPA without


14

Further, EPA’s representation that it “plans to grant reconsideration” on one

limited issue raised by Luminant Petitioners “in the near future” is disingenuous and

does not justify remand without vacatur—certainly not remand without vacatur of the

entire rule. EPA Mot. at 23. EPA does not explain how granting reconsideration on

this one limited issue would or could resolve this case. Moreover, multiple parties

petitioned EPA for reconsideration, yet EPA is not proposing to grant other parties’

petitions. And Luminant’s reconsideration petition raised several grounds for

reconsideration, most of which EPA’s motion does not address. Given that EPA has

not committed to fully reconsider the Final Rule and its fundamental legal

underpinnings, remand alone would be of limited value. Moreover, since EPA has

not yet even granted reconsideration, and thus the scope of any reconsideration

proceeding is uncertain, it is premature to remand the rule to EPA on this basis.11

C. Remand Without Vacatur Would Not Promote Judicial Efficiency

Finally, EPA’s request for remand without vacatur should be denied because it

would not promote efficiency, but would instead interpose further delay and

needlessly complicate these proceedings. See B.J. Alan Co., 897 F.2d at 562 n.1 (“The assurance that EPA will accept the fundamental legal constraints on its authority identified by this Court. 11 EPA can address Luminant’s reconsideration petition without a remand. Should EPA grant reconsideration in a way that would materially alter the rule here, then it may be appropriate to abate these proceedings. However, EPA has not done that, and has not requested abeyance as was done by the agency in B.J. Alan Co., Inc. v. ICC, 897 F.2d 561, 562 (D.C. Cir. 1990) (noting case was held “in abeyance pending resolution of the request for administrative reconsideration”).


15

Commission has discretion to reconsider, so long as its resumption does not conflict with

proceedings in court.” (emphasis added)). EPA’s “last second motion to remand” is not

an effort to reach the correct result, i.e., approval of Texas’s SIP, but rather appears

designed to “avoid judicial review.” Lutheran, 141 F.3d at 349 (“[T]he Commission

has on occasion employed some rather unusual legal tactics when it wished to avoid

judicial review, but this ploy may well take the prize.”). Given EPA’s actions, the only

conclusion that can be reached is that it is engaging in an “administrative law shell

game” to avoid a ruling on the merits of the pending petitions for review so that it can

adopt substantively similar regulatory obligations in related proceedings. Am. Tel. &

Tel. Co. v. FCC, 978 F.2d 727, 731-32 (D.C. Cir. 1992).

Since EPA has not acceded to the Court’s legal conclusions about the flaws in

the Final Rule or agreed to vacatur, remand alone would not promote efficiency and

fairness, but only defer judicial resolution. Texas submitted its plan to EPA on March

31, 2009, yet EPA delayed final action on the plan for more than six years, in violation

of statutory deadlines. 81 Fed. Reg. at 296. The State, regulated parties, and EPA

should have the benefit of this Court’s final rulings on Texas’s first plan, before a

second plan is prepared and submitted.

II. Petitioners and Petitioner-Intervenors Move the Court to Grant Summary Vacatur of the SIP Disapprovals and FIP in the Final Rule Based on the Four Legal Errors Identified in the Court’s Stay Order Although remand without vacatur as proposed by EPA would not advance

resolution of this matter, summary vacatur of the illegal portions of the Final Rule


16

would. The Court has already reviewed extensive briefing and heard oral argument on

several merits arguments that go to the legality of EPA’s rule, and determined that

four of those arguments are likely to succeed on the merits. Based on those four

grounds, and pursuant to Federal Rule of Appellate Procedure 27(a)(3)(B), Petitioners

and Petitioner-Intervenors cross-move the Court to vacate the SIP disapprovals and

FIP in the Final Rule without further proceedings.

Summary disposition is proper where “the position of one of the parties is

clearly right as a matter of law so that there can be no substantial question as to the

outcome of the case[.]” Groendyke Transp., Inc. v. Davis, 406 F.2d 1158, 1162 (5th Cir.

1969). Moreover, consistent with “orderly judicial administration,” a panel of the

Court of Appeals that decides preliminary relief, such as a stay, may also properly

reach the merits where the grounds are based on the “applicable rule of law, and the

facts are established or of no controlling relevance.” OFC Comm Baseball v. Markell,

579 F.3d 293, 298-99 (3d Cir. 2009) (citations and quotation marks omitted) (appeal

of district court’s preliminary-injunction ruling).

Here, vacatur of the Final Rule’s SIP disapprovals and FIPs by the Motions

Panel would be appropriate without additional briefing or arguments, based on the

four legal errors on which the Panel found Petitioners were likely to succeed on the

merits. Further briefing and argument on these issues would be largely academic.

Accordingly, Petitioners and Petitioner-Intervenors move the Panel to vacate the SIP

disapprovals and FIP in the Final Rule and hold them unlawful for four reasons: (1)


17

“EPA improperly failed to defer to Texas’s application of the statutory factors and

improperly required a source-specific analysis not found in the Act or Regional Haze

Rule”; (2) “EPA’s disapproval of the consultation between Oklahoma and Texas was

arbitrary and capricious”; (3) “EPA exceeded its statutory authority by imposing

emissions controls that go into effect years after the period of time covered by the

current round of implementation plans”; and (4) EPA’s action was arbitrary and

capricious because EPA failed to take into account “the explicit directive in the Clean

Air Act that implementation plans ‘take[] into consideration … the energy … impacts

of compliance,’ 42 U.S.C. §7491(g)(1),” by providing “an exemption from compliance

when necessary to preserve the power supply [or] a more rigorous exploration of the

impact of the Final Rule on grid reliability.” Texas, 829 F.3d at 428-33.12

III. The Court Should Deny EPA’s Request to Partially Lift the Court’s Stay of the Final Rule

In any event, the Court should deny EPA’s motion to partially lift the stay,

regardless of what action it takes on EPA’s motion to remand and Petitioners’ cross-

motion for vacatur. As before, EPA has not shown how “a limited stay” is necessary,

id. at 435, nor has it explained why it seeks to have limited provisions of the Texas SIP

go into immediate effect in isolation. EPA cannot, through partially approving some

provisions of a SIP and disapproving others, create a SIP the state did not intend. See

12 In support of their cross-motion for summary vacatur, Petitioners and Petitioner-Intervenors incorporate by reference their prior briefing on these issues. Doc. Nos. 00513405269, 00513428276, 00513469417, 00513469785.


18

Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028, 1035-37 (7th Cir. 1984) (EPA cannot,

through selective approvals and disapprovals, make overall SIP “completely

unpalatable to the state.”). Moreover, given EPA’s present intention to use aspects of

the Final Rule to impose the same emission controls that are stayed, a partial lifting of

the stay is particularly inappropriate.

IV. Petitioners and Petitioner-Intervenors Move the Court to Clarify and Enforce the Court’s Stay Order

In addition to denying EPA’s motion to partially lift the stay, Petitioners and

Petitioner-Intervenors move the Court to clarify and enforce its Stay Order.

Petitioners and Petitioner-Intervenors believe the Court’s Stay Order is crystal clear:

the Final Rule is stayed “in its entirety, including the emissions control requirements,

pending the outcome of this petition for review.” Texas, 829 F.3d at 435. EPA,

however, contends there are “uncertainties” with regard to the Stay Order that

“complicate[] next steps.” December 9 Proposed Rule at 19. Indeed, EPA asserts the

false premise that it has an “obligation to promulgate a [new] FIP” based on

disapprovals contained in the stayed Final Rule. Id. at 23. Thus, clarification of the

Stay Order’s scope and effect is necessary to ensure that any new regulations that

EPA may promulgate do not rest on an improper and illegal foundation.

Accordingly, the Court should clarify that by staying the Final Rule “in its

entirety,” Texas, 829 F.3d at 435, the Court intended the Stay Order’s scope to extend

to all aspects of the Final Rule, including all the disapproval and FIP actions in the


19

Final Rule without exception. This would include EPA’s disapprovals of those

“portions of the Texas SIP submittals that address CAA provisions for prohibiting air

pollutant emissions from interfering with measures required to protect visibility in any

other state for the 1997 PM2.5, 2006 PM2.5, 1997 ozone, 2008 ozone, 2010 NO2, and

2010 SO2 NAAQS,” 81 Fed. Reg. at 302, which EPA asserts obligate it to issue the

December 9 Proposed Rule. See December 9 Proposed Rule at 23.

Petitioners and Petitioner-Intervenors further request that the Court clarify that

the Stay Order’s effect is to prohibit EPA, while the stay is in place, from relying on

any of its SIP disapprovals or FIP actions and related findings in the Final Rule in any

subsequent rule or action, including a subsequent rule or action to impose virtually the

same emissions control requirements that are presently stayed. As this Court has

explained: “Parties subject to the decision of a federal appellate court are ‘without

power to do anything which is contrary to either the letter or spirit of the mandate

construed in the light of the opinion of [the] court deciding the case.’” Order on

Motion to Amend and Enforce Judgment, Luminant Generation Co. LLC v. EPA, No.

10-60891, at 4-5 (5th Cir. Feb. 21, 2014) (alteration in original) (quoting Am. Trucking

Ass’ns v. ICC, 669 F.2d 957, 960 (5th Cir. 1982)). Given EPA’s attempt to rely on

certain portions of the Final Rule in its December 9 Proposed Rule despite the Stay

Order, such clarification is particularly appropriate and necessary. See United States v.

United Mine Workers, 330 U.S. 258, 293 (1947) (“[A]n order issued by a court with


20

jurisdiction … must be obeyed by the parties” unless “reversed by orderly and proper

proceedings.”).

CONCLUSION

Petitioners and Petitioner-Intervenors respectfully request that the Court: (1)

deny EPA’s motion for partial voluntary remand unless remand is accompanied by

vacatur of the Final Rule’s SIP disapprovals and FIP provisions; (2) deny EPA’s

motion for partial lifting of the stay; (3) grant summary vacatur of the Final Rule’s SIP

disapprovals and FIP provisions based on the legal errors identified in the Stay Order;

and (4) issue an order clarifying that the Stay Order encompasses all aspects of the

Final Rule without exception and prohibits EPA from relying on any of its SIP

disapprovals or FIP actions and related findings in the Final Rule in any subsequent

rule or action, while the stay is in place.


21

Dated: December 19, 2016 Respectfully Submitted,

KEN PAXTON Attorney General of Texas JEFFREY C. MATEER First Assistant Attorney General SCOTT A. KELLER Solicitor General s/ Lisa A. Bennett LISA A. BENNETT Assistant Solicitor General [email protected] KELLIE E. BILLINGS-RAY Assistant Attorney General Office of the Attorney General P.O. Box 12548 (MC 059) Austin, Texas 78711-2548 512-936-1700 (phone) 512-474-2697 (fax)

Counsel for the State of Texas, The Texas Commission on Environmental Quality, and The Public Utility Commission of Texas


22

s/ P. Stephen Gidiere III P. Stephen Gidiere III BALCH & BINGHAM LLP 1901 6th Ave. N., Ste. 1500 Birmingham, Alabama 35203 205-251-8100 [email protected]

David W. Mitchell BALCH & BINGHAM LLP 601 Pennsylvania Avenue, N.W. Suite 825 South Washington, D.C. 20004 Stephanie Z. Moore Executive Vice President & General Counsel VISTRA ENERGY CORP. 1601 Bryan Street 22nd Floor Dallas, Texas 75201

Daniel J. Kelly Vice President & Associate General Counsel VISTRA ENERGY CORP. 1601 Bryan Street 43rd Floor Dallas, Texas 75201

Counsel for Luminant Generation Company LLC, Big Brown Power Company LLC, Luminant Mining Company LLC, Big Brown Lignite Company LLC, and Luminant Big Brown Mining Company LLC

s/ Debra J. Jezouit Debra J. Jezouit DC Bar No. 433921 William M. Bumpers DC Bar No. 385282 BAKER BOTTS L.L.P. The Warner 1299 Pennsylvania Avenue, NW Washington, DC 20004-2400 202-639-7728 (phone) 202-585-1032 (fax) [email protected] [email protected] Ann M. Seha Minn. Bar No. 0157235 XCEL ENERGY SERVICES INC. 414 Nicollet Mall 5th Floor Minneapolis, MN 55401-1993 612-215-4619 (phone) 612-215-4544 (fax) [email protected] Counsel for Southwestern Public Service Company s/ Norman W. Fichthorn Norman W. Fichthorn Aaron M. Flynn HUNTON & WILLIAMS LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 202-955-1500 [email protected] [email protected] Counsel for the Utility Air Regulatory Group


mailto:[email protected]

23

s/ Derek R. McDonald Derek R. McDonald Carlos R. Romo BAKER BOTTS L.L.P. 98 San Jacinto Boulevard Suite 1500 Austin, Texas 78701 512-322-2667 (phone) 512-322-8342 (fax) [email protected] Counsel for Coleto Creek Power, LP s/ Eugene M. Trisko Eugene M. Trisko LAW OFFICES OF EUGENE M. TRISKO P.O. Box 596 Berkeley Springs, WV 25411 Tel: (304) 258-1977 Tel: (301) 639-5238 (cell) [email protected] Counsel for Local Union 2337 of the International Brotherhood of Electrical Workers s/ Mark Walters Mark Walters Michael Nasi JACKSON WALKER L.L.P. 100 Congress Avenue, Suite 1100 Austin, Texas 78701 512-236-2000 (phone) 512-236-2002 (facsimile) [email protected] [email protected]

Counsel for Balanced Energy for Texas and the Texas Mining and Reclamation Association

s/ David R. Taggart David R. Taggart Texas Bar No. 00793102 Natalie J. Taylor La. Bar No. 31282 BRADLEY MURCHISON KELLY & SHEA LLC 401 Edwards Street, Suite 1000 Shreveport, LA 71101-5529 318-227-1131 (phone) 318-227-1141 (fax) [email protected] [email protected] Mark H. Allison Ark. Bar. No. 85001 DOVER DIXON HORNE, PLLC Suite 3700 425 West Capitol Avenue Little Rock, Arkansas 72201 501-375-9151 (phone) 501-375-6484 (fax) [email protected] Counsel for Nucor Corporation


mailto:[email protected]

24

s/ C. Frederick Beckner III Roger R. Martella, Jr. C. Frederick Beckner III Joel F. Visser SIDLEY AUSTIN LLP 1501 K Street, NW Washington, DC 20005 (202) 736-8000 Counsel for Texas Association of Business, Bay City Chamber of Commerce & Agriculture, Baytown Chamber of Commerce, Cedar Park Chamber of Commerce, Clear Lake Area Chamber of Commerce, Corpus Christi Chamber of Commerce, Frisco Chamber of Commerce, Grapevine Chamber of Commerce, Greater Angleton Chamber of Commerce, Greater Beaumont Chamber of Commerce, Greater Hewitt Chamber of Commerce, Greater Irving-Las Colinas Chamber of Commerce, Greater Waco Chamber of Commerce, Henderson Area Chamber of Commerce, Lake Houston Area Chamber of Commerce, Lubbock Chamber of Commerce, Mineral Wells Chamber of Commerce, Port Arthur Chamber of Commerce, Rockwall Area Chamber of Commerce, San Angelo Chamber of Commerce, South Padre Island Chamber of Commerce, Texas City-La Marque Chamber of Commerce, Tyler Area Chamber of Commerce, Victoria Chamber of Commerce, and the Chamber of Commerce of the United States of America

Of Counsel: Steven P. Lehotsky Sheldon Gilbert U.S. Chamber Litigation Center 1615 H Street, NW Washington, DC 20062 (202) 463-5337 Counsel for the Chamber of Commerce of the United States of America


25

CERTIFICATE OF COMPLIANCE

The undersigned counsel states that this motion complies with Fed. R. App. P.

27(d)(2)(A) because it contains 5,167 words, as counted by a word processing system

that includes headings, footnotes, quotations, and citations in the count, and therefore

is within the word limit. This motion also complies with typeface requirements of

Fed. R. App. P. 27(d)(1)(E) because it has been prepared in a proportionally spaced

typeface in 14-point Garamond font.

Dated: December 19, 2016

s/ P. Stephen Gidiere III P. Stephen Gidiere III Counsel for Luminant Petitioners


26

CERTIFICATE OF SERVICE

I hereby certify that all counsel of record who have consented to electronic

service are being served with a copy of this document via the Court’s CM/ECF

system on this 19th day of December, 2016.

s/ P. Stephen Gidiere III P. Stephen Gidiere III Counsel for Luminant Petitioners


Exhibit 1


The EPA Region 6 Regional Administrator, Ron Curry, signed this proposed rule on 12/9/2016, and EPA is submitting it for publication in the Federal Register (FR). While we have taken steps to ensure the accuracy of this Internet version of the rule, it is not the official version of the rule for purposes of public comment. Please refer to

the official version in a forthcoming FR publication, which will appear on the Government Printing Office’s FDsys website (https://www.gpo.gov/fdsys/search/home.action), Regulations.gov (http://www.regulations.gov/#!home),

and in the EPA section of the FR website (https://www.federalregister.gov/agencies/environmental-protection-agency) in Docket No. EPA-R06-OAR-2016-0611.

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2016-0611; FRL-9955-77-Region 6]

Promulgation of Air Quality Implementation Plans; State of Texas; Regional Haze and

Interstate Visibility Transport Federal Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

SUMMARY: Pursuant to the Federal Clean Air Act (CAA or Act), the Environmental

Protection Agency (EPA) is proposing to promulgate a Federal Implementation Plan (FIP) in

Texas to address the remaining outstanding requirements that are not satisfied by the Texas

Regional Haze State Implementation Plan (SIP) submission. Specifically, the EPA proposes SO2

limits on 29 Electric Generating Units (EGUs) located at 14 Texas facilities to fulfill

requirements for the installation and operation of the Best Available Retrofit Technology

(BART) for SO2. To address the requirement for NOX BART for Texas EGU sources, we are

proposing a FIP that relies upon two other EPA rulemakings, one already final and one proposed,

which together will establish that participation in the Cross-State Air Pollution Rule (CSAPR)

continues to qualify as an alternative to NOX BART for EGUs in Texas. We also are proposing

to disapprove the portion of the Texas Regional Haze SIP that addresses the BART requirement


https://www.federalregister.gov/agencies/environmental-protectionhttp://www.regulations.gov/#!homehttp:Regulations.govhttps://www.gpo.gov/fdsys/search/home.action

This document is a prepublication version, signed by EPA Region 6 Regional Administrator, Ron Curry, on 12/9/2016. We have taken steps to ensure the accuracy of this version, but it is not the official version.

2

for EGUs for Particulate Matter (PM) and proposing a FIP with PM BART limits for EGUs at 29

EGUs located at 14 Texas facilities, based on existing practices and control capabilities. In

addition, we propose to reconsider and re-propose disapproval of portions of several SIP

revisions submitted to satisfy the requirement to address interstate visibility transport for six

NAAQS (1) 1997 8-hour ozone, (2) 1997 PM2.5 (annual and 24 hour), (3) 2006 PM2.5 (24-hour),

(4) 2008 8-hour ozone, (5) 2010 1-hour NO2 and (6) 2010 1-hour SO2 and we propose that the

FIP emission limits we are proposing meet the interstate visibility transport requirements for

these NAAQS.

DATES: Comments: Comments must be received on or before [Insert date 60 days from date

of publication in the Federal Register].

Public Hearing:

We are holding an information session, for the purpose of providing additional information and

informal discussion for our proposal. We are also holding a public hearing to accept oral

comments into the record:

Date: Tuesday, January 10, 2017

Time: Open House: 1:30 p.m. - 3:30 p.m.

Public hearing: 4:00 p.m. – 8:00 p.m. (including short break)

Location: Joe C. Thompson Conference Center

(on the University of Texas (UT) Campus)



3

Room 3.102

2405 Robert Dedman Drive

Austin, Texas 78712

For additional logistical information regarding the public hearing please see the

SUPPLEMENTARY INFORMATION section of this action.

ADDRESSES: Submit your comments, identified by Docket No. EPA-R06-OAR-2016-0611, at

http://www.regulations.gov or via email to [email protected]. Follow the online

instructions for submitting comments. Once submitted, comments cannot be edited or removed

from Regulations.gov. The EPA may publish any comment received to its public docket. Do

not submit electronically any information you consider to be Confidential Business Information

(CBI) or other information whose disclosure is restricted by statute. Multimedia submissions

(audio, video, etc.) must be accompanied by a written comment. The written comment is

considered the official comment and should include discussion of all points you wish to make.

The EPA will generally not consider comments or comment contents located outside of the

primary submission (i.e. on the web, cloud, or other file sharing system). For additional

submission methods, please contact Joe Kordzi, 214-665-7186, [email protected]. For the

full EPA public comment policy, information about CBI or multimedia submissions, and general

guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-

epa-dockets.

Docket: The index to the docket for this action is available electronically at

http://www.regulations.gov and in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700,


http:http://www.regulations.govhttp://www2.epa.gov/dockets/commentingmailto:[email protected]:Regulations.govmailto:[email protected]:http://www.regulations.gov


4

Dallas, Texas. While all documents in the docket are listed in the index, some information may

be publicly available only at the hard copy location (e.g., copyrighted material), and some may

not be publicly available at either location (e.g., CBI).

The Texas regional haze SIP is available online at:

https://www.tceq.texas.gov/airquality/sip/bart/haze_sip.html. It is also available for public

inspection during official business hours, by appointment, at the Texas Commission on

Environmental Quality, Office of Air Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Joe Kordzi, Air Planning Section (6PD-L),

Environmental Protection Agency, Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas

75202-2733, telephone 214-665-7186; fax number 214-665-7263; e-mail address

[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document wherever “we,” “us,” or

“our” is used, we mean the EPA.

Joe C. Thompson Conference Center parking is adjacent to the building in Lot 40, located at the

intersection of East Dean Keeton Street and Red River Street. Additional parking is available at

the Manor Garage, located at the intersection of Clyde Littlefield Drive and Robert Dedman

Drive. If arranged in advance, the UT Parking Office will allow buses to park along Dedman

Drive near the Manor Garage for a fee.


mailto:[email protected]://www.tceq.texas.gov/airquality/sip/bart/haze_sip.html


5

The public hearing will provide interested parties the opportunity to present information and

opinions to us concerning our proposal. Interested parties may also submit written comments, as

discussed in the proposal. Written statements and supporting information submitted during the

comment period will be considered with the same weight as any oral comments and supporting

information presented at the public hearing. We will not respond to comments during the public

hearing. When we publish our final action, we will provide written responses to all significant

oral and written comments received on our proposal. To provide opportunities for questions and

discussion, we will hold an information session prior to the public hearing. During the

information session, EPA staff will be available to informally answer questions on our proposed

action. Any comments made to EPA staff during an information session must still be provided

orally during the public hearing, or formally in writing within 30 days after completion of the

hearings, in order to be considered in the record.

At the public hearings, the hearing officer may limit the time available for each commenter to

address the proposal to three minutes or less if the hearing officer determines it to be appropriate.

We will not be providing equipment for commenters to show overhead slides or make

computerized slide presentations. Any person may provide written or oral comments and data

pertaining to our proposal at the public hearings. Verbatim English language transcripts of the

hearing and written statements will be included in the rulemaking docket.



6

I. Background

II. Overview of Proposed Actions

A. Regional Haze

B. Interstate Transport of Pollutants that Affect Visibility

C. Our Authority to Promulgate a FIP

III. Our Proposed BART Analyses for SO2 and PM

A. Identification of BART-Eligible Sources

B. Identification of Sources that are Subject to BART

1. Our use of the Standard BART Model Plant Exemption

2. Our Extension of the BART Model Plant Exemption

3. Our use of CALPUFF Modeling to Exempt Sources from Being Subject to BART

4. Our use of CAMx Modeling to Exempt Sources from Being Subject to BART

5. Summary of Sources that are Subject to BART

C. Our BART Five Factor Analyses

1. Steps 1 and 2: Technically Feasible SO2 Retrofit Controls

a. Identification of Technically Feasible SO2 Retrofit Control Technologies for Coal

Fired Units

b. Identification of Technically Feasible SO2 Retrofit Control Technologies for Gas-

Fired Units that Burn Oil

c. Identification of Technically Feasible SO2 Control Technologies for Scrubber

Upgrades



7

2. Step 3: Evaluation of Control Effectiveness

a. Evaluation of SO2 Control Effectiveness for Coal Fired Units

b. Evaluation of SO2 Control Effectiveness for Gas Fired Units

3. Step 4: Evaluate Impacts and Document the Results for SO2

a. Impact Analysis Part 1: Cost of Compliance for DSI, SDA, and Wet FGD

b. Impact Analysis Part 1: Cost of Compliance for Scrubber Upgrades

c. Impact Analysis Part 1: Cost of Compliance for Gas Units that Burn Oil

4. Impact Analysis Parts 2, 3, and 4: Energy and Non-air Quality Environmental

Impacts, and Remaining Useful Life

5. Step 5: Evaluate Visibility Impacts

a. Visibility Benefits of DSI, SDA, and Wet FGD for Coal-fired Units

b. Visibility Benefits of Scrubber Upgrades for Coal-fired Units

c. Visibility Benefits of Fuel Oil Switching for Gas/Fuel Oil-Fired Units

6. BART Five Factor Analysis for PM

D. How, if at all, Do Issues of “Grid Reliability” Relate to the Proposed BART

Determinations?

IV. Our Weighing of the Five BART Factors

A. SO2 BART for Coal-fired Units with no SO2 Controls

1. Big Brown 1 & 2

2. Monticello 1 & 2

3. Coleto Creek 1

4. Welsh 1



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5. Harrington 061B & 062B

6. W A Parish WAP 5 & 6

7. J T Deely 1 & 2

B. SO2 BART for Coal-fired Units with Underperforming Scrubbers

C. SO2 BART for Gas-fired Units that Burn Oil

D. PM BART

V. Proposed Actions

A. Regional Haze

1. NOX BART

2. SO2 BART for Coal-fired Units

3. Potential Process for Alternative Scrubber Upgrade Emission Limits

4. SO2 BART for Gas-fired Units that Burn Oil

5. PM BART

B. Interstate Visibility Transport

VI. Statutory and Executive Order Reviews

I. Background

Regional haze is visibility impairment that is produced by a multitude of sources and

activities that are located across a broad geographic area and emit fine particulates (PM2.5) (e.g.,

sulfates, nitrates, Organic Carbon (OC), Elemental Carbon (EC), and soil dust), and their

precursors (e.g., Sulfur Dioxide (SO2), Nitrogen Oxides (NOX), and in some cases, ammonia

(NH3) and Volatile Organic Compounds (VOCs)). Fine particle precursors react in the



9

atmosphere to form PM2.5, which impairs visibility by scattering and absorbing light. Visibility

impairment reduces the clarity, color, and visible distance that can be seen. PM2.5 can also cause

serious health effects and mortality in humans and contributes to environmental effects such as

acid deposition and eutrophication.

Data from the existing visibility monitoring network, the “Interagency Monitoring of

Protected Visual Environments” (IMPROVE) monitoring network, show that visibility

impairment caused by air pollution occurs virtually all the time at most national parks and

wilderness areas. In 1999, the average visual range1 in many Class I areas (i.e., national parks

and memorial parks, wilderness areas, and international parks meeting certain size criteria) in the

western United States was 100-150 kilometers, or about one-half to two-thirds of the visual

range that would exist without anthropogenic air pollution. In most of the eastern Class I areas

of the United States, the average visual range was less than 30 kilometers, or about one-fifth of

the visual range that would exist under estimated natural conditions.2 CAA programs have

reduced some haze-causing pollution, lessening some visibility impairment and resulting in

partially improved average visual ranges.3

CAA requirements to address the problem of visibility impairment are continuing to be

addressed and implemented. In Section 169A of the 1977 Amendments to the CAA, Congress

created a program for protecting visibility in the nation’s national parks and wilderness areas.

This section of the CAA establishes as a national goal the prevention of any future, and the

1 Visual range is the greatest distance, in kilometers or miles, at which a dark object can be viewed against the sky.

2 64 FR 35715 (July 1, 1999).

3 An interactive “story map” depicting efforts and recent progress by EPA and states to improve visibility at

national parks and wilderness areas may be visited at: http://arcg.is/29tAbS3.


http://arcg.is/29tAbS3


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remedying of any existing man-made impairment of visibility in 156 national parks and

wilderness areas designated as mandatory Class I Federal areas.4 On December 2, 1980, EPA

promulgated regulations to address visibility impairment in Class I areas that is “reasonably

attributable” to a single source or small group of sources, i.e., “reasonably attributable visibility

impairment.”5 These regulations represented the first phase in addressing visibility impairment.

EPA deferred action on regional haze that emanates from a variety of sources until monitoring,

modeling, and scientific knowledge about the relationships between pollutants and visibility

impairment were improved.

Congress added section 169B to the CAA in 1990 to address regional haze issues, and we

promulgated regulations addressing regional haze in 1999.6 The Regional Haze Rule revised the

existing visibility regulations to integrate into the regulations provisions addressing regional haze

impairment and established a comprehensive visibility protection program for Class I areas. The

requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in our visibility

protection regulations at 40 CFR 51.300–309. The requirement to submit a regional haze SIP

applies to all 50 states, the District of Columbia, and the Virgin Islands. States were required to

4 Areas designated as mandatory Class I Federal areas consist of National Parks exceeding 6000 acres, wilderness areas and national memorial parks exceeding 5000 acres, and all international parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a). In accordance with section 169A of the CAA, EPA, in consultation with the Department of Interior, promulgated a list of 156 areas where visibility is identified as an important value. 44 FR 69122 (November 30, 1979). The extent of a mandatory Class I area includes subsequent changes in boundaries, such as park expansions. 42 U.S.C. 7472(a). Although states and tribes may designate as Class I additional areas which they consider to have visibility as an important value, the requirements of the visibility program set forth in section 169A of the CAA apply only to “mandatory Class I Federal areas.” Each mandatory Class I Federal area is the responsibility of a “Federal Land Manager.” 42 U.S.C. 7602(i). When we use the term “Class I area” in this action, we mean a “mandatory Class I Federal area.” 5 45 FR 80084 (December 2, 1980). 6 64 FR 35714 (July 1, 1999), codified at 40 CFR part 51, subpart P (Regional Haze Rule).



11

submit the first implementation plan addressing regional haze visibility impairment no later than

December 17, 2007.7

Section 169A of the CAA directs states to evaluate the use of retrofit controls at certain

larger, often under-controlled, older stationary sources in order to address visibility impacts from

these sources. Specifically, section 169A(b)(2)(A) of the CAA requires states to revise their

SIPs to contain such measures as may be necessary to make reasonable progress toward the

natural visibility goal, including a requirement that certain categories of existing major stationary

sources8 built between 1962 and 1977 procure, install and operate the “Best Available Retrofit

Technology” (BART). Larger “fossil-fuel fired steam electric plants” are included among the

BART source categories. Under the Regional Haze Rule, states are directed to conduct BART

determinations for “BART-eligible” sources that may be anticipated to cause or contribute to any

visibility impairment in a Class I area. The evaluation of BART for Electric Generating Units

(EGUs) that are located at fossil-fuel fired power plants having a generating capacity in excess of

750 megawatts must follow the “Guidelines for BART Determinations Under the Regional Haze

Rule” at appendix Y to 40 CFR Part 51 (hereinafter referred to as the “BART Guidelines”).

Rather than requiring source-specific BART controls, states also have the flexibility to adopt an

emissions trading program or alternative program as long as the alternative provides greater

reasonable progress towards improving visibility than BART. To the extent a Regional Haze

SIP does not meet CAA requirements to address BART, the CAA requires EPA to promulgate a

7 See 40 CFR 51.308(b). EPA’s regional haze regulations require subsequent updates to the regional haze SIPs. 40 CFR 51.308(g)–(i).

8 See 42 U.S.C. 7491(g)(7) (listing the set of “major stationary sources” potentially subject-to-BART).



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FIP that makes the requisite determinations to ensure the BART requirement is satisfied, as

applicable, for sources in the state.9

II. Overview of Proposed Actions

A. Regional Haze

On January 5, 2016, we took final action on nearly all portions of a Regional Haze SIP

submittal submitted by the State of Texas on March 31, 2009.10 In that final rule, we did not take

action on the portion of the submittal that was intended to satisfy BART requirements for EGUs

as mandated by 40 CFR 51.308(e). In an earlier, separate action, we issued a limited disapproval

of the Texas Regional Haze SIP concerning EGU BART due to Texas’ reliance on the Clean Air

Interstate Rule (CAIR).11 The EGU BART requirements for NOX and SO2 remain unmet

following the limited disapproval, and Texas has not submitted a revised SIP to address the

deficiencies. While we previously proposed to approve the portion of the Regional Haze SIP

that was intended to address whether EGUs in Texas must install and operate BART for PM,12

that part of the proposed action was not finalized.13 In connection with changed circumstances

9 See, 42 U.S.C. 7491(b)(2)(A)(citing the potential need for BART as determined by “the Administrator in the case of a plan promulgated under section 7410(c) of this title”). 10 81 FR 296 (January 5, 2016). A preliminary order of the Fifth Circuit Court of Appeals in Case No. 16-60118 was issued on July 15, 2016, and stayed the rule “in its

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