EPA Loses Another PSD Case: The Clean Air Act is “Extraordinarily Rigid”

In Sierra Club v. EPA, issued today, The Court of Appeals for the District of Columbia rejected EPA’s rules governing “significant impact levels” and “significant monitoring concentrations” for determining PSD permitting requirements for new sources of PM2.5.  Both the SIL and SMC provisions provided important exemptions from the PSD permitting regime. The Court ruled that neither provision was justified given the inflexible language of the Clean Air Act.

The SIL is “the level of ambient impact below which the EPA considers a source to have an insignificant effect on ambient air quality.”  However, it is possible for a source to be below the SIL, but still have projected impacts sufficient to cause a violation of a PM2.5 increment or the PM2.5 NAAQS.  EPA acknowledged this flaw during the litigation and actually proposed that the Court vacate and remand the rule.  The Court agreed, resisting the entreaty of the Utility Air Regulation Group to affirm the rule and the entreaty of the Sierra Club’s that the Court should hold that SILs are per se invalid.  The Court concluded that there was no need for it to reach that issue now.

SMCs are de minimis air concentrations used to exempt facilities from pre-permitting air monitoring requirements.  EPA cited as its authority for promulgating the SMC – and the SIL – Alabama Power Co. v. Costle, which held that agencies have inherent authority to establish various de minimis thresholds.  As noted in Sierra Club v. EPA, the Alabama Power decision stated that

[u]nless Congress has been extraordinarily rigid, there is likely a basis for an implication of de minimis authority to provide exemption when the burdens of regulation yield a gain of trivial or no value.

So what’s the problem here?  Just that the Court concluded that the CAA is indeed “extraordinarily rigid” in this area.  Section 165(e) of the CAA, which addresses preconstruction monitoring, does not seem to leave much room for flexibility:

Congress’s use of the word “shall” in each sentence of the Act evidences a clear legislative mandate that the preconstruction monitoring requirement applies to PSD permit applicants.  That Congress provided only one exception to this monitoring requirement – a shorter monitoring period – suggests that Congress did not intend any other exceptions.

For those working in NGOs – and regulated entities dealing with NGOs – it is also worth noting that the Court buttressed its decision by referencing the language in § 165(e)(2) that the monitoring is necessary to support the statute’s requirement that PSD permitting decisions be made “after adequate procedural opportunities for informed public participation.”

My quick interpretation here is that the Court’s analysis of EPA’s de minimis authority is essentially a form of Chevron review, even though the Court did not site Chevron in the decision.  If, in the first step of Chevron analysis, the Court concludes that the statute is unambiguous, then EPA has no de minimis authority.  If, on the other hand, the statute does not provide an answer under step one of Chevron, then EPA retains inherent authority to create de minimis exemptions.

As a final note, I feel compelled to point out that the “extraordinarily rigid” provisions here were approved 73-7 in the Senate and 326 to 49 in the House.

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