Emergency Application — Ohio, et al., Applicants v. Environmental Protection Agency, et al.
Supreme Court briefOct 13, 2023
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Appendix A
USCA Case #23-1157
Document #2018645
Filed: 09/25/2023
Page 1 of 2
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
____________
No. 23-1157
September Term, 2023
EPA-88FR36654
Filed On: September 25, 2023
State of Utah, by and through its Governor,
Spencer J. Cox, and its Attorney General,
Sean D. Reyes,
Petitioner
v.
Environmental Protection Agency and
Michael S. Regan, Administrator, U.S. EPA,
Respondents
-----------------------------City of New York, et al.,
Intervenors
-----------------------------Consolidated with 23-1181, 23-1183,
23-1190, 23-1191, 23-1193, 23-1195,
23-1199, 23-1200, 23-1201, 23-1202,
23-1203, 23-1205, 23-1206, 23-1207,
23-1208, 23-1209, 23-1211
BEFORE:
Pillard, Walker*, and Childs, Circuit Judges
ORDER
Upon consideration of the motions for stay in Nos. 23-1181, 23-1183, 23-1190,
23-1191, 23-1193, 23-1195, 23-1199, 23-1202, and 23-1205, the oppositions thereto,
the replies, and the amicus briefs, it is
ORDERED that the motions for stay be denied. Petitioners have not satisfied
the stringent requirements for a stay pending court review. See Nken v. Holder, 556
* Judge Walker would stay the federal implementation plan in question.
App. A-1
USCA Case #23-1157
Document #2018645
Filed: 09/25/2023
Page 2 of 2
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
____________
No. 23-1157
September Term, 2023
U.S. 418, 434 (2009); D.C. Circuit Handbook of Practice and Internal Procedures 33
(2021).
Per Curiam
FOR THE COURT:
Mark J. Langer, Clerk
BY:
Page 2
/s/
Tatiana Magruder
Deputy Clerk
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Appendix C
No. 23-1183 (consolidated with 23-1157)
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
State of Ohio, et al.,
Petitioners,
v.
Environmental Protection Agency and Michael S. Regan, in his official capacity,
as Administrator of the U.S. Environmental Protection Agency
Respondents.
On Petition for Review of Action by the U.S. Environmental Protection Agency
DECLARATION OF LAURA M. CROWDER IN SUPPORT OF
PETITIONERS' MOTION FOR STAY PENDING REVIEW AND FOR
AN ADMINISTRATIVE STAY
I, Laura M. Crowder, make the following declaration pursuant to 28 U.S.C.
§ 1746:
1.
I currently serve as Director for West Virginia's Division of Air Quality
("WVDAQ") within the West Virginia Department of Environmental Protection
("WVDEP"). I have held this position since May 11, 2019. Prior to then, I served
as the Deputy Director of WVDAQ and have been with WVDAQ since February
1994. I have a bachelor's degree in electrical engineering from West Virginia
Institute of Technology. I am over the age of 18 and am competent to testify
concerning the matters in this declaration based on my personal knowledge, my
experience with WVDAQ, and information provided to me by WVDAQ personnel.
1
App. C-1
2.
I am providing this declaration in support of the State of West
Virginia's motion for a stay of the Federal Implementation Plan, or "FIP," published
by the U.S. Environmental Protection Agency ("EPA") as a Final Rule titled
"Federal `Good Neighbor Plan' for the 2015 Ozone National Ambient Air Quality
Standards," 88 Fed. Reg. 36,654 (June 5, 2023). I am aware that EPA published the
FIP following EPA's disapproval of the West Virginia State Implementation Plan
("SIP") addressing interstate transport for the 2015 ozone National Ambient Air
Quality Standards ("NAAQS") on February 13, 2023. See Air Plan Disapprovals;
Interstate Transport of Air Pollution for the 2015 8-Hour Ozone National Ambient
Air Quality Standards, Final Rule, 88 Fed. Reg. 9336 (Feb. 13, 2023). EPA's FIP
will result in imminent, irreparable harm to the State and its citizens.
I.
West Virginia's Division of Air Quality
3.
WVDAQ's mission is to achieve and maintain such levels of air quality
as will protect human health and safety, and to the greatest degree practicable,
prevent injury to plant and animal life and property, foster the comfort and
convenience of the people, promote the economic and social development of this
state and facilitate the enjoyment of the natural attractions of this state.
4.
To these ends, WVDAQ provides for a coordinated statewide program
of air pollution prevention, abatement and control; facilitates cooperation across
jurisdictional lines in dealing with problems of air pollution not confined within
2
App. C-2
single jurisdictions; assures the economic competitiveness of the state by providing
for the timely processing of permit applications and other authorizations; and
provides a framework within which all values may be balanced in the public interest.
5.
WVDAQ is responsible for ensuring that West Virginia's air meets
public health and welfare standards established under the federal Clean Air Act
("CAA"), as amended. To fulfill this responsibility, WVDAQ must attain EPA's
NAAQS within West Virginia's borders.
6.
Among other things, WVDAQ promulgates legislative rules pertaining
to air quality standards, develops SIPs to meet the federal standards, works to obtain
EPA approval of SIP elements, issues pre-construction and operating permits to
stationary sources, and ensures compliance with state and federal air quality rules.
7.
As WVDAQ's Director, I am authorized to develop ways and means
for the regulation and control of air pollution of the state, to promulgate legislative
rules relating to the control of air pollution, and to employ personnel to accomplish
its purpose. See W. Va. Code § 22-5-4(1), (4), (8).
8.
I am also authorized to do all things necessary and convenient to
prepare and submit a plan or plans for the implementation, maintenance and
enforcement of the CAA, as amended, and to promulgate legislative rules to
establish air permit applications and requirements. See W. Va. Code § 22-5-4(17),
(18).
3
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9.
WVDAQ is responsible for preparing and developing plans for the
prevention, abatement, and control of air pollution in West Virginia, complying with
the requirements of federal air pollution laws, and enforcing West Virginia air
pollution laws. As WVDAQ's Director, I am responsible for managing WVDAQ's
staff and programs associated with these endeavors.
II.
EPA's Overlapping SIP and FIP Rulemaking
10.
The CAA requires West Virginia to submit a SIP to EPA within three
years after the promulgation of new or revised NAAQS. 42 U.S.C. § 7410(a)(1).
States must include in their SIPs "adequate provisions" prohibiting "any source or
other type of emissions activity within the State from emitting any air pollutant in
amounts which will ... contribute significantly to nonattainment in, or interfere with
maintenance by, any other State with respect to any" primary or secondary NAAQS.
Id. § 7410(a)(2)(D)(i). When necessary, upwind states must reduce emissions within
their borders to account for emissions that travel outside the state that will
"contribute significantly" to nonattainment, or "interfere with maintenance," of
NAAQS in downwind states. Id. This is known as the "Good Neighbor" provision.
11.
On October 26, 2015, EPA revised the NAAQS for ozone, lowering the
primary and secondary standards from 75 parts per billion (ppb) to 70 ppb. See 80
4
App. C-4
Fed. Reg. 65,292. This triggered West Virginia's obligation to prepare a SIP to
ensure compliance with the new NAAQS.
12.
On February 4, 2019, WVDEP, on behalf of West Virginia, submitted
to EPA a SIP addressing the CAA's Section 110(a)(2)(D)(i)(I) interstate transport
requirements for the 2015 8-hour ozone NAAQS.
WVDEP noted that it had
proposed legislative rule 45 CSR 43, which incorporates by reference the federal
Cross-State Air Pollution Rule ("CSAPR") and CSAPR Update Rule, to the
legislature. WVDEP thus sought conditional approval of its SIP and told EPA that
it would submit 45 CSR 43 to EPA upon authorization from the legislature and
promulgation.
13.
On June 5, 2019, WVDEP submitted a corresponding SIP revision to
add 45 CSR 43, which had by then been approved by the legislature. Legislative
rule 43 "establishes West Virginia CSAPR state trading programs for annual NON,
ozone season NON, and annual SO2 emissions for units in the state" and would be
integrated with, and substantively identical to, three federal trading programs. 84
Fed. Reg. 41,944, 41,947 (Aug. 16, 2019). WVDEP requested that EPA fully
approve the Good Neighbor SIP submitted on February 4, 2019. EPA proposed
approving 45 CSR 43 as part of West Virginia's SIP on August 16, 2019. See 84
Fed. Reg. 41,944-48. But EPA has not yet taken final action on WVDEP's request
to revise its SIP to include 45 CSR 43 into the SIP, which incorporated by reference
5
App. C-5
the then-current trading programs under CSAPR into the SIP, now that 45 CSR 43
has been approved.
14.
West Virginia's SIP submissions were the culmination of extensive
analysis, public comment, plan development, and consultation with EPA and other
states
all of which was meant to maximize the likelihood that EPA would approve
West Virginia's SIP.
15.
West Virginia's SIP reflected review and comments from EPA Region
3 staff on a draft proposed SIP that WVDAQ had provided EPA earlier on that
assessed the impact of emissions from West Virginia on the attainment or
maintenance of EPA's 2015 ozone NAAQS in downwind states.
16.
In preparing its proposed SIP, WVDAQ relied on one of the guidance
memoranda provided by EPA on analyzing downwind impacts: "Information on the
Interstate Transport State Implementation Plan Submissions for the 2015 Ozone
National Ambient Air Quality Standards under Clean Air Act Section
110(a)(2)(D)(i)(1)," ("March 2018 Memo"). WVDAQ did not rely on a second
guidance memorandum issued August 31, 2018, "Analysis of Contribution
Thresholds for Use in Clean Air Act Section 110(a)(2)(D)(i)(I) Interstate Transport
State Implementation Plan Submissions for the 2015 Ozone National Ambient Air
Quality Standards," ("August 2018 Memo") because it was issued immediately
before WVDAQ went to public notice on the Proposed SIP and after WVDAQ
6
App. C-6
received its early engagement feedback from EPA, Region 3; therefore, the guidance
was not considered timely.
17.
The SIP reflected WVDAQ's coordination with the regional air
planning organizations regarding each state's understanding of the Good Neighbor
Provisions' requirements, including Southeastern Air Pollution Control Agencies
("SESARM") and the Association of Air Pollution Control Agencies ("AAPCA").
18.
The SIP also reflected WVDAQ's consultation with various groups to
discuss West Virginia's emission inputs and West Virginia's modeled impacts to
nonattainment and maintenance monitors, including the Midwest Ozone Group
("MOG"), Alpine Geophysics, LLC ("Alpine"), and the Lake Michigan Air
Directors Consortium ("LADCO").
19.
In forming the West Virginia's proposed SIP, WVDAQ applied its
exhaustive analysis to EPA's recommended four-step analytical framework to assess
contributions under the "Good Neighbor" provision.
20.
West Virginia considered various modeling studies and used the "Good
Neighbor" Modeling provided by Alpine (June 2018), which relied on a nested 4km grid as the most robust way to identify the nonattainment and maintenance
receptors to which West Virginia significantly contributes. A nested 4-km grid is
more granular than the 12-km grid used in EPA's modeling from March 2018. See
Sections 3.4.e and 3.5 of West Virginia's February 2019 SIP Submission.
7
App. C-7
21.
West Virginia used the 1% of the NAAQS threshold (or 0.70 ppb)
which was more conservative than the alternative threshold allowed of 1 ppb, for
determining the significant contribution to downwind states' nonattainment at Step
2 of the analysis. Based on the 1% threshold, West Virginia determined that it was
"linked" to the downwind 8-hour ozone nonattainment receptor at Harford, MD and
"linked" to three maintenance receptors at Gloucester, NJ, Richmond, NY, and
Philadelphia, PA.
22.
WVDAQ engaged in further review and analysis relevant to those areas
under Steps 3 and 4. West Virginia identified the emissions reductions necessary (if
any), considering cost and air quality factors.
WVDAQ conducted a thorough
analysis and determined there were not any additional highly cost-effective
reductions available for the 2015 ozone NAAQS beyond incorporating by reference
the CSAPR trading program into the West Virginia SIP under legislative rule 45
CSR 43.
23.
EPA did not respond to, act upon, or otherwise engage with West
Virginia on its February 4, 2019 SIP submission for years. EPA did not note any
deficiencies in the submission and did not otherwise provide comment on West
Virginia's analysis of significant contribution. When consulting with EPA during
the SIP drafting process, EPA did not provide any "Key Comments" that must be
addressed in the SIP before it could be approved. And during West Virginia's public
8
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comment period between September 7, 2018 and October 8, 2019, EPA chose not to
provide comments to WVDAQ on its proposed SIP. WVDEP did not receive a letter
from EPA stating that the SIP was deemed administratively and technically
complete. Therefore, it was deemed administratively and technically complete by
operation of law six months later on August 4, 2019. See 42 U.S.C. § 7401(k)(1)(B).
24.
The next time WVDAQ received feedback from EPA on its SIP was
February 22, 2022, when EPA announced its proposed disapproval of the SIP for
noncompliance with the CAA's "Good Neighbor" provision, and did so through a
proposed rule titled "Air Plan Disapproval; West Virginia; Interstate Transport of
Air Pollution for the 2015 8-Hour Ozone National Ambient Air Quality Standards,"
87 Fed. Reg. 9516. That proposed rule stated that any "[w]ritten comments must be
received on or before April 25, 2022." 87 Fed. Reg. at 9517.
25.
On April 13, 2022, WVDAQ submitted comments on the proposed rule
disapproving West Virginia's SIP. See EPA Docket R03-OAR-2021-0873-0006.
26.
On April 6, 2022—one week earlier and almost three weeks before the
comment period on the proposed rule disapproving West Virginia's SIP was
scheduled to close—EPA issued another proposed rule that would impose a FIP for
West Virginia and 26 other states whose SIPs did not receive EPA's approval. This
proposed rule was titled "Federal Implementation Plan Addressing Regional Ozone
9
App. C-9
Transport for the 2015 Ozone National Ambient Air Quality Standard," 87 Fed. Reg.
20,036.
27.
On June 21, 2022, WVDEP submitted comments on the proposed rule
to implement the FIP. See EPA Docket HQ-OAR-2021-0668-0359.
28.
On February 13, 2023, EPA issued a final rule and final agency action
finalizing full or partial disapproval of SIPs filed by 21 states, titled "Air Plan
Disapprovals; Interstate Transport of Air Pollution for the 2015 8-Hour Ozone
National Ambient Air Quality Standards," 88 Fed. Reg. 9336. West Virginia was
among the states whose SIP received a full disapproval. See 88 Fed. Reg. at 9360.
29.
On April 14, 2023, the State of West Virginia filed its Petition for
Review of EPA's SIP disapproval. See Petition, State of West Virginia v. U.S. EPA,
et al., No. 23-1418 (Apr. 14, 2023, 4th Cir.), ECF 3-1.
30.
On June 5, 2023, EPA issued a rule finalizing the FIP, which applies to
West Virginia and 22 other states. 88 Fed. Reg. 36,654. On July 17, 2023, the State
of West Virginia filed a Petition for Review of EPA's FIP.
III.
Problems with EPA's Final Rule
31.
As noted in its earlier comment letters, WVDEP has several concerns
with EPA's rulemakings.
10
App. C-10
A.
EPA failed to follow the CAA's cooperative federalism mandate
32.
EPA's conduct in denying West Virginia's proposed SIP and
immediately imposing the FIP is inconsistent with the CAA's cooperative federalism
mandate, which gives States, not EPA, primary responsibility for regulating air
quality within their borders. Indeed, EPA may impose a FIP only if a State fails to
submit a SIP that meets the requirements of the CAA. See 42 U.S.C. § 7410(c).
33.
As detailed in WVDEP's comment letter regarding EPA's proposal to
deny West Virginia's SIP submission, EPA ignored numerous statutory deadlines to
provide West Virginia feedback about its proposal. Rather than working with West
Virginia to resolve any concerns with the proposed SIP, it seems EPA dedicated its
resources to developing and issuing the FIP.
34.
By proposing a FIP instead of working with West Virginia to perfect
the proposed SIP, EPA demonstrated its preference for promulgating a FIP instead
of helping West Virginia develop an approvable SIP.
West Virginia made
substantial investments in time and personnel resources on the proposed SIP and
stood ready to work with EPA to address any issues.
35.
Again, the CAA is structured to prefer state regulation of air quality
with limited federal oversight. But EPA shelved West Virginia's plan, preventing
West Virginia from addressing alleged deficiencies while the agency developed a
FIP that it could impose immediately after disapproving West Virginia's proposed
11
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SIP.
EPA's disapproval of West Virginia's SIP deprived West Virginia and
WVDAQ of the ability to fashion an interstate transport program that considers West
Virginia and the region's unique circumstances, determines the appropriate sources
that may need additional pollution controls, assess and determine the acceptability
of the costs of implementation, and adequately consider the needs of West Virginia's
citizens and economy.
EPA's actions fundamentally undermine Congress's
intention that West Virginia should have primary responsibility for developing and
Thus, EPA's Final Rule harms West
administering its air quality program.
Virginia's sovereign interests.
B.
The EPA's Final Rule Uses New Modeling
36.
At the time West Virginia was preparing its proposed SIP, EPA
provided updated modeling information with its March 2018 Memo for states to
consider in developing their SIPs. West Virginia used the information provided in
the March 2018 Memo to evaluate the impacts that West Virginia's emissions may
have on downwind monitors.
37.
But EPA disapproved West Virginia's proposed SIP as noncompliant
with the "Good Neighbor" provision based on a second version of newly modeled
data that was only made available to West Virginia well past the statutory deadline
to submit a SIP for the 2015 ozone NAAQS. Indeed, this modeling was available
only after EPA was statutorily required to act on West Virginia's SIP submission
12
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(but had failed to do so). This new modeling is significant because the monitors
previously linked as being impacted by West Virginia have changed with the newly
available data.
West Virginia also had no opportunity to evaluate these new
modeling results in crafting its SIP submittal.
IV.
The Final Rule Harms West Virginia and Regulated Sources
38.
The consequences from the Final FIP imposed on West Virginia harm
West Virginia and the regulated sources within its borders. Although the FIP is
based on an assessment of statewide emissions of all relevant pollutants, it will
require emission controls only for NOx emissions, with the most onerous emissions
targets impacting coal-fired electricity generating plants within the State. In total,
40 EGUs across 13 facilities will be impacted-24 of these units are coal-fired, and
they span 8 facilities.
39.
As identified in the WVDEP comments regarding the proposed FIP,
West Virginia was not previously linked to the receptors identified in the proposed
FIP when it developed its 2015 Good Neighbor SIP based on a more robust modeling
platform. However, to the extent emissions controls are needed, EPA has deprived
West Virginia of its rights under the CAA to identify and regulate in-state sources
as needed to mitigate significant contributions.
40.
EPA's FIP imposes a May 1, 2026, compliance deadline when
additional complex and costly controls are required under the FIP for non-EGU
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sources within West Virginia. WVDAQ must permit these new controls through its
permitting process for the affected facilities. The permitting process must start as
soon as the FIP becomes final and effective to meet the compliance deadline because
it may take several years for some sources to install required controls after WVDAQ
permits them.
41.
WVDAQ must permit numerous facilities in the state that are subject
to the FIP control requirements. WVDAQ estimates 52 facilities will be subject to
the non-EGU control requirements finalized in the FIP and 13 facilities will be
subject to the EGU requirements (both coal and non-coal fired) of the FIP. The nonEGU facilities subject to the FIP represent engines at natural gas transportation
facilities, cement manufacturing, iron and steel mills and ferroalloy manufacturing
facilities, and industrial boilers.
Additionally, under the FIP, the following
categories of sources will require permitting decisions: natural gas pipeline engines;
cement kilns; iron, steel, and ferroalloy manufacturing boilers; glass manufacturing
furnaces; large boilers used in chemical manufacturing, petroleum, and coal
manufacturing; and large boilers used in pulp, paper, and paperboard mills
manufacturing. WVDAQ will need to begin identifying which industrial sources
will be required to install controls and obtain permits, including analysis of an
estimated 130 engines in the pipeline transportation of natural gas.
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42.
The FIP compliance deadlines impose immediate permitting burdens
on WVDAQ. The permitting process is lengthy and resource intensive. It involves
staff review and development of draft permits, public notice, potential public
meetings, and likely extensive public input. WVDAQ will then review and respond
to the submitted comments on the proposed permit changes, in some circumstances
adjusting the permits. Groups that usually oppose coal-fired power plants, chemical
manufacturing, and other emissions sources, are likely to comment and formally
object to the proposed permits.
43.
These permitting burdens will put a significant strain on WVDAQ's
staff and will coincide with WVDAQ's other critical work involving the same key
personnel. That personnel is already strained as WVDAQ currently has 15 vacant
positions (17% vacancy), including 4 in the permitting section; though WVDAQ is
trying to fill these positions, it is having trouble finding interested and qualified
candidates. The Permitting Section reviews applications for modifications, new
facilities, and renewals and subsequently issues construction and operating permits.
An onslaught of applications to modify permits for the Ozone Transport FIP would
divert attention from new and expanding facilities in West Virginia, negatively
impacting economic growth and public protection.
The Planning Section is
responsible for reviewing and commenting on proposed federal regulations and
develops SIPs and State Plans required when EPA issues emission guidelines for
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existing sources. WVDAQ provides valuable comments to EPA on how regulations
will impact West Virginia air quality and economic activity. Diverting resources
away from these important projects undermines West Virginia's interest in
protecting public health.
44.
Each of these problems with EPA's FIP and Final Rule disapproving
the SIP causes West Virginia immediate harm to its sovereign interests and harms
regulated sources in the State.
Because the compliance deadlines are rapidly
approaching, West Virginia and its regulated entities must begin planning for
compliance and implementation immediately.
45.
Staying the FIP during the pendency of this litigation, however, will
cause no harm. A stay will maintain the status quo. The FIP is set to take effect on
August 4, 2023 with immediate control stringencies for the 2023 ozone season,
which began May 1, 2023. The program cannot be effectively implemented in West
Virginia that quickly. Past control projects for emissions have required years of
design, permitting, construction and sequencing of shut-downs to provide power
reliably to the utility customers. Assuming expeditious resolution of this litigation,
a stay during its pendency should not significantly affect the implementation of the
FIP for later ozone seasons.
46.
Moreover, WVDAQ has already implemented several programs that
have reduced ozone and other emissions, and which will continue to do so. For
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example, West Virginia ozone-season NOx emissions from EGUs have decreased
from 60,528 tons in 2003 to 11,531 tons in 2022 which is an 81% reduction in
statewide NOx emissions. These reductions have been achieved through several
regulations including: the Acid Rain Program, CAIR, CSAPR, MATS, Regional
Haze, and SIPs. With these other programs in place, air quality within West Virginia
and in downwind states is already improved and will continue to improve. Thus,
WVDAQ is taking adequate steps to address public health in West Virginia, while
there is no need for regulated sources to move forward with complying with EPA's
flawed Final FIP pending judicial review.
*
*
*
*
I declare under penalty of perjury that the foregoing is true and correct to the
best of my knowledge. Executed on this 18th day of July, 2023, in Charleston, West
Virginia.
aura M. Crowder
Director
West Virginia Division of Air Quality
West Virginia Department of Environmental Protection
17
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Appendix D
No. 23-1183 (consolidated with 23-1157)
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
State of Ohio, et al.,
Petitioners,
v.
Environmental Protection Agency and Michael S. Regan, in his official capacity,
as Administrator of the U.S. Environmental Protection Agency
Respondents.
On Petition for Review of Action by the U.S. Environmental Protection Agency
DECLARATION OF CHARLOTTE R. LANE IN SUPPORT OF
PETITIONERS’ MOTION FOR STAY PENDING REVIEW AND FOR
AN ADMINISTRATIVE STAY
I, Charlotte R. Lane, make the following declaration pursuant to 28 U.S.C.
§ 1746:
1.
I am the Chairman of the Public Service Commission of West Virginia
(“PSCWV”). I have held this position from July 1, 2019 to present and from 1997
to 2001. I served as Commissioner from 1985 to 1991. I served on the International
Trade Commission from 2003 to 2011. I have also served for several years in the
West Virginia House of Delegates. I served as President of the Mid-Atlantic
Conference of Regulated Utility Commissioners as well as a member of the Board
of Directors of the National Association of Utility Regulatory Commissioners. I
practiced law in State and Federal Courts in West Virginia for many years. I was
App. D-1
awarded the Justitia Officium Award from the West Virginia College of Law and
the Distinguished Alumnus Award from Marshall University. I am also a Fellow of
the American Bar Foundation and the West Virginia Bar Foundation. I am over the
age of 18 and am competent to testify concerning the matters in this declaration
based on my personal knowledge, my experience with PSCWV, and information
provided to me by PSCWV personnel.
2.
The PSCWV is responsible for regulating the service and rates of
utilities, including electric utilities serving retail customers in West Virginia. As
Chairman and a member of the Commission, I am charged with the responsibility
for appraising and balancing the interests of current and future utility service
customers, the general interests of the state’s economy and the interests of the
utilities subject to Commission jurisdiction in its deliberations and decisions,
including matters relating to PJM Interconnection, LLC (“PJM”) and the Federal
Energy Regulatory Commission.
3.
I am providing this declaration in support of the State of West
Virginia’s motion for a stay of the Federal Implementation Plan, or “FIP,” published
by the U.S. Environmental Protection Agency (“EPA”) as a Final Rule titled
“Federal ‘Good Neighbor Plan’ for the 2015 Ozone National Ambient Air Quality
Standards,” 88 Fed. Reg. 36,654 (June 5, 2023), promulgated to regulate West
Virginia’s nitrogen oxides (“NOx”) emissions. The FIP forces regulated coal-fired
2
App. D-2
electricity generating units (“EGUs”) within the state to install expensive new
emission control technologies in order to comply with the FIP’s stringent emissions
allowance budgets. The effective date of the FIP is August 4, 2023. Id.
4.
I am aware that EPA published the FIP following EPA’s final rule
issued on February 13, 2023, disapproving the state implementation plan (“SIP”)
submitted by West Virginia on February 4, 2019 to comply with the interstate
transport requirements for the 2015 8-hour ozone National Ambient Air Quality
Standards (“NAAQS”). See Air Plan Disapprovals; Interstate Transport of Air
Pollution for the 2015 8-Hour Ozone National Ambient Air Quality Standards, Final
Rule, 88 Fed. Reg. 9336.
5.
The FIP will burden West Virginia, its ratepayers, and its vertically
integrated electric utilities1 that own and operate electric generation facilities—both
by destabilizing the power grid and by making electricity less affordable.
6.
The FIP capacity restrictions will make electricity less reliable in West
Virginia and throughout the electricity grid by forcing the retirement of base load,
fuel-reliable, always-available, fossil fuel-fired thermal generation resources,
including the most fuel-reliable of the fossil fuel plants—coal-fired plants—which
1
Vertically integrated electric utilities provide all functions of electric service with
their own facilities, production, transmission and distribution.
3
App. D-3
can store fuel supply on-site and remain available for extended operations when
needed to back up less reliable generation resources.
7.
One of the affected power plants is the Fort Martin plant, owned by a
vertically integrated electric utility, Monongahela Power Company (MPCo). Fort
Martin is an integral component of MPCo’s fleet in West Virginia, providing
approximately 1,300 Megawatts (“MW”), or over thirty percent of MPCo’s load
requirement. The plant is a valuable asset for the West Virginia utility and has been
upgraded and maintained at the cost of the West Virginia ratepayers so that it can
provide service for the next fifteen or more years. The budgets imposed by the FIP
beginning in 2026 are based on an assumption that selective catalytic reduction
(“SCR”) equipment can be installed on existing units by the start of the 2026 ozone
season, but Fort Martin is not equipped with SCR equipment. Therefore, under the
FIP, Fort Martin will be required to be (1) retrofitted with expensive SCR equipment,
(2) significantly reduce its capacity utilization, or (3) retire prematurely. Any of
these solutions to satisfy the FIP will cost ratepayers much more than the average
cost estimates put out by EPA for its new rule. Retrofitting SCR equipment on the
plant will cost in excess of $500 million and will substantially increase operating
costs. These costs will be passed on to West Virginia ratepayers. In the alternative,
the plant may be scheduled for early retirement which will entail equally high costs
for ratepayers, and add to the instability of the electric grid in the future.
4
App. D-4
8.
Although the two units at the Pleasants Power Station have ceased
operations, the facility has not surrendered its operating permit, so it might be able
to resume operations if needed to maintain electric reliability during the retrofit at
the Fort Martin units. This is not a certainty, however, because the present owner
has announced an agreement to sell the plant to a new owner with plans to use the
plant for new load and to produce hydrogen. If the electrical output at Pleasants is
directed to a new load related to hydrogen production, then it may not be able to
substitute for the capacity lost at Fort Martin to maintain electric reliability.
Moreover, based on its announced retirement, the FIP does not allocate any NOx
allowances to either of the two units at the Pleasants Power Station. Therefore,
whether Pleasants could be used for hydrogen production or to support the electric
reliability during installation at Fort Martin, it would be unable to do so without
purchasing NOx allowances on the market.
The cost of purchasing enough
allowances to operate the EGUs at the Pleasants Power Station would likely be
exorbitantly expensive, assuming enough credits are even available.
9.
Decisions to spend or not spend over a half billion dollars to allow the
plant to continue to operate efficiently or to shut down prematurely cannot be
delayed. If the FIP stays in place, planning for the installation of SCR equipment
and construction timelines will require immediate decisions that will have long-term
debilitating consequences for ratepayers.
5
App. D-5
10.
Alternative decisions to forego installation of SCR equipment will
likewise have to be made quickly and once made will have long-term cost
consequences. If the decision is made to retire the plant prematurely, MPCo will be
required to notify PJM of the planned retirement and plan for replacement capacity.
PJM will conduct a retirement study to determine whether transmission system
upgrades will be needed due to the redistribution of electricity flows across the PJM
system. If transmission upgrades are required, they could be very expensive and
involve transmission construction in surrounding states.
11.
Replacement of 1,300 MW of coal-fired generation with no-NOx wind
or solar generation will require between 3,000 and 6,000 MW of these intermittent
wind or solar capacity resources.2 Assuming that MPCo could purchase those levels
of capacity to substitute for the capacity from Fort Martin, it could not contract for
the capacity at a price below the PJM market price of capacity. The current cost of
6,000 MW of intermittent capacity in the PJM market is $78 million per year. That
cost, however, fluctuates from year to year and is currently at a relatively low level.
Based on capacity costs over the last five years, it is more likely that 6,000 MW of
2
PJM has stated that replacement of thermal fired generation capacity will require
many multiples of solar or wind capacity because of the unreliable and limited capabilities of those replacement facilities to generate twenty-four hours per day, yearround, as is the case for thermal generation plants.
6
App. D-6
market-priced capacity will cost between $120 million and $220 million per year.3
Costs of this level, imposed on a relatively small West Virginia utility, far exceed
the fractional average percentage nationwide compliance cost set forth in the FIP.
12.
The forced premature retirement of West Virginia utility-owned power
plants brought on by the FIP will require replacement capacity supplied by less
reliable sources, and that, in turn, will increase utility costs and electricity rates while
destabilizing the grid. The PSCWV and MPCo will not have the luxury of waiting
for future developments before making decisions that will lead to expensive
construction of SCR equipment or acquisition of replacement capacity for a
prematurely retired unit. Evaluation of alternatives, filings with the PSCWV,
evidentiary proceedings and decisions by the PSCWV, and implementation of the
selected compliance strategies will take time and cannot be delayed.
3
Another option for MPCo to replace a prematurely retired Fort Martin power plant
would be to construct, own and operate a new thermal generation plant. Given the
restrictions on new coal-fired power plants, a new thermal power plant would have
to be natural-gas-fired. If existing thermal capacity is replaced with new thermal
capacity, it would require the same amount of capacity rather than the multiples required for intermittent wind or solar resources. A recent study for PJM estimated
that the 2026/2027 net Cost of New Entry (CONE) for thermal capacity (natural gasfired generation) would be between $307 and $356 per MW per day. PJM CONE
2026/2027 Report, Prepared for PJM Interconnection, April 21, 2022,
https://bit.ly/3pTxSVj (last visited July 18, 2023). At those net CONE levels, 1,300
MW of replacement capacity will cost between $145 million and $169 million per
year.
7
App. D-7
13.
In addition to cost of compliance, the FIP is problematic because it will
place increased reliance on intermittent (wind-powered and solar-powered) electric
generation resources within the region that includes the electric grid operated by
PJM—the regional transmission and supply organization responsible for
transmission adequacy and power supply markets in the region encompassing West
Virginia, twelve other states, and the District of Columbia. This move to intermittent
resources will be unsafe and unreliable without online reserve resources necessary
to provide the constant balance of supply to load when wind and solar resources are
intermittent; that is, when the wind is not blowing (or blowing unevenly) or the sun
is not shining (or shining unevenly).
14.
Indeed, PJM has recently warned in a February 2023 report on the risks
relating to energy resource transitions that a movement away from base load
dispatchable generation will cause capacity deficiencies and reliability degradation
as dispatchable thermal plants are retired prematurely. In its report, PJM stated:
The composition of the PJM Interconnection Queue has evolved
significantly in recent years, primarily increasing in the amount of
renewables, storage, and hybrid resources and decreasing in the amount
of natural gas-fired resources entering the queue…
By the 2028/2029 Delivery Year and beyond, at Low New Entry
scenario levels, projected reserve margins would be 8%, as projected
demand response may be insufficient to cover peak demand
expectations, unless new entry progresses at levels exhibited in the
High New Entry scenario. This will require the ability to maintain
needed existing resources, as well as quickly incentivize and integrate
new entry …
8
App. D-8
Thermal generators are retiring at a rapid pace due to government and
private sector policies as well as economics …
PJM’s interconnection queue is composed primarily of intermittent and
limited-duration resources. Given the operating characteristics of these
resources, we need multiple megawatts of these resources to replace 1
MW of thermal generation.
Energy Transition in PJM: Resource Retirements, Replacements & Risks, 1, 10, 16
(Feb. 24, 2023), https://bit.ly/3D0BRlP.
15.
This shift of generation will also be expensive. The report noted that
PJM requires multiple MW of intermittent and limited duration resources to replace
one MW of thermal generation. If the FIP puts significant quantities of thermal
generation resources out of business, replacing each MW of thermal generation with
“multiple megawatts” of “intermittent and limited-duration resources” will have
major cost implications and major impacts on electricity rates.
16.
EPA’s argument that solar and wind resources are “cheap” relative to
thermal resources is incomplete and incorrect. First, the thermal resources that are
affected by the FIP are legacy, up and running generation units that have embedded
ratemaking values that are much lower than the cost of new capacity. And second,
it will take many multiples of generation capacity to replace thermal generation
capacity with intermittent and limited-duration wind and solar generation resources.
PJM has quantified the ability of wind and solar resources to serve load: replacing
1,000 MW of thermal capacity will require either 10,000 MW of onshore wind,
9
App. D-9
4,000 MW of more expensive offshore wind, 3,300 MW of fixed solar, or 2,000 MW
of more expensive tracking solar. Updated ELCC Class Ratings for the 2025/26
BRA
reflecting
FERC
Order
accepting
PJM’s
ELCC
CIR
proposal,
https://bit.ly/3ND5EWB.
17.
Thus, even if a MW of new wind or solar capacity is “cheaper” to
construct than a thermal facility, that advantage is offset, again, by the need to
construct “multiple megawatts of these resources to replace 1 [megawatt] of thermal
generation.” Energy Transition, supra, at 1. And, again, these multiple MW are
still not consistent and certain—they produce energy only when the wind is blowing
or the sun is shining.
18.
Proponents of the FIP believe that PJM approval of a few individual
thermal generation retirements in recent years demonstrates that such units can be
retired without jeopardizing system reliability. Not so. The FIP will cause not
isolated but wide-spread and coincidental premature retirements of fossil fuel
thermal units. This, in turn, will accelerate the closing of the fuel-reliable coal-fired
thermal generation plants, leaving our area unnecessarily vulnerable to brownouts
and blackouts.
19.
West Virginia has approved plans to allow utility-owned thermal
resources to comply with EPA rules in place prior to the recent proposed ozone
transport rules and FIP that strain base load coal-fired thermal units, which are the
10
App. D-10
critically needed units that can provide electricity reliability and resilience with an
onsite, multi-month fuel source.
20.
Under the FIP, West Virginia ratepayers will be harmed by the
uneconomic premature retirement of thermal power plants.
West Virginia’s
generating utilities have hundreds of millions of dollars invested in base load thermal
units—an investment that grows monthly as the utilities spend money on
construction necessary to meet previously finalized EPA rules. If the FIP forces
those generating units to retire prematurely, the utilities will expect West Virginia
ratepayers to both (1) help recover the unrecovered investments in these facilities,
and (2) shoulder the additional cost of replacement capacity.
In effect, West
Virginia ratepayers will be expected to pay for unreliable capacity that would not be
needed but for the unreasonable early retirement of our existing, reliable generation
resources forced by the FIP.
21.
The resulting harm to West Virginia ratepayers will be real and lasting.
It will hit households in a state with some of the lowest average incomes and oldest
populations in the United States. But the negative impact will not be limited to rate
impact in West Virginia.
22.
The electricity grid instability brought on by the FIP will only serve to
exacerbate these harms as brownouts and blackouts become commonplace due to
11
App. D-11
overreliance on intermittent generation resources and insufficient thermal generation
with reliable on site fuel supply.
23.
This is neither the time nor the place for a FIP that is likely going to
force premature retirement of the very resources that are needed for reliability in the
face of accelerated growth in less reliable intermittent solar and wind resources. See
generally Energy Transition, supra (PJM report discussing the risks from the pace
of additions intermittent resources and accelerated retirements of thermal resources).
I declare under penalty of perjury that the foregoing is true and correct to the
best of my knowledge. Executed on this 18th day of July, 2023, in Austin, Texas.
elidAUttekaea.ta.
Charlotte R. Lane
Chairman
Public Service Commission of West Virginia
12
App. D-12
Appendix E
No. 23-1183 (consolidated with 23-1157)
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
State of Ohio, et al.,
Petitioners,
v.
Environmental Protection Agency and Michael S. Regan, in his official capacity,
as Administrator of the U.S. Environmental Protection Agency
Respondents.
On Petition for Review of Action by the U.S. Environmental Protection Agency
DECLARATION OF GEORGE J. FARAH IN SUPPORT OF
PETITIONERS’ MOTION FOR STAY PENDING REVIEW AND FOR
AN ADMINISTRATIVE STAY
I, George J. Farah, hereby make the following declaration pursuant to 28
U.S.C. § 1746:
1.
I am the Vice President, Utility Services for FirstEnergy Service
Company which provides various services to Monongahela Power Company, a West
Virginia electric utility operating subsidiary of FirstEnergy Corp. (hereinafter, “Mon
Power” or “FirstEnergy”). Mon Power owns and operates two coal-fired power
stations in West Virginia and is headquartered in Fairmont, West Virginia. I have
been employed by FirstEnergy or its predecessors since May 1986. I earned a
Bachelor of Science degree in Mechanical Engineering from the University of
Pittsburgh in 1986. In 2007 I earned a Master’s degree in Business Administration
from Indiana University of Pennsylvania. I have worked in various corporate and
App. E-1
power station roles for over 37 years. I am over the age of 18 and am competent to
testify concerning the matters in this declaration based on my personal knowledge,
my experience with Mon Power, and information provided to me by Mon Power
personnel.
2.
I am providing this declaration in support of the State of West
Virginia’s motion for a stay Federal Implementation Plan, or “FIP,” published by
the U.S. Environmental Protection Agency (“EPA”) as a Final Rule titled “Federal
‘Good Neighbor Plan’ for the 2015 Ozone National Ambient Air Quality Standards,”
88 Fed. Reg. 36,654 (June 5, 2023). I am aware that EPA published the FIP
following EPA’s disapproval of the West Virginia State Implementation Plan
(“SIP”) addressing interstate transport for the 2015 ozone National Ambient Air
Quality Standards (“NAAQS”) on February 13, 2023. See Air Plan Disapprovals;
Interstate Transport of Air Pollution for the 2015 8-Hour Ozone National Ambient
Air Quality Standards, Final Rule, 88 Fed. Reg. 9336 (Feb. 13, 2023). EPA’s FIP
will result in imminent, irreparable harm to the State and its citizens
3.
In the operation of its business, Mon Power generates electric power at
its power stations for the benefit of its and Potomac Edison’s approximately 550,000
customers located in West Virginia. As Vice President of Utility Services for
FirstEnergy Service Corporation,
I am charged with overseeing engineering,
2
App. E-2
environmental, fuel and reagent procurement, and other duties for Mon Power’s
generating plants.
4.
Mon Power owns and/or operates over 3,000 megawatts of installed
generation capacity in West Virginia; employs approximately 2,000 full-time
employees; and spends approximately $1.5 billion annually in the form of taxes,
fuel, maintenance, and other operating and capital expenditures, and its impact on
gross state product and gross domestic product is substantial.
5.
I am aware that the State of West Virginia, through the West Virginia
Department of Environmental Protection (“WVDEP”), submitted to EPA a proposed
SIP to comply with the interstate transport requirements for the 2015 8-hour ozone
National Ambient Air Quality Standards (“NAAQS”).
6.
Mon Power engaged with and provided comments to the WVDEP
regarding the proposed SIP during West Virginia’s public comment period from
September 7, 2018 to October 8, 2018.
7.
On February 22, 2022, EPA announced its proposed disapproval of
West Virginia’s SIP for noncompliance with the CAA’s “Good Neighbor”
provision. See Air Plan Disapproval; West Virginia; Interstate Transport of Air
Pollution for the 2015 8-Hour Ozone National Ambient Air Quality Standards, 87
Fed. Reg. 9516. On April 25, 2022, Mon Power, by virtue of its membership in the
3
App. E-3
Midwest Ozone Group, submitted comments on the proposed rule disapproving
West Virginia’s SIP. See EPA Docket R03-OAR-2021-0873-0007.
8.
I am aware that, on April 6, 2022, EPA issued another proposed rule
that would impose a FIP for West Virginia and 26 other states whose SIPs did not
receive EPA’s approval. See Federal Implementation Plan Addressing Regional
Ozone Transport for the 2015 Ozone National Ambient Air Quality Standard, 87
Fed. Reg. 20,036. On June 21, 2022, Mon Power, by virtue of its membership in the
Midwest Ozone Group, submitted comments on the proposed rule to implement the
FIP. See EPA Docket HQ-OAR-2021-668-0323.
9.
I am also aware that as a result of the EPA’s disapproval of West
Virginia’s SIP on February 13, 2023, the agency promulgated a final rule on June 5,
2023, imposing a FIP on West Virginia and 22 other states with an effective date of
August 4, 2023. See Federal “Good Neighbor Plan” for the 2015 Ozone National
Ambient Air Quality Standards, 88 Fed. Reg. 36,654.
10.
The FIP will cause immediate, detrimental, and irreversible harm to
Mon Power as well as its affiliate, The Potomac Edison Company, who contracts for
all of its power supply requirements for its West Virginia customers from Mon
Power. Our other customers, suppliers, vendors, and contractors will be negatively
impacted as well. When vendors are impacted, communities and local business are
4
App. E-4
impacted as well as local and state governments and their respective employees,
vendors, and communities in which they operate.
11.
The annual allocations of seasonal NOx allowances have decreased and
are expected to decrease more in the future. In 2022, Mon Power had to purchase
thousands of seasonal NOx allowances from the market in order to be able to operate
its Fort Martin Power Station.
The prices for these allowances increased
dramatically to over $40,000 per credit causing an additional cost burden on our
customers of over $50 million for just the five month period of May through
September 2022.
12.
Options at Fort Martin for compliance with the FIP are still under
review and consideration, but all compliance options result in additional costs which
would be borne by our customers. Options include upgrades of existing combustion
systems, enhancements to the selective non-catalytic reduction (“SnCR”)
equipment, lowering generation output, and/or installing selective catalytic
reduction (“SCR”) equipment that EPA assumes in the FIP will be installed at many
power stations by 2026. The impacts could range into the hundreds of millions of
dollars in capital compliance and construction costs.
13.
Additionally, the cost of reagents, if either the option of enhancing
SnCR or installing SCR equipment is chosen, would be in the millions of dollars per
year, and there are additional Operation & Maintenance costs annually estimated for
5
App. E-5
equipment and operations. Power generation will be reduced and/or lost at times in
order to perform installation of and periodic maintenance of the equipment, which
is difficult to estimate but can be substantial. Finally, additional capital is typically
required in future years to replace equipment and catalysts.
14.
Regardless of which option is chosen for compliance, rates would
increase to West Virginia customers as a result. Rate increase estimates could be in
the range of $50-$85 million per year depending on the option chosen for
compliance.
15.
Absent a stay, Mon Power will need to take imminent action in order
to comply with the FIP. In order to comply with the FIP beginning in 2026, when
state budgets reduce substantially based on the assumption that SCRs are installed
on many existing units, Mon Power will need to make a decision in the near future
regarding installation of equipment for compliance. Without a stay of the FIP, Mon
Power must incur engineering, design, procurement, and construction expenditures
on an option that may ultimately not be necessary if the FIP is held unlawful.
Issuance of a stay would avoid wasteful expenditures on rule compliance that may
be altered and thereby would avoid unnecessary customer rate increases.
6
App. E-6
I declare under penalty of perjury that the foregoing is true and correct to the
best of my knowledge. Executed on this 18th day of July, 2023, in Fairmont, West
Virginia.
George J. Farjth
Vice President
FirstEnergy Service Company
Monongahela Power Company
7
App. E-7
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.