Opposition Brief — New York v. Thomas

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Nos. 86-1373 and 86-1374 | APR OF YOST

JOSEPH F. SPANIOL, JR.

IN THE CLERK

Supreme Court of the United States

OCTOBER TERM, 1986

STATE OF NEW YORK, et al.,

" Petitioners,

LEE M. THOMAS, Administrator,

United States Environmental

Protection Agency,

Respondent.

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, et al.,

. Petitioners,

LEE M. THOMAS, Administrator,

United States Environmental

Protection Agency,

Respondent.

On Petitions for Writs of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR INDUSTRY AND STATE

RESPONDENTS IN OPPOSITION TO

PETITIONS FOR WRITS OF CERTIORARI

MICHAEL B. BARR HENRY V. NICKEL

CHARLES D. OSSOLA (Counsel of Record)

KERRY A. WALSH SKELLY F. WILLIAM BROWNELL

HUNTON & WILLIAMS HUNTON & WILLIAMS

2000 Pennsylvania Ave., N.W. 2000 Pennsylvania Ave., N.W.

Suite 9000 Suite 9000

Washington, D.C. 20006 Washington, D.C. 20006

Counsel for (202) 955-1500

National Coal Association Counsel for Alabama

Power Company, et al.

(Counsel continued on inside cover)

TL LL ELIE DENI ATT CS TE

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

vr

LARRY G. KOPELMAN

Special Assistant

Attorney General

State of West Virginia

1558 Washington Street, East

Charleston, WV 25311

Counsel for the

State of West Virginia

DALE T. VITALE

DOUGLAS O. METZ

Assistant Attorneys General

Environmental Enforcement

Section

Office of the Attorney

General, 17th Floor

State Office Tower

30 East Broad Street

Columbus, Ohio 43215

Counsel for the State of Ohio

MICHAEL B. BARR

CHARLES D. OSSOLA

HUNTON & WILLIAMS

2000 Pennsylvania Ave., N.W.

Suite 9000

Washington, D.C. 20006

Counsel for the

Commonwealth of Kentucky

TABLE OF CONTENTS

Page

eg | TE Sin ien eee ii

RESTATEMENT OF QUESTION PRESENTED ...... 2

STATEMENT OF THE CASB o.oo... eeeeeceeeeee 2

I. ORIGINS OF THE § 115 SUIT ..............00..0....... 5

II. THE DISTRICT COURT SUIT 8

9

NE ili taicineteccibivictonsipsaenentistnbncelaniictbemannl Rsicshinetahii 10

I. FINDINGS DISEMBODIED FROM RULES

CANNOT BIND AN AGENCY ......W0222w..... 12

II. REQUIRING NOTICE AND COMMENT BE-

FORE ISSUANCE OF A RULE DOES NOT

CONFLICT WITH VERMONT YANKEE......_........ 18

II siciinitneencann nici ctendliinn ai dibisdtuhesnitabasi 20

ii

TABLE OF AUTHORITIES

CASES: Page

Burlington Truck Lines v. United States, 371 U.S.

BOD CIID | sicecncsccccrntersccnttinsininnitaniapitinditin ttt 15

Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, reh’g

denied, 468 U.S. 1227 (1984) .................--....---000--- 15

Cincinnati Gas & Electric Co. v. EPA, Nos. 81-

BR. ob ak, CE CI RD nec itine.... 7

EEOC v. FLRA, 54 U.S.L.W. 4408 (April 29,

|___Fan name Eas Re vENDOO PSO IN 17

Ethyl Corp. v. EPA, 541 F.2d 1 (D.C. Cir.), cert.

denied, 426 U.S. 941 (1976) ..............-..--------0--0000++ 15

FTC v. Standard Oil of California, 449 U.S. 232

I sisiainichicicsntpsacpiinnelaticmmniactanibesbinieanientacrnaentiemnnaninnaiiies 14

Heckler v. Day, 467 U.S. 104 (1984) -.................-..-. 16

National Asphalt Paving Ass’n v. Train, 539 F.2d

i > os | oe 19

New York v. Thomas, 613 F. Supp. 1472 (D.D.C.

1985), rev’d, 802 F.2d 1443 (D.C. Cir. 1986) ....8, 9, 17

NRDC v. NRC, 547 F.2d 633 (D.C. Cir. 1976),

rev'd sub nom. Vermont Yankee Nuclear Power

Corp. v. NRDC, 435 U.S. 519 (1978) ...............-... 18

NRDC v. SEC, 606 F.2d 1031 (D.C. Cir. 1979)... 16

Public Citizens Health Research Group v. FDA,

OR A fai SR) RD | Renner 14

Ross v. Moffitt, 417 U.S. 600 (1974) ......................... 11

Thomas v. New York, 802 F.2d 1443 (D.C. Cir.

ED sideestacticsickibaadatebesabitecinninsbiiaiaasinneipeibaaiicnadiianinniainneeel passim

Vermont Yankee Nuclear Power Corp. v. NRDC,

_ 2 1 7 Sl - _ ERRSERSPSaneseonsscnea se oree Unnaoe 18

STATUTES:

Administrative Procedure Act, 5 U.S.C. §§ 551-

MID srttcitshinissisteeiincsccniaicnsstvaissaiantaginiddacalomeanicasiivininats passim

I ahse,. discs sncehaileiekaceamstnacanecsisecataelianietannivaemnoasees 14, 19

| RSE La Re enirT ee Tae eae eee 14

Clean Air Act, 42 U.S.C. §§ 7401-7626 (1982) ........ passim

Pls CORE 21k Com bf (| eee 16

§ 108 (a) (1), 42 U.S.C. § 7408 (a) (1) -............... 16

§ 109 (a) (1), 42 U.S.C. § 7409 (a) (1) ............-..- 16

iii

TABLE. OF AUTHORITIES—Continued

Page

§ 110(a) (2), 42 U.S.C. § 7410 (a) (2) 13, 16

§ 110(a) (2) (H) (ii), 42 U.S.C. § 7410(a) (2)

(H) (ii) REE RI Ae COT 5

§ 110(a) (3) (A), 42 U.S.C. § 7410(a) (3) (A).. 13

$.110(c), 428 U.S.C. § T4104e) .....................-..--- 5

S LIGCH),, SB UG. SB TGRO GD nnn nsen cccnesececesee 16

peed sy Se gtk foe by ht! | 14

§ 111(b) (1) (A), 42 U.S.C. § 7411 (b) (1) (A).. 16

§ 111 (b) (1) (B), 42 U.S.C. § 7411 (b) (1) (B).. 14, 16

© DER CO). Ge Rites CBR CED cnccceccsnennececencasrarcce 13, 16

§ 112(b) (1) (B), 42 U.S.C. § 7412 (b) (1) (B).. 14, 16

Boe (me ik Fem he 5) TC | cee 13

iy ae Rt I ices ernete enniiiniaians passim

pe te pik lok bs Te ee 5

S 115 (), SB UBC. S TAI B OD ncaa ncn cccenenses 5, 16

§ 115(e), 42 U.S.C. § T4186 (e) 02... nce... -00s. 5

§ 119(a) (1) (B), 42 U.S.C. § 7419 (a) (1) (B).. 13

§ 128 (¢), 42 U.S.C. § 7428 (ce) ............................. 16

§ 166(a), 42 U.S.C. § 7466 (a) ............................ 16

§ 202 (a) (6), 42 U.S.C. § 7521 (a) (6)... 13

§ 207 (b) (1), 42 U.S.C. § 7541 (b) (1)... 13

§ 304 (a) (2), 42 U.S.C. § 7604 (a) (2) ow... passim

§ 307 (d), 42 U.S.C. § 7607 (d) ............................ 15

42 U.S.C. §§ 8901-8905 (1982)

LEGISLATIVE HISTORY:

Review of the Federal Government’s Research

Program on the Causes and Effects of Acid

Rain, 99th Cong., Ist Sess. (1985) 0.0.0.0... 3

Hearings Before the Senate Committee on En-

vironment and Public Works, 99th Cong., 1st

RR es ee ee 4

Acid Deposition Control Act of 1986 (Part 1):

Hearings Before the House Subcommittee on

Health and Environment, 99th Cong., 2d Sess.

ff TIT . sutnnisincaslctoeshoisidiiidhinhebtbblentiine ec tienes oc 4

Acid Rain, 1984: Hearings Before the Senate

Committee on Environment and Public Works,

96th Cong., 2d Sess. (1964) .n........cccccccccccccseceses.. 3

iv -

TABLE OF AUTHORITIES—Continued

Page

Review of the Federal Government's Research

Program on the Causes and Effects of Acid

Rain: Hearings Before the Senate Committee

on Environment and Public Works, 99th Cong.,

es Si: | eee ae

126 Cong. Rec, H5694 (daily ed. June 26, 1980) ....

126 Cong. Rec. 87432 (daily ed. June 19, 1980) ....

130 Cong. Rec. H145 (daily ed. Jan.'25, 1984)...

S. 3041, 97th Cong., 2d Sess. (1982) —........................

H.R. 3251, 98th Cong., Ist Sess. (1983) ...............

H.R. 3400, 98th Cong., Ist Sess. (1983)...

H.R. 4404, 98th Cong., Ist Sess. (1983) -...................

S. 768, 98th Cong., Ist Sess. (1983) ..........00000.........

H.R. 5370, 98th Cong., 2d Sess. (1984) 0.0.0.0...

S. 2215, 98th Cong., 2d Sess. (1984) .........................

H.R. 2679, 99th Cong., Ist Sess. (1985) .................

S. 52, 99th Cong., Ist Sess. (1985) ...........................

H.R. 4567, 99th Cong., 2d Sess. (1986)

MISCELLANEOUS:

Office of Technology Assessment, Oceans and En-

vironment Program Staff Paper, An Analysis of

H.R. 4567: the “Acid Deposition Control Act of

ge Pe ee ee 3

National Acid Precipitation Assessment Program,

Press Release—‘‘Government Scientists Report

on Acid Rain Research Progress” (February 25,

weCwwwnwwwwwwrt rh & & Ww

RED scrticscdinensemtnciieasininctiabindanniamnaaadaaaaaataiaan 4

R. Stern and kK. Gressman, Supreme Court Prac-

ea Se ee 11

I SL ay en eR 11

La 8 a eee 2

Temple, Barker & Sloan, Inc., Economic Evalua-

tion of §.300, Prepared for Edison Electric In-

stitute (March 1987)

The Washington Post, March 22, 1987, at C-6........ 3

|

In THE

Supreme Court of the United States

OCTOBER TERM, 1986

4

Nos. 86-1373 and 86-1374

STATE OF NEW YORK, et al.,

Petitioners,

v.

LEE M. THOMAS, Administrator,

United States Environmental

Protection Agency,

Respondent.

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, et al.,

Petitioners,

v.

LEE M. THoMAS, Administrator,

United States Environmental

Protection Agency,

Respondent.

On Petitions for Writs of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR INDUSTRY AND STATE

RESPONDENTS IN OPPOSITION TO

PETITIONS FOR WRITS OF CERTIORARI

These cases involve a decision of the United States a

Court of Appeals for the District of Columbia Fai )

written by Judge Scalia, which is reported at 802 F.2d

1443 (D.C. Cir. 1986), and which appears in the apperti-

ames |

2

dices to the petitions for certiorari. New York, et al.,

and Ontario, et al., seek to have this Court review the

correctness of the lower court’s decision. This brief in

opposition to the petitions for certiorari is filed on behalf

of Alabama Power Co., et al., the National Coal Associa-

tion, and the States of Ohio, West Virginia, and Ken-

tucky.?

RESTATEMENT OF QUESTION PRESENTED

Both the New York and Ontario petitions for certi-

|

orari present one basic issue:

Whether the Administrator of the Environmental

Protection Agency must adopt a rule in accordance

with the Administrative Procedure Act if he wishes

to force the Agency to undertake specific, future reg-

ulatory action.

STATEMENT OF THE CASE

The petitions for certiorari filed by New York and |

Ontario address one of the more hotly disputed political |

issues of the day—acid deposition.* During the past |

seven years, New York and others have repeatedly asked

Congress to enact costly emissions control legislation to |

1 Alabama Power Co., et al. is comprised of 62 electric utility

companies, the Edison Electric Institute, the National Rural Elec- |

tric Cooperative Association, and the American Public Power Asso-

ciation. A complete list of the companies that comprise Alabama

Power Co., et al., along with a listing of parent companies, subsidi-

aries, and affiliates, is contained in the appendix to this brief, in

accordance with Rule 28.1 of this Court.

2 Respondents the States of Ohio, West Virginia, and Kentucky

participated separately in the proceeding below. While they have

joined in this brief in opposition in order to avoid duplication of

argument, they reserve the right to file an independent brief on the

merits should certiorari be granted.

3“Acid rain” or “acid deposition” refers to the wet (e.g., rain

and snow) or dry (e.g., dust settling) deposition of acidic air

pollutants.

3

address “acid deposition.” Given scientific uncertainty *

and the high costs of proposed control measures (which

would add billions of dollars annually to the emission

control expenditures already required by the Clean Air

Act),® Congress has considered and rejected since 1980

over 30 bills designed to impose additional controls on

potential acid deposition-related pollutants.®

Instead of enacting legislation requiring immediate

emission controls, Congress responded to requests for

legislation by enacting the National Acid Precipitation

* See, e.g., Review of the Federal Government’s Research Pro-

gram on the Causes and Effects of Acid Rain, 99th Cong., 1st Sess.

11, 14-15 (1985) (testimony of Lee M. Thomas, Administrator,

U.S. EPA) (“scientific uncertainty [surrounding acid deposition]

... is probably greater than any of the uncertainties I deal with in

decisions I make related to environmental risk. . . . The reduction

of that uncertainty so we can have some basic decision rationale is

the purpose for our research program as it relates to acid rain.”) ;

Acid Rain, 1984: Hearings Before the Senate Committee on Envi-

ronment and Public Works, 98th Cong., 2d Sess. 9 (1984) (testi-

mony of William D. Ruckelshaus, Administrator, U.S. EPA) (“be-

fore launching the country on an expensive and potentially divisive

control program, we feel we need more scientific information.’’).

5 The estimated costs of proposed acid deposition control legisla-

tion have ranged from $2.5 to $22 billion per year levelized over

twenty years. See, e.g., Temple, Barker & Sloane, Inc., Economic

Evaluation of 8.300, prepared for Edison Electric Institute (Mar.

1987) ($16.3 to $21 billion per year) ; Office of Technology Assess-

ment Oceans and Environment Program Staff Paper, An Analysis

of H.R. 4567: the “Acid Deposition Control Act of 1986” (July 29,

1986) ($2.7 billion to $3.0 billion per year to meet sulfur dioxide

controls). Cf. How Much for Acid Rain?, The Washington Post,

March 22, 1987, at C-6 (“with the cost of controlling air pollution

already over $30 billion a year, how much more should the country

spend on it—and is acid rain necessarily the top priority?”).

6 See, e.g., S. 3041, 97th Cong., 2d Sess. (1982); H.R. 3251, 3400,

4404, 98th Cong., Ist Sess. (1983); S. 768, 98th Cong., Ist Sess.

(1983); H.R. 5370, 98th Cong., 2d Sess. (1984); S. 2215, 98th

Cong., 2d Sess. (1984); H.R. 2679, 99th Cong., Ist Sess. (1985);

S. 52, 99th Cong., Ist Sess. (1985) ; H.R. 4567, 99th Cong., 2d Sess.

(1986).

d

Assessment Program (NAPAP).” This legislation created

an extensive federal research program to resolve scientific

uncertainties regarding, inter alia, the sources and effects

of acid deposition. The research, to be completed by

1990, will assist Congress in deciding whether additional

controls are needed and, if so, the nature of those con-

trols.

Given the scientific uncertainty and the enormous costs

of a control program, President Reagan and three EPA

Administrators (Ann Gorsuch Burford, William D. Ruck-

elshaus, and Lee M. Thomas) have all expressed support

for Congress’ decision to accelerate research and to reject

legislation requiring the immediate imposition of new con-

trol measures.® Over $200 million has been spent. since

1982 on the accelerated federal research effort.’®

-——

7 42 U.S.C. §§ 8901-8905 (1982).

8 See Statement of Senator Daniel P. Moynihan, 126 Cong. Rec.

$7432 (daily ed. June 19, 1980) (NAPAP is “[d]esigned to be the

legislative underpinning of the acid rain program initiated by

President Carter last August [1979].”); see also Memorandum of

President Carter (Aug. 2, 1979), reprinted in 126 Cong. Rec. H5694

(daily ed. June 26, 1980) (“our knowledge of possible effects and

specific causes of acid rain are inadequate for determining what

kinds of controls would best mitigate the problems of acid rain... .

[Therefore] we must establish a comprehensive federal acid rain

research program.’’).

9 See, e.g., Hearings Before the Senate Committee on Environ-

ment and Public Wor’:s, 99th Cong., lst Sess. (1985) (statement

of Lee M. Thomas, Administrator, U.S. Environmental Protection

Agency); Acid Rain, 1984: Hearings Before the Senate Committee

on Environment and Public Works, 98th Cong., 2d Sess. 9, 19

(1984) (testimony of William D. Ruckelshaus, Administrator, U.S.

Environmental Protection Agency); The State of the Union Ad-

dress by the President of the United States, reprinted in 130 Cong.

Rec. H145 (daily ed. Jan. 25, 1984).

10 National Acid Precipitation Assessment Program, “Press-

Release—Government Scientists Report on Acid Rain Research

Progress” 4 (February 25, 1987).

5

I. ORIGINS OF THE § 115 SUIT

Section 115 of the Clean Air Act ™ is entitled “Inter-

national Air Pollution.” Section 115(a) provides that:

Whenever the Administrator, upon receipt of reports,

surveys or studies from any duly constituted inter-

national agency[,] has reason to believe that any

air pollutant or pollutants emitted in the United

States cause or contribute to air pollution which may

reasonably be anticipated to endanger public health

or welfare in a foreign country[,] or whenever the

Secretary of State requests him to do so with respect

to such pollution which the Secretary of State alleges

is of such a nature[,] the Administrator shall give

formal notification thereof to the Governor of the

State in which such emissions originate. [Emphasis

added ]

Section 115(c) further provides that “formal notifica-

tion” shall be issued to governors of states only if the

Administrator “determines” that the foreign country pro-

vides U.S. citizens “essentially the same rights” as af-

forded by § 115. Any notification to states issued under

this section is to be treated as a notice of SIP deficiency

pursuant to §110(a) (2) (H) of the Act, requiring cor-

rective state action.”

The instant litigation has unfolded against the congres-

sional and administrative background described above.

1142 U.S.C. § 7415 (1982) (hereinafter referred to as “CAA”

or “the Act”). For convenience, all further citations will be to

sections of the Act. Parallel citations to the U.S. Code are provided

in the Table of Authorities.

12CAA §115(b). Section 110(a)(2)(H) of the Act requires

state control programs that implement the Clean Air Act (called

“state implementation plans” or “SIPs’) to provide for revision

if the EPA Administrator issues a notice (called a “SIP deficiency

notice’) that the SIP is “substantially inadequate to meet Clean Air

Act requirements.” Section 110(c) requires the federal government

to revise the SIP if the state fails to cure the deficiency within the

time provided in the notice.

6

In the final days of the Carter Administration, Senator

Mitchell of Maine, an unsuccessful proponent of imme-

diate acid deposition controls, wrote then-EPA Adminis-

trator Costle to inquire whether §115 of the existing

Clean Air Act could be used to impose controls on sub-

stances suspected of contributing to acid deposition.”

Administrator Costle responded to Senator Mitchell’s

inquiry only days before Costle left office.* He sent a

similar letter to Secretary of State Muskie, and issued

a press release.” In this correspondence, Administrator

Costle stated that a report from an international study

group indicated that pollution from the United States

and Canada likely contributed to acid deposition in Can-

ada, but that available information did not permit allo-

cation of acid deposition falling in Canada between U.S.

and Canadian emission sources.’* As a result, Adminis-

trator Costle made clear that “EPA has not yet deter-

13 Letter from George J. Mitchell, Senator from Maine, to

Douglas M. Costle, Administrator, U.S. EPA (December 23, 1980),

cited in Letter from Douglas M. Costle, Administrator, U.S. EPA,

to Senator George J. Mitchell (January 13, 1981), Appendix to

New York Petition for Writ of Certiorari (February 23, 1987) at

A-34 to A-41 (hereinafter cited as “New York App.’’).

14 Letter from Costle to Mitchell, New York App. at A-34 to A-41.

15 Letter from Douglas M. Costle, Administrator, U.S. EPA, to

Edmund S. Muskie, Secretary of State (January 13, 1981), New

York App. at A-30 to A-33; U.S. EPA Press Release (January 16,

1981).

16 The October 1980 report by the International Joint Commission

(IJC) on “Great Lakes Water Quality,” on which the Costle cor-

respondence was based, contained only nine pages of discussion on

acid deposition. It observed that “expansion of research programs

[is needed] to provide information on the causes, effects and

measures for the contro! of the long range transport of airborne

pollutants, especially acid rain” (p. 5), and that “research and

monitoring are required to demonstrate . . . effects” from acid

deposition (p. 53) (emphasis added).

7

mined which State or States will require notification”

under § 115, and informed Senator Mitchell that he would

direct his staff to undertake additional analysis to develop

information and recommendations on future EPA activity

regarding § 115.'7 Administrator Costle also stated that

he believed Canadian pollution control laws provided au-

thority for development of emission controls in Canada

similar to those that could be developed in the U.S. under

§ 115.*

After Administrator Costle left office, EPA continued

its research activities into the causes and effects of acid

deposition.” All three subsequent EPA Administrators

made clear that they did not regard Costle’s eleventh-

hour statements regarding § 115 as obligating EPA to

impose immediate emission controls under § 115.°° Thus,

consistent with the NAPAP legislation, EPA’s efforts

were devoted to completing necessary research before

making decisions on the need for and nature of further

emission control programs.

17 Letter from Costle to Mitchell at 6, New York App. at A-40.

18 Jd. at 4-5, New York App. at A-39. He indicated, however,

that whether Canadian law provided “essentially the same rights”

would depend upon how that law was implemented at the time EPA

developed SIP deficiency notices. Jd.

19 This EPA research is part of NAPAP, the results of which are

published in annual and other periodic reports. See, e.g., supra

note 10.

20 See supra note 9; see also Letter from Anne M. Gorsuch,

Administrator, U.S. EPA, to James A. Rhodes, Governor of the

State of Ohio (Sept. 22, 1981); Letter from James A. Rhodes,

Governor of the State of Ohio, to Anne M. Gorsuch, Administrator,

U.S. EPA (June 17, 1981); Letter from Defendant William D.

Ruckelshaus in Response to Notice of Intent to Sue (March 13,

1984). Cf. Cincinnati Gas & Electric Co. v. EPA, Nos. 81-1311,

et al. (D.C. Cir. 1981) (per curiam) (dismissing petitions to review

the Costle statements filed by the State of Ohio and two electric

utility companies because these petitions sought “review of action

that is not ripe for judicial decision at this time.”’).

8

II. THE DISTRICT COURT SUIT

By mid-1984, EPA and Congress’ position on the need

to complete basic research before making decisions on

regulatory programs was clear. Against this background,

New York and several other Northeastern States and

environmental groups [hereinafter referred to jointly as

“New York’] responded to what they perceived as a

need for immediate acid deposition emission controls not

with a petition for rulemaking, but with a suit in the

United States District Court for the District of Columbia

to compel regulation of acid deposition under § 115.”

The New York suit was filed on March 20, 1984, over

four years after the Costle correspondence. In that suit,

New York alleged that former Administrator Costle, in

writing these letters, bound subsequent EPA Administra-

tors to issue SIP deficiency notices that would require

states to reduce emissions to eliminate harmful pollution

in Canada.” According to New York, this alleged duty

to issue SIP deficiency notices was enforceable in the

District Court under § 304(a) (2) of the Clean Air Act,

which gives those courts jurisdiction to compel “the Ad-

ministrator to perform any act or duty ... which is not

discretionary with the Administrator.” *

21 See Notice of Intent to Sue, Interstate and International Air

Pollution, filed by New York, et al. (January 12, 1984).

22 See Complaint of New York, et al. at 10-12, in New York v.

Thomas, 613 F. Supp. 1472 (D.D.C. 1985), rev’d, 802 F.2d 1448

(D.C. Cir. 1986); see also Brief for Appellees New York, e¢ al.

at 4, in Thomas v. New York, 802 F.2d 1443 (D.C. Cir. 1986) (“the

Costle determinations . . . established a continuing obligation to

issue § 115 notices. ...”) (emphasis added); Brief of Intervenors-

Appellees Her Majesty the Queen in Right of Ontario, et al. at 13,

in Thomas v. New York, 802 F.2d 1443 (D.C. Cir. 1986) (‘“Costle’s

determinations were intended to bind . . . subsequent EPA Admin-

istrators.’’).

23 CAA § 304(a) (2) (emphasis added); see Complaint of New

York, et al., supra note 22 at 10.

9

EPA and Industry Intervenors Alabama Power Co.,

et al. and the National Coal Association moved to dis-

miss New York’s complaint, inter alia, on the grounds

that the district court had no jurisdiction under § 304

(a) (2) of the Act, since the Costle correspondence did

not create a nondiscretionary duty.* The district court

rejected this argument, holding that former Administra-

tor Costle’s four-year old correspondence should be treated

as “formal” determinations that bound EPA to issue SIP

deficiency notices.”

In response to EPA’s observation that § 115 did not

indicate, and that the Agency did not have sufficient in-

formation to determine, what states should receive SIP

deficiency notices, the court told EPA how to implement

§ 115. According to the district court, “the language of

Section 115 already indicates that a reduction in emis-

sions will abate the deleterious effects of midwestern

pollution on public health and welfare in Canada.” *

Ill. THE COURT OF APPEALS DECISION

In October 1985, the district court decision was ap-

pealed to the United States Court of Appeals for the

District of Columbia Circuit by EPA and Industry Inter-

venors Alabama Power Co., et al., and the National Coal

Association. The province of Ontario intervened on be-

half of New York, and the states of Ohio, West Vir-

ginia, and Kentucky intervened on behalf of EPA.

24 See Defendant’s Motion to Dismiss or in the Alternative for

Summary Judgment on Count II (May 30, 1984); Motion of Inter-

venors to Dismiss Plaintiffs’ §115 Claim for Lack of Subject

Matter Jurisdiction (May 30, 1984).

25 New York v. Thomas, 613 F. Supp. 1472, 1481-86 (D.D.C.

1985), New York App. at A-20 to A-29.

267d. at 1480, New York App. at A-19 (emphasis added). It

should be noted that neither the language of § 115 nor its legislative

history ever mention “mid-western pollution,” much less relate that

pollution to harm in Canada.

10

After briefing and argument, a unanimous panel of

the D.C. Circuit (consisting of Judges Wright, Mikva,

and Scalia) reversed the district court decision. In his

opinion for the panel, Judge Scalia applied the basic

principle of administrative law that “a statement of

‘future effect designed to implement . . . law or policy’

[footnote omitted] ... [is] a rule.”?’ Based upon this

straightforward principle, Judge Scalia reached the un-

surprising conclusion that:

[I]f Administrator Costle’s findings left the EPA

no alternative but to issue SIP notices ultimately

causing the termination or restriction of the opera-

tions of many utilities and manufacturers—if they

forced the EPA to take direct and substantial regu-

latory actions—they could not be promulgated with-

out notice-and-comment procedures.

* * * *

[B]ecause the findings were issued without notice

and comment, they cannot be the basis for the judi-

cial relief appellees seek. How and when the agency

chooses to proceed to the stage of notification trig-

gered by the findings is within the agency’s discre-

tion and not subject to judicial compulsion [as a non-

discretionary duty under § 304(a) (2) of the Act].*

ARGUMENT

Section 304(a)(2) of the Act gives district courts

jurisdiction to order EPA to take action that is “not dis-

cretionary with the Administrator.” In this case, the

district court held that the Costle letters created a non-

discretionary duty to issue SIP deficiency notices pur-

suant to §115 of the Act. The D.C. Circuit, however,

disagreed. It held that the Costle correspondence did not

27 Thomas v. New York, 802 F.2d 1448, 1446-1447 (D.C. Cir.

1986), New York App. at A-5 to A-6.

28 Jd. at 1447-48, New York App. at A-7 to A-8 (emphasis in

original and added).

11

legally obligate future EPA Administrators to imple

ment § 115, and therefore ordered dismissal of the case.

New York and Ontario attempt to support their peti-

tions by arguing that there is an immediate need for

acid deposition controls that will not be satisfied without

action by the judiciary.2® This argument is misplaced in

a petition for certiorari.

The acid deposition issue has been and is being debated

in Congress. It is the subject of discussions with Canada.

It is being addressed by federal agencies, who are spend-

ing millions of research dollars to identify whether and,

if so, what regulation is needed.*° New York and On-

tario’s policy arguments for immediate acid deposition

controls are for Congress or EPA, not for this Court on

certiorari.

Otherwise, New York and Ontario’s petitions simply

reargue the merits of the case decided below. Only in

exceptional cases will this Court grant certiorari to re-

view the correctness of a lower court’s decision.*! This

clearly is not such a case. The issue resolved by the court

of appeals is not novel and the decision below is not in

29 See Petition for Certiorari of New York, et al. (February 23,

1987) at 7-12 (hereinafter “New York Petition”); Petition for

Certiorari of Ontario, et al. (February 23, 1987) at 11-12 (herein-

after “Ontario Petition’’).

80 See supra p. 4.

81 See Ross v. Moffitt, 417 U.S. 600, 616-617 (1974) (“this Court’s

review ... is discretionary and depends on numerous factors other

than the perceived correctness of the judgment we are asked to

review.”) ; see also R. Stern and E. Gressman, Supreme Court Prac-

tice § 4.18 (5th Ed. 1978) (this Court “is not primarily concerned

with the correction of errors in lower court decisions. . . . Hence the

Court generally will not grant certiorari just because the decision

below may be erroneous.” (footnotes omitted) ) ; S.Ct. Rule 17 (cer-

tiorari may be granted where “an important question of federal

law” has been decided which “has not been . . . settled by this

court.”).

12

conflict with other precedent. Accordingly, no review of

the merits of the D.C. Circuit opinion is appropriate.

I. FINDINGS DISEMBODIED FROM RULES CAN-

NOT BIND AN AGENCY

New York and Ontario argued below that the Costle

correspondence legally obligated subsequent EPA Admin-

istrators to issue § 115 SIP deficiency notices calling for

emission reductions. The D.C. Circuit rejected New

York’s argument that informal correspondence can give

rise to an enforceable legal obligation to undertake future

regulatory action, holding that statutory findings ex-

pressed in letters do not bind subsequent EPA Admin-

istrators unless those findings are also embodied in a rule

requiring the Agency to implement the applicable statu-

tory provision.*? As Judge Scalia observed, if “Costle’s

findings left the EPA no alternative but to issue SIP

notices . . —if they forced the EPA to take direct and

substantial regulatory actions—they could not be promul-

gated without notice-and-comment procedures.” *

In a “now-you-see-it-now-you-don’t” argument, New

York and Ontario suggest in their petitions for certiorari

that an informal statement by an EPA Administrator

can create legal obligations akin to a “rule” (i.e., that it

can establish an obligation of “future effect’) for pur-

poses of § 304(a) (2) jurisdiction, but need not be con-

sidered a “rule” for purposes of the Administrative Pro-

cedure Act’s (APA) notice and comment requirements.

This attempted sleight-of-hand does not withstand anal-

ysis.

Ontario first argues that the binding effect of the

Costle correspondence “arises solely from Section 115 of

32 Thomas v. New York, 802 F.2d at 1447-48, New York App. at

A-7 to A-8.

83 Jd. at 1447, New York App. at A-7 (emphasis in original).

84 See New York Petition at 17; Ontario Petition at 15, 16.

13

the Clean Air Act.”* According to Ontario, once any

EPA Administrator “has ‘reason to believe’ that endan-

germent exists” in another country, the Agency has an

immediate and “binding duty to issue SIP [deficiency]

notices.” *° Ontario finds “no statutory requirement that

the Administrator’s belief [concerning endangerment] be

expressed in written form or communicated to anyone”

before the Agency becomes bound to issue SIP deficiency

notices in the future.*7 In sum, Ontario contends that

through the “reason to believe” language, Congress in-

vested “beliefs” with the power to create future legal

obligations, and did not intend that rulemaking precede

the creation of these obligations.

Acceptance of Ontario’s argument would mean that

whenever the Administrator expressed himself in a pre-

liminary or informal manner regarding findings under

any statutory provision containing the word “shall,” he

would be found to have created a nondiscretionary duty

forcing the Agency to act.** Under Ontario’s theory,

35 Ontario Petition at 16.

36 Jd. at 6, 16 (emphasis added).

37 Td. at 6.

88 Numerous provisions of the Clean Air Act provide that

the Administrator “shall” take specific action after making discre-

tionary findings or performing discretionary analyses. For example,

under § 110(a) (3) (A) the Administrator “shall” approve SIP revi-

sions if he finds that they meet the requirements of § 110(a) (2).

nder other provisions, the Administrator “shall” delegate various

*ypes of enforcement authority to states if he finds state procedures

are adequate (see, e.g., CAA §§111(c), 112(d)); he “shall” hold

hearings on reasonably available control technology for nonferrous

smelters if he finds orders issued by states to be inadequate (see

CAA §119(a)(1)(B)); he “shall” prescribe regulations for on-

board hydrocarbon control equipment if he finds that such systems

are feasible and desirable (see CAA § 202(a) (6)); and he “shall”

set vehicle emission test standards if he finds that such standards

are in accordance with good engineering practice (see CAA

§ 207(b) (1) ). Other sections provide that regulations “shall” con-

14

whenever the Administrator proposed a rule, appeared

before Congress, held a press conference, wrote a letter,

or even was overheard in the hallways of EPA head-

quarters expressing a belief regarding a Clean Air Act

regulatory finding, the Agency would be legally obligated

to take specific, future regulatory action in accordance

with those informal or preliminary statements, without

having provided any opportunity for prior public notice

and comment.**

The APA provides that a “rule” is “an agency state-

ment of .. . future effect designed to implement .. . law

or policy,” and requires that any rule be preceded by

notice and comment.*° In light of these requirements, for

an agency to impose on itself a future obligation to imple-

ment a regulatory provision like § 115, the agency must

adopt a rule after notice and comment. Congress in § 115

did not excuse the Agency from these requirements of

form to the Administrator’s exercise of judgment on specific

issues. See, e.g., CAA §111(a) (standards of performance for

new sources); §112(b)(1)(B) (national emission standards for

hazardous air pollutants).

3° Compare FTC v. Standard Oil of California, 449 U.S. 232,

241-42 (1980) (the FTC’s “adverment of ‘reason to believe’ that

Socal was violating the [FTC] act is not a definitive statement of

position . . . [but rather) represents a threshold determination”

that is not reviewable until the Agency takes final action. A con-

trary holding “denies the Agency an opportunity to correct its own

mistakes and to apply its expertise.”); Public Citizen Health Re-

search Group v. FDA, 740 F.2d 21, 30-31 (D.C. Cir. 1984) (the

district court properly refused to bind the agency to “preliminary

findings” contained in proposed rulemaking notice and statements

of the agency head, since to do so would deny the agency the “full

opportunity to apply its expertise and to correct errors or modify

positions.”).

© Administrative Procedure Act, 5 U.S.C. §§551(4), 553(c)

(1982).

15

the APA.*' If there were any doubt as to the applicabil-

ity of the APA here, it is eliminated by § 307(d) (1) of

the Act, which makes clear that the APA applies to pro-

visions, like § 115, that are not subject to the more elabo-

rate procedural provisions of § 307(d) of the Act.* Ac-

cordingly, if the Administrator of EPA wishes to impose

on the Agency an obligation to take future regulatory

action under § 115, he must first comply with the notice

and comment requirements of the APA.*

Petitioner New York suggests that the Costle cor-

respondence was binding (for purposes of § 304(a) (2)

jurisdiction) but yet not binding (for purposes of the

APA notice and comment requirements), since EPA

could revoke Costle’s statements concerning endangerment

*! Indeed, the “endangerment” concept used in § 115 has tradi-

tionally been viewed as calling for the exercise of rulemaking dis-

cretion. See, e.g., Ethyl Corp. v. EPA, 541 F.2d 1, 20-28 and

nn.23, 37, 56 (D.C. Cir.) (EPA decision under § 211 of Clean Air

Act that automobile lead emissions “will endanger” the public health

calls for the exercise of policy judgment and risk assessment),

cert. denied, 426 U.S. 941 (1976). The exercise of discretion to

implement a statutory term such as “endangerment,” of course, is

what the rulemaking process is all about. See Burlington Truck

Lines v. United States, 371 U.S. 156, 167 (1962) (an agency’s

“(e]xpert discretion is the lifeblood of the administrative process”).

*2 Section 307(d) provides special procedures for certain Clean

Air Act proceedings. Regulatory provisions that are not specifically

listed in § 307(d) (1), like § 115, are covered by the APA procedural

requirements. CAA § 307(d)(1)(N).

*8In any event, the Agency has not interpreted § 115 to mean

that an informal or even uncommunicated expression of “belief” as

to endangerment will bind the Agency to issue SIP deficiency

notices. Rather, a succession of EPA Administrators has inter-

preted § 115 as not raising an informal expression of views to the

level of a rule. See supra note 20. Under this Court’s decision in

Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 843, reh’g denied, 468

U.S. 1227 (1984), the Agency’s interpretation of its enabling

statute must be afforded substantial deference.

16

and reciprocity during a subsequent rulemaking to define

emission reductions.“ This argument also misses the

point.

It is well-established that agencies have broad discre-

tion to set priorities and schedules for action. This dis-

cretion can be removed by Congress, for example, where

it sets specific statutory deadlines for action.** There are

no statutory deadlines in § 115, however. Thus, if Ad-

ministrator Costle wished to remove the Agency’s discre-

tion to determine whether and when to implement § 115,

he needed to adopt a rule in accordance with the APA.

Accordingly, given Costle’s failure to issue his findings in

the context of a rule designed to compel action under

§ 115 by a specific date, “[h]ow and when the agency

chooses to proceed to the stage of notification [under

§115(b)] . .. is within the agency’s discretion.” *’

As a result, even if, as New York now contends,* the

Agency could revoke Costle’s preliminary findings through

#4 New York Petition at 17.

45 See, e.g., Heckler v. Day, 467 U.S. 104, 119 (1984); NRDC v.

SEC, 606 F.2d 1031, 1046 (D.C. Cir. 1979).

46 See, e.g., CAA §§107(c), 108(a) (1), 109(a) (1), 110(a) (2),

110(h), 111(b)(1) (A), 111(b)(1)(B), 112(b)(1)(B), 123(c),

166(a).

47 Thomas v. New York, 802 F.2d at 1448, New York App. at A-8.

New York and Ontario’s contention that the lower court’s decision

would gut the citizen suit provisions of the Clean Air Act and other

environmental statutes, see New York Petition at 20-22; Ontario

Petition at 13, is without merit. Many of the statutory provisions

cited by New York and Ontario contain deadlines for agency action

which can be enforced through citizen suits. For those provisions

that do not contain deadlines, judicial intervention in the adminis-

trative process based upon informal expressions of belief should

be discouraged.

48It should be noted that New York argued below that the

Agency was bound by the Costle correspondence to issue SIP

17

subsequent rulemaking, this would not diminish in any

way the importance oi following rulemaking procedures

before taking action that obligated the Agency to initi-

ate future rulemakings. In other words, Administrator

Costle could remove the discretion given EPA by Con-

gress over scheduling and the setting of regulatory priori-

ties, thereby forcing EPA to undertake rulemaking, only

if he adopted, in accordance with the APA, a rule re-

quiring such action.

In sum, the fundamental flaw in Petitioners’ theory is

their failure to understand that the expression of a

belief—whether in a proposed rule, in informal corre-

spondence, or in a statement to the press—is not the

Same as an agency exercising its discretion to create a

future legal obligation. As Judge Scalia recognized, dis-

cretion is exercised, and binding action is taken, only

when rights are resolved at the conclusion of a rule-

making proceeding.” No such proceeding was conducted

in this case. Accordingly, New York and Ontario’s argu-

ment that the Costle correspondence could create a legal

obligation for EPA to undertake regulatory action under

§ 115 is wrong on the merits, and provides no basis for

certiorari.

deficiency notices requiring emission reductions, not that EPA

was required to initiate a rulemaking to determine whether such

notices should be issued. Based upon New York’s argument below,

the district court ordered EPA to “comply with [its] mandate...

by formally notifying the governors of any state in which such

emissions originate” to reduce emissions. 613 F. Supp. at 1486,

New York App. at A-43. Since New York’s argument described

above was not presented below, it cannot be presented on appeal.

EEOC v. FLRA, 54 U.S.L.W. 4408, 4409 (April 29, 1986) (certio-

rari dismissed as improvidently granted because issue not pre-

sented below).

#9 Thomas v. New York, 802 F.2d at 1447-48, New York App. at

A-7 to A-8; see supra note 39.

18

il. REQUIRING NUTICE AND COMMENT BEFORE

ISSUANCE OF A RULE DOES NOT CONFLICT

WITH VERMONT YANKEE

New York and Ontario contend in their petitions that

Judge Scalia wrongly concluded that rulemaking proce-

dures are necessary before an agency can legally obligate

itself to undertake regulatory action,®® and that this hold-

ing violates this Court’s Vermont Yankee decision.” This

argument is without merit.

In Vermont Yankee, this Court rejected the D.C. Cir-

cuit’s attempt to “develop new procedures to accomplish

the innovative task of implementing NEPA through rule-

making,” ** since there was “nothing in the APA, NEPA,

the circumstances of this case, [or] the nature of the

issues being considered” that either required or author-

ized such procedures. By contrast, in this case, Judge

Sealia has not created ‘new procedures” to implement

his view of the Clean Air Act, but rather has merely re-

stated the law regarding the statutorily mandated rule-

making procedures of the APA.

The court below did not, as Petitioners argue,” hold

that EPA must conduct two notice and comment rule-

makings in order to implement § 115. The D.C. Circuit

only held that, if the Administrator wishes to imple-

ment § 115 in two stages—the first stage being prom-

50 See, e.g., Ontario Petition at 17 (notice and comment at any

other stage of a § 115 proceeding is “totally unnecessary”) ; see also

New York Petition at 15-16, 20 (notice and comment at any other

stage of a § 115 proceeding would be “merely redundant to that

which would have been later afforded’’).

51 See New York Petition at 17-20; Ontario Petition at 17.

52 NRDC v. NRC, 547 F.2d 633, 653 (D.C. Cir. 1976), rev’d sub

nom. Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519

(1978).

53 Vermont Yankee, 435 U.S. at 548.

54 See New York Petition at 17-20; Ontario Petition at 17.

19

ulgations of findings that bind the Agency to conduct the

second stage, which would be issuance of § 115 SIP de-

ficiency notices—the Administrator must conduct two

rulemakings. If the Administrator wishes to implement

§ 115 in one stage—which is the usual way provisions

like § 115 are implemented—® the Administrator can is-

sue a notice of proposed rulemaking containing proposed

§ 115 findings and proposed § 115 SIP deficiency notices.

After receiving comments, he can promulgate final de-

ficiency notices accompanied by final findings.

In sum, the lower court’s holding is a straightforward

application of the APA requirement that any “statement

of ... future effect designed to implement . . . law or

policy” (i.e., a “rule”)*’ must be preceded by notice and

55 See Thomas v. New York, 802 F.2d at 1446, New York App.

at A-5.

56 New York simply misreads National Asphalt Paving Ass’n v.

Train, 539 F.2d 775 (U.C. Cir. 1976), as well as the other decisions

cited at pages 15-16 of its petition, in suggesting to the contrary.

For example, in National Asphalt, the D.C. Circuit addressed § 111

of the Clean Air Act, which provides that if EPA finds that a source

category is a “significant contributor” to pollution, it must propose

emission control standards for that source category within 120 days.

See 539 F.2d at 779. In addressing industry’s challenge to the “sig-

nificant contributor” finding, the D.C. Circuit rejected the govern-

ment’s suggestion “that an opportunity to comment on... [this

finding] is not required at all,” finding that both “(the Clean

Air Act and] section 4 of the APA require[] that interested per-

sons have a meaningful opportunity to comment on that part of the

rule [ie., the “significant contributor” finding].” Jd. at 779 n.2

(emphasis added and in original). Since the “significant contribu-

tor” finding was issued simultaneously with the proposed emission

standards as a “proposed” rule, however, the Court found that

notice and comment on this proposal couid take place concurrently

with notice and comment on the proposed emission standard. Id.

In the instant case, of course, New York and Ontario do not seek,

nor has EPA undertaken, a concurrent rulemaking on proposed

“endangerment” and “reciprocity” findings and on proposed emis-

sion controls.

87 5 U.S.C. § 551(4).

20

comment. Since former Administrator Costle’s eleventh-

hour correspondence failed to satisfy this APA require-

ment, this correspondence could not establish a legally

binding future obligation to issue § 115 SIP deficiency

notices. Accordingly, the decision of the court below does

no more than confirm the requirements of the APA and

in no way conflicts with Vermont Yankee.

CONCLUSION

For the foregoing reasons, Respondents Alabama Power

Co., et al., National Coal Association, and the States of

Ohio, Kentucky, and West Virginia hereby request that

the petitions for certiorari in case numbers 86-1373 and

86-1374 be denied.

MICHAEL B. BARR

CHARLES D. OSSOLA

KERRY A. WALSH SKELLY

HUNTON & WILLIAMS

2000 Pennsylvania Ave., N.W.

Suite 9000

Washington, D.C. 20006

Counsel for -

National Coal Association

LARRY G. KOPELMAN

Special Assistant

Attorney General

State of West Virginia

1558 Washington Street, East

Charleston, WV 25311

Counsel for the

State of West Virginia

Respectfully submitted,

HENRY V. NICKEL

(Counsel of Record)

F. WILLIAM BROWNELL

HUNTON & WILLIAMS

2000 Pennsylvania Ave., N.W.

Suite 9000

Washington, D.C. 20006

(202) 955-1500

Counsel for Alabama

Power Company, et al.

DALE T. VITALE

DOUGLAS O. METZ

Assistant Attorneys General

Environmental Enforcement

Section

Office of the Attorney

General, 17th Floor

State Office Tower

30 East Broad Street

Columbus, Ohio 43215

Counsel for the State of Ohio

MICHAEL B. BARR

CHARLES D. OSSOLA

HUNTON & WILLIAMS

2000 Pennsylvania Ave., N.W.

Suite 9000

Washington, D.C. 20006

Counsel for the

Commonwealth of Kentucky

APPENDIX

la

APPENDIX

PARENT COMPANIES, SUBSIDIARIES AND

AFFILIATES OF INDIVIDUAL ELECTRIC UTILITIES

Alabama Power Company

(subsidiary of The Southern Company)

subsidiaries :

Alabama Property Company

Columbia Fuels, Inc.

affiliate:

Southern Electric Generating Company

Appalachian Power Company

(controlled by American Electric Power Company, Inc.)

subsidiaries :

Central Appalachian Coal Company

Central Coal Company

Central Operating Company

Kanawha Valley Power Company

Southern Appalachian Coal Company

Southern Ohio Coal Company

West Virginia Power Company

Cedar Coal Company

Arkansas Power & Light Company

(controlled by Middle South Utilities, Inc.)

subsidiary :

Associate Natural Gas Company

affiliates:

Systems Fuels, Inc.

The Arklahoma Corp.

2a

Baltimore Gas and Electric Company

subsidiaries:

Resource and Property Management, Inc.

Safe Harbor Water Power Corp.

Diversified Holdings, Inc.

subsidiaries :

Baltimore Biogas, Inc.

Baltimore Capitol Resources, Inc.

Boston Edison Company

Carolina Power & Light Company

subsidiaries:

Capital Corporation

Leslie Coal Mining Company

affiliate:

Carolinas-Virginia Nuclear Power Ass’n, Inc.

Central and South West Corporation

subsidiaries :

Central Power and Light Company

affiliate:

Central and South West Fuels, Inc.

Public Service Company of Oklahoma

affiliate:

Central and South West Fuels, Inc.

subsidiaries :

Transok Pipe Line Co.

Ash Creek Mining Co.

Transok, Ine.

3a

Southwestern Electric Power Company

subsidiary:

Southwest Arkansas Utilities Corp.

affiliate:

Arklahoma Corp.

Central and South West Fuels, Inc.

West Texas Utility Company

subsidiary:

CSR Services, Inc.

affiliate:

Central and South West Fuels, Inc.

Central and South West Services, Inc.

CSW Financial, Inc.

CSW Energy, Inc.

Central and South West Fuels, Inc.

Central Hudson Gas and Electric Corporation

subsidiaries :

Phoenix Development Company, Inc.

Cruger Development Corporation

Greene Point Development Corporation

Central Hudson Enterprises Corp.

CH Resources, Ince.

Central Illinois Light Company

subsidiaries:

CILCO Exploration and Dev. Co.

CILCO Energy Corporation

Central Illinois Public Service Company

affiliate:

Electric Energy, Inc.

art

4a

The Cincinnati Gas and Electric Company

subsidiaries :

Union Light, Heat and Power Co.

West Harrison Gas & Electric Co.

Miami Power Corp.

Lawrenceburg Gas Co.

Lawrenceburg Gas Transmission Corp.

Tri-State Improvement Co.

YGK, Inc.

The Cleveland Electric Illuminating Co.

subsidiaries :

The Ceico Co.

CCO Co.

Dynamic Energy Ventures, Inc.

Columbus and Southern Ohio Electric Company

(controlled by American Electric Power Company, Inc.)

subsidiaries :

Colomet, Inc.

Simco, Ince.

Commonwealth Edison Company

subsidiaries :

Commonwealth Edison Co. of Indiana, Inc.

Chicago and Illinois Midland Railway Co.

Cotter Corp.

Commonwealth Research Corp.

Edison Development Canada, Inc.

Edison Development Co.

Concomber, Ltd.

Consolidated Edison Company of New York, Inc.

Consumers Power Company

subsidiaries :

Michigan Gas Storage Company

Northern Michigan Exploration Company

5a

Michigan Utility Collection Service, Ine.

Plateau Resources Limited

Utility Systems, Inc.

Consumers Power Finance, N.V.

Conar Corp.

The Dayton Power and Light Company

subsidiaries:

DP&L Community Urban Redevelopment Corp.

Miami Valley Development Company

UCON Ine.

ZMS Ine.

Delmarva Power & Light Company

subsidiaries :

Delmarva Power & Light Co. of Maryland

Delmarva Power & Light Co. of Virginia

Delmarva Energy Co.

Delmarva Industries, Inc.

The Detroit Edison Company

subsidiaries:

Edison Illuminating Company

Midwest Energy Resources Company

Peninsular Electric Light Company

St. Clair Edison Company

Washtenaw Light & Power Company

Essex County Light

St. Clair Energy Corp.

Utility Technical Services, Inc.

Duke Power Company

subsidiaries :

Mill-Power Supply Co.

Crescent Land & Timber Corp.

Eastover Land Co.

Eastover Mining Co.

6a

Wateree Power Co.”

Catawba Manufacturing and Electric Power Co.*

Western Carolina Power Co.*

Caldwell Power Co.*

Florida Power Corporation

(controlled by Florida Progress Corporation )

Florida Power & Light Company

subsidiaries :

Southern Power Co.*

Greenville Gas and Electric Light and Power Co.*

Duke Power Overseas Finance, N.V.

Fuel Supply Service, Inc.

Land Resources Investment Company

W. Flagler Investment Corp.

Georgia Power Company

(subsidiary of The Southern Company )

subsidiary:

Piedmont Forrest Co.

affiliate:

Southern Electric Generating Company

Gulf Power Company

(subsidiary of The Southern Company)

Gulf States Utilities Company

subsidiaries :

Varibus Corporation

Prudential Drilling Company

Houston Lighting & Power Company

(controlled by Houston Industries, Inc.)

* Inactive.

7a

Illinois Power Company

subsidiaries :

IP Ine.

IPF Co., N.V.

Illinois Power Fuel Company

affiliate:

Electric Energy Inc.

Indiana & Michigan Electric Company

(controlled by American Electric Power Company, Inc.)

subsidiaries

Castlegate Coal Company, Inc.

Indiana & Michigan Power Company

Price River Coal Company

Blackhawk Coal Company

Indianapolis Power & Light Company

(controlled by IPALCO Enterprises, Inc.)

lowa-Illinois Gas and Electric Company

subsidiary :

Iowa-Illinois Energy Co.

Iowa Public Service Company

~ (subsidiary of Midwest Energy Co.)

subsidiaries :

Cimmred, Inc.

Energy Development Company

Energy Reserves, Inc.

Centennial Coal, Inc.

Midwest Energy Co.

Midwest Energy Service Co.

Kansas City Power and Light Company

Kentucky Power Company

(controlled by American Electric Power Company, Inc.)

cael iets

8a

Kentucky Utilities Company

subsidiary :

Old Dominion Power Company

affiliate:

Electric Energy, Inc.

Louisiana Power & Light Company

(controlled by Middle South Utilities, Inc.)

Madison Gas and Electric Company

subsidiaries :

MG&E Nuclear Fue! Inc.

MAGAEL Ine.

MAGAEL Material Resources, Inc.

Mississippi Power Company

(subsidiary of The Southern Company )

Mississippi Power & Light Company

{controlled by Middle Sout’ Utilities, Inc.)

subsidiaries:

The Light, Heat & Water Company of Jackson *

Jackson Gas Light Company*

Jackson Light & Traction Company*

affiliate:

Systems Fuels, Inc.

Monongahela Pewer Company

(controlled by Allegheny Power System, Inc.)

subsidiary :

Allegheny Pittsburgh Coal Company

affiliate:

Allegheny Generating Co.

* Inactive.

9a

Montaup Electric Company

New England Power Company

(controlled by New England Electric System)

affiliates:

Yankee Atomic Electric Co.

Connecticut Yankee Atomic Power Co.

Vermont Yankee Nuclear Power Co

Maine Yankee Atomic Power Co.

New Orleans Public Service, Inc.

subsidiary :

Systems Fuels, Inc.

Northern Indiana Public Service Company

subsidiaries :

Shore Line Shops, Incorporated

NIPSCO Exploration Co.

NIPSCO Fuel Co., Ine.

Northern Indiana Public Service Finance, N.V.

Ohio Edison Company

subsidiaries:

Pennsylvania Power Co.

Ohio Edison Finance, N.A.

Ohio Power Company

(controlled by American Electric Power Company, Inc.)

subsidiaries:

Central Coal Company

Central Ohio Coal Company

Central Operating Company

Ohio Electric Company

Southern Ohio Coal Company

Windsor Power House Coal Company

Cardinal Operating Co.

Beech Bottom Power Co., Inc.

—_™—-—-—s—<‘< OS:

10a

Ohio Valley Electric Corporation

subsidiary :

Indiana-Kentucky Electric Corp.

Oklahoma Gas and Electric Company

subsidiary:

Arklahoma Corporation

Pennsylvania Electric Company

subsidiaries :

Nineveh Water Co.

Waverly Electric Light & Power Co.

Pennsylvania Power Company

(controlled by Ohio Edison Company )

Pennsylvania Power & Light Co.

subsidiaries :

Pennsylvania Coal Resources Corp.

subsidiary:

Pennsylvania Mines Corp.

subsidiaries :

Tunnelton Mining Co.

Greene Manor Coal

Rushton Mining Co.

Greene Hill Coal Co.

Oneida Mining Co.

Interstate Energy Co.

Hershey Electric Company

Service Development Company

Safe Harbor Water Power Corp.

Realty Company of Pennsylvania

subsidiaries :

Interstate Energy Co.

BDW Corp.

——.

lla

LCA Leasing Corp.

Lady Jane Colleries, Inc.

affiliates:

The Arcadia Company, Inc.

Safe Harbor Water Power Co.

The Potomac Edison Company

(controlled by Allegheny Power System, Inc.)

subsidiaries:

Allegheny Pittsburgh Coal Company

Allegheny Generating Company

Potomac Electric Power Company

subsidiaries:

Potomac Electric Finance N.V.

PEPCO Enterprises, Inc.

Potomac Capital Investment Corp.

Public Service Company of Indiana, Inc.

Public Service Electric and Gas Company

subsidiaries :

Energy Development Corp.

subsidiary:

Gasdel Pipeline System, Inc.

PSE&G Research Corp.

Energy Terminal Services Corp.

Energy Pipeline Corp.

EASCOGAS LNG, Ine.

Transport of New Jersey

subsidiaries :

Maplewood Equipment Co.

Private Reinvestment Capital Corp.

PSE&G Overseas Finance N.V.

Mulberry Street Urban Renewal Corp.

12a

Salt River Project

Southern California Edison Company

subsidiaries :

Associated Southern Investment Co. (ASIC)

Electric Systems Company

Conservation Financing Corp.

Energy Services Inc. Non-Utility Corp.

Calabasas Park Company (CPC)

Calabasas Communication Company

California Electric Power Co.

Palo Verde Uranium Venture

Southern Surplus Realty Company

Calabasas Park Company, Inc.

Southern California Edison Finance Co., N.V.

Mono Power Company (Calif.)

Mono Power Company (Bolivia)

Mono Power Company ( Malaysia)

Mono Power Company ( Nicaragua)

Mono Power Company (Peru)

Mono Power Company (Italy)

Union Pacific Company

Southern Sierra Energy Co.

Bear Creek Uranium Company

Tampa Electric Company

(controlled by TECO Energy, Inc.)

subsidiaries :

Tampa Bay Industrial Corp.

Mid-South Towing Company

Electro-Coal Transfer Corp.

Gulfcoast Transit Co.

Southern Marine Management Corp.

Cal-Glo Coal, Inc.

Texas Utilities Generating Company

(subsidiary of Texas Utilities Company)

13a

Toledo Edison Company

Tueson Electric Power Company

subsidiaries :

Western Coal Company

Alamito Co.

Esequada Leasing Co.

Valencia Energy Co.

Rincon Investing Co.

Rincon Securities, Inc.

Union Electric Company

subsidiaries:

Union Colliery Company

Missouri Power & Light Company

Missouri Edison Company

Missouri Utilities Company

affiliate:

Electric Energy, Inc.

Virginia Electric and Power Company

(controlled by Dominion Resources, Inc.)

subsidiaries:

Laurel Run Mining Company

Virginia Nuclear, Inc.

Dominion Exploration, Inc.

West Penn Power Company

(subsidiary of Allegheny Power System, Inc.)

subsidiaries :

Allegheny Generating Company

Allegheny Pittsburgh Coal Company

Beech Bottom Power Company, Inc.

West Virginia Power & Transmission Co.

subsidiary:

West Penn West Virginia

Water Power Co.

l4a

Wisconsin Electric Power Company

subsidiaries :

Wisconsin Natural Gas Company

Wisconsin Michigan Power Company

subsidiary:

Badger Service Company

Wisconsin Power and Light Company

subsidiaries :

South Beloit Water, Gas and Electric Co.

Wisconsin Power and Light Nuclear Fuel, Inc.

NUFUS Resources, Inc.

Wisconsin Mobile Telephone Company, Inc.

Windworks, Inc.

Wisconsin Mobile Telephone, Inc.

Residuals Management Technology, Inc.

affiliate:

Wisconsin River Power Company

Wisconsin Public Service Corporation

affiliates:

Wisconsin River Power Company

Wisconsin Valley Improvement Company

. Delores Bench General Partner, Inc.