# Appendix — Environmental Defense v. Duke Energy Corporation > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0237%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2007 - **Citation:** 549 U.S. 561 ## Text United States Court of Appeals, Fourth Circuit UNITED STATES OF AMERICA, Plaintiff-Appellant, ENVIRONMENTAL DEFENSE; NORTH CAROLINA SIERRA CLUB; NORTH CAROLINA PUBLIC INTEREST RESEARCH GROUP CITIZEN LOBBY/EDUCATION FUND, Intervenors/Plaintiffs-Appellants, v. DUKE ENERGY CORPORATION, Defendant-Appellee. No. 04-1763. Argued and Submitted February 3, 2005. Filed June 15, 2005. Todd Sunhwae Kim, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C., for the United States. James Blanding Holman, [V, Southern Environmental Law Center, Chapel Hill, NC, for Appellants Environmental Defense, North Carolina Sierra Club, and North Carolina Public Interest Research Group Citizen Lobby/Education Fund. F. William Brownell, Hunton & Williams, Washington, D.C., for Appellee. Before LUTTIG and MOTZ, Circuit Judges, and Samuel G. WILSON, United States District Judge for the Western District of Virginia, sitting by designation. MOTZ, Circuit Judge: The United States brought this enforcement action against Duke Energy Corporation, which provides North Carolina and South Carolina with electricity generated from eight plants located throughout the two states. The United la States maintains that Duke Energy on numerous occasions modified these plants without first obtaining appropriate permits in violation of the Clean Air Act. 42 U.S.C. §§ 7401 et seq. (2000). The district court granted summary judgment to Duke Energy. See United States v. Duke Energy Corp., 278 F. Supp. 2d 619 (M.D.N.C. 2003). We affirm, albeit for somewhat different reasons than those relied on by the district court. I. The Clean Air Act is a complex statute supported by an elaborate regulatory scheme; both have a complicated history. This case involves two different, but complementary provisions of the Act: the New Source Performance Standards (“NSPS”) provisions, 42 U.S.C. § 7411, and the Prevention of Significant Deterioration (“PSD”) provisions, 42 U.S.C. §§ 7470-92. In order to “protect and enhance the quality of the Nation's air resources” and “promote the public health and welfare,” 42 U.S.C. § 7401(b)(1), the Clean Air Amendments of 1970 directed the Environmental Protection Agency (“EPA”) to devise National Ambient Air Quality Standards establishing the maximvm concentrations of certain air pollutants allowable in each region of the United States. 42 U.S.C. § 7409. The Act then directed each State to design a State Implementation Plan to effect compliance with its air quality standards. 42 U.S.C. § 7410. To help attain and thereafter maintain these air quality standards, the 1970 amendments enacted the NSPS provisions, which required the EPA to promulgate standards regulating emissions from both newly constructed and modified sources of pollution at power plants. 42 U.S.C. § 7411. Congress defined “modification” in the NSPS provisions as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or 2a which results in the emission of any air pollutant not previously emitted.” 42 U.S.C. § 7411(a)(4). Since 1971, the EPA has promulgated NSPS regulations that define “modification” in virtually the same words as the statute. See, e.g., 36 Fed. Reg. 24,876, 24,877 (Dec. 23, 1971); 40 C.F.R. § 60.2 (1976); 40 C.F.R. § 60.2 (2004). In 1975, the EPA added a regulation elaborating on this definition and further defining “modification” by reference to an increase in the hourly emission rate: a modification includes “any physical or operational change to an existing facility which results in an increase in the emission rate to the atmosphere of any [regulated] pollutant,” measured not in tons per year, but in kilograms per hour. 40 Fed. Reg. 58,416, 58,419 (Dec. 16, 1975) (codified at 40 C.F.R. § 60.14(a) & (b)). Modified equipment becomes subject to the NSPS’s “technology-based” standards, Alabama Power Co. v. Costle, 636 F.2d 323, 346 (D.C. Cir. 1980), which mandate the installation of the “best demonstrated pollution control technology.” Potomac Elec. Power Co. v. EPA, 650 F.2d 509, 518 (4th Cir. 1981) {hereinafter PEPCo]}. The NSPS program was not entirely successful. See Wisconsin Elec. Power Co. v. Reilly, 893 F.2d 901, 904 (7th Cir. 1990). In 1972, the United States District Court for the District of Columbia issued a preliminary injunction directing the EPA to promulgate regulations to supplement the NSPS program and protect air quality from deterioration in areas that had met or exceeded the relevant ambient standards. See Sierra Club v. Ruckelshaus, 344 F. Supp. 253 (D.D.C. 1972), affd 4 E.R.C. 1815 (D.C. Cir. 1972), affd by an equally divided court sub nom. Fri v. Sierra Club, 412 USS. 541(1973). The EPA duly disseminated the first PSD regulations in 1974. See 39 Fed. Reg. 42,510 (Dec. 5, 1974). Congress thereafter enacted a PSD program in the Clean Air Act Amendments of 1977. See 42 U.S.C. § 7470(1). 3a As originally enacted, the PSD permit provisions in the Clean Air Act applied only to the “construction” of major emitting facilities. See Clean Air Act Amendments of 1977, Pub. L. No. 95-95, 91 Stat. 685, 735 (1977) (“No major emitting facility on which construction is commenced after the date of the enactment of this part, may be constructed in any area to which this part applies unless . . . a permit has been issued .. . .”). However, in November 1977, a few months after the original enactment became effective, Congress passed the “Clean Air Act Technical and Conforming Amendments.” Pub. L. No. 95-190, 91 Stat. 1393, 1399 (1977). These amendments added to the “Definitions” section of the PSD provisions in 42 U.S.C. § 7479 a subparagraph that provides: “The term ‘construction’ when used in connection with any source or facility, includes the modification (as defined in [section 7411(a)]) of any source or facility.” /d. at 1402. This amendment thus incorporated the NSPS statutory definition of “modification,” § 7411(a)(4), into § 7479 of the PSD statute. The PSD program imposes, inter alia, preconstruction review and permit requirements on new or modified sources in areas that have attained or exceeded their air quality standards. 42 U.S.C. § 7475. Unlike the NSPS program, the PSD program does not focus primarily on technology-based controls, but on the “net emissions from an entire plant resulting from construction or modification of one or more emitting sources within the plant.” PEPCo, 650 F.2d at 518 (emphasis omitted). And so, while NSPS centers on technological controls at an individual pollution-emitting apparatus, PSD fixes on the actual emissions from a site. See N. Plains Res. Council v. EPA, 645 F.2d 1349, 1356 (9th Cir. 1981) (“The NSPS program is . . . equipment oriented. On the other hand, the PSD program ... is . . . site oriented.”). The EPA promulgated regulations under the PSD da provisions of the statute in 1978, see 43 Fed. Reg. 26,380 (June 19, 1978), and amended them in 1980, see 45 Fed. Reg. 52,676 (Aug. 7, 1980). Under the 1980 PSD regulations, a plant cannot engage in a “major modification” of equipment without first undergoing the EPA's permit process and acquiring a permit. 45 Fed. Reg. 52,676. The EPA's PSD regulations define a “major modification” as “any physical change in or change in the method of operation of a major stationary source that would result in a significant net emissions increase of any pollutant subject to regulation under the Act.” 40 C.F.R. § 51.166(b)(2)(i) (1987).° A “net emissions increase” is “any increase in actual emissions from a particular physical change or change in the method of operation” of a unit. 40 C.F.R. § 51.166(b)(3)(i). The PSD regulations measure emissions increases relative to a baseline calculation of “actual emissions,” i.e., “the average rate, in tons per year, at which the unit actually emitted” the regulated pollutant for, usually, the two years prior to date of measurement, “using the unit's actual operating hours, production rates, and types of materials processed, stored, or combusted during the selected time period.” 40 C.F.R. § 51.166(b)(2 1) (ii). Il. A. Duke Energy’s eight plants in the Carolinas include thirty coal-fired generating units that were placed in service between 1940 and 1975. Each unit contains, as one of its ' The 1980 regulations, which the parties agree control the projects at issue here, were recodified in the 1987 Code of Federal Regulations. None of the relevant PSD or NSPS provisions were revised during the period pertaining to this dispute. All subsequent references herein are to the 1987 C.F.R. unless otherwise noted. Sa three major components, a boiler, which is a large structure from six-to twenty-stories tall containing thousands of steel tubes. The tubes are arranged into sets of tube assemblies, including economizer tubes, in which water is initially heated; furnace waterwall tubes, in which water evaporates to steam; superheater tubes, in which the temperature of the steam is raised before being released into a turbine; and reheater tubes, in which steam released from the turbine is reheated and returned to the turbine. Between 1988 and 2000, as part of a plant modernization program, Duke Energy engaged in twenty-nine projects on the coal-fired generating units, most of which consisted of replacing and/or redesigning one or more of the boiler tube assemblies. These projects would both extend the life of the generating units and allow the units to increase their daily hours of operation. Duke Energy did not apply for or acquire new permits from the EPA for these projects, some of which, according to the Government, cost “more than seven times the original cost of the unit.” Brief of United States at 14. In December 2000, at the direction of the Administrator of the EPA, the Attorney General brought this enforcement action against Duke Energy, alleging that the life-extension projects violated, inter alia, the Clean Air Act's PSD provisions. In September 2001, the district court granted Environmental Defense, the North Carolina Sierra Club, and the North Carolina Public Interest Research Group Citizen Lobby/Education Fund leave to intervene as plaintiffs, and these groups filed a complaint against Duke Energy alleging similar violations. The EPA and the Intervenors maintain that these life- extension projects constitute “major modifications” of Duke Energy’s furnaces as defined in the PSD statutory and regulatory provisions — that is, physical changes leading to a 6a significant net emissions increase — and thus Duke Energy was required to obtain permits for them. The EPA does not contend that the post-project hourly rate of emissions increased. Rather, it argues that the PSD _ requires measurement of the net emissions increase by using an “actual-to-projected-actual” test, comparing the actual pre- project emissions from a unit to the projected post-project emissions, which takes into account a unit’s ability to operate for more hours. Because the Duke Energy projects enable the units to operate for more hours each day, they will lead to an increase in actual yearly emissions. Duke Energy counters that its projects do not constitute modifications subject to PSD because they did not increase the units’ levels of emissions. The company maintains that, under the PSD program, a net emissions increase will result only if there is an increase in the hourly rate of emissions. Because none of its projects increased a unit’s hourly capacity to emit pollution (but increased only the number of hours the unit could operate), the projects did not increase emissions from pre-project levels, and so, according to Duke Energy, it did not have to obtain permits. The district court agreed with Duke Energy. It held that a modification subject to PSD exists only if there is a post-project increase in the hourly rate of emissions from a unit. Duke Energy Corp., 278 F. Supp. 2d at 640.2 In ? Duke Energy asserted in the alternative that its projects constitute maintenance, repair and replacement that is routine in the utility industry and, for this reason, were exempt from the permit requirements. See The EPA and the Intervenors disagreed, contending that this regulatory exemption only applies to repairs and 40 C.F.R. 51.166(b)(2)(iii)(a). Ta reaching this conclusion, the district court relied on the language of the PSD _ regulations, “contemporaneous interpretations” of the regulations by the EPA, and “the statutory language incorporating the NSPS concept of modification into PSD.” Jd. One regulation promulgated by the EPA pursuant to the PSD statute, 40 C.F.R. § 51.166(b)(2)(i), characterizes a “major modification” as “any physical change in or change in the method of operation . . . that would result in a significant net emissions increase”; another, 40 CFR. § 51.166(b)(2)(i1i)(f), excludes “an increase in the hours of operation or in the production rate” from the definition of “physical change or change in the method of operation.” Reading these two provisions in conjunction, the district court determined that an emissions increase traceable to increased hours of operation cannot trigger the PSD provisions because an increase in hours is not a physical change. Put another way, because increased hours are not a physical change under the PSD regulations, calculation of post-project net emissions cannot take into account increased hours of operation, but rather must be based on pre-project hours of operation and rates of production. Therefore, the court concluded, only if the hourly rate of emissions increases can there be a net emissions increase under the PSD regulations. Duke Energy, 278 F. Supp. 2d at 640-41. The district court recognized that the EPA interpreted replacements routine within the life of a generating unit and, therefore, Duke Energy's life-enhancing projects did not qualify for this exemption. The district court again agreed with Duke Energy's interpretation, but held that there was insufficient evidence to grant summary judgment to Duke Energy on this claim. Duke Energy, 278 F. Supp. 2d at 638. Given our resolution of this case, we need not reach this question. 8a its PSD regulations differently, excluding a much smaller group of projects from the definition of “major modification.” The EPA would exclude only those projects that increase hours of operation and involve no construction. /d. at 641. According to the interpretation pressed by the EPA, whenever there is an increase “in utilization coupled with a physical change, any increase in hours of operation . . . may be considered in the emissions calculus.” /d. The district court concluded that it could not defer to the EPA's interpretation because in addition to being, in the court's view, belied by the plain language of the PSD regulations, the present EPA interpretation was “clearly contrary to earlier [EPA] interpretations” of the regulations. /d. Specifically, the court noted that “immediately after the promulgation of the PSD regulations in 1980, the EPA’s Director of the Division of Stationary Source Enforcement . . ., Edward E. Reich, confirmed in two separate applicability determinations that the requirements of PSD would be implicated only by an increase in the hourly rate of emissions.” /d. Finally, the court determined that its interpretation of the PSD regulation was “also consistent with the NSPS [statutory] definition of ‘modification’” found in 42 U.S.C. § 7411(a), “which was incorporated by explicit reference into PSD” in 42 U.S.C. § 7479(2)(C) (defining “construction” to include “the modification (as defined in section 7411(a) . . .) of any source or facility”). Jd. at 642. The interpretation of PSD regulations urged by the EPA in this suit would, the district court concluded, be “inconsistent with the congressional design of defining PSD construction in terms of NSPS modification and should therefore be accorded little deference.” /d. at 643. After resolution of this legal issue, the parties stipulated that the Duke Energy projects would not result in an increase in the hourly rate of emissions. The court then entered summary judgment for Duke Energy. 9a Il. In cases in which an agency”s interpretation of its regulations are at issue, a court engages in a modified Chevron analysis. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984); United States v. Deaton, 332 F.3d 698, 708-09 (4th Cir. 2003). First, as in the usual Chevron analysis, a court must determine “whether Congress has directly spoken to the precise question at issue.” Chevron, 467 U.S. at 842. “The judiciary is the final authority on issues of statutory construction” and “if a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.” /d. at 843 n.9. Only if the statute is silent or ambiguous on the point is Congress deemed to have delegated authority to the agency to clarify the point in its regulations. Jd. at 843-45. Thus, only in such cases does a court examine the regulation itself, determining its legitimate meaning, asking whether the regulation is based on a permissible construction of the statute, and, if so, deferring to it. See id. at 843; Deaton, 332 F.3d at 708-09. The EPA and the Intervenors expressly acknowledge that these principles govern our review in the case at hand. See Brief of United States at 14-15; Brief of Intervenors at 7- 9. They fail to understand, however, that straightforward application of these principles can lead to only one conclusion: affirmance of the judgment of the district court. This is so because Congress has indeed “directly spoken to the precise question at issue.” Chevron, 467 U.S. at 842. As the EPA itself concedes, the critical first “question at issue” here is whether the EPA “can interpret the statutory term ‘modification’ under PSD differently from how EPA interpreted that term” in the NSPS. Brief of United States at 10a 1. As the EPA also concedes, see id. at 4, Congress expressly defined “modification” in the NSPS provisions of the Clean Air Act, 42 U.S.C. § 7411(a), and then expressly directed that the PSD provisions of the Act employ this same definition. See 42 U.S.C. 7479(2)(C) (providing that “construction” in the PSD includes “modification . . . as defined in section 7411(a)”). When Congress mandates that two provisions of a single statutory scheme define a term identically, the agency charged with administering the statutory scheme cannot interpret these identical definitions differently. Thus, because Congress mandated that the PSD definition of “modification” be identical to the NSPS definition of “modification,” the EPA cannot interpret “modification” under the PSD inconsistently with the way it interprets that term under the NSPS.’ Common sense would seem to dictate this result. Supreme Court precedent certainly does. See Rowan Cos. v. United States, 452 U.S. 247 (1981). In Rowan, the Court faced a situation strikingly similar to the one at hand, and held that when Congress itself provided “substantially identical” statutory definitions of a term in different statutes, the agency charged with enforcing the statutes could not interpret the statutory definitions “differently.” Jd. at 257.‘ 3 Since Congress has "directly spoken to the precise question at issue . . ., that is the end of the matter." Chevron, 467 U.S. at 842. A court need not, indeed cannot, go further. Thus, the language and various interpretations of the PSD regulations, on which the district court partially based its holding and which the parties exhaustively discuss, are largely irrelevant to the proper analysis of this case. * Because none of the parties or the thirty amici cited Rowan in their original briefs or reply briefs, we requested supplemental briefing addressing the case. Predictably (but inexplicably in view of its original failure to cite Rowan), Duke Energy asserts that Rowan strongly supports its lla The question presented in Rowan was whether the Commissioner of the Interna] Revenue Service could interpret the statutory term “wages” differently for, on the one hand, the Federal Insurance Contributions Act (“FICA”) and the Federal Unemployment Tax Act (“FUTA”), and, on the other, the statute governing income-tax withholding. /d at 250. Congress had defined the term “wages” in these statutes in substantially the same language: for both FICA and FUTA, “wages” were defined as “all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash”; for income tax withholding, “wages” were defined as “all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration paid in any medium other than cash.” Rowan, 452 U.S. at 249 n.4.° The Commissioner, however, issued regulations interpreting “wages” under FICA and FUTA to include the value of meals and lodging provided to employees for the convenience of the employer, and “wages” under the income-tax withholding statute to exclude this value. See Rowan, 452 U.S. at 250. position. More significantly, although the United States and Intervenors attempt to counter Rowan in various ways (which we address within), they do not contend that the Rowan analysis is no longer good law. > In 1983, Congress amended two of the statutes at issue in Rowan. See Pub. L. No. 98-21 § 327(b)(1), 97 Stat. 65, 127 (1983) (adding to 26 U.S.C. § § 3121(a)(21) and 3306(b)(17) a paragraph stating, “Nothing in the regulations prescribed for purposes of . . . income tax withholding . . . which provides an exclusion from ‘wages’ as used in such chapter shall be construed to require a similar exclusion from ‘wages’ in the regulations prescribed for purposes of this chapter”). 12a In holding the Commissioner’s interpretation impermissible, the Court relied on the plain language of the statutes and their legislative history. First, the Court noted that when Congress enacted the precursors to FICA and FUTA as part of the Social Security Act of 1935, it chose “wages” as the basis for employer taxation and then statutorily defined the term. Jd. at 255. Similarly, seven years later, when Congress enacted the original income-tax withholding statute, it chose “wages” as the basis for taxation and statutorily defined the term “in substantially the same language that it used in FICA and FUTA.” Jd. The Rowan Court held that, “in view of this sequence of consistency, the plain language of the statute is strong evidence that Congress intended ‘wages’ to mean the same thing under FICA, FUTA, and income-tax withholding.” /d.° The Court then examined the statutes’ history, finding indications that Congress intended to “coordinate the income-tax withholding system © We note that the standards of judicial review followed in Rowan differ somewhat from those established three years later in Chevron. The most significant change for the case at hand is that Chevron abolished judicial deference to agency interpretation of a statute in step one. See John F. Coverdale, Chevron's Reduced Domain: Judicial Review of Treasury Regulations and Revenue Rulings After Mead, 55 Admin. L. Rev. 39, 77 (2003); cf. United States v. Mead Corp., 533 U.S. 218, 229 (2001); Christensen v. Harris County, 529 U.S. 576, 582-83 (2000). This difference does not in any way lessen the precedential value of Rowan here. Indeed, if anything, it strengthens Rowan’'s support for our holding because even though in Rowan the Court gave some deference to the agency’s interpretation of the statutes (rather than examining the statutes de novo as Chevron step one directs), the Court nevertheless rejected the agency’s position that it could interpret very similar statutory language differently. l3a with FICA and FUTA . . . to promote simplicity and ease of administration,” and concluding that “contradictory interpretations of substantially identical definitions do not serve that interest.” Jd. at 257. The plain language of the Clean Air Act provides even stronger evidence that Congress intended the statutory definitions of “modification” in the PSD and NSPS provisions to be interpreted identically. While Congress used only “substantially the same language” in the statutory definitions at issue in Rowan, id. at 255, here Congress mandated that the definition of “modification” in the PSD provisions precisely mirror the definition of “modification” in the NSPS provision. Congress did this by directly incorporating the NSPS definition, which it had enacted in 1970, into the PSD provisions, which it enacted seven years later. See Pub. L. No. 95-190, 91 Stat. 1393, 1402 (1977) (“The term ‘construction’ when used in connection with any source or facility, includes the modification (as defined in [section 7411(a)]) of any source or facility.”); 42 U.S.C. § 7479(2)(C). Moreover, as in Rowan, the legislative history of the statutes at issue here does not in any way suggest that Congress intended these identical statutory definitions to receive different interpretations. Notwithstanding the EPA's contentions to the contrary, the fact that the PSD definition of modification became part of the statute through “Technical and Conforming Amendments” does not change the fact that the definition is a statutory enactment, entitled to be treated as such. See United States v. R.L.C., 503 U.S. 291, 305 n.5 (Opinion of Souter, J.) (“[A] statute is a statute, whatever its label,” and must be interpreted using “the usual tools of statutory construction.”). Indeed, the expressed intent in the congressional summary of the legislative amendments to “conform” the definition of modification in the PSD provisions “to usage in other parts of the Act,” 123 Cong. Rec. 36,253 (Nov. 1, 1977), indicates congressional concern l4a with the same sort of simplicity and consistency that the Rowan Court discerned from the legislative history examined there. As the Court explained in Rowan, “it would be extraordinary for a Congress pursuing this interest to intend, without ever saying so, for identical definitions to be interpreted differently.” 452 U.S. at 257.’ ” Confronted with FICA and FUTA regulations that directly contradicted established rules developed under income taxation, see Rowan, 452 U.S. at 258, the Court invalidated the FICA and FUTA regulations, id at 263. In contrast, notwithstanding the contentions of the United States and Intervenors in their supplemental briefs, no question as to the validity of the PSD regulations is (or could be, see 42 U.S.C. § 7607(b)) presented here. Unlike the FICA and FUTA regulations at issue in Rowan, the PSD regulations can be interpreted consistently with pre-existing principles — the NSPS regulations ~ as the district court demonstrated and as the EPA’s Director of the Division of Stationary Source Enforcement twice opined shortly after promulgation of the PSD regulations. Our choice of this interpretation of the PSD regulations — as required under the statute —- over the EPA’s interpretation is not an invalidation of those regulations. The PSD regulations remain fully intact and enforceable and, indeed, could even be enforced as the EPA urges provided that, as long as the PSD and NSPS statutes define “modification” identically, the NSPS regulations are similarly interpreted and enforced. Thus, the only question that we need resolve is one properly before us, indeed one that EPA itself poses, i.e., whether it “can interpret the statutory term modification under PSD differently from how” it has interpreted that term under NSPS. See Brief of United States at 1, 22-30; Reply Brief of United States at 2. Given that the EPA expressly asks that we resolve this question, we have difficulty understanding its suggestion in its supplemental brief that Duke Energy “waived” resolution of this question. 1Sa The EPA points to Senator Muskie’s statement that it was “not the purpose of these amendments to re-open substantive issues” in the Act, 123 Cong. Rec. 36,252, as evidence that Congress was merely using an expedient method to correct the inadvertent omission of the word “modification” from the PSD provisions. To the extent that Senator Muskie’s remarks demonstrate Congress’ intent, see Runnebaum v. NationsBank of Maryland, N.A., 123 F.3d 156, 169 n.7 (4th Cir. 1997) (en banc), they do not support the EPA’s position. The assertion that the Technical and Conforming Amendments were not “designed to resolve issues that were not resolved” in the debate and passage of the Act, see 123 Cong. Rec. 36,252 (statement of Sen. Muskie), says nothing about whether Congress had previously resolved the issue of whether the interpretation of “modification” was to be congruent under the PSD and NSPS statutory provisions. The EPA and Intervenors also emphasize the “vital differences” between PSD and NSPS. Brief of United States at 22; see also id. at 4-6; Brief of Intervenors at 13-21. We do not ignore or minimize those differences. Although both statutes are part of the Clean Air Act and designed to serve its purpose “to protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare and the productive capacity of its population,” 42 U.S.C. § 7401(b)(1), they address somewhat different problems. PSD exists primarily to prevent significant deterioration of ambient air quality in areas meeting clean air standards, see 42 U.S.C. § 7470(1), while NSPS requires new sources to implement particular technologies to limit their own emissions. /d. § 7411. These differences have led us and other courts to approve different regulatory definitions for an identical statutory term in the two statutes. In PEPCo, for example, we held that “significant differences between the PSD and NSPS programs” justified a different interpretation of the statutory 16a term “stationary source.” 650 F.2d at 518. But in PEPCo, although Congress had defined the term “stationary source” in the NSPS provisions, see 42 U.S.C. § 7411(a)(3), it had not defined that term in the PSD provisions. Thus, while in PEPCo both statutes contained the same term, the statutes did not define that term in the same manner; nor was the use of the term in the PSD provisions linked to the statutory definition of the term in the NSPS provisions. Similarly, in Northern Plains Resource Council, the Ninth Circuit allowed the EPA to interpret the statutory term “commenced” differently in the NSPS and PSD reguiations. 645 F.2d at 1357. But again, although one statute — there the PSD provisions — defined the term, see 42 U.S.C. § 7479(2)(A), the other — the NSPS provisions — did not. And, Congress had not linked the PSD definition of the term to its use in the NSPS provisions of the statute. PEPCo and Northern Plains Resource Council illustrate the principle that the same word or phrase will generally be presumed to have the same meaning when used in different parts of the statute, but this “presumption of the uniform usage . . . relents” when there is “a variation in the connection in which the words are used as reasonably to warrant the conclusion that they were employed in different parts of the act with different intent.” Gen. Dynamics Land Sys., Inc. v. Cline, 540 U.S. 581 (2004) (internal quotation marks and citation omitted). Thus, in PEPCo and Northern Plains Resource Council, the difference in purpose between the NSPS and PSD programs justified the conclusion that the same words had different meanings in the two sections of the statute. See N. Plains Res. Council, 645 F.2d at 1355-56. In the case before us, however, the presumption of uniform usage has become effectively irrebutable because Congress’ decision to create identical statutory definitions of the term “modification” has affirmatively mandated that this term be interpreted identically in the two programs. The 17a different purposes of the NSPS and PSD programs cannot override that mandate. Neither the United States nor the Intervenors have cited a single case in which any court has held that identical statutory definitions can be interpreted differently by the agency charged with enforcement of the statute. Moreover, in Rowan the Supreme Court expressly rejected the argument, which was successful in the Fifth Circuit, that the different purposes of FICA/FUTA and income-tax withholding justified the different regulatory interpretations of the same statutory definition. See Rowan, 452 U.S. at 250, 257-58. The Rowan Court concluded that to permit the Commissioner to interpret the same statutory terms differently would “fail to implement the congressional mandate in a consistent and reasonable manner.” /d. at 253. So it is here. Congress mandated that the PSD statute incorporate the NSPS statutory definition of “modification.” No one disputes that prior to enactment of the PSD statute, the EPA promulgated NSPS regulations that define the term “modification” so that only a project that increases a plant’s hourly rate of emissions constitutes a “modification.” The EPA must, therefore, interpret its PSD regulations defining “modification” congruently. Of course, this does not mean that this regulatory interpretation must be retained indefinitely. The EPA retains its authority to amend and revise this and other regulations “through exercise of appropriate rulemaking powers.” Helvering v. Wilshire Oil Co., 308 U.S. 90, 100-01 (1939) (noting that “the contrary conclusion would . . . drastically curtail the scope and materially impair the flexibility of administrative action”); McCoy v. United States, 802 F.2d 762, 766 (4th Cir. 1986). Indeed, the parties point out that the EPA has already amended some of the regulations at issue here. See Brief of Duke Energy at 62-63; Reply Brief of United States at 17-18. As long as Congress mandates that “modification” be defined identically in the NSPS and PSD statutes, however, EPA must interpret that term in a consistent manner in the NSPS and 18a PSD regulations. IV. For the foregoing reasons, the judgment of the district court is AFFIRMED. 19a United States Court of Appeals, Fourth Circuit UNITED STATES OF AMERICA, Plaintiff-Appellant, ENVIRONMENTAL DEFENSE; NORTH CAROLINA SIERRA CLUB; NORTH CAROLINA PUBLIC INTEREST RESEARCH GROUP CITIZEN LOBBY/EDUCATION FUND, Intervenors/Plaintiffs-Appellants, v. DUKE ENERGY CORPORATION, Defendant-Appellee. No. 04-1763. On Petition for Rehearing and Rehearing En Banc Filed August 30, 2005 The Appellants' petitions for rehearing and rehearing en banc were submitted to this Court. As no member of this Court or the panel requested a poll on the petitions for rehearing en banc, and As the panel considered the petitions for rehearing and is of the opinion that they should be denied, IT IS ORDERED that the petitions for rehearing and rehearing en banc are denied. Entered for a panel composed of Judge Luttig, Judge Motz, and U. S. District Judge Wilson. For the Court /s/ Patricia S. Connor CLERK 20a United States Court of Appeals, Fourth Circuit UNITED STATES OF AMERICA, Plaintiff-Appellant, ENVIRONMENTAL DEFENSE; NORTH CAROLINA SIERRA CLUB; NORTH CAROLINA PUBLIC INTEREST RESEARCH GROUP CITIZEN LOBBY/EDUCATION FUND, Intervenors/Plaintiffs-Appellants, v. . DUKE ENERGY CORPORATION, Defendant-Appellee. No. 04-1763. FILED: May 2, 2005 ORDER The parties are directed to serve and file in the office of the Clerk, on or before May 9, 2005, supplemental briefs not to exceed five (5) pages addressing the relevance of Rowan Cos. v. United States, 452 U.S. 247 (1981) to the above entitled case. For the Court /s/ Patricia S. Connor CLERK 2la IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA UNITED STATES OF AMERICA, Plaintiff and Counter-Defendant, and ENVIRONMENTAL DEFENSE; NORTH CAROLINA SIERRA CLUB; and NORTH CAROLINA PUBLIC INTEREST RESEARCH GROUP CITIZEN LOBBY/EDUCATION FUND, Intervenor- Plaintiffs, Vv. DUKE ENERGY CORPORATION, Defendant and Counter-Claimant. Civil No. 1:00CV01262 MEMORANDUM OPINION BULLOCK, District Judge: On December 22, 2000, the Attorney General of the United States acting at the request of the Administrator of the United States Environmental Protection Agency (“EPA”) filed this action against Defendant Duke Energy Corporation (“Duke Energy”). The EPA alleges that Duke Energy made modifications to and operated eight coal-fired electrical generating plants in North Carolina and South Carolina in violation of the Clean Air Act (the “CAA” or “Act”), 42 U.S.C. § 7401 ef seqg., specifically the Prevention of Significant Deterioration (“PSD”) provisions of the Act, 42 U.S.C. §§ 7470-92, and for violations of State Implementation Plans approved under the Act for the States of North Carolina and South Carolina. On May 8, 2001, the 22a following groups, Environmental Defense, North Carolina Sierra Club, and North Carolina Public Interest Research Group Citizen Lobby/Education Fund (hereinafter collectively referred to as “Intervenor-Plaintiffs”) moved to intervene as plaintiffs. On September 6, 2001, the court granted these groups’ motion to intervene, United States v. Duke Energy Corp., 171 F. Supp. 2d 560 (M.D.N.C. 2001), and on the same date the Intervenor-Plaintiffs filed a complaint against Duke Energy alleging similar violations as those in the original complaint. After a lengthy discovery period, which produced approximately 4.6 million pages of documents, extensive discovery disputes, and numerous pretrial motions, the parties now move for summary judgment. The EPA, Intervenor- Plaintiffs, and Duke Energy have submitted lengthy briefs, accompanied by thousands of pages of exhibits, and the motions for summary judgment are ripe for resolution. For the reasons that follow, the court will deny Duke Energy’s motion for summary judgment, grant in part and deny in part the EPA’s motion for partial summary judgment in which Intervenor-Plaintiffs join, deny Intervenor-Plaintiffs’ motion for partial summary judgment on Duke Energy’s “fair notice” defense, and deny Duke Energy’s motion for partial judgment on the pleadings. FACTS' ' The issues the court will resolve at this stage involve questions of law, i.e., (1) whether the correct standard for determining routine maintenance, repair, and replacement is “routine in the industry” or “routine at a particular generating unit”; (2) whether a post project net emissions increase should be calculated assuming constant hours of operation or increased utilization; and (3) whether certain claims for statutory penalties and injunctive relief are barred by the 23a Duke Energy is an international energy company headquartered in Charlotte, North Carolina, and has provided electricity to North Carolina and South Carolina since the early 1900s. Duke Energy’s system of electrical generating facilities includes nuclear, hydroelectric, gas-fired combustion turbine, and coal-fired generating plants. Duke Energy currently operates thirty coal-fired electric generating units at eight plants located throughout North Carolina and South Carolina. It is these coal-fired units which are the subject of this litigation. Duke Energy’s coal-fired generating units were placed in service between 1940 and 1975. These units have net rated generating capacities from 38 MW (for some of the oldest units) to 1120 MW (for the newest units). Each unit of a coal- fired generating plant consists of three primary components: the boiler, the steam turbine, and the electric generator. The boiler on these units is a large, building-like structure ranging from six to twenty stories tall and contains thousands of steel tubes in which water is heated to superheated steam with temperatures in excess of 900 °F. While the specific design of each boiler at issue may differ slightly, in general the boiler consists of collections of tube assemblies, including the economizer tubes, where water is initially heated; the furnace waterwall tubes, where water evaporates to steam; the superheater tubes, where the temperature of the steam is raised just before the steam exits the boiler and reaches the turbine; and the reheater tubes, where steam from the turbine is reheated and returned to the turbine. The furnace waterwall tubes form the walls of the statute of limitations. Because these legal determinations are not necessarily dependent on any particular facts, only a general overview of the facts giving rise to this action is provided. 24a boiler and provide an envelope for coal combustion while also absorbing heat. A coal-fired unit operates by converting the chemical energy contained in coal into electricity. Pulverized coal is fed into the boiler and combusted. “Flue gas” is created with temperatures of up to 3000 °F when the ground coal is ignited in the boiler’s furnace. The flue gas, which contains sulfur dioxide, ash particles or particulate matter, and nitrogen oxides, passes around the tubes and tube assemblies. This combustion process heats water that flows continuously through the tubes and tube assemblies making up the walls, roof, and floor of the boiler. The water in the tubes is thus converted to high pressure steam, which then flows through additional panels or assemblies of tubes to become superheated. The superheated steam enters the turbines where the pressure of the steam against a series of blades turns the turbine shaft. The turbine shaft turns the shaft of a generator, which transforms the mechanical energy into electric energy. After passing through the turbine, the steam is converted to water in condensers and pumped through feedwater heaters back to the economizer where it begins the entire steam cycle process again. Once the flue gas used to heat the water passes through the boiler, it passes through pollution control devices, if any, and exits through a stack into the atmosphere. The EPA alleges that Duke Energy modified and subsequently operated its seven coal-fired generating plants in North Carolina and its one coal-fired generating plant in South Carolina in violation of the PSD provisions of the CAA. The EPA’s allegations stem from twenty-nine projects Duke Energy engaged in between 1988 and 2000.7 (Compl. at ? The following plants, units, and projects are the subject of this lawsuit: (1) Allen, Unit No. 5, 2000 Project; (2) Allen, Unit No. 5, 1996 Project; (3) Allen, Unit No. 4, 1996 Project; (4) Allen, Unit No. 4, 1998 Project; (5) Allen, Unit No. 2, 25a PP 31-292.) A detailed description of the work performed at each plant and unit would be lengthy and ultimately unnecessary.” However, the majority of the projects consisted 1988 Project; (6) Allen, Unit No. 1, 1989 Project; (7) Belews Creek, Unit No. 2, 1999 Project; (8) Belews Creek, Unit No. 2, 1996 Project; (9) Belews Creek, Unit No. 1, 2000 Project; (10) Buck, Unit No. 5, 1991 Project; (11) Buck, Unit No. 4, 1994 Project; (12) Buck, Unit No. 3, 1994 Project; (13) Marshall, Unit No. 4, 1990 Project; (14) Marshall, Unit No. 3, 1999 Project; (15) Marshall, Unit No. 2, 1989 Project; (16) Marshall, Unit No. 2, 1996 Project; (17) Cliffside, Unit No. 2, 1993 Project; (18) Cliffside, Unit No. 3, 1990 Project; (19) Cliffside, Unit No. 4, 1990 Project; (20) Cliffside, Unit No. 5, 1992/1995 Project; (21) Cliffside, Unit No. 1, 1993 Project; (22) Dan River, Unit No. 3, 1988 Project; (23) Allen, Unit No. 3, 1994 Project; (24) W.S. Lee, Unit No. 3, 1989-90 Project; (25) Riverbend, Unit No. 4, 1990 Project; (26) Riverbend, Unit No. 6, 1991 Project; (27) Riverbend, Unit No. 7, 1992 Project; (28) Buck, Unit No. 6, 1990 Project; and (29) Marshall, Unit No. 1, 1992 Project. 3 The only unit that warrants a detailed description of the work performed during the alleged “modification” is Buck, Unit No. 4 (“Buck 4”), which the EPA has moved for summary judgment on. The extent and scope of the Buck 4 project, however, is disputed by Duke Energy and the EPA. The EPA describes the work performed at Buck 4 as involving the replacement of the “entire boiler backpass (including the screen tubes, generating banks, and superheater) at Buck 4 (Boiler 7) with a completely redesigned configuration.” (EPA Mem. Supp. Mot. Partial Summ. J. at 7.) In replacing the entire backpass, Duke Energy installed approximately 1,070 new tubes or approximately 7,132 feet of new tubing. In addition, the EPA contends that Duke Energy “replaced all of the waterwall tubes, floor screen tubes, and roof tubes.” (/d. at 8.) This work involved 26a of replacement and/or redesign of one or more of four sets of boiler tube assemblies--economizers, portions of waterwalls, superheaters, and reheaters. (/d.) In 1984, Duke Energy placed several of the units at issue, including Buck 4, into “Extended Cold Storage” (“ECS”).* During the period of ECS, dehumidified air was circulated through the water, steam, air, and gas passages in order to protect the units. The reason behind Duke Energy’s decision to place its units in ECS is disputed. Duke Energy contends that it placed these units into ECS because it increased its system generating capacity by adding additional generating plants, which in turn led to less use of its coal-fired units.’ Duke Energy also asserts that when it placed these the installation of approximately 10,700 feet of tubing. Duke Energy asserts that its boiler backpass work did not involve the replacement of the entire backpass. According to Duke Energy, the backpass work involved “replacing tubular pressure parts rather than the heavy-walled components such as the’drums and headers.” (Duke Energy Am. Br. Opp'n Mot. Partial Summ. J. at 3.) Furthermore, Duke Energy takes exception to the EPA’s description that “all the waterwall tubes” were replaced. Duke Energy contends that the side waterwall header supply tubes were not removed and replaced. (/d. at 3-4.) * These project were: Allen, Unit Nos. 1 & 2; Buck, Unit Nos. 3, 4, & 5; Cliffside, Unit Nos. 1, 2, 3, & 4; Dan River, Unit No. 3; Riverbend, Unit Nos. 4, 6, & 7. > Beginning in the mid-1970s, Duke Energy brought online Belews Creek, Unit Nos. 1 & 2 (2200 MW of coal-fired capacity), and Oconee, Unit Nos. 1, 2 & 3 (2600 MW of nuclear capacity). During the 1981-1986 period, Duke Energy added four more nuclear units, McGuire, Unit Nos. 1 & 2, and Catawba, Unit Nos. | & 2 (4800 MW of nuclear 27a units into ECS, it made definitive plans for preserving and . conditioning these units while in ECS so that they could be returned to service when demand dictated. (Knudsen Decl. P 5 (Duke Energy Ex. 59); Kinsey Decl. P 6 (Duke Energy Ex. 69).) The EPA, however, contends that Duke Energy removed these units from service due to their advanced age and condition. William S$. Lee, Chairman of the Board and CEO of Duke Energy, testified before the South Carolina state public utility regulators in 1985 that the units placed into ECS were “no longer reliable because of their age and because their use as peaking units in the past few years had stressed the units, which originally were designed for base load use ... Historically, units of this age and condition would be retired and scrapped.” (Lee Test. at 90 (EPA Ex. 13).) Lee further explained that Duke Energy had plans to rehabilitate the units, but if it continued to operate the units in their current condition they would “simply fall apart, or damage themselves in a very serious way.” (Lee Test. at 41 (EPA Ex. 15).) Shortly after placing its units into ECS, Duke Energy developed a “Plant Modernization Program” (“PMP”). Based on information gathered during inspection of the units, Duke Energy developed plans to address a variety of maintenance, repair, and replacement needs. According to Duke Energy, the purpose for PMP was “to conduct maintenance and upgrade to selected fossil generating units so that they operate safely, reliably and cost effectively for an additional 20 years.” (Plant Modernization Project Review (Apr. 24, 1989) at 2 (EPA Ex. 23).) According to Duke Energy’s “PMP Strategy Statement,” the “extended operating life of the rehabilitated units is a cost-effective alternative to the addition of new capacity.” (Mem. from Parker to Owen, et al. (Feb. 13, 1986) (EPA Ex. 25).) capacity). 28a Any work performed at the units not placed into ECS was undertaken during regularly scheduled planned turbine outages.° Regularly scheduled outages typically occur at a unit every forty-eight to eighty-four months depending on the particular unit's condition and other system requirements. On December 22, 2000, approximately twelve years after the completion of Duke Energy’s earliest PMP project, the United States on behalf of the EPA filed the present suit against Duke Energy. The EPA contends that Duke Energy’s projects at its coal-fired units were “modifications” and thus triggered the requirements of PSD. A unit that is subject to PSD must obtain a preconstruction review and permit. If it is determined during this review that a proposed project will modify an existing unit and thereby increase the level of emissions, the operator of the unit is required to install the best available control technology for pollutants emitted by the particular unit. As noted previously, Duke Energy, the EPA, and Intervenor-Plaintiffs have all moved for summary judgment or partial summary judgment. Duke Energy seeks summary judgment dismissing all claims of the EPA and Intervenor- Plaintiffs. It argues that the EPA cannot establish that the projects undertaken at its coal-fired generating units were non-routine maintenance, repair, and replacement activities or ® These projects were: Allen, Unit No. 3, 1994 Project; Allen, Unit No. 4, 1996 & 1998 Projects; Allen Unit No. 5, 1996 & 2000 Projects; Belews Creek, Unit No. 1, 2000 Project; Belews Creek, Unit No. 2, 1996 & 1999 Projects; Buck, Unit No. 6, 1990/1991 Project; Cliffside, Unit No. 5, 1992/1995 Project; W.S. Lee, Unit No. 3, 1989/1990 Project; Marshall, Unit No. 1, 1992 Project; Marshall, Unit No. 2, 1989 & 1996 Projects; Marshall, Unit No. 3, 1999 Project; Marshall, Unit No. 4, 1990 Project. 29a that the projects caused a net emissions increase. As to the issue of whether Duke Energy’s projects were routine maintenance, repair, and replacement, Duke Energy contends that the established interpretation of what is routine “‘must be based on the evaluation of whether that type of equipment has been repaired or replaced by sources within the relevant industrial category.’” (Duke Energy Br. Supp. Mot. Summ. J. at 35 (quoting 57 Fed. Reg. 32,314, 32,326 (July 21, 1992)).) Under this standard, according to Duke Energy, its component repair and replacement projects were not modifications because they consisted of repairs and replacements that are common in the utility industry. Duke Energy similarly argues that its component repair and replacement projects were not modifications because they did not increase the units’ levels of emissions. Duke Energy contends that under the 1980 PSD regulations, a net emissions increase will result only if there is an increase in the hourly rate of emissions. It acknowledges that for purposes of PSD, emissions are measured in annual tons per year. Yet Duke Energy argues that in calculating post-project actual emissions, the regulations require that the hours and conditions of operation be held constant. Accordingly, because none of the projects increased a unit’s hourly capacity to emit pollution, there is no increase in emissions from pre-project levels. The EPA and Intervenor-Plaintiffs move for partial summary judgment on similar grounds. They, too, seek a legal determination as to the appropriate standard for determining what is routine maintenance, repair, and replacement. The EPA and Intervenor-Plaintiffs argue that the standard is not the industry or source category standard advanced by Duke Energy. Rather, they contend that whether a particular project is routine maintenance, repair, and replacement must be determined based on whether that type 30a of project is routine within the life of a generating unit. The EPA and Intervenor-Plaintiffs also request partial summary judgment that the “comprehensive renovation” at Buck 4 was a physical change that does not qualify as routine maintenance and repair. Furthermore, the EPA and Intervenor-Plaintiffs move for partial summary judgment as to Duke Energy’s defense that it did not have fair notice of the EPA’s interpretation of the PSD regulations. The EPA and Intervenor-Plaintiffs, similar to Duke Energy, also seek a legal determination as to how post-project emissions should be calculated. The EPA argues that PSD requires that the source predict annual emissions increases prior to construction. In predicting an increase in emissions, the EPA asserts, the source operator must consider the hourly rate of emissions and the increased utilization of the unit following the project. As to Buck 4 specifically, the EPA argues that because the project enabled Duke Energy to utilize a previously inoperable unit, the project resulted in a net increase in emissions. Finally, the EPA and Intervenor-Plaintiffs seek partial summary judgment that the claims for penalties and injunctive relief with respect to modifications that were completed more than five years before this suit was filed are not barred by the statute of limitations. Duke Energy previously moved for partial judgment on the pleadings arguing that such claims were barred by the statute of limitations. The court deferred ruling on Duke Energy’s motion in order to allow the record to develop more fully. Duke Energy’s motion for partial judgment on the pleadings, as well as the EPA and Intervenor-Plaintiffs’ motion for partial summary judgment, is ripe for resolution. 3la DISCUSSION 1. Standard of Review Summary judgment must be granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party bears the burden of persuasion on the relevant issues. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The non-moving party may survive a motion for summary judgment by producing “evidence from which a [fact finder] might return a verdict in [its] favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). When the motion is supported by affidavits, the non-moving party must set forth specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(e); see also Cray Communications, Inc. v. Novatel Computer Sys., Inc., 33 F.3d 390, 393-94 (4th Cir. 1994) (moving party on summary judgment motion can simply argue the absence of evidence by which the non-movant can prove its case). In considering the evidence, all reasonable inferences are to be drawn in favor of the non-moving party. Anderson, 477 U.S. at 255. However, “the mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the [fact finder] could reasonably find for the plaintiff.” Jd. at 252. In general, reviewing courts typically grant substantial deference to the EPA’s interpretation of the CAA Amendments and its implementing regulations. The reasoning behind this deferential review is that “considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer.” Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984). Deference to agency interpretation is particularly appropriate where the subject being regulated is 32a technical and complex. Aluminum Co. of Am. v. Central Lincoln Peoples’ Util. Dist., 467 U.S. 380, 390 (1984). An agency’s interpretation of its own regulations must be given " ““controlling weight unless it is plainly erroneous or inconsistent with the regulation.”” Udall v. Tallman, 380 U.S. 1, 16-17 (1965) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 413-14 (1945)). However, “this standard does not give the EPA unbridled discretion to construe the [CAA] Amendments free from judicial oversight. [The court] must consider whether the EPA’s construction comports with its statutory mandate and Congress's intent in enacting clean air legislation.” Wisconsin Elec. Power Co. v. Reilly, 893 F.2d 901, 907 (7th Cir. 1990) (“WEPCO”). II. Statutory and Regulatory Background One of the primary purposes of the CAA is to “speed up, expand, and intensify the war against air pollution in the United States with a view to assuring that the air we breathe throughout the Nation is wholesome once again.” H.R. Rep. No. 91-1146, at 1 (1970), reprinted in 1970 U.S.C.C.A.N. 5356, 5356. In order to accomplish the congressional objective of “protecting and enhancing the quality of the Nation's air resources,” 42 U.S.C. § 7401(b)(1) (1995), Congress directed the EPA to develop National Ambient Air Quality Standards (“NAAQS”) which specify the maximum allowable concentrations of air pollutants for different areas of the country. /d. § 7409. Based on the levels of pollution established by the EPA, the states were required to develop State Implementation Plans (“SIPs”) that defined source-by- source emissions limits so that each state could meet the NAAQS. Id. § 7410; Train v. Natural Res. Def. Council, Inc.., 421 U.S. 60, 66-67 (1975). Areas that meet the NAAQS for a particular pollutant are designated as “attainment” areas and areas that do not meet the NAAQS are designated “non- attainment” areas. 42 U.S.C. § 7407(d) (1995). 33a As part of the 1970 CAA Amendments, Congress required the EPA to promulgate New Source Performance Standards (“NSPS”) in order to regulate and minimize the environmental impact from the emission of air pollutants from “new sources.” The NSPS regulates hourly emission rates (expressed as kg/hr) and applies to both newly constructed sources and to “modifications” of existing facilities that create new or increased pollution. Under NSPS, Congress defined “new source” as “any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source.” /d. § 7411(a)(2) (emphasis added). Congress then defined “modification” as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.” /d. § 7411(a)(4). Due to the cost and difficulty of installing new pollution control technologies on existing sources, the EPA provided exemptions from the “modification” rule for certain activities undertaken at already operating sources. The regulations initially provided that “routine maintenance, repair, and replacement shall not be considered physical changes.” 40 C.F.R. § 60.2(h)(1) (Duke Energy Ex. 4). This standard was later clarified to mean that a modification shall not include “maintenance, repair, and replacement which the Administrator determines to be routine for a source category.” 40 C.F.R. § 60.14(e)(1) (1975) (Duke Energy Ex. 6). The regulations also provided that increases in hours of operation or production rates within the operating design capacity of a facility are not considered modifications. 40 C.F.R. § 60.2(h)(2)(ii) (1971) (Duke Energy Ex. 4); 40 C.F.R. § 60.14(e)(2), (3) (1975) (Duke Energy Ex. 6). 34a In 1977 Congress again amended the CAA by enacting a program called New Source Review (“NSR”). The NSR had provisions for the protection of areas with relatively clean air, Prevention of Significant Deterioration (“PSD”), and for areas that did not meet certain air quality standards, Non-Attainment New Source Review (“NNSR”).’ PSD was designed to ensure that the air quality of relatively unpolluted areas, i.e., attainment areas, did not decline to the minimum levels permitted by NAAQS due to increases in total annual emissions. To prevent significant deterioration of air quality, operators of regulated sources in attainment areas are required to limit emissions to a “baseline rate” and obtain a permit before constructing or modifying facilities. 42 U.S.C. § 7475(a)(1)(1995). When Congress enacted the PSD program, it incorporated by explicit reference the NSPS definition of modification into the NSR definition of construction/modtiication. Jd. § 7479(2)(C) (PSD) (“The term ‘construction’ ... includes the modification (as defined in section 7411l(a) of this title [NSPS]) of any source or facility.”); id. § 7501(4) (NNSR) (“The terms ‘modifications’ and ‘modified’ mean the same as the term ‘modification’ as used in section 7411(a)(4) of this title [NSPS].”). The PSD statutory definition incorporated not only the NSPS statutory definition of modification, but also the regulations implementing the NSPS program. A _ House-Senate Conference Committee report explained the congressional intent “to conform” the NSR definition of modification to the “usage in other parts of the Act.” 123 Cong. Rec. H11956, ’ PSD applies to emissions increases in attainment areas, while NNSR applies to emissions increases in non-attainment areas. The EPA has alleged violations of PSD because the areas of North Carolina and South Carolina where Duke Energy operates the units at issue are in attainment areas for all relevant pollutants. 35a 3665 (daily ed. Nov. 1, 1977) (Duke Energy Ex. 13). The EPA explained that “the phrase ‘usage in other parts of the Act’ most probably refers, not only to section 111(a)(4) [NSPS], but also to the EPA regulations implementing section 111 that were in effect at the time.” 49 Fed. Reg. 43,211, 43,213 (Oct. 26, 1984) (Duke Energy Ex. 14). In addition, the Director of the Stationary Source Compliance Division, Edward E. Reich, explained: The Clean Air Act provides in Section 169(1)(c) that for PSD purposes the term modification shall be defined as that term is defined in Section 111(a) of the Act relating to NSPS. EPA has interpreted this to mean that for PSD purposes Congress intended the term modification to include all exemptions included in the NSPS regulations promulgated under Section 111 of the Act prior to the date of enactment of Section 169. (Mem. from Reich to Davis (Apr. 21, 1983) at 2 (Duke Energy Ex. 16). Subsequent to the congressional enactment of NSR, the EPA promulgated regulations for PSD. The regulation at the center of the controversy between the parties is the regulation concerning the term “modification.” Under its 1980 PSD regulations, which the parties acknowledge as the controlling regulations, the EPA defined modification as “any physical change in or change in the method of operation of a major stationary source that would result in a significant net emissions increase of any pollutant subject to regulation under the Act.” 40 C.F.R. § 51.166(b)(2)(i) (1987) (Duke Energy Ex. 21). Accordingly, to trigger the PSD’s permitting requirement and the requirement to install pollution controls, two criteria must be satisfied: (1) there must be a “physical change” and (2) there must be a “significant net emissions increase.” 36a The term “physical change” has been interpreted broadly. “The most trivial activities--the replacement of leaky pipes, for example--may trigger the modification provisions if the change results in an increase in the emissions of a facility.” WEPCO, 893 F.2d at 905. The EPA promulgated under the PSD program regulatory exclusions from the definition of modification using substantially the same terms it used in the NSPS regulations. Specifically, the EPA created an exemption for “routine maintenance, repair, and replacement” (““RMRR”). 40 C.F.R. § 51.166(b)(2)(iii)(a) (1987) (Duke Energy Ex. 21). The meaning and scope to be afforded this exemption is one of the central disagreements between Duke Energy and the EPA. The issue for the court to decide is whether RMRR should be defined relative to an industrial category or to a particular unit. The EPA’s PSD relations also provided that a physical change or change in th, .ethod of operation shall not include “an increase in the hours of operation or in the production rate.” Jd § 51.166(b)(2)(iii)(f). The second criteria necessary to trigger the PSD's requirements is that the physical or operational change must cause a “significant net emissions increase.” Under the PSD regulations, a “net emissions increase” is defined as “any increase in actual emissions from a particular physical change or change in the method of operation at a stationary source.” Id. § 51.166(b)(3)(i)(a). Unlike NSPS which measures emissions increases based on an hourly rate, PSD measures emissions based on total annual emissions. The second primary issue of disagreement between the parties is the appropriate emissions test that should be employed in calculating the post-project emissions rates. Ill. Routine Maintenance, Repair, and Replacement 37a The court is presented with two different interpretations of the RMRR exemption. As described by the Eleventh Circuit, the “central disagreement between [the utility] and EPA is whether ‘routine’ should be defined relative to an industrial category or to a particular unit.” Tennessee Valley Auth. v. United States EPA, 278 F.3d 1184, 1189 n.3 (11th Cir. 2002). The EPA argues that the RMRR exemption requires “a case-by-case determination of whether the activity is routinely performed at an individual unit within the relevant industrial category, considering common-sense factors such as nature and extent, purpose, frequency, and cost,” (EPA Mem. Supp. Mot. Partial Summ. J. at 1), and that this has been the EPA's "long-standing interpretation.” (Jd. at 23.) Conversely, Duke Energy asserts that the “‘routine’ inquiry has as its ultimate purpose the determination of ® The EPA cites two recent decisions, In re Tenn. Valley Auth., CAA Docket No. 00-6, 2000 EPA App. LEXIS 25 (Envt'l Appeals Bd., U.S. EPA Sept. 15, 2000) (EPA Ex. 100), and Detroit Edison Applicability Determination (May 23, 2000) (EPA Ex. 101), to strengthen its position that the “routine at an individual unit” standard has consistently been applied. (EPA Mem. Supp. Mot. Partial Summ. J. at 22-23.) Both decisions, however, were issued following the EPA’s decision in 1999 to initiate a number of enforcement »roceedings. Further, with respect to the order issued in Jn re Tenn. Valley Auth., the objectivity of this decision has been brought into question because of the failure of the proceedings to comply with the requirements of due process. TVAv. Whitman, 2003 U.S. App. LEXIS 12830, 2003 WL 21452521 (11th Cir. June 24, 2003). The Eleventh Circuit, therefore, held that the EPA must prove the existence of a CAA violation in district court, and until that time the EPA’s decision was “legally inconsequential.” Accordingly, given the potentially self-serving nature of these decisions, they do not evidence a long-standing interpretation. 38a whether a project is routine in the industry, considering all relevant facts--e.g., nature and extent, scope, frequency, and cost.” (Duke Energy Am. Br. Opp'n Mot. Partial Summ. J. at 29.) A. Legislative intent The EPA has promulgated under its regulations an RMRR exemption since the enactment of the NSPS. 40 C.F.R. § 60.2(h)(1)(1971) (Duke Energy Ex. 4) (“Routine maintenance, repair, and replacement shall not be considered physical changes.”). This exemption was designed to achieve the congressional intent of not subjecting existing sources to the costly requirements of installing advanced pollution control devices.” Such a provision was necessary because of the expansive meaning afforded "physical change" under the definition of modification. In 1975, the EPA clarified that the RMRR provision under NSPS excluded from the definition of modification “maintenance, repair, and replacement ... routine for a source category." 40 C.F.R. § 60.14(e)(1)(1975) (Duke Energy Ex. 6); 40 Fed. Reg. 58,416, 58,419 (Dec. 16, 1975) (Duke Energy Ex. 7). Under this regulatory framework, Congress enacted the PSD program in 1977. A generating facility is subject to the ° See S. Rep. No. 91-1196, Comm. on Public Works, 91st Cong. 2d Sess. (1970), reprinted in Legal Compilation: Statutes and Legislative History, Environmental Protection Agency (Jan. 1975), at 15-16 (Duke Energy Ex. 3) (“The overriding purpose of [NSPS is] to prevent new air pollution problems, and towards that end, maximum feasible control of new sources at the time of their construction is seen by the committee as the most effective and, in the long run, the least expensive approach.”). 39a strictures of the PSD program if it undergoes “construction,” which Congress defined by explicitly incorporating the definition of “modification” under NSPS. 42 U.S.C. § 7479(2)(C (1995). In accordance with this statutory mandate, the EPA defined the term “modification” as “any physical [or operational] change ... that would result in a significant net emissions increase of any pollutant subject to regulation under the Act.” 40 C.F.R. § 51.166(b)(2)(i)(1987) (Duke Energy Ex. 21). Also consistent with the NSPS definition of modification, the EPA promulgated a provision excluding from the definition of “modification” projects undertaken at a facility that are “routine maintenance, repair, and replacement.” Jd. § 51.166(b){2)(iii) (a). In order to give the PSD RMRR exemption its proper scope, this provision must be defined according to what is routine maintenance, repair, and replacement within the relevant source category.” This construction is compelled by the statutory mandate of the PSD program and congressional intent. When Congress enacted the NSR program, it specifically stated its intent to incorporate the NSPS “usage” ‘0 The court in United States v. Southern Ind. Gas & Elec. Co., 245 F. Supp. 2d 994, 1007-10 (S.D. Ind. 2003) (“SIGECO”), granted summary judgment for the EPA as to SIGECO's fair notice defense. As to the correctness of this determination, this court expresses no opinion. The SIGECO court also concluded that the EPA’s position that RMRR should be defined relative to an individual unit was reasonable and therefore entitled to deference. The court in United States v. Ohio Edison Co., 276 F. Supp. 2d 829, 2003 U.S. Dist. LEXIS 13799, 2003 WL 21910738, at *24-26 (Aug. 7, 2003 S.D. Ohio), arrived at a similar conclusion. As to that determination, this court, for the reasons contained herein, respectfully disagrees. 40a of the term “modification” into PSD, including the 1975 NSPS exclusion for maintenance, repair, and replacement projects that are routine for a source category. 42 U.S.C. § 7479(2)(C)(1995) (“The term ‘construction’ ... includes the modification (as defined in [NSPS]) of any source or facility.”); 123 Cong. Rec. H11956, 3665 (daily ed. Nov. 1, 1977) (Duke Energy Ex. 13) (explaining Congress’s intent “to conform” NSR definition of modification to the “usage” in NSPS). The EPA confirmed this congressional design. (Duke Energy Ex. 16 at 2) (“EPA has interpreted ... that for PSD purposes Congress intended the term modification to include all exemptions included in the NSPS regulations promulgated ... ptior to the date of [PSD’s} enactment ....”).'' Therefore, to be consistent with the NSPS “usage” of RMRR, the RMRR provision under PSD must be applied to cover those projects '! Walter C. Barber, the former Director of EPA’s Office of Air Quality Planning and Standards (““OAQPS”), explained: OAOQPS carried over into the PSD and NNSR regulations the general mindset regarding the magnitude and scale needed to trigger a modification developed under the NSPS program and the specific NSPS definitional terms of “modification,” “routine maintenance repair and replacement,” and “increased hours of operation” and our interpretations thereof. Furthermore, as used in the PSD and NNSR programs, OAQPS gave these terms the same meaning and intent as in the NSPS program and believed that the same order of magnitude and scale needed to trigger NSPS would apply to the PSD and NNSR programs. Barber Expert Report at 8 (Duke Energy Ex. 10). 4la that are routine for a source category. See INS v. Cardoza- Fonseca, 480 U.S. 421, 448 (1987) (“If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.’” (quoting Chevron U.S.A. 467 U.S. at 843 n.9)). The EPA acknowledged this standard for the PSD’s RMRR exemption in 1992 by: clarifying that the determination of whether th. repair or replacement of a particular item of equipment is “routine” under the NSR regulations, while made on a case-by-case basis, must be based on the evaluation of whether that type of equipment has been repaired or replaced by sources within the relevant industrial category. 57 Fed. Reg. 32,314, 32,326 (July 21, 1992).'2 The EPA specifically referred to “electric utilities’ as a “source category.” /d. at 32,317. '2 This “clarification” was not a pronouncement of a new rule. Indeed, the EPA stated that commentators had requested that the EPA “define or provide guidance on ‘routine repair, replacement and maintenance’ activities,” but the rules the EPA was promulgating “did not deal with this aspect of the regulations.” 57 Fed. Reg. at 32,326. The EPA recognized, however, that the RMRR exemption could potentially affect the rules it was issuing, and therefore stated its “plans to issue guidance on this subject as part of a NSR regulatory update package which EPA presently intends to propose by early summer.” /d. The EPA went on to state that “in the meantime” it would clarify the appropriate standard for determining RMRR. /d The EPA, nonetheless, now argues that what is routine within the “relevant industrial category” 42a B. WEPCO applicability determination Prior to this affirmation of the routine in the industrial category standard for RMRR, the EPA issued an NSPS and PSD applicability determination for a proposed project at Wisconsin Electric Power Company's ("WEPCO") Port Washington facility. The EPA explained that "in determining whether proposed work at an existing facility is 'routine,' EPA makes a case-by-case determination by weighing the nature, extent, purpose, frequency, and cost of the work, as well as other relevant factors, to arrive at a common-sense finding." (Mem. from Clay to Kee (Sept. 9, 1988) at 3 (EPA Ex. 73).) The EPA intended this determination, which was set forth in a memorandum prepared by Don R. Clay, Acting Assistant Administrator for Air and Radiation, to be used not only by WEPCO, but also by other utilities which might seek to claim the RMRR exemption. (/d. at 2.) WEPCO proposed a project at its five-unit Port Washington Power Plant that contemplated replacing rear steam drums, each of which measured 60 feet in length, 50.5 inches in diameter, and 5.25 inches in thickness; plate-type air heaters; and other components. (/d. at 4.) The five units at the Port Washington plant were originally rated at "80 megawatts electrical output capacity," but due to the deterioration of the physical plant, the units had operated at a maximum achievable capacity less than their original design capacity. (/d. at 2; Mem. from Kee to Emison (Mar. 25, 1988) (Duke Energy Ex. 31) (that units had been derated from their design is inapplicable to PSD. It would be a _ nonsensical interpretation of the EPA’s 1992 clarification of the PSD RMRR exemption standard to assume that the EPA was clarifying a standard that did not exist under the exemption in the first instance. 43a NIELS Eo BARONS SPR RRE SIE O O capacity of 80 MW each to operating capacities ranging from 49 MW to 75 MW).) The EPA indicated that following the proposed project "plantwide capacity would increase about 40 percent above current levels to 400 megawatts." (Duke Energy Ex. 31 at 2.) Given this information, the EPA determined that the "work proposed at Port Washington [was] far from being a regular, customary, or standard undertaking." (EPA Ex. 73 at 3.) "Rather, [it was] a highly unusual, if not unprecedented, and costly project." (/d. at 4.). In subsequent correspondence with WEPCO, the EPA further indicated that based on an informal survey, it had detected "no examples of steam drum replacement at aged electric generating facilities." (Letter from Thomas to Boston (Oct. 14, 1988) at 4 (Duke Energy Ex. 29).) Similarly, in response to WEPCO's contention that forty other units had replaced similar air heater elements, the EPA concluded that "no units containing plate elements such as those on units 1-4 at Port Washington" had ever replaced air heaters. (Letter from Clay to Boston (Feb. 15, 1989) at 7 (Duke Energy Ex. 30).) Accordingly, the EPA concluded that WEPCO's proposed project was not RMRR and the projects were therefore subject to NSPS and PSD. WEPCO appealed the EPA's determination to the Seventh Circuit Court of Appeals. The court affirmed the EPA's determination that the project proposed at the Port Washington plant was not RMRR. WEPCO, 893 F.2d at 910- 13. The court agreed with the EPA that "far from being routine, the Port Washington project apparently was unprecedented: "WEPCO did not identify, and EPA did not find, even a single instance of renovation work at any electric utility generating station that approached the Port Washington life extension project in nature, scope or extent." /d. at 911 (quoting EPA Br. at 44). Although the record was silent, the court "surmised" that the unprecedented character of the Port Washington project "may reflect historical practice in the 44a electric utility industry" to replace facilities once they have reached their useful life. Jd. Among its arguments before the Seventh Circuit, WEPCO argued, as it had before the EPA, that its proposed replacement of air heaters paralleled similar replacements of air heaters at forty other plants. /d. In affirming the EPA's determination that the forty other air heater replacements were dissimilar, the court noted that "the plate-type air heaters at issue in the Port Washington project must be replaced in whole" while the air heaters at the forty other units, which contained tubular type heaters, "permitt{ed] the replacement of the heat transfer surface without requiring the removal of the entire unit." /d. The EPA and the Seventh Circuit both confirmed the relevance of industry practice under the RMRR analysis. The EPA gave considerable attention te WEPCO's contention that the types of replacements it contemplated undertaking were "routine" because others in the industry had undertaken similar projects. While in the end the EPA disagreed, its disagreement was with WEPCO's characterization of the projects undertaken elsewhere, not with WEPCO's position that what other utilities were doing should inform the EPA's anaiysis. For example, in the Clay Memorandum, the EPA stated that the "work called for under the project was rarely, if ever, performed." (EPA Ex. 73 at 5.) This conclusion was confirmed by WEPCO which stated: "Generally, the renovation work items included in this application are those that would normally occur only once or twice during a unit's expected life cycle." (/d.) If the relevant inquiry under the RMRR exemption is whether a particular activity is "routinely performed at an individual unit" as the EPA now asserts, the EPA in WEPCO could have simply concluded its RMRR inquiry with the admission by WEPCO that the proposed project would occur only once or twice during a unit's expected life cycle 45a The EPA, however, requested that WEPCO “submit information regarding the frequency of replacement of steam drums, the largest category of work item called for under the project." (Id.) In response to this request, "WEPCO reported that to date, no steam drums have ever been replaced at any of its coal-fired electrical generating facilities." (/Jd.) WEPCO was able to provide examples of other "headers" comparable in design pressure and function, but the EPA distinguished these headers on the ground that they were not comparable in size. (Id. at 5-6 (stating that "the largest of these [headers] was 16 inches in diameter, and EPA does not believe that they are comparable in diameter, wall thickness, function, or importance to the rear steam drums at Port Washington"). The characteristic used to _ differentiate these "header" replacements from the rear steam drum header replacements proposed by WEPCO was not the extent to which the other headers had or had not been replaced, but rather was the size of the header and presumably the extent and cost of the work required to replace them. In addition, WEPCO argued to the EPA that its rear steam drum replacements were routine, principally relying on its identification of four other steam drum replacement projects at other facilities. The EPA rejected WEPCO's reliance on these steam drum projects, finding that they were not "sufficiently similar to the Port Washington project." (Duke Energy Ex. 29 at 3.) The EPA distinguished several of the projects from WEPCO's project primarily on the ground that they did not involve utility boilers, i.e., they were not in the same source category. (/d. at 4.) Moreover, the EPA indicated that the results of its informal survey revealed "no examples of steam drum replacement at aged electric generating facilities." (/d.) The fact that no other utilities replaced steam drums can be relevant only if the appropriate inquiry is what is routine within the industry. Otherwise, there would be no need for the EPA to conduct an informal survey 46a given that steam drums are replaced only once or twice in the life of a generating unit. The EPA attempts to bolster its current position that the EPA did not apply a routine in the industry standard in WEPCO by citing the EPA's conclusion as to the forty units that WEPCO alleged engaged in similar air heater replacement projects. The EPA concluded that the projects performed at the forty units identified by WEPCO involved a different type of air heater and were therefore "too dissimilar to the plate-type elements in use at units 1-4 to support WEPCO's contention that the work in question is routine." (Duke Energy Ex. 30 at 7.) This conclusion was affirmed by the Seventh Circuit. WEPCO, 893 F.2d at 911. The EPA continued, however, and stated: Further, even the list of air heater replacement work submitted by WEPCO did not establish this as routine repair work. Those 40 units comprise only a small fraction of total operating utility units, and even at the 40 units, air heater repair or replacement appears to have been a one-time occurrence, not routine repair. (Duke Energy Ex. 30 at 7 n.6.) Contrary to the EPA's position, this reference further supports the industry standard for RMRR. Even if the replacement projects at these forty units were similar to the WEPCO project, the EPA determined that a particular project performed at forty units, which "comprise only a small fraction of total operating utility units," is not representative enough of the industry to establish that the project was routine. Furthermore, the EPA concluded in the alternative that this type of project could not be considered routine for the industry because these forty units did not undertake this type of project with enough frequency. If the air heater replacements were frequently performed at an individual unit and therefore "routine repair," 47a by implication air heater replacements would be “routine repair" for the industry. The EPA's continual reference to other projects within the utility industry confirms Congress's intent to define RMRR under PSD according to the relevant source category. The EPA, however, continues to argue that the reference in the WEPCO applicability determination to the fact that the proposed replacements would be performed only once or twice during the life of a unit reveals the appropriate standard for RMRR to be routine at an individual unit and that its interpretation is entitled to deference. To accept this proposition would require that one completely ignore all references in the WEPCO determination to what was done in the industry Moreover, "an agency's interpretation of a statute or regulation that conflicts with a prior interpretation is entitled to considerably less deference than a consistently held agency view.” Miller v. AT & T Corp., 250 F.3d 820, 832 (4th Cir. 2001) (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515, 129 L. Ed. 2d 405, 114 S. Ct. 2381 (1994)). The EPA further asserts that its position is supported by the Seventh Circuit's decision, arguing that the court was “particularly persuaded" by the fact that the proposed activity occurred so infrequently at the particular units. (EPA's Mem. Supp. Mot. Partial Summ. J. at 22.) Duke Energy rightly points out, however, that the “opinion itself ... ascribes no overriding importance to that fact." (Duke Energy's Am. Br. Opp'n Mot. Partial Summ. J. at 17.) Indeed, the next sentence of the opinion provides: "WEPCO reported that it had never previously replaced a steam drum or ‘header’ of comparable size at any of its coal-fired electrical generating facilities." WEPCO, 893 F.2d at 912. The court's recognition of both the frequency of a project at an individual unit and in the industry confirms the relevant scope of the RMRR inquiry to be what is routine within the industry. 48a The only way in which both experience at a unit and in the industry at large can be relevant is under a routine within the industry standard. Projects that are repeatedly performed at a particular unit will be routine in the industry, as will projects performed at a number of units within the industry. If the relevant inquiry were that proposed by the EPA, namely that RMRR applies only to “activity routinely performed at an individual unit," consideration of what occurred within the utility industry is irrelevant. The EPA in WEPCO could have simply dismissed WEPCO's attempt to support the routineness of its proposed project by reference to other projects, as it does with Duke Energy here, and relied primarily on WEPCO's admission that the proposed project would be performed only once or twice in the life of a unit. Accordingly, applying its multi-factored test, the EPA could have determined that the project did not qualify as RMRR. Yet even if the EPA were to consider what occurred within the industry, the relevant inquiry under a “routine for an individual unit" standard would be the number of times a particular project is undertaken at a unit. The focus of the EPA's effort at distinguishing the projects identified by WEPCO from the Port Washington project, however, was on the type of equipment replaced, not the frequency with which it was replaced. The EPA's “routine for an _ individual unit" interpretation of the WEPCO determination is certainly consistent with its analysis of the Buck 4 project. Nowhere in its discussion of the relevant factors as applied to this unit does the EPA consider what other utilities have done or are doing. This aspect of the WEPCO analysis has completely disappeared. What has occurred within the industry, however, is relevant and must inform the routine inquiry. This is revealed by the EPA's careful consideration of the other projects identified by WEPCO. This is also revealed by Congress's intent to define the application of the PSD 49a program according to the definitions and exemptions provided under the NSPS program. The EPA confirmed this intent in 1992 and must now apply the law as intended by Congress and as previously applied. C. EPA's post-WEPCO statements The "routine in the industry" standard is also supported by the EPA's statements that the WEPCO determination would not affect utility life extension projects.'? In December ‘> The EPA was aware of the utility industry practice of engaging in life extension projects as early as the 1980s. For example, EPA inspection reports from the 1980s indicate that projects were being performed that involved "major work aimed at upgrading and extending the operating life of [the] boilers" at an "estimated ... cost of $ 50 million." (Inspection Report of Riverside Generating Station (Oct. 18, 1985) (Duke Energy Ex. 78).) Another report stated that a unit was out for a "13 week life extension major overhaul, estimated to cost approximately $ 15 million." (Inspection Report of Beckjord Generating Station (Mar. 14, 1988) (Duke Energy Ex. 78).) Furthermore, a 1989 EPA-directed study designed to assess future utility air emission trends assumed that existing coal- fired power plants would continue to operate at original capacity for fifty-five to sixty-five years, being "refurbished" around age thirty. (1989 EPA Base Case Forecasts, App. C (Duke Energy Ex. 40); Letter from Schweers to Beck (July 26, 1989) (Duke Energy Ex. 41).) In March 1986, three EPA policy analysts published an article in which they listed ten "life extension" projects of which they were aware, including Duke Energy's PMP projects at the Dan River and Allen Plants. (James DeMocker, Judith Greenwald, Paul Schwengels, Extended Lifetimes for Coal-Fired Power Plants: Effect Upon Air Quality, Pub. Util. Fortnightly 30, Mar. 20, 1986, at 32-33 (Duke Energy Ex. 79).) That same year, an 50a 1988, the Chairman of the House Subcommittee on Oversight and Investigations, Congressman John Dingell, informed the EPA Administrator, Lee Thomas, that his subcommittee had requested the Government Accounting Office ("GAO") to prepare a report on utility life extension issues. (Letter from Dingell to Thomas (Dec. 21, 1988) (Duke Energy Ex. 88).) The GAO issued its report in September 1990, stating that "according to EPA policy officials, WEPCO’'s life extension project is not typical of the majority of utilities’ life extension projects and concerns that the agency will broadly apply the ruling it applied to WEPCO's project are unfounded." (GAO 1990 Report at 30-31 (Duke Energy Ex. 42).) “Lending evidence to the officials’ statements,” the report noted, "EPA's 1989 emission forecast assumed that the WEPCO decision would not result in a significant number of additional power plants having to comply with the NSPS and the PSD program requirements."'* (Jd. at 31.) EPA official attended an Electric Power Research Institute ("EPRI") conference on "Life Extension and Assessment of Fossil Plants." (U.S. Resp. to Def.'s Req. for Admis. No. 223 (Excerpt at Duke Energy Ex. 81).) EPRI published the proceedings of the conference in an |,100-page publication in which utilities, including Duke Energy, presented detailed descriptions of many “life extension" projects. (Conference Proceedings: Life Extension and Assessment of Fossil Power Plants, EPRI Pub. CS-5208 (1987) (Excerpt at Duke Energy Ex. 82).) '* Before the report was issued, GAO sent a fact sheet about life extension listing most of the information to be included in the report and asked for the EPA's comments. (See Mem. from Tiber to Kete et al. (Apr. 10, 1990) (Duke Energy Ex. 93).) The fact sheet was widely distributed among the personnel in the Office of Policy, Planning and Evaluation. (See id.) Sla Chairman Dingell formally transmitted the report to the EPA and asked the Administrator about WEPCO and the GAO report's assessment. (Letter from Dingell to Watkins et al. (Oct. 9, 1990) (Duke Energy Ex. 94).) Assistant Administrator William Rosenberg responded for the EPA, stating that "as indicated in the GAO report, it is expected that most utility projects will not be similar to the WEPCO situation" and that the "[WEPCO] ruling is not expected to significantly affect power plant life extension projects." (Letter from Rosenberg to Dingell (June 19, 1991) at 5-6 (Duke Energy Ex. 44).) The EPA's position that life extension projects would not be significantly affected was again acknowledged in 1995. The EPA's Assistant Administrator for Air and Radiation stated in response to an industry proposal to add a “restoration” exemption to the NSR programs that the EPA's position was that the "routine maintenance exclusion already included in the existing NSR regulations ... has the effect of excluding ‘routine restorations” from the requirements of the NSR programs. ("EPA's Response to Issues Raised by Industry on Clean Air Act Implementation Reform,” attached to Letter from Nichols to Lewis (May 31, 1995) at 19 (Duke Energy Ex. 46).) The EPA's position on WEPCO's life extension project and life extension projects in general confirms the understanding that projects which are routine in the industry qualify as RMRR. To reconcile the EPA's previously stated position with its litigation position that RMRR applies only to routine activities performed at an individual unit, one must assume that a generating unit routinely and repetitively undergoes life extension projects. This assumption defies common sense. Further, this is an assumption the EPA 52a explicitly rejected when it assumed for the purpose of assessing future utility air emission trends that coal-fired generating utilities would undergo life extension refurbishment once around age thirty. (Duke Energy Ex. 40 at App. C.) Through the EPA's statements in the Federal Register, its statements to the regulated community and Congress, and its conduct for at least two decades the EPA has established an interpretation of RMRR under which routine is judged by reference to whether a particular activity is routine in the industry. See Shell Offshore Inc. v. Babbitt, 238 F.3d 622, 629 (Sth Cir. 2001) ("existing practice” evidence of current interpretation of regulation). Accordingly, “once an agency gives its regulation an interpretation, it can only change that interpretation as it would formally modify the regulation itself: through the process of notice and comment rulemaking.” Alaska Prof'l Hunters Ass'n v. FAA, 177 F.3d 1030, 1033-34 (D.C. Cir. 1999) (quoting Paralyzed Veterans of Am. v. D.C. Arena, 117 F.3d 579, 586 (D.C. Cir. 1997)). D. Application of the WEPCO multi-factor test The EPA in the WEPCO applicability determination identified a multi-factored test that must be used to evaluate whether a proposed project qualifies as RMRR. The EPA characterizes Duke Energy's RMRR test as providing that "if a project has ever been done before, it is ‘routine maintenance” and that "if a project has ever been performed by another utility, it is exempt." (EPA Reply Br. Supp. Mot. Partial Summ. J. at 4.) The WEPCO multi-factored test under this characterization of the approach advocated by Duke Energy would collapse the WEPCO test into a single inquiry-- has this type of project been performed before. Because the WEPCO multi-factored test applies and is entitled to deference, the determination of RMRR cannot tum exclusively on whether a particular replacement project has 53a ever occurred in the industry. If this were dispositive, it would render the PSD program a nullity. The frequency with which a component is repaired or replaced within the industry, however, cannot be ignored. Nor can the frequency with which a component is repaired or replaced at a particular unit be conclusive. Rather, the WEPCO factors--nature and extent, purpose, frequency, and cost--must be analyzed and applied in reference to the source or industry category. For example, if a proposed project were estimated to cost $50 million dollars, that figure must be analyzed against what other projects within the industry have cost. If projects within the industry routinely cost $20 million, the $50 million cost of the proposed project may be one consideration in support of a finding that the project is not RMRR. This inquiry must be performed for each WEPCO factor. The EPA has moved for partial summary judgment on the Buck 4 project on the basis that the work performed was not RMRR for that particular unit. At this stage in the litigation, the court cannot conclude that there is no genuine issue of material fact as to whether the project at Buck 4 was non-RMRR. Insufficient evidence has been provided regarding whether the project undertaken at Buck 4, given the specific nature and extent, purpose, frequency, and cost of the work, is routine in the electrical utility industry. The EPA applied the WEPCO factors to Buck 4 in arriving at its determination that the Buck 4 project does not qualify as RMRR. That analysis, however, was focused only on Buck 4. Consequently, a further analysis of the WEPCO factors must be performed in order to characterize the project at Buck 4. Once a case-specific analysis has been performed, it must be determined whether a project of that character is routine or not routine in the industry. Duke Energy moves for summary judgment as to all its units, contending that the projects at these units were RMRR. Duke Energy, however, has not presented sufficient evidence to persuade the court that no reasonable trier of fact could conclude otherwise. Duke Energy has presented the reports of its experts who conclude that Duke Energy's projects involved RMRR. (Tuppeny Expert Report (Duke Energy Ex. 62); Bishop Expert Report (Duke Energy Ex. 64).) These reports provide no specific information, however, as to the number of units within the industry that have engaged in similar work, whether the costs of Duke Energy's projects were comparable to the costs of other similar industry projects, etc. The EPA's expert did concede to Duke Energy that other utilities within the utility industry were performing work similar to that performed by Duke Energy. (Koppe Dep. at 63 (Duke Energy Ex. 61).) This alone is not sufficient to establish RMRR. If it were, the utility industry would be the ultimate authority on what is and is not permissible. Because there are factual issues which remain for trial, it is appropriate that the court provide the parties with guidance as to who bears the burden of proving whether Duke Energy's projects qualify as RMRR. As a general proposition, the party claiming the benefit of a statutory or regulatory exception bears the burden of proof. See United States v. First City Nat'l Bank of Houston, 386 U.S. 361, 366 (1967); United States v. Moore, 613 F.2d 1029, 1044-45 (D.C. Cir. 1979). This general proposition is just that; it is not dispositive. Rather, it is merely an interpretive aid to be used by the court in evaluating and allocating burdens of proof. See United States v. McArthur, 108 F.3d 1350, 1354 (11th Cir. 1997) (characterizing rule as "merely [an] interpretative aid[]" to be considered along with “other indications of legislative will evident in the statute"). One court has expressed its view that the issue should be approached by drawing a distinction between an exception to a statutory prohibition and an 55a exclusion from a statutory definition. EEOC v. Chicago Club, 86 F.3d 1423, 1429-31 (7th Cir. 1996) (stating that there is an "important distinction between an exception to the prohibition of a statute and an exclusion from the definition of entities covered by [the] statute"). The court believes this approach to be useful as it allows for the consideration of legislative intent. The requirements of PSD are triggered by any physical change that results in an increase in emissions. 40 C.F.R. § 51.166(b)(2)(i) (1987) (Duke Energy Ex. 21). The EPA has defined physical change expansively, such as the simple repair of a leaky pipe. WEPCO, 893 F.2d at 905; 57 Fed. Reg. 32,314, 32,316 (July 21, 1992) (stating that the EPA has “always recognized" that the definition of physical change could "encompass the most mundane activities at an industrial facility (even the repair or replacement of a leaky pipe)"). The EPA's burden of proving a "physical change," therefore, is quite easy to satisfy. The EPA has also recognized, however, "that Congress obviously did not intend to make every activity at a source subject to new source requirements" and therefore “defined ‘modification’ in the NSPS and NSR regulations to include common-sense exclusions from the ‘physical ... change’ component of the definition." 57 Fed. Reg. at 32,316. For example, both NSPS and PSD regulations "contain similar exclusions for routine maintenance, repair, and replacement."'* Jd. Accordingly, the 'S This exclusionary view is consistent with the EPA's historic understanding of the RMRR exemption. In the 1980 PSD regulations, the EPA stated, within a section entitled "Final Definitions of 'Major Modification’ and ‘Net Emissions Increase," that the statutory phrase “physical change’ ... [did] not encompass certain specific types of events," including "routine maintenance, repair and replacement." 45 Fed. Reg. 52,676, 52,698 (Aug. 7, 1980) (Duke Energy Ex. 22). 56a 1980 PSD regulations provide that "[a] physical change ... shall not include ... routine maintenance, repair, and replacement.” 40 C.F.R. § 51.166(b)(2)(iii) (a) (1987) (Duke Energy Ex. 21). In light of the legislative intent not to include in the PSD requirements every activity and the EPA's exclusion of RMRR from the definition of physical change, the EPA should bear the burden of proving that Duke Energy's projects do not fall within this exemption. See Chicago Club, 86 F.3d at 1430-31 (explaining that where the "exclusion is incorporated in the definition" the defendant should not bear the burden of proving the exclusions application). To place the burden on Duke Energy would be in effect to sanction an almost de facto presumption of a PSD violation whenever a utility performs any type of work. This is especially true if the EPA applied the actual-to-potential emissions test, which always results in a net emissions increase, given the trivial showing necessary to prove a “physical change”.'° Congress, however, did not provide a presumption or anything approaching a presumption. The elements of a PSD violation, therefore, entail more than proving a physical change, which is no burden at all. It entails a showing that a utility engaged in a non-routine physical change that resulted in an increase in emissions. The EPA should appropri-tely bear the burden of making this showing at trial. '© The EPA elected not to seek application of this test, although it did se not based on the validity of its position but for other considerations unknown to the court. See infra n.17. S7a IV. Net Emissions Increase Like the exemption for RMRR, the parties have presented two competing methods for quantifying emissions increases, both of which presumably stem from the 1980 PSD regulations.'’ The EPA advances as the correct method the "actual-to-projected-actual" test. Under this test, a source must predict a project's impact on hourly emissions rates and hours and rates of production, i.e., capacity utilization. Duke Energy argues that the only method that can be applied to its projects is the “actual-to-actual" test. It contends that this is the test provided for under the 1980 regulations and that the test requires a comparison of pre-project actual emissions and future “actual” emissions, assuming constant hours and conditions of operation. The court finds, based on the PSD rules, the contemporaneous interpretations of the PSD rules, and the statutory language incorporating the NSPS concept of modification into PSD, post-project emissions must be calculated on an annual basis, measuring emissions in tons per year, and in calculating post-project emissions levels the '’ The EPA in its briefing argued that a third test, the “actual- to-potential" test should apply to Duke Energy's units. (EPA Mem. Supp. Mot. Partial Summ J. at 33-35.) Under the actual-to-potential test, the EPA assumes that a unit will operate at its maximum hourly rate of emissions and will do so continuously. Because no unit operates under these conditions, an emissions increase will always result. During the summary judgment hearing on July 18, 2003, the EPA indicated that it would not seek application of the actual-to- potential test but would rather pursue its contention that the emissions test under PSD requires consideration of both increased hourly rates and utilization. Accordingly, the court will not address the potential application of the actual-to- potential test. 58a hours and conditions of operation must be held constant. Accordingly, a net emissions increase can result only from an increase in the hourly rate of emissions. A. Plain language of increased hours exclusion The permitting and pollution control requirements of PSD are triggered by a non-routine physical change at a source that results in a "significant net emissions increase." 40 C.F.R. § 51.166(b)(2)(i)(1987) (Duke Energy Ex. 21). In order to prove a “net emissions increase," the EPA must show an “increase in actual emissions from a particular physical change or change in the method of operation at a stationary source." /d. § 51.166(b)(3)(i)(a). For units that have begun normal operations, such as the units at issue in the case at bar, "actual emissions" is defined according to a pre-project (or baseline) period that is "representative of normal source operation." Jd. § 51.166(b)(21)(ii).'* Thus, a comparison between the pre-project levels of emissions and post-project levels of emissions is required to determine whether there has been a net emissions increase above the baseline levels. The key to this comparison is how to calculate the post- project emissions levels. Because an increase in emissions must result from a "physical [or operational] change," which by definition excludes "an increase in the hours of operation or in the production rate," id. § 51.166(b)(2)(iii)(f), post- project emissions levels must be calculated assuming the same pre-project "representative" conditions of operation, i.e., '8 “For any emissions unit which has not begun normal operations ... actual emissions shall equal the potential to emit of the unit ...." 40 C.F.R. § 51.166(b)(21)(iv) (1987) (Duke Energy Ex. 21). Neither party seeks to apply this standard to the units at issue. 59a hours and rates of production. Under the 1980 PSD regulations, therefore, only if the project increases the hourly rate of emissions will there be an annual emissions increase. The EPA asserts that the increased hours exclusion applies only to exclude increased utilization where the ~ jncreased utilization is not associated with a construction project. Thus, whenever there is an increase in utilization coupled with a physical change, any increase in hours of operation and production rates may be considered in the emissions calculus. Such a limitation on-the application of this exclusion, however, is not provided for in the plain text of the regulations. Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999). The only limitation on the increased hours exemption provided for in the regulations is that any increase in hours or rates cannot otherwise be prohibited by a federally enforceable permit.'? 40 C.F.R. § 51.166(b)(2)(iii)(f) (1987) (Duke Energy Ex. 21). Nevertheless, the EPA contends that its interpretation of this exemption is reasonable and therefore entitled to deference. The court, however, cannot simply defer to the EPA's interpretation when that interpretation imposes an additional condition on a regulatory exemption. See Christensen v. Harris County, 529 U.S. 576, 588 (2000) ("To defer to the agency's position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation."). B. EPA's historic interpretation of increased hours exclusion The court cannot defer to the EPA's interpretation when it is clearly contrary to earlier interpretations. '9 It is undisputed that Duke Energy's units are not subject to permit limitations on hours or rates of production. 60a Immediately after the promulgation of the PSD regulations in 1980, the EPA's Director of the Division of Stationary Source Enforcement ("DSSE"), Edward E. Reich, confirmed in two separate applicability determinations that the requirements of PSD would be implicated only by an increase in the hourly rate of emissions. In a June 24, 1981, applicability determination, Reich wrote that "PSD applicability [at a previously operating source] is determined by evaluating any change in the [hourly] emissions rates caused by" the physical or operational change being examined. (Letter from Reich to Gill (June 24, 1981) (Duke Energy Ex. 23).) Because the available data indicated that there would be no increase in the hourly rate of emissions following the contemplated change, Reich concluded that “actual emissions could increase only if there [was] an increase in the production rate or hours of operation, both of which are specifically exempt from PSD review." (/d.) This determination reconfirmed an earlier PSD applicability determination in which Reich stated that increased hours of operation, even when coupled with a physical or operational change, would not be considered a modification. (Mem. from Reich to Whitmore (Jan. 22, 1981) (Duke Energy Ex. 24).) Thus, absent an increase in the maximum hourly rate of emissions, the mandates of PSD are not implicated. Once an agency issues a determination or ruling, it “must either follow its own precedents or explain why it departs from them.” Puerto Rican Cement Co. v. United States EPA, 889 F.2d 292, 298 (ist Cir. 1989) (quoting Shaw's Supermarkets, Inc. v. NLRB, 884 F.2d 34, 36 (1st Cir. 1989)). The EPA attempts to explain why it has not followed its precedent by dismissing these determinations as “erroneous” and mere "dicta." Reich as the Director of the DSSE, however, was not a low-level employee from an irrelevant division opining as to what he believed the appropriate interpretation of the EPA regulations should be. Rather, he was the head of the division at the EPA responsible 6la for "providing guidance for interpretations which address the implementation of [the PSD] regulations." (Mem. from Reich to Devine (Feb. 13, 1978) (Duke Energy Ex. 143).) "[EPA] policy required that DSSE... make the final recommendation for interpretation of these requirements." (/d.) Accordingly, these contemporaneous interpretations provide compelling evidence of the rules' original meaning and cannot simply be ignored out of blind deference to the EPA's current interpretation. Ohio Dep't of Human Servs. v. United States Dep't of HHS, 862 F.2d 1228, 1234-35 (6th Cir. 1988). C. Legislative intent The interpretation that requires an increase in the hourly emissions rate and the exclusion of any increase in the hours of operation is not only consistent with the plain language of the regulations and the EPA's contemporaneous interpretations, but is also consistent with the NSPS definition of “modification” which was incorporated by explicit reference into PSD.”” The PSD program provides that "no major emitting facility on which construction is commenced ... May be constructed in any area to which this part applies unless--(1) a permit has been issued." 42 U.S.C. § 7475(a)(1) (1995) (emphasis added). The term "construction" is defined to “include[] the modification (as defined in section 741 1(a) 20 See 123 Cong. Rec. H11956, 3665 (daily ed. Nov. 1, 1977) (Duke Energy Ex. 13) (explaining that Congress intended "to conform" the NSR definition of "modification" to the “usage in other parts of the Act," namely NSPS). EPA interpreted this reference to "usage" to "mean that for PSD purposes Congress intended the term modification to include all exemptions included in the NSPS regulations promulgated ... prior to the date of [PSD's] enactment." (Duke Energy Ex. 16). 62a of this title [NSPS]) of any source or facility." Jd. § 7479(2)(C). An NSPS modification requires a physical or operational change and an increase in the unit's maximum hourly rate of emissions. /d. § 7411(a)(4); 40 C.F.R. § 60.14(a) (1975) (Duke Energy Ex. 6). Thus, in order to undergo "construction" as defined in PSD, an existing source must also undergo a "modification" as defined in NSPS,” ice., to undergo PSD construction a physical change must result in an increase in the hourly rate of emissions. Under the emissions standard advanced by the EPA under the 1980 regulations, however, a physical change at an existing source that does not increase the source's hourly emissions rate, thereby implicating NSPS, could nonetheless trigger PSD based on a projected increase in hours of operation. Accordingly, an existing source would be considered modified under PSD even in the absence of an NSPS modification at that source. This interpretation of the regulations is inconsistent with the congressional design of defining PSD construction in terms of NSPS modification and should therefore be accorded little deference. See Stinson v. United States, 508 U.S. 36, 45 (1993) (stating that no weight 21 In 1975, the EPA revised the NSPS regulations to clarify that the modification definition applied to an increase "in emissions rate," "expressed as kg/hr." 40 Fed. Reg. 58,416, 58,419 (Dec. 16, 1975) (Duke Energy Ex. 7). The EPA explained that the unit of measurement would clarify that the modification rule would be sensitive to "increased production capacity and to the overall increase in total emissions to the atmosphere," i.e., to new capacity to emit pollution, while “automatically allowing increases in operating hours as intended by one of the existing exemptions under 40 CFR 60.2(h)." 39 Fed. Reg. 36,946, 36,947 (Oct. 15, 1974) (Duke Energy Ex. 8). 63a can be given to a regulatory interpretation that would "violate the Constitution or a federal statute"). The EPA contends that an emissions test for PSD that excludes from its calculations any emissions caused by an increase in the hours of operation ignores the critical differences between NSPS and PSD. Further, the EPA argues, this construction of the emissions test renders the PSD test indistinguishable from the NSPS test. While NSPS is focused on technology requirements for source categories, PSD requirements focus on the location of the source and its potential impact on air quality in that locality. Northern Plains Res. Council v. United States EPA, 645 F.2d 1349, 1356 (9th Cir. 1981). An hourly emissions rate test, however, contrary to the EPA's assertion, does not ignore the objectives of each program and does not render the test for each program indistinguishable. PSD may be triggered if there is an increase in the maximum hourly emissions rate. In this regard, the PSD and NSPS emissions tests are similar. Unlike NSPS which is always triggered whenever there is an increase in the hourly rate of emissions, PSD is potentially triggered when there is an increase in the hourly emissions rate but only if the annualized emissions increase: (1) exceeds the significance levels in 40 C.F.R. § 51.166(b)(23) and (2) is not offset by contemporaneous decreases at the source, id. § 51.166(b)(3). These two conditions for PSD applicability--significance levels and netting--effectuate the air quality purpose of the PSD program. See Alabama Power Co. v. Costle, 636 F.2d 323, 401 (D.C. Cir. 1979) (explaining that PSD is concerned only with air quality and thus requires netting). These conditions also explain why emissions under PSD must be calculated on an annual basis: measuring emissions in tons 64a per year makes possible netting (addition and subtraction) of emissions rates between various units at a plant.” While courts have construed some of the same terms used in NSPS and PSD in different ways, these decisions do not compel a similar result here. In fact, the explicit reference by Congress incorporating the concept of NSPS modification into the PSD concept of construction compels the result that PSD is triggered only by an increase in a unit's hourly emissions rate. In Northern Plains, the court upheld the EPA's interpretation of the term “commenced,” which was defined ” The netting provisions of PSD state: The first step in determining whether a “net emissions increase" would occur is to determine whether the physical or operational change in question would itself result in an increase in “actual emissions." If it would not, then it could not result in a “net emissions increase." If it would, the second step is to identify and quantify any other prior increases and decreases in “actual emissions" that would be contemporaneous with the particular change and otherwise creditable. The third step, finally, is to total the increase from the particular change with other contemporaneous increases and decreases. If the total would exceed zero, then a "net emissions increase" would result from the change. 45 Fed. Reg. 52,676, 52,698 (Aug. 7, 1980) (Duke Energy Ex. 22).) 65a differently under NSPS and PSD. 645 F.2d at 1354-57. The court examined the regulatory history, statutory provisions, and legislative history of the term and concluded that there was “no manifest congressional intent" to apply the same definition of "commenced" under both NSPS and PSD. /d. at 1355. Significantly, the court observed that "commenced" was not defined in the 1970 CAA Amendments but was instead defined in 1971 by an NSPS regulation. /d. Accordingly, the court rejected the argument that the term should be given the same meaning under both programs because when Congress enacted PSD in 1977, it explicitly defined "commenced" in the statute differently from the pre- existing NSPS definition and "expressly limited [the PSD definition] by the introductory phrase ‘For purposes of this part--' to Part C of the Act, i.e., the statutory PSD program." Id. The court in Alabama Power similarly relied on the statutory language in holding that the EPA had the authority _ to “adopt definitions of the component terms of ‘source’ that are different in scope from those that may be employed for NSPS ... due to differences in the purpose and structure of the [NSPS and PSD] programs." 636 F.2d at 397-98. The decision, however, was not based solely on the different objectives of the two programs. Rather, it was based in large measure on the differences in the statutory language used in NSPS and PSD to describe the term "source." Compare 42 U.S.C. § 7411(a)(3) (1995) (NSPS) (defining the term "source" to mean “any building, structure, facility, or installation") with id. § 7479(1) (PSD) (defining the term "source" to include “fossil-fuel fired steam electric plants ..., coal cleaning plants (thermal dryers), kraft pulp mills, Portland Cement plants, ... [and] iron and steel mill plants"). This reference to “entire plants" in PSD, according to the court, demonstrated that “Congress clearly envisioned" that the term "source" should be given a different construction under PSD than NSPS, which applies to individual units. Alabama Power, 636 F.2d at 397. In stark contrast to these cases in which there was a clear congressional intent to treat similar terms differently, Congress clearly manifested its intent that the definition of "modification" should be given the same construction under NSPS and PSD. The CAA defines the term "modification" in only one place: 42 U.S.C. § 7411(a)(4) (NSPS). Seven years later, when Congress enacted PSD, it explicitly defined the application of PSD according to the NSPS definition of modification. Furthermore, Congress expressly stated that it inte [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0237%3A03. Public record. Not legal advice.