Reply Brief — Michigan v. Envtl. Prot. Agency, 135 S. Ct. 702 (2014) (No. 14-46)

~Gupreme Cour, US.

FILED

MAR 18 2015

LOFFICE OF THE CLERK |

Nos. 14-46, 14-47, 14-49

IN THE

Supreme Court of the Anited States

STATE OF MICHIGAN, ET AL.,

Pp t . q o :

Vv.

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY, ET AL.,

Reapondents.

On Writs of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF OF PETITIONER

UTILITY AIR REGULATORY GROUP, ET AL.

F. WILLIAM BROWNELL

(Counsel of Record)

HENRY V. NICKEL

LEE B. ZEUGIN

ELIZABETH L. HORNER

HUNTON & WILLIAMS LLP

2200 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20037

(202) 955-1500

bbrowneli@hunton.com

March 18, 2015 Counsel for Petitioner

[Counsel for Respondents in Support of Petitioner Joining

in This Brief Are Listed Inside This Cover]

COUNSEL FOR RESPONDENTS IN SUPPORT OF

PETITIONER JOINING IN THIS BRIEF

LESLIE SUE RITTS

Rirts LAW GROUP, PLLC

THE CARRIAGE HOUSE

BALA CYNWYD, PA 19004

(484) 430-5700

bcassidy@mankogold.com

Counsel for ARIPPA

MICHAEL NASI

JACKSON WALKER LLP

100 CONGRESS AVENUE

SUITE 1100

AUSTIN, TX 78701

DENNIS LANE

STINSON LEONARD STREET

LLP

1775 PENNSYLVANIA

AVENUE, NW, SUITE 800

WASHINGTON, D.C. 20006

(202) 785-9100

dennis.lane@

stinsonleonard.com

PARTHENIA B. EVANS

STINSON LEONARD STREET

LLP

1201 WALNUT STREET

SUITE 2900

KANSAS CITY, MO 64106

(816) 842-8600

parthy.evans@

stinsonleonard.com

Counsel for Kansas City

Board of Public Utilities

ERIC GROTEN

VINSON & ELKINS LLP

2801 VIA FORTUNA

SUITE 100

AUSTIN, TX 78746-7568

(512) 642-8709

egroten@velaw.com

Counsel for White Stallion

Energy Center, LLC

RULE 29.6 DISCLOSURE STATEMENTS

Petitioner

Utility Air Regulatory Group (UARG”) is an

ad hoc, unincorporated association of individual elec-

tric generating companies and industry trade associ-

ations that participates on behalf of its members col-

lectively in administrative proceedings under the

Clean Air Act, and in litigation arising from those

proceedings, that affect electric generators. UARG

has no outstanding shares or debt securities in the

hands of the public and has no parent company. No

publicly held company has a 10% or greater owner-

ship interest in UARG.

Respondents in Support of Petitioner

American Public Power Association (“APPA”)

is a nonprofit trade association whose members are

units of state and local governments that own and

operate electric generating, distribution and trans-

mission assets. APPA addresses issues of interest to

its members, including those issues related to the

development and implementation of requirements

under federal and state Clean Air Act programs.

APPA does not have any outstanding securities in

the hands of the public, nor does APPA have a pub-

licly owned parent, subsidiary, or affiliate.

ARIPPA is a non-profit trade association that

represents a membership primarily comprised of

electric generating plants using environmentally-

friendly circulating fluidized bed boiler technology to

convert coal refuse and/or other alternative fuels

such as biomass into alternative energy and/or

steam, with the resultant alkaline ash used to re-

claim mine lands. ARIPPA wss organized in 1988

ss

for the purpose of promoting the professional, legis-

lative and technical interests of its member facilities.

ARIPPA has no outstanding shares or debt securities

in the hands of the public and does not have any par-

ent, subsidiary, or affiliate that has issued shares or

debt securities to the public.

Gulf Coast Lignite Coalition (“GCLC”) is a

non-profit corporation organized under the laws of

the State of Texas and comprised of individual elec-

tric generating and mining companies. GCLC partic-

ipates on behalf of its members collectively in pro-

ceedings brought under United States environmental]

regulations, and in litigation arising from those pro-

ceedings, which affect electric generators and mines.

GCLC has no outstanding shares or debt securities

in the hands of the public and has no parent compa-

ny. No publicly held company has a 10% or greater

ownership interest in GCLC.

Kansas City Board Of Public Utilities-

Unified Government Wyandotte County/Kansas

City, Kansas is not required to provide a Rule 29.6

Disclosure Statement because it is a governmental

entity organized under the laws of the State of Kan-

sas. Accordingly, no Disclosure Statement is being

provided.

White Stallion Energy Center, LLC (“WSEC’)

is a limited liability company organized under the

laws of the State of Texas engaged in the business of

energy development and production. Maris Invest-

ment Company, LLC, and Sky Global Partners, LLC

each hold a 10% or greater ownership interest in it.

TABLE OF CONTENTS

Page

RULE 29.6 DISCLOSURE STATEMENTS ................ i

EE CEE IIE cstihicnls conenstieccctainidialeeestenonies il

eS IE i aiintctchnsccsescccansmeineditaocasdinns iv

ERR ES Ee REE a ER eD aE 1

IIIT sthidiciiniciiieiiciniciih abet aa ca ea 8 3

I. “Appropriate and Necessary” Is Not

Used in §7412(n){1)(A) to Decide

Whether, or Not, to List EGUs Under

§7412(c), But Is the Ultimate

Decisional Standard Governing

Whether or Not to Regulate Under

§7412 EGU HAP Emissions That

Pose Public Health Risks.............00.000.000000002.. 3

Il. Section 7412(n)(1)(A) Authorizes

“Residual Risk” Regulation Only If

“Such Regulation” Is “Appropriate

ag SORE RENE BOE UND SAAD RBIS LSB 9

SEIU itr stetenctenbtinss coaterectorsteascinegtceimcidialceaets 13

iV

TABLE OF AUTHORITIES

Page

Cases:

Motor Vehicle Mfrs. Ass'n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29 (1983).................:0see000 2

Natural Res. Def. Council v. EPA, 824 F.2d 1146

a RI IU sctitaciceiceirnlssassandaeninecdasasndnincnncsinisabeies 12

Natural Res. Def. Council v. EPA, 529 F.3d 1077

Ne IE sc ticinitele sian eladtosceinirust sbatedonmmadil 10, 12

Statutes:

Clean Air Act, 42 U.S.C. §§7401, et seq.

ee passim

CR SR Ra ISS i AO sr passim

Ae es I ccirersecctstcraiideecaclcachebaeiceaomtasn passim

Oe es ME Gets orncs eae cenbcenetiaene 1

Ri EE are RN LTT 1

Ae re I IED cicinereccterccosdctcicsieduiecidancduecascoes 1

A Eas I enseiksasiesttadbeninictendnerns 1,10, 11, 13

Be Uae BORN svi ivicnicniscsesvatezrcesssoses 11, 12

FR Satan LTR rs sree eis ed 1,13

RRMA RUE ce ORCAS REC EIS 1, 12

a Sr es Se ID iavckteciececececscnsseaions passim

Federal ister:

54 Fed. Reg. 38,044 (Sept. 14, 1989) .........0.0.. 12

INTRODUCTION

Section §112(n)(1)(A) of the Clean Air Act (“CAA”

or “Act”), 42 U.S.C. §7412(n)(1)(A), requires the U.S.

Environmental Protection Agency (“EPA” or “Agen-

cy’) to decide whether “regulation” of hazardous air

pollutant (“HAP”) emissions from electric utility gen-

erating units (“EGUs”) “under this section” is “ap-

propriate and necessary” after considering a study

that addresses only two subjects: (1) “hazards to

public health” that remain “after imposition of the

requirements of this chapter,” and (2) “alternative

control strategies for emissions which may warrant

regulation.”

In §7412(n)(1)(A), EPA’s first task is to find that a

residual public health hazard is posed by specific

EGU HAP emissions remaining after those emissions

have been reduced under other provisions of the Act,

and to identify alternative control strategies to re-

duce further any emissions that “mey warrant regu-

lation.” Next, if it finds any remaining EGU HAP

emissions pose a health hazard, EPA must deter-

mine how to regulate those emissions “under this

section.”

Different subsections of §7412 provide different

decisional standards for regulating HAP emissions

“under this section,” including subsections (d)(2)

(‘maximum achievable” control technology); (d)(3)

(“floor” control technology); (d)(5) (‘generally availa-

ble control technolog[y]}”); (H (‘ample margin of safe-

ty”); (m) (‘necessary and appropriate”); and (n) itself.

Once EPA determines the HAP emissions that war-

rant regulation and the degree to which those EGU

emissions would be regulated under §7412, EPA

must resolve whether or not “such regulation” under

2

this section “is appropriate and necessary.” Costs,

along with potentially myriad other factors, are rele-

vant in applying this broad regulatory decisional

standard that concludes the §7412(n)(1)(A) process.

Notwithstanding its mischaracterization of the

Chevron standard, see National Mining Ass’n Reply

Br. 1-2, 9, EPA is right that the interpretive question

before the Court is whether the term “appropriate”

requires EPA to consider costs “when deciding ... to

regulate” EGUs. EPA Br. 21. After correctly stating

the question, however, EPA addresses a wholly dif-

ferent question—that is, whether the term “appro-

priate” makes costs relevant to “listing” decisions

under §7412(c). See, e.g., id. at 17, 18, 28, 36, 48, 57

(arguing that “appropriate” addresses the threshold

“listing” decision).

According to EPA, if any EGU HAP emission

threatens “health or the environment” (i.e., satisfies

the criteria for “area source” listing under §7412(c)),

EPA can find that it is “appropriate and necessary”

to list, and that ends EPA’s responsibilities under

§7412(n)(1)(A). Id. at 26. But “to list or not to list” is

not the question raised by §7412(n)(1)(A); the ques-

tion raised by that section is whether additional

“regulation” of EGU HAP emissions “under this sec-

tion” is “appropriste and necessary.” The statutory

question calls for a decision to authorize or to pre-

clude specific regulation of EGU HAP emissions un-

der §7412.

This Court long ago made it clear that agency de-

cision-making is unreasonable whenever it has

“failed to consider an important aspect of the prob-

lem.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 43 (1983). EPA’s failure

3

to make the §7412(n)(1)(A) finding whether “such

regulation” under §7412 is “appropriate and neces-

sary” after considering costs and other consequences

of that decision was per se unreasonable.

ARGUMENT

This case presents a stark difference in how the

parties read §7412(n)(1)(A). According to EPA and

its respondents, EPA's obligation under this provi-

sion is discharged once EPA concludes that “listing”

under §7412(c) is “appropriate and necessary.” In

Petitioners view, EPA’s_ obligation under

§7412(n)(1)(A) is not discharged until EPA decides on

the regulatory standard to apply “under this sec-

tion”—whether using §7412(d) or some other regula-

tory metric—and then determines that “such regula-

tion” is “appropriate and necessary.” For the reasons

discussed below, EPA’s construction of §7412(n)(1)(A)

is wrong and the Mercury and Air Toxics Standards

(“MATS Rule”) is unlawful.

I. “Appropriate and Necessary” Is Not Used

in §7412(m)(1)(A) to Decide Whether, or

Not, to List EGUs Under §7412(c), But Is

the Ultimate Decisional Standard Gov-

erning Whether or Not to Regulate Under

§7412 EGU HAP Emissions That Pose

Public Health Risks.

EPA’s brief presents a clearly drawn distinction

between the parties’ positions regarding the role of

§7412(n)(1)(A) and the relevance of costs under that

provision. According to EPA and its respondents,

the phrase “appropriate and necessary” merely de-

scribes a “special procedure” related to listing EGUs

under §7412(c). EPA Br. 7. As EPA sees it,

§7412(n)(1)(A) provides that, once the study of re-

4

maining EGU health hazards is completed, it is “ap-

propriate and necessary” to list EGUs under §7412(c)

when the criteria for listing would otherwise be pre-

sent after implementation of other EGU emission re-

ductions under the Act. Id. at 32 (“[I]t is farfetched

to suppose ... Congress required the agency to use

listing criteria fundamentally different from those

that Congress had mandated for all other stationary-

source categories.” (emphasis omitted)).

By contrast, in the Utility Air Regulatory Group's

(“‘UARG’s”) view, the term “appropriate and neces-

sary” calls on EPA to make the ultimate substantive

regulatory determination with respect to §7412 regu-

lation of EGU HAP emissions: Specific regulation

under §7412 limiting EGU HAP emissions may be

adopted by EPA only if “such regulation is appropri-

ate and necessary” after considering remaining pub-

lic health hazards and alternative control strategies

for those HAP emissions that “may warrant regula-

tion.” This decisional standard applies at the end of

the §7412(n)(1)(A) regulatory process to resolve

whether to promulgate, or to reject, a specific type

and level of regulation for any EGU HAP emissions

posing health hazards. Resolving the nature of

EPA’s “appropriate and necessary” finding resolves

the “contextual” debate in this case.

EPA describes the “appropriate and necessary”

language in §7412(n)(1)(A) as “a special procedure

that EPA must follow before deciding whether to list

power plants for regulation under the [national

emission standards for hazardous air pollutants

(NESHAP’] program.” EPA Br. 7 (emphasis added).

Through this prism, EPA and respondents repeat

over and over statements to the effect that nothing in

“the text of [§7412(n)(1)(A), or in} ... Comgress’s rea-

5

sons for enacting it, suggest that Congress wished to

encourage (much less require) EPA to consider costs

in making the threshold listing decision.” Id. at 18

(emphasis added); see also id. at 17, 18, 28, 36 (de-

scribing the §7412(n)(1)(A) determination as a

threshold “listing” determination). To find that EGU

regulation is “appropriate,” EPA need only complete

its study of remaining hazards and find that, if any

remaining EGU HAP emissions pose a threat to

“public health or the environment,” listing is “appro-

priate.” Jd. at 11, 26.

Furthermore, because EPA interprets §7412 to

require regulation of EGUs the same as other source

categories, if a “single” HAP emitted by an EGU

“poses a hazard to public health or the environment”

requiring listing, EPA must “promulgate standards

for all hazardous air pollutants emitted” by EGUs,

regardless of cost or hazard. Id. at 12, 45 (“[I]Jf EPA

lists power plants ... [under] Section 7412(n)(1)(A),

those facilities will be subject to the same standard-

setting provisions that govern stationary sources

within all other [§7412(c)] listed categories.”). Given

this interpretation of §7412, EPA continues,

§7412(n)(1)(A) “does not mandate distinct ‘appropri-

ate and necessary’ findings for each individual pollu-

tant [being regulated]” because §7412(c) listing can

be triggered by a single HAP. I/d. at 12. Rather,

EPA’s §7412(n)(1)(A) responsibilities end with listing

EGUs, and Congress’s mandate that all HAPs emit-

ted by a source category listed under §7412(c) be

regulated under §7412(d) governs everything that

follows listing. Jd. at 30.

If §7412(n)(1)(A)’s only function is, as EPA claims,

to confirm that “listing” under §7412(c) is “appropri-

ate” based on a remaining threat to “public health or

6

the environment,” cost would be irrelevant to that

narrow decision. See id. at 30 n.8 (‘Congress would

not have expected EPA to consider—at the listing

stage—the cost of complying with emission stand-

ards that had not yet been formulated.”). The con-

trast between what EPA would have §7412(n)(1)(A)

say and the actual language of that provision, how-

ever, is striking.

Section 7412(n)(1)(A) calls for EPA to prepare “a

study” (“Utility Study”) identifying those EGU emis-

sions that pose a “hazard[] to public health” after

compliance with other EGU CAA control programs,

and then to evaluate alternative control strategies

for only those EGU HAP emissions that “may war-

rant regulation.” That Utility Study, and only that

Utility Study, was identified by Congress for consid-

eration by EPA in making an “appropriate and nec-

essary’ decision under §7412(n)(1)(A). Under the

terms of the statute, the Utility Study addresses fac-

tors irrelevant to §7412(c) listing (e.g., alternative

strategies to control emissions posing health haz-

ards) and ignores two of the three factors relevant to

listing (i.e., HAP tonnages and HAP “environmental!”

threats). In other words, there is a fundamental dis-

connect between the subject matter of the Utility

Study and the criteria for listing. But there is a di-

rect connection between the Utility Study and

whether and how regulation of those EGU emissions

posing remaining hazards to public health might be

regulated “under this section” if “appropriate and

necessary” (e.g., identification of alternative control

strategies for HAP emissions where further reduc-

tions may be “warranti[ed]”).

Furthermore, under EPA's construction of

§7412(n)(1)(A), if the Utility Study had not identified

7

any EGU HAP emissions that posed a health hazard,

EPA could still find that listing is “appropriate”

based on an “environmental” risk, and that simple

finding would satisfy §7412(n)(1)(A). Following list-

ing, EPA could promulgate §7412(d) standards regu-

lating all EGU HAP emissions—even emissions that

pose no residual public health risk—and could prom-

ulgate these standards without any evaluation of

whether “such regulation” was “appropriate and nec-

essary.” EPA Br. 30. That result is not consistent

with any reasonable interpretation of the language of

§7412(n)(1)(A).

In §7412(n)(1)(A), Congress did not—as EPA

claims—‘“implicitly authorize[] EPA to determine the

‘appropriate[ness]’ of such listing.” Id. at 23 (empha-

sis added). Instead, Congress required EPA to “regu-

late ... under ... section [74127 HAP emissions from

EGUs that pose residual public health “hazards,” but

only “if the Administrator finds such regulation is

appropriate and necessary after considering the

[study] results.” 42 U.S.C. §7412(n)(1)(A) (emphases

added). Section 7412(n)(1)(A) does not mention list-

ing because listing is only a precondition to regula-

tion under one subsection of §7412: §7412(d), the

subsection under which EPA chose to regulate EGUs

in this case. Only after EPA determined what those

standards would require could EPA make the “ap-

propriate and necessary” finding called for in

§7412(n)(1)(A), as written by Congress: whether or

not “such [§7412] regulation [of EGU emissions] is

appropriate and necessary.” Jd. (emphasis added).

At the time of the 1990 Amendments, EGU HAP

emissions had been extensively controlled under oth-

er CAA programs and were targeted for substantial

further reductions under the 1990 Amendments. See

8

UARG Opening Br. 9-11. By contrast, the §7412(d)

regulatory program was established to bring about

expeditious regulation of non-EGU source categories

that had avoided regulation under the pre-1990

HAPs emission standards program. Congress made

costs (and a whole host of other factors) irrelevant to

the §7412(c) listing decision, which must be made as

a prerequisite to initiating §7412(d) standard setting.

As enacted by Congress in 1990, only two factors

are relevant to listing under §7412(c): whether ton-

nage thresholds are exceeded (for major sources) and

whether emissions pose a “health or environmenta!”

threat (for area sources). In construing EPA’s

§7412(n)(1)(A) “appropriate and necessary” responsi-

bilities to be fully discharged once EGUs are listed

under §7412(c), see, e.g., EPA Br. 26, EPA gives no

content to §7412(n)(1)(A)’s direction to EPA to de-

termine whether “such regulation” under this section

igs “appropriate and necessary.” Because §7412(c)

listing precedes any regulation of HAP emissions, it

cannot discharge EPA’s obligation to engage the

question whether or not standards under §7412(d)

(or any other subsection of §7412 under which the

Administrator may choose to regulate) are “appro-

priate and necessary.”

In sum, “appropriate and necessary” is not a find-

ing focused on §7412(c) “listing” It is a finding that

must follow the identification of “hazards to public

health” in the Utility Study and the determination of

how emissions posing a hazard should be regulated

“under” §7412. Only after EPA determines the re-

ductions in EGU emissions required by that “regula-

tion” would EPA have the information that it must

have to discharge its §7412(n)(1)(A) obligation to de-

termine whether “such regulation” is “appropriate

9

and necessary.” For these reasons, the “appropriate

and necessary” finding is an independent regulatory

standard that authorizes, limits, or precludes regula-

tion of EGU emissions under §7412. A broad range

of factors—including costs—are relevant to that kind

of a regulatory judgment.

II. Section 7412(m)(1)(A) Authorizes “Resid-

ual Risk” Regulation Only If “Such Regu-

lation” Is “Appropriate and Necessary.”

On its face, §7412(n)(1)(A) is a “residual risk”

regulatory provision. It focuses exclusively on regu-

lation of “hazards to public health” from EGU HAP

emissions that are “reasonably anticipated to occur

... after imposition of ... requirements” of the Act,

and requires EPA to determine whether further reg-

ulation of EGU HAP emissions that pose public

health hazards is “appropriate and necessary.” 42

U.S.C. §7412(n){1)(A). In this context, “appropriate

and necessary” requires EPA to make a risk man-

agement decision regarding whether and, if so, the

degree to which health risks need to be reduced.

This is a policy judgment to which cost is relevant.

See UARG Opening Br. 26.!

In the MATS rulemaking, EPA promulgated

three different §7412(d) standards that have signifi-

cant cost consequence for EGUs: (i) standards for

mercury emissions, (ii) standards for emissions of

“non-mercury metals,” and (iii) standards for “acid

gases.” The relevance of cost to determining whether

| For these reasons, State Respondents’ argument that

§7412(n)(1)(A) does not call for a residual risk determination

“because no such [§7412] standards have ever been in place” for

EGUs, State Resp’ts’ Br. 25, profoundly misses the point.

10

“such regulation” under §7412 is “appropriate and

necessary” is illustrated by the consequences of reg-

ulation under each of these §7412(d) standards.

In the case of mercury, the §7412(d) standard will

cost approximately $3 billion dollars annually, Amici

Curiae Brief of the Chamber of Commerce of the

United States of America, et al. in Support of Peti-

tioners (“Chamber Br.”) 22, and is claimed by EPA to

reduce developmental health risks across the country

posed by current and past exposures. Had EPA con-

sidered costs, it is unclear whether the Agency would

have been able to explain why regulation is “appro-

priate and necessary” in light of the projected quan-

titative and qualitative health benefits. See Amicus

Curiae Br. of Cato Institute in Supp. of Pet’rs. But

there is no lack of clarity for the other two §7412(d)

standards.

In the case of non-mercury HAP metals, only a

small subset of EGUs were projected by EPA to re-

sult in public health risks slightly exceeding EPA’s

one-in-one million de minimis risk threshold, and

EPA projected no risk for the remaining EGUs sub-

ject to the standard. UARG Opening Br. 13. These

are risk levels that EPA has determined protect

“public health” with an “ample margin of safety” in

§7412(f) “residual risk” rulemakings. Id. at 8; Natu-

ral Res. Def. Council v. EPA, 529 F.3d 1077, 1081-83

(D.C. Cir. 2008). By comparison to these insignifi-

cant health risks, the §7412(d) non-mercury metal

standards impose control costs of approximately $1

billion annually on all EGUs that emit non-mercury

metals. Chamber Br. 22-23.

In the case of acid gases, EPA’s standards do not

address any public health hazard, but only an as-

11

serted “environmental!” threat and will impose annu-

al costs that are almost two times the mercury costs.

UARG Opening Br. 19. This $5 billion annual ex-

penditure will result in approximately a 40,000 ton

reduction in hydrogen chloride (and lesser amounts

of other) acid gas emissions, UARG Pet. App. 442a,

all for no health benefit. By shifting the focus of the

“appropriate and necessary” determination from

“regulation” under §7412 to “listing” under §7412(c),

EPA avoided addressing the statutory question: Is

“such regulation” “appropriate and necessary” to ad-

dress residual public health risk.

EPA argues that it is “irrelevant” whether or not

§7412(n)(1)(A) addresses regulation of residual risk,

asserting that “[t]he fact that a particular CAA pro-

vision” like §7412(n)(1)(A) “requires EPA to take ac-

count of existing regulatory requirements when de-

ciding whether to impose further regulation” simply

has “no bearing” on whether EPA should have “con-

sider[ed] costs in making” its finding to list. EPA Br.

51, 52. That argument fails for the reasons dis-

cussed above. Section 7412(n)(1)(A) asks whether or

not “regulation” is “appropriate and necessary” in re-

sponse to a health hazard, not “listing.”

More fundamentally, §7412(f(2)(B) confirms

Congress's general approach to regulation of residual

risk under §7412. Section 7412(f) is a residual risk

provision because its focus is on whether or not to

reduce “public health” or “environmental” risks posed

by emissions that remain after implementation of

control requirements under §7412(d). In the Sep-

tember 1989 Federal Register notice referenced by

Congress in §7412(f)(2)(B), EPA affirmed that, in de-

termining whether and how to regulate any remain-

ing health risk under the “ample margin of safety

12

standard,” EPA would take into account all “relevant

factors including costs and economic impacts, techno-

logical feasibility, and other factors relevant to each

particular decision.” 654 Fed. Reg. 38,044, 38,045

(Sept. 14, 1989) (emphasis added). As a result, even

if Natural Resources Defense Council v. EPA, 824

F.2d 1146 (D.C. Cir. 1987), only held that EPA had

“discretion” to consider costs in establishing an “am-

ple margin of safety,” EPA Br. 52, EPA exercised its

Chevron Step Two discretion to give “ample margin

of safety” that interpretation after that decision, and

Congress adopted that interpretation in the CAA.?

Congress included the §7412(n) residual risk pro-

vision in the 1990 Amendments because EGUs were

already extensively controlled, and those controls

would result in significant reductions in EGU HAPs.

In the case of acid gases, for example, other CAA

programs have resulted in millions of tons of reduc-

tion 1m emissions, at a fraction of the cost of the

thousands of tons of acid gas emissions reduction

mandated by the MATS Rule.

To conclude that Congress intended to give EPA

discretion to negate a carefully crafted, market-based

“acid deposition” program established in the 1990

Amendments by allowing EPA to impose command

and control regulation on EGU acid gases under

§7412 is a bridge too far. Congress’s focus on only

residual public health hazards in §7412(n)({1)(A), not

2 Cf. Natural Res. Def. Council, 529 F.3d at 1082 (The word

‘interpretation’ [as used in §7412(f)(2)(B)] indicates that the

savings clause is not limited to EPA’s benzene-specific determi-

nations, but applies broadly to the agency's construction of the

Clean Air Act” as set forth in the benzene standard. (emphasis

added)).

13

both health and environment threats as provided in

§7412(f) and (m), took acid gases off the §7412 “regu-

latory table” for ECUs, leaving a mandate to regu-

late only as “appropriate and necessary” to reduce

remaining health risks. This broad subjective policy

judgment requires consideration of all regulatory

consequences, including cost.

CONCLUSION

The judgment below should be reversed. Further,

because of regulatory extensions granted by certain

atates, approximately 130 EGUs still face a future

compliance date for the MATS Rule, by which they

must shut down or install costly control technology.

In light of these impending deadlines and the lead-

time needed to adjust compliance plans accordingly,

UARG requests that, if the rule is remanded for fur-

ther rulemaking, the Court direct that all future

compliance dates be suspended pending any such

additional rulemaking, and order such further relief

as is necessary based on this Court’s decision.

March 18, 2015

14

Respectfully submitted,

F. WILLIAM BROWNELL

(Counsel of Record)

HENRY V. NICKEL

LEE B. ZEUGIN

ELIZABETH L. HORNER

HUNTON & WILLIAMS LLP

2200 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20037

(202) 955-1500

bbrownell@hunton.com

Counsel for Petitioner

Utility Air Regulatory Group

RESPONDENTS IN SUPPORT OF

PETITIONER JOINING IN THIS BRIEF

LESLIE SUE RITTS

Ritts LAW GRouP, PLLC

THE CARRIAGE HOUSE

620 FORT WILLIAMS

PARKWAY

ALEXANDRIA, VA 22304

(703) 823-2292

LSRitts@

rittslawgroup.com

Counsel for American

Public Power Associa-

tion

BART E. CASSIDY

KATHERINE L. VACCARO

MANKO, GOLD, KATCHER

& Fox, LLP

401 Crry AVENUE

SUITE 901

DENNIS LANE

STINSON LEONARD STREET

LLP

1775 PENNSYLVANIA

AVENUE, NW, SUITE 800

WASHINGTON, D.C. 20006

(202) 785-9100

dennis. lane@

stinsonleonard.com

PARTHENIA B. EVANS

STINSON LEONARD STREET

LLP

1201 WALNUT STREET

SUITE 2900

KANSAS CITy, MO 64106

(816) 842-8600

parthy.evans@

stinsonleonard.com

BALA CYNWYD, PA

19004

(484) 430-5700

bcassidy@

mankogold.com

Counsel for ARIPPA

MICHAEL NASI

JACKSON WALKER LLP

100 CONGRESS AVENUE

SUITE 1100

AUSTIN, TX 78701

(512) 236-2000

mnasi@jw.com

Counsel for Gulf Coast

Lignite Coalition

15

Counsel for Kansas City

Board of Public Utilities

ERIC GROTEN

VINSON & ELKINS LLP

2801 VIA FORTUNA

SUITE 100

AUSTIN, TX 78746-7568

(512) 542-8709

egroten@velaw.com

Counsel for White Stallion

Energy Center, LLC