Reply Brief — Appalachian Power Co. v. Environmental Protection Agency

No. 00-633

In the Supreme Court of enh nite Wee

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FILED

JAN 16 200)

THE STATES OF OHIO AND INDIANA, Petitioners,

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY, et al., Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF OF PETITIONERS

OHIO AND INDIANA

STEVE CARTER

Attorney General of Indiana

STEVEN D. GRIFFIN

Deputy Attorney General

402 West Washington St.

Indianapolis, Indiana 46204

(317) 232-6226

BETTY D. MONTGOMERY

Attorney General of Ohio

DAVID M GORMLEY*

State Solicitor

*Counsel of Record

FRANK J. REED, JR.

BRYAN F. ZIMA

ELISE PORTER

Assistant Attorneys General

30 E. Broad St., 17th Floor

Columbus, Ohio 43215

(614) 466-8980

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TABLE OF CONTENTS

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EPA FAILED TO CONSIDER AIR QUALITY

FACTORS AS REQUIRED BY SECTIONS

110(a)(2)(D)(i)(1I) AND (k)(5) OF THE CLEAN

AIR ACT IN MAKING THE NOx SIP CALL..................... 1

___ RSREERE TESTS ap eee OS ORE TOR SER MEE NAT Se 5

ii

TABLE OF AUTHORITIES

Cases Page

General Motors Corp v. United States,

SOG UB, BD Ce iaatetedatetseanetiits cacanthnndactuoaccsacancone 2

Natural Resources Defense Council v. EPA,

SBS FF. Ded 2 RGB CA, Ca Bete Macacsancccdsctencenatanctuacsccseoans 5

Constitution, statutes and regulations

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

Section 110(a)(2)(D)G)(D,

42 U.S.C. § 7410 (a2) DG)... 1, 2, 4,5

Section 110(k)(5),

43 U.S.C. FQ RIOD vvscsincessssesctevtecscnsicais 1, 2, 4, 5

63 Fed. Reg. 57356 (Oct. 27, 1998) (lodged with

the Court by petitioners in No. 00-445) ............0.... 1

66 Fed. Reg. 1006 (lait. BER Boers vecccaisetsscnsceiccnwsccsapirestesses 3

Miscellaneous

Air Quality Modeling Technical Support

Document for the NOx SIP Call, U.S. EPA,

Office of Air and Radiation, Sept. 23, 1998,

reproduced in Joint Appendix of Industry

Petitioners before the Court of Appeals,

Vol. S, BOGB ...c<sicccsrscceacecsmunetabamnetaniansauesetaaasskasancmians 4

EPA FAILED TO CONSIDER AIR QUALITY

FACTORS AS REQUIRED BY SECTIONS

110(a)(2)(D)(i)(D AND (k)(5) OF THE CLEAN AIR

ACT IN MAKING THE NOx SIP CALL

EPA wrongly criticizes Petitioners for a “mistaken

characterization of the manner in which EPA considered

costs in the [NOx SIP call] rulemaking.” EPA Brief in

Opposition (“EPA Opp.”) at 10. Petitioners Ohio and

Indiana do not dispute, and recognized in their brief, Ohio

Pet. 4, that EPA used air quality modeling to identify the

23 States included in the NOx SIP Call rule. Even EPA

claims a focus on air quality only as “the principal basis”

for determining a State’s “inclusion in the SIP Call.” EPA

Opp. 10. (Emphasis added.)

But including a State in the NOx SIP Call, and

thus imposing some _ additional controls, differs

substantially from determining the amount of a

particular State’s “significant contribution” to downwind

nonattainment and the measures “necessary” to

adequately mitigate the offending downwind pollution.!

EPA’s discussion of its use of air quality factors fails to

fully emphasize that EPA abandoned consideration of air

quality factors in favor of cost effectiveness in making the

critical “significant contribution” and “necessary

mitigation” determinations under Sections

110(a)(2)(D)G)(1D) and 110 (k)(5).

EPA used air quality factors to identify myriad

linkages between various upwind and downwind States,

and, above some “very low threshold,” 213 F.3d 663, at

675, determined that 23 States should be required to

' See also 63 Fed. Reg. at 57381, where, in discussing its use of

its multifactor test to identify “covered states,” EPA carefully

distinguished its finding that upwind State emissions were

“significant” in that they are sufficiently large to warrant

requiring controls for that State (i.e., large enough to include

the State in the SIP Call) from the “actual finding of significant

contribution,” which “applies only to the portion of the State’s

emissions for which EPA has identified highly cost-effective

controls.”

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revise their state implementation plans (SIPs). But EPA

failed to use the information it generated on air quality

factors to finish its statutorily-mandated task.

Congress mandated that state implementation

plans contain adequate provisions prohibiting emissions

from “contributing significantly” to nonattainment of

National Ambient Air Quality Standards in downwind

States, 42 U.S.C. 7410(a)(2)D)GX(1), and authorized EPA

to require plan revisions only “as necessary to correct”

plan inadequacies. 42 U.S.C. 7410(k\(5). EPA never

identified in air quality terms the significant contribution

of each State so that the State could assess the necessary

actions to correct the inadequacy. As dissenting Judge

Sentelle asked: under this statutory mandate, “what

should EPA look for as being contributed significantly?

Congress clearly answered that question for the agency as

being the ‘amount’ of an ‘air pollutant.” 213 F.3d at 696.

Instead, EPA used the blunt instrument of a one-size-fits-

all, $2,000-per-ton cost-effectiveness standard, which had

the effect of disregarding the variable nature of the

linkages, rather than addressing them. EPA did not

follow the statutory mandate.

Consequently, EPA has also disregarded the

principles of cooperative federalism embodied in the

Clean Air Act. EPA acknowledges that the Clean Air Act

“makes ‘the States and the Federal Government partners

in the struggle against air pollution.” EPA Opp. 3, citing

General Motors Corp. v. United States, 496 U.S. 530, 532

(1990). EPA’s one-size-fits-all cost-effectiveness approach

makes States not so much partners as functionaries.

EPA’s approach makes the unit of the State largely

irrelevant in defining the actual significant contribution

of ozone and in defining its cure. The approach

obliterates the State’s ability to gauge and address its

relative share of the downwind pollution it is causing.

State boundaries serve only as ad hoc dividing lines for

apportioning the $2000-per-ton common solution.

Faced with an alleged linkage of ozone transport to

Western Pennsylvania, Ohio might, for example, use air

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quality data and modeling to fashion a mitigation scheme

that focuses upon NOx-emitting sources along the Ohio

River.2, Whether the resulting scheme would cost more or

less than $2000 a ton in air pollution controls when added

to the costs of additional control plans to address alleged

linkages to other downwind States, the State of Ohio is

nonetheless addressing what modeling shows is its air

quality contribution. Contrary to the statute, the one-

size-fits-all cost approach makes the State’s pollution

contribution irrelevant above the initial NOx SIP Call

inclusion thresholds.

EPA states that it “found that the non-uniform

approaches provided no significant advantages over the

uniform approach, in terms of either air quality or

cost....” EPA Opp. 17. That does not justify choosing a

uniform approach over a non-uniform approach when the

statute clearly favors the latter. Indeed, EPA’s finding

indicates that there should be no air-quality or cost

impediment to a non-uniform approach.

Nor should the fact that upwind States contribute

in varying degrees to numerous downwind States justify

the implication that everything “evens out,” so the one-

size-fits-all cost approach is reasonable. Petitioners Ohio

and Indiana noted the inequity in the fact that

Pennsylvania contributes to 18 percent of the amount of

ozone pollution in New York above the national standard,

while Indiana contributes only one percent, yet both must

reduce emissions pursuant to the $2,000-per-ton

standard. Ohio Pet. 12. Respondent States New York, et

al., counter that, among other linkages, Indiana

contributes, for example, an average of 17 percent of the

ozone in Louisville while Pennsylvania contributes less

* Of course, this example may be purely hypothetical, as EPA

has proposed to determine that the Pittsburgh-Beaver Valley

Ozone Nonattainment Area and the Lancaster Ozone

Nonattainment Area have attained the 1-hour ozone National

Ambient Air Quality Standard. 66 Fed. Reg. 1925 (Jan. 10,

2001).

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than one _ percent. However, simply comparing

percentages at different downwind areas can mask the

varying magnitudes of the problem in the downwind |

areas receiving the pollution. The ozone problem in New |

York is greater than the ozone problem in Louisville.

This is shown by the comparative numbers of “grid hours”

of ozone exceedances, an input in EPA modeling and a

rough measure of the severity or extent of the ozone |

problems in a downwind “receptor area.”> For a period |

modeled by EPA, New York had 1,924 grid hours of

exceedances and Louisville had 166 grid hours. Air

Quality Modeling Technical Support Document for the

NOx SIP Call, U.S. EPA, Office of Air and Radiation,

Sept. 23, 1998, at p. I-13, I-17. Joint Court of Appeals

Appendix of Industry Petitioners, Vol. 3, 1048, at 1350,

1354. By this measure, 18 percent of New York’s ozone

problem is a larger contribution than 17 percent of

Louisville’s ozone problem. EPA’s uniform cost approach

improperly amalgamates all these variations and denies a

State the opportunity to comply with the “good neighbor”

provision in a way commensurate with its contribution of

pollutants to downwind States.

EPA’s disregard of State-to-State variations in

imposing the single $2,000-per-ton cost-effectiveness

standard also cannot be excused on the basis of economic

fairness. Contrary to EPA’s claim, EPA Opp. 13, the

statutory mandates of Sections 110(aX2XD\iXI and

(kX5) do not identify economic fairness as a factor that

should be considered by EPA to “equally distribute the

burdens borne by all the States”; at least, it should not be

considered in disregard of the States’ relative

contributions of downwind pollutants. Nor do the quoted

‘ For modeling purposes, downwind receptor areas are divided

into grids. Ozone exceedances for each grid square are tallied

for the receptor area for a given period. A higher number of

“grid hours” over a period indicates an ozone problem in an area

that covers a larger area, or is more frequent, or both, when

compared to an area with a smaller number.

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passages from the legislative history support such a

position. EPA Opp. 13, n. 10. The passage noting the

need to “equalize the positions of the States with respect

to interstate pollution by making a source at least as

responsible for polluting another State as it would be for

polluting its own State,” ties the responsibility for

pollution control to the extent of pollution contributed. It

does not suggest that costs be equalized regardless of the

amount of pollution caused.

In sum, EPA’s one-size-fits-all cost-effectiveness

standard is not a reasonable application of Sections

110(aX2XD)\iXD) and (kX5). These Sections do not allow

EPA to abandon so early and so completely the

consideration of air quality factors in favor of a cost-

effectiveness standard. When a statute includes an

express factor, EPA must give that factor the greatest

weight in interpreting the statute. Natural Resources

Defense Council v. EPA, 824 F.2d 1146, 1163 (D.C. Cir.

1987). Under the Section 110 mandates, EPA’s first

concern must be to define how much contribution of ozone

from a State to a downwind State’s nonattainment is

“significant,” i.e., too much. The necessary mitigation

required should be proportionate to that significant

amount contributed. Petitioners Ohio and Indiana do not

object to considering cost as a secondary factor, as when

EPA assesses the adequacy of a revised SIP developed to

reduce interstate NOx emissions. Cost should not be

considered either in place of air quality factors or before

“significant contribution” is first determined using air

quality factors and the amount of pollution contributed.

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CONCLUSION

For the reasons stated above, the petition for a

writ of certiorari should be granted.

Respectfully submitted.

STEVE CARTER BETTY D. MONTGOMERY

Attorney General of Indiana Attorney General of Ohio

STEVEN D. GRIFFIN DAVID M. GORMLEY*

Deputy Attorney General State Solicitor

402 West Washington St. *Counsel of Record

Indianapolis, Indiana 46204 FRANK J. REED, JR.

(317) 232-6226 BRYAN F. ZIMA

ELISE PORTER

Assistant Attorneys General

30 E. Broad St., 17th Floor

Columbus, Ohio 43215

(614) 466-8980

January 12, 2001

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