Petition for Writ of Certiorari — Utility Air Regulatory Group v. New Jersey (No. 08-352)

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IN THE

Supreme Court of the Gnited States

UTILITY AIR REGULATORY GROUP,

Petitioner,

STATE OF NEW JERSEY, ET AL.,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

HENRY V. NICKEL

F. WILLIAM BROWNELL

LEE B. ZEUGIN

(Counsel of Record)

HUNTON & WILLIAMS LLP

1900 K Street, N.W.

Washington, D.C. 20006

(202) 955-1500

aT AE TAT ATE A TT, AAAS TE AT AA TT CET

WALSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D.C. 20002

QUESTIONS PRESENTED

The Clean Air Act (“CAA”) authorizes the U.S. En-

vironmental Protection Agency to regulate hazardous

air pollutant emissions from electric generating units

(““EGUs”) under CAA §112 only where EPA deter-

mines, pursuant to CAA § 112(n), that “such regula-

tion is appropriate and necessary.” In December

2000, without notice-and-comment, the then-EPA

Administrator issued a finding that regulation of

EGUs was “appropriate and necessary” and added

them to the list of source categories to be regulated

pursuant to CAA § 112(c) and (d). In March 2005,

EPA determined following rulemaking that the De-

cember 2000 finding “lacked foundation,” concluded

that regulation of EGUs was neither “appropriate” nor

“necessary,” and removed them from the CAA § 112(c)

list of source categories. The D.C. Circuit held that

EPA’s 2005 “delisting” action was unlawful under the

“plain language” of CAA § 112(c), and that EPA must

proceed to regulate EGUs.

1. Whether the D.C. Circuit acted contrary to

Chevron by focusing solely on the supposed meaning

of CAA § 112(c) to find that EPA must regulate EGUs

under CAA § 112(d), even though EPA determined

under CAA § 112(n) that such regulation was neither

“appropriate” nor “necessary.”

2. Whether an outgoing EPA Administrator may,

without notice-and-comment, require a subsequent

Administrator to regulate EGUs under CAA § 112(d),

despite the subsequent Administrator's determination

after rulemaking that such regulation is not “appro-

priate and necessary.”

PARTIES TO THE PROCEEDINGS

1. The following were petitioners in the consoli-

dated proceeding, the judgment in which review is

sought.

In No. 05-1097, the State of New Jersey, State of

California, State of Connecticut, State of Maine,

Commonwealth of Massachusetts, State of New

Hampshire, State of New Mexico, State of New York,

and State of Vermont.

In No. 05-1104, the Commonwealth of Pennsyl-

vania, Department of Environmental Protection.

In No. 05-1116, the State of Delaware.

In No. 05-1118, the State of Wisconsin.

In No. 05-1158, the Chesapeake Bay Foundation,

Inc., Conservation Law Foundation, and Waterkeeper

Alliance.

In No. 05-1159, Environmental Defense, National

Wildlife Federation, and Sierra Club.

In. No. 05-1160, the Natural Resources Council of

Maine, Ohio Environmental Council, and U.S. Public

Interest Research Group.

In No. 05-1162, the State of New Jersey, State of

California, State of Connecticut, State of Maine,

Commonwealth of Massachusetts, State of New

Hampshire, State of New Mexico, State of New York,

Commonwealth of Pennsylvania, State of Vermont,

and State of Wisconsin.

In No. 05-1163, the Natural Resources Defense

Council.

In No. 05-1164, the Ohio Environmental Council,

Natural Resources Council of Maine, and U.S. Public

Interest Research Group.

lll

In No. 05-1167, the Natural Resources Defense

Council.

In No. 05-1174, the State of Illinois.

In No. 05-1175, the State of Minnesota.

In No. 05-1176, the State of Minnesota.

In No. 05-1183, the State of Delaware.

In No. 05-1189, the State of Hlinois.

In No. 05-1263, the Mayor and City Council of Bal-

timore.

In No. 05-1267, the Chesapeake Bay Foundation,

Inc., Environmental Defense, National Wildlife Fed-

eration, Sierra Club, and Waterkeeper Alliance.

In No. 05-1270, American Coal for Balanced Mer-

cury Regulation, Alabama Coal Asseciation, Coal Op-

erators & Associates, Inc., Maryland Coal Association,

Ohio Coal Association, Pennsylvania Coal Associa-

tion, Virginia Coal Association, and West Virginia.

In No. 05-1271, ARIPPA.

In No. 05-1275, the Utility Air Regulatory Group.

In No. 05-1277, the United Mine Workers of Amer-

ica.

In No. 06-1211, the State of New Jersey, State of

California, State of Connecticut, State of Delaware,

State of Illinois, State of Maine, Commonwealth of

Massachusetts, State of Minnesota, State of New

Hampshire, State of New Mexico, State of New York,

Commonwealth of Pennsylvania, State of Rhode Is-

land, State of Vermont, State of Wisconsin, and

Michigan Department of Envircnmental Quality.

In No. 06-1220, the National Congress of American

Indtans, Little River Band of Ottawa Indians, Bay

Mills Indian Community, Grand Traverse Band of Ot-

tawa and Chippewa Indians, Jamestown S’Klallam

Tribe, Lac Courte Oreilles Bank of Lake Superior

Chippewa Indians, Little Traverse Bay Bands of

Odawa Indians, Lower Elwha Klallam Tribe, Lummi

Nation, Minnesota Chippewa Tribe, Nisqually Tribe,

and Swinomish Indian Tribe Community.

In No. 06-1231, the American Nurses Association,

the American Public Health Association, American

Academy of Pediatrics, Chesapeake Bay Foundation,

Inc., Conservation Law Foundation, Environmental

Defense, National Wiidlife Federation, Natural Re-

sources Council of Maine, Natural Resources Defense

Council, Ohio Environmental Council, Physicians for

Social Responsibility, Sierra Club, U.S. Public Inter-

est Research Group, and WaterKeeper Alliance.

In No. 06-1287, the Mayor and City Council of Bal-

timore.

In No. 06-1291, American Coal for Balanced Mer-

cury Regulation, Alabama Coal Association, Coal Op-

erators and Associates of Kentucky, Maryland Coal

Association, Ohio Coal Association, Pennsylvania

Coal Association, Virginia Coal Association, and West

Virginia Coal Association.

In No. 06-1293, ARIPPA.

In No. 6-1294, The Alaska Industrial Development

and Export Authority.

2. The following was respondent in the consoli-

Gated proceeding, the judgment in which review is

sought.

United States Environmental Protection Agency.

3. The following was intervenor in support of re-

spondent in the consolidated proceeding, the

judgment in which review is sought, and who files

this petition.

The Utility Air Regulatory Group.

4. The following were intervenors in support of re-

spondent in the consolidated proceeding, the judg-

ment in which review is sought, and who do not join

in this petition.

Duke Energy Indiana, Incorporated

Duke Energy Kentucky, Incorporated

Duke Energy Ohio, Incorporated

Edison Electric Institute

Florida Power & Light Company

National Mining Association

NRG Energy, Inc.

PPL Corp.

Producers for Electric Reliabilit:

PSEG Fossil LLC

State of Alabama

State of Indiana

State of Nebraska

State of North Dakota

State of South Dakota

State of Wyoming

West Associates

5. The following was intervernor in support of

petitioners in the consolidated proceeding, the judg-

ment in which review is sought.

Adirondack Mountain Club

American Academy of Pediatrics

American Nurses Association

The American Public Health Association

Bay Mills Indian Community

City of Baltimore

Greater Traverse Band of Ottawa and Chippewa

Indians

Jamestown S’Klallam Tribe

Lac Courte Oreilles Band of Lake Superior Chip-

pewa Indians

Little River Band of Ottawa Indians

Little Traverse Bay Bands of Odawa Indians

Lower Elwha Klallam Tribe

Lummi Tribe

Michigan Department of Environmental Quality

Minnesota Chippewa Tribe

National Congress of American Indians

Nisqually Tribe

Physicians for Social Responsibility

State of Maryland

State of Rhode Island

Swinomish Indian Tribe Community

6. The following appeared as amici in support of

respondent in the consolidated proceeding, the judg-

ment in which review is sought.

The Washington Legal Foundation

The State of West Virginia, Department of Envi-

ronmental Protection

Vii

DISCLOSURE STATEMENT

The Utility Air Regulatory Group (““UARG”) is a

non-profit, unincorporated organization of individual]

electric utilities and national trade associations.

UARG has no outstanding shares or debt securities in

the hands of the public and does not have any parent,

subsidiary or affiliate that has issued shares or debt

securities to the public.

TABLE OF CONTENTS

GiriGetions PYOROTIOOG 0 oo<i0cevegescescecsnenvecesssererteeens

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Statutory and Regulatory Provisions

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Statement of 1hO@ Cae. «0 isssicsiciecssevsseeceeneee

Reasons for Granting the Petition....................008.

I. Certiorari Is Needed to Address

the D.C. Circuit’s New Approach

to Statutory Construction, Which

Contisete wills CRO is cascsscccsadessescacnsnases enn

IJ. Certiorari Is Needed to Address

Whether a Departing EPA Administrator

Can Compei Future Agency Action

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Items Contained in the Appendix

New Jersey v. U.S. Environmental

Protection Agency, 517 F.3d 574

CPAs. Ge. BOOS) GADDONGINR A)... ccccccssccccscevsesvecess

December 2000 Regulatory Finding,

65 Fed. Reg. 79,825 (Dec. 20, 2000)

ads veces huua des hsuaebesetneteneusueebatedes

Revision of December 2000 Regulatory

Finding, 70 Fed. Reg. 15,994

(atarch 29, 2605) (Appendix C).......scccccccsescsccccss

Order on Panel Rehearing (Appendix D)...............

Order on Rehearing en banc (Appendix E)............

meemment CANDONGIN F)..........cccccesccccvsccesescvseresves

Oral Argument Transcript

CORMIER 02), Ws. ccusecevsecerseeusercdoncesewen

Order, No. 01-1074 (July 26, 2001)

i os sn kad oa culubd wae nee ebm eaeaneee enn

Excerpts from the Clean Air Act (Appendix I)........

229a

233a

235a

TABLE OF AUTHORITIES

CASES Page

Chevron U.S.A., Inc. v. NRDC,

Oe Ss WEE ices rivnrscetcisensrentnsevccceunsions passim

Duquesne Light Co. v. EPA, 166 F.3d

el. iaxcntsebesdhiedaussmiaaseasavousacenes 30

FDA v. Brown & Williamson Tobacco Corp.,

ee Cre, Ree CN iss scnsinnesdcecutensdsctiiiewn 23

Friends of the Earth v. EPA, 446 F.3d 140

Ses Ss EE biikhonvxnannscuseandnnseesenvsreuaueneds 21

King v. St. Vincent’s Hospital, 502 U.S.

ee Re aks rckck caucbibivenecckis caesar iemcnuemcsiens 23

National Asphalt Pavement Ass’n v.

Train, 5389 F.2d 776 @D.C. Cir. 1976).....cc.0css. 10, 28

New York v. EPA, 443 F.3d 880

es ts cries riaucoucuviarncievsetmeacunian cee 20

Philbrook v. Glodgett, 421 U.S. 707 (1975)....... 23

Sierra Club v. EPA, 536 F.3d 673

es a haat es 21

South Coast Air Quality Management

District v. EPA, 472 F.3d 882 (2006).............. 20

Thomas v. New York, 802 F.2d 1443

a Se I kckceesncanncctadense veutensudecssssitens

United Savings Ass'n v. Timbers of

Inwood Forest, 484 U.S. 365 (1988)................

Vermont Yankee Nuclear Power Corp. v.

Poi 2) OMS Bas Me. Be) 7: | ane

STATUTES

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

RS RIO; SE UG, © POs ivnexssscvecncsctsaess

ey Y SBS te Biss ee oS > a ernee

CRA S218; OE DG. S FOB iiiviccedicietscsiscces

CAA § 112(b); 42 U.S.C. § 7412(b)............000.

CAA § 112(c); 42 U.S.C. § 112(6).......cceeeceeeeeens

CAA § 112(d); 42 U.S.C. § 7412(d)..................

CAA § 112(e)(4); 42 U.S.C. § 7412(e)(4).....0..2ee

CAA § 112(n); 42 U.S.C. § 7412(n)..........cseeees

CAA § 307(d); 42 U.S.C. § 7607(A)..............cc0eees

16 UB, © Fes sictsi ieee reneeanen

42 U.S.C. § SOOT}-7la)...cccccccoccccceccesescacseccncenes

passim

Gis IS ep sivecnseciskcdcdersdavevecesevesens 18

a es Bs kkk veccacocersepttccsesssccseavaeries 18

ee ee I ivexs cetera sdsviveveicccsivsctsieerseses 18

FEDERAL REGISTER

40 Fed. Reg. 48,292 et seq. (1975)............00ceeee 5

48 Fed Reg. 15,076, et seq. (19838)..............0c eee. §

52 Fed. Reg. 8,724 et seq. (1987).........cccccceceees 5

65 Fed. Reg. 79,825, et seq. (2000)...............008. 10, 11

69 Fed. Reg. 4,652 et seq. (2004)................0008- 7,8

70 Fed. Reg. 15,994, et seq. (2005)...............006. 2, 13

70 Fed. Reg. 28,606, et seq. (2005)............... ee 13

71 Fed. Reg. 33,388, et seq. (2006)..............0008. 15

X11

PETITION FOR A WRIT OF CERTIORARI

The Utility Air Regulatory Group (““UARG’”) respect-

fully petitions for a writ of certiorari to review the de-

cision of the United States Court of Appeals for the

District of Columbia Circuit in New Jersey v. U.S.

Environmental Protection Agency, 517 F.3d 574 (D.C.

Cir. 2008).

OPINION BELOW

The opinion of the D.C. Circuit is reported at 517

F.3d 574, 380 U.S. App. D.C. 134, and is reproduced

in the Appendix (“App.”) at pages la-19a. The orders

on the petitions for panel and en banc rehearing, as

well as the judgment of the D.C. Circuit, are included

in the Appendix at pages 223a-224a, 225a-226a, and

227a-228a.

JURISDICTION

The D.C. Circuit entered its judgment on February

8, 2008. Timely petitions for panel and en bane re-

hearing were denied by orders entered on May 20,

2008. On August 14, 2008, this Court extended the

deadline for the filing of the instant petition to and

including September 17, 2008. The Court’s jurisdic-

tion is invoked under 28 U.S.C. § 1254(1).

STATUTORY AND REGULATORY

PROVISIONS INVOLVED IN THE CASE

This case involves portions of the Clean Air Act

(““CAA” or “the Act”), 42 U.S.C. §§ 7412; CAA § 112

(App. 235a-238a); the U.S. Environmental Protection

Agency's December 2000 Regulatory Finding, 65 Fed.

Reg. 79,825 et seq. (Dec. 20, 2000) (App. 20a-43a); and

the now-vacated Revision of December 2000 Regula-

tory Finding (the so-called “Delisting Rule”), 70 Fed.

Reg. 15,994 et seg., (March 29, 2005) (App. 44a-222a).

STATEMENT OF THE CASE

On February 8, 2008, the U.S. Court of Appeals for

the D.C. Circuit struck down a final rule of the U.S.

Environmental Protection Agency (“EPA” or “the

Agency”) that G) removed electric generating units

(““EGUs”) from the list of source categories whose

hazardous air pollutant (“HAP”) emissions are to be

regulated under CAA § 112(d); and (ii) established

stringent requirements limiting EGU emissions of

mercury under CAA § 111 of the Act. New Jersey u.

U.S. Environmental Protection Agency, 517 F.3d 574

(D.C. Cir. 2008). The D.C. Circuit’s decision ignores

Congress’ explicit direction to EPA in CAA § 112(n)

that it regulate EGUs under CAA § 112 only if regu-

lation is “appropriate” and “necessary” under that

section, and EPA’s express conclusion reached after

extensive rulemaking that it had neither a legal nor a

factual basis for regulating EGUs under CAA § 112.

Instead, the Court required EPA to proceed with a

CAA § 112(d) rulemaking that the Agency had ex-

pressly found it lacked the authority to conduct. As

Judge Tatel observed during oral argument, “maybe

that’s what Congress intended,” 1.e., for EPA “to go

through a standard setting process that the Agency

itself admits is wrong.” Oral Argument Transcript at

40, App. 232a.

Under this view of CAA § 112, Congress required

promulgation of unlawful standards so that the Court

could “invalidate . . . [them] under the statute” once

promulgated. Oral Argument Transcript at 37, App.

230a. The decision is contrary to the requirements of

the CAA and violates fundamental principles of ad-

ministrative law and of statutory interpretation, as

laid out by this Court in Chevron v. NRDC, 467 U.S.

837 (1984).

When Congress overhauled the CAA in 1990, it had

a clear vision for controlling HAP emissions from

EGUs and from other sources. In general, Congress

provided that CAA § 112 regulation begins with iden-

tifying source categories which have at least one

“major” source, then rulemakings to set stringent

technology-based standards for those major source

categories, and then further rulemakings to address

any unacceptable residual risk from those source

categories.

In contrast, Congress concluded that this general

framework did not make sense for EGUs. Congress

knew that other parts of the 1990 CAA Amendments,

notably the Acid Rain program, would impose sub-

stantial emission reduction requirements on EGUs

that would reduce indirectly EGU HAP emissions. As

a result, the public-health implications of any re-

maining HAP emissions, as well as the efficacy and

costs of additional control, required further study.

Consequently, Congress did not apply the new

HAP-control framework to EGUs. Rather, it directed

EPA in CAA § 1:i2(n)(1)(A) to study EGU HAP emis-

sions and to determine if further regulation of those

emissions under CAA § 112 is “appropriate and nec-

essary.” At issue here is how EPA carried out this

broad delegation of authority under CAA §&

112(n)(1)(A).

In December 2000, in the closing hours of the Clin-

ton Administration and without notice and comment

rulemaking, EPA’s Administrator announced that

regulation of EGUs under CAA § 112 was appropriate

and necessary, and added EGUs to the list of source

categories for regulation under CAA § 112. In that

“notice of finding” under CAA § 112(n), EPA promised

the public an opportunity for comment in the context

of the CAA § 112(n) rulemaking required under CAA

§ 307(d)(1)(C) to establish emission standards for

EGUs under CAA § 112.

EPA subsequently undertook that rulemaking, pro-

posing to regulate EGUs under either CAA § 111 or

CAA § 112 depending on its review of the December

2000 “notice of finding” under CAA § 112(n). At the

end of this rulemaking, EPA found that the December

2000 finding “lacked foundation” and that regulation

of EGUs under CAA § 112 was neither “appropriate”

nor “necessary.” The Agency nevertheless promul-

gated stringent emission reduction requirements un-

der CAA § 111.

Without addressing the merits of EPA’s CAA

§ 112(m) rulemaking determination, a panel of the

D.C. Circuit found that the December 2000 “notice of

finding” precluded subsequent EPA Administrators

from any course of action other than one that would

involve unlawful regulation of EGUs under CAA

§ 112(d) — i.e., unlawful due to the absence of a CAA

§ 112(m) “appropriate and necessary” finding. As the

statute and the long history of EPA’s efforts to 1m-

plement CAA § 112(n)(1)(A) show, however, the De-

cember 2000 finding could have no such effect. The

D.C. Circuit erred in ignoring CAA § 112(n)’s thresh-

old requirements and focusing exclusively on another

provision of the statute (i.e., CAA § 112(c)(9)) to re-

quire, under the guise of a Chevron step one analysis,

future EPA Administrators to proceed with unlawful

rulemaking.

The Clean Air Act

Section 112 was added to the CAA in 1970. The

1970 Act required EPA to make a risk-based determi-

nation in order to regulate substances as HAPs: EPA

could regulate substances “reasonably . . . anticipated

to result in an increase in mortality or an increase in

serious ... illness,” to a level that protects public

health with an “ample margin of safety.” CAA §

112(a)(1) (1970). Under this provision, EPA regulated

a number of HAPs emitted from industrial source

categories other than EGUs. See 40 CFR Part 63.

As for EGUs, EPA found that the combustion of fos-

sil fuels produces extremely small releases of a broad

variety of substances that are present in trace

amounts in fuels and that are removed from the gas

stream by contro] equipment installed to satisfy other

CAA requirements. EPA found that these HAP re-

leases did not pose hazards to public heaith. See 48

Fed. Reg. 15,076, 15,085 (1983). In the case of mer-

cury specifically, EPA found that “coal-fired power

plants... donot emit mercury in such quantities that

they are likely to cause the ambient mercury concen-

tration to exceed” a level that “will protect -the public

health with an ample margin of safety.” 40 Fed. Reg.

48,297-98 (1975) (mercury); 52 Fed. Reg. 8,725 (1987)

(reaffirming mercury conclusion).

In 1990, Congress expressed general concern that

the risk-based approach to HAP regulation of the

1970 CAA was time-consuming and expensive to 1m-

plement for non-EGUs. See S.Rep. No. 101-228, at

131-33 (1989), 1990 U.S. Code Cong. & Admin. News

at 3385, 3516-18. Congress therefore designated 189

chemicals as HAPs under CAA § 112(b) and in-

structed EPA in CAA § 112(c) to list categories of

“major” stationary sources of HAP emissions for the

development of control technology-based emission

standards under CAA § 112(d). These technology-

based standards are referred to as “maximum achiev-

able control technology” or “MACT” standards and are

based on the emission reductions achieved by the best

controlled similar sources. CAA § 112(d).

To remove a category or subcategory of major

sources from this technology-based program for a non-

carcinogen (such as mercury), EPA must make a risk-

based determination that “no source in the category

. . exceed a level which is adequate to protect public

health with an ample margin of safety and no adverse

environmental effect will result.” CAA § 112(c)(9).

For major source categories other than EGUs, there-

fore, the 1990 CAA Amendments changed the risk-

based determination from a threshold for HAP regu-

lation to a criterion for “de-listing” a major source

category.

By contrast, in CAA § 112(n)(1)(A), Congress spe-

cifically directed that EPA shall regulate EGU HAP

emissions under CAA § 112 only after completion of a

study of the “hazards” to public health “reasonably

anticipated to occur” as a result of EGU HAP emis-

sions, and only after the Agency had considered the

impact of “imposition of the requirements of this Act”

on those emissions. As part of that evaluation, Con-

gress directed EPA to “develop and describe” “alterna-

tive control strategies” for any HAP emissions that

“may warrant regulation under this section.” Finally,

Congress provided that EPA shall regulate HAP

emissions from EGUs under CAA § 112 only to the

extent it found, after rulemaking, that regulation was

“appropriate and necessary after considering the re-

sults of the study” required by CAA § 112(n)(1)(A).

In implementing provisions such as CAA § 112,

CAA § 307(d) provides rulemaking procedures that

apply in lieu of the Administrative Procedures Act

rulemaking requirements. In CAA § 307(d)(1)(©),

Congress directed that these rulemaking procedures

“appl[y] to... any regulation under section 112...

(n).”

In sum, Congress recognized that EGUs are specif}-

cally and extensively regulated under various CAA

programs. It therefore treated EGUs differently from

other source categories under CAA § 112 by providing

that EPA can regulate EGU HAP emissions under

CAA § 112 only if it determines after rulemaking, and

after considering the impact. of other CAA require-

ments, that regulation of specific HAP emissions is

“appropriate and necessary” to avoid “hazards” to

“public health.”

Mercury

Mercury is a naturally occurring element in the

Earth’s crust that is released into the environment as

a result of both natural processes such as volcanoes,

oceans, and soils, and manmade processes such as

gold and ore mining, municipal and medical waste

incineration, fossil fuel combustion, and chlorine

manufacturing. EPA has estimated that total global

emissions of mercury are about 5,000 tons per year:

1,000 tons from natural sources, 2,000 tons from

manmade sources and 2,000 tons from release of mer-

cury into ambient air that has been deposited on soil

or 1n water. 69 Fed. Reg. 4,658 (2004). Mercury is a

global pollutant. Much of the mercury emitted enters

the global pool where it circulates in the atmosphere

for up to one year before depositing on soil or in wa-

ter.

EPA estimates that U.S. coal-fired EGUs emit

about 45 tons of mercury annually, or about 1% of

worldwide mercury emissions. Furthermore, EPA es-

timates that only about 30% of EGU mercury emis-

sions (13.5 tons) deposits in the U.S. (By comparison,

about 75% of the mercury that deposits in the U.S.

originates from sources outside the U.S.) As a result,

U.S. coal-fired EGUs contribute only about 8% of the

total annual mercury deposited across the U.S. See

70 Fed. Reg. 16,019, App. 155a.

In nature, mercury is found in elemental, organic

(methylmercury) and inorganic forms. 69 Fed. Reg.

4657. The primary route of human exposure to mer-

cury is by consumption of methylmercury in fish. 69

Fed. Reg. 4,658. Methylmercury is principally formed

by microbial action in the top layers of sediment in

water bodies, after mercury has precipitated from the

air and deposited into those waters. Once formed,

methylmercury bioaccumulates in the aquatic food

chain, ultimately reaching large predator fish con-

sumed by humans. See Utility Study, p. 7-1.

Fossil fuel combustion by EGUs produces trace

amounts of three forms of mercury: elemental, par-

ticulate, and gaseous ionic. 70 Fed. Reg. 16,011, App.

120a. EGUs do not produce or emit organic forms of

mercury, like methylmercury. As a result, the mer-

cury deposited in the U.S. as a result of EGU emis-

sions must be transformed in the environment into

methylmercury before it can enter the food chain and

contribute to human exposure. As EPA recognizes,

only a fraction of the EGU mercury emissions depos-

ited in the U.S. actually enters water bodies, and only

a fraction of that deposition is transformed into me-

thylmercury. /d. at 16,020, App. 157a.

CAA § 112(n)(1)(A) Rule

Shortly after enactment of the 1990 CAA Amend-

ments, EPA began updating information on the types

and amounts of HAPs emitted from the combustion of

coal, oil] and gas by EGUs. EPA also collected infor-

mation on the health effects of those HAPs, and con-

ducted modeling to determine how those emissions

may affect public health. The products of these ef-

forts were reported in the Mercury Study and the

Utility Study, published in December 1997 and Feb-

ruary 1998, respectively. The Utility Study did not

contain a CAA § 112(n)(1)(A) regulatory determina-

tion whether regulation of certain HAPs under CAA §

112 was “appropriate and necessary.” Utility Study,

ES-1. Instead, EPA stated that it “believes that mer-

cury from coal-fired utilities is the HAP of greatest

potential concern and merits additional research and

monitoring” to inform a regulatory determination.

Utility Study, p. ES-27.

Following issuance of the Utility Study, EPA under-

took several efforts to advance its understanding of

mercury health effects and of the quantity and form

of mercury emissions from coal-fired EGUs. At Con-

gress’ direction, EPA asked the National Academy of

Sciences (“NAS”) to review the toxicological effects of

methylmercury and to make recommendations re-

garding an appropriate reference dose (“RfD”). The

NAS National Research Council panel found that

EPA’s current RfD for methylmercury was “scientifi-

cally justified.” KPA also issued two information

collection requests to EGUs. The first required all

coal-fired EGUs to collect coal samples throughout

1999 and to analyze those samples for mercury con-

tent. The second required approximately 80 EGUs to

conduct stack sampling of their mercury emissions

over a three-day period.

On December 14, 2000, days before the Clinton

Administration left office and well before EPA could

complete the data collection and research it had pre-

viously said was necessary to make a CAA §

112(n)(1)(A) determination, then-departing EPA Ad-

ministrator Browner published, without any rule-

making under CAA § 307(d)(1)(C), a “notice of regula-

tory finding.” This “notice” announced her “conclu-

sion” that regulation of mercury emissions from coal-

fired EGUs was “appropriate and necessary” under

CAA § 112. 65 Fed. Reg. 79,825 (Dec. 20, 2000), App.

20a. Because necessary research had not been com-

pleted, the notice neither described the increment of

emissions whose control was “necessary and appro-

priate” under CAA § 112, nor the “alternative control

strategies warranted to address those emissions un-

der this section.” Indeed, Administrator Browner ac-

knowledged that EPA could not at that time quantify

the amount of methylmercury (the form of mercury of

health concern) in U.S. fish attributable to mercury

emissions from domestic coal-fired EGUs. 65 Fed.

Reg. 79,827, App. 27a-28a.

Administrator Browner explained that it was “un-

necessary to solicit additional public comment on to-

day’s finding {because] .. . [t]he regulation developed

subsequent to the finding will be subject to public re-

view and comment.” 65 Fed. Reg. at 79,831, App.

42a-43a; cf. National Asphalt Pavement Ass’n ov.

Train, 539 F. 2d 775, 779 nn. 1 & 2 (D.C. Cir. 1976)

(“The preliminary action of the Administrator in list-

ing a particular source category is action taken in the

course of promulgating final standards. . . . [S}ince

the Administrator can propose regulations only for a

source category on his list... we think the Clean Air

Act requires an opportunity for comment on the des-

ignation issue.”). In that future rulemaking, she rep-

resented, EPA would also consider the “effectiveness

and costs of controls” for mercury, and alternative

control strategies, including “economic incentives

such as emissions trading.” 65 Fed. Reg. 79,830, App.

39a, 41a. As EPA explained, “judicial review would

be available on both the listing decision and the sub-

sequent regulation” at the end of that rulemaking.

Id. at 79,831, App. 42a.

Immediately following its publication, UARG

sought review of the December 2000 notice in the

D.C. Circuit. UARG intended to argue that Adminis-

trator Browner’s “appropriate and necessary” finding

was not factually justified and that EPA had violated

CAA §§ 112(n)(1)(A), and 307(d) by issuing the finding

and by purporting to list EGUs under CAA § 112(c) as

a “major” source category based on that finding. In

response, EPA filed a motion to dismiss and advised

the court that “[b]ecause the decision to add coal and

oil fired electric utility steam generating units to the

source category list is not yet final agency action, it

will be among the matters subject to further comment

in the subsequent rulemaking.” EPA’s Motion to

Dismiss (April 9, 2001) at 9 (emphasis added). On

July 26, 2001, the D.C. Circuit granted EPA’s motion

to dismiss. Order, App. 233a-234a.

Following the December 2000 notice, EPA con-

ducted the comprehensive CAA rulemaking it had

promised, addressing former Administrator Browner’s

“appropriate and necessary” finding, the CAA § 112(c)

listing decision, and regulatory options. Regulatory

options considered by EPA in that rulemaking in-

cluded: (1) no further regulation of EGU mercury

emissions, or (2) adoption of legislative rules regu-

lating EGU mercury emissions under the MACT pro-

visions of CAA § 112(d), or (3) adoption of legislative

rules under CAA § 112(n) addressing any EGU emis-

sions that are “appropriate and necessary” to regu-

late, or (4) adoption of legislative rules under other

sections of the Act (e.g., CAA § 111) that make further

controls inappropriate and unnecessary under CAA §

112.

EPA also completed extensive scientific and techni-

cal studies to address the areas of research need iden-

tified in the Utility Study. Commentors submitted

detailed technical information on EGU mercury emis-

sions and on the health consequences of those emis-

sions. This process resulted in a rulemaking record

that is the most detailed technical record ever devel-

oped by EPA under CAA § 112.

In particular, EPA conducted extensive modeling to

analyze how changes in mercury emissions from coal-

fired EGUs would affect U.S. mercury deposition and

methylmercury levels in fish for a range of cases.

EPA’s analyses included an alternative scenario as-

suming zero mercury emissions from all EGUs. The

modeling showed that total mercury deposition in the

U.S. is not significantly affected by mercury deposi-

tion from EGUs, and that EGUs contribute a “rela-

tively small percentage” to fish tissue methylmercury

levels in the U.S. 70 Fed. Reg. 16,020, App. 158a.

More importantly, the modeling showed that, quite

apart from any CAA 6§112_ regulation, the

implementation of other requirements of the Act (in-

cluding CAA § 110 state implementation plans, the

CAA § 111 new source performed standards, and the

Title IV Acid Rain Program) produces the vast ma-

jority of the reductions in U.S. mercury deposition

and in U.S. methylmercury levels in fish tissue that

can be achieved by controlling mercury emissions

from coal-fired EGUs.

Thus, EPA concluded that “the December 2000 ‘ap-

propriate’ finding lacked foundation because it was

not based on the level of utility Hg emissions re-

maining ‘after imposition of the requirements of thle]

Act.” 70 Fed. Reg. 16,004, App. 91a. EPA explained

that because “we now recognize the availability of

these other statutory provisions . . . we further con-

clude today that it is not necessary to regulate” EGUs

under CAA § 112. /d. at 16,005, App. 97a. At the

conclusion of this rulemaking, EPA removed EGUs

from the CAA § 112(c) list because regulation under

CAA § 112 was neither “appropriate” nor “necessary”

and therefore the December 2000 notice “lacked [le-

gal] foundation.” Jd. at 15,994, App. 44a.

The Clean Air Mercury Rule

On the same day EPA issued its CAA § 112(n)(1)(A)

rule and removed EGUs from the lst of major source

categories under CAA § 112, the Agency decided in-

stead to regulate mercury emissions from coal-fired

EGUs under CAA § 111. 70 Fed. Reg. 28,606 (May

18, 2005). EPA interpreted the term “standard of per-

formance” in CAA § 111(a) to include emission trad-

ing systems and determined that the “best system of

[mercury] emission reduction” for existing EGUs was

a national cap-and-trade program that ensured that

(i) mercury emissions were limited in accordance with

the “best system” of emissions control, and (ii) that

mercury emissions from coal-fired EGUs — both ex-

isting and new — were capped so total emissions could

never increase in the future as new facilities were

built to meet increased electricity demand. 70 Fed.

Reg. 28,616, 28,617. The result was the Clean Air

Mercury Rule (““CAMR’”).

CAMR set output-based emission limits for new

EGUs and established a nationwide cap-and-trade

program for mercury emissions from all coal-fired

EGUs. Total mercury emissions from all EGUs were

capped at 38 tons per year (“tons/yr”’) in 2010 and 15

tons/yr beginning in 2018. CAMR’s cap-and-trade

program is implemented through state plans devel-

oped under CAA § 111(d). Based on the extensive

analyses performed for the CAA § 112(n)(1)(A) regula-

tory determination, EPA found that the additional

mercury controls required by CAMR would result in

“relatively small” additional reductions in mercury

deposition in the United States when compared to the

imposition of other CAA requirements, and that going

beyond CAMR to zero emissions would produce little

or no health benefits. 70 Fed. Reg. 16,019-20, App.

156a.

Petitions for Reconsideration

After EPA published its CAA § 112(n)(1)(A) rule

and CAMR, several parties filed petitions seeking re-

consideration of both CAMR and EPA’s CAA §&

112(n)(1)(A) rule. On October 28, 2005, EPA agreed

to reconsider these decisions. EPA requested addi-

tional comment on several aspects of its CAA §

112(n)(1)(A) rule, including its legal interpretation of

CAA § 112(n)(1)(A), and the detailed technical and

scientific analyses of the impact of EGU mercury

emissions on public health. 70 Fed. Reg. 62,200.

After considering the petitions, EPA produced a de-

tailed 306-page response to comments. Based on the

petitions and the additional comments, EPA found no

reason to make any substantive revisions to its CAA §

112(n)(1)(A) rule or te CAMR and therefore reaf-

firmed its rulemaking determination. 71 Fed. Reg.

33,388 (June 9, 2006).

The D.C. Circuit’s Decision

In vacating both the Delisting Rule and CAMR, the

D.C. Circuit never questioned EPA’s March 2005

rulemaking determination (i) that the December 2000

notice of regulatory finding, made without rulemak-

ing, “lacked foundation,” and (ii) that regulation of

EGUs under CAA § 112 is neither “appropriate” nor

“necessary.” Instead, the court focused exclusively on

another CAA provision, CAA § 112(c)(9), that deals

with the “delisting” of lawfully listed source catego-

ries.

Section 112({c)(9) provides that once listed “the Ad-

ministration may delete any source category from this

list under this subsection” if he makes a specific risk-

based determination. In the case of non-carcinogens

(such as mercury), this determination involves a

showing that “no source in the category . . . [will] ex-

ceed a level which is adequate to protect public health

with an ample margin of safety.”

According to the D.C. Circuit, this statutory lan-

guage establishes, as a Chevron step one matter, that

Administrator Browner’s eleventh-hour CAA § 112(n)

“notice of regulatory finding,” made without the

rulemaking required under CAA § 307(d)(1)(C), had a

legally binding effect on all future actions by EPA.

According to the court, this “finding” precluded the

Agency from adopting a different position in the sub-

sequent rulemaking promised by Administrator

Browner and required by the CAA. According to the

court, “[s]ection 112(n)({1) governs how the Adminis-

trator decides whether to list EGUs,” but “says noth-

ing about delisting EGUs.” 517 F.3d at 582, App. 16a.

By contrast, because “section 112(c)(9) governs the

removal of ‘any source category’ from the section

112(c)(1) list,” the court found that once the December

2000 “notice of regulatory finding” was issued, “the

only way EPA could remove EGUs from the... list

was by satisfying section 112(c)(9)’s requirements.”

517 F.3d at 582, App. 15a (emphasis in original). As

a result, as Judge Tatel observed during oral argu-

ment, the Agency, “can’t correct its own mistake” in

the rulemaking that follows its “notice of regulatory

finding,” undertaken to address regulatory options.

Oral Argument Transcript at 36, App. 229a. Rather,

it must promulgate unlawful rules so that the court

(not the Agency) can correct “the errors in a challenge

to th[ose] emission standards.” Id.

REASONS FOR GRANTING THE PETITION

By its express terms, the CAA states that EPA shall

regulate HAP emissions from EGUs under CAA § 112

only after the Agency has determined that “such

regulation is appropriate and necessary.” On March

29, 2005, the Agency concluded following notice-and-

comment rulemaking that regulation of EGUs under

CAA § 112 was not “appropriate and necessary.” EPA

therefore removed EGUs from the list of major source

categories to be regulated under CAA § 112, and in-

stead issued a stringent CAA § 111 regulatory pro-

gram for EGUs.

In its decision, the D.C. Circuit invoked Chevron

step one to conclude that EPA’s March 29, 2005 rule-

making decision to remove EGUs from the CAA

§ 112(c) list, based on the Agency’s CAA § 112(n) de-

termination that regulation of EGUs under CAA

§ 112 was neither “appropriate” nor “necessary,” was

unlawful under the “plain text and structure of sec-

tion 112.”! 517 F.3d at 583, App. 19a. According to

the court, three words in CAA § 112(c)(9) — “any

source category” — compel to EPA to adopt a standard

under CAA § 112(d) that ts not authorized under CAA

§ 112(n), a standard that would therefore have to be

vacated on subsequent review by the D.C. Circuit.

This case is but the latest and perhaps most strik-

ing example of recent decisions by appellate courts,

and by the D.C. Circuit in particular, under which

specific meaning is given to fragments of statutory

language in order to find an unambiguous congres-

sional intent that could not be discerned if traditional

canons of statutory construction were applied to the

statutory provision as a whole. This results-oriented

approach to statutory construction using Chevron

step one allows the court to conclude that the “plain

language” of the CAA compels a policy result that

Congress could have never imagined, much less in-

tended the Agency to pursue.

Years ago, this Court found it necessary to admon-

ish the D.C. Circuit that the “fundamental policy

questions appropriately resolved in Congress ...are

not subject to re-examination in the federal courts

under the guise judicial review of agency action.”

Vermont Yankee Nuclear Power Corp. v. NRDC, 435

U.S. 519, 558 (1978) (emphasis in original). “Admin-

istrative decisions,” the Court said, should not be set

' The D.C. Circuit expressly declined even to “reach [the] con-

tention that... EPA was arbitrary and capricious in reversing

its determination that regulating EGUs under section 112 was

‘appropriate and necessary.” See 517 F.3d at 581, App. 13a.

aside “simply because the [reviewing] court is un-

happy with the result reached.” Id.

Seemingly, a reminder of these principles is today

in order. In vacating the Delisting Rule and CAMR,

the D.C. Circuit has so far departed from the accepted

and usual course of judicial proceedings under Chev-

ron that it calls for the exercise of this Court’s super-

visory power.

The D.C. Circuit is afforded exclusive jurisdiction to

review the validity of legislative rules promulgated by

EPA to implement the CAA, see CAA § 307(b), as well

as rules, orders and actions by other federal agencies

under many other federal statutes.2 This imposes on

this Court the responsibility to give heightened scru-

tiny to the D.C. Circuit’s exercise of its judicial review

function, recognizing that the D.C. Circuit’s views as

to the meaning of authorizing statutes — because that

court’s word is final absent review by this Court — will

necessarily have an enormous impact on the shape

and direction of many regulatory initiatives. Certio-

rari is needed to ensure that the respective roles of

agencies and reviewing courts in our constitutional

system are respected.

Finally, certiorari is needed to address whether a

non-final notice and finding that regulation is au-

“ See, eg., 47 U.S.C. § 402(b) (Federal Communications

Commission orders); 42 U.S.C. § 300j-7(a) (EPA regulations

under the Safe Drinking Water Act); 42 U.S.C. § 6976(a)(1) (EPA

regulations under the Resource Conservation and Recovery Act):

42 U.S.C. § 9613(a) (EPA regulations under the Comprehensive

Environmental Response, Compensation, and Liability Act); 15

U.S.C. § 766(c) (Federal Energy Regulatory Commission

regulations).

thorized, issued by an outgoing administration with-

out rulemaking, can compel a new administration to

adopt a regulatory program found to be unauthorized

following notice and comment rulemaking. A funda-

mental principle of administrative law is that an

agency can only bind itself in the future through leg-

islative rulemaking. Equally fundamental is the

principle that an agency is required to correct a legal

error where a rulemaking record establishes that an

agency’s preliminary findings were unsupported.

Both principles were ignored by the D.C. Circuit.

As a consequence, the court’s decision deprives

UARG of a timely opportunity to have the legal defi-

ciencies of EPA’s December 2000 notice of finding and

listing judicially reviewed. When UARG sought re-

view of EPA’s December 2000 actions in February

2001, the court dismissed UARG’s petition after EPA

averred that its December 2000 notice and listing

were not final agency action, and that they would be

the subject of comment during subsequent rulemak-

ing. After UARG convinced EPA that its December

2000 CAA § 112(n) finding was legally and factually

in error, the D.C. Circuit again refused to resolve the

issue of the legal adequacy of EPA’s December 2000

notice of finding, but nevertheless found that that no-

tice compelled future EPA action to adopt an invalid

CAA § 112(d) MACT standard for EGUs. The court’s

decision requires UARG to participate in many more

years of unnecessary rulemaking activities simply be-

cause the court has refused to address EPA’s author-

ity to hst EGUs in the first place.

:. CERTIORARI IS NEEDED TO ADDRESS

THE D.C. CIRCUITS NEW APPROACH

TO STATUTORY CONSTRUCTION,

WHICH CONFLICTS WITH CHEVRON.

Under CAA § 112(n)(1)(A), EPA may regulate EGUs

under CAA § 112 only if the Agency finds that such

regulation is “appropriate and necessary.” Notwith-

standing EPA’s having determined under CAA

§ 112(n)(1)(A) that it had no legal or factual basis for

regulating EGUs under CAA § 112, the D.C. Circuit

held that the words “any source category” in CAA

§ 112(c)(9) required the completion of the very MACT

standard-setting rulemaking under CAA § 112(d) that

the Agency had expressly found was neither “appro-

priate” nor “necessary.” As Judge Tatel observed

during oral argument, Congress used these three

words to mandate that EPA “go through a standard

setting process that the Agency itself admits is

wrong,” leaving it to the court later to “invalidate” the

resulting unlawful MACT standard that Congress

supposedly directed EPA to develop. Oral Argument

Transcript at 40, App.232a.

This case is the latest in a series of recent appellate

decisions under which specific meaning is given to

fragments of statutory language in order to find an

unambiguous congressional intent that could not be

discerned from the statutory provision as a whole.

For example, in New York v. EPA, 443 F.3d 880 (D.C.

Cir. 2006), the D.C. Circuit found that “the word ‘any’

before a phrase with several common meanings”

eliminates the agency’s discretion to interpret that

phrase to select among those meanings, regardless of

the statutory definition “taken as a whole.” 443 F.3d

at 885 and 888 n.4 (D.C. Cir. 2006). In South Coast

Air Quality Management District v. EPA, 172 F.3d

882 (D.C. Cir. 2006), the D.C. Circuit found that the

word “control” unambiguously requires EPA to in-

clude in the definition of that term not only pollution

control requirements, but “penalties, rate-of-progress

milestone, [and] contingency plans.” 472 F.3d at 900.

In.Friends of the Earth v. EPA, 446 F.3d 140 (D.C.

Cir. 2006), the D.C. Circuit found that the word

“daily” must be interpreted by EPA as a 24-hour

measurement of effluent discharges as opposed to

other measures of “daily” discharges. 446 F.3d at

142. Most recently, in Sierra Club v. EPA, 536 F.3d

673 (D.C. Cir. 2008), two judges on a D.C. Circuit

panel rejected EPA’s interpretation of the CAA based

on the conclusion that the words “each permit”

evinced an unambiguous command. 536 F.3d at 678.

The dissenting judge also employed a Chevron step

one analysis to cite other broader provisions in the

CAA that he believed supported EPA’s action. 536

F.3d at 680-82. That Congress could so often convey

unambiguous: intent on such complex _ subjects

through isolated words or fragments of phrases defies

credulity.

Similarly, in this case, the entirety of the D.C. Cir-

cuit’s decision boils down to a fragment of a phrase:

“because Section 112(c)(9) governs the removal of ‘any

source category’ from the section 112(c)(1) list,” once

the Administrator listed them under section 112(c)(1)”

in December 2000, EPA “had no authority to delist

them without taking the steps required under section

112(c)(9).” See 517 F.3d at 582, 581, App. 15a, 14a

(emphasis in original). As a result, even though EPA

found after rulemaking that the December 2000 no-

tice of regulatory finding and listing “lacked founda-

tion” and that regulation of EGUs under CAA § 112

was neither “appropriate” nor “necessary,” the

Agency's “purported removal of EGUs from the sec-

tion 112(c)(1) lst” without making the CAA

§ 112(c)(9) findings for delisting, according to the

court, “violated the CAA’s plain text and must be re-

jected under step one of Chevron.” Id. at 582, App.

15a.

In Chevron, this Court enunciated the now-familiar

approach to judicial review of an agency’s interpreta-

tion of a statute it is responsible for implementing:

“First, always, is the question whether Congress has

spoken to the precise question at issue.” 467 U.S. at

842. “If the intent of Congress is clear, that is the end

of the matter,” for the reviewing court, like the agency

before it, “must give effect to the unambiguously ex-

pressed intent of Congress.” Jd. If, however, “Con-

gress has not directly addressed the precise question

at issue” — because the statute is “silent or ambiguous

with respect to the specific issue” — the “question for

the court is whether the agency’s answer is based ona

permissible construction of the statute.” Jd. In the

latter case, “federal judges ... have a duty to respect

legitimate policy choices” made by the agency. Id. at

866.

The judiciary is the “final authority on issues of

statutory construction.” 467 U.S. at 843 n.9. Exer-

cising this authority with care is particularly impor-

tant for the D.C. Circuit, because it is charged with

exclusive jurisdiction to review many of the legislative

rules issued by EPA and other agencies. In exercising

this authority, this Court has made clear that the

“court ... employ{s] traditional tools of statutory con-

struction ... [to] ascertain|[} whether . . . Congress

had an intention on the precise question at issue.” Jd.

at 843 n.9 (emphasis added).

Application of “traditional tools of statutory con-

struction” requires a court to examine both the statu-

tory context and the history of a word or phrase. In

particular, the “meaning of a word must be ascer-

tained in the context of achieving particular objec-

tives, and the words associated with it may indicate

... the true meaning.” 467 U.S. at 861. For that rea-

son, a reviewing court “should not confine itself to ex-

amining a particular statutory provision in isolation.”

See FDA v. Brown & Williamson Tobacco Corp., 529

U.S. 120, 132 (2000); see also Philbrook v. Glodgett,

421 U.S. 707, 713 (1975) (‘In expounding a statute,

we must not be guided by a single sentence or mem-

ber of a sentence, but look to the provisions of the

whole law, and to its object and policy.”). In other

words, “[s]tatutory construction” is a “holistic en-

deavor,” United Savings Ass’n vu. Timbers of Inwood

Forest, 484 U.S. 365, 371 (1988), a characterization

that reflects the “cardinal rule” that a “statute is to be

read as a whole,” since the “meaning of statutory lan-

guage, plain or not, depends on context.” See King v.

St. Vincent’s Hosp., 502 U.S. 215, 221 (1991) (citations

omitted).

In this case, the court’s gaze never deviated from

three words — “any source category” — as the basis for

its holding that EPA’s decision “violated the CAA’s

plain test and must be rejected under step one of

Chevron.” 517 F.2d at 582, App. 15a. Had the court

_read CAA § 112 “as a whole,” it could not have con-

cluded that, even after determining in March 2005

that regulation of EGUs under CAA § 112 was not

“appropriate and necessary,” the Agency was never-

theless precluded from removing EGUs from the CAA

§ 112(c) source list.

To begin with, the D.C. Circuit’s holding ignores the

plain language of CAA § 112(n)(1)(A), which clearly

and unambiguously communicates Congress’s intent

that EPA is to regulate EGUs under CAA § 112 only

if the Agency “finds such regulation is appropriate

and necessary.” Notably, the D.C. Circuit did not

take issue with EPA’s decision, as part of its March

2005 Delisting Rule, that former Administrator

Browner’s December 2000 regulatory notice “lacked

foundation,” and that EPA had subsequently deter-

mined that regulation of EGUs under CAA § 112 was

not “appropriate and necessary.” Indeed, the court

expressly declined to reach the petitioners’ challenge

to that aspect of the Delisting Rule.

Instead, the panel reasoned that CAA § 112(n)(1)(A)

“governs how the Administrator decides whether to

hst EGUs,” and that it “says nothing about delisting

EGUs.” See 517 F.3d at 582, App. 16a. But this is no

answer. As the language of CAA § 112(n)(1)(A)

makes clear, the “appropriate and necessary” finding

is the prerequisite for EPA’s regulating EGUs “under

this section” — t.e. under CAA § 112 itself. Under the

plain language of the CAA, EGUs cannot simultane-

ously be listed under CAA § 112(c) — and, thus, sub-

ject to regulation under CAA § 112(d) — and at the

same time have been found by EPA not to warrant

regulation under CAA § 112, based on the Agency’s

determination that regulation of EGUs is not “appro-

priate and necessary.” Yet that anomalous situation

is precisely what the D.C. Circuit’s decision has cre-

ated. Chevron step one does not allow that result,

much less, as the court found, compel it.

Second, even when _ recad in isolation, CAA

§ 112(c)(9)(B), does not say what the D.C. Circuit be-

leved it to say. The court read subparagraph (9)(B)

as if it provides that EPA “may delete any source

category from the list” under subsection (c) only

where either of the criteria set forth in clauses (i) or

(ii) is satisfied. But, by its plain terms, subparagraph

(9)(B) says no such thing, nor can the provision be

plausibly construed in such a fashion. To the con-

trary, subparagraph (b)(9)(B) addresses the situation

where a source category otherwise properly listed un-

der subsection (c) may nevertheless be removed from

the list applying a risk-based test — and thereby avoid

being subject to a MACT standard established under

subsection (d).

In other words, the provisions of subparagraph

(9)(B) have nothing whatsoever to do with EPA’s au-

thority to police the inclusion and deletion of major

sources that may or may not be properly listed under

subsection (c). Rather, CAA § 112(c)(9)(B) reflects

Congress’s intent that an “off-ramp,” as it were, be af-

forded for those categories of major sources for which

establishment of a MACT standard under subsection

(d) would not be warranted, based on a determination

by EPA that the sources within the category do not

present a significant risk to public health or to the

environment. The D.C. Circuit’s contrary conclusion

that the provisions of subparagraph (c)(9)(B) repre-

sent a “comprehensive delisting process’? that serve

as the only means by which EPA is authorized to re-

move major sources from the subsection (c) list is it-

self contrary to the plain language of the state.

For example, what of the situation where EPA de-

termines that a category initially listed under CAA §

112(c) should be deleted from this st due to the

Agency’s having subsequently learned that, in fact,

the category in question contains no “major sources”

warranting its listing? Nothing on the face of CAA §

112(c)(9)(B) speaks to that situation, but Congress

could not have intended to restrain EPA’s authority to

3 See 517 F.3d at 582, App. 16a.

revise the source category listing in the face of later-

developed information indicating that the initial list-

ing of a particular category was incorrect. To the con-

trary, other language in subsection (c) makes it per-

fectly clear that EPA has such authority.

Specifically, CAA § 112(c)(1) provides that EPA

“shall publish, and shall from time to time, if appro-

priate, revise, tn response to public comment or new

information, a list of all categories and subcategories

of major sources and area sources.” (emphasis

added). It is hard to imagine a clearer indication that

Congress expected that EPA would and should peri-

odically revise the subsection (c) source category list

as “appropriate,” based on “public comment or new

information,” but the D.C. Circuit steadfastly ignored

this language even as it was purporting to ferret out

“unambiguously expressed” congressional intent on

the face of CAA § 112.

Indeed, when EPA pointed out to the D.C. Circuit

that the Agency had in the past revised the source

category list to remove certain previously-listed cate-

gories upon determining that, in fact, the category

contained no sources that emitted at the “major

source” thresholds, and that this underscored EPA’s

authority to remove EGUs from the listed based on its

March 2005 determination that the December 2000

“appropriate and necessary” finding “lacked founda-

tion,” the court responded that “previous statutory

violations cannot excuse the one now before the

court.” See 517 F.3d at 583, App. 18a But this retort

is circular nonsense, as the only basis for the D.C.

Circuit’s assumption that such prior action by EPA

constituted a “statutory violation” is the court’s own

mistaken conclusion, based on its misplaced reading

of a snippet of the language of CAA § 112(c), that the

Agency had no such authority to correct mistakes in

the CAA § 112(c) list based on “new information.”

Finally, the D.C. Circuit’s decision fails altogether

to address the point that, regardless whether then-

Administrator Browner’s December 2000 “finding”

that regulation of EGUs was “appropriate and neces-

sary’ was substantively valid, her purported listing of

EGUs under CAA § 112(c) was per se unlawful under

the plain language of the Act. That is, an affirmative

finding under CAA § 112(n)(i)(A) does not automati-

cally entail that EGUs must be listed under CAA §

112(c). By its plain terms, CAA § 112(n)(1)(A) merely

provides that EGUs are to be regulated “under this

section” if such a finding is made; it does not specify

that such regulation is to take place, or must take

place, pursuant to the source category listing and

MACT standard-setting procedures laid out in CAA §

112(c) and (d).

Had the D.C. Circuit employed the “traditional tools

of statutory construction” in assessing what Congress

intended under CAA § 112 (as Chevron directs), read

the statute “as a whole,” and looked to the “provisions

of the whole law, and to its object and policy,” it could

not have concluded that, once listed, EGUs could only

be removed from the CAA § 112(c) list through EPA’s

making one of the showings described by the provi-

sions of CAA § 112(c)(9)(B). After all, if then-Adminis-

trator Browner’s purported listing of EGUs was itself

unlawful under the CAA, it could not possibly be the

case that CAA § 112(c)(9)(B) provides the “only”

means by which EPA could “undo” that illegal action.

I]. CERTIORARI IS NEEDED TO ADDRESS

WHETHER A DEPARTING EPA

ADMINISTRATOR CAN COMPEL

FUTURE AGENCY REGULATION

WITHOUT RULEMAKING.

The Clean Air Act and similar statutes are replete

with provisions that condition regulation on specific

statutory findings. Rulemaking is the procedure pre-

scribed by Congress either to transform a preliminary

finding into the predicate for a binding regulatory

program or to abandon that preliminary finding as

unsupported. If preliminary findings announced

without rulemaking could compel future administra-

tions to establish new regulatory programs, then new

regulatory policy could be mandated without any ac-

countability or opportunity for correcting that finding.

That is precisely the result reached by the D.C. Cir-

cuit here. According to the D.C. Circuit, Administra-

tor Browner in December 2000 successfully compelled

the incoming administration to promulgate regula-

tions under CAA § 112(d) merely by issuing, without

rulemaking, a “notice of regulatory finding” under

CAA §112(m) and a listing of EGUs under CAA

§ 112(c).

In this case, there is no dispute that, when EPA is-

sued its December 2000 notice, it had not undertaken

rulemaking, it had not completed “necessary” studies,

it had not considered all of the specific factors re-

quired to be considered by CAA § 112(n)(1)(A), and it

had not justified that MACT controls under CAA §

112(c) and (d) were the proper way to address the

hazards to public health it had identified as war-

ranting regulation. UARG challenged that notice in

early 2001, but, consistent with longstanding D.C.

Circuit case law postponing judicial review of listing

decisions until the conclusion of .rulemaking on -

whether to promulgate emission standards,* and in

response to EPA’s representations that the CAA §

112(n) finding would not be final until completion of

future notice and comment rulemaking, the D.C. Cir-

cuit dismissed UARG’s petition to review the Decem-

ber 2000 “notice of regulatory finding.”

Following the promised CAA § 112{n) rulemaking,

EPA corrected the preliminary, nenfinal finding and

listing decision made by Administrator Browner, and

announced that regulation of EGUs under CAA § 112

was neither “appropriate” nor “necessary.” Under the

D.C. Circuit’s decision, however, a subsequent Ad-

ministrator cannot correct an erroneous listing that

was based on a preliminary CAA § 112(n) finding

subsequently determined to have been unfounded.

Instead, the new Administrator must proceed to es-

tablish a MACT standard for EGU’s under CAA §

112(da), notwithstanding a final CAA § 112(n) finding

that will necessarily render those standards a nullity

upon subseguent review in the D.C. Circuit.

Whether unreviewable preliminary action taken

without notice and comment rulemaking can preclude

reconsideration of that action following rulemaking

and can compel establishment of a new regulatory

program is a question of no small importance to the

future of administrative law and executive branch ac-

countability. It is also a question that UARG believed

that the D.C. Circuit resolved decades ago in one of

Justice Scalia’s last opinions on that court.

4 See, e.g.. National Asphalt Pavement Ass'n, 539 F.2d 775;

see also CAA § 112(e)(4).

In Thomas v. State of New York, 802 F.2d 1443

(D.C. Cir. 1986), the D.C. Circuit addressed whether a

letter sent by the EPA Administrator to the Secretary

of State in the last days of the Carter Administration,

in which the outgoing Administrator concluded that

acid deposition was endangering public health in the

U.S. and Canada, obligated future EPA Administra-

tors to take regulatory action under CAA § 115. The

court found that an agency statement that binds sub-

sequent Administrators is a statement of future effect

designed te implement law or policy, and is therefore

a “rule.” Jd. at 1446. Because the Administrator had

not issued the letter through notice and comment

rulemaking, this Court found that it was not a “rule”

and, therefore, could have no binding effect. Jd. at

1447.

Similarly, when EPA has taken action that, when

completed, has future regulatory consequences, like

“approval” of a State Implementation Plan (which

transforms state-adopted regulations into federally

enforceable ones), the court of appeals have uniformly

held that EPA must do more than simply publish a

notice in the Federal Register. Instead, EPA must

conduct a “notice and comment” rulemaking in order

to create enforceable requirements for the future.®

For the foregoing reasons, this Court should grant

certiorari to address whether agency “findings,” is-

sued without rulemaking, can be used to bind incom-

5 See, e.g., Duquesne Light Co. v. EPA, 166 F.3d 606, 611 (3d

Cir. 1999) (“Each SIP must be submitted to EPA for review and

approval. The [CAA] requires a notice and comment period.”).

ing administration’s to their predecessor’s policy pref-

erences.

CONCLUSION

The petition for writ of certiorari should be

granted.

Respectfully submitted,

HENRY V. NICKEL

F. WILLIAM BROWNELL

LEE B. ZEUGIN

(Counsel of Record)

HUNTON & WILLIAMS LLP

1900 K Street, N.W.

Washington, D.C. 20006

(202) 955-1500

Counsel for the Utility Atr

Regulatory Group

September 17, 2008

APPENDIX

APPENDIX TABLE OF CONTENTS

New Jersey v. U.S. Environmental

Protection Agency, 517 F.3d 574

CE sc Re. Sas bv ccckvodaneshdcabunestennsastoveunee la

December 2000 Regulatory Finding,

65 Fed. Reg. 79,825 (Dec. 20, 2000)............ 20a

Revision of December 2000 Regulatory

Finding, 70 Fed. Reg. 15,994

CE ee kas oun beewavscyertvariewcndccvuesss 44a

Order on Panel Rehearing.....................4. 223a

Order on Rehearing en banc................000 225a

idk sid sieiniadars entrada sees 227a

Oral Argument Transcript, New Jersey v.

EPA, No. 05-1097 (excerpts)...........ceeeeeeees 22Ya

Order, No. 01-1074 (July 26, 2001)............ 233a

Excerpts from the Clean Air Act............... 235a

APPENDIX A

UNITED STATES COURT OF APPEALS

For the District of Columbia Circuit

Argued December 6, 2007 Decided February 8, 2008

No. 05-1097

State of New Jersey, et al.,

Petitioners

Vv.

Environmental Protection Agency,

Respondent

Utility Air Regulatory Group, et al.,

Intervenors

Consolidated with Nos.

05-1104, 05-1116, 05-1118, 05-1158, 05-1159,

05-1160, 05-1162, 05-1163, 05-1164, 05-1167,

05-1174, 05-1175, 05-1176, 05-1183, 05-1189,

05-1263, 05-1267, 05-1270, 05-1271, 05-1275,

05-1277, 06-1211, 06-1220, CS-1231, 06-1287,

06-1291, 06-1293, 06-1294

On Petitions for Review of the Final Action of the

Environmental Protection Agency

James S. Pew argued the cause for Environmental

Petitioners. With him on the briefs were John D.

Walke, Jon Devine, Scott Edwards, Jon A. Mueller,

Ann Brewster Weeks, Jonathan F. Lewis, Brad Kuster.

Vanya S. Hogen, Colette Routel, Sarah I. Wheelock,

Riyaz A. Kanji, Philip E. Katzen, and Ann Tweedy

were on the briefs for petitioners National Congress of

American Indians and Treaty Tribes. Brian B. O'Neill

entered an appearance.

Bart E. Cassidy and Meredith DuBarry Huston

were on the briefs for petitioner ARIPPA. Carol F.

McCabe entered an appearance.

Scott C. Oostdyk, Neal J. Cabral, Grant F.

Crandall, Judith Ellen Rivlin, and Eugene M. Trisko

were on the briefs for petitioners American Coal for

Balanced Mercury Regulation, et al. and United Mine

Workers of America, AFL-CIO.

James B. Vasile, Brian R. Gish, Susan E. Reeves,

and Robert K. Reges were on the briefs for petitioner

Alaska Industrial Development and Export Authority.

Anne Milgram, Attorney General, Attorney

General’s Office of the State of New Jersey,

Christopher D. Ball and Ruth E. Carter, Deputy

Attorneys General, Edmund G. Brown, Jr., Attorney

General, Attorney General’s Office of the State of

California, Susan Durbin, Deputy Attorney General,

Richard Blumenthal, Attorney General, Attorney

General’s Office of the State of Connecticut, Matthew

Levine, Assistant Attorney General, Joseph R. Biden,

ITI, Attorney General, Attorney General’s Office of the

State of Delaware, Valerie S. Csizmadia, Deputy

Attorney General, Lisa Madigan, Attorney General,

Attorney Gencral’s Office of the State of Ilhnois, Ann

Alexander, Assistant Attorney, G. Steven Rowe,

Attorney General, Attorney General’s Office of the

State of Maine, Gerald D. Reid, Assistant Attorney

General, Douglas F. Gansler, Attorney General,

Attorney General’s Office of the State of Maryland,

Kathy M. Kinsey and Judah Prero, Assistant

Attorneys General, Martha Coakley, Attorney

General, Attorney General’s Office of the

Commonwealth of Massachusetts, William L. Pardee,

Assistant Attorney General, Michael A. Cox, Attorney

General, Attorney General’s Office of the State of

Michigan, Michigan Department of Environmental

Quality, Thomas L. Casey, Solicitor General, Alan F.

Hoffman and Neil D. Gordon, Assistant Attorneys

General, Lori Swanson, Attorney General, Attorney

General’s Office of the State of Minnesota, Alan C.

Williams, Assistant Attorney General, Kelly A. Ayotte,

Attorney General, Attorney General’s Office of the

State of New Hampshire, Maureen D. Smith, Senior

Assistant Attorney General, Gary King, Attorney

General, Attorney General’s Office of the State of

New Mexico, Karen L. Reed, Assistant Attorney

General, Andrew M. Cuomo, Attorney General,

Attorney General’s Office of the State of New York,

Jacob Hollinger, Assistant Attorney General, Robert

A. Reiley, Assistant Counsel, Commonwealth of

Pennsylvania, Department of Environmental

Protection, Patrick C. Lynch, Attorney General,

Attorney General’s Office of the State of Rhode

Island, Terence Tierney, Special Assistant Attorney

General, William H. Sorrell, Attorney General,

Attorney General’s Office of the State of Vermont,

Kevin O. Leske, Assistant Attorney General, J.B. Van

Hollen, Attorney General, Attorney General’s Office of

the State of Wisconsin, Thomas J. Dawson, Assistant

Attorney General, and William R. Phelan, Jdr.,

Attorney, for the City of Baltimore, Maryland, were

on the briefs for Government Petitioners. Jean P.

Reilly and Kevin P. Auerbacher, Assistant Attorneys

General, Attorney General’s Office of the State of

New Jersey, Peter H. Lehner, Assistant Attorney

General, Attorney General’s Office of the State of

Connecticut, Christopher D. Coppin, Assistant

Attorney General, Attorney General’s Office of the

State of New Mexico, Gerald T. Karr, Assistant

Attorney General, Attorney General’s Office of the

State of Illinois, entered appearances.

Henry V. Nickel, F. William Brownell, David G.

Scott, and Lee B. Zeugin were on the briefs for

petitioner Utility Air Regulatory Group.

Eric G. Hostetler, Attorney, U.S. Department of

Justice, argued the cause for respondent. With him on

the brief were John C. Cruden, Deputy Assistant

Attorney General, Jon M. Lipshultz and Matthew R.

Oakes, Attorneys, and Carol S. Holmes and Howard

J. Hoffman, Counsel, U.S. Environmental Protection

Agency. Wendy L. Blake, Attorney, U.S.

Environmental Protection Agency, entered = an

appearance.

Lee B. Zeugin argued the cause for Industry State

Intervenors and State Amici Curiae. With him on the

briefs were Troy King, Attorney General, Attorney

General's Office of the State of Alabama, Milt E.

Belcher, Assistant Attorney General, Wayne

Stenehjem, Attorney General, Attorney General's

Office of the State of North Dakota, Paul Seby,

Special Assistant, Lyle Witham, Solicitor General,

Steve Carter, Attorney General, Attorney General’s

Office of the State of Indiana, Thomas M. Fisher,

Assistant Attorney General, Lawrence E. Long,

Attorney General, Attorney General’s Office of the

State of South Dakota, Roxanne Giedd, Deputy

Attorney General, Mark J. Rudolph, Senior Counsel,

State of West Virginia, Department of Environmental

Protection, Peter H. Wyckoff, Henri D. Bartholomot,

Jon C. Bruning, Attorney General, Attorney General’s

Office of the State of Nebraska, Jodi Fenner,

Assistant Attorney General, Patrick Crank, Attorney

General, Attorney General’s Office of the State of

Wyoming, Nancy Vehr, Assistant Attorney General,

Henry V. Nickel, F. William Brownell, Lee B. Zeugin,

William M. Bumpers, Debra J. Jezouit, and Peter

Glaser. Valerie M. Tachtiris, Assistant Attorney

General, Attorney General's Office of State of

Indiana, Jay A. Jerde and Vicci M. Colgan, Assistant

Attorneys General, Attorney General's Office of State

of Wyoming, Kevin C. Newsom, Harold P. Quinn, Jr.,

and Claudia M. O'Brien entered appearances.

Leah W. Casey was on the brief for intervenor for

petitioner Adirondack Mountain Club.

Charles H. Knauss, Sandra P. Franco, and David G.

Scott, IJ were on the brief for intervenors Producers

for Electric Reliability and West Associates. Karma B.

Brown entered an appearance.

John T. Suttles, Jr. was on the brief for intervenors

Physicians for Social Responsibility, et al.

Peter Glaser, Daniel J. Popeo, and Paul D. Kamenar

were on the brief for amicus curiae Washington Legal

Foundation in support of respondent.

Before: ROGERS, TATEL and BROWN, Circuit

Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Before the court are

petitions for review of two final rules promulgated by

the Environmental Protection Agency regarding the

emission of hazardous air pollutants (“HAPs”) from

electric utility steam generating units (“EGUs’”). The

first rule removes coal- and oil-fired EGUs from the

list of sources whose emissions are regulated under

section 112 of the Clean Air Act (“CAA”), 42 U.S.C. §

7412. Revision of December 2000 Regulatory Finding

(“Delisting Rule”), 70 Fed. Reg. 15,994 (Mar. 29,

2005). The second rule sets performance standards

pursuant to section 111, 42 U.S.C. § 7411, for new

coal-fired EGUs and establishes total mercury

emissions limits for States and certain tribal areas,

along with a voluntary cap-and-trade program for

new and existing coal-fired EGUs. Standards of

Performance for New and _ Existing Stationary

Sources: Electric Utility Steam Generating Units

(““CAMR”), 70 Fed. Reg. 28,606 (May 18, 2005).

Petitioners contend that the Delisting Rule is

contrary to the plain text and structure of section 112.

In response, EPA and certain intervenors rely on

section 112(n), which sets special conditions before

EGUs can be regulated under section 112, to justify

the rule. We hold that the delisting was unlawful.

Section 112 requires EPA to regulate emissions of

HAPs. Section 112(n) requires EPA to regulate EGUs

under section 112 when it concludes that doing so is

“appropriate and necessary.” In December 2000, EPA

concluded that it was “appropriate and necessary” to

regulate mercury emissions from coal- and oil-fired

power plants under section 112 and lhsted these

EGUs as sources of HAPs regulated under that

section. In 2005, after reconsidering its previous

determination, EPA purported to remove these EGUs

from the section 112 list. Thereafter it promulgated

CAMR under section 111. EPA’s removal of these

EGUs from the section 112 list violates the CAA

because section 112(c)(9) requires EPA to make

specific findings before removing a source listed under

section 112; EPA concedes it never made _ such

findings. Because coal-fired EGUs are listed sources

under section 112, regulation of existing coal-fired

EGUs’ mercury emissions under section 111 is

prohibited, effectively invalidating CAMR’s

regulatory approach. Accordingly, the court grants

the petitions and vacates both rules.

In 1970, Congress added section 112 to the CAA.

Pub. L. No. 91-604, § 4(a), 84 Stat. 1676, 1685 (1970).

In its original form, section 112 required EPA to list

HAPs that should be regulated because they could

“cause, or contribute to, an increase in mortality or an

increase in serious irreversible[{] or incapacitating

reversible[] illness.” Jd. § 112(a)(1). Over the next

eighteen years, however, EPA listed only eight HAPs,

established standards for only seven of these and as

to these seven addressed only a limited selection of

possible pollution sources. See Natl Mining Ass'n v.

EPA, 59 F.3d 1351, 1353 n.1 (D.C. Cir. 1995); S.

COMM. ON ENV’T & PUB. WORKS, CLEAN AIR ACT

AMENDMENTS OF 1989, S. REP. NO. 101-228, at 131

(1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3516.

In 1990, Congress, concerned about the slow pace of

EPA’s regulation of HAPs, altered section 112 by

eliminating much of EPA’s discretion in the process.

See, e.g., Natl Lime Ass’n. v. EPA, 233 F.3d 625, 633-

34 (D.C. Cir. 2000). Three aspects of the amendments

are relevant here.

First, Congress required EPA to regulate more than

one hundred specific HAPs, including mercury and

nickel compounds. CAA § 112(b)(1). Further, EPA was

required to list and to regulate, on a_ prioritized

schedule, id. § 112(e)(1)-(3), “all categories and

subcategories of major sources and areas sources”

that emit one or more HAPs, id. § 112(c)(1). In

seeking to ensure that regulation of HAPs reflects the

“maximum reduction in emissions which can be

achieved by application of [the] best available control

technology,” S. REP. NO. 101-228, at 133, reprinted in

1990 U.S.C.C.A.N. at 3518; see, eg. CAA §

112(g)(2)(A), Congress imposed _ specific, strict

pollution control requirements on both new and

existing sources of HAPs. Congress specified that new

sources must adopt at minimum “the emission control

that is achieved in practice by the best controlled

similar source, as determined by the Administrator.”

Id. § 112(d)(3). Existing sources (with certain

exceptions) must adopt emission controls equal to the

“average emission limitation achieved by the best

performing 12 percent of the existing sources.” Id. §

112(d)(3)(A).

Second, Congress restricted the opportunities for

EPA and others to intervene in the regulation of HAP

sources. For HAPs that result in health effects other

than cancer, as is true of mercury, Congress directed

that the Administrator “may delete any source

category” from the section 112(c)(1) list only after

determining that “emissions from no source in the

category or subcategory concerned . . . exceed a level

which is adequate to protect public health with an

ample margin of safety and no adverse environmental

effect will result from emissions from any source.” /d.

§ 112(c)(9). Third parties may not challenge the

Administrator’s decision to add a pollutant to the list

under section 112(b) or a source category or

subcategory to the list under section 112(c) until “the

Administrator issues emission standards for such

pollutant or category.” Jd. § 112(e)(4).

Third, Congress required the Administrator to

evaluate regulatory options with care and to meet

certain conditions before listing EGUs as an HAP

source under section 112(c)(1). Specifically:

[t]he Administrator shall perform a study of the

hazards to public health reasonably anticipated to

occur as a result of emissions by [EGUs] of pollutants

listed under subsection (b) of this section after

imposition of the requirements of this chapter. The

Administrator shall report the results of this study to

the Congress within 3 years after November 15, 1990.

The Administrator shall develop and describe in the

Administrator’s report to Congress alternative control

strategies for emissions which may warrant

regulation under this section. The Administrator

shall regulate [EGUs] under this section, if the

Administrator finds such regulation is appropriate

and necessary after considering the results of the study

required by this subparagraph.

Id. § 112(n)(1)(A) (emphasis added).

10a

The study of public health hazards required by

section 112(n)(1)(A) was finally completed in 1998.

This study found “a _ plausible link between

anthropogenic releases of mercury from industrial

and combustion sources in the United States and

methylmercury in fish” and that “mercury emissions

from [EGUs] may add to the existing environmental

burden.” EPA, OFFICE OF AIR QUALITY PLANNING AND

STANDARDS, STUDY OF HAZARDOUS AIR POLLUTANT

EMISSIONS FROM ELEC. UTIL. STEAM GENERATING

UNITS--FINAL REPORT TO CONG. 7-1, 45 (1998). On

December 20, 2000, the Administrator announced —

in light of the study mandated by section 112(n)(1)(A),

as well as subsequent information and consideration

of alternative feasible control strategies — that it was

“appropriate and necessary” to regulate coal- and oil-

fired EGUs under section 112 because, as relevant,

mercury emissions from EGUs, which are the largest

domestic source of mercury emissions, present

significant hazards to public health and _ the

environment. Regulatory Finding on the Emissions of

Hazardous Air Pollutants From Electric Utility Steam

Generating Units, 65 Fed. Reg. 79,825, 79,827 (Dec.

20, 2000) (“2000 Determination”). “As a result the

source category for Coal- and QOuil-Fired [EGUs] was

added to the lst of source categories under section

112(c)” on December 20, 2000. National Emission

Standards for Hazardous Air Pollutants: Revision of

Source Category List Under Section 112 of the Clean

Air Act (“2002 Notice of Listing”), 67 Fed. Reg. 6521,

6522, 6524 (Feb. 12, 2002). In early 2004, EPA

proposed two regulatory alternatives to control

emissions from coal- and oil-fired EGUs. The first was

similar to EPA’s proposal in 2000 — regulation under

section 112 through issuance of Maximum Achievable

lla

Control Technology standards, see, e.g., CAA §

112(g)(2)(A), or implementation of a cap-and-trade

system. The second proposed removing EGUs from

the list of HAP sources prepared pursuant to section

112(c)(1) and instead regulating their emissions

under section 111.! Proposed National Emission

Standards for Hazardous Air Pollutants; and, in the

Alternative, Proposed Standards of Performance for

New and Existing Stationary Sources: Electric Utility

Steam Generating Units, 69 Fed. Reg. 4652, 4659-61,

4683, 4689 (Jan. 30, 2004). After receiving public

comment, EPA chose the_ second alternative,

announcing in March 2005 that it was removing

EGUs from the section 112({c)(1) list, Delisting Rule,

70 Fed. Reg. at 16,002-08, 16,032, and regulating

mercury emissions from coal-fired EGUs under

section 111, CAMR, 70 Fed. Reg. at 28,610, 28,624-32.

EPA justified its decision to delist EGUs by

explaining that it “reasonably interprets section

112(n)(1)(A) as providing [] authority to remove coal-

and oil-fired units from the section 112(c) list at any

1 Section 111 requires the Administrator to “establish{]

. standards of performance,” CAA § 111(b)(1)(B), for pollutants

from new sources that in the Administrator's judgment “cause[].

or contribute[] significantly to, air pollution which may

reasonably be anticipated to endanger public health or welfare.”

Id. § 111(b)(1)(A). “Standards of performance” are designed to

limit emissions to reflect “the degree of emission limitation

achievable through the application of the best system of

emission reduction which (taking into account the cost of

achieving such reduction and any nonair quality health and

environmental impact and = energy requirements) the

Administrator determines has been adequately demonstrated.”

Id. § 111(a)(1). Existing sources of pollutants are regulated

under section 111(d).

12a

time that it makes a negative appropriate and

necessary fjding under the section.” Delisting Rule,

70 Fed. Rey. at 16,032. It based this interpretation on

the “entirely different structure and predicate for

assessing whether [EGUs] should be listed for

regulation under section 112” as set forth in section

112(n)(1)(A), id., and on the absence of a temporal

“deadline” for deciding “whether regulation of [EGUs

was] appropriate and necessary” under section 112,

id. at 16,001. It also interpreted “section 112(c)(9)

[delisting] criteria... not [to] apply” to EGUs because

their inclusion in the list established by section

112(c)(1) was not a “final agency action[],” and

claimed, contrary to the 2000 Determination, that

“the source category at issue did not meet the

statutory criteria for listing at the time of listing.” Jd.

at 16,033.

Having decided that it possessed the authority to

delist EGUs without making the findings required by

section 112(c)(9), EPA explained that the delisting of

EGUs was justified because their regulation under

section 112 was neither “appropriate” nor “necessary.”

The potential mercury emissions’ reductions

achievable under CAMR figured prominently in

EPA’s explanation of its delisting of coal-fired EGUs,

id. at 16,005, which EPA promulgated in May 2005.

CAMR_ established plant-specific “standards of

performance” for mercury emissions from new coal-

fired EGUs under section 111(b). 70 Fed. Reg. at

28,613-16. Relying on sections 111(b) and (d), it also

established a national mercury emissions cap for new

and existing EGUs, allocating each state and certain

tribal areas a mercury emissions budget. This was

13a

supplemented by a voluntary cap-and-trade program.

Id. at 28,616, 28,622, 28,629.

IT.

New Jersey and fourteen additional States, the

Michigan Department of Environmental Quality, the

Pennsylvania Department of Environmental

Protection, the City of Baltimore (“Government

Petitioners”), and various environmental

organizations (“Environmental Petitioners”) contend

that EPA violated Section 112’s plain text and

structure when it did not comply with the

requirements of section 112(c)(9) in delisting EGUs.

Because we agree, we do not reach their alternative

contention that even if this delisting was lawful, EPA

was arbitrary and capricious in reversing its

determination that regulating EGUs under section

112 was “appropriate and necessary.” Government

and Environmental! Petitioners further contend that

CAMR is inconsistent with provisions of section 111,

and that both the Delisting Rule and CAMR should

be vacated. Certain intervenors — including various

industry representatives, States, and state agencies

—join EPA in urging the lawfulness of the two rules.

2 Upon reconsideration, EPA made no _ substantive

change to the Delisting Rule but revised CAMR’s State mercury

allocations and the statistical analysis used for new source

performance standards; EPA declined to stay CAMR. Revision of

December 2000 Clean Air Act Section 112(n) Finding Regarding

Electric Utility Steam Generating Units; and Standards of

Performance for New and Existing Electric Utility Steam

Generating Units: Reconsideration, 71 Fed. Reg. 33,388, 33,388-

89, 33,395-96 (June 9, 2006).

l4a

The court reviews the challenges to the final rules

to determine whether EPA’s promulgation of them

was arbitrary or capricious, an abuse of discretion, or

otherwise not in accordance with law. See CAA §

307(d)(9)(A), 42 U.S.C. § 7607(d)(9)(A). Challenges to

EPA’s interpretation of the CAA itself are governed

by the familiar two-pronged test of Chevron, U.S.A.,

Inc. v. Natural Resources Defense Council, Inc., 467

U.S. 837 (1984). Under step ene, the court asks

“whether Congress has directly spoken to the...

issue.” Id. at 842. If Congress’s intent “is clear, that is

the end of the matter; for the court, as well as the

agency, must give effect to the unambiguously

expressed intent of Congress.” /d. at 842-43. However,

if the court determines that “Congress has not

directly addressed the precise question at issue,”

then, under step two, “the question for the court is

whether the agency's answer is based on a

permissible construction of the statute.” Id. at 843.

The agency’s interpretation need not be the only

permissible reading of the _ statute, nor. the

interpretation that the court might have originally

given the statute. Jd. at 843 n.11.

Petitioners contend that once the Administrator

determined in 2000 that EGUs should be regulated

under Section 112 and listed them under section

112(c)1), EPA had no authority to delist them

without taking the steps required under section

112(c)(9). We agree.*

3 Certain intervenors also contend, citing Thomas v. New

‘ork, 802 F.2d 1443, 1446-47 (D.C. Cir. 1986), that the

Administrator's determination in December 2000 to list EGUs as

a source under section 112(c)(1) was not binding for lack of

notice and comment and, consequently, that EPA was never

(continued...)

15a

Section 112(c)(9) provides that:

The Administrator may delete any source category

from the [section 112(c)(1) list] . . . whenever the

Administrator ... [determines] that emissions from

no source in the category or subcategory concerned

. . exceed a level which is adequate to protect public

health with an ample margin of safety and no adverse

environmental effect will result from emissions from

any source. [emphasis added]

EPA concedes that it listed EGUs under section

112. Thus, because section 112(c)(9) governs the

removal of “any source category” (emphasis added)

from the section 112(c)(1) list, and nothing in the CAA

exempts EGUs from section 112(c)(9), the only way

EPA could remove EGUs from the section 112(c)(1)

list was by satisfying section 112(c)(9)’s requirements.

Yet EPA concedes that it never made the findings

section 112(c)(9) would require in order to delist

EGUs. EPA’s purported removal of EGUs from the

section 112(c)({1) list therefore violated the CAA’s

plain text and must be rejected under step one of

Chevron.

EPA offers several arguments in an attempt to

evade section 112(c)(9)’s plain text, but they are not

persuasive. First, EPA seeks to reach step two of

required to comply with section 112(c)(9)'s delisting process for

EGUs. We need not consider this contention, however, because

EPA has steadfastly refused to join it. See New York v. Reilly,

969 F.2d 1147, 1154 n.11 (D.C. Cir. 1992); see also Util. Air

Regulatory Group v. EPA, No. 01-1074, 2001 WL 936363, at *1

(D.C. Cir. July 26, 2001).

16a

Chevron and obtain judicial deference to its

interpretation by maintaining that section 112(n)(1)

makes _ section 112(c)(9) ambiguous because

“(llogically, if EPA makes a determination under

section 112(n)(1)(A) that power plants should not be

regulated at all under section 112 .. . [then] this

‘determination ipso facto must result in removal of

power plants from the section 112(c) list.” Resp’t Br.

at 26. But this simply does not follow. Section

112(n)(1) governs how the Administrator decides

whether to list EGUs; it says nothing about delisting

EGUs, and the plain text of section 112(c)(9) specifies

that it applies to the delisting of “any source.” In the

context of the CAA, “the word ‘any’ has an expansive

meaning.” New York v. EPA, 443 F.3d 880, 885 (D.C.

Cir. 2006) (citations omitted); see also id. at 885-86.

Moreover, where Congress wished to exempt EGUs

from specific requirements of section 112, it said so

explicitly. For example, section 112(c)(6) expressly

exempts EGUs from the strict deadlines imposed on

other sources of certain pollutants. Furthermore, EPA

concedes that lhsting EGUs under section 112(c)

triggered application of some subparts of section 112,

see, e.g., 2002 Notice of Listing, 67 Fed. Reg. at 6521,

6524, 6535 n.b; CAA § 112(c)(2), but provides no

persuasive rationale for why the comprehensive

delisting process of section 112(c)(9) does not also

apply. Its brief states only that previous applications

of section 112 provisions in response to EGUs listing

were undertaken “based on the fact that [EPA] had

made a positive ‘appropriate and necessary’ finding

that was still in place. EPA has now reversed that

finding.” Resp’t Br. at 28. This explanation deploys

the logic of the Queen of Hearts, substituting EPA’s

desires for the plain text of section 112(c)(9). Thus,

EPA can point to no persuasive evidence suggesting

17a

that section 112(c)(9)’s plain text is ambiguous. It is

therefore bound by section 112(c)(9) because “for []

EPA to avoid a literal interpretation at Chevron step

one, it must show either that, as a matter of historical

fact, Congress did not mean what it appears to have

said, or that, as a matter of logic and statutory

structure, it almost surely could not have meant it,”

Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1089 (D.C.

Cir. 1996), showings EPA has failed to make.

Second, EPA maintains that it possesses authority

to remove EGUs from the section 112 list under the

“fundamental principle of administrative law that an

agency has inherent authority to reverse an earlier

administrative determination or ruling where an

agency has a principled basis for doing so.” Resp’t Br.

at 22 (citing Williams Gas Processing-Gulf Coast Co.

v. FERC, 475 F.3d 319, 326 (D.C. Cir. 2006); Dun &

Bradstreet Corp. Found. v. USPS, 946 F.2d 189, 193

(2d Cir. 1991)). An agency can normally change its

position and reverse a decision, and prior to EPA’s

listing of EGUs under section 112(c)(1), nothing in the

CAA would have prevented it from reversing its

determination about whether it was “appropriate and

necessary” to do so. Congress, however, undoubtedly

can limit an agency’s discretion to reverse itself, and

in section 112(c)(9) Congress did just that,

unambiguously limiting EPA’s discretion to remove

sources, including EGUs, from the section 112(c)(1)

list once they have been added to it. This precludes

EPA’s inherent authority claim for “EPA may not

construe [a] statute in a way that completely nullifies

textually applicable provisions meant to limit its

discretion.” Whitman v. Am. Trucking Ass’ns, 531

U.S. 457, 485 (2001). As this court has observed,

“when Congress has provided a mechanism capable of

18a

rectifying mistaken actions... it is not reasonable to

infer authority to reconsider agency action.” Am.

Methyl Corp. v. EPA, 749 F.2d 826, 835 (D.C. Cir.

1984). Indeed, EPA’s position would nullify section

112(c)(9) altogether, not just with regard to EGUs, for

EPA is unable to explain how, if it were allowed to

remove EGUs from the section 112 list without regard

to section 112(c)(9), it would not also have the

_ authority to remove any other source by ignoring the

statutory delisting process.

Finally, EPA states in its brief that it has

previously removed sources listed under section

112(c) without satisfying the requirements of section

112(c)(9). But previous statutory violations cannot

excuse the one now before the court. “[W]Je do not see

how merely applying an unreasonable statutory

interpretation for several years can transform it into

a reasonable interpretation.” F.J. Vollmer Co. uv.

Magaw, 102 F.3d 591, 598 (D.C. Cir. 1996). EPA

suggests that it would be “anomalous” for it to be

forced to await a court order to correct “its own

mistake” in listing coal- and oil-fired EGUs as a

source under section 112(c)(1). Resp’t Br. at 32; see

also id. at 33 (citing Cleveland Nat'l Air Show, Inc. v.

DOT, 430 F.3d 757, 765 (6th Cir. 2005)). However

Congress was not preoccupied with what EPA

considers “anomalous,” but rather with the fact that

EPA had failed for decades to regulate HAPs

sufficiently. See, e.g., Natl Lime Ass’n, 233 F.3d at

634 (citing S. REP. NO. 101-228, at 128, reprinted in

1990 U.S.C.C.A.N. at 3513). In the context of this

congressional concern, EPA’s disbelief that it would

be prevented from correcting its own listing “errors”

except through section 112(c)(9)’s delisting process or

19a

court-sanctioned vacatur cannot overcome the plain

text enacted by Congress.

Accordingly, in view of the plain text and structure

of section 112, we grant the petitions and vacate the

Delisting Rule. See Allied-Signal, Inc. v. U.S. Nuclear

Regulatory Comm'n, 988 F.2d 146, 150-51 (D.C. Cir.

1993). This requires vacation of CAMR’s regulations

for both new and existing EGUs. EPA promulgated

the CAMR regulations for existing EGUs under

section 111(d), but under EPA’s own interpretation of

the section, it cannot be used to regulate sources

listed under section 112; EPA thus concedes that if

EGUs remain listed under section 112, as we hold,

then the CAMR regulations for existing sources must

fall. Resp’t Br. at 99, 101-02; see also Delisting Rule,

70 Fed. Reg. at 16,031. EPA promulgated the CAMR

regulations for new sources under section 111(b) on

the basis that there would be no section 112

regulation of EGU emissions and that the new source

performance standards would be accompanied by a

national emissions cap and a voluntary cap-and-

trade program. See CAMR, 70 Fed. Reg. at 28,608-10,

28,614-15, 28,619, 28,622; see also id. at 28,616.

Given that these vital assumptions were incorrect,

the court must vacate CAMR’s new = source

performance standards and remand them to EPA for

reconsideration, for “[s]everance and affirmance of a

portion of an administrative regulation is improper if

there is ‘substantial doubt’ that the agency would

have adopted the severed portion on its own.” Davis

County Solid Waste Mgmt. v. EPA, 108 F.3d 1454,

1459 (D.C. Cir. 1997) (citations omitted). In view of

our disposition, the court does not reach other

contentions of petitioners or intervenors.

20a

APPENDIX B

December 2000 Regulatory Finding

65 Fed. Reg. 79,825 (December 20, 2000)

ENVIRONMENTAL PROTECTION AGENCY

[AD-FRL-6919-6]

2060-ZA10

Regulatory Finding on the Emissions of

Hazardous Air Pollutants From Electric Utility

Steam Generating Units

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of regulatory finding.

SUMMARY: This notice presents EPA's finding

required by section 112(n)(1)(A) of the Clean Air Act

(CAA) as to whether regulation of emissions of

hazardous air pollutants (HAP) from fossil fuel-fired

electric utility steam generating units (as defined in

section 112(a)(8) of the CAA) is appropriate and

necessary. This finding is based on the results of

EPA's February 1998 "Study of Hazardous Air

Pollutant Emissions from Electric Utility Steam

Generating Units-Final Report to Congress' (utility

RTC), and on information obtained subsequent to the

utility RTC concerning HAP emissions to the

atmosphere from electric utility steam generating

units. In the utility RTC, the EPA indicated that coal-

and oil-fired electric utility steam generating units

are significant emitters of HAP, including mercury

21a

which is emitted from coal-fired units, and which EPA

identified as the HAP of greatest concern to public

health from the industry. Based on the available

information, the Administrator finds that regulation

of HAP emissions from coal- and oil-fired electric

utility steam generating units under section 112 of

the CAA is appropriate and necessary. As a result,

this notice adds coal-and oil-fired electric utility

steam generating units to the list of source categories

under section 112(c) of the CAA. Also in the utility

RTC, the EPA indicated that the impacts due to HAP

emissions from natural gas-fired electric utility steam

generating units were negligible based on the results

of the study. The Administrator finds that regulation

of HAP emissions from natural gas-fired electric

utility steam generating units is not appropriate or

necessary. The EPA does not believe that the

definition of electric utility steam generating unit

found in section 112(a)(8) of the CAA encompasses

stationary combustion turbines. Therefore, the

finding concerning natural-gas fired electric utility

steam generating units does not apply to stationary

combustion turbines.

ADDRESSES: Docket No. A-92-55, containing

information used in development of this notice, is

available for public inspection and copying between

8:00 a.m. and 5:30 p.m., Monday through Friday,

excluding legal holidays. The docket is located in

EPA's Air and Radiation Docket and Information

Center, Waterside Mali, Room M-1500, 401 M Street,

SW, Washington, DC 20460, or by calling (202) 260-

7548. A reasonable fee may be charged for copying

docket materials.

22a

FOR FURTHER INFORMATION CONTACT: Mr.

William Maxwell, Emission Standards Division (MD-

13), U.S. EPA, Research Triangle Park, North

Carolina 27711, telephone number (919) 541-5430,

facsimile number (919) 541-5450, electronic mail

address <maxwell.bill@epa.gov>.

SUPPLEMENTARY INFORMATION: Docket. The

docket is an organized file of all the information

submitted to or otherwise relied upon by EPA in the

development of this regulatory finding. The principal

purpose of the docket is to allow interested parties to

identify and locate documents that serve as a record

of the process engaged in by EPA which resulted in

the publication of today's finding.

World Wide Web. In addition to being available in

the docket, an electronic copy of today's notice will be

posted on the Technology Transfer Network's (TTN)

policy and guidance information page

<Attp://www.epa.govu/tnn/oarpg> under "Recent

Actions." The TIT'N provides’ information § and

technology exchange in various areas of air pollution

control. If more information regarding the TTN is

needed, call the TTN HELP line at (919) 541-5384.

I. What Is the Statutory Authority and

Background of This Finding?

Today's finding is issued under the authority of

section 112(n)(1)(A) and 112(c) of the CAA. Section

112(n)(1)(A) requires that, after considering the

results of the study mandated by the same section

and reported in the utility RTC, the Administrator

determine whether regulation of HAP emissions from

electric utility steam generating units 1s appropriate

23a

and necessary. The study was initiated following

enactment of the 1990 Amendments to the CAA,

which included section 112(n)(1)(A). Data were

gathered, and the utility RTC was prepared. Section

112(c) provides that the Administrator shall lst

categories of sources of the air pollutants contained in

the section 112(b) list. The listing of source categories

under section 112(c) is a dynamic process. (See

"Initial List of Categories of sources under Section

112(c)(1) of the Clean Air Act Amendments of 1990,"

57 FR 31576.) Decisions as to the description and

scope of source categories listed will be perfected

during the course of the rulemaking process for each

listed category and will take account of improvements

in available information and analysis during the

rulemaking. A draft utility RTC was submitted for

scientific peer review in July 1995, and, concurrently,

was made available for public review (60 FR 35393).

A public meeting to obtain comments from the

scientific peer review panel was held on July 11-12,

1995 in Research Triangle Park, North Carolina. In

addition, a public outreach meeting was held on July

13, 1995 in Durham, North Carolina, at which time

the public was invited to present oral comments on its

interpretation of the "results of the study." The utility

RTC was finalized in February 1998 and released to

Congress and the public. In the final utility RTC, the

EPA stated that, for the utility industry, mercury

from coal-fired electric utility steam generating units

was the HAP of greatest concern for public health.

To further inform the regulatory finding, the EPA

issued an information collection request under the

authority of section 114 of the CAA to all coal-fired

electric utility steam generating units requesting coal

data from such units for calendar year 1999. Certain

units were also required to conduct stack tests to

24a

evaluate their HAP emissions. In addition, the EPA

solicited data from the public through a February 29,

2000 notice (65 FR 10783). Another public meeting

was held on June 13, 2000 in Chicago, Illinois, where

the public was invited to provide EPA with their

views on what the regulatory finding should be (65

FR 18992).

Further, the EPA undertook an evaluation of the

mercury control performance of various emission

control technologies that are either currently in use

on electric utility steam generating units for

pollutants other than mercury or that could be

applied to such units for mercury control. The

evaluation was conducted along with other parties,

including the Department of Energy (DOE).

In addition, at the direction of Congress, the EPA

funded the National Academy of Sciences (NAS) to

perform an independent evaluation of the available

data related to the health impacts of methylmercury

and provide recommendations for EPA's reference

dose (RfD-the amount of a chemical which, when

ingested daily over a lifetime, is anticipated to be

without adverse health effects to humans, including

sensitive subpopulations). The NAS conducted an 18-

month study of the available data on the health

effects of methylmercury and provided EPA a report

of its findings in July 2000.

II. What Has EPA Learned From the Utility RTC

and the Subsequent Data- Gathering Activities?

The following four sections present a summary of

the information and conclusions presented in the

utility RTC along with the information obtained

subsequent to publishing the utility RTC.

25a

A. Health Hazard Assessment

The EPA evaluated exposures, hazards, and risks

due to HAP emissions from coal-, oil-, and natural

gas-fired electric utility steam generating units. Much

of the assessment focused on inhalation exposure.

However, multipathway exposures (e.g., inhalation

plus ingestion) were considered for six HAP (mercury,

radionuclides, arsenic, cadmium, lead, and dioxins).

The assessment for radionuclides was relatively

extensive and included multipathway modeling for all

facilities identified in the utility RTC. The analysis

for mercury was primarily based on information

obtained from EPA's December 1997 "Mercury Study

Report to Congress" (mercury RTC) and included a

multipathway modeling assessment of mercury from

four model electric utility plants. Screening level

multipathway exposure modeling analyses were also

conducted for arsenic and dioxins. For the other two

HAP (cadmium and lead), a qualitative assessment of

potential concerns for multipathway exposure was

presented; multipathway modeling was not conducted

for those two HAP. The methods and results of the

analyses are presented in the utility RTC.

Based on the assessment of hazards and risks due

to emissions of HAP from electric utility steam

generating units, mercury is the HAP of greatest

concern. Mercury is highly toxic, persistent, and

bioaccumulates in food chains. Mercury emitted from

electric utility steam generating units (and other

sources), primarily in the elemental or divalent forms,

is transported through the atmosphere’ and

eventually deposits onto land or water bodies (with

the divalent form depositing nearer the source than

the elemental form). Once deposited, the chemical

form of mercury can change (through a methylation

26a

process) into methylmercury which is a highly toxic,

more bioavailable, form that biomagnifies in the

aquatic food chain (e.g., fish). Nearly all the mercury

that accumulates in fish is methylmercury. Fish

consumption dominates the pathway for human and

wildlife exposure to mercury. As of July 2000, 40

States ard American Samoa have issued fish

advisories ior mercury. Thirteen of those States have

issued advisories for all water bodies in their State,

and the other 27 States have issued advisories for

over 1,900 specific water bodies.

Because the developing fetus is the most sensitive

to the effects of methylmercury, the greatest concern

is the consumption of mercury contaminated fish by

women of childbearing age. Also of particular concern

are subsistence fish-eating populations that may be

consuming fish from contaminated waterbodies. The

EPA estimates that about 7 percent of women of

childbearing age (i.e., between the ages of 15 and 44

years) are exposed to methylmercury at levels

exceeding its RfD of 0.1 microgram per kilogram body

weight per day (0.1 ug/ kg/day). The risk following

exposures above the RfD is uncertain, but risk

increases with increasing exposure. About 1 percent

of women have methylmercury exposures 3 to 4 times

the methylmercury RfD. The NAS, in its July 2000

report "Toxicological Effects of Methylmercury,"

affirmed EPA's assessment of methylmercury toxicity

and the level of its RfD.

Most of the mercury currently entering U.S. water

bodies and contaminating fish is the result of air

emissions which, following atmospheric transport,

deposit onto watersheds or directly to water bodies.

Wastewater discharges also contribute to

environmental loadings, but to a much lesser degree

than air emissions. Based on modeling conducted for

27a

the mercury RTC, the EPA estimates that roughly 60

percent of the total mercury deposited in the U.S.

comes from U.S. anthropogenic air emission sources;

the percentage is estimated to be even higher in

certain regions (e.g., northeast U.S.). The remainder

of the mercury deposited from the air comes from

natural emission sources, reemissions of historic

global anthropogenic mercury releases, and from

anthropogenic sources outside the U.S. In the

mercury RTC, the EPA concluded that, given the total

mass of mercury estimated to be emitted from all

anthropogenic sources and EPA's modeling of the

atmospheric transport of emitted mercury, coal

combustion and waste incineration most likely bear

the greatest responsibility for direct anthropogenic

mercury deposition to the continental U.S. Mercury

emissions from waste incineration (including

municipal waste combustors and _ hospital/medical/

infectious waste incinerators) have been declining

substantially over the last decade largely due to

regulations issued by EPA. Electric utility steam

generating units (which are not currently regulated

for mercury emissions) are the largest source of

mercury emissions in the U.S., estimated to emit

about 30 percent of current U.S. anthropogenic

emissions. There is a_ plausible link between

emissions of mercury from anthropogenic sources

(including coal- fired electric utility steam generating

units) and methylmercury in fish. Therefore, mercury

emissions from electric utility steam generating units

are considered a threat to public health and the

environment. It is acknowledged that there are

uncertainties regarding the extent of the risks due to

electric utility mercury emissions. For example, there

is no quantification of how much. of the

methylmercury in fish consumed by the U.S.

28a

population is due to electric utility emissions relative

to other mercury sources (e.g., natural and other

anthropogenic sources). Nonetheless, the available

information indicates that mercury emissions from

electric utility steam generating units comprise a

substantial portion of the environmental loadings and

are a threat to public health and the environment.

The EPA believes that it is not necessary to quantify

the amount of mercury in fish due to electric utility

steam gencrating unit emissions relative to other

sources for the purposes of this finding.

With regard to the other HAP, arsenic and a few

other metals (e.g., chromium, nickel, cadmium) are of

potential concern for carcinogenic effects. Although

the results of the risk assessment indicate that cancer

risks are not high, they are not low enough to

eliminate those metals as a potential concern for

public health. Dioxins, hydrogen chloride, and

hydrogen fluoride are three additional HAP that are

of potential concern and may be evaluated further

during the regulatory development process.

The other HAP studied in the risk assessment do

not aprear to be a concern for public health based on

the available information. However, because of data

gaps and uncertainties, it is possible that future data

collection efforts or analyses may identify other HAP

of potential concern.

B. Emissions

In developing the utility RTC, the EPA examined

HAP emissions test data acquired by the DOE,

electric utility companies and organizations, and EPA

itself. Further, using section 114 authority, the EPA

obtained data from each coal-fired electric utility unit

to update and refine the information on mercury

29a

emissions from such units. After evaluating various

methods to estimate the emissions, the EPA

estimates that the industry emitted 43 tons of

mercury in 1999 from 1,149 units at 464 coal-fired

plants.

The analyses of the data obtained are explained in

the utility RTC and in subsequent documentation.

Table 1 of this notice presents estimated 1990 and

2010 nationwide HAP emissions from electric utility

steam generating units as presented in the utility

RTC. The estimates account for projected changes in

the population of units, fuel consumption, and control

device configurations. Coal- and oil-fired electric

utility steam generating units are major sources (as

defined in section 112(a){1) of the CAA) of hydrogen

chloride and hydrogen fluoride emissions, emit a

significant number of the 188 HAP on the section

112(b) list, and are the leading anthropogenic sources

of mercury emissions in the U.S.

TABLE 1. — SELECTED NATIONWIDE ESTIMATED HAP EMISSIONS

| Selected nationwide

HAP emissions

estimated (tons/year)

Natural gas

1990

2010

Beryllium 8.2

Cadmium 3.3 3.8 |

Chromium 73 87 |

Dioxins.......... ..... | 0.000097 | 0.000108 |

Formaldehyde

Hydrogen

chloride 143,000 155,000 2.860

Hydrogen

flouride esis _19,500 27,500 |

OS a ee 75 87 10.6 5.4

Manganese.........- 164 219 9.3 4.7

Serer 46 60 0.25 0.13

ie cs | weewiewendennes | 393 198 y Be 3.5

For mercury, it was estimated in the utility RTC

that the industry emitted approximately 46 tons in

1990 (51 tons in 1994) and was projected to emit

approximately 60 tons in 2010 from 1,026 units at

426 coal-fired plants. The new information obtained

under section 114 £4authority corroborates’ the

emissions estimates. The increase in the number of

units over that of the utility RTC results primarily

from the identification of additional co-generation

facilities meeting the section 112(a)(8) definition. The

quality of the 1999 data is considered to be

significantly better than that of the data reported in

the utility RIC. Specific coal data, including the

mercury content, were obtained for each coal-fired

unit in the U.S. over the entire year; previously,

State-average data were used. In addition, the control

performance of existing control devices for each of the

three major species of mercury (divalent, elemental,

and particulate) were available; for the utility RTC,

only total mercury values were available. The new

data allowed EPA to significantly refine and improve

its analyses and evaluate various methodologies in

estimating nationwide mercury emissions from coal-

fired electric utility steam generating units.

C. Alternative Control Strategies

Recent data show the technologies used to control

criteria pollutants (particulate matter (PM), nitrogen

oxides (NOx) and sulfur dioxide (SO2)) are effective in

controlling emissions of nearly all HAP except

3la

mercury. In addition, combinations of controls for

criteria pollutants can lead to varying levels of

control, and in some cases full control, of mercury

emissions. The application of technologies used to

control mercury emissions in conjunction with

technologies used to control other pollutants, an

approach called multipollutant control, can

substantially reduce or offset the costs of HAP

control.

Potential strategies for controlling mercury and

other HAP emissions include the use of:

precombustion controls (e.g., fuel switching, coal

switching, coal cleaning); combustion modification

methods used to control NOx emissions; flue gas

cleaning technologies that can be used to control

emissions of criteria pollutants and HAP; and

nontraditional controls such as demand _= side

management and energy conservation.

Conversion of coal- and oil-fired units to natural gas

firing effectively eliminates HAP emissions. Although

conversion of coal-fired units to oil combustion will

decrease emissions of some HAP, including mercury,

it could increase emissions of others (especially

nickel). Because of the wide variability in the trace

metal contents of coals, switching coals generally may

not result in consistently reduced HAP emissions.

Current methods of coal cleaning remove portions of

the trace metals contained within the coal; the

average emissions reductions range from

approximately 30 percent for mercury to

approximately 50 percent for lead.

Nontraditional control methods (e.g., demand side

management, energy conservation, pollution

prevention) have the potential to result in reauced

HAP emissions, but the extent to which that is

possible is currently uncertain. The nontraditional

32a

controls reduce HAP emissions through the avoided

generation of HAP rather than by their removal from

the exhaust gas stream.

Mercury in the flue gas from coal combustion may

be present in three different forms. The forms, called

species, include elemental mercury, divalent oxidized

forms, and mercury adsorbed onto the surface of fly

ash or other particles. The capture of mercury is

highly dependent on the relative amount of mercury

species that are present in the flue gas. Particulate

bound mercury can easily be removed in conventional

PM emission control devices such as electrostatic

precipitators (ESP) and fabric filters (FF). Divalent

forms of mercury are generally soluble in water and

can be captured in wet scrubbers. Wet flue gas

desulfurization (FGD) systems generally capture

more than 90 percent of the divalent mercury, which

may represent a 20 to 80 percent removal of the total

mercury. Elemental mercury is insoluble in water,

does not react with alkaline reagents used in FGD

systems, and cannot be captured in wet scrubbers.

Both the elemental and divalent forms of mercury can

be adsorbed onto porous solids (e.g., fly ash, powdered

activated carbon, calcium-based acid gas sorbents) for

subsequent removal in a PM control device, although

elemental mercury is more difficult to adsorb onto

solid surfaces than are the divalent forms of mercury.

Bituminous coals contain higher concentrations of

chlorine and other constituents that promote the

oxidation and capture of mercury in conventional air

pollution control devices. In contrast, flue gas from

the combustion of subbituminous and lignite coals

typically have higher amounts of the more difficult to

control elemental form of mercury.

The available data indicate that installation of low-

NOx burners and other combustion modification

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methods in pulverized coal-fired units may increase

the carbon content of the fly ash. Mercury emissions

may then be reduced through adsorption onto the fly

ash carbon and subsequent capture in the PM control

device. The improved mercury capture may come at

the expense of slightly higher emissions of organic

HAP. Cyclone-fired units emit low amounts of fly ash

and reduce the chances of mercury adsorption and

capture as particle-bound mercury. Fluidized bed

combustion systems typically have high flue gas

concentrations of high carbon-content fly ash and

high levels of mercury capture in PM emission control

devices.

Electrostatic precipitators and FF generally remove

greater than 90 percent of all trace metallic HAP,

with the exception of mercury. They are not effective

in reducing emissions of gas- phase HAP, which

include trace organic HAP and HAP such as hydrogen

chloride and hydrogen fluoride.

Mechanical collectors and wet PM scrubbers are not

generally effective in reducing HAP emissions.

Mechanical collectors capture only HAP that are

associated with large particles; fine- particle HAP and

gas-phase HAP pass through and are emitted to the

atmosphere. Wet PM _ scrubbers are moderately

effective in reducing water- soluble HAP but do not

effectively reduce HAP emissions associated with fine

particulate or hydrophobic volatile organic HAP.

Dry scrubbers which employ a spray dryer adsorber

(SDA) in conjunction with an ESP or FF are typically

very effective in reducing HAP emissions. In SDA

systems, water containing an acid gas sorbent is

sprayed into a reaction vessel where the acid gases

and other pollutants are reacted to form solid

particles that can be collected in a downstream PM

control device. Some coal-fired utilities that use

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bituminous coal in pulverized coal-fired units have

shown mercury capture in excess of 90 percent in

SDA/FF systems.

Wet FGD systems are capable of capturing nearly

all HAP other than mercury and more than 90

percent of the divalent and particle bound mercury.

Mercury removal in wet FGD systems may range

from less than 20 to more then 80 percent, depending

on the type of coal and combustion system used.

Mercury capture in such units can be improved by the

use of catalysts or reagents to increase the conversion

of elemental mercury to soluble divalent forms of

mercury.

Recent research indicates that mercury removal

may be enhanced through the use of oxidizing agents

(that convert elemental mercury to the ionized form)

or through the use of sorbents (that adsorb the

mercury onto solid particles). Enhanced mercury

removal may also be achieved through greater use of

multipollutant control options. Recent data indicate

that the use of selective catalytic or noncatalytic

reduction for NOx control may also oxidize mercury

and, therefore, enhance mercury control.

Thus, EPA's analysis of potential HAP control

strategies allows EPA to conclude that, during the

regulatory development process, effective controls for

mercury and other HAP can be shown to be feasible.

D. Conclusions

The following conclusions summarize those

presented in the utility RTC and those based on the

information subsequently obtained and are based on

the currently available’ scientific data. The

conclusions, as a whole, support a finding that

regulation of coal-and oil- fired electric utility steam

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generating units for HAP is appropriate and

necessary.

1. Fossil fuel-fired electric utility steam generating

units (coal-and oil- fired units in particular) emit a

significant number of the 188 HAP included on the

section 112(b) list. Estimated growth in the number

of, and fuel use by, electric utility steam’ generating

units (particularly coal-fired units) during the period

1990 to 2010 will result in an overall increase in HAP

emissions. The new data gathered to date corroborate

the previous nationwide mercury emissions estimate

and confirm that electric utility steam generating

units are the largest anthropogenic source of mercury

in the U.S.

2. Mercury is highly toxic, persistent, and

bioaccumulates in the food chain. Mercury emissions

are transported through the atmosphere and

eventually deposit onto land or water bodies. The

deposition can occur locally near the source or at long

distances (e.g., hundreds or thousands of miles away).

The air transport and deposition patterns of mercury

emissions depend on various factors, including: The

form of mercury released (divalent mercury deposits

nearer to the source whereas elemental mercury

enters the global pool and deposits farther from the

source); the stack height and meteorology; and

chemical transformations during transport in the

atmosphere. Once deposited, the chemical form of

mercury can change into methylmercury (through a

methylation process), which is a more toxic form that

biomagnifies up the aquatic food chain. Fish

consumption dominates the pathway for human and

wildlife exposure to mercury. There is a plausible link

between emissions of mercury from anthropogenic

sources (including coal-fired electric utility units) and

methylmercury in fish.

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3. Neurotoxicity is the health effect of greatest

concern with methylmercury exposure.

Methylmercury has a relatively long half-life in the

human body (averaging about 70 to 80 days). Dietary

methylmercury is almost completely absorbed into

the blood and distributed to all tissues including the

brain; it also readily passes through the placenta to

the fetus and fetal brain. The developing fetus is

considered most sensitive to the effects from

methylmercury; therefore, women of childbearing age

are the population of greatest concern. Offspring born

of women exposed to relatively high levels of

methylmercury during pregnancy have exhibited a

variety of developmental neurological abnormalities,

including delayed developmental milestones, cerebral

palsy, and reduced neurological test scores. Studies

suggest that far lower levels of in utero exposures

have resulted in delays and deficits in learning

abilities. It is also possible that children exposed after

birth are also potentially more sensitive to the toxic

effects of methylmercury than adults because their

nervous systems are still developing.

4. Extrapolating from high-dose exposure incidents,

the EPA derived an RfD for methylmercury of 0.1

ug/kg/day based on developmental neurological effects

observed in children born to mothers exposed to

methylmercury during their pregnancy. The NAS

study determined that EPA's RID is a scientifically

justifiable level for the protection of public health. At

the RID or below, exposures are expected to be safe.

The risks following exposures above the RfD are

uncertain, but risk increases as exposures to

methylmercury increase.

5. The results of recent dietary surveys indicate

that most of the U.S. population consumes fish and is

exposed to methylmercury as a result. Based on the

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surveys, about 85 percent of adults in the US.

consume fish at least once a month, about 40 percent

of adults consume fish once a week, and 1 to 2 percent

of adults consume fish almost daily.

6. The EPA estimates that about 7 percent of

women of childbearing age (1.e., between the ages of

15 and 44 years) are exposed to methylmercury at

levels exceeding the RfD and about 1 percent of

women have methylmercury exposures 3 to 4 times

that level.

7. Exposure to methylmercury can have serious

toxicologic effects on wildlife as well as on humans.

Adverse effects to avian species and wildlife have

been observed in laboratory studies at levels

corresponding to fish tissue methylmercury

concentrations that are exceeded by a significant

percentage of fish sampled in lake surveys. Generally.

wildlife consume fish from a much more limited

geographic area than do humans which can result in

elevated levels of mercury in certain fish-eating

species in localized geographic areas. Those species

can include kingfisher, river otter, racoon, loon, as

well as some endangered species such as the Florida

panther.

8. The EPA predicts that increased mercury

deposition will lead to increased levels. of

methylmercury in fish, and that increased levels in

fish will lead to toxicity in fish-eating birds and

mammals, including humans. The NAS, in its July

2000 report, stated that “because of the beneficial

effects of fish consumption, the long-term goal needs

to be a= reduction in the’ concentrations of

methylmercury in fish." The EPA agrees with that

goal and believes that reducing emissions of mercury

from electric utility steam generating units is an

important step toward achieving the goal.

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9. There are a number of alternative control

strategies that are effective in controlling some of the

HAP emitted from electric utility steam generating

units. Recent data indicate that mercury, perhaps the

hardest HAP to remove from the exhaust gas stream,

can be effectively removed by using oxidizing agents

or sorbents injected into the gas stream. Recent data

also indicate the possibility for multipollutant control

with other pollutants (e.g., NOx, S02, and PM),

greatly reducing mercury control costs.

Ill. What Is EPA's Regulatory Finding?

Based on the results of the study documented in the

utility RTC, as well as subsequent analyses and other

available information, the Administrator has

concluded that mercury is both a public health

concern and a concern in the environment. The

Administrator has concluded that there is a plausible

link between methylmercury concentrations in fish

and mercury emissions from coal-fired electric utility

steam generating units. Although the degree to which

that linkage occurs cannot’ be estimated

quantitatively now, the facts are that: There is a

linkage between coal consumption and mercury

emissions; electric utility steam generating units are

the largest domestic source of mercury emissions; and

certain segments of the U.S. population (i.e., the

developing fetus, subsistence fish-eating populations)

are believed to be at potential risk of adverse health

effects due to mercury exposures resulting from

consumption of contaminated fish. Further, there

remain uncertainties regarding the extent of the

public health impact from HAP emissions from oil-

fired electric utility steam generating units. Those

facts and uncertainties lead the Administrator to find

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that regulation of HAP emissions from coal- and oil-

fired electric utility steam generating: units under

section 112 is appropriate and necessary. It is

appropriate to regulate HAP emissions from coal- and

oil-fired electric utility steam generating units under

section 112 of the CAA because, as documented in the

utility RTC and stated above, electric utility steam

generating units are the largest domestic source of

mercury emissions, and mercury in the environment

presents significant hazards to public health and the

environment. The NAS study confirms that mercury

in the environment presents significant hazards to

public health. Further, it is appropriate to regulate

HAP emissions from such units because EPA has

identified a number of control options which EPA

anticipates will effectively reduce HAP emissions

from such units. It is necessary to regulate HAP

emissions from coal- and oil-fired electric utility

steam generating units under section 112 of the CAA

because the implementation of other requirements

under the CAA will not adequately address the

serious public health and environmental hazards

arising from such emissions identified in the utility

RTC and confirmed by the NAS study, and which

section 112 is intended to address. Therefore, the

EPA is adding coal- and oil-fired electric utility steam

generating units to the list of source categories under

section 112(c) of the CAA. As a part of developing a

regulation, the effectiveness and costs of controls will

be examined along with the level(s) of contro] that

may be technically feasible.

In developing a regulation under section 112(d), the

statute authorizes EPA to consider subcategorization

of a source category. The emissions standard fér

existing sources cannot be less stringent than the

average emissions limitation achieved by the best

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performing 12 percent of existing sources in the

category or subcategory (the "floor"). However, the

EPA intends to develop a record to facilitate

consideration of subcategorization of the source

category in setting the "floor." Based on the

information that EPA has to date, the EPA

anticipates that a factual record will allow EPA to

propose appropriate subcategories for this source

category. In developing standards under section

112(d) to date, the EPA has based subcategorization

on considerations such as: the size of a facility; the

type of fuel used at the facility; and the plant type.

The EPA also may consider other relevant factors

such as geographic conditions in_ establishing

subcategories. Once the source category is divided

into subcategories, the EPA determines the "floor" for

each subcategory and, in turn, the emissions standard

independently for each subcategory. This approach

has helped build flexibility in meeting environmental

objectives in the past.

Once the floor is determined, the EPA can set an

emissions standard that is more stringent than the

floor if a tighter level of contro] is technically

achievable and is justified. Factors that must be

considered in deciding whether a more stringent

standard than the floor is justified include: the cost of

a more stringent standard; the energy requirements;

and any non-air quality health and environmental

factors.

Every source has to meet the level of a standard set

under section 112(d), but net necessarily every

individual unit at a source. Most electric generating

plants have several units and so in meeting the

standard there may be opportunity for lower cost

solutions because the law allows for differences in

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reductions among units as long as the source as a

whole is in compliance.

There is considerable interest in an approach to

mercury regulation for power plants that would

incorporate economic incentives such as emissions

trading. Such an approach can reduce the cost of

pollution controls by allowing for least-cost solutions

among a universe of facilities that face different

control costs. Trading also can allow for a greater

level of control overall because it offers the

opportunity for greater efficiency in achieving control.

The EPA, however, recognizes and shares concerns

about the local impacts of mercury emissions and any

regulatory scheme for mercury that incorporates

trading or other approaches that involve economic

incentives must be constructed in a way that assures

that communities near the sources of emissions are

adequately protected. Thus, in developing a standard

for utilities, the EPA should consider the legal

potential for, and the economic effects of,

incorporating a trading regime under section 112 ina

manner that protects local populations.

The Administrator finds that regulation of HAP

emissions from natural gas-fired electric utility steam

generating units is not appropriate or necessary

because the impacts due to HAP emissions from such

units are negligible based on the results of the study

documented in the utility RTC.

The EPA has previously indicated that it construes

the term "electric utility steam generating unit," as

defined in section 112(a)(8) of the CAA and 40 CFR

63.41, to exclude all stationary combustion turbines,

regardless of whether such turbines are used to

generate electricity or used by an electric utility, and

regardless of whether such turbines are used in

enjunction with waste heat recovery units (65 FR

42a

34010). Therefore, the finding concerning natural-gas

fired electric utility steam generating units does not

apply to stationary combustion turbines.

IV. Is This Action Subject to Judicial Review?

Today's finding that it is appropriate and necessary

to regulate coal-and oil- fired electric utility steam

generating units adds these units to the list of source

categories under section 112(c). Section 112 (e)(4) of

the CAA states that, notwithstanding section 307 of

the CAA, no action of the Administrator listing a

source category or subcategory under section 112(c)

shall be a final EPA action subject to judicial review,

except that any such action may be reviewed under

section 307 when the Administrator issues emissions

standards for such pollutant or category. Therefore,

today's finding is not subject to judicial review. As

specified by section 112(e)(4), judicial review would be

available on both the listing decision and the

subsequent regulation at the time that such final

regulation is promulgated. At such time, the exact

dimensions of the source category and the nature of

the control required would be sufficiently clear to

allow for judicial review.

V.Is EPA Asking for Public Comment?

The EPA has held several public meetings wherein

oral and written public input were solicited and

obtained regarding the regulatory finding. In

addition, mumerous’ opportunities for written

comment relating to both the study and the

regulatory finding have been provided. The EPA has

decided that it is unnecessary to solicit additional

public comment on today's finding. ‘he regulation

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developed subsequent to the finding will be subject to

public review and comment.

VI. Administrative Requirements

Today's notice does not impose regulatory

requirements or costs. Therefore, the requirements of

Executive Order 13045 (Protection of Children from

Environmental Health Risks and Safety Risks),

Executive Order 13084 (Consultation and

Coordination with Indian Tribal Governments),

Executive Order 13132 (Federalism), the Regulatory

Flexibility Act, the National Technology Transfer and

Advancement Act, and the Unfunded Mandates

Reform Act do not apply to today's notice. Also, this

notice does not contain any information collection

requirements and, therefore, is not subject to the

Paperwork Reduction Act, 44 U.S.C. 3501 et seq. This

notice was reviewed by the Office of Management and

Budget under Executive Order 12866 (58 FR 51735,

October 4, 1993).

Dated: December 14, 2000.

Carol M. Browner,

Administrator.

[FR Doc. 00-32395 Filed 12-19-00; 8:45 am]

BILLING CODE 6560-50-U

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APPENDIX C

Revision of December 2000 Regulatory Finding

70 Fed. Reg. 15,994 (March 29, 2005)

ENVIRONMENTAL PROTECTION AGENCY

40 CFR PART 63

[OAR-2002-0056; FRL-7887-7]

RIN 2060-AM96

Revision of December 2000 Regulatory Finding

on the Emissions of Hazardous Air Pollutants

From Electric Utility Steam Generating Units

and the Removal of Coal- and Ojil-Fired Electric

Utility Steam Generating Units From the

Section 112(c) List

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Rule.

SUMMARY: The EPA is revising the regulatory

finding that it issued in December 2000 pursuant to

section 112(n)(1)(A) of the Clean Air Act (CAA), and

based on that revision, removing coal- end oil-fired

electric utility steam generating units ("coal- and oil-

fired Utility Units") from the CAA section 112(c)

source category list. Section 112(n)({1)(A) of the CAA 1s

the threshold statutory provision underlying today's

action. That provision requires EPA tc conduct a

study to examine the hazards to public health that

are reasonably anticipated to occur as the result of

hazardous air pollutant (HAP) emissions from Utility

45a

Units after imposition of the requirements of the

CAA. The provision also provides that EPA shall

regulate Utility Units under section 112, but only if

the Administrator determines that such regulation is

both "appropriate" and "“necessary" considering,

among other things, the results of the study. EPA

completed the study in 1998 (the Utility Study), and

in December 2000 found that it was "appropriate and

necessary" to regulate coal- and oil-fired Utility Units

under CAA section 112. That December 2000 finding

focused primarily on mercury (Hg) emissions from

coal-fired Utility Units. In light of the finding, EPA in

December 2000 announced its decision to list coal-

and oil-fired Utility Units on the section 112(c) lst of

regulated source categories. In January 2004, EPA

proposed revising the December 2000 appropriate and

necessary finding and, based on that revision,

removing coal- and oil-fired Utility Units from the

section 112(c) list.

By this action, we are revising the December 2000

appropriate and necessary finding and concluding

that it is neither appropriate nor necessary to

regulate coal- and oil-fired Utility Units under section

112. We are taking this action vecause we now believe

that the December 2000 finding lacked foundation

and because recent information demonstrates that it

is not appropriate or necessary to regulate coal- and

oil-fired Utility Units under section 112. Based solely

on the revised finding, we are removing coal- and oil-

fired Utility Units from the section 112(c) list..The

reasons supporting this action are described in detail

below. Other actions related to this final rule include

the recent promulgation of the final Glean Air

Interstate Rule (CAIR) and the final Glean Air

Mercury Rule (CAMR).

46a

DATES: Effective Date: The effective date of the final

rule is March 29, 2005.

ADDRESSES: EPA has established a docket for this

action under Docket ID No. OAR-2002-0056. All

documents in the docket are listed in the EDOCKET

index at http://wwwv.epa.govledocket. Although listed

in the index, some information is not publicly

available, i.e., Confidential Business Information

(CBI) or other information whose disclosure is

restricted by statute. Certain other material, such as

copyrighted material, is not placed on the Internet

and will be publicly available only in hard copy form.

Publicly available docket materials are available

either electronically in EDOCKET or in hard copy at

the EPA Docket Center (EPA/DC), EPA West

Building, Room B102, 1301 Constitution Ave., NW.,

Washington, DC. The Public Reading Room is open

from 8:30 a.m. to 4:30 p.m., Monday through Friday,

excluding legal holidays. The telephone number for

the Public Reading Room is (202) 566-1744, and the

telephone number for the EPA Docket Center is (202)

566-1742.

FOR FURTHER INFORMATION CONTACT: Ms.

Wendy Blake, OCC Attorney, Office of General

Counsel, Environmnental Protection Agency, (AR-

2344), Washington, DC 20460 telephone number:

(202) 564-1821; fax number: (202) 564-5603; e-mail

address: blake. wendy@2epa.gov.

Judicial Review. Pursuant to CAA section 307(b),

judicial review of this inal rule is available only by

filing a petition for review in the United States Court

47a

of Appeals for the District of. Columbia Circuit by

May 31, 2005. EPA designates this action a CAA

section 307(d) rulemaking. (See CAA section

307(d)(1)(V); 69 FR 4653 (January 30, 2004).) Under

CAA section 307(d)(7)(B), only an objection to the rule

that was raised with reasonable specificity during the

time period for public comment can be raised during

judicial review. Section 307(d)(7)(B) further provides

that if the person raising the objection can

demonstrate to the Administrator that: it was

impracticable to raise the objection during the public

comment period or if the grounds for the objection

arose after the public comment period but within the

time period specified for judicial review and if the

objection is of central relevance, EPA will convene a

proceeding for reconsideration of the rule and provide

the same procedural rights as would have been

afforded had the information been available at the

time the rule was proposed.

I. Statutory Background

In the 1990 Amendments to the CAA, Congress

substantially modified CAA section 112, the provision

of the CAA addressing HAP. Among other things,

section 112 contains a list of “hazardous air

pollutants,” which are “pollutants which present, or

may present, * * * a threat of adverse human health

effects * * * or adverse environmental effects whether

through ambient concentrations, bioaccumulation,

deposition, or otherwise.” (See CAA section 112(b)(2).)

In the 1990 amendments to the CAA, Congress listed

190 HAP, and authorized EPA to add or remove

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_pollutants from the list.1 (See CAA Section 112(b)(1)-

(b)(3).)

The types of sources addressed under section 112

include: major sources, area sources, and electric

utility steam generating units (Utility Units). (See

CAA 112(a)(1), (a)(2), (a)(8).) A ““major source" is any

stationary source? or group of stationary sources at a

single location and under common control that emits

or has the potential to emit ten tons or more per year

of any HAP or 25 tons or more per year of any

combination of HAP. (See CAA 112(a)(1).) A

stationary source of HAP that is not a “‘major source"

is an area source." (See CAA 112(a)(2).) Finally, an

electric utility steam generating unit is any “fossil

fuel fired combustion unit of more than 25 megawatts

that serves a generator that produces electricity for

sale." (See CAA 112(a)(8).)

There are two important steps under section 112:

(1) Determining whether a source category meets the

statutory criteria for regulation under section 112;

and (2) promulgeiing emission standards for those

source categories regulated under section 112. In

terms of the first step, Congress required EPA to

publish a list of categories and subcategories of major

sources and area sources by November 15, 1991.3 (See

The current section 112(b) list includes 188 HAP.

2 A “stationary source" of hazardous air pollutants is

any building, structure, facility or installation that emits or may

emit any air pollutant. (See CAA Section 111(a)(3) and

112(a)(3).)

3 EPA published the initial list on July 16, 1992. See 57

FR 31,576, July 16, 1992. EPA did not include Utility Units on

the initial section 112(c) list because Congress required EPA to

conduct and consider the results of the study required by section

(continued...)

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CAA 112(c)(1) & (c)(3).) Congress further directed

EPA to revise this initial list periodically, based on,

for example, new information. (See 112(c)(1).) EPA is

required to list a category of major sources under

section 112(c)(1) if at least one stationary source in

the category meets the definition of a major source--

i.e., if a certain amount of a HAP (or combination of

HAP) is emitted from the source. (See 112(a)(1).) By

contrast, EPA is required to list categories or

subcategories of area sources only if they meet one of

the following statutory criteria: (1) EPA determines

that the category of area sources presents a threat of

adverse effects to human health or the environment

that warrants regulation under CAA section 112; or

(2) the category of area sources falls within the

purview of CAA section 112(k)(3)(B) (the Urban Area

Source Strategy). (See CAA 112(c)(3).)

For those source categories regulated under section

112, the next step concerns the establishment of

emission standards. Under section 112(d), EPA must

establish emission standards that ‘require the

maximum degree of reduction in emissions of the

hazardous air pollutants subject to this section" that

the Administrator determines is achievable based on

technology, taking into account certain factors such as

cost, energy requirements, and other impacts. The

emission standard for new sources cannot be,

however, less stringent than the level of control

achieved by the best controlled similar source, and

the emission standard for existing sources cannot be

less stringent than the average emission limitation

achieved by the best performing 12 percent of existing

112(n)(1)(A) before regulating these units and, therefore, listing

in 1992 was not authorized by statute.

50a

sources in the category, regardless of cost, energy

requirements and other impacts. CAA 112(d)(2) and

(3). Finally, within eight years after promulgation of

section 112(d) emission standards for a listed source

category, EPA must promulgate additional standards

if such standards are necessary to provide an ample

margin of safety to protect public health or to prevent

an adverse environmental effect. (See CAA section

112(f).) These additional standards under CAA

section 112(f) are commonly referred to as “residual

risk" standards.

The criteria for listing major and area sources

established in section 112(c)(1) and (c)(3) do not apply

to Utility Units because Congress treated Utility

Units differently from other major and area sources.

Indeed, Congress enacted a special provision for

Utility Units in section 112(n)(1)(A), which governs

whether Utility Units should even be regulated under

section 112.4 Section 112(n)(1)(A) directs EPA to

conduct a study to evaluate what “hazards to public

health [are] reasonably anticipated to occur" as the

result of HAP emissions from Utility Units “‘after

imposition of the requirements of thfe] Act,"

(emphasis added) and to report the results of such

study to Congress by November 15, 1993. Congress

also directed EPA to describe in the report to

Congress “alternative control strategies for [those]

4 No one would dispute that certain Utility Units would

meet the definition of a “major source" based on the quantity of

HAP emitted from such units, or that other Utility Units may

meet the “area source" criteria for listing under section

112(c)(3), but Congress recognized this fact in 1990 and

specifically enacted section 112(n)(1){A), which establishes an

entirely different test for determining whether Utility Units

should be regulated under section 112.

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emissions that may warrant regulation under this

section." (See CAA section 112(n)(1)(A).) Section

112(n)({1)(A) further provides that EPA shall regulate

Utility Units under section 112 if the Administrator

determines, considering the results of the study, that

such regulation is “appropriate and necessary." Thus,

unlike other major and area sources, Congress first

required EPA to examine how “imposition of the

requirements of thf[e] Act" would affect the overall

level of utility HAP emissions, and then determine

whether regulation of Utility Units under section 112

is both appropriate and _ necessary. Section

112(n)(1)(A) therefore sets an important and unique

condition precedent for regulating Utility Units under

section 112 and_ provides EPA _ discretion in

determining whether that condition precedent has

been met.

II. Regulatory Background

A. EPA's December 20, 2000 Regulatory Finding

On December 20, 2000, EPA issued a finding

pursuant to CAA section 112(n)(1)(A) that it was

appropriate and necessary to regulate coal- and oil-

fired Utility Units under section 112. In making that

finding, EPA considered the Utility Study, which was

completed and submitted to Congress in February

1998.

In the Utility Study, we divided Utility Units into

three subcategories based on fuel type: coal-, oil-, and

gas-fired units. We then analyzed HAP emissions

from each subcategory. We followed this approach

because each subcategory burns a different fuel,

which, in turn, leads to different emissions profiles,

which can require different emission controls. This

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approach is also consistent with EPA's historical

practice of subcategorizing Utility Units based on fuel

type. (See, e.g., 40 CFR 60.44(a).)

Because EPA subcategorized Utility Units for

purposes of the Utility Study, EPA, in December

2000, made separate “appropriate and necessary"

findings under section 112(n)(1)(A) for gas-fired, coal-

fired, and oil-fired Utility Units. In making these

findings, EPA considered the Utility Study and

certain additional information obtained after

completion of the Utility Study, including the

National Academy of Sciences’ report concerning the

health effects of methylmercury and actual emissions

data obtained in response to an information collection

request EPA issued to all coal-fired Utility Units in

1999. See 65 FR 79826. EPA reasonably relied on this

additional information because the information

provided a more comprehensive and contemporaneous

record concerning Hg emissions from coal-fired units.

Nothing in _ section 112(n)(1)(A) suggests. that

Congress sought to preclude EPA from considering

more current information in making the appropriate

and necessary finding.

In the December 2000 finding, EPA determined

that it was appropriate and necessary to regulate

coal- and oil-fired units, but not gas-fired units.® With

respect to the latter, EPA found that regulation of

° Although the December 2000 finding addressed three

subcategonies of Utility Units--coal-, oil-, and gas-fired units, the

majority of the finding concerned Hg emissions from coal-fired

power plants. 65 FR 79826-29 (explaining that Hg from coal-

fired units is the HAP of greatest concern); Utility Study, ES-27

(mercury from coal-fired utilities is the HAP of greatest

potential concern.")

ed3a

HAP emissions from natural gas-fired Utility Units

“is not appropriate or necessary because the impacts

due to HAP emissions from such units are negligible

based on the results of the study documented in the

utility RTC." (Emphasis added) See 65 FR 79831.

EPA provided three primary reasons in support of

its finding that it was “appropriate" to regulate coal-

and oil-fired Utility Units under section 112. First,

EPA found that it was appropriate to regulate HAP

emissions from coal- and oil-fired Utility Units

because Utility Units “are the largest domestic

source of Hg emissions." See 65 FR 79830. EPA next

found that it was appropriate to regulate coal- and

oil-fired Utility Units because “mercury in the

environment presents significant hazards to public

health and the environment." See 65 FR 79830.

Finally, EPA explained that it was appropriate to

regulate HAP emissions from coal- and oil-fired units

because it had identified certain control options that,

it anticipated, would effectively reduce HAP from

such units. In discussing the appropriate finding,

EPA also noted that uncertainties remained

concerning the extent of the public health impact

6 Section TV below addresses our conclusion that it is not

appropriate and necessary to regulate coal- and oil-fired Utility

Units under section 112 and explains why we now believe that

our December 2000 finding lacked foundation. As explained

below, one of the reasons the December 2000 “appropriate”

finding for oil-fired Utility Units lacks foundation is because the

record that was before the Agency in December 2000 establishes

that Hg is a HAP of concern only as emitted from coal-fired

units, not oil-fired units. Utility Study ES-5,13,27. EPA

therefore should not have relied upon Hg emissions as a basis for

finding it was appropriate to regulate oil- fired units under

section 112. (See, e.g., Utility Study ES-5, ES- 27.)

54a

from HAP emissions from oil-fired units. Thus, EPA's

determination that it was “appropriate” to regulate

coal- and oil-fired units under section 112 hinged on

the health effects associated with Hg emissions from

coal- fired Utility Units, the uncertainties associated

with the health effects of HAP from oil-fired Utility

Units, and EPA's belief that control options would be

available to reduce certain utility HAP emissions.7

Once EPA determined that it was “appropriate" to

regulate coal- and oil-fired Utility Units under section

112 of the CAA, EPA next concluded that it was also

““necessary" to regulate HAP emissions from such

units under section 112. Interpreting the term

““necessary" in section 112{n)(1)(A), EPA found that it

was necessary to regulate HAP from coal- and oil-

fired Utility Units “because the implementation of

other requirements under the CAA _ will not

adequately address the serious public health and

environmental hazards arising from such emissions

identified in the Utility RTC." See 65 FR 79830.

7 The “appropriate” finding for oil-fired units stemmed

primarily from EPA's concerns over the potential health effects

of nickel from such units. As explained in the January 2004

proposed rule, the record before the Agency in December 2000

supported a distinction between nickel and the other HAP

emitted from oil-fired units. See 69 FR 4688. We proposed that

this distinction was reasonable based on the relative amount of

nickel emitted from oil- fired units and the health effects

associated with such emissions. (See also Utility Study at ES-12

(noting higher population concentrations surrounding oil-fired

units). At the time of the proposed rule, we recognized, however,

the uncertainties in the data underlying our ~‘appropriate"

finding for oil-fired units based on nickel emissions, and for that

reason solicited information as to whether nickel emissions from

oil-fired plants currently pose a hazard to public health.

55a

In light of the positive appropriate and necessary

determination, EPA in December 2000 listed coal-

and oil-fired Utility Units on the section 112(c) source

category list. See 65 FR 79831 (our finding that it is

appropriate and necessary to regulate coal-. and oil-

fired Utility Units under section 112 “adds these

units to the list of source categories under section

112(c)."). Relying on CAA section 112(e)(4), EPA

explained in its December 2000 finding that neither

the appropriate and necessary finding under section

112(n)(1)(A), nor the associated listing were subject to

judicial review at that time. EPA did not add natural-

gas fired units to the section 112(c) list in December

2000 because it did not make a positive appropriate

and necessary finding for such units.

B. Litigation Challenging December 2000 Regulatory

Finding

Shortly after issuance of the December 2000

Finding, an industry group challenged the December

2000 finding in the United States Court of Appeals for

the District of Columbia Circuit (DC Circuit). UARG

v. EPA, 2001 WL 936363, No. 01-1074 (DC Cir. July

26, 2001). EPA moved to dismiss the lawsuit on the

basis of section 112(e)(4), which provides, in pertinent

part, that “‘no action of the Administrator * * * listing

a source category or subcategory under subsection (c)

of this section shall be a final agency action subject to

judicial review, except that any such action may be

reviewed under such section 7607 of this title when

the Administrator issues emission standards for such

pollutant or category." (Emphasis added.) (See CAA

Section 112(e)(4).)

In its motion to dismiss the petition, EPA argued to

the DC Circuit, among other things, that the

56a

December 2000 listing of coal- and oil-fired Utility

Units was inseparable from the appropriate and

necessary finding and that the appropriate and

necessary finding and listing actions are not final

agency actions pursuant to section 112(e)(4). See also

65 FR 79826. EPA further noted in its motion to

dismiss that both the finding and the listing would be

subject to additional notice and comment as part of

the section 112(d) rulemaking. See EPA's Motion to

Dismiss, UARG v. EPA, 2001 WL 936363, No. 01-

1074S (Because the decision to add coal and oil fired

electric utility steam generating units to the source

category list is not yet final agency action, it will be

among the matters subject to further comment in the

subsequent [standards] rulemaking."); 65 FR 79831

(noting that issues related to the listing, such as “‘the

exact dimension of the source category," will be

subject to additional comment in the emission

standard rulemaking process). The DC Circuit

dismissed the challenge to the December 2000 finding

for lack of jurisdiction based on section 112(e)(4) of

the CAA. The December 2000 finding and associated

listing are therefore not final agency actions.

C. January 30, 2004 Proposed Rule and March 2004

Supplemental Notice

On January 30, 2004, EPA published in the Federal

Emissions Standards for Hazardous Air Pollutants;

and, in the Alternative, Proposed Standards of

Performance for New and_ Existing Stationary

Sources: Electric Utility Steam Generating Units."

(See 69 FR 4652 (January 30, 2004).) In that rule,

KPA proposed three alternative regulatory

approaches. First, EPA proposed to retain the

57a

December 2000 Finding and associated listing of coal-

and oil-fired Utility Units and to issue under section

112(d) maximum achievable control technology-based

(MACT) emission standards for both subcategories.

Second, EPA alternatively proposed revising the

Agency's December 2000 Finding, removing coal and

oil- fired Utility Units from the section 112(c) list,®

and issuing final standards of performance under

CAA section 111 for new and existing coal-fired units

that emit Hg and new and existing oil-fired units that

emit nickel. Finally, as a third alternative, EPA

proposed retaining the December 2000 finding,

removing coal and oil-fired Utility Units from the

section 112(c) h

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