in the spring of two thousand and eleven t v a had finalized its integrated resource plan which by its own statements required two years of extensive analysis shortly thereafter the e p a finalized would refer to as ma mercury and her toxic standards in the summer of two thousand and twelve t v a head of a math compliance solution for its paradise station which was approved and budget by its board of directors it was going to add bag houses to units  it easily met the math timeline it was consistent with the planning directives that they had just spent two years studying and adopting and it has the e p a the environmental assessment confirmed it complied with nepa and created no significant impact on the human environment for whatever unwritten policy reasons in the summer of two thousand and twelve t v a decided that matz which is now as i've noted in my letter later earlier has been specific planning directives that had just spent those two years adopting and creating it despite it description of how bag house works take more than thirty seconds i have a mechanical engineer your honor and i think i can answer that question but he would tell me i actually worked at a part plant at the end of the so you burn coal go through the boiler and what is left you've got fly ash in there so you add a bag house to collect that fly ass or whatever is going through it correct every to caress or there filter could be correct that's what does it for the filters and reduces the air toxics that they want to get so in changing course they were disregarded the mandate that they had  provide a detail optimization houses if they were going to idle specific coal units they contradicted the recommendations that were in their own i r p l and they disregarded their own need to policies which would normally require an environmental impact statement when constructing a major power generating facility they deferred the analysis of environmental impact other agencies at a future time because frankly by the summer of two thousand and twelve decision correct your honor ok correct and they created this urgent timeline of their own doing one of the issues that came up in the lower court judge mckinley is what we can't put in we have to go down this way because matzos is complying i don't know why it's of their own doing but i'm not suggesting are not allowed to switch course at all wouldn't they have the right to set their policies and they have the right to decide whether or not they're going to put in coal or gas or build a new power plant that there's no question about that what we're suggesting your honor is is they have to do that warning to the law they have to do that according to the t v act and they have to do that according to need and what they didn't do and what we submit didn't happen was when they reversed that course they completely contradicted what their own integrated resource plan had suggested that they needed to do and what their board adopted that they'd be doing first of all just to make sure the same page i think you're implicitly agreeing with this they're allowed to incorporate the findings from the two because what this two year study did is it reviewed all the various scenarios that they thought were going to happen for the next twenty years or five years with frankly they committed to doing another one in the beginning in this year and they looked at eight specific scenarios they looked at what would happen in the economy and they looked at what happened one technology and they looked at what happens with regulations and they looked at very specific portfolios and would they diversify their portfolio would they go with more gas because this is the use of the two year study led to the twenty eleven director on correct and they did they came up with all these analysis and it's very detailed and they they even put into their administrative record the draft analysis and the final i r p and in doing all those studies and looking at how much coal was going to be idle me each one they looked specifically at whether or not they should idle between zero and seven thousand megawatts and they looked at that and they said seven thousand it's not cost effective so they went back and they looked at their strategies and they they did grading chart and in their administrative record and they looked very strange and they didn't said ok let's look and see what if we expand to seven thousand here and again they came back and said no that's too much coal it's not it's not these cost system planning and they alternately adopted a provision that would say they were going to idle between twenty four hundred megawatts in forty seven hundred megawatts of power with four thousand megawatts being the optimum out they immediately so they adopt that in the  immediately then in the time they do the math hasn't been finalized already be on the horizon depending on who's elected to what but it's not finalized yet ok fair enough your honor certainly on the drawing boards and people knew it was coming out it had not yet but see your point is there idling more than might have been optimum under one scenario but you have to acknowledge that idling more is cleaner so i mean this this is all costs and benefits right well it's it is cleaner of course right it depends on what's going to idle to do it if you're going to ask me do i think that absolutely i doing a coal plant and building a brand new gas plant is cleaner in some ways it is it certainly is cleaner to some it's not cleaner in the way that you know gases is fact in i mean there's all kinds of people suing the wrong country that's the natural gas racking is terrible so it i would agree that that is their starting position that they can do that but they have to study that their own i r p their least cost planning says seven thousand is too much least cost this sort of query here about the lease cost versus the environmental i mean as i read it correct me if you think i'm wrong they said look gas is to put less particulates and that kind of stuff it's going to put less c o two we are going to have to disturb land and we are going to have to build a pipeline but that's the tradeoff my other question is as of now natural gas looks a lot cheaper than it did in two thousand and nine when they started doing the two year study or even in two thousand and eleven when they finished it are they entitled to take that into account you're on a they're entitled to take anything they could do that but they have looked at his study they have to do the study what their what their own recommendation in their approved plan in two thousand and seven that really looked at c o two and looked at how much natural gas was go costing and it looked at with the environmental issues that they're the ones who did this detailed study and said four thousand is the right number seven thousand is too much they then said that if we're going to idle any specific plant we will perform a detailed optimization analysis to study the cost the benefits and and the uncertainties and risks that does not appear in this administrative record it's not said they can't do it is to say that they did not do it they said seven thousand is too much point i guess the point you wish us to draw from that is that the action was arbitrary and capricious i would suggest that's exactly the point your honor because i think that what they have to do is they have to support their youth and to expect that if they did the four fledged environmental impact that that would come out differently is that the hope here well i wouldn't say that's the hope your honor i would suggest to you that our expert reports would say that we come out differently again draw difference between the environmental aspects which is the need analysis and the t v act which is least system cost planning but but you answer your question i have to do both they have to comply with both in the have to support that in the administrative record and we would suggest to you that we think it would come out different but from any point of view does the does the change in you for example  gas prices is that something that requires a new e i a s as to whether that doesn't affect the human environment directly i would not suggest that your honor i don't think the change the yes i think that on the stand point what there the problem that i see with this record is is they did it in an environmental analysis which is over that and they first didn't support the whole that they have a procedure that says they will normally prepare an environmental any i asked statement they're going to build a major new generating facility there's no question that this is a major new generating facility there's also no question they did not perform any i s o the answer is why well first the e p a says well because we're going to be maintaining a system and when it commenters came in and said well you're not really maintaining it well then we're going to be the next issue was well it's continued operation and maintenance and that and they said no that's not it so then we got we f lawsuit and the first response was well they've been in those two and normally doesn't mean always i agree with that normally certainly doesn't mean always but there's a clear case law that the administrative record has to support why you are not going to follow your own procedures they were adopted pursuant to the c e q they were published they were put up for comment and that's what their procedures are so then they came up with the last argument which was in their brief before judge mckinley at the end was well normally only applies if we're going to be adding generation to a green field or if we're not going to be retiring other facilities well there's a couple problems with that one that is nowhere in the published record it's nowhere in the administrative right and if if the position is was long as we're going to retire dirty coal we can build all the new gas we want ignoring the fact that was studied by the t v a it's it's in the t v a internal policies every agency every federation c has to prepare procedures and policies for adopt for implementing nepa and if you look at the back of the of the e p a it list building a major new generating facility and we suggest to your honor's that there is nothing in this administration record which shows why they deviated from that and that need to be in there doesn't the whole i mean a pretty comprehensive it's not as big as the whole e i a s that's your whole point but doesn't the e a basically lay out why they believe the amount of impact on the human environment is not enough to require in the us under the old versus the regulations it does from the standpoint of going through the factors that they say that they look at the problem with those factors which is a different analysis as to why we would or would normally the the law we i would suggest here on what we scientists they have to show where in the administrative record they would not they would deviate from their normal procedures they haven't done that i would agree with you that the analysis says what it says or you're saying that even even though if we if we credit that there's much less impact on the environment the then would require any yes we also have to say and that's the reason that we're not doing what we normally do and i wouldn't symphony quite that much that but you know times over the years the question the premise of what you just suggested is a weighing of environmental benefits and environmental detriments that is specifically the charge of an e i us in the e a a looks at will there be impacts or not if yes or if we don't know because for katherine done its analysis yet then you either wait for her to do is the first i don't know the answer to the question i understand the economy certainly that you've noted and they had noted to us as well it's a question of well following the law your honor we believe that right we it is what it is we're rule laws t v act was passed need was passed procedures were passed they should be followed thank you counsel you'll have your  good afternoon and may it please the court manning these are gina coho and i'm here on behalf of the apple the tennessee valley authority and if i could just begin by clarifying a few points about the timeline the matts rule was not actually finalized until and i'd just like to touch on a few pointers judge mckinley does say on the first page in april of two thousand and thirteen t v a still seemed to be on track to upgrade paradise one and two and then in august they changed their thirteen view on what caused that and well i think that what caused the change was the result in the environment review which showed that the gas plant was the more environmentally environmentally beneficial so when when did the environmental review of the gas plant stored and i believe it began and it began shortly before the the board gave its provisional  energy policy act players make make much of the fact that there was a recommended planning direction in the i r p that suggested that forty seven hundred mega of coal fired idling was was was recommended based on the analysis in the r p but it's very important note that it also went on to recommend increasing the idling of coal capacity and that's found  that the guideline range for natural gas additions was nine hundred ninety three hundred megawatts and that can be found it a are eighteen thirty one so this suggests that there was a great deal of do and that's that's actually incorrect the c t c c combustion turbine combined cycle plant that will be built at paradise can function as a base load if it's needed to which is what the coal fired units function as but it also allows for peaking generation so if there's a higher need on the transmission line system or lower it can respond to that and the coal fire unit simply cannot do that and so what you would maybe a little more in your response to their point you spend all this time with the comes to forty seven hundred and then you say well ok maybe you don't need another two years of study but why wouldn't you have to reassess things before you go to seven thousand i mean well i mean it's just doesn't seem as it's as simple as coles dirty doesn't seem like it's that simple it's not that simple and i would point out the fact that the i r p it recommended that if t v i decided to go beyond the forty seven hundred medical megawatts that it performed detailed optimization and alice's so there's a specifically looked at the different coal fired units that were being retired and the impact of the retirement of paradise and did the comparison between gas the gas plant and the coal fired units and again it's a high level summary that that that that analysis was done and there's no there's nothing that requires that analysis to be done in a specific specific way it does need to be almost more deferential been than arbitrary and capricious because there are such there something well it's you some of the case some of the case law speaks about the zone of reasonableness when when an ultimately different than arbitrary and capricious but it is quite different so how does this work with the pipeline so different yes but if you start down this road isn't it kind of of what can or could things really is a really possible that first going to do an assessment in shut the whole thing down well it really has no vested interest in whether t v is able to build its gas plant it has a specific duty to approve and before the whole idea of these assessments is to do a cost benefit of everything in here you're locking in certain costs and certain benefits so well it if if if we accepted the plaintiff's arguments as true that we had to wait for further to do the review that would essentially mean that t v a would have to have contracted with the gas pipeline company which which would be also that would be a clear impermissible of predetermination because the gas pipeline company is not going to submit an application to the pipeline permit you would just keep running these coal plants right you're not going to shut them down before you or am i wrong before you start building even start breaking ground on the gas plant well i guess i guess we would have to make regulations do contemplate agencies being cooperate in agencies but i don't i don't think there's anything in the regulations that specifically require the precise level of coordination that the plan i was just thinking of take you to the moment you don't even have a particular pipeline company to provide the sort of build the pipeline that's exactly right it will be if you have that than what judge was indicating might be a good idea right i mean at the time we were performing there we were just at discussions with the gas pipeline company because as i mentioned previously if we had contracted with the gas company and they could tell us exactly where they were they wanted to  issue you judge barnes i think he hit the nail on the head when he said well isn't the yea that results in the isn't that the analysis that is necessary to show that  this major power generating facility is not one that normally requires in the yes and that's that's exactly correct there's nothing in and there's nothing in the c there's nothing in regulations that require a to make an additional statement saying that this is why this is not normally this is a project that does not normally require any i a s and unless there are any further questions would simply  you think you will have your time for rebuttal for these agencies to cooperate with each other and if you're going to have to wait for another agency to make its determination you either have to stop wait for that to be done to see whether that's going to be a major problem or  not you have to prepare your own e i a s and make that determination for yourself as your theory that they would've done all this coordination but for the maps deadlines i think that's true i think what happened was is they decided in the summer twelve summer thirteen that they were going to switch and at that point there was not time under the then math requirements to do any ios there was not time to wait for the to do its e i a story on this because that's not even done all we're going to go with the bag house or are we going to go with building natural gas or are we going to go with whatever they had a solution for well over a year that complied with all that isn't til you know i mean council for t v a just said i mean i think you're right there's certainly a lot of inertia but that first has no obligation when it comes time to do the assessment and they're going to call it the way they call it a great if they say if they say no they have to cope with some other option well we'll see i gree with you in theory that's true but the point of what we're saying is is i do think that the the requirements are that they either perform there or they wait many of the cases that six services has done i was going to comment on the kentucky kentucky and for the commonwealth of the army corps it talks about the coordination that was going back and forth between the governmental agencies when one was doing the e i a s and one was doing this c i s and they were relying on each other that's the way it is supposed to work it isn't like this is the first