Title: POWDER RIVER BASIN RESOURCE COUNCIL and SIERRA CLUB v. WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, and BASIN ELECTRIC POWER COOPERATIVE

State: wyoming

Issuer: Wyoming Supreme Court

Document:

POWDER RIVER BASIN RESOURCE COUNCIL and SIERRA CLUB v. WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, and BASIN ELECTRIC POWER COOPERATIVE2010 WY 25226 P.3d 809Case Number: No. S-09-0037Decided: 03/05/2010
OCTOBER 
TERM, A.D. 2009

 
 
POWDER 
RIVER BASIN RESOURCE COUNCIL and SIERRA 
CLUB,Appellants(Petitioners),v.WYOMING DEPARTMENT OF 
ENVIRONMENTAL QUALITY, and BASIN ELECTRIC POWER 
COOPERATIVE,Appellees(Respondents).

 
 

Rule 
12.09(b) Certification from the District Court of Laramie 
County

The 
Honorable Edward L. Grant, Judge

 
 
Representing 
Appellants:

James 
S. Angell and Robin Cooley of Earthjustice, Denver, Colorado.  Argument by Robin 
Cooley.

 
 
Representing 
Appellee Wyoming Department of Environmental 
Quality:

Bruce 
A. Salzburg, Wyoming Attorney General; Jay A. Jerde, Deputy Attorney General; 
Nancy E. Vehr, Senior Assistant Attorney General; Lucas J. Esch, Assistant 
Attorney General.  Argument by Ms. 
Vehr.

 
 
Representing 
Appellee Basin Electric Power Cooperative, Inc.:

Patrick 
R. Day and Mark R. Ruppert of Holland & Hart LLP, Cheyenne, Wyoming.  Argument by Mr. 
Day.

 
 
Representing 
Amicus Curiae Northern Cheyenne Tribe:

John 
C. Schumacher of Law Office of John Schumacher, Riverton, Wyoming; Brian C. 
Gruber of Ziontz, Chestnut, Varnell, Berley & Slonim, Seattle, 
Washington.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
KITE, 
Justice.

 
 
[¶1]      The Wyoming 
Department of Environmental Quality (DEQ) issued an air quality permit to Basin 
Electric Power Cooperative (Basin Electric) for a new coal-fired electric power 
plant, called the Dry Fork Station, to be built in Wyoming's Powder River 
Basin.  The Powder River Basin 
Resource Council and the Sierra Club (collectively the PRBRC) challenged that 
air quality permit before the Wyoming Environmental Quality Council 
(Council).  After hearings on the 
PRBRC's different claims, the Council upheld the DEQ's issuance of the 
permit.  The PRBRC appealed the 
Council's decision to the district court, which certified the appeal directly to 
this Court pursuant to W.R.A.P. 12.09(b).  
The Northern Cheyenne Tribe was granted leave to file an amicus curiae brief.  We will affirm the issuance of the air 
quality permit.  

 
 
ISSUES

 
 
[¶2]      The PRBRC 
presents these issues for our consideration:

 
 
            
1.         
Whether the Wyoming Environmental Quality Council ("Council") and the 
Wyoming Department of Environmental Quality ("DEQ") violated the law by 
authorizing construction of the Dry Fork Station coal-fired power plant despite 
modeled violations of Class I air quality standards at the Northern Cheyenne 
Indian Reservation;

 
 
            
2.         
Whether the Council and DEQ violated the law by finding that DEQ was not 
required to consider more efficient supercritical technology as part of its best 
available control technology ("BACT") analysis for the Dry Fork Station and that 
the permit applicant alone defines the emission source DEQ may consider; and 

 
 
            
3.         
Whether the Council and the DEQ violated the law by finding that DEQ did 
not have to consider greenhouse gas emissions as part of the BACT analysis for 
the Dry Fork Station.

 
 
FACTS

 
 
[¶3]      Because the facts 
in this case are largely undisputed, we will present a very general background 
here, and provide more detailed facts as they arise in the discussion 
below.  On November 10, 2005, Basin 
Electric submitted an application to the DEQ for an air quality permit for the 
Dry Fork Station, a new 422 megawatt coal-fired electric power plant proposed to 
be constructed near the Dry Fork coal mine, approximately seven miles north of 
Gillette, Wyoming.  To obtain this 
permit, Basin Electric was required to demonstrate, among other things, that 
emissions from Dry Fork will not cause significant deterioration of existing air 
quality, and the power plant will use the best available control technology for 
each regulated pollutant. 

 
 
[¶4]      The DEQ reviewed 
the permit application, asking Basin Electric to provide additional information 
on several issues.  The DEQ also 
considered public comments from interested parties, including the PRBRC and the 
Northern Cheyenne Tribe.  The DEQ 
issued the permit on October 15, 2007.  
The PRBRC appealed to the Council.  
The Council granted a motion to dismiss the PRBRC's claim regarding 
greenhouse gases (listed above as Issue 3).  It granted motions for summary judgment 
on PRBRC's claims regarding increment consumption and best available control 
technology (listed above as Issues 1 and 2).  The PRBRC's appeal has now made its way 
before us for review, and the amicus 
curiae brief filed by the Northern Cheyenne Tribe supports the PRBRC on 
Issue 1.  

 
 
STANDARD 
OF REVIEW

 
 
[¶5]      Our standard of 
review for appeals from administrative agency decisions is governed by the 
Wyoming Administrative Procedure Act, which provides in pertinent 
part:

 
 
            
To the extent necessary to make a decision and when presented, the 
reviewing court shall decide all relevant questions of law, interpret 
constitutional and statutory provisions, and determine the meaning or 
applicability of the terms of an agency action. In making the following 
determinations, the court shall review the whole record or those parts of it 
cited by a party and due account shall be taken of the rule of prejudicial 
error. The reviewing court shall: 

. 
. . .

     (ii)   Hold unlawful and set aside agency 
action, findings and conclusions found to be:

                        
(A)       
Arbitrary, capricious, an abuse of discretion or otherwise not in 
accordance with law;

                        
(B)       
Contrary to constitutional right, power, privilege or 
immunity;

 
 
                        
(C)       
In excess of statutory jurisdiction, authority or limitations or lacking 
statutory right;

                        
(D)       
Without observance of procedure required by law; or

                        
(E)       
Unsupported by substantial evidence in a case reviewed on the record of 
an agency hearing provided by statute.

 
 
Wyo. 
Stat. Ann. § 16-3-114 (LexisNexis  2007).  As we have further 
explained:

 
 
            
When reviewing a case certified to us from district court pursuant to 
W.R.A.P. 12.09(b), we apply the appellate standards applicable to a reviewing 
court of the first instance. Williams 
Prod. RMT Co. v. State Dep't of Revenue, 2005 WY 28, ¶ 7, 107 P.3d 179, 
182-183 (Wyo. 2005).  We review 
factual determinations for substantial evidence, meaning we consider whether 
there is relevant evidence in the entire record which a reasonable mind might 
accept in support of the agency's conclusions. Dale v. S & S Builders, LLC, 2008 WY 
84, ¶ 21, 188 P.3d 554, 561 (Wyo. 2008).  Importantly, our review of any 
particular decision turns not on whether we agree with the outcome, but on 
whether the agency could reasonably conclude as it did based upon all of the 
evidence presented. Id., ¶ 23, 
188 P.3d  at 561. . . .  We review an 
agency's conclusions of law de novo, 
and will affirm an agency's legal conclusion only if it is in accordance with 
the law.  Dale, ¶ 27, 188 P.3d  at 
562.

 
 

Kennedy 
Oil v. Dep't of Revenue, 
2008 WY 154, ¶ 7, 205 P.3d 999, 1002 (Wyo. 2008).

 
 
[¶6]      While the 
interpretation of statutes and their implementing regulations is a question of 
law that we review de novo, it is 
also settled that we defer to an agency's interpretation of its own rules and 
regulations unless that interpretation is clearly erroneous or inconsistent with 
the plain language of the rules.  Pinther v. Wyoming Dep't of Admin. and 
Info., 866 P.2d 1300, 1302 (Wyo. 1994); RME Petroleum Co. v. Wyoming Dep't of 
Revenue, 2007 WY 16, ¶ 44, 150 P.3d 673, 689 (Wyo. 2007).  Accordingly, when we review the DEQ's 
interpretations of regulations promulgated under Wyoming's Environmental Quality 
Act, we apply the same standard the Council was required to use:  we accept those interpretations unless 
they are clearly erroneous or inconsistent with the plain language of the 
rules.

 
 
DISCUSSION

 
 
[¶7]      The DEQ 
administers and enforces the Wyoming Environmental Quality Act, Wyo. Stat Ann. 
§§ 35-11-101 through 35-11-1904 (LexisNexis 2009).  The DEQ's Air Quality Division is 
responsible for the air quality program, and it operates under the Wyoming Air 
Quality Standards and Regulations (WAQSR).  
The federal Environmental Protection Agency has approved of Wyoming's air 
quality regulatory program, 40 C.F.R. part 52, subpart ZZ, and so the DEQ is the 
primary regulatory authority for air quality in Wyoming.  See 42 U.S.C. § 7410(a).   However, because the state program 
is intended to be compatible with, and at least as stringent as, the federal 
Clean Air Act, federal precedent and regulatory guidance is persuasive authority 
in Wyoming air quality cases.

 
 
Issue 
1.  Increment 
Protection

 
 
[¶8]      Before reaching 
the heart of this issue, it is helpful to review the applicable law and 
introduce some key terms.  Wyoming's 
Environmental Quality Act states that "No person shall cause, threaten or allow 
the discharge or emission of any air contaminant in any form so as to cause 
pollution which violates rules, regulations and standards adopted by the 
council."  
Section 35-11-201.  The 
rules and regulations require the DEQ to review permit applications for proposed 
major sources of air emissions.  It 
issues a permit only if the proposed source demonstrates that its emissions will 
not cause significant deterioration of ambient air quality.  6 WAQSR §§ 2 and 4.  

 
 
[¶9]      More 
specifically, the regulations provide that the DEQ's review 
must

 
 
include 
analysis of the predicted impact of the allowable and secondary emissions from 
the stationary source. . . .  Such 
analysis shall identify and quantify the impact on the air quality in the area 
of all emissions not included in the baseline concentrations including, but not 
limited to, those emissions resulting from the instant application and all other 
permits issued in the area. The purpose of this analysis is to determine the 
total deterioration of air quality from the baseline concentrations. . . .  A permit to construct . . . shall be 
issued only . . . if the predicted impact (over and above the baseline 
concentration) of emissions defined above is less than the maximum allowable 
increment shown in Table 1 for the classification of the area in which the 
impact is predicted.

 
 
6 
WAQSR § 4(b)(i)(A)(I). To predict whether the impacts of a proposed 
source's emissions will exceed the increments shown in Table 1, one tool 
available to the DEQ is a computer model that estimates what the impacts will 
be.  The results of the computer 
model are based on information that includes the emissions from the proposed 
source and other sources in the area, air dispersion over time and distance, 
varying terrain, and meteorological data such as wind direction, wind speed, and 
temperatures.  

 
 
[¶10]   The DEQ's review includes two 
separate phases to determine whether emissions from the proposed source and 
other area sources will cause or contribute to increment exceedances.  In the first phase, which we will refer 
to as the screening phase, the computer model is run to estimate the impacts of 
emissions from the proposed source alone.  
Results from this model run are compared to Significant Impact Levels, 
which are a very small percentage (generally 4%) of the increments.  If the computer model indicates that the 
estimated impacts of emissions from the proposed source alone are below the 
Significant Impact Levels, then the DEQ can determine that the cumulative 
impacts of emissions from the proposed source and other area sources will not 
exceed the increments, and no further analysis is necessary.  In this case, the computer model 
indicated that the estimated impacts of emissions from Dry Fork were below the 
Significant Impact Levels for particulate matter and nitrogen dioxide, but above 
the Significant Impact Levels for sulfur dioxide.  The DEQ therefore required Basin 
Electric to proceed to the second phase of review for sulfur dioxide 
emissions.

 
 
[¶11]   In the second phase, which we will 
refer to as the cumulative phase, the computer model is run to estimate the 
impacts of the combined emissions from the proposed source along with emissions 
from other area sources.  The model 
results are compared to the increments.  
As the regulation provides, a permit is issued for the proposed source 
only if the estimated impacts are less than the maximum allowable 
increments.

 
 
[¶12]   The other area sources of 
particular significance in this case are the coal-fired electric power plants 
known as Colstrip Units 3 and 4, located in Montana approximately 120 miles 
north of the proposed Dry Fork location.  
The Colstrip Units are only about fifteen miles from the Northern 
Cheyenne Indian Reservation (Reservation).  
The Reservation is a Class I area which, in air quality terms, is an area 
where existing air quality is considered pristine.  See 42 Fed. Reg. 40,695 (Aug. 5, 
1977).  Air quality in Class I areas 
is more stringently protected than air quality in Class II areas.  For example, the 24-hour increment for 
sulfur dioxide is 5 micrograms per cubic meter in Class I areas, and 20 
micrograms per cubic meter in Class II areas.  6 WAQSR § 4(b)(i)(A)(I), Table 
1.  Given the proximity of the 
Colstrip Units to the Reservation, their emissions can have a significant 
influence on the Reservation's air quality.  As a result, when the computer models 
are run to estimate the impacts of combined emissions from Dry Fork and other 
area sources, the emissions from the Colstrip Units have a significant influence 
on the results.

 
 
[¶13]   In the cumulative phase, Basin 
Electric ran the computer model using different assumptions about the sulfur 
dioxide emissions from the Colstrip Units.  
For our purposes, it is sufficient to consider only two of these computer 
model runs.  As further detailed 
below, in the first model run Basin Electric used the maximum actual daily 
emission rate for the Colstrip Units.  
In the second model run, Basin Electric used the maximum allowable daily 
emission rate for the Colstrip Units.1 The regulations do not specify that 
maximum allowable emissions rates from existing sources must be used in this 
analysis.

 
 
[¶14]   In the first computer model run, 
Basin Electric obtained the actual reported sulfur dioxide emissions from 
Colstrip Units 3 and 4 for the years 2004 and 2005.  It combined the emissions from the two 
units, and determined the day on which emissions from the two units were at 
their maximum.  It then ran the 
computer model assuming that the Colstrip Units would emit sulfur dioxide 
continuously at this maximum actual one day rate.  In reality, the Colstrip Units emitted 
sulfur dioxide at this maximum rate only one day during this two year period, 
and at lower rates the other 730 days.  
Accordingly, because the model used this worst case maximum actual daily 
emission rate for the Colstrip Units, the estimated impacts were necessarily 
higher than the actual impacts will be.  
Even so, the results of this first model run estimated that the impacts 
of combined actual emissions from the Colstrip Units, the Dry Fork Station, and 
all other area sources would not exceed the Class I increments for sulfur 
dioxide at any location within the Reservation.

 
 
[¶15]   In the second computer model run, 
Basin obtained information on the maximum emissions the Colstrip Units are 
allowed under their air quality permits.  
These are known as the allowable emissions rates, and unless the Colstrip 
Units are violating their air quality permits, the allowable emissions are 
always higher than actual emissions.   
Basin Electric then ran the computer model assuming that the Colstrip 
Units would continuously emit sulfur dioxide at the maximum allowable rate.  Because actual emissions from the 
Colstrip Units are well below the highest allowable rates, this second computer 
model run overestimated impacts to an even greater degree than the first 
computer model run.  The results of 
the second run showed that the impacts of sulfur dioxide emissions from Dry Fork 
and other area sources could exceed the Class I increments within the 
Reservation.

 
 
[¶16]   More specifically, the model 
estimated that there would be, over a three year period, forty-seven violations 
of the 24-hour increment of 5 micrograms per cubic meter.  For eighteen of these modeled increment 
exceedances, emissions from the Dry Fork Station had no impact at all, meaning 
that the exceedances were caused entirely by other area sources, chiefly the 
Colstrip Units.  For the remaining 
twenty-nine modeled increment exceedances, the estimated impact of Dry Fork's 
emissions was between 0.0002 and 0.0009 micrograms per cubic meter.2 

 
 
[¶17]   That brings us to the heart of this 
dispute.  The PRBRC contends that, 
because the second computer model run indicated exceedances of the increment, 
the DEQ could not legally issue the air quality permit for the Dry Fork 
Station.  The DEQ and Basin Electric 
point out that the first computer model run using maximum actual emissions 
projected no increment exceedances.  
Even in the second computer model run using maximum allowable emissions, 
Dry Fork's contributions to the increment exceedances were so exceedingly small 
that the DEQ treated them as non-existent.  
Under these circumstances, the DEQ and Basin Electric assert, the agency 
had discretion to determine that Dry Fork will not cause or contribute to any 
actual exceedances of the increment, and the air quality permit was properly 
issued.

 
 
[¶18]   The PRBRC's position, supported by 
the Northern Cheyenne Tribe, is based squarely on the language of the 
regulation:  "A permit to construct 
. . . shall be issued only . . . if the predicted impact . . . is less than the 
maximum allowable increment . . . ."  
6 WAQSR § 4(b)(i)(A)(I).  
This language is plain and unambiguous, the PRBRC contends, and because 
the second computer model run indicated exceedances of the increment, the permit 
could not be issued.

 
 
[¶19]   The DEQ's position, supported by 
Basin Electric, is that the DEQ is allowed a certain amount of flexibility in 
administering Wyoming's air quality program.  It asserts that the regulatory language 
relied upon by the PRBRC must be read together with the provision of 6 WAQSR 
§ 2(c)(iii) that no permit shall be granted "unless the applicant shows, to 
the satisfaction of the Administrator of the Division of Air Quality that . . . 
[t]he proposed facility will not cause significant deterioration of existing 
ambient air quality."  The DEQ 
contends that Basin Electric showed, to the satisfaction of the agency, that Dry 
Fork would not cause significant deterioration of air quality within the 
Reservation.  For the increment 
exceedances indicated by the second run of the computer model, the contributions 
of Dry Fork's emissions were extremely small, ranging from 0.0002 to 0.0009 
micrograms per cubic meter.  The DEQ 
contends that it properly exercised its discretion to overlook these modeled 
increment exceedances because Dry Fork's contributions were well below the 
Significant Impact Levels used by the DEQ.

 
 
[¶20]   Under the DEQ's interpretation of 
its own rules and regulations, this use of Significant Impact Levels is 
proper.  We defer to that 
interpretation unless it is clearly erroneous or inconsistent with the plain 
language of the regulations.  Pinther, 866 P.2d  at 1302.  The DEQ contends that its interpretation 
cannot be considered clearly erroneous because it is well established by the 
agency's longstanding practices, and consistent with the EPA's 
interpretation.

 
 
[¶21]   The DEQ explains that the use of 
Significant Impact Levels in air quality regulation arose from a leading federal 
air quality case in which the court stated that an agency should have "authority 
to provide exemption when the burdens of regulation yield a gain of trivial or 
no value."  Alabama Power Co. v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1979).  This, 
the DEQ says, led the federal EPA to develop Significant Impact Levels below 
which the impacts of a proposed source's emissions are treated as de minimis 
rather than as a disqualification from receiving permit.  The EPA later proposed a regulation 
allowing the use of Significant Impact Levels.  See 61 Fed. Reg. 38250, 38292 (July 23, 
1996).  The DEQ and Basin Electric 
admit that the EPA never finalized or promulgated the regulation, but point out 
that the EPA "is aware that many States have been using these proposed 
[Significant Impact Levels] for . . . screening tools since 
1996."  72 Fed. Reg. 54,112 (Sept. 
21, 2007).  The DEQ and Basin 
Electric also cite federal environmental cases supporting the use of Significant 
Impact Levels.  See, e.g., In re Prairie State Generating 
Co., 2006 WL 2847225, P.S.D. Appeal No. 05-05, slip op. (EAB Aug. 24, 
2006).

 
 
[¶22]   The difficulty we have with the 
DEQ's position is one emphasized by the Northern Cheyenne Tribe.  As discussed earlier, the DEQ employs a 
two-phase review of air quality impacts.  
The screening phase analyzes emissions from the proposed source by 
itself.  If the screening phase 
indicates that further analysis is required, the cumulative phase proceeds to 
analyze emissions from the proposed source and other area sources.  After careful consideration of the 
authorities cited by the DEQ, we agree that they support the use of Significant 
Impact Levels in the screening phase.  
It is less clear that these authorities support the use of Significant 
Impact Levels in the cumulative phase, as the DEQ did in this 
case.

 
 
[¶23]   In the preamble to its proposed 
regulation, the EPA explained that Significant Impact Levels "would be used to 
determine whether a new major source or major modification, due to the predicted 
ambient concentration from its own emissions, would be required to conduct a 
comprehensive Class I increment analysis for a given pollutant."  61 Fed. Reg. at 38292.  This clearly establishes the EPA's 
position that Significant Impact Levels may be employed in the screening phase, 
but there is no indication that the EPA intended them to be used in the 
cumulative phase as well.  
Accordingly, while it is true that the EPA recognizes that states use 
Significant Impact Levels as "screening tools," 72 Fed. Reg. at 54,140, it is 
also true that these screening tools were meant to be used "for determining when 
a new major source . . . must conduct a more extensive air analysis to 
demonstrate that it will not cause or contribute to a violation of the . . . 
increment."  Id. at 54,138.  In other words, these regulatory 
materials support the DEQ's use of Significant Impact Levels in the initial 
screening phase, but provide no support for their use in the subsequent 
cumulative phase.

 
 
[¶24]   Other authorities suggest that 
Significant Impact Levels may be used in the cumulative phase.  In Prairie State, for example, the 
Environmental Appeals Board (the administrative body authorized to hear appeals 
from EPA decisions) appears to have approved of the EPA's use of Significant 
Impact Levels in both the screening phase and the cumulative phase.  Prairie State, slip op. at 134, 
137-38.3  Similar support appears in the 
Environmental Protection Agency's "New Source Review Workshop Manual: Prevention 
of Significant Deterioration and Nonattainment Area Permitting" (Draft, Oct. 
1990) (NSR Manual).4  
The manual indicates how Significant Impact Levels are to be used in the 
screening phase:

 
 
The 
EPA does not require a full impact analysis for a particular pollutant when 
emissions of that pollutant from a proposed source or modification would not 
increase ambient concentrations by more than prescribed significant ambient 
impact levels.

 
 

Id. 
at C.24.  It also indicates how 
Significant Impact Levels are to be used in the cumulative 
phase:

 
 
When 
a violation of any . . . increment is predicted at one or more receptors in the 
impact area, the applicant can determine whether the net emissions increase from 
the proposed source will result in a significant ambient impact at the point 
(receptor) of each predicted violation, and at the time violation is 
predicted to occur.  The source will 
not be considered to cause or contribute to the violation if its own impact is 
not significant . . . .  In such a 
case, the permitting agency, upon verification of the demonstration, may approve 
the permit.

 
 

Id. 
at C.52 (emphasis in original).  
Thus, the manual does seem consistent with the DEQ's application of 
Significant Impact Levels in both the screening phase and the cumulative 
phase.

 
 
[¶25]   On the other hand, the EPA has made 
it clear that, in at least some circumstances, Significant Impact Levels cannot 
be used in the cumulative phase.  In 
2002, the EPA's comments on North Dakota's State Implementation Plan included 
this statement:

 
 
We 
have recently consulted with our Headquarters office and it is EPA's position 
(as we stated in an August 30, 2001 letter to the North Dakota Department of 
Health) that it is not appropriate to establish Class I significance levels when an increment violation already 
exists.  We believe any impact 
(not just one that is "significant") on a receptor in a Class I area that shows 
a violation of the PSD increment would be considered to contribute to that 
violation.  Furthermore, we believe 
that, even if some of the impacts are relatively small they are still 
contributing to an existing problem.

 
 
Under 
current EPA policy, the PSD Class II significant impact levels are used 
primarily as a threshold in new source permitting to determine the scope of the 
modeling analysis.

 
 
Letter 
from Richard R. Long, EPA, to Terry L. O'Clair, North Dakota Department of 
Health, April 12, 2002.  

 
 
[¶26]   Unfortunately, we are unable to 
determine how this statement from the EPA might apply in our current case, 
because the record does not establish whether the Class I area on the 
Reservation has already experienced increment violations.  The Northern Cheyenne Tribe's brief 
describes the air quality monitoring program established on the Reservation, but 
does not say whether any actual increment exceedances have been monitored.  At oral argument, counsel for the 
parties suggested that there have been no measured exceedances, but the record 
is insufficient to establish or refute that fact.  However, while we cannot determine the 
applicability of the EPA's statement, we can perceive its generally disapproving 
tone as to the use of Significant Impact Levels in the cumulative phase of 
review.  This, together with the 
other EPA materials considered, leaves the federal agency's interpretation 
uncertain, or at least unclear.  The 
EPA's inconsistency undermines the DEQ's argument that its interpretation cannot 
be clearly erroneous because it is supported by the EPA.

 
 
[¶27]   The DEQ and Basin Electric further 
assert that, over the past several years, the DEQ has routinely used Significant 
Impact Levels when reviewing air quality permit applications.  Conceding that the use of Significant 
Impact Levels is not explicitly authorized by any particular Wyoming regulation, 
the DEQ maintains that they are commonly used by many air quality regulatory 
agencies, and that their use is well within the DEQ's discretion.  However, this assertion by the DEQ 
suffers from the same flaw as its previous argument.  The record indicates that the DEQ has 
used Significant Impact Levels in at least ten permit reviews, but in almost 
every instance, it did so in the screening phase.  There appears to be only one instance in 
which the DEQ employed Significant Impact Levels in the cumulative phase.  A single, recent example is insufficient 
to establish that the DEQ has a settled regulatory interpretation entitled to 
deference.  See RME Petroleum, ¶ 44, 150 P.3d  
at 689.  

 
 
[¶28]   At this point, it seems appropriate 
to quote the applicable regulation again.  
It requires the DEQ's permit review to

 
 
include 
analysis of the predicted impact of the allowable and secondary emissions from 
the stationary source. . . .  Such 
analysis shall identify and quantify the impact on the air quality in the area 
of all emissions not included in the baseline concentrations including, but not 
limited to, those emissions resulting from the instant application and all other 
permits issued in the area. The purpose of this analysis is to determine the 
total deterioration of air quality from the baseline concentrations. . . .  A permit to construct . . . shall be 
issued only . . . if the predicted impact (over and above the baseline 
concentration) of emissions defined above is less than the maximum allowable 
increment shown in Table 1 for the classification of the area in which the 
impact is predicted.

 
 
6 
WAQSR § 4(b)(i)(A)(I).  

 
 
[¶29]   The regulation clearly does not 
provide authority for the DEQ to treat small exceedances as de minimis and issue 
the permit anyway.  If it were meant 
to provide such discretion, we would expect it to say, "A permit to construct 
. . . shall be issued only . . . if the predicted impact . . 
. is not significantly greater than 
the maximum allowable increment shown in Table 1," or words to that effect.  The regulation does not say that, or 
anything like that.  Moreover, the 
increments shown in Table 1 are precise numbers, not subject to 
interpretation.  The 24-hour 
increment for sulfur dioxide, for example, is 5 micrograms per cubic meter, not 
approximately 5 micrograms per cubic 
meter.  Given the language of this 
regulation, we see no room for the DEQ to waive application of the increment 
through the use of Significant Impact Levels, and no authority for the DEQ to 
invoke Significant Impact Levels to issue a permit despite modeled exceedances 
of the increment, no matter how small those exceedances might be or how small 
the proposed source's contribution may be.  
We therefore conclude that the DEQ's reliance solely on Significant 
Impact Levels is not consistent with the language of the 
regulations.

 
 
[¶30]   We are mindful of the argument 
presented by the DEQ and Basin Electric that this regulation must be read in 
context.  "The rules of statutory 
interpretation also apply to the interpretation of administrative rules and 
regulations."  Powder River Coal Co. v. Wyoming State Bd. 
of Equalization, 2002 WY 5, ¶ 6, 38 P.3d 423, 426 (Wyo. 2002).  Accordingly, "all portions of an act [or 
regulation] must be read in pari materia, and every word, clause and sentence of 
it must be considered so that no part will be inoperative or superfluous."  KP v. State, 2004 WY 165, ¶ 22, 102 P.3d 217, 224 (Wyo. 2004).  We are 
guided by the "full text of the statute [or regulation], paying attention to its 
internal structure and the functional relation between the parts and the 
whole."  Hede v. Gilstrap, 2005 WY 24, ¶ 6, 
107 P.3d 158, 163 (Wyo. 2005).

 
 
[¶31]   The internal structure of the 
applicable regulations is explained in the regulations themselves:  

 
 
Chapter 
6 establishes permitting requirements for all sources constructing and/or 
operating in the State of Wyoming.  
Section 2 covers general air quality permitting requirements for 
construction and modification as well as minor source permits to operate.  Section 3 is the state operating permit 
program required under Title V of the Clean Air Act.  Section 4 is the prevention of 
significant deterioration (PSD) program.

 
 
6 
WAQSR § 1(a).  Section 2, 
covering general permitting requirements, provides that no permit may be issued 
"unless the applicant shows, to the satisfaction of the Administrator of the 
Division of Air Quality," that:

 The proposed facility will not cause 
significant deterioration of existing ambient air quality in the Region as 
defined by any Wyoming standard or regulation that might address significant 
deterioration.

 
 
WAQSR 
§ 2(c)(iii).  Section 4, the 
prevention of significant deterioration section, includes the regulation 
providing that a permit shall be issued only if the predicted impact of 
emissions is less than the increment.  
6 WAQSR § 4(b)(i)(A)(I).

 
 
[¶32]   The DEQ and Basin Electric 
repeatedly point out the provision of Section 2 that a permit applicant must 
show compliance with permitting requirements "to the satisfaction of the 
Administrator of the Division of Air Quality."  This language, they contend, provides 
sufficient discretion to justify using Significant Impact Levels in the 
cumulative phase of permit review.  
We can hardly disagree that this language provides discretionary 
authority to the agency, but that authority is limited.  Section 2 provides that a permit 
applicant must demonstrate to the agency's satisfaction that the proposed source 
"will not cause significant deterioration of existing ambient air quality in the 
Region as defined by any Wyoming standard or regulation that might address 
significant deterioration."  This 
gives the agency discretion to determine whether or not the proposed source will 
cause significant deterioration.  It 
does not give the agency discretion in determining what significant 
deterioration is.  Rather, 
significant deterioration is as "defined by any Wyoming standard or regulation 
that might address significant deterioration."  

 
 
[¶33]   We must therefore disagree with the 
Council's conclusion that the DEQ properly used Significant Impact Levels to 
determine that the Dry Fork Station would not cause or contribute to increment 
exceedances on the Reservation.  
However, we will ultimately affirm the Council's ruling on summary 
judgment that the DEQ properly issued the air quality permit to Basin Electric, 
because there is another valid basis for that decision.  In the administrative law context, we 
have indicated that "we review an agency's order granting a summary judgment in 
the same manner as in the civil context by employing our de novo standard of review and utilizing 
the same standards and reviewing the same materials as the agency."  Rollins v. Wyo. Tribune-Eagle, 2007 WY 
28, ¶ 7 n.7, 152 P.3d 367, 370 (Wyo. 2007).  In the civil context, it is well 
established that "we can affirm a district court's summary judgment order on any 
basis apparent in the record."  Stewart Title Guaranty Co. v. Tilden, 
2005 WY 53, ¶ 22, 110 P.3d 865, 874 n.7 (Wyo. 2005).  The combination of these two concepts 
suggests that we can affirm an administrative agency's summary judgment decision 
on any basis apparent in the record.

 
 
[¶34]   The basis on which we sustain the 
Council's summary judgment decision in this case is mentioned, but not pressed, 
in the DEQ's brief.  The regulation 
provides that the permit shall be issued only if the predicted impact is less than the 
increment.  One definition of 
predict is "to declare in advance; [to] foretell on the basis of observation, 
experience, or scientific reason."  
Webster's Ninth New Collegiate 
Dictionary 926 (1991).  In 
applying its experience and scientific reason, the DEQ must exercise its 
discretion to make a sound prediction of whether the impact of emissions from a 
proposed source will be less than the increment.

 
 
[¶35]   It is appropriate to conclude that 
the DEQ has discretion in determining the predicted impacts of pollution 
emissions, but does not have discretion to depart from the increments by the use 
of Significant Impact Levels.  When 
the regulations provide specific numbers, such as the increments, the regulated 
community and other interested parties expect the DEQ to apply those numbers 
strictly as written.  If the DEQ is 
going to use Significant Impact Levels to vary from those specific numbers, then 
it should incorporate the Significant Impact Levels into its regulations in 
order to provide notice of that practice to the regulated community and other 
interested parties.  In contrast, 
when the regulation requires the DEQ to predict impacts of pollution emissions, 
the agency can be expected to apply its judgment and expertise to make a sound 
prediction.  Some discretion is 
inherent in the exercise of judgment and expertise. 

 
 
[¶36]   In the analysis of emissions from 
the Dry Fork Station, exceedances were modeled only when the maximum allowable 
emissions for the Colstrip Units were used, but not when the maximum actual 
emissions were used.  There is 
nothing in the regulations requiring the DEQ to consider only maximum allowable 
emissions from existing sources in its analysis, or to ignore models using the 
maximum actual emissions.  Indeed 
the NSR Manual at C.48-49 indicates that it is maximum actual emissions that 
should be modeled for area sources such as the Colstrip Units.  The DEQ could reasonably determine that 
the computer modeling based on maximum actual emissions provided a better 
prediction than the computer modeling based on maximum allowable 
emissions.

 
 
[¶37]   We therefore conclude that the 
regulations provide the DEQ with some discretion in predicting the impacts of 
emissions from a proposed source.  
In this appeal, the DEQ does not explicitly contend that it reached its 
decision on this basis, nor did it defend its decision on this basis before the 
Council.  However, that is the 
logical underpinning of its decision.  
We could remand this case to allow the DEQ to explain its decision on the 
proper basis, but we fail to see what that would accomplish.  See, State ex rel. Arnold v. Ommen, 2009 
WY 24, ¶ 32, 201 P.3d 1127, 1136 (Wyo. 2009).  In this case, the facts are not in 
dispute, "making it possible for this Court to review without re-weighing 
disputed evidence."  Wells Fargo Bank v. Hodder, 2006 WY 128, 
¶ 32, 144 P.3d 401, 413 (Wyo. 2006).  
Based on the DEQ's analysis as reflected in the record, there is no doubt 
that the fundamental position of the DEQ was that no increment exceedances could 
be predicted to result from the operation of the Dry Fork facility.  Based on common sense and notions of 
judicial economy, it is appropriate for us to decline to remand a case if 
further proceedings "would serve no useful purpose."  Cellers v. Adami, 2009 WY 120, ¶ 2, 
216 P.3d 1134, 1136 (Wyo. 2009); State v. 
Homar, 798 P.2d 824, 826 (Wyo. 1990).

 
 
[¶38]   The first computer model run was 
based on maximum actual emissions from Colstrip, rather than typical actual 
emissions, so it necessarily overpredicted the impacts.  Even so, it indicated no increment 
exceedances on the Reservation.  The 
second computer run was based on maximum allowable emissions, so it 
overpredicted the impact of emissions to an even greater degree.  Although it did model theoretical 
increment exceedances on the Reservation, the estimated contribution of the Dry 
Fork emissions was exceedingly small.  
Moreover, according to the expert who performed the computer modeling, in 
every instance for which this second model run indicated increment exceedances 
on the Reservation, "the winds were blowing the Dry Fork emissions away 
from the [Reservation].  It 
was not physically possible for Dry Fork to contribute to this problem."  (Emphasis added.)  

 
 
[¶39]   The computer model does not make 
predictions, but rather, it is a tool for the DEQ to use to make 
predictions.  Given the DEQ's and 
the Council's position that the regulations provided the agency some discretion, 
and their ultimate conclusion that there would be no actual increment violation, 
it seems obvious the DEQ, based on its experience, expertise, and judgment, gave 
greater weight to the results of the first computer model run, and discounted 
the results of the second.  On that 
basis, the DEQ essentially decided that the predicted impacts of emissions from 
the Dry Fork Station will be less than the maximum allowable increment.  We therefore affirm the Council's 
summary judgment in favor of Basin Electric on the increment consumption 
issue.

 
 
Issue 
2.  BACT  Control Technology versus 
Redesign

 
 
[¶40]   In its application for the air 
quality permit for the Dry Creek Station, Basin Electric was required to 
demonstrate that "[t]he proposed facility will utilize the Best Available 
Control Technology with consideration of the technical practicability and 
economic reasonableness of reducing or eliminating the emissions resulting from 
the facility."  6 WAQSR 
§ 2(c)(v).  Best Available 
Control Technology, commonly referred to as BACT, is defined 
as

 
 
an 
emission limitation (including a visible emission standard) based on the maximum 
degree of reduction of each pollutant subject to regulation under these 
Standards and Regulations or regulation under the Federal Clean Air Act, which 
would be emitted from or which results [from] any proposed major stationary 
source or major modification which the Administrator, on a case-by-case basis, 
taking into account energy, environmental, and economic impacts and other costs, 
determines is achievable for such source or modification through application 
[of] production processes and available methods, systems, and techniques, 
including fuel cleaning or treatment or innovative fuel combustion techniques 
for control of such pollutant. 

 
 
6 
WAQSR § 4(a).  In simplified 
terms, this regulation requires the DEQ to consider a broad range of available 
pollution control and reduction options, determine which can be achieved 
reasonably, and impose those as permit requirements.

 
 
[¶41]   The PRBRC asserts that the DEQ did 
not consider a sufficiently broad range of pollution control options when it 
reviewed the Dry Fork permit application.  
As proposed by Basin Electric, the Dry Fork Station will incorporate a 
"subcritical" boiler, which will operate at temperatures and pressures below the 
critical point of water.  The PRBRC 
contends that, as part of its BACT analysis, the DEQ should also have considered 
a "supercritical" boiler, which would operate at temperatures and pressures 
above the critical point of water.5  The PRBRC maintains that supercritical 
boiler technology is, in the terms used in the regulation, one of the 
"production processes" or "available methods, systems, [or] techniques" by which 
pollution from the Dry Fork Station could be reduced.

 
 
[¶42]   The first step in resolving this 
issue is to interpret the BACT regulations.  As noted above, we defer to an agency's 
interpretation of its own rules and regulations unless that interpretation is 
clearly erroneous or inconsistent with the plain language of the rules.  Pinther, 866 P.2d  at 1302; RME Petroleum, ¶ 44, 150 P.3d  at 
698.  With that in mind, we consider 
the DEQ's interpretation of its BACT regulations.

 
 
[¶43]   The DEQ begins by pointing out that 
the BACT regulations obligate it to analyze the pollutants emitted by "any 
proposed major stationary source."  
The source is proposed in the permit application, and the DEQ must 
analyze other "production processes and available methods, systems, and 
techniques" that can be applied to or adapted by the proposed source.  However, the DEQ is not required to 
analyze options that would require substantial changes to the basic design of 
the proposed source.  This 
interpretation by the DEQ is consistent with the regulatory language, and the 
DEQ has apparently applied this interpretation since at least 1993.  In a case before the Council that year, 
the permit applicant had proposed a pulverized coal boiler.  The Council upheld the DEQ's decision 
that the BACT regulations did not require analysis of "a different type of 
boiler, such as a circulating fluidized bed boiler" because that would require 
the DEQ "to redefine the source."  
In re Permit Issued to Black Hills 
Power & Light Co., Neil Simpson Unit #2, Docket No. 2476-93 
(Council 1993).  

 
 
[¶44]   Wyoming's regulatory definition of 
BACT is nearly identical to the federal statutory definition found at 42 U.S.C. 
§ 7479(3).  It is therefore 
persuasive that the DEQ's interpretation is also consistent with the EPA's 
interpretation:

 
 
Historically, 
EPA has not considered the BACT requirement as a means to redefine the design of 
the source when considering available control alternatives. For example, 
applicants proposing to construct a coal-fired electric generator, have not been 
required by EPA as part of a BACT analysis to consider building a natural 
gas-fired electric turbine although the turbine may be inherently less polluting 
per unit product (in this case electricity). 

 
 
NSR 
Manual at B.13.  

 
 
[¶45]   The EPA's interpretation has been 
upheld repeatedly in litigation.  
For example, in Sierra Club v. 
United States Environmental Protection Agency, 499 F.3d 653, 654 (7th Cir. 
2007), the court accepted the EPA's interpretation that BACT "does not include 
redesigning the plant proposed by the permit applicant."  More recently, in Blue Skies Alliance v. Texas Comm'n on 
Environmental Quality, 283 S.W.3d 525, 535 (Tex. App. 2009), the court 
concluded "that a BACT analysis must consider any control technology that may be 
applied to the proposed facility, but does not need to consider any control 
technology that would require such a redesign of the facility that it would 
constitute an alternative proposal."  
See also, In re Knauf Fiber 
Glass, 8 E.A.D. 121 (E.A.B. 1999); In 
re Old Dominion Elec. Coop., 3 E.A.D. 779, 793 (Adm'r 
1992).

 
 
[¶46]   Because we conclude that the DEQ's 
interpretation is not inconsistent with the plain language of the regulation, 
and is not clearly erroneous, we accept that interpretation.  That, however, is only the first step in 
resolving the issue.  As stated in 
Sierra Club, 499 F.3d  at 655, the 
next question is "where control technology ends and a redesign of the proposed 
facility' begins."  In other words, 
we must decide whether imposing supercritical boiler technology on Basin 
Electric would redefine the basic design of the proposed Dry Fork Station.  The Council's findings of fact on this 
question are clear and concise:

 
 
12.       
Supercritical boilers operate at temperatures and pressures above the 
"critical point" of water, while subcritical boilers operate at temperatures and 
pressures below the critical point of water.  As a result of these different pressure 
and temperature conditions, changing from subcritical to supercritical 
technologies would require a different boiler made with different steel alloys, 
different water wall tubing, different valves, different turbines, different 
reheaters, different boiler feed pumps, and a different economizer. 

 
 
. 
. . .

 
 
16.       DEQ did not 
consider . . . supercritical technologies to be control technologies that had to 
be evaluated as part of the BACT process . . . .  As a consequence, although DEQ did 
require Basin Electric to explain the reasons for its decision not to employ 
these technologies, DEQ did not submit these technologies to a separate "BACT" 
analysis as potential pollution control options when issuing Basin Electric's 
permit.

 
 
17.       DEQ did not 
do so because it considered these technologies to be fundamentally different 
emission source technologies than the one proposed by Basin Electric and, if 
applied, would require Basin Electric to "redefine" its proposed emissions 
source, a subcritical pulverized coal boiler, contrary to DEQ's interpretation 
of [the regulations].

 
 
(Internal 
citations omitted.)  Our review of 
the record revealed substantial evidence to support these findings of fact, 
including reports from experts and affidavits from DEQ personnel.  Under the applicable standard of review, 
these findings must be affirmed. 

 
 
[¶47]   As found by the Council, requiring 
the Dry Fork Station to adopt supercritical boiler technology would force it to 
make substantial changes to its proposed design.  Such substantial changes seem less like 
a control technology option and more like a redesign of the proposed 
source.  That is the decision 
reached by the DEQ.  Because this 
decision was made "in a technically complex field with limited statutory 
guidance," it is better "entrusted to the judgment of the agency that 
administers the regulatory scheme rather than to courts of generalist 
judges."  Sierra Club, 499 F.3d  at 
656.

 
 
[¶48]   The PRBRC disagrees with the DEQ's 
judgment, and contends that the DEQ was required to perform a BACT analysis of 
supercritical boiler technology because it is a potentially lower-polluting 
production process or method.  In 
support of its contention, the PRBRC cites In re Prairie State Generating Co., in 
which an air quality permit was issued for a pulverized coal-fired power 
plant.  As part of its BACT 
analysis, the permitting agency considered an option known as integrated 
gasification combined cycle technology (IGCC).6 The agency required this analysis even 
though "selection of IGCC would have required extensive design changes to 
Prairie State's proposed facility."  
Prairie State, slip op. at 
36.  This decision, the PRBRC 
maintains, indicates that the DEQ was required to consider supercritical boiler 
technology despite the fact that it would require extensive design changes to 
the Dry Fork Station.

 
 
[¶49]   We disagree that Prairie State supports the PRBRC's 
position. The specific issue in that case was whether the permitting agency's 
BACT analysis should have included the use of low-sulfur coal from the western 
United States in place of the high-sulfur coal from Illinois proposed by the 
permit applicant.  The Board upheld 
the agency's decision not to require consideration of low-sulfur coal, and the 
Board's decision was ultimately upheld on judicial review.  Sierra Club, 499 F.3d  at 657.  The Board was not asked to decide 
whether the agency was required to consider IGCC technology.  It appears to have noted that the agency 
considered IGCC technology only to show how broad a range of options the agency 
had considered in its BACT analysis.  
The Board did not hold that the agency was required to perform BACT 
analysis on a technology that would require extensive design changes.  Rather, it suggested in dicta that the 
agency may have done even more than the law required.

 
 
[¶50]   The PRBRC further contends that 
supercritical boiler technology would not actually redefine or redesign the Dry 
Fork Station as proposed by Basin Electric.  This argument rests on the concept that 
a facility's basic design is defined by the raw materials it uses and the 
product it produces.  On this basis, 
the PRBRC concedes that a permit applicant who proposes a coal-fired power plant 
is not required to consider a natural gas-fired power plant, because that would 
require the use of a different raw material as input.  In contrast, the PRBRC contends, an 
applicant who proposes a coal-fired power plant can be forced to use any 
technology options available, so long as the raw material is coal and the 
product is electricity.  
Characterizing subcritical and supercritical boiler technology as 
"different flavors" of coal-fired power plants, the PRBRC insists that the DEQ 
must consider the option of supercritical boiler technology in its BACT 
analysis.

 
 
[¶51]   It is too simplistic to say that a 
proposed source is defined solely by the raw materials it uses and the product 
it makes.  The PRBRC's contention 
that subcritical and supercritical boiler technology represent the same basic 
design is contrary to the fact, as found by the Council, that "changing from 
subcritical to supercritical technologies would require a different boiler made 
with different steel alloys, different water wall tubing, different valves, 
different turbines, different reheaters, different boiler feed pumps, and a 
different economizer."  Moreover, 
the PRBRC's contention is contrary to the decision in Sierra Club, 499 F.3d 653, which held 
that the agency did not have to consider the option of low-sulfur coal from the 
western United States as a replacement for high-sulfur coal from a nearby 
Illinois mine.  Even though both 
would use the same raw material to make the same product, the court held that 
analysis of low-sulfur coal was not required because "[t]o burn low-sulfur coal, 
Prairie State would have to arrange for it to be transported from mines more 
than a thousand miles away and would have to make changes in the design of the 
plantspecifically, the design of the plant's facilities for receiving 
coal."  Id. at 654.  In the case before us now, to employ 
supercritical boiler technology, Basin Electric would have to make changes in 
the design of the plant specifically, the design of the plant's 
boiler.  For that reason, 
supercritical boiler technology is beyond the scope of options the DEQ was 
required to consider in its BACT analysis.

 
 
[¶52]   In summary, we have determined that 
the DEQ's interpretation of the BACT regulations is not clearly erroneous or 
inconsistent with the plain language of the regulations, and is supported by 
persuasive federal authority.  
Accordingly, we agree that BACT analysis does not have to include options 
that would require the proposed source to redefine its basic design.  The record contains substantial evidence 
to support the Council's findings that imposing supercritical boiler technology 
on the Dry Fork Station would require extensive changes to its basic 
design.  These determinations lead 
to the conclusion that the DEQ was not required by the BACT regulations to 
consider supercritical boiler technology as an alternative to Basin Electric's 
proposed subcritical boiler technology.  
We affirm the Council's decision on this issue.

 
 
Issue 
3.  Greenhouse Gas 
Emissions

 
 
[¶53]   The Dry Fork Station is predicted 
to emit 3.7 million tons per year of carbon dioxide, along with lesser amounts 
of other gases that the PRBRC characterizes as greenhouse gases.7 The PRBRC asserts that the DEQ was 
required to impose BACT requirements forcing Dry Fork to control its emissions 
of carbon dioxide.  Indeed, the 
PRBRC claims that the DEQ's failure to do so is 
"indefensible."

 
 
[¶54]   Under Wyoming's regulations, BACT 
is "an emission limit . . . based on the maximum degree of reduction of each 
pollutant subject to regulation under these Standards and 
Regulations or regulation under the Federal Clean Air Act."  6 WAQSR § 4(a).  The PRBRC does not maintain that carbon 
dioxide is subject to regulation under the Wyoming Air Quality Standards and 
Regulations.  Rather, it contends 
that carbon dioxide is subject to BACT analysis and control because it is 
subject to regulation under the federal Clean Air Act.  Accordingly, we consider this issue 
solely under federal law.

 
 
[¶55]   Federal regulations define which 
pollutants are considered subject to regulation under the federal Clean Air 
Act:

 
 
   (i)      Any pollutant for which 
a national ambient air quality 

standard 
has been promulgated . . . ;

 
 
   (ii)   Any pollutant that is subject to 
any [new source review] standard promulgated under section 111 of the [Clean 
Air] Act;

 
 
   (iii)  Any Class I or II substance subject to 
[an ozone protection] standard promulgated under or established by title VI of 
the Act; or

 
 
   (iv)   Any pollutant that otherwise is 
subject to regulation under the Act.

 
 
40 
C.F.R. §§ 51.166(b)(49), 52.21(b)(50).  While conceding that carbon dioxide does 
not fall within the first three categories, the PRBRC contends that carbon 
dioxide is a "pollutant that otherwise is subject to regulation under the 
Act."  It bases this contention on 
the fact that, in 1993, the federal EPA promulgated regulations requiring 
specified sources to monitor and report emissions of carbon dioxide.  See 40 C.F.R. §§ 75.10, 17.13, 
75.64(a)(10).

 
 
[¶56]   The DEQ and Basin Electric point 
out that there are no limits, standards, or control requirements for carbon 
dioxide.  The EPA requires only 
monitoring and reporting of carbon dioxide emissions.  The DEQ and Basin Electric contend that 
monitoring and reporting requirements alone do not make carbon dioxide subject 
to regulation.

 
 
[¶57]   The position taken by the DEQ and 
Basin Electric is fully consistent with the EPA's longstanding position.  The definition quoted above of what 
pollutants are subject to regulation was promulgated in 2002.  67 Fed. Reg. 80,186 (Dec. 31, 
2002).  In the preamble to this 
regulation, the EPA also provided a list of all pollutants it considered subject 
to regulation.  Id. at 80,240.  Carbon dioxide was not on that list, 
even though the EPA had imposed carbon dioxide monitoring and reporting 
requirements in 1993.  The EPA did 
not consider monitoring and reporting requirements, by themselves, sufficient to 
make carbon dioxide emissions subject to regulation under the federal Clean Air 
Act.

 
 
[¶58]   According to the PRBRC, the EPA was 
forced to change this interpretation by the United States Supreme Court's 
decision in Massachusetts v. EPA, 549 U.S. 497, 127 S. Ct. 1438, 167 L. Ed. 2d 248 (2007).  In that case, the Court said that 
greenhouse gases, including carbon dioxide, are "air pollutants" as defined in 
the Clean Air Act.  It ruled that 
the EPA has the authority to regulate carbon dioxide emissions from new motor 
vehicles, but it did not hold that the EPA is required to do so.  In fact, the case was remanded to allow 
the EPA to decide whether or not to regulate carbon dioxide emissions from new 
motor vehicles.  Contrary to the 
PRBRC's assertion, the Court's ruling established that carbon dioxide is 
potentially subject to regulation, but not that it is subject to 
regulation.  See Longleaf Energy Assoc. v. Friends of the 
Chatahoochee, Inc., 681 S.E.2d 203, 207 (Ga. Ct. App. 2009) ("The United 
States Supreme Court decision in Massachusetts v. EPA does not mandate 
the Superior Court's ruling [that carbon dioxide is subject to regulation under 
the Clean Air Act].")

 
 
[¶59]   Following the decision in Massachusetts, the Sierra Club 
challenged a PSD permit issued by the EPA to a coal-fired power plant in 
Utah.  In re Deseret Power Elec. Coop., 2008 WL 
5572891 (E.A.B. Nov. 13, 2008).  As 
in the case before us now, the Sierra Club asserted that the EPA was required to 
apply BACT analysis and controls to the plant's carbon dioxide emissions.  The EPA responded that it had 
historically interpreted the term "subject to regulation" to include only those 
air pollutants subject to statutory or regulatory emissions controls, not to 
pollutants such as carbon dioxide that are subject only to monitoring and 
reporting requirements.  

 
 
[¶60]   The Environmental Appeals Board 
rejected the Sierra Club's argument that the term "subject to regulation" was so 
clear and unambiguous as to require the EPA to include carbon dioxide 
emissions.  Id. at 26.  It also ruled, however, that the EPA's 
stated reason for not including a BACT limit for carbon dioxide in the 
permitthat it was bound by the historical interpretation of the term subject to 
regulationwas not sufficiently supported in the administrative record of the 
permitting decision.  Id. at 37.  On that basis, the Board remanded the 
permit to the EPA to reconsider whether carbon dioxide should be considered 
subject to regulation.  Id. at 63.  The Deseret decision, much like the Massachusetts decision, establishes only 
that carbon dioxide is potentially subject to regulation at some future 
time.

 
 
[¶61]   Shortly after the Deseret decision, the EPA issued a 
memorandum reaffirming its historical interpretation that the term "subject to 
regulation" includes those pollutants for which a statute or regulation 
"requires actual control of emissions of that pollutant."  Memorandum from Stephen L. Johnson, 
Administrator, EPA, to Regional Administrators (Dec. 18, 2008).  The PRBRC tries to minimize the 
significance of this memorandum by pointing out that the EPA later granted a 
petition to reconsider.  See Letter from Lisa P. Jackson, EPA 
Administrator, to David Bookbinder, Sierra Club (Feb. 17, 2009).  In granting reconsideration, however, 
the EPA expressly refused to stay the effectiveness of the interpretation set 
forth in the memorandum.  

 
 
 [¶62]  On reconsideration, the EPA might change 
its interpretation, and begin to consider carbon dioxide subject to 
regulation.  Such a change would not 
affect Dry Fork, however, because its air quality permit has already been 
issued.  While the PRBRC has made a 
persuasive argument that carbon dioxide may be regulated in the future, it has 
not shown that carbon dioxide was subject to regulation when the Dry Fork permit 
was pending.  We therefore agree 
with the DEQ and Basin Electric that the DEQ was not required to subject the Dry 
Fork Station's carbon dioxide emissions to BACT analysis and control.  On this basis, we affirm the Council's 
decision to dismiss the PRBRC's claim on this issue.  

 
 
CONCLUSION

 
 
[¶63]   We affirm the Council's decision 
that the DEQ properly issued an air quality permit to Basin Electric for the Dry 
Fork Station.

 
 
FOOTNOTES

 
 

1All of the computer model runs used maxim allowable emissions from the Dry 
Fork Station.  Because Dry Fork was 
not yet in operation, its actual emissions could not be 
documented.

 
 

2Exceedances of the 3-hour increment were also modeled.  Because these were comparable in number 
and degree to the exceedances of the 24-hour increment, and because the 
regulatory framework is the same for the 3-hour and 24-hour increments, our 
analysis is the same for both.  To 
avoid confusion and duplication, our discussion will focus on the 24-hour 
increment.

 
 

3To be precise, in Prairie 
State the Significant Impact Levels were used to determine compliance with 
the National Ambient Air Quality Standards, not to determine whether emissions 
from the proposed source would cause or contribute to increment 
exceedances.  None of the parties 
have addressed this distinction or suggested that it makes a difference in this 
case.

 
 

4While this manual was never finalized, and has remained in draft form for 
twenty years, it is widely recognized as an authoritative source on air quality 
regulation.  It has been cited as 
persuasive by the parties on both sides of this 
case.

 
 

5The record includes technical definitions of the critical point of water, 
but for our purposes, it is sufficient to note simply that supercritical boilers 
operate at higher temperatures and pressures than subcritical 
boilers.

 
 

6The key difference is that a pulverized coal-fired power plant is fueled 
by pulverized coal, while a power plant employing IGCC technology is fueled by 
synthetic gas converted from coal.  
See Prairie State, slip op. at 
35.

 
 

7We will focus on carbon dioxide because it is recognized as "the most 
important species" of greenhouse gases.  
Massachusetts v. EPA, 549 U.S. 497, 505, 127 S. Ct. 1438, 1446, 167 L. Ed. 2d 248 (2007).  Our analysis pertaining to carbon 
dioxide also applies to other greenhouse gas 
emissions.