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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 230)11-1-1 0 Docket Number: 

# A-90-0 6

Printed 10/28/20089:51:02 AM

Sheet 230of 276P. 2

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MNS:CD

G D J #90-5-2-3-174 3 U.S . Departmen to l Justice

II-I-1 0

Washington. D.C. 20530

March2 , 199 0

Mr . Thoma s F . Strubb e Cler k o f th e Cour t Unite d State s Cour t o f Appeal s fo r th e 7t h Circui t 21 9 Sout h Dearbor n Stree t Chicago , Illinoi s 6060 4 

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### EPAAjftJE^--

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Re : Wisconsi n Electri c Powe r Compan yv . Reilly , Nos . 88-3264 , 88-133 9 Dea r Mr . Strubbe : Pleas e fin

d enclose d fo r filing o n behal f o f Respondents , EPA , e £ ai. , i n th e above-reference d case , th e origina l an d twenty-si x copie s o f Respondents ' Oppositio n T o Petitioner' s Petitio n fo r Rehearin g an d Suggestio n fo r Rehearin g I n Banc . Also-include d i s th e origina l an d fou r copie s o f Respondents ' Motio n fo r a n Extensio n o f Tim e t o Fil e a Petitio n fo r Rehearin g wit h supporting affidavit
. I n addition , pleas e sen d on e stampe d cop ybac k t o me , i n th e envelope s provided , o f eac h o f th e above-mentione d document s fo r m yfiles
. Sincerely , Richar d B . Stewar t Assistan t Attorne yGenera l Lan d £ Natura l Resourc e Divisio n By : Crai g D . Galli , Attorne y U.S . Departmen to f

Justic e Land an d Natura l Resource s Divisio n Environmenta l Defens e Sectio n 10t h & Pennsylvani aAve. , N.W . Washington , D.C . 2053 0 (202 ) 633-228 5P. 3

I N THE UNITED STATE S COUR T O F APPEAL S FO RTH E SEVENT H CIRCUI T

Nos . 88-326 4 an

d89-133 9
WISCONSI N

ELECTRI C POWERCOMPANY ,

Petitioner , v . WILLIA M K . REILLY , Administrator ; Unite dState s Environmenta l Protectio

nAgency , e t al. . Respondents . RESPONDENTS ' OPPOSITIO N T O PETITIONER' S PETITIO N FO RREHEARIN

GAN D SUGGESTIO

N FORREHEARIN

GI N BAN C

OF COUNSEL : E . DONAL

D ELLIOT T Genera l Counse l ALA N W . ECKERT Associat e Genera l Counse l MICHAE L S . WINE

R Assistant Genera l Counse l U.S . Environmenta l Protectio n Agenc y 40 1 M Street , S.W . Washington , D.C . 2046 0 RICHAR D B . STEWART Assistan t Attorney Genera l Lan dan dNatura l Resource s Divisio n CRAI GD . GALLI , Attorne y Environmenta l Defens e Sectio n U.S . Departmen t o f Justic e 10t h& ConstitutionAvenue , N.W . Washington , D.C . 2053 0 GREGOR YB . FOOT E U.S . Environmenta l Protectio n Agenc y Offic e o f Genera l Counse l Ai r an dRadiationDivisio n (LE-132A ) 40 1 M Street , S.W . Washington , D.C . 2046 0 ROBERT J . MARTINEAU,J R U.S . Environmenta l Protectio n Agenc y Offic e o f Genera l Counse l Ai r an dRadiationDivisio n (LE-132A ) 40 1 M Street , S.W . Washington , D.C . 2046 0P. 4

- 1 -
TABL E O F CONTENT S 

### Eaa £ INTRODUCTIO

N1 ARGUMENT 5 I . TH E COUR T CORRECTL

Y CONSTRUED TH

E STATUTOR

Y AN D REGULATOR

Y DEFINITIO N O F THE TER M •"MODIFICATION* " 5 A . Th e Cour tProperl y Conclude d Tha tEPA' s Interpretatio n O f

Th e Statutor y Ter

m 'Modification 4 ' Wa

s Reasonabl e An

d Properl y Rejecte d WEPCO' s Interpretatio n 5 B . WEPCO'

s Statutor y Constructio n Argumen t Constitute s A Disagreemen tWit h EPA' s "Modification " Regulatio n 8 *\ C . Th e Court' s Decisio n Doe s No t Improperl y Allo wEP AT o Expand Th e Coverag e o f NSP S Withou t Rulemakin g 1 0 II . TH E COURT' S AFFIRMANC E O F EPA' S DECISIONT O DEN Y WEPC O CREDI T FO R IT S SWITC H T O LOW SULFU R FUEL S WA S REASONABL E AN D CONSISTENT WIT H CONGRESSIONAL INTENT 1 2 CONCLUSIO

N1 5

### - i i -

TABL E O F AUTHORITIE S 

### Pag g CASES : Chevro n U.S.A . Inc . v . NRDC . 46 7 U.S . 83 7 (1984 ) 3 , 7 Eaale-Piche rIndustries . Inc . v . EPA . 75 9 F.2 d 90 5 (D.C . Cir . 1985 ) 3 EPAv . Nationa l Crushe d Ston e Ass'n . 44 9 U.S . 6 4 (1980 ) 3 Pepc o v . EPA . 65 0 F.2 d 50 9 (4th Cir
. 1981) , cert , denied
. 45 5 U.S . 101 6 (1982 ) 1 1 Sierr a Club v . Costle
. 65 7 F.2 d 29 8 (D.C . Cir
. 1981 ) 1 1 Trai n v . NRDC . 42 1 U.S . 6 0 (1975 ) 3 Udal l v . Tallman
. 38 0 U.S . 1 (1965 ) 3 STATUTE : Clea n Ai r Act : Sectio n 111 , 4 2 U.S.C . § 741 1 2 , 3 , 13 , 1 5 Sectio n 111(a) , 4 2 U.S.C . § 7411(a ) 5 , 1 3 Sectio n 111(a)(1)(A)(ii) , 4 2 U.S.C . § 7411(a)(1)(A)(ii ) 1 3 Sectio n 111(a)(2) , 4 2 U.S.C . § 7411(a)(2 ) 2 , 1 3 Sectio n 111(a)(4) , 4 2 U.S.C . § 7411(a)(4 ) 2 , 5 , 1 4 Sectio n 307(b)(1) , 4 2 U.S.C . § 7607(b)(1 ) 9 , 1 1
REGULATIONS : 4 0 C.F.R . § 60. 5 1 2 4 0 C.F.R . § 60.1 4 2 , 8 4 0 C.F.R . § 60.14(e)(1 ) 1 0 4 0 C.F.R . § 60.4 0 1 4P. 6

- ii i -
FEDERAL RECTBTTffi

« 3 9 Fed . Reg . 36,94 6 (1974 ) a 3 9 Fed . Reg . 36,94 8 (1974 ) .'.'.'.'.'.*.'. ' |

RULE : 7t hCir . Ct . R . 40(C )P. 7

I NTH E UNITE D STATE S COUR T O F APPEAL S FO R TH E SEVENT H CIRCUI T
NOS . 88-326 4 89-133 9
WISCONSI NELECTRI C POWE R COMPANY , Petitioner , v . WILLIA M K . REILLY , Administrator , Unite d State s Environmenta l Protectio n Agency , e t al.
.

Respondents
. ONPETITION S T O REVIE W FINAL ACTION O F TH E UNITE D STATE S ENVIRONMENTAL

PROTECTIONAGENC Y
RESPONDENTS ' OPPOSITIONT O PETITIONER' S PETITIO NFO R REHEARING AN D SUGGESTIO NFO R REHEARING I NBANC

INTRODUCTIO N Petitioner , Wisconsi n Electri c Powe r Compan y("WEPCO*) , ha s file d a petitio n fo r rehearin g an d suggestio n fo r rehearin g i n ban c i n connectio n wit h thi s Court' s decisio n i n Wisconsi n Electri c Powe r Co . v . Reillv
. Nos . 88-326 4 & 89-133 9 (7t h Cir
. Jan . 19 , 1990) , t o b e publishe d a t 89 3 F.2 d 901 . Tha t decisio n involve d WEPCO' s propose d renovation s t o extend th e lif e o f it s Por t Washingto n electri c powe r plan t locate d nea r Milwaukee , Wisconsin
. Respondents , WilliamK . Reill yan d th e Environmenta l Protectio n Agenc y(-"EPA" ) , hereb ysubmi t thi s respons e pursuan t t o th e Court' s orde r o f Februar y6 , 1990 .P. 8

- 2 - WEPC O raise s tw

o principa l issue s i nit s petitio nfo r rehearing . Th

e firs t i s whethe r a massive renovatio no f severa l utility stea m boiler s ca

ntrigge r the applicatio no f Ne w Sourc e Performanc e Standard s ("NSPS" ) unde r sectio n11 1 o f th

e Clea nAi r Ac t ("CAA") , 4 2 U.S.C . § 7411 , wher e i t i s concede dtha t emissio

n level s followin

g th e renovatio

nwil l exceedlevel s prior t o th e renovation . A

nexistin

g emission s sourc e become s subjec t t o NSP S wheni t undertakes , inter alia , a "modification " o f it s facilit y withi nthe meanin

g o f CA A § 111(a)(2) . A

"modification " occur s when"an

y physica l change i

n.. . a stationar y sourc e . . . increase s the amoun t o f an y ai r pollutant . ... " 4 2 U.S.C . § 7411(a)(4) . EP

A ha s promulgatedregulation s whic hessentiall y restat e the statutor y definitio

nbu t als o narro

w th e scop e o f coverage somewha t b y exemptin

g certai nactivitie s fro m th e genera l definition . 4 0 C.F.R . § 60.14 . The secon

dissu e i s whethe r EP

A properl y

construe

d th e statut e a s prohibitin g a nemission s sourc e undertakin g a modificatio

nfro m exemptin

g itsel f fro

m complianc e withNSP S b y switchin

g t o cleane r fue l rathe r thantakin g other pollutio

n reductio

nmeasures . Althoug hthe statut e doe s no t explicitl y addres s the point , thi s Cour t conclude dtha t it s legislativ e histor y indicate s tha t Congres s decide dfossi l fuel-fire dsource s coul dno t rel y

solel y o ncleane r fuel s t o compl y wit hNSPS . Sli p op . a t 32-33 . Althoug hWEPCO cast s it s challenge s i ndifferen t terms , it s rea l complaint s ar e withth e statut e an

dthe implementin

gP. 9

- 3 - regulation s an

dwiththi s Court' s applicatio no f th e familiar principl e tha t a

nagency' s reasonabl e interpretation s o f th e statut e i t administer s an dit s ow

nregulation s ar e entitle dt o grea t deference. 1 Thi s Court' s decisionthoroughl y considere

dan drejecte

d th e sam e argument s se t forthb y WEPCO init s petition . I n particular , that decisio nproperl y

recognize

dthe broa

dreac ho f th e statutor

y ter m "modification " unde r sectio n11 1 o f th

e CAA , 4 2 U.S.C . § 7411 , an daccordedEPA' s interpretatio no f th e ter m prope r deferenc e afte r considerin g th e statutor

y language , legislativ

e history , agency

regulations , an

dapplicabl e cas e law . WEPC O totall y

fail s t o satisf y

it s heav

y burde no f demonstrating , unde r th

e applicabl e fact s an dla w a t issue , tha t thi s Cour t improperly

followe

dthe well-establishedpreceden t o f accordin g EPA' s interpretation s deference .

1 Whenface

d wit hquestion s o f statutor y interpretation , th e Suprem

e Cour t ha s statedtha t "[i] t i s b y no w a commonplac e tha t . . . 'thi s Cour t shows grea t deferenc e t o the interpretatio

ngive nthe statut e b

y the officer s o r agenc y charge dwithit s administration.' " EP A v . Nationa l Crushe dStone Ass'n . 44 9 U.S . 64 , 8 3 (1980 ) (quotin g Udal l v . Tallman . 38 0 U.S . 1 , 1 6 (1965)) . Thi s i s particularl y tru e wher e the decisio no n th e meanin

g o f a technica l an dcomple

xstatut e involve s "'reconcilin

g conflictin

g policies' " committe dt o the agency' s car e an dexpertise . ChevronU.S.A . Inc . v . NRDC . 46 7 U.S . 837 , 84 4 (1984 ) (citatio nomitted) . Moreover , i f the statut e i s susceptibl e t o mor e thanone interpretation , the cour t mus t accep t th

e interpretatio

nchose nb

y the agenc

y i f i t i s reasonable . Id. ; see Trai nv . NRDC* . 42 1 U.S. 60 , 8 7 (1975) ; Eaale-Piche r Industries . Inc . v . EPA . 75 9 F.2d905 , 92 0 (D.C . Cir . 1985) . Suc

hdeferenc e i s evenmor e appropriat e whenth e agenc y i s interpretin

g it s ow

nregulations . Udal l v . Tallman . 38 0 U.S . a

t 16 .P.1 0

- 4 - Moreover , WEPCO certainl y canno t justif y

it s deman

d fo r a rehearin

g i nbanc . WEPCO doe s not , an dcannot , alleg e tha t th e Court' s decisio

ninthi s cas e conflict s wit han y decisiono f th

e Suprem e Court , thi s Court , or an y othe r cour t o f appeals . See Loca l Rul e 40(c) . I naddition , WEPC O fail s t o demonstrat e ho w th e decisio

ni s o f "exceptiona l importance. " Id « I nit s Rul e 40(c ) statement , WEPCO suggest s that EPA' s interpretatio no f th e relevant statutor

y provision s "potentially restrict s th

e abilit

y o f ever y industria l facility i nthi s countr

y t o repai r o r t o replac e deteriorate dequipment . ... " WEPCO Pet . a t 1 . However , a s thi s Cour t recognized , i ndeterminin

g whethe r propose dwork a

t a facility

i s "routine " an

dtherefor e exempt fro m th e definitio

no f "modification, " "EP A make s a case-by-cas e determinatio

nb y weighing th

e nature , extent , purpose , frequency , an d cos t of th

e work , a s wel l a s othe r relevan t factors , t o arriv e a t a common-sens e finding.' " Sli p op . a t 15 . Accordingly , becaus e o f th e cas e specifi c natur e o f EPA' s determination , WEPCO' s contention s a s t o th e impac t o f thi s decisio nar e greatl y

overstated . Fo r the reason s se t forthbelow , EP A respectfull y

request s the Court t o den

y WEPCO' s petition .P.1 1

- 5 - KKQVKSVT I . TH E COURT CORRECTL Y CONSTRUE D TH E STATUTORY AN D REGULATOR

Y DEFINITIONO F TH E TER M "MODIFICATION " A . Th e Cour t Properl yConclude d Tha t EPA' s Interpretatio n O f The StatutoryTer m"Modification " Wa s Reasonabl e An d Properl yRejecte d WEPCO' s Interpretation, , WEPC O firs t attack s th e Court' s constructio n o f th e statutorydefinitio n o f "modification " unde r CA A§ 111(a)(4) , 4 2 U.S.C . § 7411(a)(4). 2 WEPC O castigate s th e Cour t fo r focu s [ing ] entirel yo n th e word s "an y. . . change, " an d ignorfing ] th e remainin g statutor ylanguag e whic h modifie s th e wor d "change. " Sli p op . a t 13 . Unde r th e plai n meanin g o f [CA A§ 111] , onl y change s tha t creat e ne wemission s (i.e. , tha t resul t i n th e releas e o f pollutant s i n a n amoun t tha t i s greate r tha n th e amoun t "emitted " byth e existin g sourc e i n th e past ) ar e change s covere d byth e modificatio n rule
. WEPC O Pet . a t 9 . WEPC O therefor e contend s tha t th e plai n meaning o f th e ter

m"modification " i n CA A§ 111(a ) require s th e Cour t t o fin d tha t a n increas e i n emission s occur s onl ywhe n a sourc e emit s a t a leve l highe r tha n i t ha s eve r emitte d a t anytime i n th e past . Th e Court' s opinio n directl yaddresse s WEPCO' s contention s an d demonstrate s th e superficialit yo f WEPCO' s arguments .

CA A§ 111(a)(4 ) provides : Th e ter m"modification " mean s an yphysica l chang e in , o r chang e i n th e metho d o f operatio n of , a stationar ysourc e whic h increase s th e amoun t o f an yai r pollutan t emitte d b

ysuc h sourc e o r whic h result s i n th e emissio n o f an

yai r pollutan t no t previousl yemitted
. 4 2 U.S.C . § 7411(a)(4) .P.1 2

- 6 - Indeed , the Cour t wen t t o grea t length s t o conside r th e entir e statutor

y an dregulator

y definitio

no f "modification " unde r the NSP S program . A s the Cour t pointedout , i t i s WEPC O tha t ha s ignore d the plain , broa

dlanguage o f the statut e an dtrie dt o impos e it s ow

ninterpretatio

no f wha t i t woul dlik e th e statut e t o mean . Sli pop . a t 1 0 ("Wha t WEPCO call s 'plain ' i s anythin g bu t plai nan

dtake s th

e definitio

nfa r beyon

dth e word s enacte

d b y Congress") . Th e Court' s decisionwit hrespec t t o the NSP S issue s represent s a well-reasoned analysi s o f th e NSP S modificatio n provisions . Th

e Cour t observe

dtha t the statutor y definitio

no f "modification " consistedo f tw o part s —

(1 ) "an

y physica l change " an

d(2 ) "a

nincreas e inemissions " — an dtha t "both part s of thi s definitio n. . . mus t be satisfiedbefor e a replacement wil l b e considere da 'modification.' " ____{. at 9 . Applyin g the statutor

y definitio

nt o the facts , th e Cour t conclude

dwit hlittl e difficulty tha t WEPCO' s "four-year program " o f replacin

g stea m drums an

dothe r equipmen t constituteda "'physica l change.' " I__\. The Cour t als o correctl y notedtha t EPA' s interpretatio nwa s consisten t wit hthe twi npurpose s o f the Clea nAi r Ac t —

t o spee

dcleanu

p o f pollutio nan

dt o forc e technology . !__[. a t 11-13 . A s such , the Cour t hel dtha t t o adop t WEPCO' s positio

nwoul dbe t o vitiat e congressiona l intent i n enactin g the CAA : Wer e w e t o hol dtha t th

e replacemen t o f majo r generatin

g statio

nsystem

s — including stea

m drum s an d ai r heater s —

doe s no t constitut e a physica l chang e (an di s therefor e no t a modification) , the applicatio nP.1 3

- 7 - o f NSP S an

dPS D t o important facilitie s migh t b e postpone

dint o the indefinit e future . Ther e i s n o reaso nt o believ

e tha t suc

ha resul t wa s intendedb y Congress .

Th e developmen t o f emission s contro l systems i s no t furthere

d i f operator s could , withou t exposur e t o th e standard s o f th

e 197 7 Amendments , increas e productio

n(an dpollution ) throug hthe extensiv

e replacement o f deterioratedgenerating systems . Id . a t 11 , 13 . Next , th

e Cour t correctl y

hel dtha t the secon dstatutor

y requirement , i.e. . tha t th e physica l chang e woul dresul t i n increase

demissions , wa s satisfied . The Cour t observedtha t "WEPC O doe s not disput e tha t it s replacemen t progra m — intende

d t o enabl e it s deterioratedgenerator s t o operat e a t ful l capacit y

— wil l caus e it s emission s t o increas e fro m thei r curren t operatin

g levels. " Id . at 13 . A s such , "fo r purpose s o f th e statutor

y requirement, " th

e Cour t conclude dtha t WEPCO' s plant woul d"produc e mor e emission s afte r th e completio no f the renovatio

nprojec t thanth

e operatin

g deterioratedplan t produce d shortl y befor e the projec t wa s undertaken. " Id, , a t 14 . WEPCO' s rehearin

g petitio

ndemonstrate s tha t i t fundamentall y

misunderstand s the basi c questio nbefor e the Court . The questio

nwa s whethe r EPA' s interpretationo f the statut e an d regulation s wa s reasonable , no t whethe r EP A shoul dhav e adopte d WEPCO' s constructio no f thos e provisions . Se e ChevronU.S.A . Inc . v . NRDC . 46 7 U.S . 837 , 84 3 (1984 ) ("[T]h e questionfor th

e cour t i s whethe r the agency' s answe r i s basedo na permissibl e constructio

nof th e statute") ; se e sli pop . a t 7-8 . Th e Cour tP. M

- 8 - properl y

uphel dEPA' s determinationtha t WEPCO' s projec t fel l withi n"th

e modificationprovision s o f the CleanAi r Ac t Amendments. " I£ . a t 14 . (Indeed , i t foun dEPA' s definitio

nmor e plausibl e tha

nWEPCO's. ) Tha t WEPCO ca nposi t anothe r readin g o f th e statut e i t woul dprefe r i s irrelevant . B . WEPCO' s Statutor y ConstructionArgumen t Constitute s A Disagreemen t Wit hEPA' s "Modification " Regulation . Despit e WEPCO' s effort s t o portra y the principa l issu e regardin

g th e measuremen t o f emission s increase s a s a nissu e o f statutor

y construction , th

e Cour t correctl y

state dtha t "[t]h

e controversy

involvin

g WEPCO' s allegedincreas e inemission s primaril y

concern s th e regulations , no t the statute. " I&. a t 13. 3 Th

e Cour t squarel y

addressedan

d rejected WEPCO' s assertio n tha t th e regulator

y mechanism

for determinin

g the pre-renovatio n baselin e wa s arbitrar

y an dcapricious . ££ . a t 22-25 . Th e Cour t correctl y

dids o becaus e WEPCO' s purportedstatutor y constructio

n argument i s reall y

a recasting o f it s argumen t tha t the origina l desig ncapacit

y o f th e unit , no t the curren t physica l capacit y o f th e unit , shoul dbe the baselin e for th e emission s increas e determination . I nit s 197 5 promulgationo f 4 0 C.F.R . § 60.14 , EP A squarely

addressedan

drejected"desig

ncapacity " a s th

e prope r baselin

e fo r determining a nemission s increase . Se e EPA' s Brie f a t 56 ; 3 9 Fed . Reg . 36,946 , 36,94 8 (1974 ) ("'desig n

3 I nparticular , EPA' s regulation s mor e precisel y defin e wha t constitute s a "modification * fo r NSP S purposes . The Cour t note dtha t th

e regulation s ar e actuall y narrowe r tha

nth e statut e i nthat the

y exempt certai nactivitie s fro m th e broade r statutor

y definitio

no f "modification. " 13 . a t 14 .P.1 5

- 9 - capacity ' bear s littl e relationshi p t o th e actua l operatin g capacit yo f th e facility")
. Th e Cour t likewis e acknowledge d tha t desig n capacit y"ofte n shed s littl e ligh t o n th e unit' s actua l
curren t capacit yt o produc e emissions. " Sli p op . a t 2 1 (emphasi s b yth e Court) . EPA' s underlying regulation s wer e exclusivel ysubjec t to , revie wi n th e Distric t o f Columbi a circui t withi n 6 0 day s o f promulgatio n an

d ar e no t reviewabl e i n thi s Cour t som e 1 5 year s later
. _____CA

A§ 307(b)(1) , 4 2 U.S.C . § 7607(b)(1)
. Rather , th e questio n befor e th e Cour t wa s whethe r EPAapplie d thos e regulation s reasonably ; th e Cour t correctl yfoun d tha t EP Ahad don e it s jo b properly
. Sli p op . a t 21 . Moreover , wher e a uni t i s abl e t o operat e a t desig n (o r historical ) capacit yand th e physica l chang e doe s no t increas e tha t capacity , NSP S requirement s ar e no t triggered , a s wa s th e cas e wit h WEPC O Unit s 2 and 3 . Thus , contraryt o th e impressio n WEPC O trie s t o creat e a s t o th e allege d hars h economi c consequence s o f EPA' s decision , WEPC O woul d b e abl e t o undertak e it s planne d significan t renovatio n activit yo n thes e tw o unit s withou t an

yNSP S consequences . Further , WEPCO' s contentio n tha t th e Court' s decisio n wil l
caus e a seriou s economi c disruptio n t o ou r nation' s econom y becaus e n o on e wil l b e abl e t o "fi x a leak ypipe " withou t triggerin g NSP S i s nonsense . Se e WEPC O Pet . a t 3-5 . Th e Cour t
wa s full yawar e tha t th e applicabl e regulation s hav e alway s provide d th e exemptio n fo r routin e maintenanc e an d replacemen tP.1 6

- 1 0 - withou t triggerin

g NSPS . Se e 4 0 C.F.R . § 60.14(e)(1) ; sli p op . at 14-20 . Massiv

e undertaking s sucha s thos e propose db y WEPC O
ar e no t routine , an dwoul dtrigge r NSP S i £ ther e wa s a nincreas e inemissions . I

nan y event , suc

hproposedchange s require a case-by-cas e analysi s rathe r tha na blanke t "renovation " exemptio

na s advance

db y WEPCO . Finally , WEPC

O repeatedl y

ignore s the fac t tha t a naffecte

d facilit y ma y always undertake som e acceptabl e activity t o "ne t out " o f NSPS , i.e. . t o avoi da nincreas e inth

e hourl y

emissions rate . I f WEPC

O make s emission s reduction s t o offse t th e emission s rat e increase s tha t woul dotherwis e result , th e NSP S requirement s wil l no t b e triggered . Thus , contrar y t o th e assertion s o f WEPCO , no t ever y renovationactivity fallin g withi n th e regulator

y definitio

no f "modification " wil l ultimatel y hav e t o comply

withth

e NSP S standard s themselves. 4 C . Th e Court' s Decisio

nDoe s No t Improperl y Allo w EP A To Expan dTh e Coverage o f NSP S Withou t Rulemaking . WEPCO' s contentio

ntha t the Court' s decisionpermit s unauthorize

dexpansio

no f th e NSP S progra

m als o lack s merit . Se e WEPC O Pet . a

t 2 , 12 . First , WEPC O agai nignore s th e fac t that th e statutor

y an dregulator

y modificationprovision s wer e i n effec t a t th

e tim e th e NSP S for powe r plant s wer e promulgated .

4 Indeed , for WEPCO , th e onl y uni t tha t clearl y woul d trigge r NSP S would b e uni t 5 becaus e presentl y i t i s physicall y incapabl e o f operating . For example , a t WEPCO' s unit s 1 an d4 , renovation s woul d increas e hourl y emission s b

y 29 % an d11 % respectively . WEPC O may avoi dNSP S b

y otherwis e reducin g emission s at thes e unit s b y corresponding amounts . Thus , WEPC O woul dnot hav

e to mee t the 70 % t o 90 % reductionrequirement of th e NSPS . EPA' s Initia l Brie f a t 29 .P.1 7

- 1 1 - A s th e Court' s decisio n recognized , EPA' s determinatio n a s t o whethe r ther e woul d b e a n emission s increas e a t eac h o f the fiv e unit s wa s wel l founde d i n th e statutor yan d regulator

y provisions
. Sli p op . a t 20-25 . WEPCO' s contentio n the n i s tha t EP Adi d no t properl yconside r ho wmanyexistin g unit s woul d trigge r th e modificatio n provision s whe n th e Agenc ypromulgate d th e NSP S fo r utilit yboiler s i n 1979 . Obviously , an ydefec t i n th e analysi s underlyin g tha t rul e i s no t withi n th e purvie wo f thi s Court . CA

A§ 307(b)(1) , 4 2 U.S.C . § 7607(b)(1) ; se e PEPC O
v . EEA , 65 0 F.2 d 509 , 51 3 (4t h Cir
. 1981 ) (reviewo f applicabilit ydetermination s unde r CA A§ 11 1 doe s no t allo w collatera l challeng e t o EP Aregulations) , cert , denied
. 45 5 U.S . 101 6 (1982 ) . Th e NSP S fo r utilit yboiler s wer e reviewe d an d uphel d b

yth e D.C . circui t upo n promulgation
. Se e Sierr a Club v . Costle
. 65 7 F.2 d 298 , 41 0 (1981) . Wha t WEPC O i s reall ysayin g i s that , a s describe d i n EPA' s origina l brief , ne wcondition s hav e arise n ove r th e year s i n th e utilit yindustrysuc h tha t i t ha s becom e mor e economica l t o renovat e ol d facilitie s t o exten d thei r usefu l lif e tha n i t i s t o buil d a n entirel yne wfacility
. Se e EPA' s Brie f a t 17-19 . Whe n suc h a "life-extension " take s place , however , i t wil l trigge r NSP S requirement s t o th e sam e exten t a s an yothe r projec t involving a physica l o r operationa l chang e whic h increase s emissions
. Thi s wa s tru e i n 197 9 an d remain s tru e today
. Ther e i s nothing uniqu e abou t life-extension s whic h require s o r justifie s separat e treatmen t unde r NSPS . Th e tes t i s th e sam eP.1 8

- 1 2 - whether the physica l change i s a life-extensio nor an y other typ

e o f physica l change . Likewise , there i s nothin g i nth e CA A o r it s implementin g regulation s whic

hrequire s EP

A t o conduc t rulemakin g unde r sectio n11 1 before applyin g th e modificatio

nprovision s t o WEPCO . Rather , th

e NSP S regulation s specificall y contemplat e case-by cas e determination s a s t o whethe r specifi c activitie s a t a n existin g facilit

y woul dtrigge r th

e NSP S requirements . See 4 0 C.F.R . § 60.5 . Tha t a particula r activity i s differen t tha

n other physica l change s or tha t a particula r sourc e categor y di d
not a s a matte r o f historica l practic e undertak e suchrenovation s i s not caus e fo

r ne w rulemaking . EP

A simpl y i s no t require

d t o engag e i nrulemakin

g t o appl y

th e genera l modificationprovision s t o ever y ne w fac t patter

ntha t ma

y b e presented t o i t i nth e contex t o f a nNSP S applicability determination . Further , a s wa s th e cas e here , th

e sourc e ha s a

nopportunity

t o see k judicia l revie w o f whethe r th

e applicatio

nof the regulation s t o th e fact s o f a specifi c cas e wa s reasonable . Whil e WEPCO ma y disagre e tha t th e decisio

nwa s reasonable , i t i s speciou s t o argu e tha t th e applicabilit

y determinatio

nrequire

da separat e rulemakin g proceeding . II . TH

E COURT' S AFFIRMANCE O F EPA' S DECISIO

N T O DEN YWEPC O CREDI T FO

RIT S SWITCH T O LO

W SULFU RFUEL S WAS REASONABL E AN D CONSISTEN

T WIT H CONGRESSIONA L INTENT WEPC O als o argue s tha t i t shoul db e abl e t o avoi dcomplyin g withth e NSP S requirement s merel y b y switchin

g t o cleane r fuels . Specifically , WEPC

O challenge s EPA' s refusa l t o permi t WEPC O t oP.1 9

- 1 3 - utiliz e lowe r sulfu r coa l i n lie u o f employing pollutio n contro l equipmen t an

d technolog

yt o preven t a n increas e i n emissions
. Se e WEPC O Pet . a t 12-15 . WEPCO' s argument s concer n a n amendmen t t o sectio n 111(a ) o f th e CA Awhic h require d tha t NSP S achiev e a percentag e reductio n i n emission s fro

mcertai n fossi l fuel-fire d stationar ysources . Se e CA A§ 111(a)(1)(A)(ii) , 4 2 U.S.C . § 7411(a)(1)(A)(ii)
. WEPC O contend s tha t th e Cour t incorrectl yconclude d tha t th e politica l compromis e struc k b yCongres s requirin g percentag e reduction s t o b e include d i n th e NSP S fo r ne wfossi l fuel-fire d source s shoul d appl ywit h equa l forc e t o anyexistin g plant s tha t undertak e repai r o r replacemen t work
. WEPC O Pet . a t 14 . I t furthe r contend s tha t the Cour t faile d t o addres s th e fac t tha t Congres s di d no t chang e th e statutorymodificatio n provisio n i n 1977 , a fac t whic h WEPC O suggest s support s it s positio n o n th e fue l switchin g question
. .Id
. Thus , WEPC O come s t o th e illogica l conclusio n tha t th e Cour t improperl yallowe d EP At o expand th e scop e o f th e 197 7 amendment s b yno t allowin g fue l switchin g here
. A s th e Court' s decisio n make s clea r i n it s discussio n o f th e statutoryprovisions , sectio n 11 1 define s "ne wsource " a s any stationarysource , th e constructio n or , modificatio n o f whic h i s commence d afte r th e publicatio n o f propose d standard s o f performanc e fo r tha t sourc e category . Se e CA A§ 111(a)(2) , 4 2 U.S.C . § 7411(a)(2) ; se e sli p op . a t 2 . A s note d above , Congres s the n define d "modification " a s anyphysica l chang e in , o r chang e i n metho d of , operatio n whic h increase s th e amoun t o f an yai rP.2 0

- 1 4 - pollutan t emitted
. Sej g CA A§ 111(a)(4) , 4 2 U.S.C . § 7411(a)(4) . Thus , contraryt o WEPCO' s contention , i t wa s clea r fromth e outse t tha t an

ystandar d o f performanc e fo r "ne wsources " wil l affec t existin g facilitie s i f the yunderg o a modification
. Tha t Congres s di d no t chang e th e definitio n o f "modification " i n 197 7 whe n i t adde d th e percentag e reductio n requiremen t fo r fossi l fuel-fire d source s onl ybolster s th e Court' s affirmatio n o f EPA' s decisio n tha t existin g source s coul d
no t avoi d NSP S simpl yb yburnin g lo wsulfu r fuel
. I t doe s not , a s WEPC O suggests , undermin e tha t position
. Se e WEPC O Pet . a t 13-14 . Thus , whe n EP Ai n 197 9 engage d i n rulemakin g t o establis h th e NSP S i n respons e t o th e additio n o f th e percentag e reductio n requiremen t fo r fossi l fuel-fire d sources , th e statutor yan d regulatorydefinition s o f "modification " wer e alreadyi n place
. WEPC O point s t o nothin g i n th e 197 7 amendment s whic h require d a chang e i n thos e provisions
. Ha d WEPC O o r an yothe r utilit yfel t tha t modifie d facilitie s shoul d hav e bee n treate d differentl y unde r th e utilit yboile r NSP S promulgate d a s a resul t o f th e additio n o f th e percentag e reductio n requirement , tha t coul d hav e bee n addresse d i n th e rulemaking
. I t coul d hav e als o bee n th e subjec t o f a rulemakin g petitio n byWEPC O t o revis e 4 0 C.F.R . § 60.4 0 (NSP S fo r fossi l fuel-fire d stea m generators) . Th e Cour t properl yrecognize d tha t Congres s ha d decide d no t t o allo wsource s t o b e abl e t o switc h fuel s t o avoi d th e installatio n o f pollutio n contro l technology
. Se e sli p op . a t 33 . Thi s Cour t als o recognize d tha t Congres s di d no t distinguis h- 1 5 -

betwee n "ne wsources " whic h commence d constructio n afte r th e proposa l o f standard s o f performanc e o r "ne wsources " whic h ar e modification s unde r CA A§ 111 . Tha t decisio n shoul d remai n intact
. CONCLUSION WEPC O ha s presente d nothin g i n it s petitio n tha t warrant s rehearin g o r rehearin g i n banc
. Fo r th e reason s se t fort h above , th e petitio n shoul d b e denied
. Respectfull ysubmitted , RICHAR D B . STEWAR T Assistan t Attorne yGenera l Land an d Natura l Resource s Divisio n < ^ CRkKyt. GALL

] U.S . Departmen to f

Justic e Lan d an d Natura l Resource s Divisio n Environmenta l Defens e Sectio n 10t h & Pennsylvani aAve. , N.W . Washington , D.C . 2053 0 (202 ) 633-228 5 

# 7 ^CJ^, &* 6A*3TM5Fo0

# t* *** GREGOR Y B . FOOT E Poboi T ROBER T J . MARTINEAU , JR . flAA*^**** U.S . Environmenta l Protectio n Agenc y Offic e o f Genera l Counse l 40 1 H . Street , S.W . Washington , D.C . 2046 0 (202 ) 382-762 5P.2 2

Pau l J . Lamber t Bingham , Dan a & Goul d 155 0 M Street , N.W . Washington , D.C . 2000 6 Caro l L . Dalcanto n Assistan t Genera l Counse l Westinghous e Electri c Corporatio n 1 1 Stanwic k Stree t Pittsburgh , Pennsylvani a 1522 2 Crai g S . Harriso n Hunto n & William s 200 0 Pennsylvani a Avenue , N.W . Suit e 900 0 Washington , D.C . 2000 6

Crai g €. Gall i U.S . Departmen t o f Justic e Land & Natura l Resource s Divisio n Environmenta l Defens e Sectio n 10t h & Pennsylvani a Ave. , N.W . Roo m721 4 - Mai n Buildin g Washington , D.C . 2053 0 (202 ) 633-228 5P.2 3

I NTH E UNITE D STATE S COUR T O F APPEAL S FO R TH E SEVENTH CIRCUI T
NOS . 88-326 4 89-133 9
WISCONSI NELECTRI C POWE R COMPANY , Petitioner , v . WILLIA M K . REILLY , Administrator
. Unite d state s Environmenta l Protectio n Agency , e t ai. ,

Respondents
. O NPETITION S T O REVIE W FINA L ACTIO N O F TH E UNITE D STATE S ENVIRONMENTA L

PROTECTIONAGENC Y
RESPONDENTS ' MOTIONFOR SECOND EXTENSION O F TIM E T O FIL E PETITIO NFO R REHEARING
Respondents , WilliamK . Reilly , Administrator , Unite d State s Environmenta l Protectio n Agency , e t ai. , hereb ymov e fo r a n extensio n o f tim e o f te n day s up t o and includin g Marc h 15 , 1990 , t o fil e a Petitio n fo r Rehearing
. Th e fact s whic h ar e th e basi s o f thi s Motio n di d no t exis t prio r t o thi s time
. I n suppor t o f thi s Motion , attache d i s a supportin g affidavi t a s require d by Circui t Rul e 26 .P.2 4

- 2 -
Respectfull y

submitted , RICHARD B . STEWAR

T ssistan t Attorne

y Genera l Lan dan dNatura l Resource s Division

CRAI GD . JSALLI U.S . Departmen t o f Justic e Lan dan dNatura l Resource s Divisio n Environmenta l Defens e Sectio n 10th& Pennsylvani a Ave. , N.W . Washington , D.C . 2053 0 (202 ) 633-228 5
GREGOR YB . FOOT E U.S . Environmenta l Protectio n Agenc y Offic e o f Genera l Counse l 40 1 M . Street , S.W . Washington , D.C . 2046 0 (202 ) 382-762 5P.2 5

I NTH E UNITE D STATE S COUR T O F APPEAL S FOR TH E SEVENT H CIRCUI T
Nos . 88-326 4 89-133 9
WISCONSI NELECTRI C POWE R COMPANY , Petitioner , v . WILLIA M K . REILLY , Administrato r Unite d State s Environmenta l Protectio n Agency , ___: ai. ,

Respondents
. ONPETITION S T O REVIE W FINAL ACTION O F TH E UNITE D STATE S ENVIRONMENTAL

PROTECTIONAGENC Y
AFFIDAVI T I NSUPPOR T O F RESPONDENTS ' MOTIONFO R SECOND EXTENSIONO F TIM E

AFFIDAVI T O F GREGOR Y B . FOOT E 1 . M yname i s Gregor yB . Foote . I a ma staf f attorne yi n th e Offic e o f Genera l Counse l a t th e U.S . Environmenta l Protectio n Agenc y("EPA" ) i n Washington , D.C . I hav e hel d thi s positio n sinc e 1985 . I n thi s capacit yI hav e primary responsibilit ywithi n th e Offic e o f Genera l Counse l fo r advising an d representing EP Ai n matter s involvin g th e preventio n o f significan t deterioratio n ("PSD" ) provision s o f th e Clea n Ai r Act , 4 2 U.S.C . § § 7470-7479 . 2 . Thi s affidavi t i s file d i n suppor t o f Respondents ' Motio n Fo r Secon

d Extensio n o f Time
.



# _ JP.2 6

- 2 - 3 . I a massigne d primar yresponsibilit yi n th e abov e captione d case . 4 . EPAan

d th e Unite d State s Departmen t o f Justic e ar e presentl yconsidering whethe r t o fil e a Petitio n fo r Rehearin g i n connectio n wit h th e decisio n issue d b ythi s Cour t o n Januar y19 , 1990 . 5 . Th e matte r unde r revie wi s s o comple x tha t a n adequat e brie f i n suppor t o f th e Petitio n fo r Rehearin g canno t reasonabl y b e submitte d b

yMarc h 5 , 199 0 fo r th e followin g reasons : (a ) A s explaine d i n th e affidavi t o f Gregor yB . Foot e date d Januar y26 , 1990 , th e Court' s decisio n o f Januar y19 , 199 0 largel yuphel d EPA' s applicabilit ydetermination s rulin g tha t a n extensiv e renovatio n projec t a t th e Por t Washingto n powe r plan t
owne d an

d operate d b

ypetitione r Wisconsi n Electri c Co . ("WEPCO" ) woul d b e subjec t t o ne wsourc e requirement s unde r th e Clea n Ai r Act , 4 2 U.S.C . § 7401 , e t seq . However , th e cour t vacate d EPA' s determinatio n tha t th e calculatio n o f futur e increase s i n "actua l emissions " fo r purpose s o f determinin g applicabilit yo f th e PS D provision s o f th e Ac t shoul d b e mad e usin g th e "potentia l t o emit " concep t i n 4 0 C.F.R . § 52.21(b)(21)(iv)
. Sli p op . a t 28

- 31 . Th e Cour t remande d th e PS D applicabilit ydeterminatio n t o EP Afo r furthe r proceeding s no t inconsisten t wit h it s opinion
. Id
. a t 33 . (b ) O n Februar

y1 , 1990 , th e Cour t grante d EPA' s firs t Motio n fo r Extensio n o f Time , allowin g EP Aunti l Marc h 5 t o fil e a petitio n fo r rehearing
. EP Aexplaine d i n it s supportin gP.2 7

- 3 - affidavi t tha t i t intende d t o as k th e Cour t t o reinstat e EPA' s PS D applicabilit y

determination , and tha t i t neede dadditiona l tim e t o determin e th e meanin g andimpac t o f th e Court' s January 19 , 199 0 decisio no nth e PS D program , s o tha t i nth e alternativ e EP A coul dsee k clarificatio no f th e Court' s decision . (c ) Withi nth e las t severa l day s th e partie s hav e bee n discussin g th e possibilit y o f resolvin g thi s litigatio nwithou t th e necessit y

o f EP A

filin g a petitio nfo r rehearing . O n Februar y

26 , 1990 , th e petitione r sen t additiona l correspondenc e t o EPA addressin g th e PS D issues . (d ) Base do nit s analysi s o f th e meanin g an dimpac t o f th e Court' s Januar y

19 , 199 0 decisio no nth e PS D emission s increas e issue , includin g th e ne w informatio nrecentl y submitte db

y WEPCO , EP A i s activel y

considerin g whethe r to accep t som e interpretatio n
o f tha t decisio no r petitio nth e Cour t fo r rehearing . However , EP A ha s bee nunabl e to reac ha fina l decisio no nthi s matter . Key EP A official s responsibl e fo r th e decisio nhav e beenunavailabl e to consul t wit hcounse l du e to thei r nee dt o b e ou t o f th e offic e
muc ho f th e time i nrecen t week s conferrin g wit hmember s o f Congres s an

dWhit e Hous e official s regardin g pendin g legislatio n to amendth e Clea nAi r Act . I nparticular , durin g thi s pas t wee k thos e official s wer e engage di nth e time-consumin g proces s o f negotiatin g a compromis e Senat e bil l amendin g th e statute . Th e fac t tha t key

EPA official s woul d b e unavailabl e durin g thi s tim e
wa s no t know

nearlier .P.2 8

- 4 - (e ) I anticipat e tha t a fina l decisio n o n whethe r t o see k rehearin g wil l b e mad e durin g th e nex t week , afte r whic h EP A wil l eithe r fil e a petitio n fo r rehearin g o r notif yth e Cour t tha t n o petitio n wil l b e forthcoming
. Shoul d EPAdecid e no t t o fil e a petitio n fo r rehearing , i t wil l conserv e judicia l resource s a s wel l a s th e resource s o f th e parties
. Consequently , EP Abelieve s tha t a ten-dayextensio n o f th e Marc h 5 , 199 0 deadline , unti l Marc h 15 , 1990 , i s appropriate
. 6 . Counse l fo r WEPC O ha s bee n contacte d regardin g thi s motion
. Pursuan t t o 2 8 U.S.C . § 1746 , I declar e unde r penalt yo f perjur ytha t the foregoing i s tru e an d correc t t o th e bes t o f m y knowledg e an

d belief
. Execute d thi s 2n

d da yo f Marc h 199 0 a t Washington , D.C .