# Exhib it 2 9 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 1DECLARATION OF FRANK KNAPP, JR.,

PRESIDENT AND CEO OF THE SOUTH CAROLINA SMALL BUSINESS CHAMBER OF COMMERCE

1

. I, Frank Knapp, Jr

. , co-founder, president and CEO of The South Carolina Small Business Chamber of Commerce, make this Declaration in support of the response filed by the Environmental Defense Fund, the Natural Resources Defense Council, and other environmental intervenors in opposition to motions filed by various parties to stay various actions of the U

. S. Environmental Protection Agency (EPA) relating to the control of greenhouse gas (GHG) emissions under the Clean Air Act

. The purpose of this Declaration is to express The South Carolina Small Business Chamber of Commerce's support for EPA's decisions to move forward with controls on emissions of GHGs under the Act and to oppose motions to stay EP A actions in order to further delay implementation of the Act as to GHG emissions. The EP A decisions at issue here include (1) determinations that the emissions of GHGs from mobile sources cause or contribute to air pollution that endangers human health and the environment, (2) regulations limiting GHG emissions from motor vehicles; (3) an interpretative rule addressing when pollutants become "subject to regulation" for purposes of the Act's Prevention of Significant Deterioration and Title V permitting programs, and (4) a Tailoring Rule limiting application of the permitting requirements to the largest sources of GHG emissions during the initial phases of the program. If all of the motions were granted, the effect would be to delay application of the Act to mobile and stationary sources during this litigation. 2. I am the co-founder of The South Carolina Small Business Chamber of Commerce, and I

serve as its president and CEO providing management and governmental relations for the organization

. I am also the founder and President of The Knapp Agency, an advertising and public relations firm. Prior to that, I was the Associate Director of Public Information for South Carolina Educational Television and a partner in a political consulting group . I have authored

numerous opinion editorials advocating the small business benefits of effective energy conservation policy and have appeared in a national television advertisement endorsing GHG regulation as a way to jump start our economy . I serve on a number of committees including the American Sustainable Business Council steering committee, the DHEC Commissioner's Advisory Council for the Elimination of Health Disparities, the USC Small Business



### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 2Development Center Advisory Board, and the SCE&G Demand Side Management Advisory

Group

. The South Carolina Small Business Chamber of Commerce 3

. The South Carolina Small Business Chamber ofCornrnerce (SCSBCC) is a 5000 + memb er non-profit adv ocacy organi z ation in the Palmetto State. As a strong proponent for small business economic development , the SCSBCC has championed regulation of GHG since 2007 in order to protect our small business tourism and outdoor recreation economy from the negative effects of climate change and to promote the development of new green industries that will consist largely of small businesses.

A Stay of EPA's GHG Regulations Could Hamper the Growth of the Clean Energy Sector of the Economy in South Carolina and Could Harm the Existing Small Business Economy in South Carolina 4

. SCSBCC opposes a stay ofEPA's GHG regulations because it would delay and disrupt efforts to achieve controls of GHG emissions under the Clean Air Act. The clean energy economy is a sector that small business owners in South Carolina view as essential to their ability to compete , and as one area that

- in a time when globalization and consolidation hav e limited small businesses ' opportunities in many areas - represents extremely promising opportunities for small business growth and innovation

. EPA's GHG regulations can also be an important step toward long-term investment decisions that will help the transition to low-carbon , cleaner technologies and stimulate business for small businesses as well as clean energy jobs. 5. Based on the scienc e underlying climate change, SCSBCC believes GHG policies must be designed in order to protect the small business tourism and outdoor recreation economy in South Carolina

- one of the state's largest industries

- from the negative effects of climate chang e . In li ght of Congre ssional inaction on climate le gislation , SCSBCC believes that EP A regulation of GHG emissions under the Clean Air Act can be an important first step in reversing the current trend of increasing GHG emissions. 6. If the EP A actions at issue in this case are stayed by the Court , some inv estors could delay inv estments in small businesses that would be important sources of innovation in

areas such as GHG emissions control and energy efficiency and could reduce opportunities for small businesses in these areas.

2



### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 37. I declare under penalty of perjury under the laws of the United States of America

that the foregoing is true and correct

. Executed in Columbia , South Carolina on October 25 , 2010.

3



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# Exhib it 3 0 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 5

### IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

DECLARATION OF KATHLEEN M. KRUST
Under penalty of perjury, Kathl een M. Krust states as follows: 1. I am a paralegal with the Sierra Club’s Environmental Law Program located at 85 Second Street, San Francisco, CA 94105. I have held this position for over six years and have beenemployed with Sierra Club for over nine years. 2. Sierra Club’s Beyond Coal Campai gn monitors the permitting and operation of coal-fired facilities nationwide to ensure the vigorous enforcement of environmental law governing such facilities. 3. As part of the Beyond Coal Campaign, Sierra Club has an ongoing effort to compile information on new and propos ed coal-fired power plants, coal-togas plants, and coal-to-liquid plants (“coal plants”) in the U.S. This information is made publicly available through Sierra Club’s coal tracker, an online database providing up-to-date, detailed information about proposed coal plants across the country. I am listed as the Sierra Club’s contact person for the coal tracker and am regularly contacted by the general public, other organizations and governmentalofficials about the information contained in the coal tracker. Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 6

### 2 

### 4. As a paralegal with Sierra Club, my duties includeoverall management of the coal tracker and supervision of a small team of law program staff who are responsible for maintaining the ti meliness, accuracy, and reliability of the coal tracker. I am also direc tly responsible for maintaining the timeliness, accuracy, and reliability of a number of individual coal plants listed on the coal tracker. 5. As part of my duties, I collect information on proposed coal plants from a number of sources, including draft and final permits, permit applications, environmental impact statements, filingswith state regulatory agencies and proceedings before state public utility and service commissions. I also collect information from media sources, company and developer press releases and financial filings, as well as contacts with local and state nonprofit organizations and local, state and federal agency employees.
6. For the purposes of this declaration, I reviewed our coal tracker for the following information on proposed coal plants across the nation: coal plant name, developer name, location, size, estimated short tons of carbon dioxide per year of operation, and likelihood thatthe proposed coal plant will receive a draft and/or final prevention of significant deterioration permit (“PSD permit”) between January 1, 2011 and December 31, 2011. The information is collected in the Tables 1, 2 and 3 below. Sierra Club offers no Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 7

### 3 

### independent assessment of the viability of the coal plants listed in Tables 1, 2 and 3 and instead relies on developer a ssertions that the coal plants are proceeding as planned. 7. According to my review, the coal plants shown in Table 1 below are coal plants expected to receive a draft orfinal PSD permit between January 1, 2011 and December 31, 2011. Table 1 also contains two refineries, the Hyperion Energy Center and the SweeneyRefinery Gasification Project, of which the Sierra Club is aware of through work on these projects, including reviewing relevant permit materials. Table 1 State Developer(s) Location or Plant Name MW CO2 Annually (short tons) AK Golden Valley Electric Association, Homer Electric Association & Alaska Industrial Development Export Authority Healy Clean Coal Plant 50 350,000

IL Tenaska & Christian County Generation Taylorville Energy Center 770 1,709,000
KY Estill County Energy Estill County 110 1,045,133
MN New Ulm Public Utilities Commission New Ulm 15 105,000

ND Great Northern Project Development & South Heart Coal Stark County 175 1,225,000 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 8

### 4 

### PA Wellington Development Greene County 580 2,941,778
SD Hyperion Hyperion Energy Center 200 18,960,000 TX ConocoPhillips Sweeny Refinery Gasification Project 683 4,781,000

Totals 2,583 31,116,911
8. According to my review , the coal plants shown in Table 2 below are coal plants expected to receive a final PSD permit before January 1, 2011, but which could potentially receive a final PSDpermit between January 1, 2011 and December 31, 2011. Table 2 State Developer(s) Location or Plant Name MW CO2 Annually (short tons) GA LS Power Development & Longleaf Associates Early County Longleaf plant 1200 8,850,000

KS Sunflower Electric Power Corp. & Tri-State Generation and Transmission Association Holcomb/H2 895 6,670,000

TX Tenaska Trailblazer Energy Center 600 4,200,000
Totals 2,695 19,720,0o0
9. According to my review , the coal plants shown in Table 3 below are coal plants expected to receivea draft PSD permit after De cember 31, 2011, but which

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### 5 

### could potentially receive a draft PSDpermit between January 1, 2011 and December 31, 2011. Table 3 State Developer(s) Location or Plant Name MW CO2 Annually (short tons) CA Hydrogen Energy International LLC (joint venture of BP Alternative Energy & Rio Tinto) Hydrogen Energy California Project 390 2,730,000

GA Power4Georgians Plant Ben Hill Fitzgerald 850 6,578,534
IL U.S. Department of Energy & Ameren Energy Resources Company & Babcock & Wilcox Company & Air Liquide FutureGen 2.0 (Meredosia refit) 200 1,444,000

IN Leucadia/Indiana Gasification, LLC Indiana Gasification 134 4,500,000
KY Black Stallion Energy Center Breathitt County 660 4,620,000 MN Excelsior Energy Mesaba Energy Project 603 2,147,506

MS Rentech Development Corp. Belwood Coal-toLiquids plant n/a unknown

MT Australian-American Energy Company & Crow Reservation Many Stars CTL Plant n/a unknown

TX Summit Power Group Ector County 400 2,800,000 TX Chase Power & Las Brisas Energy Center, LLC Las Brisas Energy Center 1320 9,240,000 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 10

### 6 

### VA Old Dominion Electric Cooperative Cypress Creek Power Station 1500 14,600,000
Totals 6,057 48,660,040

Dated this 27th of October 2010 in San Francisco, CA.

___ ________ Kathleen M. Krust Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 11

# Exhib it 3 1 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 12

# E2

ENVIRONMENTAL ENTREPRENEURS· The Independent Busi)1ess Voice for the Environment www.e2.org

DECLARATION OF NICOLE LEDERER, CO-FOUNDER ENVIRONMENTAL ENTREPRENEURS

1. I make this Declaration in support of the response filed by the Environmental Defense Fund, the Natural Resources Defense Council, and other environmental intervenors in opposition to motions filed by various parties to stay actions of the U.S. Environmental Protection Agency (EPA) relating to the regulation of greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act. The purpose of this Declaration is to express my view that EPA's regulations establish an important mechanism for beginning to reduce greenhouse gas emissions starting with the largest sources. EPA's Tailoring Rule identifies which sources would be subject to permitting requirements for greenhouse gases and which would not, and thus provides regulatory relief for many sources. A stay of EPA's actions concerning GHG emissions for stationary sources would only exacerbate and prolong uncertainty concerning the impact of greenhouse gas regulations on businesses, investors and entrepreneurs. Qualifications and Background 2. I am a Co-Founder of Environmental Entrepreneurs (E2), a national community of individual business leaders working in support of policies that both protect the environment and grow the' economy. We support policies that foster innovation, economic development and green job creation. Since 2002, I have led many E2 delegations to Washington to meet with House and Senate members, as well as representatives from the Executive Branch. I am a frequent speaker on green job creation and other business benefits related to environmental policy. Business group E2 at a glance 3. E2 represents a national community of 850 business leaders who promote strong environmental policy to grow the economy. We are entrepreneurs, investors and professionals doing business in 41 states who collectively manage over $90 billion of venture capital and private equity. Our members have started well over 1,100 businesses, which in turn have created over 500,000 jobs. EPA's Greenhouse Gas Regulations Create an Important Mechanism and Provide Clarity for Businesses and Investors 4. EPA's GHG regulations establish a mechanism for the implementation of greenhouse gas emissions permitting starting with the largest sources. Because of the Tailoring Rule, we better understand the sources covered by the rules (I.e., under the Tailoring Rule, sources that must undergo permitting based on their emissions of other pollutants, and also would increase greenhouse gas emissions by 75,000 tons per year of CO,e or more, will have to apply the best available control technology to reduce their greenhouse gas emissions beginning January 2, 2011. A larger category of new and modified sources of greenhouse gas emissions

- new sources with the potential to emit 100,000 tons per year of CO,e, and source modifications that will result in a net emissions increase of 75,000 tons per year of CO,e

- will be subject to permitting beginning July 1, 2011. See, e.g., 75 Fed. Reg. 31523). A Stay of EPA's GHG Regulations Could Hamper the Growth of the Clean Energy Sector of the Economy 5. Environmental Entrepreneurs opposes a stay of EPA's greenhouse gas regulations. If the EPA actions at issue in this case are stayed by the Court, it is likely that many investors will delay or abandon investments in new and existing businesses that would be important sources of innovation in areas such as greenhouse gas emissions control and energy efficiency. A stay

NORTHERN CALIFORNIA, PACIFIC NORTHWEST & ROCKY MOUNTAINS III Sutter Street, FI20 San Francisco, CA 94-104 TEL 415875-6100 FAX 415875-6161 NEW YORK & NEW ENGLAND 40 West 20th Street New York, NY 10011 TEL 212 727-2700 FAX 212 727-1773 SOUTHERN CALIFORNIA 1314 Second Street Santa Monica, CA 90401 TEL 310 434-2300 FAX 310 434-2399 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 13would also dampen innovation and investment in the green technology area more generaily and wouid be a source of uncertainty for ail businesses and investors. 6. The growing clean energy sector represents our greatest opportunity to restore a robust economy and create new jobs. Investors and entrepreneurs in this sector are seeking to commercialize the innovations and technologies that wiil secure America's competitive position in the global economy. EPA's greenhouse gas regulations will provide the necessary market signal to stimulate long-term investment decisions that wiil help the transition to low-carbon, cleaner technologies and stimulate new businesses and clean energy jobs.

7. We believe that the U.S. should focus on curbing poilution, creating jobs, and promoting U.S. leadership in 21" century clean technologies. We support enabling American business leaders like ourselves to continue leading the way to a clean energy future. As such, we oppose this stay of regulations and oppose any attempt to weaken or deiay enforcement of the Clean Air Act and" the regulation of greenhouse gases under the Act.
8. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed in Washington, DC on October 22, 2010.

Nicole Lederer

Environmental Entrepreneurs page 2



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# Exhib it 3 2 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 15

### 1 IN THE U.S. COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

DECLARATION OF MICHAEL C. MacCRACKEN I, MICHAEL C. MacCRACK EN, declare as follows: Background and Experience
1. I received my Bachelor of Science in Engineering with high honors in Aerospace and Mechanical Sciences from Princeton University in 1964 and was recognized by election to the Phi Beta Kappa honor society. I then received my Master of Science and Ph.D. degrees in Applied Science from the University of California Davis in 1966 and 1968, respectively. My graduate studies were recognized by election to the Phi Kappa Phi honorary society.
2. From 1968 to 2002, I was employed as a physicist at the University of California’s Lawrence Livermore National Laboratory (LLNL), where I led a number of scientific projects, including using numerical models to simulate the response of the climate to a range of natural and human-induced perturbations, including the likely impacts of an increas e in the concentrations of greenhouse gases such as carbon dioxid e. From 1978 to 1993, I also served in various advisory capacities for the climate change researchprograms managed by the Department of Energy, and participated actively in numerou s other professional activities relating to climate change and its impacts. In addition, I served as Deputy Division Leader of the Atmospheric and Geophysical SciencesDivision from its formation in 1974 to 1987 and as Division Le ader from 1987 to 1993.

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### 2 3. From 1993 to 2002, I was on assignment from my permanent position with LLNL to serve as the senior scientis t on global change at the interagency Office of the U. S. Global Change Rese arch Program in Washington, DC. In this capacity, I served as the firs t Executive Director of the Office of the U.S. Global Change Research Program (“USGCRP”) from 1993-1997. I was responsible for assisting in the coordination of the global change 1 

### research programs of ten federal agencies, including the Environmental Pr otection Agency, the Department of Energy, the National Science Foundation, the National Oceanographic and Atmospheric Administration, NASA, and others . In addition, in my role as senior scientist, I was responsible for keeping up with scientific advances in the field for the USGCRP and assisting the Office of Science and Technology Policy (OSTP) of the Executive Office of the President in summarizing the scientific advances for government leaders.
4. Following my tenure as Executive Director of the Office of the USGCRP, I was appointed Executive Dire ctor of the National Assessment Coordination Office, and se rved from 1997 through 2001 in this role. I led a small staff charged with facilitating the U.S. National Assessment of the Potential Consequences of Climate Variability and Change (U.S. National Assessment), which was carried out under the auspicesof the USGCRP. This responsibility included helping to design and support the overall assessment activity, ensuring the

1 The term “global change” encompasses research relating to climate variability and change, depletion of stratospheric ozone and atmospheric chemistry, changes in land cover such as deforestation and desertification, and associated impacts such as changes in water,resources ecosystems and land cover, etc.



### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 17

### 3 high quality of the scientific aspects of the assessment effort, and otherwise facilitating the assessment effort effectively.
5. The U. S. National Assessment was carried out at the direction of the Director of the Office of Science and Technology Policy in his role as Executive Secretary to the National Science and Te chnology Council, which is chaired by the President and the members of which are the cabinet secretaries. The National Assessment brought together the efforts of 20 university-based regional teams, 5 joint university-government scientific teams focused on particular sectors of the economy and natural resources, and a federal advisory committee composed of 12 leading scientists and experts. In addition to participating in and reviewing many of the regional and sectoral activities and reports, I served as an additional lead author and generally contributed to the preparation of the national level reports entitled Climate Change Impacts on the United States: The Potential Consequences of Climate Variability and Change , which were published in 2000 and 2001. 2

### In my role as Executive Director of the NationalAssessment Coordination Office, I also prepared Chapter 6 of the U.S. government’s Climate Action Report 2002

. 3

### This report was the U.S. government’s quadrennial national communication under the United Nations Framework Convention on Climate Change (UNFCCC); Chapter 6, on impacts and adaptation, incorporated th e findings of the National Assessment.

2U.S. Global Change Research Program, Climate Change Impacts on the United States: The Potential Consequences of Climate Variability and Change: Overview Report (2000) and Foundation Report (2001). Available from Cambridge University Press. 3U.S. Dept. of State, U.S. Climate Action Report 2002(U.S. Government Printing Office 2002).



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### 4 6. I have served in various capacities in the preparation of the First, Second, Third, and Fourth Assessments of the Intergovernmental Panel on Climate Change (IPCC), which is the international organization responsible for preparing authoritative assessments of the science of climate change, impacts, adaptation, and mitigation in support of the UNFCCC. For the IPCC’s First Assessment Report, which was completed in 1990, I was a contributor to two chapters in the Working Group I report: Chapter 5 on “EquilibriumClimate Change—and its Implications for the Future” and Chapter 8 on “Detection of the Greenhouse Effect in the Observations.” For the Second Assessme nt, which was completed in 1995, I was a contributor to Chapter 8 of Working Group I, “Detection of Climate Change and Attribution of Causes,” and a lead auth or of Chapter 25 of Working Group II, “Mitigation: Cross-Sectoral and Other Is sues.” For the Third Assessment that was completed in 2001, I was a contributing author to Chapter 12 of Working Group I, “Detection of Climate Change and Attribution of Causes.” For the Fourth Assessment, which was completed in 2007, I se rved as review editor for Chapter 14 of the Working Group II report, which su mmarized past, ongoing, and expected future impacts of climate change on North America. For all of the assessments, I was also a reviewer of various chapters, an d as part of my re sponsibility with the Office of the U.S. Global Change Rese arch Program, I served as scientific coordinator for the official reviews of the U.S. government for both the Working Group I and II contributions for the Second and Third IPCC Assessment Reports. I also served as scientific advisor to the U. S. delegation at the plenary meetings of

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### 5 Working Group I for the Second and Third Assessments, contributing to the preparation of the Summary for Policymakers of each assessment.
7. Since retiring from the Lawrence Livermore National Laboratory in September 2002 upon completing my assignme nt with the Office of the USGCRP, I have continued to actively assess the scie nce of climate change and its consequent impacts. I am currently serving as Chie f Scientist for Climate Change Programswith the Climate Institute in Washington D.C., which is the oldest nongovernmental organization focused on understanding and helping to address the climate change issue. I also served on the 13-member Assessment Integration Team of the 8-nation Arctic Climate Impacts Assessment (ACIA), which completed its
assessment 4

### in 2004 describing how climate change and enhanced ultraviolet radiation are now affecting and are likely in the future to affect the Arctic region, and how these changes are likely to affectand impact the rest of the world. In addition, from 2004 to 2007 I was a member of the Scientific Expert Group (SEG) on Climate Change and Sustainable Development, organized by Sigma Xi, The Scientific Research Society and th e UN Foundation to prepare a report 5

### for the UN Commission on Sustainable Development indicating the types of actions needed to simultaneously address the issues of climate change and sustainability.

4Arctic Climate Impact Assessment (ACIA), Impacts of a Warming Arctic: Arctic Climate Impact Assessment (Synthesis Report) , Cambridge University Press, 2004; and Impacts of a Warming Arctic: Arctic Climate Impact Assessment (Technical Report) , Cambridge University Press, 2005. 5 Scientific Expert Group on Climate Change (SEG), 2007: Confronting Climate Change: Avoiding the Unmanageable and Managing the Unavoidable , Rosina M. Bierbaum, John P. Holdren, Michael C. MacCracken, Richard H. Moss, and Peter H. Raven (eds.), Report prepared for the United Nations Commission on Sustainable Development by Sigma Xi, Research Triangle Park, NC, and the United Nations Foundation, Washington, DC, 144 pp. 

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### 6 8. In 2003 I was elected to a four-y ear term as President of the International Association of Meteorology and Atmospheric Sciences, which is an international scientific organization wh ose sponsoring member s are the national academies of science of the leading nations of the world; as a result of my position, I also serve on the executive committee of the Scientific Committee on Oceanic Research, which oversees the scientific aspects of international ocean research
programs. 9. As a result of efforts undertaken in my various positions and responsibilities, I am the co-author/co-editor of ten books/major reports, roughly 50 peer-reviewed journal articles and book ch apters, and hundreds of other reports and
notes. Summary of Opinions
10. The following findings and supporting information are offered as my expert scientific opinion, based on my education, qualifications, experience, and knowledge of the relevant scientific literature and national and international assessment processes. These findings, in myexpert opinion, alsoreflect the strong consensus of opinion among qualified scientific experts involved in climate change research in the U.S. and around the world.
11. I have reviewed (a) EPA’s Endangerment and Cause or Contribute Finding for Greenhouse Gases Under Sectio n 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009), (b) EPA’s Denial of the Petitions to Reconsider this finding, 75 Fed. Reg. 49,556 (Aug. 13, 2010) , (c) associated materials supporting

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### 7 these findings, including much of EPA’s response to comments and response to petitions documents and the technical support document for the Endangerment Finding, and (d) the motions of the Coalition for Responsible Regulation and the State of Texas requesting that these and other greenhouse gas rules be stayed.
12. Based upon my review, this declaration focuses on three points: A. The Sound Procedural Basis of EPA’s Endangerment Process: EPA correctly relied upon the most authoritative assessments as the sources for scientific information in develo ping, describing, and defending its Endangerment Finding; B. The Sound Scientific Content of EPA’s Endangerment Finding: The Endangerment Finding is based on scientific information and findings that are credible and current, and thathave been widely accepted in the scientific community through many a ssessment cycles; research reported since completion of the most recent assessments on which EPA relied has further strengthened the basis of EPA’s findings; C. The Harm and Costs of Delaying EPA’s Endangerment Finding: Delaying the ability of EPA to moveforward with its Endangerment Finding would increase the damage from climate change impacts that are already occurring, increase the risk an d imminence of projected impacts, and make controlling climate change more difficult. Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 22

### 8 The Sound Procedural Basis of EPA’s Endangerment Process
13. The Endangerment Finding is ground ed on an extensive, and sound, scientific record. EPA gathered evidence from a wide range of sources, including a series of highly credible scientific assessment reports produced by the Intergovernmental Panel on Climate Change (IPCC), the USGCRP, and the National Research Council (NRC). The careful consideration EPA gave to the evidence it gathered is consistent with high scientific standards. See74 Fed. Reg. at 66,510-12 (describing EPA’s process).
14. EPA used data from the IPCC asit weighed its Endangerment Finding. The IPCC is a highly credible scientific body. EPA correctly concluded that its review and analysis proce sses are transparent, unbiased, and comprehensive. See74 Fed. Reg. at 66,5111.
15. EPA’s description of the IPCC as an international body preparing comprehensive assessments of climate change, see 75 Fed. Re g. at 49,580, is correct. The US joined with other nations to organize the IPCC in 1989 in order to consider, assemble, summarize, and assess the breadth and depth of climate change research being conducted around the world. The IPCC has now issued four comprehensive scientific assessments, the latest of which was issued in 2007. Each of these assessments, as EPA explains in the Endangerment Finding’s Technical Support Document (“TSD”) at 4-5, has gone through an extensive, multi-stage, international review process that has led to each of the IPCC assessments being accepted

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### 9 unanimously by the international communityof nations participating (this last assessment involving 194 nations).
16. EPA was an active participant in the IPCC assessment process. See74 Fed. Reg. 66,511. IPCC’s draf t assessments are extensiv ely reviewed and revised and refined through a multi-stage process inwhich, for the expert stage, a number of EPA’s expert scientists review the draf t chapters for technical accuracy, and in the final two stages, EPA as an agency participates actively in the US government review and ultimate approval of the assessment. Although the IPCC’s review process is highly robust, a few regrettable, but minor, errors have appeared in the thousands of pages of its very lengthy Fourth Assess ment Report (IPCC, 2007). These errors were reviewed and acknowle dged, and they do not negate or alter IPCC’s conclusions.
17. EPA has clearly examined this issue, see 75 Fed. Reg. at 49,576-78 and EPA’s Response to Petition documents, and, in agreement with all authoritative bodies that have examined this question , correctly found that ”[t]he small number of errors and alleged errors in the IPCC AR 4 report are not materially relevant for EPA’s Endangerment Finding.” 75 Fed. Reg. at 49.576. For example, the error in the timing of the loss of snow cover in th e Himalayas is not relevant to impacts in the US, and in any case was a misstatement in the chapter that was not elevated to the IPCC Technical Summary or Summaryfor Policymakers that present the internationally agreed to consequences of climate change. See 75 Fed. Reg. at 49,577 (noting that the error had been corrected, that EPA did not rely upon it, and

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### 10 that widespread glacial melting in the Himalaya is continuing and threatens water availability “where more than one-sixth of the world population currently lives”)..
18. With respect to the overall credib ility of the IPCC assessment, several independent reviews, including EPA’s havecorrectly concluded that the IPCC is impartial and unbiased. I discuss these re views in more detail in ¶ 34, below. The recent review of the InterAcademy Council, Climate Change Assess ments, Review of the Processes and Procedures of the IPCC (“IAC Report”), similarly concluded that “[t]he IPCC assessment process has been su ccessful overall and served society well.” IAC Report at 52. The IAC Report recommended a number of procedural changes to further strengthen their process. Resp onding to IAC’s request for criticisms and constructive ideas for improving the IPCC process, I offered suggestions for strengthening the officially documented process that a number of us who had been involved had actually followed during IP CC’s Fourth Assessment to ensure its credibility; one of the major ones, regardin g how comments should be prioritized by the review editors, was highlighted in th e IAC report. Being focused on procedures and processes, the IAC report did not call th e IPCC’s core scientific conclusions, or their basis, into question. Indeed, the IAC recognized that the IPCC has provided the most credible and authoritative assess ments available. The IPCC’s success in conducting a process that has achieved unani mous international approval of its four assessment reports on the potentially very contentious issue of climate change, its impacts, and options for addressing the issue was recognized with a Nobel Peace Prize in 2007.

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### 11 19. The USGCRP and NRC reports EPA relied upon are also scientifically rigorous. Within the US, independent scientific assessments covering variously narrow to broad aspects of the issue have also been undertaken by the NRC, and by the USGCRP. The USGCRP coordinates the cooperative, interagency efforts of the US government’s research agencies, including EPA, and by individual agencies, including EPA. As EPA correctly states, th ese scientific organizations have “their own, separate report development pr ocedures.” 75 Fed. Reg. at 49,579.
20. The USGCRP and NRC assessments are not simply based on IPCC reports. Indeed, as described in EPA’s re consideration decision, 75 Fed. Reg. at 66,651, while the IPCC assessments do provid e a global-scale perspective of climate change, their climate model summarizations are based on modeling results input to IPCC by, among others, US climate modeling groups, and their impact results are based primarily on assessments carried out as part of USGCRP activities in which EPA has been a very active participant, and indeed has been the lead agency for studies on human health and welfare, ecos ystems and resources, and sea level. See 75 Fed. Reg. 66,511 n.12. As EPA makes clear, it “h as been a very active part of the U. S. government climate change research enterprise, and has taken an active part in the review, writing, and approval of th ese assessments.” 75 Fed. Reg. at 66,511.
21. The scientific community participates in all of these assessments to provide synthesized, evaluated, and th oroughly peer-reviewed information to governments for use in their policy processes. As such, the scientific community is strongly supportive of EPA’s assessment pr ocess, in which, for a number of sound

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### 12 reasons, see75 Fed. Reg. at 66,510-12, “the Admini strator is relying heavily on the major assessments of the USGCRP, IPCC, and NRC as the primary scientific and technical basis of her endangerment decision,” id. at 66,510, determining that these assessments “represent the best referenc e materials for determining the general state of knowledge....” The EPA’s asse ssment of the authoritativeness and credibility of these materials is strongly su pported by the national and international scientific communities.
22. The IPCC, GCRP and NRC reports, in my view, provide the Administrator with a sound basis for her “t o exercise judgment by weighing risks, assessing potential harms and making reas onable projections of future trends and possibilities,” 74 Fed. Reg. at 66,505, in order to “protect public health and welfare.” The IPCC and other assessments have all developed approaches to accurately and transparently communicate the relative likelihood of their various findings, and their confidence in these conclusions. These methods are intended to allow those using the assessments to readily understan d how assessment results relate to risk thresholds in their own particular policy and legal frameworks, thus providing just the type of policy-relevant, but not policy prescriptive, information required by the EPA Administrator to make correct and properuse of the scientific information, as has been done.
23. EPA’s TSD, while drawing upon the scientifically authoritative and thoroughly reviewed major assessments discussed above, was unique and independent through, for example, its detailed coverage and analysis of issues of

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### 13 special interest for the Endangerment Finding. Its synthesis of data from many sources reflects independent scientific judg ments. EPA’s TSD also contains original analysis that covers issues that are not covered in nearly as integrated a manner in the major assessments; for example, the EPA TSD synthesized results from around the world to estimate how climate changes elsewhere would be likely to affect the US, finding that “human-induced climate change has the potential to aggravate natural resource, trade, and humanitarian issues in other worl d regions, which in turn may contribute to the endangerment of public welfare in the United States...” See, e.g. , 74 Fed. Reg. at 66,535-36. The Sound Scientific Content of EPA’s Endangerment Finding
24. Based on my knowledge and experiencethe analysis of climate change science presented by EPA in the Endangerment Finding, TSD, and in its Reconsideration decision, and their response documents, is credible and current with respect to all of the key findings that underpin the Endangerment Finding. I have reviewed the portions of the motions in this case contending EPA made serious scientific errors, but the points they rais e are minor at best and do not call EPA’s conclusions into doubt. Scientific research on the relationship of climate change and human activities has built up a stro ng structure of knowledge from solid, intensely peer-reviewed findings. While some details are being refined by ongoing studies, the foundation stones upon which the EPA Administrator based her Endangerment Finding, see e.g., 74 Fed. Reg. 66,497-98, 75 Fe d. Reg. at 49,563-68, have been well established for decades.

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### 14 25. As EPA’s reconsideration denial clearly explains, the set of six gases that are the basis for the Endangerment Finding all contribute to climate change by increasing the trapping of infrared (heat) radiation, thus exerting a warming influence. While it may prove appropriat e to distinguish them when developing policy for controlling their emissions, these gases act collectively in the atmosphere, as is explained clearly in the TSD, at 23-26, the Endangerment Finding, 74 Fed. Reg. at 66,517-20, and in EPA’s reconsideration denial, 75 Fed. Reg. at 49,564-68. This warming is causing major disruption to Earth’s climate system.
26. The scientific community has for decades been carefully examining the potential role of changes in solar radiatio n and other natural influences in changing the climate, and the climate models used toevaluate the effects of human activities do also take these natural influences into account. The detection-attribution studies described in the Technical Support Document, at 47-54, are designed to distinguish these influences by creating a temporal and geographic “fingerprint” of how the climate system would respond to each influe nce or “forcing” – from the sun, clouds, and so on. These studies then compare th e unique aspects of the fingerprints for each forcing with observed data to est ablish the relative responsibility of each potential cause of the change in climate. For increased solar radiation to be the primary cause of the warming, for exampl e, both the lower and upper atmosphere would be expected to be warming because solar radiation warms the entire atmosphere, but that pattern is not occu rring. EPA’s Response to Comments (RTC) explains this point cogently . RTC Vol. 3, 21-22.

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### 15 27. On the contrary, observations make very clear that, while the surface and troposphere are warming, the stratosphereis cooling, which is just what would be expected from increasing concentrations of CO 2

### and other greenhouse gases, as those gases cause the stratosphere to lo se energy through increased emission of heat radiation to space and toward the surfac e, even as they trap heat closer to the surface to cause warming. EPA again explai ns this point clearly, correctly writing that this result is “predicted by models and consistent with a [greenhouse gas] forcing.” See id. at 21. 28. Moreover, observations indicate thatthe amount of solar radiation was actually decreasing during the latter 20th century when the surface temperature started growing more rapidly, as EPA notes. See id. This is additional evidence that changes in solar radiation are not a primary cause of the warming, especially since 1970. Similar analyses have ruled out other po ssible natural causes of the warming, leaving CO 2

### and other greenhouse gases as the primary cause, in agreement with analytical and climate modeling studies.
29. Global warming is continuing, with 2010 likely to be among the three warmest years since the start of instrumental records in the mid-19 th

### century and with the most recent decade being warmerthan the previous one and the warmest in the instrumental record, as addressed by EPA in its Response to Petitions (RTP), Volume 1, section 1.2.2. The ‘urban myth’ that the climate is no longer warming was created by choosing an inappropriate time interval for creating a trend line. In essence, this error is similar to supposi ng an outstanding student is heading for

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### 16 failing grades when she makes a B+ on a si ngle test, even though she received an A+ on her last exam, and aced every other te st she had taken. Small fluctuations do not undermine the overwhelming trend. .
30. Thus, I find the statement that “elevated concentrations of greenhouse gases in the atmosphere may reasonably be anticipated to endanger the public health and to endanger the public welfar e of current and future generations,” 74 Fed. Reg. at 66,516, to be very soundly supported and consistent with the findings of the national and international scientific communities.
31. Similarly, based on my experience, in cluding having been on the expert review panel for the USGCRP’s assessment of climate change impacts on the United States that forms the basis for many of EPA’s findings, I find EPA’s summary of climate change’s many impacts to be generally comprehensive and credible. Indeed, my only reservation is that, if anything , an even greater sense of urgency might have been indicated based on the amplif ied changes in polar regions that are affecting Alaska and other US interests in the Arctic. 6 

### 32. In addition, even a cursory review of the findings in the succession of four IPCC assessments since 1990, as EPA discusses in its TSD, see TSD at 47, clearly indicates that “IPCC statements onthe linkage between [greenhouse gases] and temperature have strengthened since the organization’s early assessments” as increasing global warming and ever-growing scientific scrutiny of global environmental changes make clear that the situation is becoming more and more

6 

### See Arctic Climate Impact Assessment (ACIA), 2004: Impacts of a Warming Arctic: Arctic Climate Impact Assessment, Cambridge University Press, 140 pp.; National Oceanic and Atmospheric Agency (NOAA), 2010, Arctic Report Card: Update for 2010 , 101 pp.

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### 17 serious. There is every indication that this trend will continue with further assessments. For example, as explained further below, emerging scientific results are indicating that the seriousness of ocean acidification, the accelerated loss of ice from the Greenland and Antarctic ice sheets, and projections of sea level rise are all likely to create even greater climatic and ecological disruption than indicated in IPCC’s Fourth Assessment Report and in EPA’s Endangerment Finding. Thus, EPA’s findings, though entirely scientif ically sound, reflect a conservative, and cautious, interpretation of the data, analyses, and model simulations.
33. The release of internal emails to an d from scientists at the University of East Anglia UK relating to the construction of the past temperature record from observations and proxy records (the so-called “Climategate” situation) does not in any way weaken the basis for the Endanger ment Finding. In an analysis with which I am in full accord, EPA documentedand explained, 75 Fed. Reg. at 49,578- 79 and RTP Vol. 2, that there is no basisfor the assertion that “the scientific underpinnings of the Endangerment Finding are flawed” and every reason for concluding that “the Administrator appropriately interpreted the science to make the Endangerment Finding. ” 75 Fed. Reg. at 49,570.
34. Every other body to have examined these emails has also concluded that they do not indicate any flaws or biasin the IPCC’s scientific findings. These reviews, include an international science review panel set up by the University of East Anglia and chaired by Lord Oxburgh, a commission chaired by Sir Muir Russell, a review by Pennsylva nia State University, and a report by the Science and

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### 18 Technology Committee of the British Hous e of Commons. Although the reports recommended improving the openness of the University of East Anglia’s databases and various other procedural improvements, they uniformly concluded that there was absolutely no wrong-doing and that the scientific conclusions of the researchers were sound. Indeed, Lord Oxburgh’s reportcharacterized East Anglia’s work as a “public service of great value.”
35. There is also no doubt that the oceansare rising in response to climate change-induced thermal expansion and loss of ice from mountain glaciers and the Greenland and West Antarctic ice sh eets, as EPA correctly concludes. See 74 Fed. Reg. at 66,518. The geologic record clearly shows that oceans rise when ice sheets retreat and the ice sheets are now recedingat an accelerating rate. Residual uncertainties do remain in determining ho w rapidly the oceans rose during past periods of warming. This uncertainty, however, is one-sided, in that sea level is rising morerapidly than existing models calculat e, not less. As EPA explains in its Response to Comments, “if anything, future sea level rise is likely to be near or above the high end of the IPCC projections.” RTC Vol. 4 at 60-61.
36. The InterAcademy Council’s review considered how the IPCC discussed its sea level rise results. Itnoted that IPCC Working Group I, which described the physical basis of climate ch ange, generally drew its conclusions based on the results of careful statistical analyses that required a very high probability before it adopted a given prediction (roughly equivalent to the legal standard of beyond reasonable doubt). However, in conveying the likely risk and impacts to

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### 19 those living in coastal regions, which isthe responsibility of IPCC Working Group II, the IPCC came to its conclusions basedon relative risk and the most likely outcome (roughly equivalent to the le gal standard of preponderance of the evidence), as is typically used by the public and policy-makers. The InterAcademy Council recommended that the IPCC should convey the level of understanding and uncertainties more clearly in communicating probability. The IAC did not, however, suggest that the IPCC’s results were in error.
37. In EPA’s analysis for the Endangerment Finding, it followed the scientifically cautious approach of IPCC Working Group 1, calculating the potential rise based on contributing factors that are entirely well-understood. As a result, EPA gave only limited consideration to the less well-understood influence of increasing movement of the Greenland an d Antarctic ice sheets towards the sea (movement that more recent evidence appears to indicate is underway). EPA’s conservative approach means that its sea level rise conclusions are very likely to be underestimates, and therefore quite cautiously stated. The Harm and Costs of Delaying EPA’s Endangerment Finding
38. Preventing EPA’s Endangerment Finding, and the greenhouse gas controls it enables, from going into effe ct would further exacerbate the increasingly serious climatic disruption that is already adversely impacting citizens of the United States and the world.
39. As EPA explains, emissions of the six greenhouse gases cause increases in their atmospheric concentrationsthat will, in most cases, persist for

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### 20 the centuries due to the slow pace of long -term removal processe s -- and even the perturbation for methane will last decades

. See TSD at 16-19. Thus, each increment of emissions has a cumulative effect on the atmospheric composition, creating a warming influence on the climate that will persist for centuries and more. This is a very different situatio n than for traditional short-lived air pollutants, which persist for only days to a few weeks in the atmosphere and so are rapidly removed once emissions stop. Thus, the additional reduction of vehicle emissions and stationary source emissions that EPA is seeking will exert a benefit over many centuries.
40. Global warming is already causing serious harms, including very serious disruptions in the Arctic and an accelerating rate of lo ss of the Greenland and Antarctic ice sheets. Thus, any additi onal increment of emissions will worsen impacts that policymakers could appropriat ely already determine are unacceptable. Thus, any delay in moving forward with the Endangerment Finding and greenhouse gas controls would cause continuing and increasing harm.
41. Further, to the extent that many leaders have suggested we must keep global temperature increases less than 2oC above preindustrial conditions to avoid extremely dangerous levels of c limate change, or 1.2oC above present temperatures, each additional day of emissi ons makes it more diffi cult to meet this goal. Indeed, we are already committed to substantial further temperature increases by our past and current emissi ons. Continuing higher than minimum feasible emissions will reduce the amountallowable for future generations and

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### 21 other nations. The result of this will be that the economic and political cost of staying below this bright line will increas e greatly over time because emissions cutbacks will need to be done more rapi dly, further burdening future generations that will also be experiencing more serious impacts than we are at present.
42. As EPA properly finds, a holistic assessment of the risks associated with climate change demonstrates that its harms are widespread and pressing. See 74 Fed. Reg. at 66,534-36. Given the geographic extent and diversity of the United States extending from Alaska to Puerto Ri co, and Maine to the Trust Territories of the Pacific, the many different types of ve ry disruptive impacts, and the long time scales of the greenhouse gas impacts, EPA could readily determine that the public is already adversely exposed to the impacts of climate change.
43. In such situations involving other air pollutants, EPA has protected the most vulnerable populations. Were thisto be applied to the climate change situation, the very serious and amplifie d climate changes being experienced in Alaska, which is already starting to ne cessitate the relocation of indigenous villages, would seem to make clear thatclimate change harms are already above any reasonable acceptable threshold and delay would clearly be a cause of harm. The National Oceanic and Atmospheric Association (NOAA), for instance, has documented a dramatic melting back and thi nning of Arctic sea ice, record heat, and major snowpack melting around the re gion. These changes seriously threaten the livelihoods and life styles of people across the region.

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### 22 44. Delay would also allow the ongoing intensification of climate extremes, as EPA discusses. SeeTSD at 73-75, 75 Fed. Reg. at 66,525. The environment and society developed and evolved in the context of past climatic conditions, and we are used to both that climate’s average behavior and its level of variations and extremes (e.g., much infrastructure is designed to withstand the historic one-in-a-hundred year storm). Observations and model simulations indicate that global warming has been leading to more frequent occurrence of heat waves and extreme rainfall and to greater evaporation, faster lo ss of soil moisture, and earlier onset of drought. As an example, severe storms that, under hist oric conditions, would have occurred on average only once in a hundred years, are projected by the end of the century to occur as often as every few decades. Suchfrequent devastating storms would likely be psychologically and economically overwhelming for those experiencing such conditions. In general, because weather variations tend to occur in a bell-shaped probability distribution, even a small shift in this distribution can cause a proportionately larger change in the intensity and likelihood of occurrence of extreme events, as EPA recognizes. SeeTSD at 75-78. Given this observationally supported finding, any delay in implementing emissions reductions will thus increase the risk and danger of more and more severe impacts.
45. Delay would also increase the risk of triggering nonlinear and possibly globally abrupt changes in climate, as EPA explains. See id . The Greenland ice sheet, for instance, has persisted through the last 10,000 years of the present interglacial, yet it is now st arting to rapidly lose mass, accelerating the rate of

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### 23 global sea level rise. Apparently a threshol d temperature has, or is near to being, passed that could well lead to significant lo ss of sea ice and sea level rise of several meters over several centuries. Permafrost is starting to thaw over significant areas of the land areas around the Arctic, withthe potential for release of significant amounts of methane and/or CO 2 

### . Such releases would trigger further warming and then further thawing—thus exciting one of the natural amplifying feedback mechanisms that has until recently lain dormant. While there are significant uncertainties concerning our proximity to thresholds for these and other processes, that each transition has apparently starte d to occur with a global warming of just 0.8oC is very worrisome and isanother reason that every delay in taking action to limit emissions will increase the risk of very severe outcomes.

Dated: October 27, 2010 Michael C. MacCracken

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# Exhib it 3 3 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 39

### DECLARATION OF THAD MILLER EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER AND SECRE1"ARY OIT 

### CALPINE CORPORATION

1. I, Thad Miller, the Executive Vice President, Chief Legal Officer and Secretary of Calpine Corporation, make this Declaration in support of the respo'nse filed by the Environmental Defense Fund, the Natural Resources Defense Council, and other environmental intervenors in opposition to motions filed by various parties to stay various actions of the u.S. Environmental Protection Agency (EPA) relating to the permitting of greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act. The purpose of this Declaration is to express my view that, while there will be costs associated with any program for regulating GHGs from stationary sources, the regulations can be designed to manage those costs. A stay of EP A's actions concerning GHG emissions for stationary sources would exacerbate and prolong uncertainty in the electric sector, not reduce it. This is true of the requested stay of EP A's Tailoring Rule,**whi~h** identifies which sources would be subject to the PSD permitting requirements for GHGs and which would not, and thus provides regulatory relief for many sources, including at Calpine Corporation (Calpine), while also establishing the process to develop the ground rules that will govern the PSD program's application to the large GHG

sources that will be covered by PSD. 2. Calpine is a member of the Clean Energy Group's Clean Air Policy Initiative. Michael J. Bradley submitted a declaration on behalf of a subset of members of the Clean Energy Group's Clean Air Policy Initiative, including Calpine, and the statements included in this declaration are in addition to those submitted by Michael J. Bradley. 

### Qualifications and Background 3. I joined Calpine in August 2008 as Executive Vice President, Chief Legal Otlicer and Secretary. I have almost 30 years of legal experience, and the last 20 years ofwl1ich l1ave been in the energy industry. Prior to joining Calpine, I served as Executive Vice President and Chief Legal Officer of Texas Genco Inc. until 2006. From 2002 to 2004, I was a consultant to Texas Pacific Group, a private equity firm. From 1998 to 2002, I served as Executive Vice President and Chief Legal Officer of Orion Power, an independent power producer. From 1994 to 1998, I

was Vice President of Goldman Sachs & Co., where I focused on wholesale electric and other

1 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 40energy commodity trading. Before joining Goldman Sachs & Co., I was a partner in a New York law firm. I earned my Bachelor of Science degree from the United States Merchant Marine Academy and my Juris Doctor from St. John's School of Law. In addition, I was an officer in the United States Coast Guard. Calpine Corporation 4. Calpine is a U.S. company that owns and operates power generation facilities al1d sells electricity to wholesale and industrial customers in the United States and Canada. Founded in 1984, Calpine operates 93 power plants that are capable of delivering nearly 29,000 megawatts of clean, reliable electricity to customers and communities. Over the last decade, Calpine completed one of the largest development and construction programs in recent United States history, investing billions of dollars to construct highly efficient, low-emitting power facilities. Today, the company operates one of the cleanest, most efficient fleets of power generation in the United States. The Implications of the Application of the PSD Program to Calpine's Sources of Greenhouse Gases 5. Under the Tailoring Rule, sources that must undergo PSD permitting anyway, based on their emissions of other pollutants, and would increase emissions by 75,000 tons per year of C0 2 e or more, will become subject to PSD for their GHG emissions beginning January 2, 2011. A larger category of new and modified sources of GHG emissions

- new sources with the potential to emit 100,000 tpy, and source modifications that will result in a net emissions increase of75,000 tons per year ofC0 2 e - will be**subjec~** to PSD permitting beginning July 1, 2011. See, e.g., 75 Fed. Reg. 31523. 6. While the inclusion of GHGs will add new elements to the permitting process for new and modified facilities, Calpine is committed to working with EP A and states to ensure that consideration of GHGs can proceed without disruption of the permitting process. For example, Calpine's Vice President, Environmental Health & Safety, Don Neal, participated on the Climate Change Workgroup for the Clean Air Act Advisory Committee. Through the Clean Energy Group, Calpine has worked to discuss with EPA how the Tailoring Rule could be implemented most effectively for the electric sector. 7. Calpine Corporation owns facilitates that we anticipate are likely to trigger the Tailoril1g Rule thresholds and are, therefore, likely to be subject to PSD starting in January 2,2011 and/or

2 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 41July 1,2011. We also own other facilities that would be excluded from permitting requiren1ents

as a result of the Tailoring Rule. Calpine anticipates that subjecting new facilities to major NSR under the Tailoring Rule will require applicants to demonstrate that their productio11 process is efficient. Calpine continues to explore opportunities to expand its generation portfolio via new development projects or expansions of existing projects. The prospect of GHG regulation under the Clean Air Act has had no impact on these activities as we anticipate that efficient combustion will be considered BACT for GHGs in the power sector given the absence of a demonstrated control technology. In the case of GHG regulation, the reduction of emissions due to increased efficiency is consistent with the desire in business to consume as few raw materials as possible to manufacture a product. 8. Calpine supported EPA raising the thresholds for the Tailoring Rule from the proposed 25,000 tons per year to 75,000 and 100,000 tons per year because of concerns that standard efficiency upgrades would consistently trigger PSD permitting thresholds for GI-IGs. For example, Calpine is currently undertaking efficiency upgrades at a number of turbines throughout our fleet. As a result of the upgrades, which include improved compressor seals, blades, and turbine section sealing, the turbines will have an increased exhaust flow rate. By increasing the exhaust flow rate, the turbines will be able to process fuel more efficiently, which increases total capacity. While the increases in criteria pollutants would be minor for PSD purposes, the C0 2 e emissions would likely increase by more than 25,000 tpy per unit. However, by raising the threshold to 75,000 tons per year of C0 2 e, efficiency upgrades such as these are not expected to trigger PSD permitting starting in July 2011. 9. Prior to the date that EP A finalized its regulation requiring stationary source G 

### I-I G emissions to become subject to PSD permitting requirements, Calpine Corporation received a final federal PSD permit from the Bay Area Air Quality Management District (BAAQMD), the federally-delegated permitting authority, for the Russell City Energy Center (RCEC).l RCEC is

a 600 MW combined cycle natural gas turbine (CCGT) facility, which will be located in the City of Hayward in Alameda County, California. During the application process for the federal PSD permit under the Clean Air Act, RCEC agreed to undertake a voluntary Best Available Control

1 While ten citizens and/or interest groups have appealed RCEC's PSD permit to the Environmental Appeals Board (EAB), and that appeal remains pending, the appeal was largely filed on grounds unrelated to the plant' s**BAC1~** analysis. (EAB Appeal Numbers Appeal Numbers PSD 10-01; PSD 10-02; PSD 10-03; PSD 10-04; PSD 10-05; PSD 10-06; PSD 10-07)

3



### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 42Technology (BACT) review for GHG emissions in addition to the federally-mandated criteria pollutants. BAAQMD's GHG BACT analysis focused on the following GHG

- carbon dioxide (C0 2 ), methane (CH 4), and nitrous oxide (N20) from the combustion of natural gas in the turbines and the heat recovery steam generators (duct burners), fugitive sulfur hexafluoride (SF6) from circuit breakers, and the potential emissions of CO 2 , CH 4 , and N 2 0 from the fire pump diesel engine. Calpine anticipates that the RCEC's BACT limit would comply with future (JHG permitting requirements under the Tailoring Rule. The Russell City facility will be desig11ed to operate in a way that produces 50 percent fewer GHG emissions than even the most advanced coal-fired plants and 25 percent fewer GHG emissions than the standard set by the California Public Utilities Commission. 

### A Stay of the Tailoring Rule Would Create New Uncertainty for the Electric Sector 10. EPA's decisions in the PSD Interpretive Memorandum and in the Tailoring Rule will help Calpine understand what is required prior to Congressional action on climate legislation, and will make clear which of our sources are required to comply with PSD for GI-IG emissions and which will not, as well as when the obligations for covered sources take effect. If the Court stays the EPA actions that parties have sought to stay in this case, including the 'Tailoring Rule, Calpine could experience undue delays in permit processing as state agencies, unsure about the prospect for GHG regulation under the Act, await resolution of the court proceeding. More importantly, regulatory uncertainty creates risks that could negatively affect the financing of new generation projects that would reduce the overall GHG footprint of the electricity sector. 11. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed in Houston, Texas on 

# (!!)dCJ!Jer 2-7, 2.0 (0

Thad Miller

4 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 43

# Exhib it 3 4 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 441 

### DECLARATION OF DAVID SCHOENGOLD I, David Schoengold, hereby declare and state as follows:

1. I am a senior consultant and co-founder of MSB Energy Assoc iates, Inc. (MSB), a consulting firm located at 7505 Hubbard Avenue, Suite 200, Middleton, Wisconsin 53562. I provide planning and analytical services to public utility commissions, and others with an interest in p ublic utility policy. I have been involved in the planning and regulation of the electric power generating sector for over thirty-five years, both at MSB since 1988, and at the Wisconsin Public Service Commission, where I worked for sixteen ye ars. I have substantial experience in analyzing and forecasting the need for large-scale power plants and electricity systems, including nine years as the Direc tor of the Systems Analysis Bureau of the Wisconsin Public Service Commission, where I was responsible for electricity forecasting, generation and transmission planning, demand-side analysis, system modeling, fuel cost analysis, natural ga s planning and emissions reduction strategies. I also have extensive experienc e in energy-related environmental analysis, power systems economics and market analysis, and the regulations and institutions that govern the production and sale of electricity, including federal environmental regulations. My expertise includes a familiarity

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### with the types and amounts of the greenhouse gases, including carbon dioxide (CO 2

### ), emitted when fossil fuels are combusted to generateelectricity at various kinds of power plant configurations.

2. My experience includes reviewing, analyzing, and preparing comments on many utility-related U.S. Environmental Protec tion Agency (EPA) rules and decisions. I am aware that U.S. EPA has is sued a regulatory finding that anthropogenic emissions of six greenhouse gases (CO 2 

### , methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride) collectively endanger public health and welfare. I am also aware that U.S. EPA has, in a separate rulemaking, determined to regulate GHG emissions from automobiles, and has issued such regulations. Additionally, I am aware of EPA’s efforts to regulate the largest stationary sources of GHGs. Spe cifically, I have reviewed background material on EPA’s rule phasing in the application of Clean Air Act permitting and control requirements first to the largest sources of CO 2

### and other greenhouse gases, known to me as the Tailoring Rule.

3. I received a Bachelor of Science in Physics from Rutgers University and did graduate work in Physics at the University of Chic ago. A copy of my (resume/curriculum vitae) is attached hereto as Attachment A.

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### 4. I submit this declaration in support of the efforts of various environmental organizations and states to oppose a stay of the Tailoring Rule, pending the outcome of this litigation. As set out in mo re detail below, if the rules are stayed, new large power plants and other large stati onary sources permitted during the period of the stay will not require any controls o n their CO 2 

### emissions, which will amount to many millions of tons per year. Furthermore, because of the long-lived nature of CO 2

### emissions, a significant amount of each uncontrolled, or incremental, ton of CO 2

### emitted during the period of the stay will persist for at least 100 years in the earth’s atmosphere, with some fraction persisting longer.

5. Because of my experience and background, I am aware that foss il-fuel fired power plants are among the largest industrial source s of CO 2 

### emissions. According to the EPA’s most recent Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2008 , these plants were responsible for over 62% of the CO 2 

### emissions from stationary sources in 2008.

6. Based on my review of the materials on the Tailoring Rule , I am aware that beginning on January 2, 2011, a new stationary source that emits at least 75,000 tons per year of CO 2

### and other greenhouse gases (measured as CO 2 

### equivalent, or CO 2

### e), and that also would trigger permit requirements for any nongreenhouse gas pollutant, will need to undergo a control technology review and

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### hold a permit containing a greenhouse gas emissions limit based on the Best Available Control Technology for that facility, before construction can begin. I am also aware that beginning on July 1, 2011, all new stationary s ources that emit at least 100,000 tons per year of greenhouse gases (measured as C O 2

### e) will be subject to these review and permit requirements, regardless whether they would otherwise trigger the need to hold a Clean Air Act permit prior to c onstruction. In addition, existing sources that emit or have the potential to emit at least 100,000 tons per year of greenhouse gases (CO 2

### e) and propose to make a modification that would increase greenhouse gas emissions by at least 75,000 tons per year (CO 2

### e) will also be subject to these preconstruction review and permitting re quirements.

7. Because of my experience and background, I am aware of how much CO 2

### is released when various fossil fuels are combusted to generate electricity, by new generating units of various configurations, and without GHG controls. For example:

a. A new, typical supercritical coal-fired generating unit of 500-1000 megaWatts (MW) with uncontrolled CO 2

### emissions has the potential 1 

### to release 4.13 to 8.26 million short tons per year of CO 2 

### .

1 

### By “potential,” I am referring to the emissions that wo uld result from a facility running at 100 percent capacity.

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### b. A new, more efficient, ultrasupercritical coal-fired generating unit of the same size with uncontrolled CO 2

### emissions has the potential to release 3.9 to 7.8 million tons per year of CO 2 

### .

c. A new natural gas-fired combined cycle generating unit of the same size with uncontrolled CO 2

### emissions has the potential to release about 40% as much CO 2 

### , or 1.65 to 3.3 million tons per year of CO 2

### .
8. Because of my background in physics, I understand that CO 2

### and other greenhouse gases, once emitted to the earth’s atmos phere, create a “greenhouse effect” -- greenhouse gases act to trap heat within the earth’s atmosphere so that it is not quickly released. The trapped heat is re-radiated down towards the earth’s surface, as well as in other dire ctions. The result is higher earth surface temperatures than would be the case if the greenhouse gases were not present in such large amounts in the atmosphere. Furthermore, as stated above, I understand that once emitted to the atmosphere by any mean s, manmade or otherwise, a significant portion of each ton of emitted CO 2

### persists for 100 years. So, a significant amount of the CO 2

### emitted in 2010 will still be in the atmosphere, and causing greenhouse effects, in 2110.

9. Based on my review of the background material on EPA’s rule s governing permitting for the largest stationary sources , and my understanding of

Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 496



### how much CO 2

### is produced by electricity generating plants of various configurations and sizes, I can say that a typical new generating unit of 500-1000 MW in size, and proposed to burn either natural gas or coal to generate electricity, would generate enough CO 2

### emissions to require a preconstruction permit containing best available CO 2

### controls, under EPA’s Tailoring Rule. If that rule were stayed, such a generating unit could begin constructio n without any CO 2 

### controls.

10. Even if post combustion controls, or fuel switching to natural gas, are not considered as greenhouse gas control options for a newcoal-fired generating unit, more efficient power generation could reduce CO 2

### emissions from such a generating unit by 5% or more. Such a minimal improvement would reduce CO 2 

### emissions at a typical 500-1000 MW unit by 230,000 to 460,000 tons per year. Over the expected, potential 60 year life of a new generating unit, this would total 13.8 to 27.6 million tons of CO 2 

### . I declare under penalty of perjury that the foregoing is true and correct.

______________________________ David Schoengold

Executed on October 29, 2010.

Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 50

### EXHIBIT A.

DAVID SCHOENGOLD Senior Consultant MSB Energy Associates EXPERIENCE MSB Energy Associates, 1988 to present. Wisconsin Public Service Commission, 1974 to 1990. University of Wisconsin, Institute for Environmenta l Studies, 1973 to 1974. United States Peace Corps, Philippines, 1970 to 1972

. Argonne National Laboratories, Applied Mathematics D ivision, 1968 to 1970. EDUCATION BA in Physics , Rutgers University, 1966. Graduate Study in Physics and Computer Science , University of Chicago, 1966-68. UTILITY PLANNING AND REGULATORY EXPERIENCE David Schoengold co-founded MSB Energy Associates in 1 988 to provide planning and analytical services to public utility commissions, state energy offices, public interest groups, and others with an interest in public utili ty policy. Since co-founding MSB Energy Associates Mr. Schoengold has served clients in Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Florida, Geo rgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New Hampshire, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, West Virginia, and Wisconsin. Since 1998 he has been working with the Clean Air T ask Force to promote clean air policy in the U.S. He has provided on-going technical sup port to the Clean Air Task Force in the form of analysis of power plant emissions, cost of e mission control technologies, and analysis of the impact, cost, and benefit of federal and state legislation. Other areas of interest have been utility restructu ring, tax subsidy issues, long-range planning, and rate design. He has analyzed the impa ct of utility restructuring proposals in California, Illinois, Iowa, Michigan, New York, Ohi o, and Pennsylvania. He has provided technical expertise to planning col laboratives, reviewed utility integrated resource plans and supply-side plans, developed inde pendent integrated resource plans, analyzed sales promotion practices, reviewed and developed avoided costs, analyzed the impact of resource alternatives on emissions of pollu tants, reviewed utility transmission planning studies, and developed alternative transmissio n plans including distributed resources as an option. He has presented testimony i n Arkansas, Connecticut, District of

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### 2

Columbia, Georgia, Florida, Illinois, Iowa, Massachus etts, Michigan, Minnesota, New York, Ohio, Pennsylvania, Texas, Vermont, West Virginia, a nd Wisconsin. In addition he has presented workshops and seminars on various aspects of utility planning for numerous groups. Mr. Schoengold has testified in cases involving rates, resource planning, facility certification, administrative rules, externalities, independent power projects, public policy, and civil damages. He has testified on the need fo r, alternatives to, and system planning implications of utility plans and proposals, rate d esign, buy-back rates for cogenerators, energy forecasts, fuel costs, planning budgets, and po wer plant prudence. Mr. Schoengold has been involved in utility planning and regulation since 1974 when he joined the Wisconsin Public Service Commission staff. He spent sixteen years at the Wisconsin Commission, including nine years as the Di rector of the Systems Analysis Bureau which was responsible for electricity forecasting, generation and transmission planning, demand-side analysis, system modeling, fuel costs, renewable and alternative energy resources, natural gas planning, and emission reduction strategies. At the Wisconsin Commission Mr. Schoengold played a major role in the development of the Wisconsin advance planning process, integrated resour ce planning, statewide integrated transmission planning and access, and the inclusion ofexternalities in resource planning. He directed one of the first studies of conservation and renewable resources as least-cost alternatives to traditional utility generation. Heperformed the analytical work which resulted in Wisconsin abandoning its plans for a he avily nuclear dependent future, enabling the state to avoid the nuclear financial p roblems common to many states. TESTIMONY • Iowa Utility Board (2009) Docket No. NOI-2009-0002 American Clean Energy and Security Act of 2009 Testimony addressed the impact of ACES-2009 on Iowa utilities and customers • Michigan Public Service Commission (2004) Docket U-13917 Consumers Energy Power Supply Cost Recovery Plan Testimony addressed contractual and pricing issues for Qualifying Facilities • Maryland House of Delegates Economic Affairs Committee (2004) A Proposed Bill to Require Emission Reductions fro m Maryland Power Plants Testimony addressed the costs of the proposal • Wisconsin Public Service Commission (2002) Docket 05-CE-117 Application to Construct the Port Washington Generating Station Testimony addressed the appropriate level of emissi on controls

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### 3

• Minnesota Public Utility Commission (2002) Docket E002/CN-01-1958 Application for Transmission Facilities in SouthwestMinnesota Testimony addressed the need for and alternatives t o the proposed lines. • Wisconsin Public Service Commission (2002) Docket 05-EI-129 Recovery of Costs Related to the American Transmissi on Company Testimony addressed start up and continuing costs of transmission, appropriate tasks for utilities versus the ATC, and prudence of co sts. • Wisconsin Public Service Commission (2002) Docket 05-EI-131 Ratemaking Mechanisms concerning Long Term Purchased Power Contracts Testimony addressed the appropriateness of allowing for incentive payments to utilities which enter into long-term contracts for purchased power. • Wisconsin Public Service Commission (2002) Docket 6680-UR-111 Wisconsin Power and Light Rate Case Testimony addressed Kewaunee Nuclear Power Plant de preciation and overcollection during a rate freeze • Florida Energy 2020 Commission (2001) Testimony addressed the cost and benefit of emissio n reduction requirements • United States Environmental Protection Agency (200 1) Testimony addressed the cost and benefit of enforci ng the New Source Review standards for coal-fired power plants • Wisconsin Public Service Commission (2000) Docket 05-CE-113 Arrowhead-Weston Transmission Line Testimony addressed the need for the proposed line and air pollution implications of the line • Wisconsin Public Service Commission (2000) Docket 6690-UR-12 Wisconsin Public Service Corporation Rate Case Testimony addressed Kewaunee depreciation issues • Connecticut House of Representatives EnvironmentCommittee (2000) Impacts of Emission Reduction Rules Testimony addressed the cost of meeting proposed ne w emission rules • Texas Public Utility Commission (2000)

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### 4

Impacts of Emission Reduction Rules Testimony addressed the impact of proposed emission reduction rules on the ongoing economics of Texas power plants • Wisconsin Public Service Commission (1999) Docket 05-CE-108 Cost Recovery for Environmental Control Expenses Testimony addressed the time period and allocation considerations relative to collection of the costs for meeting the NOx SIP Call • Arkansas Public Service Commission (1998) Docket 98-141-U Entergy Arkansas Transmission Line Proposal The need for a proposed 161 kV transmission line andthe appropriateness of the selected route for that line • Vermont Public Service Board (1997-8) Docket 5983 Green Mountain Power Rate Case The prudence of Green Mountain Power's decision topurchase power from HydroQuebec under a long-term contract • Pennsylvania Public Utility Commission (1997) Docket A-110150F0015 Application of DQE and Allegheny Power System to Me rge their Systems • Pennsylvania Public Utility Commission (1997) Docket R-00974008/R00974009 Application of Metropolitan Edison Company and Pen nsylvania Electric Company for Approval of their Restructuring Plans • Pennsylvania Public Utility Commission (1997) Docket R-00974104/R00973981 Applications of Duquesne Light Company and West Pen n Power for Approval of their Restructuring Plans • Pennsylvania Public Utility Commission (1997) Docket R-00973953 Application of PECO Energy for Approval of Restruct uring Plan • Pennsylvania Public Utility Commission (1997) Docket R-00973954 Application of Pennsylvania Power and Light for App roval of Restructuring Plan • Pennsylvania Public Utility Commission (1997)

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### 5

Dockets P-00971168 through 1173, 1175, and 1183 Petitions for Approval of Retail Access Pilot Prog rams • New York State Public Service Commission (1997) Dockets 96-E-0909, 96-E-0897, 96-E-0891, 96-E-0900, 96-E-0898 Regulatory principles for distribution utilities u nder restructuring for five major New York utilities • Michigan Public Service Commission (1997) Docket U-11290 The impact of different restructuring approaches o n electricity utility customers; Comments on staff restructuring report • Iowa Utilities Board (1996) Docket NOI-95-1 The impacts of different restructuring approaches o n residential and low income customers • Public Service Commission of Wisconsin (1996) Docket 6630-UR-109 Appropriate rates for industrial interruptible cust omers • Public Service Commission of Wisconsin (1996) Docket 6690-UR-110 Appropriate buyback rates for power from a small hyd roelectric facility • Minnesota Legislature (1996) Testimony before the Senate Taxation Committee Cost and environmental impacts of a proposed cogene ration facility • Public Service Commission of Wisconsin (1996) Dockets 6630-CE-197/209 (Point Beach Projects) Cost-benefit analysis of nuclear plant steam generator repairs • Minnesota Legislature (1995) Testimony before the House Energy Committee Cost and environmental impacts of a proposed cogene ration facility • Public Service Commission of Wisconsin (1995) Docket 05-EP-7 (Advance Plans for Electric Utilities ) Cost-benefit analysis of nuclear plant repairs • Public Service Commission of Wisconsin (1994) Docket 6690-UR-109 Appropriate buyback rates for power from a small hyd roelectric facility

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### 6

• Illinois Commerce Commission (1994) Docket 92-0121 Need for and alternatives to a proposed 138 kV transm ission line • Illinois Commerce Commission (1993, 1994) Docket 92-0221 Need for and alternatives to a proposed 138 kV transm ission line • Public Service Commission of Wisconsin (1992, 199 3) Docket 05-EP-6 (Advance Plans for Electric Utilities ) Cogeneration policies, buy-back rates, and avoided cost methods • Minnesota Legislature (1992) Testimony before the Joint Energy Committee Savings from joint or shared planning among Minnesota utilities • Georgia Public Service Commission (1992) Dockets 4031-U and 4034-U Review of the integrated resource plans of GeorgiaPower and Savannah Electric Power and development of alternative long-range expa nsion plans • Georgia Public Service Commission (1991) Docket 4047-U Rules for the preparation and filing of integratedresource plans • Civil Court, Iron County, Michigan (1991) AGA Connor Forest Products vs Indeck Energy Civil damages related to a canceled cogeneration pl ant • Minnesota Public Utility Commission (1991) Docket E-002/CN-91-19 Economics analysis of dry-cask storage for spent nuc lear fuel at the Prairie Island Nuclear Power Plant and alternative power sources • District of Columbia Public Service Commission (1 991) Case 905 Cost allocation for a large customer of Potomac El ectric Power Company • Public Service Commission of Wisconsin (1990) Docket 9990-EP-100 Load management practices of Wisconsin utilities • Illinois Commerce Commission (1990) Docket 90-0041 Review of the least-cost plans and planning policies of Central Illinois Light Company Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 56

### 7

• Illinois Commerce Commission (1990) Docket 88-0139 Proper use of economic dispatch on the Commonwealt h Edison system in the face of complex coal contracts. Testimony, while prepare d, was not given due to a settlement in the case. • West Virginia Public Service Commission (1990) Docket 89-239-G-PW, et al Analysis of the conditions under which sales promoti on activities should be allowed for gas and electric utilities • Public Utilities Commission of Ohio (1990) Dockets 90-659-EL-FOR and 90-660-EL-FOR Analysis of forecasts and long range plans for OhioPower and Columbus Southern, including alternative long-range expansio n plans for the companies. Testimony, while prepared, was not given due to a s ettlement of the case. Mr. Schoengold also testified in numerous cases as a senior staff witness at the Wisconsin Public Service Commission. • Advance Plans 1 through 5 (Dockets 05-EP-1 through 05-EP-5 -- on numerous occasions between 1977 and 1990) A wide variety of planning issues including forecasts, nuclear vs coal power, alternative energy, load management, transmission pla nning, demand-side management resources, cost allocation, cogeneration, avoided costs, demand-side vs supply-side resources, principles and methods of integrated resource planning, and principles and impacts of sales promotion • Rate Cases (numerous occasions between 1975 and 1990 ) Wisconsin Electric Power Wisconsin Power and Light Madison Gas and Electric Wisconsin Public Service Northern States Power Proctor and Gamble Cogeneration Buyback rates Fuel costs, cost allocations, sales promotion, dema nd-side management, time-ofuse pricing, avoided costs, and incentive regulation • Construction Cases Germantown Combustion Turbines (1976-1977) Pleasant Prairie Power Plant (1978) Tyrone Nuclear Power Plant (1978) Weston 3 (1979) Edgewater 5 (1980) Prairie Island -- Eau Claire Transmission Line (19 81-1982)

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### 8

Point Beach Nuclear Plant Steam Generator Replace ment (1982) Need for power, appropriateness of the utility prop osals, and the comparative economics of alternatives • Generic Investigations Time-of-Use Rates (1978) Load Management (1980) Avoided Cost Methodology (1980) Electric Sales Promotion (1983) Interruptible Rates (1988) Costs and benefits of various proposals, system pla nning impacts of load management, and the impacts of resource alternative s SELECTED REPORTS AND MANUSCRIPTS “Clean Air Task Force Power Plant Technical Information,” Report on Operating Characteristics and Emissions of U.S. Power Plants, 1 999. "Alternatives to the Continued Operation of Commonwealth Edison's Dresden, LaSalle, and Zion Nuclear Power Plants," Report to the Energ y Foundation and the Environmental Law and Policy Center, 1998. "Electric Industry Restructuring in Ohio: Residential and Low Income Customer Impacts," 1997. "Electric Industry Restructuring in Iowa: Residential and Low Income Customer Impacts," 1996. "Integrating Clean Air Policy to Improve Air Quality and Reduce Pollution Control Costs for the Electric Power Industry," Report to the Boston Edison DSM Settlement Board, 1996 (co-author). "Regulation of Distribution Monopolies," Report fro m the California Regulatory Research Project of the Center for Energy Efficiency and Ren ewable Technologies, August 1996 (co-author). "Major Tax Subsidies to Investor-Owned Electric Utili ties and the Cost to the U.S. Treasury -- 1994," Report to the American Public Power Association, 1996. "Explaining Public Power's Low Rates: A Critical Rev iew of the EEI-Sponsored Report: 'Subsidies and Unfair Competitive Advantages Availa ble to Publicly Owned and Cooperative Utilities'," Report to the American Pu blic Power Association, 1996. "Application of the Distributed Utility Concept to t he Boston Edison Company: Creating Additional Value for the Customer," 1995.

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### 9

"Major Tax Subsidies to Investor-Owned Electric Utili ties and the Cost to the U.S. Treasury," Report to the American Public Power Associ ation, 1995. "The Impact of Nuclear Retirements on Commonwealth Edison and the Eastern Wisconsin Utilities," Report to the Environmental Law and Pol icy Center of the Midwest, 1995. "Allocating the Cost of Generating Capacity -- a Di scussion Paper of Interclass Subsidies," 1994. "Energy Efficiency and Renewable Energy -- Opportuni ties from Title IV of the Clean Air Act," United States Environmental Protection Agency, 1994. "Planning for Environmental Constraints on the PJM System," 1993. "Avoided Costs for Electric Utilities -- a Theoretical and Practical Handbook," 1993. "Spare the Stick and Spoil the Carrot: Why DSM Incentives for Shareholders Aren't Necessary," invited chapter in, Regulatory Incentives for Demand-Side Management , Steven Nadel, Michael Reid, and David Walcott, editors, American Council for an Energy Efficient Economy, 1992 (with Steven Kihm and Paul N ewman). "Final Report on the New Orleans Integrated Resource Planning Project," 1992. "Assessment of Tradeable Sulfur Dioxide Allowances Gene rated by Selected Energy Conservation Initiatives," 1991. "Tertiary Sector Energy Use Model for the Tunisian E nergy Planning Project," Resource Management Associates, 1985. "Alternative Electric Power Supply Study -- Update 1 985," Wisconsin Public Service Commission, 1985. "Alternative Electric Power Supply Study for the Yea r 2000," Wisconsin Public Service Commission, 1982.

PRESENTATIONS “Valuing Demand Side Management in a Restructured W orld,” ACEEE National Conference on Energy Efficiency and Reliability, October 2001. "Stranded Costs in Ohio," presentation to the Electr icity Roundtable, 1997.

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### 10

"Distributed Generation on the Boston Edison System, " presentation to the Boston Edison Settlement Board Distributed Utility Workshop, 1995

. "Major Tax Subsidies to Investor-Owned Electric Utili ties," presentation to the American Public Power Association, 1995. "Planning in the Face of Environmental Constraints,"presentation to the Public Utilities Institute of the University of Wisconsin, 1994. "Avoided Cost Methods," presentation to the Pennsy lvania Public Utility Commission, 1993. "Avoided Cost Methods," presentation to the PublicUtilities Institute of the University of Wisconsin, 1993.

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# Exhib it 3 5 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 611 

### Declaration of Michael P. Walsh
1. I am a mechanical engineer, BSME from Manhattan College, June 1966, and I have spent my entire career, approximately 42years , working on motor vehicle pollution control and energy issues. I spent the first part of my career in government service, initially with the City of New York (from 1970 to 1974) and then with the U.S. Environmental Protection Agency (from 1974 to 1981). I served in various capacities with each agency and eventually, as Director of EPA’s motor vehic le pollution control efforts.

2. Since leaving government, I have been an independent consultant advising governments and industries around the world. For example, for several years, I served as the Chairman of the World Bank Advisory Panel to the Mexico C ity Transport / Air Quality Management Program. Subsequently, I served in a similar capacity with the Chinese National Environmental Protection Agency. During the 1980’s, I was an advisor to the U.S. Senate Environment and Public Works Committee during development of the 1990 Clean Air Act Amendments. For many years, I also served as the co

- chair for the U.S. EPA’s Mobile Source Technical Advisory Subcommittee , and I am actively involved in projects in Brazil, Hong Kong, Mexico City, India , and China. Iserved as a member of the National Research Council “committee on the Future of Personal Transport Vehicles in China.” I have also served as the principal technical consultant to the Asian Development Bank regarding a regional technical assistance project, “Reducing Motor Vehicle Emissions in Asia” and served as a peer review expert to the European Commission during its deliberations regarding near zero sulfur fuels. In 2005, I received the MacArthur Foundation’s “genius” award, and this year, I was awarded the China Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 622 

### Friendship Award in recognition of my contributions to controlling mobile source emissions in China

.

3. Since the mid 1980’s, much of my consulting work has been outside of the United States. I have carried out projects for government bodiesin the European Union, Japan, South Korea, Taiwan, China, Hong Kong, Philippines, Thailand, Indonesia (for US AID), Vietnam, Malays ia, Singapore, Sri Lanka, India , Kuwait, Iran, Romania, Russia, Hungary, Poland, Mexico, Brazil, Canada, and Chile. My consulting has included projects for numerous international organizations such as the United Nations Environment Program, the World Bank, the Asian Development Bank, the World Health Organization and the Organization for Economic Cooperation and Development.

4. EPA and NHTSA promulgated the joint final rule, Light

- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards (Light

- Duty Vehicle Rule) in an attempt to coordinate fuel

- economy standards under the CAFE program with greenhouses gas emission standards under section 202(a) of the Clean Air Act (CAA). EPA’s authority to regulate greenhouse gases under section 202(a) is broad and designed to fulfill statutory purposes of protecting human health and the environment . As a result, EPA’s GHG emissions standards achieve greater GHG emission reductions than NHTSA’s CAFE program. Indeed, any claim that the EPA program is redundant of, or coextensive with, the NHTSA program, is plainly incorrect. In fact, roughly 1/3 rd 

### of the Light

- Duty Vehicle Rule’s GHG reductions will be lost if EPA’s vehicle standards are vacated. See75 Fed. Reg. 25324, 25345, 25347 (May 7, 2010). Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 633 

### 5. NHTSA’s CAFE standards are based solely on technologies that improve fuel economy, and as a result, NHTSA cannot consider other potential vehicle improvements or adjustments that reduce greenhouse gases such as mitigation of greenhouse gas pollution associated with air conditioning systems. Recognizing that air conditioners place “ a significant additional load on the engine, thus reducing fuel economy and increasing CO 2 tailpipe emissions,” NHTSA sought to offer air condition credits, but “a 1975 statutory provision made it unfruitful even to explore the possibility of administratively proving such credits for cars. ” 75 Fed. Reg. at 25339 . As such, 

### CAFE standards do not address at all the 5

- 8 percent of GHG emissions that are not CO 2 

### , including nitrous oxide (N2 

### O), and methane (CH 4

### ) as well as emissions of CO 2

### and hydrofluorocarbons (HFCs) related to operation of the air conditioning system. EPA, in contrast, possesses the authority to consider air conditioning improvements when setting its GHG emissions standards, thus allowing the Agency to mitigate CO 2

### associated with the air conditioning load as well as fluorinated gases associated with leaks and venting of the A/C system. GWPRefrigerant is the global warming potential (GWP) for direct radiative forcing of the refrigerant used in the AC system. In the rule, EPA noted that the GWP of HFC

– 134a is 1430, the GWP of HFC

– 152a is 124, the GWP of HFO

– 1234yf is 4, and the GWP of CO 2 

### as a refrigerant is 1. Thus , there is a tremendous potential for reducing the climate impacts of vehicle AC systems solely by shifting to a refrigerant with a lower GWP. In fact, General Motors has already announced its intention to HFO

123yf as a response to the rule. See http://media.gm.com/content/media /us/en/news/news_detail.brand_gm.html/content/Pages/news/us/en/2010/July/0723 _refrigerant

. 

### EPA’s consideration of air conditioning improvements is but one example Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 644 

### of EPA’s broad statutory authority to consider GHG pollution reductions across the full vehicle.

6. The other major way in which EPA standards produce emission reductions beyond those achievable by NHTSA alone stems from the more rigorous, less exemption

-ridden compliance approach applied under the CAA. While EPCA allows manufacturers to pay fines as an alternative to compliance with applicable CAFE standards, EPA’s program does not permit manufacturers to intentionally pay fines in lieu of meeting GHG emissions standards. In past iterations of NHTSA standards, manufacturers have repeatedly opted to pay these fines instead of complying, thus resulting in vehicle fleets that burn substantially more fuel than provided for by the NHTS A standards

. EPA also possesses the authority to enjoin the sale of vehicles that donot conform to CAA standards, while EPCA contains no such similar authority. EPA’s rigorous approach is consistent with the CAA’s statutory purposes to protect the publ ic’s health and welfare. 42 U.S.C. § 7521(a)(1)

.

7. A stay of EPA’s GHG emission standards

– even assuming NHTSA’s rule remains in place

– would result in significantly greater GHG emissions. Assuming only a one

-year stay of EPA’s emission standards, MY 2012 vehicle emissions would increase, not only during the one year when they are new, but over the entire life of the vehicle. In this case, EPA and NHTSA’s analysis estimates that light

- duty vehicle GHG emissions would increase by 35.8 million metric tons of CO 2

### equivalent (mmtCO 2 

### e) over the lifetime of vehicles sold just in model year 2012. See75 Fed. Reg. at 25344, 25347. This increase represents roughly 40 percent of the total GHG emissions reductions attributable to the Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 655 

### Light

- Duty Vehicle Rule in MY 2012. Id. Increased emissions would, in turn, reduce the lifetime discounted benefits associated with the Light

- Duty Vehicle Rule. For MY 2012 alone, EPA estimates that EPA emission standards would account for $17.4 billion in benefits, compared to only $11.2 billion attributable to NHTSA’s CAFE standards. 1 

### 75 Fed. Reg. at 25345, 25347. These significant harms would only be magnified if a stay impacted MY 2013 vehicles as well. In this case, emissions would increase by an additional 41 mmtCO 2 

### e and Americans would lose an additional $6.4 billion in benefits. 75 Fed. Reg. at 25344

- 47.

8. Even if the duration of the stay were limited to one year, staying EPA’s GHG emission standards would likewise have implications for the effectiveness of EPA’s GHG emi ssions reduction program in 2013 and beyond. Projected emission reductions in the later years of the Light

- Duty Vehicle Rule are dependent upon the steps manufacturers take to comply with the rule in 2012. Without these advances, manufacturers will have greater difficulty complying with the MY 2013

- 2016 standards, reducing the likelihood that manufacturers will be capable of achieving the significant GHG emissions reductions in the later portions of the rule.

9. Finally, the adoption of emission standards in the United States for a wide variety of motor vehicle emissions from 1968 to the present resulted in substantial investment by the automobile industry and its suppliers. As a result of this investment, both vehicle manufacturers and their suppliers developed a variety of pollution control technologies. These technologies, in turn, have resulted in dramatic reductions in emissions from

1These estimates assume a 7% discount rate.



### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 666 

### vehicles produced and sold in the United States. Once developed and demonstrated in the United States, these technolog ies have subsequently spread around the world. Some of these technologies involved improvements and refinements to existing combustion engines, while others were add

- on post

- combustion technologies. In some cases, fundamentally new technologies were deve loped and commercialized. One example is the development of electronic controls that optimize air/fuel and spark management systems; these innovations improved combustion and increased power and range while at the same time cutting conventional emissions, reducing fuel consumption, and reducing carbon dioxide emissions. Another example is the catalytic converter technology developed during the 1970s to comply with U.S. Vehicle emissions standards. Similar technology is now used on all new cars produced and sold in Japan, the European Union, South Korea, China, Taiwan, Thailand, Indian, Australia, Brazil, and Mexico. This spread of U.S. emissions control technology has substantially reduced emissions in other countries below what they would have otherwisebeen.

10. Similarly, EPA’s GHG emission standards are likely to result in significant new investments in pollution control technologies and significant research initiatives. Staying the rule would reduce these important investments, delay technology development, and limit the ability of the United States to serve as a leading exporter of GHG emission control technologies worldwide. EPA and NHTSA’s analysis suggest that vehicle manufacturers would invest $3.7 billion in technology development to meet NHTSA’s fuel

- economy requirements in 2012. 75 Fed. Reg. at 25345. The same analysis finds that manufacturers will spend $4.9 billion in technology outlays to comply with EPA’s GHG Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 67Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 68

# Exhib it 3 6 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 69

# Great**~,,()rthern** 

# Power Develor.- • .tent L.P. 173 Cottonwood Road Townsend. tvIT 59644 (406) 266·4360 • Fax (4061 266·4577



## --------

..

_ •. 

## _--_
.. __ 

### ._--

.. _.

January 23. 2008 

## ------_._-_._ ....

# _. ----------

\-15. mona A. Jeffcoat-Sacco**Execuliv~** Secretary :-';orth Dakota Public Sel"\"ice Commission 600 East Boulevard. Dept.408 Bismarck. NO 5850:'·0480 Rc: Letter of Jntenl

- South HeJlrt Project
Dear \15. Jelfcoat-Sacco:
On behalf of South Heart Coal LLC (SHC). Great Northern Power Development LP**(G~PD)** is**pl~d** to notify the North Dakota Public Service Commission (PSC) of its intem to construct and operate a coal-lo-S)nthetic natural gas production facility**(facility~** in southwest 'orth Dakota near the communit) of South Heart in Stark County. That planned facilit: is a component of the South Heart Projc:ct (SHP). which would also include an adjacc=nt suriace lignite mine that would provide raw material to the planned facility, SHe is a wholly O\\;1led subsidiary of**G~'PD.** a private!) held natural resource development company affiliated \\ith Oreal Northern Properties

- the nation's largest private 4:oaJ reserve holder. GNPD. headquartered in Houston. TX. m.aintains offices in Bismarck. :--;D and in To\\nsend and Miles City. MT.
In a previous Jetter to you dated August 18. 2005. GNPD notified the PSC thaI it intended to constnlct and operate a 500 MW lignite-tired steam-ell:(;m<: generating station on the same Sile:o This letter updates and revises that August 18. 2005 notification to retlee. changes to the: fa.ciJit} design. GNPD no longer plans a lignite-fired sleam-electric generating station as a component of the SHP. This**I~tter** and its attachments are: intended to fulfill SHes obligations under Chapter 69-06-03 of Title 69 of the North Dakota Administrative Code to file <it Letter of Intent at least one year prior to tiling an application for a certificate of site compatibHity.
Size and Type of**Fac:ili~'** The planned facility would be a nominal 100 million standard cubic feet per day (MMSCFO I synthetic natura] gas (SNG) production facility. The final design production capacity has not yet been dctennined as process design refinements are ongoing at this writing. However. as currently configured. it would seven British Gas Lurgi gasifiers and associated do\lt'llstream process units to convert lignite from 1M adjacent mine infO pipeline quality natu.ra.l gas.

4 PU-05-527 Filed: 1/23/2008 Pages: 3 Letter Updating and Revising August 18. 2005 Notification
South Heart Coal LLC 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 70

### j\,ls. mona A. Jeftcoat-Sac, Januar;-' 23. 2008 Page 2**~')f:2**

'Ibe facility is intended to serve the natural gas needs of !\otth Dakota..**~orth** Dakota industries. and the people and industries of the Upper Midwest. Map of**Stud~'** Area Figure I attached 10 this letter is a map of the study area sho\\ing the planned .SHP location in**~orth** Dakota (inset). the planned site lor the SHP production facility and the location of the**plann~** lignite mine. Anticipated Construction and Operation Schedule SHe currently plans to begin construction of the fllcilit)· in December 2009 and commence commercial operation in December 2012.
Estimated Cost of Construetion The estimated cost for !he construction of the facility is $1.4 billion. G!'l"PD looks forward to working \\ith the I)SC and its statr to obtain aU required approvals for the SHP production facility and those for the associated lignite mine. Please do not hesitate to contact Rich Voss. V.P. Power Development at 701-223-8783**(Q'Qss;'~gnplp,CQm)** or me at 406- 266-4360 (£SOu!hwick@wpln.com) with any questions pertaining to SHe GNPD. or the SHP. \

### Sin~erely. 

# I

# '~APA~j**=I~\"~\** , , \ ' \.....


### .. chard A. Soulh\\eick Manager

- Permitting & Environmental Attachments

cc: Chuck Kerr. President GNPD Rich Voss. VP GNPD JetT Burgess. Lignite Energy Council 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 71

# Exhib it 3 7 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 72

### STATE OF NORTH DAKOTA
COUNTY OF STARK



### Dakota Resource Council, Gordon Krance, Neil and Laura Tangen, and Frank and Lucy Hurt, Appellants,

vs. Stark County Board of County Commissioners, Appellee. IN DISTRICT COURT SOUTHWEST JUDICIAL DISTRICT

By: ·.·.······ 

### MEMORANDUM. OPINION Case Nos. 08C-282 and 08C-668

The above cases involve identical parties and both involve appeals from the decision of Stark County Commission approving requests for zoning amendments. The first case (Case No. 08C-282),

concerns the request of Great Northen Power Development LP ("Great Northern"), submitted on November 14, 2007, to amend the zoning ordinance and change the zoning from agricultural to industrial for the purpose of operating. a coal mine. The second case (Case No. 08C-668), concerns the request of GTLE Dakota Plant 1, LLC ("GTLE"), submitted on July 14, 2008, to amend the zoning ordinance and also change the zoning from agricultural to industrial with a special use permit for the processing and beneficiation of coal. Great Northern's request was approved and finalized by a resolution

Page 1 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 73

### adopted by the Stark County Commission ("county commission") on April 1, 2008. GTLE's request was approved and finalized by a resolution adopted and finalized by the county commission on September 2, 2008. The above listed Appellants ("Appellants"), include a 

### non-profit corporation concerned with landowner's rights (Dakota Resource Council) and individual landowners who believe they are aggrieved by the decisions made by the county commission. Although there are some differences between the cases, the parties, attorneys, and major issues are the same, and the appeals will be decided collectively in this memorandum. For the reasons discussed below, the decisions of the county commission, in both cases, are reversed and vacated. DISCUSSION This Court does not minimize the power of the Stark County Zoning Board or the Stark County Commission. This court is very mindful of the well established deferential standard of review applicable when considering an 

### appeal from the decision of a local governing body. It has repeatedly been stated that review of decisions of local legislative bodies is very limited under the doctrine of separation of powers. Ci ty of Fargo v. 

### Ness, 529 N.W.2d 572, 576 (N.D. 

### 1995); Gullickson v. 

### Stark County Board of County Commission, 474 

### N.W.2d 89·0, 

### 892 (N.D. 

### 1991); Lindteiqen v. City of Bismarck, 1997 N.D., 

### 6, 565 N.W.2d 47. 

### A reviewing

Page 2 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 74

### court must determine only whether the commission acted arbitrarily, capriciously, or unreasonably in reaching its decision and the
court does not substitute its judgment for that of the commission. Id. The county commission's decision must be affirmed unless the local body acted arbitrarily, capriciously, or unreasonably, or there is not substantial evidence supporting the decision. Tibert

v. City of Minto, 2006 ND 189 8, 720 N.W.2d 921. Leaving the

manner and means of exercising municipal powers to the discretion of municipal authorities implies a range of reasonableness within which the municipality's exercise of discretion will not be interfered with by the jUdiciary. Lindteiqen at 6. Accordingly,

a decision of a local governing body is arbitrary, capricious, or unreasonable only if it is not the product of a rational mental process. Id.
In 

### these cases, this Court is not substituting its judgment for that of the zoning board or county commission and certainly is
not implying that their ultimate decisions were not the product of

a rational decision making process. Rather, the difficulty was in the record on appeal not adequately showing how the facts and law

were relied upon and considered. It is well established that a county commission's failure to correctly interpret and apply controlling law constitutes arbitrary, capricious, and unreasonable conduct. Gowan v. Ward County Commission, 2009 NO 72 , 5, 764

Page 3 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 75

### N.W.2d 425; City of Fargo v. Ness, 551 N.W.2d 790, 792 (N.D. 1996). The issue here is the failure o"f both boards, in both cases,
to follow the law 

### and state the grounds upon which the zoning amendments were approved. More particularly, neither board prepared and included, as part of the record, written findings upon which their decisions were based. N.D.C.C. § 

### 11-33-01. 1 It 

### is
true that the particular provisions of the law in question are relatively new. They became effective as of August 1, 

### 2007. Prior
to the enactment of the new provisions, the Court was left with the task of trying to**dis~ern** 

### from the entire record, the governing body'S rationale for its decision. In 

### many cases this may have been a difficult task. The new law may have, at least in part, been intended to help avoid this difficulty. But, whether or not it 

### would be difficult here, is not relevant.

I N•D• C • C • § 11-33-01 as amended on August 1, 2007 provides: 

### Procedural

County power to regulate property. For the purpose of promoting health, safety, morals, public convenience, gener,al prosperity, and public welfare, the board of county commissioners of any county may regulate and restrict within the county, subject to section 11-33-20 and chapter 54-21.3, the location and the use of buildings and structures and the use, condition of use, or occupancy of lands for residence, recreation, and other purposes. The board of county commissioners and a eounty zoning commission shall state the grounds upon which any request for a :z:oning amendment or variance is approved or disapproved, and written findings upon which the decision is based must be included within the records of the board or commission. The board of county commissioners shall establish zoning requirements for solid waste disposal and incineration facilities before July 1, 1994. The board of county commissioners may impose tipping or other fees on solid waste management and incineration facilities. The board of county commissioners may not impose any fee under this section on an energy conversion**facili~y** or coal mining operation that disposes of its waste onsite. The board of county commissioners may establish institutional controls that address environmental concerns with the state department of health as provided in section 23-20.3-03.1. 

### Page 4 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 76

### requirements in state zoning enabling statutes Uare regarded as mandatory and a substantial failure to comply will render an ordinanoe invalid." Homer Township v. Zimney, 490 N.W.2d 256, 258 (N.D. 1992), 

### quoting C. Rhyme, "The Law of Government Operations"
§ 26.22 (1980). 

### This court declines the invitation to disregard the law and embark on its own expedition in an 

### attempt to weigh the evidence or judge the oredibility of witnesses. These tasks must be done by the zoning board members or county commissioners. They
must collectively make appropriate written findings and state the rationale for their decisions. The county commission**sugge~ted** 

### in its brief that it may be judicious for the Court to stay the matter at hand. They suggest the county commission be allowed to reform its resolution 2

, 

### and prepare, and file the written findings required by N.D.C.C. § 11-
33-01.

2

1.

2.

3.

4. 

### Such a procedure was employed in Gowan y. 

### Ward County

The county commission concedes that through inadvertence or oversight, the Resolution approved by the county commission on April 1, 2008, and the amendment to the Resolution filed on April 16, 2008, excluded the following provisions: That Great Northern Power Development obtain all necessary state approval, licenses and permits relative to the operation of the coal mine. That Great Northern Power Development agree in writing to replace all water lost as a result of damage to water wells caused by their mining operations. That Great Northern Power Development build and maintain necessary access roads to mine and plant, such roads to be built to the satisfaction of the Stark County Commissioners. That Great Northern Power Development will work in concert with law enforcement and emergency responders to facilitate public safety. 

### Page 5 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 77

### Commission, 2009 NO 72, , 10, 764 N. W. 2d 425 and was found acceptable. The problem in these· cases is, that unlike Gowan, an appropriate and timely request to supplement the record was not made. The county commission has made several motions to supplement the record pursuant to N.D.C.C. § 

### 28-34-01, but has never done so in regard to these issues in question here. Further, to allow Appellants to prepare written findings after briefs have been filed and so much time has elapsed, would he unfair and prejudicial to Appellants. This Court declines to order such a procedure at this stage of proceedings. The requirement of written findings upon which the decision is based, is no doubt, not intended to be an idle exercise.:5 The preparation of written findings will help focus board members on the issues to be considered and 

### aid them in making the correct analysis. The record on appeal, in both these cases, contains several examples. The first example is the issue that has been raised in both

cases concerning neighbor approval. The question is whether the

owners of all properties within 200 feet of the property that is the subject of the request for a zoning change must approve before

The law neither does, nor requires, idle acts. Sections**33~11-05,** Subsection 23 N.D.C.C. 

### Page 6 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 78any amendment to the zoning ordinance can be granted. 4 The county commission argues that if necessary consents were not obtained, that such an omission does not prevent approval of a zoning amendment. The county commission suggests that the requirement is intended to insure that adequate notice is given and provide a
straw poll of how affected landowners view the proposal. The county commission suggests that this Court determine that the requirement is not intended to provide landowners within 200 feet

4 Section 9.05 of the Stark County Zoning Ordinance provides as follows: Sec. 9.05 Amendment to the Zoning Ordinance and Map. Any ohange in the ord:i.nance or map requires one public hearing and action by the Stark County planning and zoning board and the county colD1l\issioners. The application procedures are as follows: 1. Acquire application from zoning administrator or county auditor, complete application and re-aubmit to the zoning administrator. 2. The zoning administ.rator shall, forward said application to the county planning and zoning commission at their next regularly scheduled meeting. 3. The planning and zoning commission shall review and discuss the request with the applicant and shall set a date for the public hearing. 4. Notice of the amendment hearing shall be made in the following ways: (a) Once a week for two successive weeks, notice of the time and place of the hearing shall be published in the official paper of the county. (b) The zoning administrator shall notify the applicant of the time and place of said 'hearing. (c) The applicant shall acquire the signatures of the owners of all propert.ies within 200 feet of the property in question indicating their approval of the proposed changes. 5. The planning and zoning commission shall conduct the public hearing and shall forward a recommendation to the county**comm~ssion** regarding the amendment. (Emphasis added.) Page 7 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 79

### with a "veto" of any intended change, and that so long as adequate notice has been given to affected landowners, the failure of an applicant to obtain and provide the necessary consent is not fatal. The county commission suggests that to avoid an absurd result, the Court should interpret and add the words "or disapproval" after "approval" to section 9.05 (4) (c) of the zoning ordinance in order
to accurately implement the intent of the provision. Appellants argue that there is no ambiguity and the language

means what it says. Appellants argue that if the planning and zoning commission members or county commissioners believe that this provision creates a problem, that their solution is to amend the ordinance. Appellants argue that the Court should not interfere or ignore the plain language of the ordinance under the pretext of interpretation of its true meaning. While the -interpretation of a statute or ordinance is a question of law, fully reviewable on appeal, it is a well established principle of law that Court's give deference to the reasonable interpretation of a statute, administrative code, or ordinance by the agency or entity responsible for enforcing it. Consolidated Telephone v. Western Wireless Cooperative, 2001 NO 209 7, 637 N.W.2d 699. Hecker v. Stark County Social Services Board, 527 N.W.2d 226, 234 (N.D. 1994). Americana Healthcare Center v. Dept. of Human Services, 540 N.W.2d 151, 153 (N.D. 1995). It must

Page 8 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 80

### be noted, however; that this principle is most applicable when the subject matter is complex or technical or the agency or entity has special expertise. American Heal thcare Center at 153. See Medical Arts Clinic, P.C. v. Franciscan Xnitiatives, Xnc., 531 

### N.W.2d 289 (N.D. 1995). 

### No deference is called for when the language is clear. Matter of Stone Creek Channel Improvements, 424 

### N.W.2d 894, 900 

### (N.D. 1988). 

### The point is that by preparing the appropriate findings, the requirements of Section 9.05 

### of the zoning ordinance, will have to be considered by the planning and zoning board and county commission. Board members will decide whether the provision needs
to be changed or whether board members believe they can proceed so long as all landowners within 200 feet have been notified and expressed their opinion. The county conunission's interpretation of its own ordinance may be entitled to some consideration and deference by a reviewing court. Because this Court has reversed and vacated the county commission's decisions on other grounds, the issue of neighbor approval need not to be decided at this time and this Court deems it inappropriate to do so. Needless to say, however; the planning and zoning board and county commission should evaluate what is required under Section 9.05 (4) (c) of the zoning ordinance. A second example concerns consideration of the Stark County

Page 9 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 81

### Comprehensive Plan. Appellants argue that the amendments are not in accordance with the Comprehensive Plan. The county commission argues that the amendments do not contravene the Comprehensive Plan. By preparing written findings, the planning and zoning board and the county commission will have to focus on the Comprehensive Plan, and explain their rationale, and why the proposed changes are appropriate. Other examples of why written findings are required, include the other issues raised by the Appellants. The written findings
may explain what evidence members find credible and why the evidence supports the proposed changes. The findings will also show whether the planning and zoning board has considered all of the relevant uses the granted amendments would allow in the newly designated area. The findings may also explain why or how any changes are consistent with the policies and goals of the Stark County Comprehensive Plan. The planning and zoning board and county commission will have the opportunity, should they deem it appropriate, to address or consider in their written findings, any

or all of the issues raised by Appellants in this appeal. Finally, because the decisions are being reversed and vacated by this Court, it is not necessary for the Court to allow reformation of the amended resolution filed April 16, 2008, authorizing the zoning change in Case No. 08C-282. Because of the

page 10 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 82

### dec.ision of the Court and the passage of time since the original applications, as well as the changes in board memberships, the entire process will have to be followed again. Great Northern and GTLE will have to resubmit their applications should they des;i.re to pursue the zoning changes in qu.eation. In summary, for the reasons set forth**above~** 

### the decisions of the cOunty commission approving requesta.for zoning amendments, in both of the above caaes, are reversed and vacated. Appellants shall prepare and submit appropriate papers for entry of judgment accordingly in both cases. Dated this 22nd day of July, 2009.

CERTIFICATE OF SERVICE
A 

### copy of this doc'Ultlent was on July 22nd, 2009, 

### mailed or ha.nd- delivered to: DerriCk·

. Braa.ten AttorneY' at Law 222 

### N. 4th St. Bismarck, NO 58501-4004 

### Tom Henning Stark County State's Atty P.O. 

### Box 130 

### Dickinson, ND 58602-0130



### Page 11 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 83

# Exhib it 3 8 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 8410/28/2010 THO 10,13 FAX 701 227 3185 Shrk County Clerk**~o** 0 2/ 0 34 17612215842 SARAH VOGEL LAW PTNR PAGE 02/02



### STATE 

### OF NORTH DAKOTA COUNTY OF STARK ) Dakota Resource Council, ) 

### Neighbors United, Myron and Nancy Eberts, ) Neil 

### and Laurn Tangen, 

### Brittany Huggins, ) and Frank and Lucy Hurt, ) ) Appellants, ) ) 

## ) ) Stark County Board 

### of County ) 

### Commissioners, ) ) 

### Appellees. ) ) 

### IN 

### DISTRICT COURT SOUTHWEST JUDICIAL DISTRICT



### Case No.: / tJ{!. , 

### :2/5

NOTICE OF APPEAL



### FILED 

## MAY - 6 2010
D1STRI(:TCOlJRT. 

# sfAfKco

NOTICE IS HEREBY GIVEN that Dakota Resource Council, 

### Neighbors United, Myron 

### and NanJ;:y Ebrns, Neil and Laura 

### Tangen, Brittany Huggins, and Frank and Lucy Hurt hereby appeal to the Stark County 

### District Court from the 

### decision of the Board of County Commissioners, Stark County, North Dakota, made on 

### April 6, 2010, 

### approving the application for a zoning amendment 

### with 

### special use permits submitted by South Heart Energy Development
LLC and South Heart Coal LLC for 

### properties listed 

### in the application. 

### Dated this 

### 6th day 

### of May, 2010. sARAH VOGEL LAW PARTNERS

# B~~'94» 222 North 4 1h Street 

### Bismarck, NIl 58501-4004 Tell'lphone: 

### 701-221-2911 Fax: 701-221-5842 Attorneys for Appel/ants



### / ' 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 85

# Exhib it 3 9 Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 8610/28/2010 THU 10: 22 FAX 701 227 3185 Stark County Clerk

Introduction:



### , South Heart Energy Development LLC (SHED) and South Hcart Coal LLC (SHC) propose to

construct and operate a coal gasification facility and adjacent surface coal mine, respectively on approximately 7,780 acres in Township 139 North Range 98 West (T139NR98W) and on. an additional 320 

### acres in 

### T138NR98W. The area proposed for development is more specifically described in Attachment 

### I and illustrated in 

### Figure 1. 

### Togcfuer the gasification plant and the surface coal mine are referred to here as 

### the South Heart Project (project).
In order to allow the Project development to proceed as proposed, SIrED on behalf of itself and SHC, requests that the Stark County Commissioners approve a zoning change for the area described in Attachment 

### 1 and illustrated in Figure 

### I that would create an Indu>1rial district within those boundaries and that the Projcct bc issued pennits for the following conditional uses:**~027/034**



### Chemical fertilizer plant;

• Coal gasification or conversion plants;

• Coal mines;

• Electric power generating plant

• Liquid, gas bulk, explosivc, highly compressed or other hazardous material storage;

• Mineral and other substance exploration or excavation and mining in 

### accordance with the provisions of Sec. 6.1 0;



### • Solid waste 

### landfill;

• Manufacture of hazardous products; and

• Manufacture of odorous products. Projcct Overview: 

### The Project, 

### in its initial3-gasificr configuration, would gasify coal and produce the following products for sale (amounts are approximate);



### • 170 MWe ofhydrogcn-based electric power; • 2 million tons per year of**CO~** 

### for use in enhanced oil recovelY; and • 1 

### million tous per year sulfuric acid for use in fertilizer production and other manufacturing processes. The Coal Mine (Mine): The SHC mine plan has been designed to provide approximately 2.4 million tons of coal per year to supply the SHED gasification plant (plant). At that rate, coal included 

### within thc boundaries of the current minc plan would supply the Plant for approximately 30 

### years. Figure 1 shows thc proposed boundaries ofthe current mine pits. Coal would be delivered from mine to th.e plant via haul trucks over a dedicated Mine haul road. The Mine haul road would be entirely within

Pagc I of6 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 8710/28/2010 THU 10,22 FAX 701 227 3185 Stark County Clerk**~028/034**

\

.• \ f



## -\ 

# )' 

# ! the project property boundaries and would not intersect any county roads open to public travel. The Mine haul road will terminate at the Plant. Coal will be mined using scrapers to remove topsoil, bulldozers to remove overburden, shovels and front-end loaders to remove coal and to load haul trucks. The Mine does not cUITently plan to incorporate a dragline. 

### AB currently designed, under nonnal operations the Mine will operate one 8-hour shift five days per week, year-round. During the life of the mine certain existing county roads will have to be temporarily closed to public use. Others wiU 

### be re-routed rather than closed. SHC 

### is committed to minimizing the need for road closurcs a1td will endeavor to assure that necessary closures are kept as short as possible. SHC will focus primarily on public safety and maintenance of emergency services in the development of the 

### project t1'affic plan but will also take public convenience into account. SHC has committed to submit a life-of-project tramc plan to the Stark County Road Superintendent and Stark County Commissioners for approval before commencing project construction. The Gasification Plant <Plant): The Plant would be sited in Sections 33 and 34 (Figure I shows approximate location). TI,e main access route to the plant will be 122 nd 

### Avenue (beginning at the Old Highway 10 intersection) to 42 nd 

### Street and then west on 42 nd 

### Street apprOll:imately % 

### of a mile to the main entrance gate. The plant will be surrounded by a chain-link fence with two primary gates at thc front (south) a1Jd back (north) of the plaJtt. The front gate will be the main cntrance to the plant site off of 42 00 

### Street and will be guarded around thc clock. The back gate provides access between the Plant and the Minc 'md will also be continuously guarded. As currently designed, the PlaJtt would receive run-of-mine coal (as-received coal) at the baek gate via Mine haul trucks. Haul trucks will dump coal into the primary crusher, from which it will be conveyed either directly to dowo..<;tream process umts or to intermediate storage. The first downstream process unit would be the beneficiation unit Using technology developed by GTL Energy, the coal will he dried and compressed into briquettes, after which it will be conveyed either directly to downstream process units or to intermediate storage. From the beneficiation unit, the briquettes would be introduced to the gasifiers 

### in the gasification unit where the coal would be converted to an irltermediate product called raw syngas. The raw syngas would be routed directly (no intennediate storage) to a series ofdowlJstrcaro clean-up processes that would remove sulfur, mercury, carbon dioxide and other impurities.

Page 2 of6 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 8810/28/2010 THU 10,23 FAX 701 227 3185 Stark County Clerk**~029/034**

The clean syngas would then be routed directly to another process unit that would convert the clean syngas into hydrogen. The hydrogen would be routed directly to a combustion turbine as fhe! for that engine. The combustion turbine would drive a generator that would produce electricity. Using hydrogen as fuel for 

### the combustion turbine is intended to significantly reduce the CO 2 emissions associated with electric power generation. The use of hydrogen as fuel for the turbine would result in significantly lower**C~** emissions than that emitted from a natural gasfired turbine of the same size. Gasification Plant By-Products: The sulfur removed from the raw syngas would be routed directly to a sulfuric acid plant which would convert the sctlfur to 93% sulfuric acid for sale. The plant wOLtld include tankage for storage of sulfuric acid. The mercury removed from the raw syngas would be recovered, temporarily stored and ultimately shipped off-site for disposal in accordance with all local, state and federal laws and regulations. The carbon dioxide (C0 2 ) would be routed directly to off-site customers via pipeline for use in enhanced oil recovery operations in the Williston Basin. As designed, the process would capture over 92% of the carbon contained in the coal as C02 for use in nearby oil t1elds. The gasillcation process produces a by-product called slag that is produced from the non-carbon components ofthe coal. The produced slag is a granular, glass-like,**non-~ardolls** material. SHED expects to eventually markct the produced slag for beneficial uses which could include use 

### as concrete aggregate, as raw m.aterial in Portland cement manufacturing and/or as road base. However, until a beneficia! nse has been identified, SHED would manage the slag as a solid waste. The slag would be 

### managed in 

### an onsite landfill in accordance with the applicable local, state and fedcrallaws and regulations. Water Use: The mine pits 

### will encroach into the local shallow aquifer that exists above the coal seam. Nearby wells may be impacted. That impact may range from a small Urop in static water level to a dry wcll. SHe has implemented a well survey program and solicited well owners within a 2- mile radius of the mine property boundary to volunteer for the program_ Those solicitation.., have been in the form ofletters and telephone cpJls to private well owners. Unfortunately, for a variety of reasons the well swvey program has not enjoyed 100% participation. Nevertheless, 

### SHC continues to encourage well owners to participate via letters and has a local technician available to 

### survey wells upon well-owners request. As necessary to allow mining, water would be pll.'11ped from the pits to on-site retention ponds. The retention ponds would se1ve as pollutiolJ control measures and as storage. As pollution control measures, 

### the ponds prevent 

### mine "'ater from reaching and potentially polluting local streams. As storage, the ponds serve as a reservoir for water that the Mine will 

### use to control fugitive dust from pit roads, hall! roads and other mining activities.

Page 3 of6 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 8910/28/2010 THU 10,23 FAX 701 227 3185 Stark County Clerk

The project intends to obtain watcr needed for the Plant from the Southwest Water Authority via thc Southwest Water Pipeline. No groundwater will be used to serve thc plant. In fact, except for the water pumped from the mine pits and used for dust control in the 1nine, no groundwater will be used by the project. Projcct-related Linear Facilities: Thc projcct will require the construction and operation of several linear facilities including;

• CO 2 pipelines to transport captured C02 from the plant to the oil fields;

• Electric transmission lines to/from transmit power from the plant to/from a nearby substation;

• Water pipelines to transport water to the plant; and Natural gas pipeline to transport natural gas to the plant. Alternative routes for those linear facilities are currently being evaluated.
Conditional Use Permits: As described earlier, the Project concludes that in addition to !he requested zoning district changes, it will require certain conditional use permits. Those conditional uses for which the Project seeks permits and their corresponding codification in Section 5.08-B of the Stark County Ordinances are;**~030/034**

4. Chemical fertilizer plant; 5. Coal gasification or conversion plants; 6. Coal mines; 

### 8. Electric power generating plant 10. Liquid, 

### gas bulk, explosive, highly compressed or other hazardous material storage; 11. Mineral and other substance exploration or excavation and rnining in accordance with the provisions of Sec. 6.10; 23. Solid waste landfill; 24. Manufacture of hazardous products; and 25. Manufacture of odorous products. 4. Chemical fertilizer plant: The project concludes that the produclion of sulfuric acid may fall into this C<Jnditional use category and requests 

### this conditional use permit solely on that basis. Thc project anticipates that the produced sulfuric acid will be used in off-site manufacturing processes to produce agricultural fertilizers aJld requests tbis conditional use permil in order to allow compliant construction and operation of the sulfuric acid plant.

Page 4 of6 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 9010/28/2010 THU 10,23 FAX 701 227 3185 Stark County Clerk

5. Coal gasificaticl'l or conversion pla ... flts: The project would includc a plant that would convert coal to several products via gasification. The projcct requests tillS conditional use permit in order to allow compliant construction and operation of the gasification plant.
6. Coal mines: The project will include a surface coal mine. The project requests this conditional use permit in order to allow compliant construction and operation of the mine. 8. Electric power generating plant: [J031/034

Thc project will include an electric power generating plant. The project requests this conditional use permit in order to allow compliant construction and operation of the power plant. 10. Liquid, gas bulk. cxplosive, highly compresscd or other hazardous material storage; The project will include the storage of anhydrous anunonia, sulfuric acld, methanol, 

### highly compressed C02

- all of which are considered "liquid, gas bulk, explosive, highly compressed or other hazardous material storage." The project requests this conditional use pernlit to allow complaint construction and operation of project components that requirc thc usc of such materials. 11. Mineral and other substance explnration or excavation and mining 

### in accordance with the provisions of Sec. 6.1 0; The project will inolude a coal mine. Although the coal mine may be appropriately authorized by the Industrial district conditional use 6 - Coal Mines, the project reqLLests this conditional use pcrmit as a precautionary mcasure. 21. Solid wastc landfill: The project proposes to incllL(le an on-site solid waste landfiJl for thc disposal of certain construction waste and produced slag. The project requests this conditional use permit to allow compliant construction and operation of that landfill. 22. Manufacture of hazardous products: Thc project would produce sulfuric acid, a hazardous material, for sale. The project requests this conditional use permit in order to allow compliant construction and operation of the sulfuric acid plant.

Page 5 of6 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 9110/28/2010 THO 10,24 FAX 701 227 3185 Stark County Clerk

23.**Manuf"ct'.:r~** 

### of odorous products: [J032/034

The project would produce sulfuric acid. The sulfuric acid is 

### a strong irritant 

### and some intermediate sulfur compounds created during the manufacturing process have an odor characteristic of rotten eggs. Although the plant will be designed to prevent the release of those compounds to the atmosphere, upset conditions could result in temporary, shorl-ttmn off-site odors. The project requests this conditional use pemtit 

### ill order to allow compliant COl15truction and operation ofthe sulfuric acid plant 

### · P ., .v

# V Project ermltting: • ;L/(r-'**~""l(.1** 

# ,. SHED and SRC will obtain all ofthe local, state and federal approvals

### ~uired for the compliant construction and operation of the Project. Those approvals and the corresponding permitting authority(s) include but are not limited to:

• PSD air quality pennit-to-construct (NO Dept of Rea Ith);

• Surface coal 

### mining permit (NO Public Service Commission);

• Gasification Plant Siting Certificate (NO Public Service Commission);

• Corridor Siting Certificate for COz pipeliI:le, electric power transmission line and natural gas pipeline (ND Public Service Commission);

• Wetlands Disturbance (Army Corps ofEngilleers);

• Water discharge permits (ND Dept. 

### of Health); and Water Appropriation (NO State Water Commission).
Other permits, not included 

### in the list above, will 

### be obtained as necessary to comply with 

### all local, state and federal laws and regulations.

Page 

### 6 of6 

### Case: 10-1092 Document: 1274850 Filed: 11/01/2010 Page: 92