### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 10-60934

LUMINANT GENERATION CO. LLC, ET AL., Petitioners,
v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

On Petitions for Review of a Final Rule of the United States Environmental Protection Agency

Before STEWART, Chief Judge, and BENAVIDES and GRAVES, Circuit Judges. CARL E. STEWART, Chief Judge: IT IS ORDERED that the opinion previously filed in this case, Luminant Generation Co. L.L.C. v. U.S. E.P.A. , No. 10-60934, 699 F.3d 427 (5th Cir. Oct. 12, 2012), is WITHDRAWN. The following opinion is substituted therefor: U n i t e d S t a te s C o u rt o f A p p e al s F i f t h C i rc u i t 

### F I L E D March 25, 2013 Ly l e W . Cay ce Clerk Case: 10-60934 Document: 00512185307 Page: 1 Date Filed: 03/25/2013No. 10-60934

Two sets of p etitioners, hereinafter referred to as “Industry Petitioners” 1

a n d “Environmental Petitioners,” 2 s eek review o f t he United States Environmental Protection Agency’s (“EPA”) f inal r u le partially approving and partially disapproving the most recent revision to Texas’s State Implementation Plan (“SIP”) submitted by the T exas C ommi s s i on on Environmental Quality (“TCEQ”) pursuant to the Clean Air Act (“CAA” or “the Act”), 42 U.S.C. § 7401 et s eq . 3 Because we find that the EPA did n ot act arbitrarily or capriciously, or contrary to law, o r in e xcess of its statutory authority, in its partial a pproval and partial disapproval of Texas’s SIP revision, we deny both petitions for review. I. BACKGROUND A. Statutory Background T h e CAA “establishes a comprehensive p rogram for c ontrolling and improving the nation’s air quality through state and federal r egulation.” BCCA Appeal Grp. v. EPA , 355 F.3d 817, 821-22 ( 5th Cir. 2003). Under t he CAA, the EPA is responsible for identifying air pollutants and establishing N a tional Ambient Air Quality Standards (“NAAQS”) which specify maximum allowable levels of certain types o f pollutants in the air. Id

. a t 822; 42 U .S.C. § § 7408- 7409. The states are then permitted, “within limits established by [the NAAQS], to enact and administer their own regulatory p rograms, structured to m eet their

own p articular needs.” Hodel v. Virginia Surface Mining and Reclamation Ass’n ,

1 Lum inant G eneration Co. LLC, O ak Grove M anagem ent Co. LLC, Big B row n Pow er Co. LLC, and Sand ow P ow er Co. LLC.

2 E nvir o n mental Integrity Project, Sierra Club, E nvironm ent Texas Citizen Lobby, Inc. , Citizens f

or Environm enta l J u stice, Texas Environm ental Jus tice Advocacy Services , Air Alliance Hous ton, and C om munity In- Pow er and D evelop m ent A s s ociation.

3 Texas O il & G as As s ociation of Bus ines s , Texas As s ociation of M anuf acturers , and Texas Chem ical Council have f iled a brief in s up p ort of the EPA’s p artial ap p roval of Texas ’s SIP. The state of Texas has f iled an am icus brief in sup p ort of Texas ’s SIP, as s ubm itted , in its entirety. 2 Case: 10-60934 Document: 00512185307 Page: 2 Date Filed: 03/25/2013No. 10-60934

452 U.S. 264, 289 (1981). T his federal-state partnership i s often described as “cooperative federalism.” Id

. To comply with its responsibilities under the Act, each state must create and administer a SIP which provides f or the “implementation, m ai nt e n ance, and enforcement” o f NA

A QS by setting “emission limitations and other control measures.” 42 U

. S

. C

. § 7410(a)(1)-(2). The states have “wide discretion” in formula t i n g their SIPs, U nion Elec. Co. v. EPA , 427 U.S. 246, 250 (1976), including the “broad authority to determine the methods a nd particular control strategies they will use to achieve the s tatutory requirements.” B CCA Appeal G r p . , 3 5 5 F.3d at 8 22 (citing Union Elec. Co. , 427 U.S. at 266 (“So long a s national standards are m et, the state may select w hatever mix of control devices it d esires.”)). O n c e a s tate c reates or revises a SIP, i t is submitted to t he EPA for review. 42 U.S.C. §§ 7410(a)(1),(k)(1)-(2). The Act confines the EPA to the ministerial function of reviewing SIPs for consistency wi t h t h e Ac t ’s requirements. Id

. at § 7410(k)(3). T he E PA must approve the plan in its entirety if it meets t h e a p plicable requirements of the Act. Id

. a t § 7410(k)(3); F la. P ower & Light Co. v. Costle , 650 F.2d 579, 587 (5th Cir. 1 981). I f o nly “a portion of the [SIP] meets all t he applicable requirements of [the Act],” the EPA “may approve the [submittal] in part and disapprove the [submittal] in part.” 42 U.S.C. § 7410(k)( 3 )

. The EPA m ay also provide “conditional approval” of a S I P, “based o n a c ommitment of the State to adopt specific enforceable measures by a date certain, but not later than 1 year after the date of approval of the plan revision.” Id . at § 7410(k)(4). St ates must periodically revise their SIPs a s necessary to ensure continuing c ompliance with c urrent NAAQS. Id

. at § 7410 ( a)(2)(H). The EPA must r eview and approve or disapprove a SIP revision w i t hin 18 months of submission. I

d

. at §§ 7410(k)(1)(B),(2)-(3). The EPA s h all di s a p p r ove a SIP revision onl y if “the revision would interfere with a ny applicable r equirement
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concerning attainment” o f the NAAQS “or any other applicable requirement” of t h e Ac t

. Id

. at § 7410(l). If the revision meets all of the applicable CAA requirements, t h e E PA “shall approve such submittal as a whole.” Id

. at § 7410(k)(3). Once approved by the EPA as meeting the requirements of the Act, the S I P, or the approved portion thereof, is inco r p o r a ted by reference into the Code of Federal Regulations. See 40 C.F.R. § 52.02 (2011)

. The CAA provides for shared enforcement of SIPs. A state must include in its SIP, a “program to provide for the enforcement” o f the plan. 42 U.S.C. § 7 410(a)(2)(C). The program must provide the state p ermitting authority power to “recover civil penalties in a maximum amount of not l ess than $10,000 per day for each violation.” Id

. at § 7661a(b)(5)(E). Additionally, the EPA has t h e power to enforce a S I P b y commencing “a c ivil action for a permanent or temporary injunction, or to assess and recover a c ivil penalty of not more than $25,000 p er day for e ach violation, or both[.]” Id

. at § 7413(b). Such suit may be brought in district court, “and s uch court shall h ave jurisdiction to restrain such violation, to require c ompliance, to assess such civil penalty, to collect any fees owed to the United States

. . . and to award any other appropriate relief.” Id. Finally, any person may commence a civil action on his own behalf against any person who is alleged to have v i o l ated an emission standard or limitation in a SIP. Id

. at § 7604(a)

. A citizen suit may be brought in district c ourt, which shall have jurisdiction to enforce such an emission standard or limitation and to apply any appropriate civil penalties. Id. In assessing the amount of a civil penalty in either an EPA enforcement action or a citizen suit, the court must consider the penalty assessment criteria outlined in section 7413(e), i.e. , the s i ze of the b usiness, the economic impact of the penalty on the business, the violator’s full compliance h istory and good faith efforts to c omply, the duration of the violation a s e stablished by any credible evidence (including evidence o ther than t he applicable test method), payment by

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the violator of penalties previously assessed for the same violation, t h e economic benefit o f noncompliance, the seriousness o f the violation, and “other factors as justice may require.” Id . at § 7413(e). B. Facts and Proceedings In i t s f inal rule 4 which became effective on January 10, 2011, the EPA partially approved and partially disapproved the m ost recent revision to Texas’s SIP which was submitted by the TCEQ in 2006. 5 The portion o f the SIP at issue creates an affirmative defense against civil p enalties for e xc e ss emissions during both p lanned and unplanned startup, s hutdown, and maintenance/malfunction (“SSM”) events. T he EPA approved the portion of the SIP revision providing an affirmative defense a gai n s t civil penalties f or unplanned SSM events and disapproved the portion of the S IP re v i sion providing an affirmative defense against civil penalties for planned SSM events. See 75 Fed. Reg. 68,989, 68,991. Since the creation of its first SIP in 1972, Texas has provided for special treatment of SSM activity. See T ex. SIP § XIV, Rule 12 (Jan. 2 6, 1972) (providing emissions during “upsets” and “start-up or shutdown

. . . may not be required to meet the allowable emission l e vels”). The r evised SIP submitted by Texas in 2000 provided t h a t e missions from SSM activity were “exempt from compliance with a i r e m ission limitations established in permits, rules, and orders of the commission” so long as the owner or operator complied with certain reporting, record ke e p i n g, and operational requirements. See General Air Quality Rules, 25 Tex. Re g
. 6 7 2 7 , at § 1 01.11(b) (July 14, 2000). Further, the exceptions were l imited t o S SM emissions that “could not have been prevented

4 Ap p roval and Prom ulgation of Im p lem entation Plans ; T exas ; Exces s E m is s ions D uring Startup , Shutd ow n, M aintenance, and M alf unction Activities , 75 Fed

. R e g
. 68, 989 ( N ov. 10, 2010)

.

5 30 Tex. R eg. 4090 (July 15, 2005) ( p rop os ed) , a mended by 31 Tex. Reg. 422 (Jan 20, 2006)

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through planning and d esign,” that “were not p art of a recurring pattern,” and that did “not cause or contribute to a condition of air pollution.” See id. The EPA ap p r ov e d th e 2 0 0 0 S I P r evi s i o n , d e t e rmining that the e xemptions for emissions during SSM activity contained in the plan met the requirements of the CAA. See Approval a nd P r o m u lgation of Implementation Plans; Texas; Exc e s s Emissions D uring Startup, Shutdown, Malfunction and M aintenance, 65 Fed. Reg. 70,792 ( Nov. 2 8, 2000). I n its approval, the EPA noted that “under the [CAA], all excess emiss i o n s d uring SSM e pisodes are violations of applicable emission limitations [however,] we believe it would be inequitable to penalize a source for occurrences beyond the company’s control. A source has the burden of proving that the excess emissions were due to cir c u m s t ances beyond the control o f the operator or the owner.” I d. at 70,793. Additionally, the E PA found that the 2000 SIP r evision comported with past EPA guidance contained in its policy statements rega r d i n g e missions from SSM activity. Id. a t 70,792–93. These policy statements can be found in a collection o f memos that w e will refer to as the “Bennett Memos” (1982 6 & 1 983 7) the “Herman Memo” (1999 8). Id

. at 70,792.

6 M em . of K athleen B ennett, “Policy on Exces s Em is s ions D uring Startup , Shutd ow n, M aintenance, and M alf unctions ” ( Sep t. 28, 1982) ( p rovid ing that “it is reas onable to exp ect that caref

ul p lanning will elim inate violations of em is s ions lim itations d uring [ s tartup and s hutd ow n] p eriod s. . . . [ s ] i m ilarly, s ched uled m aintenance is a p red ictable event w hich can be

. . . m a d e t o c oincid e w ith m aintenance

. . . or other s ource s hutd ow ns . Cons equently, exces s em is s ions during p eriod s of s ched uled m aintenance s hould be treated as a violation[

. ] ”)

.

7 M em . of K athleen Bennett, “Policy on Exces s Em is s ions D uring Startup , Shutd ow n, M aintenance, and M alf u n c t i o ns ” ( F eb. 15, 1983) (recognizing that, in certain situations , exces s em is s ions d uring startup and s hutd ow n “need not be treated as a violation if the s ource can s how that the exces s es could not have been prevented

. . . and that byp as s ing w as unavoid able to p revent los s of lif

e, p ers onal injury, or s evere p rop erty d am age. ”)

.
8 M em . of Steven A. Herm an, “State I mp lem entation Plans ( SIPs ) : Policy Regard ing Exces s Em is s ions D uring M alf unctions , Startup , and Shutd ow n” ( Sep t. 20, 1999) ( p rovid ing that “becaus e exces s em is s ions might

. . . p revent attainm ent or interf ere w ith m aintenance of [ NAAQ S] , EPA view s all exces s em is sions as violations

. . . . N evertheles s , . . . im p os ition of a p enalty f

or s ud d en and unavoid able m alf unctions

. . . m ay not be ap p rop riate. ”)

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Additionally, in accordance wi t h the EPA’s r e quest, 28 Tex. Reg. 5787, 5787 (July 25, 2003) (proposed), Texas’s 2 004 S IP revision omitted the language indicating t h at SSM emissions were “exempt,” and substituted language that such emissions would be “subject to an affirmative defense.” 29 Tex. Reg. 118, 120 (Jan. 2, 2004) (final). F urther, as a r e sult of changes i n state law, Texas also distinguished between emissions r esulting f r o m planned SSM a ctivity and all other emission events and proposed providing an affirmative defense for these emissions. Id. at 134 (§ 1 01.222(b),(c))

. The proposed affirmative defense for scheduled SSM activity required the o wner or operator p rove “th e p eriod of unauthorized emissions

. . . c ould not have been prevented through planning and design.” Id. at 134 (§ 101.222(c)(2) )

. All other emissions w ould only be protected if they were “caused by a sudden breakdown of equipment or process, beyond the control of the owner or operator.” Id

. at 134 ( § 101.222(b)(2)). The proposed rules stated that the affirmative def e n s e p r ovision would expire on June 30, 2005. Id

. at 135 (§ 101.222(h)). The EPA ultimately g ave T exas’s 2004 SIP revision “limited approval.” See Limited Approval a n d P ro m u l g ati o n o f I m p lementation Plans; Texas; Excess Emissions During Startup, Shutdown and Malfunction Activities, 7 0 Fed. Reg. 16,129 (Mar. 30, 2005). The EPA explained that “the rule improves the SIP and is largely consistent with the relevant requirements of the [CAA]” but noted that the provisions allowing f or an affirmative d e f

e n s e for scheduled SSM activity

were “ambiguous, at b est, and inconsistent with the [CAA], at worst, and could create problems w ith enforcing the underlying applicable emission limits.” 70 Fed. Reg. at 16,130. The EPA stated as follows:

The EPA’s i nterpretat i on of [§ 7410] allows an affirmative defense to be a sserted against civil penalties

. . . f

or excess emissions a ctivities whic h a re s u dden, unavoidable o r c a u s e d b y c irc u m s t a n c e s b e yo n d the control of the owner or operator

. . . . However, EPA

7 Case: 10-60934 Document: 00512185307 Page: 7 Date Filed: 03/25/2013No. 10-60934 has determined tha t i t is inappropriate to provide an affirmative d efense for excess emissions resulting from scheduled maintenance . . . .
Id. at 16,131. N e v e r theless, the EPA approved t h e 2004 provision, noting section 101.222's expiration date of June 3 0, 2005, b ut in doi n g s o , the agency clarified that “if Texas revises its rules to include an affirmative d e f e n s e f o r
excess emissions in the Texas SIP in the future, the State should ensure . . . that the affirmative defense does not apply to excess emissions fro m s c h e d uled maintenance a ctivities

. . . .” I d

. T he EPA then granted a request from Texas to extend the affirmative defense’s expiration date to June 30, 2006. See Limited Approval and Promulgation of Implementation Plans; T exas; Excess Emissions During Startup, Shutdown a nd Malfunc t i o n Activities, 70 Fed. Reg. 50,205, 50,206 (Aug. 26, 2005). On January 23, 2006, Texas submitted the revised SIP that is the subject of this appeal. The 2006 SIP revision provides in part: (1) For any emission deemed exce s s i v e b y t h e s t a t e executive director, no a f f irmative defense would be available. See 30 T ex. A dmin. Cod e § 101.222(a). (2) F o r “ u n p l a n n e d m a i n t e n a n c e , s t a r t u p o r s h u t d o w n a c t i v i t y , ” a n affirmative d efense against civil penalties would be available if the “owner or oper a t o r proves . . . all” of t he l isted criteria, including that “(2) the periods of unauthorized emissions from unplanned [ SSM] acti v i t y could not have b een prevented through planning and design,” and “(3) the unauthorized emissions from unplanned [SS M ] activity were not part of a r ecurring pattern , ” and that t he “(9) unauthorized emissions did not c a use or c ontribute to an exceedance o f the NAAQS

. . . .” See 30 T e x . Admin. Code § § 1 0 1

. 1 (108), 101.222(c); see a lso i d. §§ 101.1(109), 101.222(b) (providing elements for “upset events”). (3) F o r “ [p]lanned maintenance, s t artup, o r s hut d o w n a c tivity , ” a naf f ir m ativ e defense against civil penalties would be available i f the “ o wner or operator proves all” o f t h e criteria listed under the section for unplanned SSM activity, including that “(2) the periods of unauthorized emissions from

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u n p la n n e d [ S S M] a c tivity c o uld not have been prevented through pl a n ni n g and design,” that “(3) the unauthorized e missions from unplanned [SSM] activity were not part o f a r ecurring pattern,” and t hat “(9) u nauthorized emissions did not c ause or c o n t r ib ute to an exceedance of t h e NAAQS

. .

. . ” See 3 0 Tex. Admin. C ode § 101.222(h) (emphasis a dded). The affirmative d efense for planned SSM activity would expire after, at most, two years. See id. § 101.222(h)-(i). Thereafter, a s mentioned above, the EPA partially a pproved and partially disapproved the revisions. 75 Fed. R eg. at 68,991. In f inalizing its approval of the portion of the SIP revision containing a n affirmative defense for unplanned SSM activity, the EPA stat e d th at s e c ti o n 1 0 1

. 222(a)-(g) “ provides an affirmative defense for certain emission events that is consistent with the i nterpretation of the Act as s et forth in our guidance documents.” Id

. at 68,990. The EPA explained that i t h a s “recognized that sources may, despite good practices, be unabl e t o m e e t e m i s s i o n li mitations during periods of s t artup a nd shutdown and, that despite good operating practices, sources may suffer a malfunction due to events beyond the control of the owner or operator.” Id. at 68,992. The EPA then finalized its disapproval o f s e c t i o n 101.222(h)-(j), which contained an affirmative defense f or p lanned S SM acti v ity, 75 F ed. Reg. at 68,991, relying on its past r easoning that “[b]ecause these events are planned,

we believe that sources should be able t o comply with applicable emission limits during these periods of time.” 75 Fed. Reg. 26,892, 26,896 (May 13, 2010). The EPA further stated that it disa p p r o v e d of the affirmative defense for planned startup and shutdown activity contained in the SIP revision because it found the provisions for such activity to be nonseverable from t h o s e for planned maintenance. 75 Fed. Reg. at 68,991. Environmental Petitioners seek review of the EPA’s final rule approving the portion of the SIP revision providing a n affirmative defense against civil penalties for excess emissions resulting from unplanned SSM activity. Industry

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Petitioners seek review of the EPA’s final rule disapproving the portion of SIP

r e vision providing an affirmative defense against civil penalties for exces s emissions resulting from planned SSM activity. I I. STANDARD OF REVIEW P u rsuant to 4 2 U.S.C. § 7607(b), this court has jurisdiction to hear a petition for review of the E PA’s approval of a SIP u nder 42 U

. S.C. § 7 410. A petition t o review the EPA’s approval or di sapproval of a SIP is governed by the Administrative Procedure Act. See 5 U

. S.C. § 7 06; BCCA Appeal Grp. , 355 F.3d at 824. The EPA’s decision is valid unless it is “arbitrary, capricious, a n abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Agency action that is in excess of s tatutory authority w i ll also be set aside. I d

. at § 706(2)(C). “An agency rule is a rbitrary and capricious ‘if t he a g e n c y h as relied on factors which Congress has n ot intended it to consider, entirely failed to consider

an important aspect of the problem, o ffered an explanation for its decision that

runs counter to the e vidence before the agency, or is s o implausible t hat it could not b e ascribed to a difference in view or the product of agency expertise.’” Tex. Oil & Gas Ass’n v. U

.S. E.P.A. , 161 F.3d 923, 933 (5th Cir. 1998) (quoting Motor V e h i c l e Mfrs. Ass’n v. S tate Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983 ) )

. “If the agency’s reasons and policy choices conform to minim a l s tandards of rationality, then its actions a re reasonable and must be upheld.” Tex. O il & Gas A s s ’ n , 1 6 1 F.3d at 934. N onetheless, the reviewing court “may not supply a reasoned basis f

o r the agency’s action that the a g e n c y i tself has not given.” Motor Vehicle Mfrs. Ass’n , 463 U.S. at 43. “[T]he focal point f or judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court.” Camp v. Pitts , 4 11 U.S. 1 38, 142 (1973). “The court applies the two-step Chevron analysis to q u e s t i ons i nvolving the EPA’s interpretation of t h e s t atutes it administers,” including the CAA.
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Chevron, U.S.A., Inc. v. NRDC, Inc. , 467 U.S. 837, 842-43 (1984). “If Congress ‘has directly spoken to the p recise question at issue,’ the a gency and the court ‘must give effect to the unambiguously expressed intent of Congress.’” Chevron, 467 U.S. at 842-43. I n performing this analysis, the court “employ[s] traditional tools of statutory const r u c t ion.” Chevron , 467 U.S. a t 843 n .9. “[A] s tatutory provision cannot be read in isolation, but necessarily derives its meaning from the context provided by the surrounding provisions, as well as the broader context of the statute as a whole.” Khalid v. Holder , 655 F .3d 363, 367 (5th Cir. 2011). “If the statute, h owever, is ‘silent or a mbiguous with respect to t he specific issue,’ the court must first assess the administrative d ecision-making process to determine whether the agency’s action is entitled to Chevron deference.” United States v. Mead C

orp. , 533 U.S. 218, 226-31 (2001) (quoting Chevron , 467 U.S. at 843). “Under M

ead , Congress must have ‘delegated a uthority to the agency generally t o make rules carrying the force of law,’ and that agency interpretation claiming deference must have been promulgated in the exercise of that authority.” BCCA Appeal G rp. , 355 F.3d at 825 (quoting Mead , 533 U.S. at 226- 27). “If the agency’s decision is a result of a sufficiently formal and d eliberative
process to warrant deference, the second s tep of Chevron requires the court to

assess whether the agency’s interpretation is ‘b a sed on a permissible construction of the statute.’” Mead , 5 33 U.S. at 230 (quoting Ch evron , 467 U.S. at 843). “If the agency’s interpretation is reasonable, it will be upheld.” Smiley

v. Citibank, N.A., 517 U.S. 735, 744-45 (1996). “Federal cour t s accord ‘great deference’ to the EPA’s construction of t h e [ CAA].” Union Elec. Co. , 427 U.S. at 266. Where a n issue presented is a c hallenge to an agency’s interpre t a t i o n of its own regulation, the agency’s interpretation is controlling u n less i t i s “plainly erroneous or inconsistent with the regulation.” Auer v . Robbins , 519 U.S. 452,
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461 (1997) (quoting Robertson v. Methow Valley Citizens Council , 490 U.S. 332, 359 (1989)). III. DISCUSSION A. Arguments Raised By Environmental Petitioners E nvironmental Petitioners argue that the EPA’s approval o f t h e affirmative defense for unplanned S SM events is in excess of the agency’s statutor y a u t h ority a nd is not in accordance with the Act. Specifically, petitioners argue that the final rule conflicts with the p lain language o f the Act authorizing civil penalties in EPA and citizen suit enforcement actions, as well

as the Act’s requirement that the state permitting authority be able t o assess civil p enalties. Environmental Petitioners further argue that, even if the affirmative defense against civil penalties for excess emissions r esulting from

u n p l a n n e d SSM activity is not contrary to the CAA, t he EPA’s a pproval was arbitrary a nd c apricious. Finally, Environm e n t al Petitioners argue that, in approving the affirmative defense for unplanned S SM a ctivity, the EPA altered the meaning of the SIP as submitted by Tex a s . W e address each of these arguments in turn. 1. In excess of statutory authority & not in accordance with law The EPA’s decision partially approving the SIP revis i o n containing an affirmative d e fense for unplanned SSM a ctivity is invalid if it found by this court to b e, inter alia, “not in accord a nce with law” or in excess of the agency’s statutory authority. 5 U.S.C. § 706(2)(A),(C). A s stated above, the Act confines the EPA to reviewing SIPs for consisten c y with the Act’s requirements. 42 U.S.C. § § 7410(k)(3); 7410(a)(1). The EPA “shall not approve a revision of a plan if t he r evision would interfere with any applicable requ i rement concerning attainment” or “or any other applicable r equirement” of the Act. Id

. at § 7410(l). Further, as p o inted out by petitioners, the CAA provides that, in the case of EPA enforcement a nd citizen suits, a federal district court “ shall have jurisdiction” to
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assess a “civil penalty.” Id

. at §§ 7413(b); 7604(a). In assessing the amount of

a civil p enalty in either an EPA enforcement action or a citizen suit, the court must consider the penalty assessment criteria outlined i n s ection 7413(e). I d

. a t § 7413(e). Additionally, the CAA mandates that t he state pe r m i t t i n g authority have the power to recover civil penalties for violations under the Act. 42 U.S.C. § 7661a(b)(5)(E). The EPA construes section 7413 of the Act a s a u thorizing affirmative defenses a gainst civil penalties if the defense is “narrowly tailored” to address

u n a v oidable, excess emissions and c o nsistent w ith the penalty assessm e n t

c r iteria set forth in s ection 7413(e). Accordingly, t his court must dete r m i n e i f the EPA’s i n t erpretation of section 7413 is entitled to Chevron deference. Chevron , 467 U.S. at 843. We hold that it is. As an initial m a t t e r , we n ote that t h e EPA’s procedure of “notice-andcomment r ulemaking” and “adjudication” is generally a sufficiently formal and deliberative p r o c e s s . Mead Corp. , 533 U.S. at 229-30. Therefore, “[t]he court applies the two-step Chevron analysis t o questions involving the EPA’s interpretation of the statutes it administers.” Chevron, 467 U.S. at 842-43. “If Congress ‘has directly spoken to the p recise q u e s tion at issue,’ the agency and the court ‘must give effect t o the unambiguously e xpressed intent of Congress.’” Id

. If the statute, however, is “silent o r ambiguous w ith respect to t he specific issue,” the court must a ssess whether the agency’s interpretation of the Act is “based on a permissible construction of t h e s t a t ute” and, t herefore, entitled to Chevron deference. Chevron , 467 U.S. at 843. Thus, under Chevron step o ne, we b egin by looking at whether the statute is silent or ambiguous with regard to t he specific issue in di spute. Here, section 7413 does not discuss whether a state may include in its SIP the availability of

an affirmative defense against civil penalties for u np l a n n ed SSM activity. 42 U.S.C. § 7413. Accordingly, we turn to step two o f Chevron a nd a sk whether the
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EPA’s interpretation of section 7413, as a uthorizing an affirmative defense for unplanned SSM activity, is entitled to deference. Chevron , 467 U.S. at 843. The EPA submits that its “interpretation of the CAA is tha t i t i s n o t appropriate for SIPs to e xempt pe r i o d s o f startup, shutdown, maintenance or malfunction from compliance with a pplicable emission limits.” 75 Fed. Reg. at 68,991-92. To support this interpretation, the agency r e lies on section 302(k) of the Act which d e fines “emission limitation” and includes a requirement that emissions be limited on a continuous basis. Id . at 68,992; 42 U.S.C. § 7602(k). Further, noting its authority to assess civil penalties under section 7413 of the Act, the a gency r easons that an effective enforcement program must be able t o collect penalties to deter avoidable violations. 42 U.S.C. § 7413. The EPA r ecognizes, however, that “sources may, despite good practices, be unable to meet emission limitations during periods of startup and shutdown and, that despite good operating practices, sources may suffer a malfunction due to events beyond t he control of the owner or operator.” I d

. a t 6 8,992. For this reason, the agency submits that a SIP “should only provide [an affirmative defense against civil penalties] for circu m s t a n c es where it is i nfeasible to meet the applicable limit and the criteria that the source m ust prove should ensure t hat the source has made a ll reasonable efforts to comply.” Id

. at 68,992-93; 42 U.S.C. § 7413(e). As a result, the EPA states that it has adopted an interpretation of section 7413 that would allow sources to assert an a f f i r mative d e fense for periods of unavoidable, excess emissions during c ertain SSM activity in an enforc ement action for penalties, though not in an a ction for injunctive r e lief. Id

. at 68,992. The agency c oncludes that this interpretation i s consistent w ith the Act because the criteria a source must prove when asserting the a f f i r m a tive defense are consisten t w i t h the penalty assessment criteria identified in section 7413(e), which are considered by the c ourts a n d t he EPA in determining whether or not to a s s e ss a civil penalty f or violations and, if so, t he amount. Id

. at 68,992; 42

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U.S.C. § 7413(e). Thus, the affirmative defense criteria are tailored to ensure that t he source has made a ll reasonable e fforts to comply with emission limitations a nd remain in compliance w ith the Act. Id

. at 68,992. Consequently, the agency reasons that an appropriately crafted affirmative defense is one that is narrowly tailored t o address u navoidable, excess emissions a nd consistent with the penalty assessment criteria in section 7413(e). Id

. at 68,992; 42 U.S.C. § 7413. The approved portion of Texas’s SIP t hat contains an affirmative defense for unplanned SSM activity provides, as an initial matter, that sources are generally subject to enforcement actions for any “upset” events, i.e. , an unplanned and unavoidable malfu n c ti o n th at r e s u l t s i n unauthorized emissions. 30 Tex. Admin. Code § 101.1(109). If an “upset” ev e n t i s c o n s idered an “exc e ssive” emission e vent based on a number of factors including f requency, duration, impact on human health, and other measures, no affirmative defense is avail a ble. Id

. at § 101.222(a)-(b). If the violation is not d eemed “excessive,” and it occurred d uring unplanned SSM activity, a nd nine a dditional criteria are met, including a demonstration that the unauthorized emissions “did not cause
or contribute to an exceedance of the NAAQS, PSD increments, or a condition of air pollution,” and that th e unauthorized e missions “could not h ave been prevented through planning and design, ” t hen the affirmative defense is available. Id

. a t § 101.222(b),(c). Regardless, even if all nine required criteria

are met and the violator establishes t he applicability of the approved affirmative defense, injunctive relief is still available. 75 Fed. Reg. at 68,991 n.4. 9

9 Ad d itionally, the availability o f the af f irm ative def

ens e d oes not negate the d is trict court’s juris d iction to as s es s civil p enalties us ing the criteria outlined in s ection 7413( e) , or the s tate p erm itting authority’s p ow er to recover civil p enalties , i t s i m p l y p rovid es a d ef ens e, und er narrow ly d ef

ined circum s tances , if and w hen p enalties are as s es s ed

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The EPA submits that the above-mentioned a ffirmative defense for unplanned SSM events is narrowly tailored to address unavoidable , excess
e m i s s i o ns and consistent with the penalty assessment criteria in section 7413(e)

. Thus, it approved this portion of Texas’s SIP revision as being consistent w i th section 7413 of the Act. 42 U.S.C. §§ 7413, 7410(l). We ho l d t h i s t o be a permissible interpretation of section 7413, w arranting deference. Chevron , 467 U.S. at 8 43. Accordingly, the EPA acted neither contrary to law n or in excess of its statutory authority when it b ased its partial approval o f the plan on this construction. 5 U.S.C. § 706(2)(A),(C). 2. Arbitrary and Capricious Environmental Petitioners argue that, even if t h e a ffirmative defense for unplanned S S M a c t i vity is not contrary to the CAA, t he EPA’s a pproval was nonetheless arbitrary and capricious. They argue that the E PA failed to explain why it approved the affirmative defen s e i n light of (1) the EPA’s position that affirmative defenses should not be available whe r e a small group of sources could cause exceedance o f the NAAQS; (2) p r e c e d ent indicating that civil penalties serve to encourage compliance with the Act; and ( 3 ) the burden an affirmative defense would place on citizen suits. The EPA’s decision is n ot valid if f ound by this cou r t to b e arbitrary or capricious. 5 U.S.C. § 7 06(2)(A). “An agency rule is arbitrary and capricious ‘ if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider a n important aspect o f t h e problem, offered an explanation f

or its decision that runs counter to the evidence before t h e agency,
or is so impl a u s ib l e t h a t it could not be ascribed to a difference in view or the product of agency expertise.’” Tex . Oil & Gas Ass’n , 1 61 F.3d a t 933. “If the agency’s reasons and p olicy choices c onform to minimal standards of rationality, then its actions are reasonable and must be upheld.” Id . at 934.

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With respect to their first argument, Environmental Petitioners are correct that the EPA has stated in its p ast policy guidance that “ [w]here a single

source or small group of sources has the potential to cause an exceedance of the NAAQS or PSD increments

. . . an affirmative defense approach will not be adequate to protect public h ealth and t he environment

. . . . ” 1 0 Petitioners are also correct that the approved affirmative de f ense provision does n ot contain specific language excluding emissions caused by “a single source or small group of sources” that could potentially “ caus e a n e x c e edance of t he NAAQS or PSD increments

. ” But, as pointed out by the agency in its brief, the affirmative defense excludes all emissions that could “ cause or c ontribute to an exceedance of t he NAAQS, PSD increments, or a condition of air pollution.” 3 0 Tex. Admin. Code § 10 1

. 2 22 (b)(11), (c)(9). Thus, the a pproved portion of the affirmative defense is not inconsistent with the agency’s past policy guidance. Environmental Petitioners’ remaining two argument s as t o why the EPA’s
approv a l of the affirmative defense was arbitrary and capricious are also unavailing. Environmental Petitioners are c o rrect that the EPA has recognized that the a v a i l a b i lity o f c ivil p enalties serves as a n incentive for companies to take actions to avoid excess emissions. 7 5 F e d

. R eg. at 68,999. I n its partial
approva l of the SIP revision, however, the EPA further r e cognized that while “the availability of civil penalties serves as an i ncentive for companies to be more cautious, to take more preventative actions, a nd to seek to develop technologies and management p ractices to avoid excess emissions[,]

. . . the criteria a source would n eed to prove in order to success f ully assert an a ffirmative d efense will encourage companies to take such caution.” Id . at 68,999. The EPA’s reasoning relies on the fact that t h e narrowly tailored affirmative defense presents a high burden for any company seeking e ntitl e m e nt

1 0 See i nf

ra M em . of St even A. H erm an, “State Im p lem entation Plans ( SIPs ) : Policy Regard ing Exces s Em is s ions D uring M alf unctions , Startup , and Shutd ow n” (Sep t. 20, 1999)

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to it. Assuming the violation is not deemed “excessive,” and i t occurred during unplanned SSM activity, nine additional crit e r i a must be met, including a demonstration that the unauthorized emissions “did not cause or contribute to an exceedance of the NAAQS, PSD increments, or a c ondition of air pollution,” and t h at the u nauthorized emissions “could not have been prevented through planning a nd d esign.” 30 Tex. Admin. Code § 1 01.222(c). This reasoning supports the EPA’s p osition that its a pp r o v a l o f t he affirmative defense for unplanned SSM activity will not serve as a disincentive for c o mpanies to avoid

excess e missions. T hus, there is no conflict with t h e a g e n c y’s previous statements that civil penalties encourage compliance with the Act. Environmental Petitioners’ second argument that the affirmative defense places a n u n r e asonable burden on plaintiffs is a lso without merit. Environmental Petitioners contend t hat the affirmative defense only requires a “prima f acie showing” by defendants, after which the burden will shift to the plaintiffs to show that the affirmative defense does not apply. As pointed out by the EPA, howe v e r , w h en a source asserts the affirmative defense, it has the burden of proving the “enumerated facto rs, including that t he period of excess emissions was minimized to the extent practicable and that the emissions were not due to faulty operations or disrepair of equipment.” 75 Fed. Reg. at 68,992 (citing see 30 T ex. Admin. Cod e § 1 01.222(b),(c)). T he provision makes no reference to a prima facie showing. Id

. Accordingly, the burden remains on the
p arty s e e ki n g e ntitl e m ent to the affirmative defense, not a plaintiff seeking relief under the Act. Given t h e se facts, we agree with t h e EPA’s position t hat the approved affirmative defense for unplanned S SM activity does not place an unreasonable burden on plaintiffs. Consequently, w e hold that the EPA did not act arbitrarily o r capriciously in its partial a pproval of the SIP revision. The above-mentioned reasons and policy choices provided by the EPA for approving the affirmative defense for

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u n p lanned SSM activity “conform to minimal standards of rationality”; therefore, they are r easonable and will be upheld by this court. Tex. Oil & Gas Ass’n , 161 F.3d at 934. 3. Alteration of the meaning of the SIP Environmenta l P e t itioners’ final argument is that, by approving the affirmative defense f

or unplanned SSM a ctivity, the E PA impermissibly altered the meaning of the SIP by making the defense potentially applicable to citizen and EPA enforcement actions, thereby limiting i njunctive relief available under the Act and delaying the enforcement of excess em i s s i o n violations. Environmental Petitioners identify a statement by the T CEQ that “its rules are not intende d t o n o r d o they impact citizens’ l egal rights under the [CAA].” 30 Tex. Reg. at 8922. Environmental Petitioners are correct that, in partially approving a S IP, the EPA may not “overid[e] state policy,” Bethlehem , 742 F.2d at 1 036-37, and alter the m eaning of the SIP. In its partial appro v a l o f the SIP revision, however, the E PA reasoned as follows: “[A]pproval of the p rovisions in sections 101.222(b), ( c ) , ( d) , and (e) into the Texas SIP does not preclude citizen suits under the Act. Rather, the affirmative defense may be raised in defense of a claim b rought by EPA, the State or a private citizen.” 75 F e d

. R e g
. at 68,999. The EPA went on to state that “even where an affirmative defense i s s uccessfully rai s e d in defense to an action for penalties, it does not preclude other judicial relief that may be available, such a s i n junctive relief or a requirement to mitigate past harm or to correct the non-compliance at issue.” I d

. The above-mentioned reasoning provided by the EPA supports its position that it did not alter the meaning o f t h e SIP or broaden its application beyond

w hat T exas intended in its partial approval of the plan. We therefore rej e c t Environmental Petitioners’ argument.

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B. Arguments Raised By Industry Petitioners Industry Petitioners argue t hat t he portion of the SIP revision containing the a ffirmative defense for p lanned S SM activity fully complies with the CAA and should have been approved b y the EPA and that the EPA’s disapproval was contrary to law. T hey further argue that the EPA’s decision was arbitrary and capricious. In the alternative, Industry Petitioners argue that the EPA should have severed and approved the a ffirmative defense for planned st a r t u p a nd shutdown activity, even if it disapproved the aff i rmative defense for planned maintenance a ctivity. I ndustry Petitioners also request that approval of the SIP be backdated to June 30, 2006, so as to eliminate a ny gap between the expiration of the previous affirmative defense and the current affirmative defense. 1. Compliance with the CAA The EPA’s decision p artially disapproving the SIP revision containing an affirmative defense f

or planned SSM activity i s invalid i f it i s found by this court to be, inter a lia , “not i n accordance with law.” 5 U.S.C. § 706(2)(A). The Act provides that the EPA “ shall not approve a revision of a pla n i f t h e r e vision would interfere with any applic a b l e requirement concerning attainment” of NAAQS or “or a ny other applicab l e requirement” of the Act. See 42 U.S.C. § 7410(l). The EPA i nterprets section 7413 of the Act as only a uthorizing affirmative defenses that are narrowly t a i l ored to address periods of unavoidable, excess emissions during certain SSM activity, “where it i s i n f e asible to meet the applicable limit.” Consequently, t he agency concludes that section 7413 does not authorize an affirmative defense for planned SSM activity. According l y , t h i s court must determine if the E PA’s in t e r p r e t a t ion of section 7413 i s entitled to Chevron deference. Chevron , 467 U.S. at 843. We hold that it is. As stated, the EPA’s procedure o f “ notice-and-comment r ulemaking” and “adjudication” is generally a sufficiently formal and deliberative process. Mead

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Corp. , 533 U.S. at 229-30. Therefore, “[t]he court applies the two-step Chevron analys i s to questions involving the EPA’s interpretation of the s tatutes it administers.” Chevron, 467 U.S. at 842-43. “If Congress ‘ has directly spoken to the precise question at issue,’ the agency and the court ‘must give effect to the unambiguously expressed intent of C o n g r e s s . ’ ” Id

. If the statute, however, is “silent or ambiguous with respect to the specific issue,” the court mus t assess

w h e ther the agency’s interpretation of the Act is “based on a permi s s ib l e construction o f the s tatute” and, therefore, entitled to Chevron deference. Chevron , 467 U.S. at 843. Thus, under Chevron step o ne, we begin by looking at whether the statute is silent or ambiguous with regard to t he specific issue in di spute. Here, section 7413 does not discuss whether a state may include in its SIP the availability of

an affirmative defense against civil p enalties f or planned SSM activit y . 42 U.S.C. § 7413. Accordingly, we turn to step two o f Chevron a nd a sk whether the EPA’s interpretation of s ection 7413, as not a uthorizing an affirmative defense against civil penalties f o r p l anned SSM a ctivity, is entitled to deference. Chevron , 467 U.S. at 843. As stated, relying o n the definition of “emission limitation” fo u n d in section 3 02(k) of the Act, the EPA submits that its “interpretation o f the CAA is that i t is not appropriate f or SIPs to exempt perio d s o f s t a rtup, s hutdown, maintenance or malfunction from compliance with applicable emission limits.” 75 Fed. Reg. at 68,991-92; 42 U.S.C. § 7602(k). Citing its authority to assess civil p enalties under section 7 413 of the Act, the agency reasons that an effective e nforcement program m ust be able to collect penalties to deter avoidable violations. 42 U.S.C. § 7413. F urther, while the EPA acknowledges that “sources may, despite good practices, be unable to meet emission limitations” during certain SS M a c t i vity, the EPA’s interpretation of section 7413 only allows sources to assert an affirmative defense for periods of

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unavoidable, e xcess e m i s s i ons “where it is infeasible t o meet the applicable limit.” Id

. at 68,992. For this reason, a SIP “should o nly provide [an affirmative defense against civil penalties] for circumstances where it is infeasible to meet the applicable l imit a n d t h e criteria that the s ource must prove should ensure that the source has made a ll r easonable e fforts to c omply.” I d

. at 68,992-93; 42 U.S.C. § 7413. Consequently, the agency reasons that an appropriately crafted affirmative d efense is one that is n arrowly t a ilored to address unavoidable, excess emissions. Th e E PA s u bmits that the portion of the SIP revision providing an affirmative defense for planned SSM activity is inconsistent with section 7413 of the Act because i t is not n arrowly t a ilored to a ddress unavoidable, excess emissions. Id

. at 68,992. The agency supports t his position by submitting that it does not “believe that it is infea s ib l e for sources to meet applicable limits during planned maintenance” activities. Id

. a t 68,993. T he agency reasons that because planned maintenance ac t i v i t i e s are predictable, a source can avoid

excess emissions from these ac t ivities by s cheduling maintenance during shutdown periods. Id

. at 68,992. Consequently, the agency concludes that the affirmative defense for p lanned SSM activity is inconsistent with section 7413 of the Act. We hold this to be a permissible i nterpretation of section 7413 of the Act, w arranting d eference. Chevron , 467 U.S. at 843; 4 2 U.S.C. § 7413. Accordingly, th e E PA did n ot act contrary t o l a w when its based its partial disapproval of the plan on this construction. 5 U.S.C. § 706(2)(A). 2. Arbitrary and Capricious Industry Petitioners submit several arguments in sup p o r t of their assertion that the EPA’s partial disa p p r o v a l of the SIP revision was a rbitrary and capricious. We address each of these in turn. As previously stated, the EPA’s decision is n ot v alid if found by this court to be arbitrary o r capricious. 5 U.S.C. § 706(2)(A). On the other hand, “[i]f the

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agency’s reasons and p olicy choices c onform to minimal standards of rationality, then its actions are r easonable and must be upheld.” Tex. O i l & Gas Ass’n , 161 F.3d at 934. Citing GHASP v. U.S. E.P.A. , 289 F. App’x 745 (5th Cir. 2 008), Industry Petitioners argue that the EPA must approve a n y S I P revision that is more stringent than the preexisting SIP. In 2000, the E PA approved a Texas excess emissions rule that i nclude d a n e xemption for emissions f rom planned maintenance. See 65 Fed. Reg. 70,792 (Nov. 28, 2000); 2 5 Tex. Reg. 6727-6751 (July 14, 2000). In its brief, however, the EPA points o ut tha t it has publicly conceded that its approval of the Texas 2000 rule was e r r o n e o us. 1 1 It is the agency’s position that it s hould not be required to make the same mistake twice for the sole purposes of consistency. An agency i s not b ound to follow a p rior, i ncorrect interpretation of its own policy. Bowles v. Seminole Rock & Sand Co. , 325 U.S

. 410, 414 (1945). Moreover, an agency is p ermitted to change its po l icy interpretations. FCC v. Fox T ele. Stations, Inc. , 556 U.S

. 5 0 2 , 514-15 (2009); National Cable & Telecommunication s As s ’ n v . B ra n d X I

n t ernet Services , 545 U.S. 967, 981 (2005). Consequently, we h old that the EPA’s previous, admittedly erroneous, approval of a prior Texas SIP provision, does not mandate its approval of the current SIP revision at issue, s imply b ecause i t is m ore stringent than the provision previously approved in error. Industry Petitioners next argue that t he EPA, in partially d isapproving the S I P revision, impermissibly made the SIP more stringent than what Texas h a d i nt e n d e d , i

. e . , a SIP without any a c commodation for planned SSM emissions. We disagree.

1 1 Technical Sup p ort D ocum ent f or 30 T ex. Ad m in. Cod e Chap ter 101, G eneral Air Q uality Rules , Rule Log N um bers 2001- 075- 101- AI & 2003- 038- 101- AI (M arch 2, 2004)

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The EPA may approve or disapprove a pr o v ision in a SIP, but may not require a state to add any provision to its proposal. See Fla. Power & Light Co. , 650 F

. 2 d at 587-89. F urther, the EPA may not exercise i ts p ower to partially
approve and disapprove portions of a SIP t o mak e i t m o r e stringent than intended by the state. See Bethlehem Steel , 742 F.2d at 1034-35. In its partial disapproval of the SIP, the EPA noted the following: The provisions being disapp r o ved address completely separate act i v i t ies

. . . (planned activities) from those addressed by the provisions being approved (unp l a n n ed activities). The a pproved provisions will provide t h e exact l imited relief intended by the State for s ources covered by those provisi o ns . . . . EPA's action disapproving similar relief for excess emissions during planned activities does not affect the stringency of the defense being approved f o r periods of excess emissions during unplanned activities.
75 Fed. R eg. at 68 , 9 9 3

. This reasoning supports t he EPA’s position that its partial disapproval of the SIP did no t make the remaining approved portions more stringent than what Texas had intended. Industry Petitioners next argue that the EPA’s partial disapproval of the SIP revision was in error because the agency never es t a b l i s hed that the affirmative defense for planned SSM a ctivit y “ w o u l d interfere” with NAAQS attainment. 42 U.S.C. § 7410(l). With respect to this i ssue, the EPA stated that it does not interpret the Act

as r equiring it to demonstrate that there will b e a violation of NAAQS if it disapproves a SIP r e v i s i o n . 75 Fed. Reg. a t 68,994. The a gency f urther noted that “the language in section 110(l) provides that EPA m u s t d i sapprove a SIP revision if it ‘ would interf e r e with any applicable requirement concerning attainment.’ T his is quite distinct from an obligation to p r o v e t h a t a violation will occur.” Id

.

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We agree with the EPA’s position t hat it is not required by t h e Act to prove that a violation will occur as a prerequisite to disapproving the plan. H owever, in disapproving a p lan, the agency is r equired to provide reasoning supporting its c onclusion th at the disapproved provision would i nterfere with an applicable requirement of the Act. 42 U.S.C. § 7410(l). As stated, the agency has p rovided sufficient reasoning supporting its conclusion that the affirmativ e d e f ense for planned S S M a c t ivity w a s i nconsistent with s ection 7 413 of the Act because it

was not narrowly t ailored to address unavoidabl e , excess emissions because it provided a defense for SSM a ctivities during wh ich excess e missions could be avoided. Consistent with ou r p r e v i o us holding that this conclusion is a permissible construction of the statute that is not contrary to law, we hold the

same conclusion to be a sufficient basis for the agency’s partial disapproval of the plan pursuant to sections 7413 a nd 7410(l). 42 U.S.C. § § 7 4 1 3 , 7 410(l) Industry Petitioners a lso argue that the E PA was required to approve the affir m ative defense scheme as a n ecessary step to Texas’s transition to a permitting scheme. In support of their argument, Industry Petitioners point to the doctrines o f “administrative necessity” and “ o ne-step-at-a- t i m e . ” See Ala. Power Co. v. Costle , 636 F.2d 323, 357-60 (D.C. Cir. 1979); U.S. Brewers Ass’n, Inc. v. EPA , 600 F.2d 974, 982 (D.C. Cir. 1979). With respect to this issue, the EPA provided the following response:

[T]he State's submitted phased-in permitting process will not s erve to modify any applicable requireme n t under the T exas SIP. F urthermore, our action disapproving the three provisions a t issue

. . . merely maintains the s tatus quo and should have no effect on that permitting process.

. . . . [S]ources have be e n obligated to comply a t a ll times with th e a p p li c ab l e e m ission limits with no enforcement discretion o r a ffirmative defense provisions s ince t h e previous Texas rules expired from the Te x as SIP o n

25 Case: 10-60934 Document: 00512185307 Page: 25 Date Filed: 03/25/2013No. 10-60934 June 30, 20 0 6 b y their o wn t erms. T hus there is n o administrative necessity or “one step at a time” argument applicable in this situation. 75 Fed. Reg. at 69,899-900. This reasoning supports the EPA’s position that it

was not required to a pprove the provision containing a n affirmative defense for planned SSM activity in light of Texas’s transition to a permitting scheme. Consequently, we hold that the EPA did not act arbitrarily or capriciously in its disapproval of the portion of the SIP revision containing a n affirmative defense f or planned SSM activity. The above-mentioned reasons provided by the EPA for disapproving the provision “ confor m to minimal s tandards of rationality”; therefore, they are reasonable and will be u pheld by this court. Tex. Oil & Gas Ass’n , 161 F.3d at 934. 3. Severability of planned startup and shutdown activity The EPA has determined that the provisions relating to planned startup and shutdown activities are not severable fro m the planned m aintenance provisions. 75 Fed. Reg. 6 8,991, 6 8 , 9 97. Industry Petitioners argue that the EPA should have severed and approv e d t h e affirmative defense for planned startup an d s h utdown activity, even if i t had d etermined that there should be no affirmative defense for planned maintenance activity. We disagree. We decline to address the issue of whether t he EPA was correct in concluding that t h e p rovisions relating t o planned startup and shutdown activities are not severable from the planned maintenance provisions because,

even if severed, the provisions would not have b een consistent with the agency’s interpretation o f section 7413 of the Act. For the same reasons provided in our discussion above upholding the EPA’s disapproval of the affirmative defense for planned maintenance activity contained i n 1 0 1 .222(h), we uphold the EPA’s disapproval of the affirmative defense as it applies to planned s ta r tup and shutdown activity. The p or t i o n o f the SIP revision providing an affirmative defense f

or planned SSM activity is inconsistent w ith section 7413 of the Act
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because it is n o t n a r r owly tailored to address unavoidable, excess emissions because it provided a defense for SSM activities during which excess emissions could b e avoided. Id

. at 68,992. Consequently, we hold that the EPA was not

a rbitrary or capricious, o r contrary to law, i n disapproving the provision a s a whole. 4. Backdating approval of the SIP In their final argument, Industry Petitioners request that approval of the SIP be backdated to June 30, 2006. In light of our conclusion t hat the E PA was not a rbitrary, capricious, or contrary to law, when it disapproved the portion of the SIP revision containing an affirmative defense for planned SSM activity, we pretermit discussion of this issue. IV. CONCLUSION F o r these foregoing reasons, we conclude that t he EPA did not a c t arbitrarily or c apriciously, contrary to law, o r in excess of its statutory authority, in its partial approval and partial disapproval of Texas’s SIP revision

. We therefore deny the petition s for r eview submitted by both Environmental Petitioners and Industry Petitioners. PETITIONS DENIED.

27 Case: 10-60934 Document: 00512185307 Page: 27 Date Filed: 03/25/2013UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT BILL OF COSTS
NOTE: The Bill of Costs is due in this office within 14 days from the date of the opinion, See FED . R. APP . P. & 5 C IR . R. 39. Untimely bills of costs must be TH accompanied by a separate motion to file out of time, which the court may deny. _______________________________________________ v. __________________________________________ No. _____________________
The Clerk is requested to tax the following costs against: _________________________________________________________________________________________

COSTS TAXABLE UNDER Fed. R. App. P. & 5 Cir. R. 39 th REQUESTED ALLOWED (If different from amount requested) No. of Copies Pages Per Copy Cost per Page* Total Cost No. of Documents Pages per

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Docket Fee ($450.00) Appendix or Record Excerpts Appellant’s Brief Appellee’s Brief Appellant’s Reply Brief
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Total $ ________________ Costs are taxed in the amount of $ _______________

Costs are hereby taxed in the amount of $ _______________________ this ________________________________ day of __________________________, ___________.

LYLE W.C AYCE , C LERK State of County of _________________________________________________ By ____________________________________________ Deputy Clerk I _____________________________________________________________, do hereby swear under penalty of perjury that the services for which fees have been charged were incurred in this action and that the services for which fees have been charged were actually and necessarily performed. A copy of this Bill of Costs was this day mailed to opposing counsel, with postage fully prepaid thereon. This _______________ day of ________________________________, ______________.

_____________________________________________________________________ (Signature) *SEE REVERSE SIDE FOR RULES GOVERNING TAXATION OF COSTS Attorney for __________________________________________ Case: 10-60934 Document: 00512185311 Page: 1 Date Filed: 03/25/2013FIFTH CIRCUIT RULE 39

39.1 Taxable Rates. The cost of reproducing necessary copies of the brief, appendices, or record excerpts shall be taxed at a rate not higher than $0.15 per page, including cover, index, and internal pages, for any for of reproduction costs. The cost of the binding required by 5 CIR

. R. 32.2.3that mandates that briefs must lie reasonably flat when open shall TH be a taxable cost but not limited to the foregoing rate. This rate is intended to approximate the current cost of the most economical acceptable method of reproduction generally available; and the clerk shall, at reasonable intervals, examine and review it to reflect current rates. Taxable costs will be authorized for up to 15 copies for a brief and 10 copies of an appendix or record excerpts, unless the clerk gives advance approval for additional copies. 39.2 Nonrecovery of Mailing and Commercial Delivery Service Costs. Mailing and commercial delivery fees incurred in transmitting briefs are not recoverable as taxable costs. 39.3 Time for Filing Bills of Costs. The clerk must receive bills of costs and any objections within the times set forth in F ED

. R. A PP

. P. 39( D ). See 5 CIR

. R. 26.1.

TH

F ED . R. A PP . P. 39. COSTS (a) Against Whom Assessed. The following rules apply unless the law provides or the court orders otherwise; (1) if an appeal is dismissed, costs are taxed against the appellant, unless the parties agree otherwise; (2) if a judgment is affirmed, costs are taxed against the appellant; (3) if a judgment is reversed, costs are taxed against the appellee; (4) if a judgment is affirmed in part, reversed in part, modified, or vacated, costs are taxed only as the court orders. (b) Costs For and Against the United States. Costs for or against the United States, its agency or officer will be assessed under Rule 39(a) only if authorized by law. ©) Costs of Copies Each court of appeals must, by local rule, fix the maximum rate for taxing the cost of producing necessary copies of a brief or appendix, or copies of records authorized by rule 30(f). The rate must not exceed that generally charged for such work in the area where the clerk’s office is located and should encourage economical methods of copying. (d) Bill of costs: Objections; Insertion in Mandate. (1) A party who wants costs taxed must – within 14 days after entry of judgment – file with the circuit clerk, with proof of service, an itemized and verified bill of costs. (2) Objections must be filed within 14 days after service of the bill of costs, unless the court extends the time. (3) The clerk must prepare and certify an itemized statement of costs for insertion in the mandate, but issuance of the mandate must not be delayed for taxing costs. If the mandate issues before costs are finally determined, the district clerk must – upon the circuit clerk’s request – add the statement of costs, or any amendment of it, to the mandate. (e) Costs of Appeal Taxable in the District Court. The following costs on appeal are taxable in the district court for the benefit of the party entitled to costs under this rule: (1) the preparation and transmission of the record; (2) the reporter’s transcript, if needed to determine the appeal; (3) premiums paid for a supersedeas bond or other bond to preserve rights pending appeal; and (4) the fee for filing the notice of appeal. Case: 10-60934 Document: 00512185311 Page: 2 Date Filed: 03/25/2013

## United States Court ofAppeals FIFTHCIRCUIT O FFICE O F THE CLERK LYLE W . CAY CE CLERK TEL. 504-310-7700 600 S. MAESTRI PLACE NEW O RLEANS, LA 70130 March 25, 2013 MEMORANDUM TO COUNSEL OR PARTIES LISTED BELOW Regarding: Fifth Circuit Statement on Petitions for Rehearing or

Rehearing En Banc No. 10-60934, Luminant Generation Company, et al v. EPA USDC No. 75 Fed. Reg. 68,989

- -------------------------------------------------- Enclosed i s a copy of the court's decision. Th e court has entered j udgment under F E D . R. A P P . P. 36. (However, the opi n i o n may y et c ontain typographical or printing errors which a r e subject to correction.)
F E D . R. A P P . P. 39 t h r ough 41, and 5 T H C I R . R U L E S 35, 39, and 41 govern costs, rehearings, and mandates. 5 T H C I R . R ULE S 35 a nd 40 require you to attach to your petition for panel r ehearing or rehearing en b anc an unmarked copy o f the court's opinion or order. Please read carefully the I nternal Operating Procedures (IOP's) followi n g F E D . R
. A P P . P. 40 a nd 5 T H C I R . R
. 35 for a discussion of when a rehearing may be appropri a t e , the legal standards applied and sanctions which may b e imposed if y ou make a nonmeritorious petition for rehearing en banc. Direct Criminal Appeals. 5 T H C I R . R
. 41 provides that a motion for a stay of mandate under F E D . R. A P P . P. 41 will not be granted simply upon request. The petition m ust set forth good cause for a stay or clearly d emonstrate that a subst a n t i a l question will be presented to the Supreme Court. Otherwise, this court may deny the motion and issue the mandate immediately.
Pro S e C a s e s. If y ou were unsuccessful in the d istrict court and/or on appeal, and are considering filing a petition for certiorari in the United States Supreme Court, you do not need to file a motion for stay of mandate und e r F E D . R
. A P P . P. 41. The i s s u ance of t he mandate does not affect t he time, or your right, to file with the Supreme Court. The judgment en t e r ed provides that p etitioners p ay to respondent the costs on appeal. Sincerely, LYLE W. CAYCE, Clerk
By:_________________________ Jamei R. Cheramie, Deputy Clerk Case: 10-60934 Document: 00512185312 Page: 1 Date Filed: 03/25/2013Enclosure(s)

Mr. Thomas Lee Casey III Mr. Scott Fulton Mr. Philip Stephen Gidiere III Mrs. Kelly Leigh Haragan Mr. Matthew Brian Henjum Mr. Charles William Irvine Ms. Samara Lackman Kline Mr. Matthew Lynn Kuryla Mr. Steven G. McKinney Mr. Jon Niermann Mr. Matthew Robert Oakes Mr. Matthew G. Paulson Mr. Harry Max Reasoner Ms. Anika Christine Stucky Mr. Eric Alan White Case: 10-60934 Document: 00512185312 Page: 2 Date Filed: 03/25/2013