F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

S T A T E O F A R

I Z O N A , E X R E L

. H E N R Y R. D A R W I N , Director, Ariz ona Department of Environmental Quality

, P etitioner
,

v

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U.S. E N V I R O N M E N T A L P R

O T E C T I O N A G E N C Y ; L I S A P. J A C K S O N , Administrator, United States Environmental Protection Ag ency ,

Respondents

,

N A T I O N A L P A R K S C O N S E R

V A T I O N A S S O C I A T I O N ; S I E R

R A C L U B , Respondent-Intervenor

. N o. 13-70366A R I Z O N A E X R E L

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S A L T R I V E R P R

O J E C T A G R I C U L T U R

A L I M P R O V E M E N T A N D P O W E R D I S T R

I C T , P etitioner
,

v

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U.S. E N V I R O N M E N T A L P R

O T E C T I O N A G E N C Y , Respondent

,

N A T I O N A L P A R K S C O N S E R

V A T I O N A S S O C I A T I O N ; S I E R

R A C L U B , Respondent-Intervenors

. N o. 13-70410

OPI NI ON

O n Petition for Review of an Order of the Environmental Protection Ag ency

Arg ued and Submitted March 9, 2015—San F r ancisco, California

F iled F ebruary

24, 2016

B efore: Marsha S. B erz o n, J ay S. B y bee, and J ohn B . Owens, Circuit J udg es.

Opinion by J udg e B e rz onA R I Z O N A E X R E L

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SUMMARY *

Environm ental Law

The panel denied consolidated petitions f or review o f a F inal Rule, promulg ated by the Environmental Protection A g ency under the Clean Air Act, that partially disapprove d Ariz ona’s reg ional haz e State I mplementation Plan (“SI P”) – setting forth emission limits and other measures – and issued

a F ederal I mplementation Plan (“F I P”) in p l a c e of the disapproved SI P elements.

The p anel held that the E P A did not act arbitrarily a nd capriciously when it disapproved i n p art the SI P’s “best available retrofit technolog y ” for the Coronado G e nerating Station, a coal-fueled power plant located in Eastern Ariz ona, and when it issued a replacement F I P as to the disapproved
p o r t ions. The panel also h eld that the EPA did n o t e r r procedurally in promulg ating the F I P in the same r ule as its partial disapproval of the SI P.

The panel held that its u ltimate r eview of the EPA’s F I P
must await the EPA’s final action o n its p roposal to revise the F I P in specific respects

. According ly

, the panel stay ed the proceeding s as to evaluation o f the F I P’s technical f easibility until the administrative process was complete.

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.A R I Z O N A E X R E L

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COUNSEL

Peter Glaser ( arg ued), Troutman Sanders L L P, W a shing ton, D.C.; Paul L

. Gale, Troutman Sanders L L P, I r v i n e, California; Carroll W

. McGuffey I I I
, Troutman Sanders L L P, Atlanta

, G e org ia; Thomas C. Horne, Ariz o na Attorney General, and J ames T. Skardon, Assistant Attorney General, Phoenix , Ariz o na, for Petitioner State of Ariz o na.

Norman W

. F ichthorn (arg ued) and A aron M. F ly

nn, Hunton & Williams L L P, W ashing ton, D.C., for Petitioners A riz o na Public Service Company and Salt River Project Ag ricultural I mprovement and Power District.

Ang eline Purdy (argued), United States Department o f J ustice; Rober

t G

. D r e her, Acting Assistant A ttorney General, W a s h i n g t o n , D

. C

. , f

o r R e s p o n d e n t U n i t e d S t a t e s Environmental Protection Ag ency

.

Michael A. H iatt (arg

ued), Earthjustic e , Denver, Colorado; Suma Peesapati, Earthjustice, San F ra n c i sco, California, for R e s p o n d e n t -I n t e r v en o r s N a t ional P a r k s C o n s e r v a t i o n Association and Sierra Club.

Maureen A

. Scott, Matthew L audone, a n d J anice M. Alward, Phoenix

, Ariz ona, for A m icus Curiae Ariz ona Corporation Commission.

Michelle L

. Wood, Phoenix

, Ariz o na, fo r Amicus Curiae Ariz ona Residential Utility Consumer Office.

Gordon A. Coffee, J ohn M

. H o l loway I I I
, and Stephanie B

. S eb or, W inston & Strawn L L P, W ashing ton, D.C.; R a e Cronmiller, Environmental Counsel, National Rural ElectricA R I Z O N A E X R E L

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Cooperative Association, Arling ton, Virg i n i a, for Amicus Curiae National Rural Electric Cooperative Association.

OP INION

B ERZ ON, Circuit J udg e :

Cong r ess initially enacted the Clean Air Act (“the Act” o r “CAA”) in 1963 to “protect and e nhan ce t h e q uality of the Nation’s a ir resources so as to p romote the public h ealth a nd welfare and th e p r o ductive capacity of its population.” 42 U.S.C. § 7401(b)(1). L ater, in the Clean Air A ct Amendments of 1 977, Pub. L

. No. 95-95, § 128, 9 1 Stat. 685, 742 (current version at 42 U .S.C. § 7491), Section 169A was added “ in response to a g rowing awareness that visibility was rapidly d eteriorating in many places, such as wilderness areas and national park s

. ” Am. Corn Growers A ss’n v. EPA
, 291 F .3d 1, 3 (D.C. Cir. 2002) (internal quota t i o n m a rks omitted) (quoting Chevron U.S.A., Inc. v. EPA
, 658 F .2d 271, 272 (5th Cir. 1981)).

To improve outdoor visibility

, the Act as amended “invites each State to submit to EPA a ‘State I mplementation Plan’ ( ‘SI P’) setting f

o rth emission limits and other measures necessary to make reasonable p r og ress toward the n ational visibility g oal.” Nat’l P arks Conservation Ass’n v. EPA
, 788 F .3d 1134
, 1 138 ( 9th Cir. 2015) (“ NPCA ”) (citing 42 U .S.C. §§ 7410(a), 7491(b)(2)). SI Ps must include determinations of the “best a vailab l e r etrofit technolog y ” (“B ART”) to reduce emissio n s f r o m certain major emission
sources, including larg e fossil

- f u e l power plants. 42 U .S.C. § 7491(b)(2). I f a state chooses not to sub m i t a S I P, or if EPA disapproves a SI P in w hole or in part, “the Act requiresA R I Z O N A E X R E L

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EPA to produce a ‘F ederal I mplementation Plan’ (‘F I P’) for that State.” NPCA
, 7 8 8 F. 3 d at 1 138–39 (citing 42 U .S.C. § 7410(c)(1)(A)).

Ariz ona a

nd the Salt River Proje c t Ag ricultural I mprovemen t a n d Power District (“the State” and “SRP,” respectively

, a

nd, collectively

, “Petitioners”) p etition for review o f a F inal Rule (“Rule”) promulg ated by EPA. The Rule partially disapproved Ariz o n a ’ s reg ional h az e SI P

s u bmission and p romulg ated a F I P in place of t h e disapproved SI P elements. Approval, Disapproval a nd Promulg ation of Air Quality I mplementation Plans, 77 F ed. Reg

. 7 2,512 ( D e c. 5
, 2012) (the “ F inal Rule”). I n what remains o f this case, 1 P etitioners c h alleng e (1) EPA’s disapproval of Ariz ona’s B A RT dete r minations, and (2) the F I P ’ s r e p l a c e m e n t d e t e r

m i n a t i o n s , c oncerning nitrog en ox ides (NO X ) emission limits at Coronado Generat i n g Station (“Coronado”), a two-unit, 733-meg awa t t coal-fueled power plant located in Eastern Ariz ona.

W e conclude t h a t EPA d id not act arbitrarily a nd

ca p r i c i o usly when it disapproved in part the SI P’s B ART determinations for Coronado and issued a replacement F I P a s to the disapproved portions. W e ther e f o re deny the consolidated petitions for review.

1 S ee in fra n ote 6

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I. STATUTORY AND REG ULATORY

BACK G ROUND

A. The Clean Air Act’s Visibility P rotections

I n enacting Section 169A 2 Cong ress “decla r e [ d] as a national g oal the prevention of any future, and the remedy ing of any e x isting

, impairment of visibility in mandatory class I F ederal areas which impairment results from manmade air pollution. ” § 7491(a)(1). “Class I ” F ederal areas include certain national wilderness areas and national parks. A riz o na contains twelve Class I a reas, the larg est of which is Grand Cany on National Park.

Section 1 69A seeks to r educe “reg ional haz e,” that is, “visibility impairment caused by g eo graphically dispersed

sources em i t t ing fine particles and their precursors into the air.” Am. Corn Growers
, 291 F .3d at 3 ( i n t e r n a l quotation marks o mitted). I n service of this g oal, Secti o n 1 6 9A requires that certain sources contributing to visibility impairment install B A RT—which, ag ain, is an acrony m for “best available retrofit technolog y .” 3 States m u s t r eview all major stationary emissions sources built b e t w e en 1962 a nd 1977 to determine w hether the source “emits any air pollutant

2 W e u se “ Sectio n 1 69 A ” t o ref er g en erically to t

h e v isi b i l i t y

am en d m en ts, b u t u se th e co d i f ied v ersio n , 42 U.S.C. § 7 4 9 1
, f o r sp ecif ic citatio n s.

3 W e ap o lo g i ze f

o r th e ex ten s iv e u se o f acro n y m s in th is o p i n i o n a n d in clu d e a b r i e f g lo ssary at t h e en d to aid th e read er. En v iro n m en t al litig atio n is aw ash in su ch alp h ab etical sh orth an d

, an d th e “ i n sid ers”

w o u ld n o t k

n o w w h at w e m ean t if w e u sed o th er term s. W e h av e th eref o re d ecid ed a g a i n st ex p an d in g t h e Fed eral Rep o rter 3d (F.3 d

, of

co u rse, an o t

h er sh o rth an d) b y

stu b b o rn ly sp ellin g o u t each term

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w h i c h may reasonably be a n ticipated to cause or contribut e to a ny i m p a i rment of visibility in” any Class I area. § 7491(b)(2)(A). T h e states are then responsible for determining the a

ppropriate B A RT controls for each source. See 42 U.S.C. § 7491(b)(2)(A), (g )(2).

EPA reviews the states’ SI P submiss i o n s , if any , for consistency with the statute and reg ulatio n s

. See 42 U .S.C. § 7410(c)(1)(A); O k l a h oma v. EPA
, 723 F .3d 1201, 1204 (10th Cir. 2013). I f EPA determines that a SI P does not meet the A ct’s requirements, the federal ag ency may itself determine B A RT and impose a F I P. See 4 2 U

. S .C. § 7491(b)(2)(A). More specifically

, if EPA f inds that a state has not submitted a required SI P, determines that a submitted SI P is incomplete, or disapproves a SI P in whole or in p art, it “shall promulg ate a [ F I P] at a n y time within 2 y ears.” 42 U.S.C. § 7410(c)(1). E PA must promulg ate a F I P “ unless the State corrects the d eficiency

, and [ EPA] approves the p lan or plan revision, before [ E PA] promulg a tes [ the F I P] .” Id.

W h en determining B ART, states or EPA must consider five factors: “[ 1] the costs of compliance, [ 2] the energ y and nonair quality environmental impacts of compliance, [ 3 ] any

ex isting p ollution c o ntrol technolog y in use at the source, [ 4] the remaining useful life of the source, and [ 5] the deg ree of improvement in visibility w hich may reasonably be anticipated to result from t h e u se of such technolog y

. ” 42 U.S.C. § 7491(g )(2). E ach source subject to the B ART requirement must install and operate B ART “as ex peditiously

as practicable but in no e v ent later than five y ears after the date o f approval of a [ SI P]

. . . or the date of p romulg ation o f [ a F I P] .” 42 U.S.C. §§ 7491(g )(4).A R I Z O N A E X R E L

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B. EP A Regional Haze Regulations

Section 169A directed EPA to issue reg ulations requiring
states with Class I areas within thei r b o r d ers to submit SI Ps

c ontaining “emission limits, schedules of compliance a n d other measures as may be necessary to make r ea s o nable
p r o gress toward meeting the national g oal.” 42 U .S.C

. § 7491(b)(2). EPA was also r equired to develop g u i d e lines for the states “on appropria t e techniques and methods for implementing ” Section 169A. Id. § 7491(b)(1). I n 1990, Cong r ess added Section 1 69B to ex pand the CAA’s focus to include reg ional haz e, see 42 U.S.C. § 7 492—that is, “visibility impai rment that is caused by the emission o f air pollutan t s from numerous sources located over a wide
g eog raphic area,” 4 0 C.F .R. § 51.301. “Section 169B requires, a mong o ther thing s, that E PA undertake research to identify ‘ sources’ and ‘source reg io n s ’ of visibility impairment in Class I areas, consider d esig na ting transport commissions to study the interstate movement of pollutants, and establish a transport commission fo r t h e Grand Cany on National Park.” Am. Corn Growers , 291 F .3d at 4.

Pursuant to Sections 169A and 169B, E PA in 1999 promulg a ted reg ional haz e reg u lations. 64 F ed. Reg

. 35,714 (J uly 1, 1 999) (codified at 40 C. F. R

. § 51.300–.309). The D.C. Circuit partially

vacated those reg ulations in American Corn Growers Ass’n v. EPA
, 291 F .3d at 6. 4 Thereafter, the
ag ency in 2 0 05 p romulg a ted new reg ulations, the Reg ional Haz e Reg ulations and G uidelines f or B est Available Retrofit Technolog y (B ART) D eterminations, 70 F ed. Reg

. 3 9
, 104 (J uly 6, 2005) ( “Haz e Reg u lations”). At the same time, EPA issued G uidelines to h elp states identify “B ART-eli g i b l e”

4 America n Co r

n Gro wers is d iscu s s ed in fra , at p . 2 1

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sources and determine the appropriate B ART for each source. Id. at 39,156 (codified at 40 C. F. R

. p t. 51, app. Y) (“Guidelines”); see also 42 U.S.C. § 7491(b).

The Haz e Reg u l a t ions set a g oal o f achieving natural visibility at all Class I areas by 2064. 4 0 C.F .R. § 51.308. Toward that end, the Reg ulations direct states to submit SI Ps
to EPA c ontaining “g o a ls (ex pressed in deciviews) that provide for reasonable p rog r e ss towards achieving natural visibility conditions.” 4 0 C

. F.R. § 51.308(d)(1). A “deciview” is a measurement of visibility impairment. More specifically

, it “is a haz e index derived f rom calculated lig ht

ex tinction, such that u niform chang es in haz iness correspond
to uniform increm e n tal chang es in perception across the entire rang e of conditions, from p ristine to hig hly impaired.” 40 C.F

. R. § 51.301. O ne d e c iview is the minimum visibility impairment humans can perceive. S ee Guidelines a t 39,120 n.32.

The SI P must also i n c l u de, among other matters, “emission limitations representing B ART a n d schedules for

co mpliance w ith B ART for each B ART-elig ible source that
may reasonably be anticipated t o cause or c ontribute to any impairment of visibility in any mandatory C lass I F ederal area.” 4 0 C.F .R. § 51.308(e). The B ART requirements a pply unless the state opts to impleme n t a n alternative emission control measure that provides g reater prog ress than would be achieved throug h the installation of BA RT (commonly referred to as “better-than B ART”). See id. § 51.308(e)(2).

B A RT is d efined as “ an emission limitation based on the deg ree of reduction achievable throug h the application of the best sy stem of contin u o u s emission reduction for e ach pollutant w hich is emitted by an ex isting stationary facility

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Id. § 51.301. T hree of the major pollutants that states m u st evaluate when determining w hethe r a source causes o r contributes to visibility impairment are sulfur diox ide (“SO 2 ”), nitrog en ox ides ( “NO X ” ), and particulate matter. See Guidelines at 39,162. States must establish B ART for e a ch pollutant. Id. at 39,163.

B A RT determinations f

or fossil-fueled power plants with

a total g ener at i ng capacity g reater than 750 meg awatts must comply with the Guidelines. 4 2 U .S.C. § 7491(b)(2). The Guidelines set forth the following f ive-step process: (1) identify a ll a vailable retr o f i t c o ntrol technolog ies; (2) eliminate technically infeasible options; (3) e valuate the control effectiveness of remaining control technolog ies; (4) evaluate impacts and d o c ument the results; a nd (5) evaluate the visibility impacts. Guidelines at 39,164. The Guidelines also provide more deta iled instructions for performing each of these steps. I d

. a t 39,164–72. “ F o r

sources other than 750 MW power plants

. . . States r e tain the discretion to a dopt approaches that d i f fer f rom the [ G] uidelines.” Guidelines at 39,158.

Section 3 09 o f the Haz e Reg ulations, 40 C.F .R. § 51.309, allows certain western states to develop alternative visibility improvement prog rams, b ased on the recommend a t ions o f the Grand Cany on Visibility Transport Commissi o n (“the Commission”). The Commission was created to ad d ress visibility impairment “for the reg ion affecting the visibility o f the Grand Cany on N ational Park.” See 42 U.S.C. § 7492(f). This reg ion includes six teen C l a s s I a reas on the Colorado Platea u l o c a ted in Ariz o na, Colorado, New Mex ico, and U tah. 40 C.F .R. § 5 1 .309(b). States within the relevant Transport Reg ion—Ariz ona, Californi a , C olorado, I daho, N evada, New Mex ico, Oreg on , Utah, and W y oming —that submit a SI PA R I Z O N A E X R E L

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compliant with all of the Commission’s recommendations a re “deemed to comply with the requirements for reasonable
prog r ess with respect to the 1 6 Class I are as

. ” Id. § 51.309(a). Any covered st at e t h a t elects not to submit a Section 309 plan is “subject to the requirements of [ Sect i o n 308] in the same manner and to the same ex tent as any State
not included within the Transport Reg ion.” Id. F urther, even if a state submits a Section 309 SI P, it must submit a Section 308 SI P or otherwise establish “reasonable prog ress g oals”

— including B A RT determinations

— for any Class I areas in the state not covered under Section 309. Id. § 51.309(g )(2).

II. P ROCEDURAL HISTORY

A. The State’s SIP Subm issions

The Haz e Reg ulations set a D ecember 17, 2007 deadline for SI P submittals. 40 C.F .R. § 51.3 0 8 ( b ). EPA issued a finding on J anuary 1 5, 2009, that thirty -seven states, including Ariz ona, h ad not submitted SI Ps s a t i sfy ing the Act’s visibility requirements. F inding of F ailure To Submit State I mplementation Plans Required by the 1999 R egional Haz e Rule, 74 F e d. Reg

. 2,392 ( J a n

. 1 5
, 2009). Noting that Ariz ona h ad “o p t e d to d evelop [ its SI P] based on the

r e commendations of the Grand Cany o n Visibility Transport Commission” pursuant to Section 309, id. a t 2,393, EPA found that the State had failed to “submit the plan elements required by ” tw o p r ovisions of the Section 309 reg ulations, 40 C.F .R. §§ 5 1.309(d)(4) and 51.309(g ). 5 I d. EPA f urther

5 A rizo n a’ s S ectio n 3 09 S IP
, w h ich A rizo n a su b m i t t e d to EP A on Decem b er 2 3
, 2 0 0 3
, an d su

p p l em en ted a y ear later, m erits f u rth er

ex p lan a t i o n

. EP A d id n o t act u p o n th e State’ s 2 0 0 3 an d 2 0 0 4

su b m issio n s. T h e Sectio n 3 0 9 reg u latio n s w ere rev ised in Octo b er 2 0 0 6
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ex p lained that “[ t] h is finding starts the two y ear c lock for the promulg a tion by

EPA of a F I P.” Id.

Althoug h EPA determined t h a t its J a nuary 2009 finding trig g ered the Act’s two-y ea r w i n dow, see 42 U .S.C. § 7410(c)(1), it did not take any further action by J anuary 2011. Several environmental g roups sued EPA in early 2011
to compel the ag ency to p r o m ulg ate F I Ps for the states covered b y the J anuary 2009 finding

. See Nat’l P a rks Conservation Ass ’n v. EPA
, No. 1 1-CV-01548 (D.D.C.). EPA a nd the plaintiff g roups entered into a Con s e n t D e cree setting deadlines for EPA action for each state covered by the

f o llo w in g th e D.C. Circu it’ s d ecisio n in Cen ter fo r En erg y a n d Eco n omic Develo p men t v. EPA
, 3 9 8 F.3 d 6 5 3 (D.C. C ir. 2 0 0 5 ). S ee 7 1 F e d

. R e g

. 6 0 ,6 1 2 (Oct. 1 3, 2 0 0 6 ). A rizo n a th en resu

b m itted its Sectio n 3 0 9 SIP to EP A i n Decem

b er 2 0 0 8
, ack

n o w led g i n g th at t

h e p lan d id n o t in clu d e p ro v i s i o n s req u ired u n d er 40 C.F.R. § § 5 1.3 0 9 (d )(4 ) an d 5 1.3 0 9 (g ) as

rev ised

. In 2 0 1 3
, EP A d i sap p ro v ed th e Sectio n 3 0 9 SIP b ecau se of th ese d ef icien cies. 7 8 Fed . Reg . 4 8 ,3 26 (A u g . 8 , 2 0 1 3 ).

A rizo n a co n ten d s th at, as EP A d id n o t ex p ressly f in d th at i ts Sectio n 3 0 9 SIP w as in co m

p le t e w i th in s ix m o n th s o f its in itial su b m issio n in 2 0 0 3
, th e p lan b ecam e co m p lete b y o p eratio n

o f law . T h u s , it co n t en d s, 4 2 U.S.C. § 7 41 0 (k )(2 ) req u ired EP A to d isap pro v e its SIP w it hi n o n e y ear, w h ich

, of co u rse, i t d id n o t do

. Bu t, as EP A n o t ed in its 2 0 1 3 d isap pro v al, th e f

act th at A rizo n a’ s su

b m i ssio n m et th e co m

p leten ess criteria set o u t in

§ 7 4 1 0 (k ) “ [d id ] n o t m ean th at [it w as] co m plete in th e

sen se th at [it] co n tain ed th e pro v isio n s n ecessary t o s atisf y th e req u irem en ts o f

[Sectio n 3 0 9 ].” 7 8 Fed

. Reg

. at 4 8 ,3 2 7

. T h e § 7 41 0 (k ) criteria “ d o n ot in clu d e th e su bstan t iv e p ro v isio n s th at a g i v e n SIP m u st in clu d e to co m

p l y w ith th e m in im

u m req u irem en ts o f th e [A ct].” Id

. T h o se p ro v i s io n s are in stead “ set o u t in th e [A ct] i tself an d in EP A ’ s im p lem en tin g reg u latio n s.” Id

. EP A co n clu d ed th at it co u ld n o t ap p ro v e A rizo n a’ s p rev io u sly su

b m itted SIP u n til it w as resu b m itted w ith v alid
p ro v isio n s f

or ad d ressi n g statio n ary so u rces, p ro v isio n s A rizo n a h as

co n ced ed w ere n o t in clu ded in th e 2 0 0 3 p lan

. Id

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lawsuit. F or Ariz ona, the Consent Decree required EPA b y November 15, 2012 either to approve the Stat e ’ s S I P with respect to its B ART determinations or to propose a F I P.

To avoid a F I P, Ariz ona elected to develop a Section 308 SI P; it was submitted to EPA on F e b r uary 28, 2011. The SI P proposed prog ress goals and long term strateg ies to achieve those g o als, including B ART determinations. Speci fically

, the SI P included B ART d eterminations for emission units at three fossil f

uel power p lants that A riz ona conc l u d ed were B ART-elig ible a

nd subject t o BA RT: Apache Generating Station Units 1–3, Cholla Power Plant U n i ts 2–4, a nd Coron ado Generating Station Units 1 –2. Only the SI P’s determinations as to Coronado are at issue in this case. 6

Overall, the State’s B A RT d e t e rminations for NO X , the pollutant with which we are c o nce r n e d here, consisted o f “combustion controls, either in the form of low-NO X burners (L N B ) with flue g as recirculation (F GR), or L N B with overfire air (OF A) or separated overfire air (SOF A).” 77 F ed. Reg

. 42,834, 42,842 (J uly 20, 2012). F or Coronado, A riz o na

6 T h e S t ate an d o th er in du stry p etitio n ers ( Ar i zo n a Electric P o w er Co o perativ e, A

rizo n a P u b l ic Serv i ce Co m

p an y , an d P acif

i Co rp ) in itially f iled p etitio n s f

o r rev iew o f th e Fin al Ru le’ s d eterm in atio n s as to A p ach e

an d Ch o lla

, a n d w e co n s o lid ated o u r rev iew o f th o se p etitio n s w ith th is

case. On Feb ru ary 2 0
, 2 0 1 5
, w e o rd ered th e l itig atio n w i t h resp ect to Ch o lla s ev ered an d h eld in ab ey a n c e p e n din g co m p letio n o f state an d f ed eral ad m in istrativ e p ro ceed in g s th at co u l d ren d er th e p etitio n s f or

rev iew m o o t. A s o f t

h e p u b l ic a tio n o f th i s o p i n io n , th o se p ro ceed in g s h av e n o t y et b een co m

pleted

. On J u n e 1 7, 2 0 1 5
, w e d ism issed th e p etitio n s as to A

p ach e af ter EP A issu ed a f

in al actio n ap p ro v i n g a so u rcesp ecif ic rev isio n to th e SIP th at es t a b l i s h e d a B A RT altern ativ e f or A p ach e a n d w i th d raw in g th e p o rtio n s o f th e FIP ad d ressin g BA RT f or A p ach e. S ee A p p ro v al an d P ro m

u lg atio n o f A ir Qu ality Im p lem en tatio n P lan s, 8 0 Fed . Reg . 1 9 ,2 2 0 (A p r. 1 0 , 2 0 1 5 ).A R I Z O N A E X R E L

. D A R W I N V

. USEPA 15

determined that the proper control technolog y was low-NO X burners with o verfire air. Translating the chosen technolog y into the resulting emission improvement, the SI P e stablished enforceable NO X emissions limits o f 0.32 lb/mmB tu for both units of the Coronado facility

. 7

B. EP A’s Actions

I n J u ly 2 012, EPA proposed (1) partially to app rove a nd partially to disapprove the State’s B ART determinations with respect to the three power plants in its Section 3 0 8 S I P; a nd (2) to promulg a te a F I P f or the disapproved el e ments. 7 7 Fed. Reg

. at 42,834. EPA deferred taking action “on the State’s o ther B ART d eterminations or any other parts of t he SI P reg arding the remaining requirements of the [ Haz e Reg ulations] .” Id. at 4 2,836. I n a later rulemaking

, EPA approved in part and disapproved i n p art the remaining portions o f Ariz ona’s Section 3 08 SI P. See 78 F ed. Reg

. 46,142 (J u ly 30, 2 013) ( “Phase 2 Rule”). 8 After a notice-andcomment period, EPA promulg ated the F inal Rule challeng ed here, in December 2012. 77 F ed. Reg . at 72,512.

The F in a l Rule approved the State’s emission limits for SO 2 and particulate matter at all the u nits but disapproved the S tate’s emissions limits f or NO X at the seven c oal-fired

7 T h e SIP also in clu ded B A RT d eterm in atio n s f o r SO 2 an d p articu latem atter, b u t th ey

are n o t at issu e in th i s case.

8 P etitio n ers p etitio n f

o r rev iew of th e P h ase 2 Ru le i n Ph o en ix Cemen t Co . v. EPA , No . 1 3

- 7 3 3 8 3 , d ecid ed co n tem p o ran eo u s ly w ith th is case in

a m em o ran d u m

d isp o sitio n

.A R I Z O N A E X R E L

. D A R W I N V

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g enerating u nits a t A pache, Cholla, and Coronado. 9 Id. at 72,514. EPA ex plained that Ariz ona’s “overall a pproach” to the five-step B ART ana l y s i s w as “g enerally reasonable a nd consistent with the [Haz e Reg ula t i o n s] and the B ART Guidelines.” 77 F ed. Reg

. at 42,840. B ut it determined that Ariz ona’s B A RT analy sis suffered f r om several flaws, particularly with respect to costs and visibility improvement, that resulted in NO X control determinations “incon s i s tent” with the Haz e Reg ulations. 77 F ed. Reg

. at 42,84 1 –42; see also 77 F ed. Reg

. at 7 2,516–21. EPA found that the State’s analy ses with respect to SO 2 a n d p articulate matter suffered from similar “defi c i encies,” 77 F ed. Reg

. at 72,517, but nonetheless ap p roved Ariz o na’s determinations for these
p o l lutants because the analy tical flaws had no “ substanti v e impact on [ the State’ s ] s e l e ction o f controls.” 77 F ed. Reg

. at 42,841.

Ex plaining that the Con sent Decree required EPA promptly to issue a F I P for any

portion of the Ariz ona SI P it disapproved, the F inal Rule simultaneously issu e d a F I P addressing the disa p p r o ved elements. 77 F ed. Reg

. at 72,567

– 6 8

. EPA conducted a “new five-factor B ART analy sis” of the three power p lants to evaluate Ariz ona’s SI P and “to docu m e n t the technical basis for proposing B ART determinations in [ EPA’s] F I P,” focusing in p a r t icular on analyz ing the c ost c ontrols and v isibility impacts associated with the d ifferent B ART options. 7 7 F ed. Reg

. at 42,852; see genera l l y 77 F ed. Reg

. at 42,852–65; 77 F ed. Reg

. at 72,526–61.

9 EP A ap p ro v ed A rizo n a’ s B A RT d eterm in atio n f o r th e n atu ral g as- f

ired A p ach e Un it 1

. S

ee 7 7 Fed . Reg . at 7 2 ,5 1 4

.A R I Z O N A E X R E L

. D A R W I N V

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Ba s e d on these analy ses, EPA c o n cluded that selecti v e cataly tic reduction ( “SCR”) with l o w -NO X burners a nd overfir e a i r — the most string ent available retrofit control option — was the prope r BA RT c ontrol for Coronado. See 77 F ed. Reg

. at 42,864. EPA proposed NO X emission limits much lower than those contained in Ariz ona’s SI P: 0.050 lb/mmB tu (calculated on a r o lling 30-boiler-operating -day
averag e ) for Coronado Unit 1, and 0.080 lb/mmBt u f o r Coronado U nit 2. 1 0 Id. a t 42,865, tbl. 24. EPA also proposed compliance deadlines, as well as recordkeeping and reporting require m e n t s, to enforce the F I P’s B A RT determinations. 1 1 Id. F inally

, EPA soug h t public comment on sev e r a l aspects of the proposed F I P. Id. at 42,835–36.

I n the F inal Rule, E P A revised certain elements of the proposed F I P in response to p ublic comments and additional i n f o r mation. 77 F ed. Reg

. at 72,514. N otably

, E P A weakened the final NO X emissions limits to “provide a n ex tra marg in of c o mpliance” and chang ed its methodolog y to require plant-wide averag ing

. Id. a t 72,514–15. As relevant here, EPA chang ed its proposed NO X emission limits from 0.050 lb/mmB tu for Coronado Unit 1 and 0.080 lb/mmB tu for Coronado Unit 2 to an averag ed limit of 0.065 lb/mmB tu across both u nits of the Coronado facility

. Id. at 72,514–15, tbl. 1. The F inal Rule also e x tended the compliance deadlines for installation and operation of the controls at the facilities. See id.

1 0 A rizo n a’ s SIP h ad ad o pted NO X em i ssio n s lim its o f 0 .3 2 lb /m m Btu f o r b o th u n its o f th e Co ro n ad o f

acility

.

11 A rizo n a’ s SIP w as d isap p ro v ed i n p art b ecau se it lack ed su ch d ead lin es an d req u irem en ts. See 7 7 Fed . Reg . at 7 2 ,5 1 4

.A R I Z O N A E X R E L

. D A R W I N V

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Ariz ona and SRP filed timely petitions for review of the F inal Rule. After the cases were consolidated, we p ermitted Nationa l P a

r k s C onservation Association and Sierra Club (the “Respondent-I

ntervenors”) to intervene in the c onsolid a t ed action.

III. DISCUSSION

A. Standard of

Review

Under the Adminis t rative Procedure Act (“APA”), we uphold a final ag ency action u nless it is “arbitrary

, capricious,

a n a b u se of discretion, or otherwise not in accordance with law.” 5 U .S.C. § 706(2). To meet its reg ulatory oblig ations,

an ag ency must “ex amine the relevant data a n d articulate a

sa tisfactory ex planation for its action including a rational connection between the facts foun d a nd the choice made.” Motor Vehicle Mfrs. Ass’n o f U.S., Inc. v. S

tate Farm M

ut. Auto. I ns. Co.
, 463 U .S. 29, 4 3 (1983) ( i n ternal quotation marks a nd citation omitted). An ag ency ’s action is “arbitrary and c apricious” within the meaning of APA § 706(2) “if the
ag ency h as relied on f

actors which Cong r ess has not intended it to consider, entirely

failed to consider an important aspect of the problem, o f

fere d a n e x planation for its decision that

r u n s co unter to the evidence b efore the ag ency , or is so implausible t h a t i t could n ot b e ascribed to a difference in view or the product of a g ency e x pertise.” Id. “W hen we review an ag ency action ‘ involv[ ing ] primarily issues of fact,’ and where ‘analy sis of the relevant documents requires a hig h level of t e c h n i c al ex pertise, we must defer to the informed discretion of the r e sponsible f ederal ag encies.’” NPCA
, 788 F .3d at 1 1 41 (quoting Marsh v. Or. Nat. Res. Co u n cil

, 490 U.S. 360, 377 (1989)).A R I Z O N A E X R E L

. D A R W I N V

. USEPA 19

The p arties vig orously disput e h ow we should apply the APA arbitrary and capricious standard here. EPA maintains that in this case, as in most a d ministrative law c ases, the standard cal l s f

o r judicial deference to the federal a g e ncy a s to the decisions within i t s a u thority

. Ariz ona (with the support of SRP) c ontends, to the co n trary , that Section 169A’s allocation of initi a l BART authority to the states requires that we defer to “ the state’s e x pert judg ments, not to EPA’s.” As this b rief summary indicates, the parties’ disag reement concerning judicial revie w i s g rounded in competing visions of the Act’s d i vision of responsibility between the states a

nd EPA. W e therefore beg in our analy sis

a t the ag ency level, prog r essing thereafter to the ques t i o n o f our review standard.

The states posses s “broad a u thority over B ART determinations.

. . . Cong r ess intended the states to dec i d e which sources impair visibility and what B ART c ontrols should apply to those sources.” A m. Corn Growers
, 291 F .3d
at 8. I n this connection, Section 169A of the Act g ives states the initial r e sponsibilities of determin i n g w hich sources a re subject to B ART and of deciding

, based on consideration o f the five statutory fa ctors, what B ART controls must be installed a

nd what the r e sulting emission limitations should be. See 42 U.S.C. § 7491(b)(2)(A), (g )(2).

B u t, as the Tenth Circ u i t has noted, the B ART determination process “does not differ from other parts of the [ Act] —states have the a

bility t o create SI Ps, but they a re subject to EPA r e view.” Oklahoma

, 723 F .3d at 1209; see also N. Dakota v

. EPA
, 730 F .3d 750, 7 58 (8th Cir. 2013). EPA may o nly approve SI Ps, or portions of SI Ps, that “meet[ ] all the applicable requirements” of the Act. 4 2 U .S.C. § 7410(k)(3). Thus, while the A ct “g ives states d iscretion inA R I Z O N A E X R E L

. D A R W I N V

. USEPA 20

b alancing the five B A RT factors, it also mandates that th e state adhere to certain requirements when conducting a BART analy sis.” Oklahoma

, 723 F .3d at 1 2 0 8

. Consequently

, when r eviewing reg ional haz e SI Ps, EPA may not approve “a B ART determi n a t i o n that is based upon an analy sis that is neith e r r easoned nor moored to the [Act] ’s provisions.” N. Dakota

, 7 30 F .3d at 7 61. I n short, E PA is not limite d to the “ministerial” role o f verify ing whether a determination was made; it must “review the substantive content of the B A RT determination.” Id.

Alaska Department of E nvironment al Conservation v

. EPA
, 540 U.S

. 4 6 1 (2004) ( “ A DEC ”), does not support the opposite conclusion, Ariz ona’s contention to the contrary notwithstanding

. A D E C i n volved a challeng e to E PA’s authority to review states’ determinations of “best available control technolog y ” (“B ACT”) under the Prevention o f Sig nificant Deterioration prog r a m ( “PSD”), 42 U.S.C. § 7470
et seq., a different part of the Act from t h e o n e m andating B ART. See A D E C
, 540 U.S. at 4 68. The PSD p rog ram is applicable to new construction o f pollution emitting f a cilities. S ee 42 U.S.C. § 7475. A s with the B ART process a t i s s u e here, for the PSD prog ram the state “ex erc ises primary o r initial responsibility f

o r i dentify ing B ACT in line with the Act[ ] .” ADEC , 540 U.S. at 484.

ADEC rejected an arg ument made by the petitione r s i n th a t case similar to Ariz ona’s contention h ere—in that instance, that EPA’s enforcement role was limited to ensuring that the state-issued PSD permit contain a B ACT requirement. I nstead, ADEC accepted EPA’s interpretation

o f its authority

—that EPA is authoriz ed to review st a t e B ACT determinations to ensure they are “reasonably moored to the Act’s provisions.” I d. at 485, 488–89.A R I Z O N A E X R E L

. D A R W I N V

. USEPA 21

To b e sure, ADEC ex plained, Alaska had “considerable leeway ” in its B ACT determinations, and EPA was required
to acco r d a p propriate deference to such determinations. Id.
at 490. B ut E PA has the authority to verify “ substantive compliance” w i t h t h e A ct’s B ACT provisions “ to g uard
ag ainst unreasonable desig nations.” Id. at 489–90. ADEC is thus fully consis t e n t w ith our conclusion that EPA has substantive authority to assure that a state’s proposals comply with the A ct, not simply the minister ial authority to assure that the state has made some determination of B ART.

Ariz ona also invokes American Corn Growers
, in which petitioners challeng ed aspects of EPA’s initial 1999 reg ional haz e r ule. That case does not su p p o rt Ariz ona’s position
reg arding EPA’s SI P r o le either. The D.C. Circuit in American Corn Growers d isap p roved EPA’s initial rule in part because its requirements were “i n c o nsistent with the Act’s provisions g iving the states broad authority over B ART determinations.” Am. Corn Growers
, 291 F

. 3 d a t 8. B ut American C o r n G r o wers in no w ay sug g ested that once a state has ex ercised its B ART role by pro p o s ing a SI P, EPA lacks autho rity substantively to review the SI P for consistency

with the Act.

F rom our determination that EPA has a substantive role in deciding whether state SI Ps are compliant with the Act a nd its implementing reg u lations follows the conclusion that the ordinary APA “arbitrary and c a pricious” judicial r eview standard appl i e s, w ith the requisite deference, to E PA’s determinations. Ag ain, neither American Corn Growers nor ADEC supports a contrary conclusion. I n particular, neither ADEC n or American Corn Grower s bolsters Ariz ona’s contention that, upon judicial r eview, EPA bears the burdenA R I Z O N A E X R E L

. D A R W I N V

. USEPA 22

of proving that the State’s B ART determinati o n s a re unreasonable.

ADEC did state that, for the purposes of d e ciding whether the state ag ency ’s B ACT d etermination in that case was reasonable, “ the production and persuasion burdens remain with EPA.” 540 U.S. at 494. B u t A DEC was at that juncture addressing a concern who l l y a bsent here. I n ADEC
, the Supreme Court held that the Act preve n t e d EPA from “g ain[ ing ] a proof-related tactical advantag e” by imposing a stop-construction order rather than filing a civil action in state court. 540 U.S. at 493–94. I n that connection, ADEC noted that “Cong ress nowhere sug g ested that the allocation of proof burdens w o uld differ depending upon which enforcement
route EPA selected.” Id. a t 493 (emphasis added). Petitioners in this case, h owever, challeng e not a n EPA enforcement action but the F inal Rule d is a p p r oving in part Ariz ona’s SI P submission. Such prospective administrative
ag ency rulemaking is ordinarily reviewed under the APA’s arbitrary and capricious standard; there i s no b asis for apply ing a different standard here.

I n sum, Sect ion 169A g ives states substantial responsibility in determining a ppropriate B ART control s. EPA may not disapprove reasonable state determinations that comply with the relevant s t atutory and reg ulatory requirements. See Am. Corn Growers
, 291 F .3d at 6–8. That is, as ADE C p ut it, EPA may not “second g uess” reasoned, leg ally compliant state decisions. 540 U.S. at 4 9 0. B ut Cong r ess intended that EPA, not the states alone, ultimately

ensure t h at state determinations as to reg ional haz e comply with the Act, and so authoriz ed EPA to disapprove st ate “analy sis that is neither reasoned no r m o o red to the [Act’s]
p r o v i s i ons.” N. Dakota

, 730 F .3d a t 761. Once the fede ra lA R I Z O N A E X R E L

. D A R W I N V

. USEPA 23

ag ency h as done so, our role as the r e v i e w i n g court remains what it alway s is when substantively reviewing ag e ncy action under the APA—deciding

, with appropriate d eference to the federal ag ency , whether the a gency ’s action w as “arbitrary

, capricious, an abuse of dis c retion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2).

B. P a r t i a l D i s a p p r o v a l o f t h e S I P ’ s B A R T Determ inations

W e now turn to Petitioners’ challeng es to EPA’s partial disapproval of Ariz ona’s SI P as it applies to the Coronado B ART determinations.

1. Arizona’s procedural claim

B e fore addressing Petitioners’ substantive arg u ments, we address Ariz ona’s procedural a rg ument

. Ariz ona maintains that, in acting only on the B ART determina t i o n s when it promulg a ted the F inal Rule, d eferring action on the rest o f the SI P, EPA “misconstrued its statutory authority and acted in

an arbitrary fashion.” Specifica l l y , Ariz ona contends that EPA c annot properly evaluate B ART determinations separately from the broader r easonable progr ess analy sis, because B ART determinations are just one aspect o f achieving Section 169A’s overall “reasonable p rog r ess” to the natural visibility

g o al. 42 U.S.C. § 7491(b)(2).

That is not so. There is no requirement that EPA approve

or disapprove a SI P submittal in a sing le action. T o the

con t rary , the Act ex pressly permits EPA to approve o r disapprove a SI P “in part.” 42 U.S.C. § 7 4 1 0 ( c ) ( 1 ), (k)(3);

s ee also Ass’n of I

rritated Residents v. EPA
, 423 F .3d 989, 997 (9th Cir. 2005).A R I Z O N A E X R E L

. D A R W I N V

. USEPA 24

The EPA rule p artially disapproving a reg ional haz e SI P which was recently upheld by Oklahoma

, 723 F. 3 d at 1206, for ex ample, “t[ ook] no action on whether O k l a homa has satisfied the r easonable prog ress r equirements.” 76 F ed. Reg

. 81,728, 81,730 (Dec. 28, 2011). Under the Haz e Reg ulations, SI Ps must co ntain reasonable prog ress g oals, 40 C.F .R. § 51.308(d)(1), as well as s o u rce-specific B ART determinations, id. § 51.308(e)(1). 1 2 O f c o urse, the implementation o f the B ART determinations will ultimately contribute toward meeting the reasonable prog ress g oals. B ut the Act sets out standards for B ART that are f r e e standing

, source-by -source, and not dependent on the long term visibility g oals i d en tified. EPA did n o t act arbitrarily b y considering Ariz ona’s B ART d eterminations separately from the State’s reasonable prog ress analy sis.

2. Arizona’s substantive claims

T u rn ing to the substance of the F inal Rule: EPA f ound that the SI P’s “overall approach” was “ generally reasonable and consistent” with the H az e Reg ulati o n s a nd the Guidelines. 1 3 7 7 F e d. Reg

. a t 42,840. Bu t it concluded that the Sta t e’ s B A RT determinations were deficient in three particular respects. F irst, Ariz ona’s control cost calculations

1 2 A s A rizo n a arg u es, in “ so m e circu m stan ces” B A RT co n tro ls m ay n o t b e “ n ecessary to m ak e reaso n ab le p ro g ress.” B u t th at i s so w h en states elect t o im

p lem en t an “ em issio n s trad in g p ro g ram o r o th er alter n ativ e

m easu re,” th at resu lt in “ g r e a t e r rea so n a b l e p ro g ress ” th an B A RT

. Id

. § 5 1 .3 0 8 (e)(2 ) (em

p h asis ad ded ). Here, th e S t ate d id n o t su b m it an altern ativ e m easu re u n d er § 5 1.3 0 8 (e)(2 ), ch o o sin g in stead to co n d u ct a

so u rce- sp ecif

i c B A RT an aly sis.

13 P etitio n ers d o n o t ch allen g e th e H aze Reg u latio n s o r th e Gu id elin es,

o n ly th eir im p lem en tatio n

in th e Fin al Ru le h ere at issu e.A R I Z O N A E X R E L

. D A R W I N V

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were not performed in accordance w ith the G u i d elines a nd

were otherwise unreasonable. See id. at 42,841; 77 F ed. Reg

. at 72,516–18, 72, 5 66. Second, A riz ona did not properly evaluate the visibility improvements to all Class I areas. See 77 F ed. Reg

. at 42,841–42; 77 F ed. Reg

. at 72,519, 72
, 5 6 6

. And third, Ariz ona ina dequately ex p lained its consideration of the B ART factors. See 77 F ed. Reg

. at 42,841, 42,846; 77 F ed. Reg

. a t 72,517, 72,566. B e cause of t h e s e deficiencies, EPA partially d isapproved Ariz ona’s B ART determinations, including those pertaining t o Coronado’s NO X emission controls.

Ariz ona and SRP contend that each of EPA’s conclusions is leg ally f

lawed and u nsupported by the record. Consequently

, they contend, the ag ency ’s partial disapproval of the SI P was arbitrary and c apricious. W e disag ree. E PA’s conclusions concerning the State’s B ART a n a ly sis a nd determinations were well e x plicated, car e fully g rounded in the a dministrative r ecord, and a n a ly tically reasonable, and so properly support its disapproval of Ariz ona’s NO X B ART determinations for Coronado.

( i) The SIP’s Cost Analysis

As one of the B ART factors, states must consider the “costs of compliance.” 42 U .S.C. § 7491(g )(2 ); 4 0 C.F .R. § 51.30 8(e)(1)(ii)(A). “States have flex ibility in how they

ca l c u l ate costs.” Haz e Reg ulations, 7 0 F ed. Reg

. at 39,127. A state’s cost calculations are critical to d etermining a B ART control’s “cost effectiveness,” where “‘effective ness’ is measured in terms of tons of pollutant emissions r e m o ved, and ‘cost’ is measured in terms of annualiz ed control costs.” Id. at 39,167.A R I Z O N A E X R E L

. D A R W I N V

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After identify ing control a lternatives and achievab l e emissions performance levels, states are directed to “develop estimates o f capital and annual c osts.” Id. a t 3 9,166. “The basis for e quipment cost estimates also sho u l d be documented, either with data supplied by an equipment vendor

. . . or by a re f

e renced source ( such as the [ Office of Air Quality Plann ing and Standards] Control Cost Manual . . . ).” Id.

The Guidelines instruct that the Cost Manual “addresses
most control technolog ies in s u f ficient detail for a B ART analy sis,” and that “ cost estimates should b e b a s e d on the [ Cost M a n u al] where possible” to “maintain and improve

c o nsistency .” Id. States are allowed by the Guidelines t o include “additional information” — such as “any information supplied by vendors that affects y our assumptions reg arding purchased equipment costs, equipment life, [ or] replacement of major components” — in their cost cal c u l a tions, but require them to provide documentation for a ny “element o f the calculation that differs from the

. . . Cost Manua l.” Id. n.15. F inally

, the Guidelines indicate that “[ t] he cost analy sis should also take into a ccount any site-specific desig n or other conditions

. . . that affect t he c ost of a particular B ART” option. Guidelines at 39,166.

I n its p r oposed r

ule, EPA found “ certain aspects” o f A r i zo n a ’ s c o s t calculations “ inconsistent” with the G u i d e l i n e s and Cost Manual and “disag ree[ d] with the manner in which [ Ariz ona] interpreted the cost-related information included in its [ ] SI P.” 7 7 F ed. Reg

. at 42,841. W ith reg ard to Coronado,
spe c i f ically

, EPA noted in its proposed rule that SRP “provided summaries of total c ontrol costs, such a s t otal annual operating and maintenance costs and total annualiz ed capital cost, but did not provide c ost information at a level o fA R I Z O N A E X R E L

. D A R W I N V

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detail that included line item costs.” Id. at 42,850. This omission meant that SRP did not provide Ariz o na “with control cost calculations at a level of detail that allowed f o r

a comprehensive review.” Id. at 42,851. As a result, EPA

ex p lained, it “[ did] n ot b elieve that [ Ariz ona] was able to evaluate whether SRP’s control costs were reasonable.” Id. Ari z o n a’s B ART analy sis was therefore inadequate because it “did not properly consider the costs o f compliance for e ach control option.” Id.

W e conclude that EPA’s disapproval of the cost analy sis underly ing Ariz ona’s B ART determination f or Coronado on t h a t b a s is was not “arbitrary

, capricious, [ or] an abuse o f discretion.” 5 U.S.C. § 706(2)(A). Ariz ona simply relied on the cost data provide d b y SRP, despite the fact that the data failed to include sufficient d etail f or the State meaning f

ully
to anal y z e the reasonableness of the costs of various control alternatives. States are required b y statute to consider “costs of compliance” in making B A RT d eterminations. 42 U .S.C. § 7491(g )(2). When they are n o t p r esented with enoug h data
to do so, EPA may

reasonably

conclude that their analy sis isA R I Z O N A E X R E L

. D A R W I N V

. USEPA 28

i n a dequate. 1 4 EPA’s decision to do so was not a rbitrary o r capricious.

( ii) The SIP’s Visibility Analysis

As p art o f its B ART analy sis, a s t a t e must analy z e “the deg ree of improvement in v isibility w hich may reasonably be anticipated to result from the use” of alternative c o n t r ol technolog ies. 4 0 C.F .R. § 51.308(e)(1)(ii)(A). EPA found no problems w ith the “technical adequacy of [ Ariz ona’s visibility ] modeling .” 77 F e d. Reg . at 72,519. Rather, EPA found Ariz ona’s interpretation of the visi bility modeling for all three plants “problematic.” Id. The problems, EPA contends, resulted in Ariz ona und e r s t ating the visibility benefits associated w ith installing SCR at Coronado. W e conclude that EPA’s assessment of Ariz ona’s visibility analy sis considered the appropriate factors rationally

, and so defer to its conclusions. See Motor Vehicle Mfrs.

, 4 63 U.S. at 43.

14 EP A also d isap p r o v ed t h e co s t an aly sis f

o r f ailin g to u se th e

“ ov ern ig h t m eth o d ” req u ired b y th e C ost Man u al. T h e “ o v ern ig h t”

m eth o d “ treats th e co s ts o f a p ro j ect as i f t h e p r o

j ect w ere co m

p l eted

‘ o v ern i g h t,’ w ith n o co n s tru ctio n p erio d an d n o in terest accru al.” 77 Fed

. Reg

. at 7 2 ,5 3 0. “ Sin ce assets u n d er co n stru ctio n d o n o t p ro v i de serv i ce to cu rren t cu sto m ers,” u tilities f o r ratem ak in g p u rp o ses u se an altern ativ e,

“ l ev elized ” m eth o d o lo g y , to “ cap italize[] th e in terest an d retu rn o n eq u ity th at w o u ld accru e o v er th e co n stru ctio n p erio d an d ad d s th em

to th e rate b ase w h en co n stru ctio n

is co m p l eted an d th e assets are u sed .” Id

.

B ecau se EP A h ad a su f

f icien t altern ativ e b asis f

o r disap p ro v in g th e C o ro n ad o co st an aly sis, w e d o n ot h ere decid e w h eth er it co u ld r e q u i r e A rizo n a to em

p lo y th e o v e r n i gh t m eth od

. W e d iscu ss EP A ’ s u se o f th e

o v ern i g h t m eth o d in its FIP in fra , at 3 9

– 40

.A R I Z O N A E X R E L

. D A R W I N V

. USEPA 29

F or Coronado, A riz ona used a “visibility i n d e x ”
averag ing the visibility benefits a t the closest ni n e C l a ss I
areas, but did not evaluate such benefits separately at the most impacted Class I area, the Gila W ilderness Area. 77 F ed. R e g

. at 72,519; see also 77 F ed. Reg

. at 42,850–51. E P A ’s
reg ulation s “do not prescribe a particular approach to calculating or considering visibility benefits across multiple Class I areas,” 77 F ed. Reg

. at 4 2,841; st at es have the “flex ibility to assess visibility improvements du e to B ART controls by one or more methods,” Guidelines at 39,170. The index ing a

pproach therefore “could be acceptable in itself a s part of assessing multiple area impacts and improvements.” 77 F e d

. Reg

. 72,519. B ut, E PA concluded, “without a ny consideration of particular area improvements, the averag ing
process causes especially larg e benefits at some indiv i d u al

areas to be diluted o r lost, effectively discounting some of the

more important effects of the c ontrols.” Id. (emphasis added).

Moreover, reg ardless o f the methodolog y used, EPA maintains, Ariz ona’s visibility analy sis in its SI P was unreasonable because it used “tw o c o ntrasting

, y et equally incomplete, a p p r oaches to assessing visibility improvements.” Ariz ona u sed a vis i b i l i t y index averag e to analy z e visi b i l i t y b enefits at Coronado, but its analy ses for Apache and Cholla considered visibility improvements “ only
at the sing le Class I area with the g reatest modeled impact fr o m a f acility ,” rather than at all impacted Class I areas. 77 F e d. Reg

. at 72,519. That i s , t he cumulative averag ing approach taken by Ariz ona in i t s an aly sis for Coronado “ is counter to [ Ariz ona’s] emphasis elsewhere in the SI P on the imp o r t ance of considering the visibility improvement at the sing le area havin g t h e larg est impact f rom a g iven facility

. ” Id. The upshot is the appearanc e t h a t the State selectivelyA R I Z O N A E X R E L

. D A R W I N V

. USEPA 30

c h o s e for e ach plant a methodolog y that minimiz ed t h e visibil i ty improvement achieved by the more string ent emission controls at each location.

Ariz ona made no attempt in its SI P, nor in its briefing in this appeal, to counter this appearance by ex plainin g w h y it chose d iffering approaches to v isibility analy sis for different facilities. SRP may be correct that “[ t] h e G uidelines allow
states to use e ither or b oth approach e s

. ” But, as described above, a state must include in its SI P “ an explanation o f t he CAA fac t o r s t h at led [ the State] to choose that option over other control levels.” Guideli n es at 39,170–71 (emphasis added). Adopting inc o n s i stent — indeed, contradictory

— approaches without p roviding a ny ex planation for that decisio n frustrated EPA’s ability to “review the substantive
content of the B ART determination.” N. Dakota

, 730 F .3d at 761.

Ariz ona a lso c o ntends that the outcome o f its B ART determinations would not have chang ed e ven if it had adopted the approach to visibility a naly sis EPA presc r ibed. The visibility improvements resulting from installing SCR, the State maintains, w ould in any e vent be “imperceptible” to the human ey e.

EPA ex press l y , and reasonably

, rejected this arg ument when it promulg ated the Haz e Reg ulations and Guidelines in 2005:

Even thoug h the visibility improvement f rom

an individual source may not be percept ible, it should still be c onsidered in setting BART because th e contribution to haz e may be

s i g n i f i c a n t r e l a t i v e t o o t h e r s o u r c eA R I Z O N A E X R E L

. D A R W I N V

. USEPA 31

contributions in the C l a s s I area. Thus, we disag ree that the deg ree o f impro v ement should be conting e nt upon p erceptibility

. F ailing to c o nsid e r less-than-perceptible contributions to visibility impairment wo uld ig no r e the CAA’s intent to h ave B ART requirements apply to sources that contribute to, as well as cause, such impairment.

70 F ed. Reg . at 39,129.

I n sum, EPA rationally determined that Ariz ona’s B ART visibility analy sis for Coronado was unsupporte d b y

ex p lanation and i nconsistent with the CAA and its
reg ulations. W e defer to its conclusions.

( iii) The SIP’s Choice of BART

E PA’s Guidelines require states to support their B ART determinations with “documentation f o r a ll r equired analy ses,” including e x planations o f t h e ir B A RT f ive-factor analy sis. 40 C.F .R. § 51.308(e)(1). F urther, the Guidelines indicate that states “should p rovide a justificatio n for adopting the techno l o gy

. . . select[ ed] as the ‘best’ level o f control, inc l u d i n g an explanation of the [ Act’s] factors that led [ t he State] to choose that option over other control levels.” Guidelines a t 39,170–71 (emphasis added). A state need not perform this analy sis if a source already has, or has committed to installing

, the most string ent controls available. Id. at 39,165. Otherwise, as EPA ex plained in proposing the Rule here at issu e , “ [s] tates are free to determine the w eig ht and sig nificance assig ned to each factor, but must consider all five factors a

nd provide a reasoned explanation for adopting [ B ART] .” 77 F ed. Reg . at 42,838 (emphasis added).A R I Z O N A E X R E L

. D A R W I N V

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I n the F inal Rule, EPA concluded that, althoug h A riz o na “presented information relevant to each of the B A RT factors” and “ex pressly stated” that it had c onsidered those factors, it did n o t “provide[ ] an ex planation r eg arding how this information was used to develop its B ART determinations.” 77 F ed. Reg

. at 72,517; see also id. at 72,566 (“[ Ariz ona] has
not demonstrated t h at it actually took into consideration the B ART factors in making its d eterminations[ .]

. . . [ I ]t g a ve no

ex p lanation o r rationale for h ow it reached a determination based on that information.”). More specifically

, EPA found that A riz on a d i d n o t discuss how the results of the visibility index were weig hed ag a inst the other B ART fa ctors for C o r o n a d o

. I

d

. at 72,518; 7 7 F ed. Reg

. at 42,851. F urther, EPA noted that while the SI P includes cost data, it “provides

no ex p lanation reg a r d i ng how, or e ven if, th[ e] cost information wa s used in a rriving a t its NO X B ART determinations.” 77 F e d

. Reg

. at 72,517. I ndeed, “[ i] n the

case of

. . . Coronado, the

. . . SI P d oes not analy z e th[ e] cost information in even a qualitative manner.” Id.

A r eview of A riz ona’s B ART Technical Supp o r t Document supports EPA’s analy ses with reg a rd to Coronado. Ariz ona’s ultimate determination w as that, “[ a] fter reviewing the B ART analy sis provided by the company , a nd b ased upon the information a

bove

. . . B ART c o n trol at [Coronado] for NO X is

. . . L ow NO X b u r n e r s with OF A ” with an emission
rate of 0.32 lbs/mmB tu. B efore announcing that decision, Ar i z o n a provided several charts of data concerning the various controls’ cost-effectiveness and visibility impac t s

. B ut, having d one so, it provided no r easoning or rationale to jus tify its ultimate B ART selection. There was simply

no attempt made to ex plain why the State chose o ne control technolog y over a nother, or how it evaluated the various B ART factors (i. e., cost-effectiveness, visibilityA R I Z O N A E X R E L

. D A R W I N V

. USEPA 33

improvement, energ y and non-air q uality environment al impacts, ex isting pollution control technolog y in use, and the remaining useful life of the source), either individually o r in combination.

I ndeed, A r iz ona does not meaning fully contest E PA’s adverse characteriz ation of its B ART analy sis. Rat h e r , it contends that “no g reat ex planation is required to understand the State’s d ecision not to s p e nd hundreds of millions o f dollars o f its citiz ens’ money for an imperceptible im p r o v e ment in visibility .” Yet, under the Act and its implementing reg ulations, states are required in SI Ps to

ex p lain the choice o f B A RT, taking into account not only cost and v isibility improvement, but a l s o t h e three other B ART factors

. See 40 C.F .R. § 51.308(e)(1)(ii)(A); Guidelines at 39,170–71.

W e recentl y invalidated a F I P in part because E PA’s conclusory cost-benefit analy sis “fail[ ed] to reveal to a reader how EPA de t e r m i n e d that the cost of controls were not justified.” NPCA , 788 F

. 3d at 1145. The same f ailure h ere, albeit by a state in its SI P, fares no better. Although the Act affords states sig nificant discretion in determinin g the appropriate le v e l s of B ART controls, EPA must r eview whether a state’s determinations comply with the statute a nd its rules. S

e e N. Dakota

, 730 F .3d at 7 61; Oklahoma

, 7 23 F .3d a t 1 209. J ust as we could not in NPCA r e v i e w EP A’s cost/benefit a

n aly sis a b sent any coherent ag ency analy sis, EPA reasonably determined th a t i t c ould not meaning fully review Ariz o na’s parallel d etermin a t ion, because the State did not provide a n adequate ex planation o f i t s u n d e r ly ing analy sis, if any

. C f

. 4 0 C

. F. R

. § 51.308(e)(1)(ii)(A); Guidelines at 39,170–71.A R I Z O N A E X R E L

. D A R W I N V

. USEPA 34

I n sum, EPA’s conclusion that Ariz ona did not adequately

ex p lain its NO X B ART determinations provides reasonable support for its partia l d i s approval of Ariz ona’s SI P. W e therefore defer to EPA’s determination.

( iv) Conclusion

EPA r e asonably concluded that Ariz ona’s cost a nd visibility impact analy ses for Coronado suffered from sig nificant analy

tical defects and that the SI P did not provide

a reasoned ex planation of the b a ses for the ultimate B ART determination for Coronado. A lthoug h Section 169A affords the states substantial authority to determine B ART controls, the combination of these d efects provided EPA reasonable
g rounds upon which to disapprove the Ariz ona’s B ART determinations as to NO X emissions limits at Corona d o. I ts partial disapproval of the SI P in this respect was not arbitrary or capricious.

C. EP A’s P rom ulgation of the F IP

To remedy the deficiencies it identified in its partial disapproval of Ariz ona’s SI P, EPA in the same F inal R u le promulg a ted a F I P. As relevant h ere, EPA concluded th at selective c ataly

tic reduction with low-NO X burners a nd overfire a ir, “the most string ent available control option” for N O X emissions, was B ART for Coronado. 77 F ed. Re g. at 42,864. I t thus proposed NO X emission limits of 0.05 lb/mmB tu, based o n a rolling 30-boiler-operating day
averag e , 1 5 fo r Coronado. I d. at 42,865. After receiving

15 “ B o iler o p eratin g d ay m ean s a 2 4 –h o u r p erio d b etw een 1 2 m id n ig h t

an d th e f ollo w in g m id n ig h t d u rin g w h ich an y f

u el is co m

b u sted at an y tim e i n th e steam

- g en eratin g u n it. It is n o t n ecessary f o r f u el to b eA R I Z O N A E X R E L

. D A R W I N V

. USEPA 35

comments on its proposed r ule, EPA’s F inal Rule imposed a F I P containing revised NO X emission limits of 0.065 lb/mmB tu, measured a s an averag e of the two Coronado
g enerating units. See 77 F ed. Reg . at 72,514–15. This final emission limit is, of c ourse, very sig nificantly more string ent than the 0 .32 lb/mmB tu NO X limit proposed by Ariz ona in its SI P. A s required b y t h e Guidelines, EPA e x plained its
g eneral a naly tical approach and B A RT determinations at substantial leng th in the F inal Rule. See id. at 72,526–35.

SRP presses a number of substantive challeng es to the F I P’s emission limit, as w ell as to EPA’s analy sis underly ing
t hat determination. Ariz ona, on the other hand, c halleng e s EPA’s decision to promulg ate a F I P in the same rule in which it disapproved in part A r iz ona’s SI P. W e address these challeng es in turn.

1. The F IP ’s BART Determ inations

Under Section 169A and the Haz e Reg ulations, EPA must perform the same BA R T a naly sis when promulg a ting a reg ional haz e F I P as that performed by states in developing SI Ps. See 42 U.S.C. § 7491(b)(2)(A), (g )( 2 ) ; s e e also 40 C.F .R. § 5 1.308(e)(1)( i i )(A)–(B ). Challeng es to the F I P a re reviewed “under the same arbitrar y and capricious standard

. . . used to evaluate the EPA’s rejection of the SI P.” Oklahoma

, 723 F .3d at 1215. Bu t this review requires a “slig h tly different perspective,” a s we “evaluat[ e] the E PA’s

own choices under the g uidelines, as opposed to evaluating its

co m bu sted t h e en tire 24

– h o u r p erio d .” 4 0 C .F.R. § 6 0 .4 1

. A t th e en d of each b o iler op eratin g d ay , em issio n s a re m easu red an d a n ew 3 0

- d ay

ro llin g av erag e is calcu lated

. S ee 4 0 C.F.R. § 6 0 .4 8 Da(b ).A R I Z O N A E X R E L

. D A R W I N V

. USEPA 36

choice to reject [ A riz ona’s] SI P u nder the g uidelines.” Id. (emphasis added).

SR P contends that E PA’s cost and visibility analy ses

c o ntained in its F I P were arbitrary and capricious. I t a l s o maintains that, for a number of reasons, the F I P’s NO X emission limits a r e n either achievable nor reasonable. Consequently , it arg ues, the F I P’s B ART determinations for Coronado w ere , o n the whole, arbitrary and capricious. F o r the reasons set forth below, we in the main do not ag r ee, but we leave one issue open because EPA is reconsidering it.

a. EPA’s V

isibility Analysis

SRP first disputes E PA’s “cumulative” approach. EPA estimated the visibility improvemen t s that would o ccur at each of the Class I areas potentially impacted by Coronado’s emissions and then ag g reg ated those impr o vements. SRP contends this analy sis resulted in “a larg e deciview number” that does not represent the actual perc e p t ion of visibility conditions a t any particular Class I area. SRP’s challeng e to EPA’s visibility improvement analy sis suffers f rom two substantial defects.

First
, EPA considered the “cumulative visibility impr o v ement” resulting from various control technolog ies “[ a] s a supplement” to considering deciview improvements at individual Class I areas. F or Coronado, specifically

, EPA

ex p lained that modeling showed that SCR control technolog y would result in visibility benefits at e a c h of eleven Class I areas—including the Gila W ilderness Area, which EPA f a u lted A riz ona for failing to consider— as well as o n a

c u m u l ative b asis. See 77 F ed. Reg

. at 42,863 tbl.23

. I n response to P etitioners’ comments critiquing E PA’sA R I Z O N A E X R E L

. D A R W I N V

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cumulative approach, EP A ex plained in the F inal Rule that “[ t] he a pproach is simply one way of assessing improvements
at multiple areas, for consideration along with other visibility

m e t rics.” 77 F ed. Reg

. at 7 2,532. SRP’s claim th a t E P A “focused on this [cumulative] methodolog y a lm o s t

ex c lusively ” is simply not supported by the record.

Second

, S R P’s insistence on “ human perception” as the determinative “ c o r

n erstone” f

or the B ART determinations for each individual source is overstated. As discus s e d above, when promulg ating the B A RT Guidelin e s, EPA ex plicitly disag reed “ that the deg ree of improvement should be conting ent u

pon perceptibility ” when determining B ART for an individual source. 70 F e d . Reg . at 39,129.

EPA’s F inal Rule provided a f ully a dequate ex planation of its application of the deciview concept in the F I P. Ag ain,

one deciview is the minimum visibility difference people can perceive. See Guidelines at 39,120 n

. 3 2

. T h e Guidelines
sug g est that states use a minimum threshold of 0.5 deciviews
to determine whether a source is subj e c t to B ART controls. EPA ex plained in its F inal Rule, however, that “[ s] maller improvements from controls should be considered in B ART determinations

, since they c an b e beneficial in considering effects from cont r o l s on multiple sources.” 77 F ed. Reg

. at 72,533 (emphasis added).

I n conclusion, EPA’s visibility improvement a ssessment

w a s consistent with the statute and r eg ulatory requiremen t s , and supported by

the record.A R I Z O N A E X R E L

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b. EPA’s Cost Analysis

SRP also challeng es EPA’s cost analy sis, arg uin g t h a t it “diverg e d” from the Guidelines a n d was “ inadequate ” to support its B ART determinat i ons for NO X e missions. Additionally

, SRP arg ues that E P A ’ s cost assessment was fla w e d “because [ EPA] insisted o n rig id adherence to the [ Cost Manual] irrespective of site-specific costs.”

EPA ex plains that it used the “ a ir pollution control cost development” component of the I nteg rated Planning Model (“I P M ”) to develop its cost estimates. See 77 F ed. Reg

. at 72,530. I PM, a model of the Uni t e d S t ates electric power

s e c t o r , “relies upon a very larg e number of data inputs a n d provide s forecasts” of costs and other variables relevant to decisionmaking in that sector. Id. SRP m a i n tains that b y using I PM cost estimates, EPA ig nored the Coronado facility ’s “site-specific characteristics,” and so understated the actual costs of compliance f or ins t a l l i n g c ontrols at Coronado.

I n the F inal Rule, however, EPA ex plained that it did not rely o n I P M as a whole, but rather o n “one component o f I PM, specifically

, the comp onent that develops the costs o f air pollution c on t r ol technolog ies.” Id. As EPA ex plained, that cost development methodolog y was not “ g eneric” o r “g enera l i z ed

. ” Id. Rather, it was g rounded in d a tabases o f actual SCR proj ects from 2004, 2006, and 2009. Id. At the

same time, EPA re c o g niz ed that “a costly eng ineering evaluation that included site visits would potentially produce

a more refined cost estimat e that could be considered more site-specific than our own.” Id.A R I Z O N A E X R E L

. D A R W I N V

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I n addition, in response to Petitioners’ public c omments contending that EPA failed to co nsider site-specific information, E PA c onducted supplemental cost analy ses that relied upon “cost estim at es provided b y SRP.” See id. at 72,558–60. B ased on thi s supplemental cost analy sis, EPA concluded that “the cost-effectiveness values of SCR

. . . [ are] not . . . cost-prohibitive” for Coronado. Id. at 72,560.

Not s a tisfied, SRP contends that in its supplemental analy sis, “EPA ex cluded c o sts it d eemed inconsistent wit h the [ Cost Manual] ” such as Allowance for F unds Utiliz ed During Construction (“AF UDC”). 1 6 This a r g ument restates Petitioners’ objections to EPA’s reliance on t h e overnig ht costing methodolog y when it partially d isapproved Ariz ona’s SI P. See supra note 1 4. EPA’s use of such a methodolog y in its own FIP’s cost a

naly sis is, without d oubt, reasonable. See 77 F ed. Reg . at 72,518.

I n rejecting Ariz ona’s SI P, EPA ex plained that the use o f the overnig ht method was “crucial to [ its] ability to assess the reasonableness of the costs of compliance.” Id. T he ag ency went on:

A proper e valuation o f cost-effectiveness allows for a reasoned comparison not only o f different control o pt ions for a g iven facility

, b u t a lso of the relative costs o f controls fo r similar faciliti e s. I f the cost-effectiveness o f

a control technolog y for a particular facility is outside the r ang e for o ther similar facilities,

1 6 “ A FUDC p rim arily rep resen ts a to o l f o r u tilities to cap tu re th eir co st

o f b o rro w in g an d retu rn o n eq u i ty du rin g co n s tru ctio n p erio d s.” 7 7 Fed

. Reg . at 7 2,5 3 1

.A R I Z O N A E X R E L

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. USEPA 40

the control technolog y may be rejected a s not cost-eff

ec t i v e.

. . . W ithout an ‘apples-to-apples’ comparison of cost s , it is impossible to draw r ational conclusions about the reasonableness of the costs of compliance for particular c ontrol optio n s

. Use of the [ Cost Manual] methodolog y is intended to allow a fair comparison of polluti o n c ontrol
costs b etween similar applications for
reg ulatory

purposes.

Id. EPA concluded that “it is reasonable for us to insist that
t h e [ Cost Manual] methodolog y be observed in the c ost estimate process.” I

d. According ly

, it rej ected c omments that items like AF UDC should have been incorporated into its
cost analy sis, as they were “i n consistent with [ the Cost Manual] methodolog y .” Id. a t 72,531.

EPA’s analy sis is reasonable. The purpose of the cost analy sis r e quired as part of a B ART determination is to foster comparison o f the cost o f the visibility improvements enabled by various control technolog ies. As EPA’s c omments indicate, cross-facility comparisons of similar sources with
reg ard to the cost-effectiveness of a g iven control option aid in determining co st-effectiveness a t a specific source. Control options are likely to impact similar sources similarly ; comparisons a ssure that the cost and benefit fig ures used for

a particular site are realistic, rather than inflated in o ne direction or another. Consideration o f A FUDC would not further this inquiry

, as AF UDC is ultimately reflective of the implementing entity ’s f

inancial and log istical situations,
g rounded in past decisions and in the c ompany ’s fin a n c i al policies and attitudes, not of the hard c osts of the equipment and construction, which should b e consistent across sites.A R I Z O N A E X R E L

. D A R W I N V

. USEPA 41

W h ile AF UDC and similar concepts are relevant for sales a nd ratemaking

, including them would und e r mine the sort o f “apples-to-apples” comparison that EPA asserts is necessary as part—but only

part—of assessing

the control options.

This approach is consonant with the Guideli n es, which specifically advise that “reasonable rang e[ s] ” for cost effectiveness are those that are “consistent with the rang e o f
cost effectiveness values used i n other similar p ermit decisions over a period of time. ” G u i delines at 39,168; see also Oklahoma

, 723 F .3d at 121 3 ( “T h e g uidelines say that
states should follow the manual’s methodolog y so that projects c an be more e asily c o mpared.”). Moreover, adopting

a costing methodolog y wh i c h focuses on a chieving consistency and facilitating comparisons alig n s with the CAA it s e l f, which empowers E PA to promulg ate national
reg ulations concerning B ART determinations. See 4 2 U .S.C. § 7491(a)(4), (b)(1).

According ly

, we reject SRP’s arg ument that the F I P’s underly ing cost analy sis was arbitrary and capricious.

c. Achievability of the FIP’s N O X em ission lim its f

or Coronado

The Haz e Reg ulations provide that the B ART determination “must b e base d on an analy sis of the best
sy stem of continuous emission c ontrol technolog y available and assoc i a ted emission reductions achievable for e ach B ART-elig ible source that is subject to B ART.” 4 0 C .F .R. § 51.308(e)(1)(ii)(A) ( e m p h asis added). The reviewing authority should “take into ac c o u n t the most string ent emission control level th at the technolog y is capable o f

a c hieving ,” by considering “recent r eg ulatory decisions a n dA R I Z O N A E X R E L

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performance data (e.g

., manufacturer’s da t a, eng ineering estimates and the ex perience of o ther sources).” Guidelines at 39,166.

S R P arg u es that the F I P’s NO X emission limit f o r Coronado

— 0.065 lb/mmB tu a v erag ed across the facility

— is not achievabl e

. More specifically

, it arg ues that (1) the emission limits are technically infeasible; and (2) EPA did
not take into account the Co n sent Decree binding Coronado Unit 2 when formulating the emission limits.

B o th of these arg

u ments will be rendered moot if EPA’s
recent action proposi n g t o revise the F I P’s NO X emission limit f or Co r o n a d o results in a final revised F I P consistent with the proposal. See 80 F ed. Reg

. 17,010 (March 31, 2015). 1 7 Th e proposed revision would replace the facility

wide compliance method with “ a u n i t

- specific compliance

m e t h od for determining compliance with

. . . B ART [] emission limits for nitrog en ox ides,” a n d would establish “unit-specific limit[ s] ” of 0

. 0 6 5 lb/mmB tu for Coronado Unit 1 and 0.080 lb/mmB tu for Coronado Unit 2. Id.

SRP’s technical feasibility arg ument was larg ely based on the assertion that a 0.050 lb/mmB tu e missions limit — which SRP contended Coronado Unit 1 would have to satisfy

—
was “infeasible” for SCR retrofits to coal-fi r ed electric
g enerating units. Even thoug h EPA based i t s BA RT determinations for Coronado o n modeling showing that SCR controls c ould achieve a 0.050 lb/mmB tu NO X emission rate with a n 80%–90% control efficiency

, see 77 F ed. Reg

. at 42,853, and has imposed a NO X e mission limit in th e 0.050

1 7 EP A h as recen tly in f

orm ed u s th at it ex p ects to issu e th e f i n al rev i s ed FIP b y March 2 0 1 6

.A R I Z O N A E X R E L

. D A R W I N V

. USEPA 43

lb/mmB tu rang e in ot h e r, similar rulemaking s, see 77 F ed. Reg

. at 72,544 tbl.7, the proposed r evised F I P’s limits for Coronado U nit 1 are now 0.065 lb/mmB tu. 1 8 L ikewise, al t h o u gh SRP initially arg ued that the F I P’s emission limits

were inconsistent with the limits prescribed by a pre-ex isting Consent Decree as to Coronado Unit 2
, E PA’s p r oposed F I P

r e vision e stablishes the same emissions limit as tha t prescribed by the Consen t D e c r ee: 0.080 lb/mmB tu. See 80 F ed. Reg . at 17,016–18. Consequently , these arg uments, whatever merit they may have had as to the orig inal F I P, will not carry force if the proposed revised F I P is adopted.

Additionally

, SRP arg ues that the F I P’s emissions limits

are in c onflict with EPA’s own “p re s u m ptive” limits. The B ART Guidelines provide a list of “ p r esumptive NO X limits,” based o n boiler and coal ty p e, for certain c oal-fired
g enerating units operating w ithout post-combustion controls. Guidelines at 39,171. Under the Guideli n e s , the reviewing authority “should require such [ f acilities ] t o meet the [ presumptive] NO X emission limits, unle s s [ it] determine[ s] that a n alternative control level is justified based on consideration of the statutory factors.” Id. The p r e sumptive NO X limits for Coronado are 0.32 lb/mmB tu for bituminous coal a nd 0.23 lb/mmB tu for s u b -bituminous coal. Id. tbl.1. A r iz ona’s SI P proposed a N O X emission limit for Coronado within the presumptiv e limit rang e, while the F I P imposes a far lower f

acility -wide limit. SRP arg u es that E PA, unlike Ariz ona, did not consider the p r e sumptive limits, a nd therefore violated the Guidelines.

18 A 0 .0 65 lb /m

m B tu em issio n s lim it m ay a lso b e, in S RP ’ s v iew

, tech n ically in f

easib le, an d SRP is en t itled to p etitio n f o r rev iew o f EP A ’ s actio n f in alizin g th e FI P r e v isio n w h en i t i s issu ed

. S

ee 42 U.S.C. § 7 6 0 7(b ).A R I Z O N A E X R E L

. D A R W I N V

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As the F inal Rule e x p l ains, EPA did c onsider the presumptive limits but found there is “no sing le p r e sumptive NO X limit that applies to any o f these units ,” a s e ach of the facilities “ historically burned b oth bituminous an d subbituminous coal.” 77 F ed. Reg

. at 72,529. According ly

, EPA instead “considered th e t echnolog ical basis for p r e sumptive NO X B ART limits

. . . as part of the five-facto r analy sis [ it] performed for each facility .” Id.

I n any event, SRP’s arg ument that the “law requires [ the presumptive] li m i t s t o be taken into account in any B ART determination” is belied b y the Guidelines. T he p r e sumptive emission limits are “rebuttable” and “do[ ] not preclude states

or EPA from setti n g l i m its that differ from those presumptions.” 77 Fe d

. Reg

. at 72,529. I nstead, the Guidelines ex p ressly allow for an alternative control level to be formulated based on the statutory factors, provided that the alternative limits are based on a r ea s o n e d B ART analy sis. 70 F ed. Reg

. at 39,171. Moreover, the presumptive emission limits are presumed to be cost-effective

, n o t p r esumed to be B ART in every case. See 77 F ed. Reg

. at 51,620, 51, 6 33 (Aug

. 24, 2 012 ) ; 7 7 F e d. Reg

. 1 4,604, 14,665 (Mar. 12, 2012).

I n sum, EPA acted rea s o n ably in departing from Guidelines’ r ebuttable presumptive limits. B ut, b ecause EPA has n ot y et completed its proposed revised F I P, we decline to rule on the reasonableness of its emissions limits, as they a re likely to be a ltered. This a s p ect of these proceeding s is therefore stay e d until EPA c o n cludes the a d m i n istrative process and issues its final revised F I P.A R I Z O N A E X R E L

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2. Sim ultaneous Disapproval of a SIP a nd P rom ulgation of

a F IP

Apart from its substantive c halleng e s to the F I P, A riz o na contends that EPA procedurally e rred in p romulg ating the F I P in the same rule as its partial disapproval of the SI P. That is
not so.

Under the Act, EPA shall promulg ate a F I P “ at any time within 2 y ears” after EPA disapproves a SI P in w h o l e or in part or finds that a state has not made a required submission. 42 U.S.C. § 7410(c) (emphasis added). A state may forestall the promulg a tion of a F I P if it “co r rects the deficiency

, a nd [ EPA] a pproves the plan or plan revision, before [EPA] promulg a tes such [ F I P]

. ” Id. F urthermore, a state may submit a SI P revision to EPA a t a n y time, and EPA must act on it within twelve months of submission. Id. § 7410(k).

The F inal Rule’s partial d isapproval of Ariz ona’s B ART d eterminations c onstituted a trig g er under the Act for promulg a ting a F I P replacing those elements. The A ct

ex p ressly authoriz e s EPA to promulg ate a F I P “ at any time ” within two y e ars o f disapproving a S I P

. “At any time,” o f
course, includes simultaneo u s l y with the SI P’s disapproval. See Oklahoma , 723 F .3d at 1223.

Ariz ona ultimately recog n iz es that EPA had the authority
to promulg ate the F I P simulta n e o usly with its partial disapproval, but maintains that EPA did not r ealiz e that it h ad discretion to provide Ariz o na up to two y ears to c or r e c t any deficiencies. EPA, A riz ona p o sits, h a r bored the erroneous belief that its oblig ations under the Consent Decree r equired it to act when it did.A R I Z O N A E X R E L

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Some p rocedural background is r e q uired to understand the thrust of Ariz ona’s arg ument

. After EPA did not promulg a te F I Ps within two y ears of its J anuary 2 009 finding that many states, including Ariz ona, had not submi tted required SI Ps, it entered into a Consent Decree requiring the federal a g e ncy to approve a SI P or promulg ate a F I P b y November 15, 2012. See supra , p. 13–14. I n the F inal Rule, EPA stated that the Consent Decree “ requir e d [ it] to issue a F I P for any portion of the Ariz ona SI P that we cannot approve.” 77 F ed. Reg

. at 7 2,569. EPA further ex p lained that “while

. . . in the absence of an ex pired statutory duty a nd

a court-ordered deadline to issue a F I P, it would be preferable for us to g ive Ariz ona additional t i m e to revise its Reg ional Haz e SI P prior to promulg ation of a F I P, we simply do not have this option under these circumstances.” Id. at 72,571.

Ariz ona contends that the J anuary 2009 finding constituted only a determination that Ariz ona failed to submit

a Section 309 SI P, and that the correct remedy for Ariz ona’s

a sserted d eficiency “was to impose a F I P supply ing the missing Section 309 elements, not to impose a F I P under Section 308, a s it did here.” B ut, as w e ex plained earlier, see supra , p. 11–12, Section 309 provides a n alternative mechanism for western states to comply w ith th e CAA’s visibili t y r equirements for certain Class I areas. Such states must include Section 308 components for other Class I areas, and they remain subject to Section 308’s requirements if they do not submit a Section 3 09 SI P. S ee 40 C.F .R. § 51.309(a), (e), (g )(2). Ariz ona e x pressly a c knowledg ed that its Section 309 SI P submission lacked c e r t a i n r equirements under sections 51.309(d)(4)(viii) and (g )

. B ecause the State did not submit an adequate Sec t ion 309 SI P, it did n ot submit an adequate regional haze SI P. EPA was required to promulg ateA R I Z O N A E X R E L

. D A R W I N V

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a F I P t o fill in the g ap. See 4 2 U.S.C. §§ 7410(c)(1), 7491(b)(2)(A).

More practically

, it is u n l i kely that a different outcome would have re s u l t ed if EPA had provided Ariz ona with

a dditional time to correct its Section 308 SI P. EPA h ad

ex p ressed a number of its concerns to Ariz ona after reviewing its propo s ed S I P in late 2 010. EPA also identified the basis for its proposed partial disapproval in its J uly 2012 proposed rule. Ariz ona made no effort to c o r r ect its SI P in lig h t o f these comments. T here is no reason to think it w ould have done so a fter the Fi n a l Rule disapproving the SI P issued either.

I n sum, EPA properl y promulg ated its F I P in the same

ru l e a s i t s partial disapproval of the SI P. F urther, as EPA stated in the F inal Rule, the State remains free to, at any time, “submit a revised SI P to replace the F I P.” 7 7 Fe d

. Reg

. at 72,571.

IV. CONCLUSION

F or the r easons set fo r t h a b ove, w e deny Ariz ona’s a nd SRP’s petitions for review of EPA’s F inal Rule as to EPA’s disapproval of Ariz ona’s SI P. Our ultimate review of E PA’s F I P, however, must await EPA’s final action on its proposal
to revise the F I P in specific re s p e c t s

. As noted, EPA has stated that it ex p ects to finaliz e the revised F I P by March 2016. According ly we stay these proc e e d i n gs as to evaluation of the F I P’s technical feasibil i t y until the administrative process is complete.

P ETITIONS DENIED.A R I Z O N A E X R E L

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G LOSSARY OF ACRONYMS

A F U D C

– A l lowance for F u nds U tiliz ed During Con s t r u c t i o n

AP A – Administrative Procedure Act

CAA – Clean Air Act

BACT – B est Available Control Technolog y

BART – B est Available Retrofit Technolog y

EP A – Environmental Protection Ag ency

F IP – F ederal I

mplementation Plan

IP M – I nteg r ated Planning Model

LNB – L ow NO X B u r

ner

NO X – Nitrog en Ox ides

OAQP S – Office of Air Quality Planning and Standards

OF A – Overfire Air

P SD – Prevention of Sig nificant Deterioration

SCR – Selective Cataly

tic Reduction

SIP – State I mplementation Plan

SO 2 – Sulfur Diox ideA R I Z O N A E X R E L

. D A R W I N V

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S RP – Salt River Project Ag ricultural I mprovement a n d Power District