April 25, 2014 Via ElectronicMail Ginger Vagenas (AIR

–2) U.S. Environmental Protection Agency, Region 9 75Hawthorne Street San Francisco, CA94105

–3901 vagenas.ginger@epa.gov Re:Sierra Club Comments in Docket No.EPA

–R09

–OAR

–2013

–0686 Dear Ms.Vagenas: EPA is proposing to approve a revision to the ArizonaStateImplementationPlan(SIP) for maintaining the 1997 National Ambient Air Quality Standardfor ozone averaged over eight hoursin the Phoenix

-Mesa nonattainment area. EPA proposesto find that the maintenance plan meets all applicable requirements of the Clean Air Act(CAA)
. EPA is also proposing to redesignate the Phoenix

-Mesa nonattainment area to attainmentof the 1997 8

-hourozonestandard. EPA hasproposedthat the area has met the five criteria for redesignation under section 107(d)(3)(E) of the Act. As Sierra Club describes in detail below, because the Arizona and Maricopa County SIPs contain illegal provisions regarding emissions during startup, shutdown and malfunction (SSM) events, the proposedozonemaintenance plan and the redesignation do not meet all the applicable requirements of Act. Specifically, because of the illegal SSM provisions, EPA cannot find that Arizona or Maricopa County have met all requirements applicable to the area under section 110 and part D of theAct, CAA section 107(d)(3)(E)(v),cannot find that the improvements in air qualityaredue to enforceable reductions in emissions, CAA section 107(d)(3)(E)(iii), and cannot findthat the maintenance plan meets all applicable requirements of theAct, CAA section 107(d)(3)(E)(iv). EPA has found in other proposed rules that illegal SSM provisions are grounds for denying redesignationrequests and maintenance plans.See Approval and Promulgation of Air Quality Implementation Plans; Utah; Redesignation Request and Maintenance Plan for Salt Lake County; Utah County; Ogden City PM10 Nonattainment Area, 74 Fed. Reg. 62717, 62725

- 6 (Dec. 1, 2009);see Finding of Substantial Inadequacy ofImplementation Plan; Call for UtahState Implementation Plan Revision, 76 Fed. Reg.21639 (Apr. 18, 2011) (Final ruleissuing SIP call for Utah to revise SSM provisions). The Sierra Club isAmerica’soldest and largest grassroots environmental group, with over 1.3 million members and supporters nationwide, and 12,129members in the state of Arizona. Sierra Club members live, work, attend school, travel and recreate in areas adversely affected by pollutionin and from the Phoenix area. Sierra Club members enjoy and are entitled to the benefits of natural resources that are adversely affected by pollution, including air, water and soil; forests and cropland; parks, wilderness areas and other greenspace; and flora and fauna. The activities enjoyed by our membership that are affected by this rule include breathing, enjoyment of scenic views, walking, gardening, hiking and work

-related activities. Sierra Club members and their families include members of sensitive populations such as asthmatics, the elderly and children who are at elevated risk for the deleterious health effects posed by emissions during periods of equipment startup, shutdown and malfunction. Arizona and MaricopaCountySSM SIP Provisions The Arizona SIP’s SSM provisions include affirmative defenses for excess emissions caused by malfunctions, Ariz. Admin. Code § 18

-2

-310(B) and startup or shutdown,id.§ 18

-2

-310(C), available at http://yosemite.epa.gov/R9/r9sips.nsf/AgencyProvision/87B02615BA87C78888256D160080CB E8?OpenDocument
. The Maricopa County Air Pollution Control Regulations contain an SSM provision that is identical to the Arizona state provision. Maricopa County Air Pollution Control Regulation 3, Rule 140, §§ 401 (affirmative defense for malfunctions), 402 (affirmative defense for startup and shutdown),approved by EPA atRevision to the Arizona State Implementation Plan, Maricopa County Environmental Services Department, 67 Fed. Reg. 54,957 (Aug. 27, 2002), andavailable at http://yosemite.epa.gov/R9/r9sips.nsf/AgencyProvision/0514F87920A9CD0185256FD6005AE5 88?OpenDocument Affirmative Defense Provisions are Inconsistentwiththe Clean Air Act As the D.C. Circuit Court of Appeals recently confirmed inNRDC v. EPA,No. 10

-1371(D.C. Cir,Apr. 4, 2014) (“Cement Kiln Decision”), EPA cannotallowaffirmative defense provisions because they are inconsistent with the Clean Air Act.Id. at 13

-18. The Clean Air Actallows citizens to enforce violations of the Act andcivil penaltiesare anavailableremedy. The Act unambiguously gives courts the discretion to assess penalties for violations, and it also specifies a list of factors courts must consider, including “the seriousness of the violation” and “other factors as justice may require.” Affirmative defense provisions conflict with the Clean Air Actbecause they give polluters the means to avoid penalties for their violations of theClean Air Act, thereby limiting courts’ discretion to assess penalties for violations and prevent courts from considering statutory factors. The availability of monetary penalties up to $37,500 per violation per day is one of the most important enforcement tools in the Clean Air Act. Section 304(a) of the Clean Air Act, 42 U.S.C. § 7604(a), allows individuals to file citizen suits in federal district court against sources that violate emission standards and gives district courts authority to impose “any appropriate civil penalties,” which may include monetary penalties. 42 U.S.C. § 7604(a);see Cement Kiln Decisionat 14

-15. “By its terms, Section 304(a) clearly vests authority over private suits in thecourts, not EPA,”or the state.See Cement Kiln Decisionat 15

- 16 (emphasis in original).As the Supreme Court has described, citizen suit enforcement is central to Congress’s enforcement scheme: Congress enacted § 304 specifically to encourage “citizen participation in the enforcement ofstandards and regulations established under this Act,” S. Rep. No. 91

-1196, p. 36 (1970), and intended the section “to afford ... citizens ... very broad opportunities to participate in the effort to prevent and abate air pollution.” Pennsylvania v.Del. Valley Citizens Council, 478 U.S. at 546, 560. Section 113(e)(1) of the Clean Air Act spells out precisely how Congress intended courts to determine penalties in Clean Air Act enforcement actions.See Cement Kiln Decisionat 15.This provisiondirectscourts to:

“
...take into consideration (in addition to such other factors as justice may require) the size of the business, the economic impact of the penalty on the business, the violator’s full compliance history and good faith efforts to comply, theduration of the violation as established by any credible evidence . . . payment by the violator of penalties previously assessed for the same violation, the economic benefit of noncompliance, and the seriousness of the violation.” 42 U.S.C. § 7413(e)(1). This language does not impose any limits on district courts’ authority to impose penalties for violating the Clean Air Act. Rather, it sets forth criteria that district courts must consider, leaving individual courts to decide on a case

-by

-case basis how to weigh these criteria in determining what penalty, if any, is appropriate. The D.C. Circuit vacated affirmativedefenseprovisions inanEPAClean Air Actrule in the Cement Kiln Decision, because “the Judiciary, not any executive agency, determines ‘the scope’

–including the available remedies

– ‘of judicial power vested by’ statutes establishing private rights of action.”Cement Kiln Decisionat 15(emphasis in original) (citing City of Arlington v. FCC, 133 S. Ct. 1863, 1871 n.3 (2013))
. Courts,not EPAor states, must determine civilpenalties in citizen suits. Neither EPA nor states have the authority to use affirmative defenses to restrict the right provided by the Clean Air Act to have penalties imposed on polluters that violate their emission standards whenever a district court finds penalties appropriate under section 113 of the Act. Indeed, EPA has recognized that parts of Arizona’sand Maricopa County’sSIPs are inconsistent with the Clean Air Act. In EPA’sProposedSSM SIPCallRule, EPA found that Arizona’s affirmative defense provisions for startup and shutdown are inconsistent with the Clean Air Act: “R18

–2

–310(C) is inconsistent with the requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k), as well as CAA sections 113 and 304. The EPA believes that a SIP provision establishing an affirmative defense for planned startup and shutdown periods is substantially inadequate to comply with CAA requirements. For these reasons, the EPA is proposing to issue a SIP call with respect to R18

–2

–310(C).” State Implementation Plans: Response to Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls ToAmend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction; Proposed Rule, 78 Fed. Reg. 12460, 12534 (Feb. 22, 2013) (“Proposed SSM SIP Call Rule”). EPA’s Proposed SSM SIP Call Rule also found that the similar provisions in the Maricopa County SIP do not comply with the Act’s requirements and proposed to issue a SIP call for Maricopa County Air Pollution Control Regulation 3, Rule 140, § 402.Proposed SSM SIP Call Ruleat 12535
. Although EPA found that affirmativedefenses for malfunctions are permitted under the Clean Air Actinthe Proposed SSM SIP Call Rule, the D.C. Circuit’sCement Kiln Decisionhas since rejected EPA’s position and found that affirmative defenses are inconsistent with the Act
. Experience demonstrates that affirmative defense provisions undermine efforts to enforce permit violations and therefore can lead to excess emissions.For example, Sierra Club identified thousands ofself

-reported violations at Luminant Generation Company’s Big Brown and Martin Lake plantsand brought two federal actions to enforce those violations. See DockettoSierra Club v. Energy Future Holdings Corp. et al, No. 5:10

-cv-00156 (E.D.T.XSept. 2, 2010), and Sierra Club v. EnergyFuture Holdings Corp et al, No.W

-12

-cv-108 (W.D.T.X May 1, 2012)
. However, both the state of Texas and Luminant reliedonaffirmative defenseprovisionsto suggest that none of the thousands of permit exceedances

–only some of which are identified in the reports submitted to the state asmalfunctions

–are in fact “violations” with any liability whatsoever attached. SeeMemorandum Opinion and Order , Sierra Club v. Energy Future Holdings Corp. et al,W

-12

-cv-108 (W.D.T.X Mar. 28, 2014), attached as Exhibit 1. Polluters (sometimes condoned by the state airregulator) have shown thatthey will make full use ofaffirmativedefenseprovisionsto raise the costsof citizen litigation, confuse the courts, and avoid both injunctive relief and penalties. As a result,these provisionsthreatento swallow the rule thatemissions limitations must apply on a continuous basis, in clear contravention of statutory mandates. Thus, EPA must disapprove the redesignation requestbecause the state has not met all requirements of section 7410 and part D as required by CAAsection 107(d)(3)(E)(v). In particular, the state has not met CAA section 110(a)(2)(A) because the emission limits in the SIP are not enforceable, at least during SSM events, and because the SIP with its faulty SSM provision does not ensure attainment and maintenance of the NAAQS. Similarly, the part D program is inadequate becausetheemission limits and emission levelsthatform the basis of offsets are not enforceable. Similarly, EPA cannot determine that the improvements in air quality are due to enforceable reductions in emissions as required by CAAsection 107(d)(3)(E)(iii) because the current SSM excuse provisions make emission reductionsunenforceable. Finally, the maintenance plan is not approvable as required by CAAsection 107(d)(3)(E)(iv). The maintenance plan cannot ensure the maintenance of the NAAQS when emissions can increaseabovethe emission inventory and allowable levels during SSM events in violation of CAA section 175A(a). // // // // // // // / / //Conclusion For the reasons explained above, EPA must disapprove Arizona’s request to redesignate the Phoenix

-Mesa nonattainment area to attainment of the 1997 8

-hourozonestandard, and EPA must also disapprove the proposed SIP revision for maintaining the 1997 8

-hour ozone standard in the Phoenix

-Mesa nonattainment area. Sincerely,

_________________________________ Andrea Issod, Staff Attorney Sierra ClubEnvironmental Law Program 85 Second St, Second Floor San Francisco, CA 94105 andrea.issod@sierraclub.org (415) 977

-5544

# Exhibit 1Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 1 of 55 

### ;LL\ f'\/ \

IN THE UNITED STATES DISTRICTCOURT FORTHEWESTERN DISTRICT OF TEXAS WACO DIVISION SIERRACLUB, Plaintiff, 

### § § § § § § § § § 

## v. ENERGY FUTURE HOLDINGS CORPORATION and LUMINANT GENERATION COMPANY LLC, Defendants. CivilAction No.W-12-CV-108

MEMORANDUM OPINION AND ORDER 

### This case is a citizen suit brought by Plaintiff Sierra Club pursuant to Section 304 of the federal Clean Air Act ("CAA"), 42 U.S.C. 

### § 7604. Plaintiff claims that Defendants Energy Future Holdings Corporation ("EFHC") and Luminant Generation Company LLC ("Luminant") own a coal-fired power plant, Big Brown Plant in Freestone County, Texas ("Big Brown") that has and continues to violate particulate matter and opacity limits under the CAA. The Court granted partial summaryjudgment in favor of Defendants and determined thattherewere no particulate matterviolations atthe Big Brown Plant. INTRODUCTION 

### On February 24, 2014, this Court held a three-day bench trial on the remaining issues on whether Defendants violated the opacity limits at the Big Brown Plant. After both parties had the opportunity to present closing arguments, the Court ruled in favor of Defendants. Pursuant to Rule 52 of the

1Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 2 of 55

Federal Rules ofCivil Procedure, the Court issues this Memorandum Opinion of Findings ofFact and Conclusions ofLaw. 1 FINDINGS OF FACTS 

### I. Background 1. The Big Brown Plant's two units generate electricity with a blend of coal. The electricity generated is supplied to 23 million Texas customers via the electricgrid operated bythe Electric Reliability Council ofTexas ("ERCOT"). 2. Big Brown Power Company LLC owns the Big Brown Plant. Big Brown PowerCompany LLC is not adefendant in this case. 3. Defendant Luminant operatesthe Big Brown Plant. 4. Defendant EFH neither owns nor operates the Big Brown Plant. At trial, undisputed testimony established that EFH does not operate or maintain Big Brown or its emissions control equipment, nor does it direct capital expenditures, purchase coal, obtain permits, or submit environmental compliance reports for Big Brown. The evidence established that Defendant Luminant does those thingsfor Big Brown. 5. The plant is located in a rural area in Freestone County, Texas. Ms. Barbara Lawrence, the only individual member ofthe Sierra Club organization in

1 Rule 52(a) obligates the district court to identify its factual findings and separately state its conclusions of law in support of its bench trial judgment. Chandler v. CityofDallas, 958 F.2d 85, 88-89 (5th Cir. 1992). 2Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 3 of 55

the area that Sierra Club has identified, lives on Richland-Chambers reservoir, approximately 11 milesfrom the plant. 6. The Court previously held that Sierra Club has Article Ill standing through Ms. Lawrence. See Doc. 202. 7. More than 60 days before filing this lawsuit, Sierra Club notified Defendants, the United States Environmental Protection Agency ("EPA"), the Texas Governor's Office, and the Texas Commission on Environmental Quality ("TCEQ"), in writing, ofthe Sierra Club's intent to file suit for repeated past and ongoing violations ofthe two emission limits at issue in this litigation. The Court previously ruled that Sierra Club gave adequate pre-suit notice to the Defendants. See Doc. 75 at 12-16. 

### II. Sierra Club'sClaim 8. Big Brown Plant is required to operate under a CAA permitting process that limits the amount of emissions the plant may legally emit into the air. That permitting program is administered and enforced bythe TCEQ. 9. One indicator ofthe potential presence ofair emissions is opacity. Texas rules define opacity as the "degree to which an emission of air contaminants obstruct the transmission of light expressed as a percentage of light obstructed
as measured by an optical instrument ortrained observer." 30 TEX. ADMIN. CODE § 101.1(72). In other words, the higher the opacity, the less light that passes through a plume ofemissions.

3Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 4 of 55

10. Opacity is measured at Big Brown Plant using a device known as a "Continuous Opacity Monitoring System" ("COMS"), one of which is located in each ofthe two exhaust stacks at the plant. The COMS operate continuously and record opacity levels in six-minute averages. 11. Under the Texas CAA State Implementation Plan ("SIP"), power plant opacity "shall notexceed 30 percent averaged overa six-minute period." 30 TEX. ADMIN. CODE § 111.111{a)(1)(A). 12. SIP limits are federal CAA limitsthat can be enforced bythe state, EPA, or citizens. 42 U.S.C. §§ 7413 &7604; 40 C.F.R § 52.23. 13. The Texas SIP contains affirmative defenses for opacity readings that exceed the 30 percent level. 

### See 30 TEX. ADMIN. CODE § 101.222(d)

### &(e). One of the defenses applies to "[e]xcess opacity events due to an upset," 

### id. at § 101.222(d), and another applies to "unplanned maintenance, startup, or shutdown," also known as "MSS," 

### id. at§ 101.222(e). 14. To qualify forthe defenses, the operator must prove to the TCEQ that ten demonstration criteria are met. Id. In general, the criteria requirethatthe opacity
was properly documented and reported to TCEQ; that the opacity was the result ofan unavoidable breakdown of equipment or a process beyond the control of the operator; that the opacity event was not caused by inadequate design, operation, or maintenance; that ifthe opacity event was caused by a bypass of control equipment, the bypass was unavoidable to prevent loss of life, personal injury, or severe property damage; that the emissions control equipment was 4Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 5 of 55
operated in a manner consistentwith good practices so as to minimize opacity at the plant; and thatthe opacity event did not cause orcontributeto "a condition of air pollution." Id. If all criteria are met, the defense applies to "all claims in enforcement actions brought for these activities, other than claims for administrativetechnical orders and actionsfor injunctive relief." Id. 15. EPA approved these two affirmative defenses for opacity into the Texas SIP, and the Fifth Circuit has affirmed that approval notwithstanding the objections ofSierra Club. See Luminant Generation Co. LLC v. U.S. E.P.A., 714 F.3d 841 (5th Cir. 2013); 75 Fed. Reg. 68,989, 68,999 (Nov. 10, 2010) ("Our approval of sections 101.222(b), (c), (d), and (e) into the Texas SIP provides a source the option to assert an affirmative defense for certain periods of excess emissions in an enforcement action brought against it by EPA or a. citizen in federal court"). The EPA explained that these affirmative defenses exist because "despite good practices, [sources may] 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 the control ofthe owner oroperator." 75 Fed. Reg. at68,992. 16. The present case involvesthe MSS and upset opacity events at Big Brown Plant that were self-reported by Luminant to the TCEQ during the period July 2007 to December2010. Sierra Club claims that Big Brown Plantviolated the 30 percent opacity limit on 6,520 occasions during this time period, and continues to

5Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 6 of 55

do so, when the plant was in MSS or upset mode.2 Sierra Club derives this number from Luminant's reports to the TCEQ, which describe the events and report the plant's COMS readings over 30 percent during this period. The number of violations during the period at issue assumes that one exceedance per hourwas allowed for the cleaning ofthe firebox (i.e., the boiler), the building ofa new fire (i.e., a "startup") or other specified exemption contained in 30 TEX. ADMIN. CODE 

### § 111.111(a)(1)(E). Sierra Club also alleges that Defendants continueto violate the limit. 17. It was revealed at trial that these readings comprise less than 1.5 percent ofthe plant'stotal operating time during this period. In otherwords, during more than 98.5 percent of the time, the plant is operating with opacity below 30 percent, usually around 10 percent. Notwithstanding the relatively short timeframe at issue, Sierra Club still notes that the amount ofemissions released during these opacity exceedances comprise of 15 to 20 percent of Big Brown Plant'stotal annual emissions. 

### Ill. TCEQ's Investigationsand Findings 18. It is not a matter of dispute that Luminant reported these MSS and upset events to TCEQ and thatthey constitute a small fraction ofthe plant's operation.

2 Sierra Club's complaint included another claim (Count 11) that alleged the plant violated a limit on particulate matter ("PM") emissions. That claim was dismissed on summaryjudgmentforthe reasons stated in the Court's Orderentered on February 10, 2014. Doc. 240. 6Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 7 of 55

Indeed, following the submission of the reports, the TCEQ conducted an investigation ofeach eventto determine ifthe affirmative defense demonstration criteria discussed abovewere, in fact, met. 19. In all instances, the TCEQ determined that the applicable criteria in 30 TexasAdministrative Code§ 101.222(d) & (e) were satisfied and that noviolation occurred. TCEQ documented its findings in publicly-available investigation reports. [Exhibit D-3]. Defendants provided certified copies of TCEQ's investigation reports documenting the events at issue in this case and the TCEQ's evaluation and regulatory determination. [Exhibit D-3.1
- D-3.184]. 20. Sierra Club does not disputethatthe TCEQ issued investigative reports for each ofthe opacity events at issue in this case afterdetermining that none ofthe events was a violation. However, Sierra Club disagrees with TCEQ's findings and conclusions applying the criteria in § 101.222(d)

### &(e). 21. Sierra Club also does not dispute that these investigative determinations fall squarely within the TCEQ's sphere of expertise, which requires the use, evaluation, and assessment of scientific, technical, and operational data, and draws on theTCEQ'stechnical expertise, enforcement experience, and technical competence. Indeed, Sierra Club's expert witness, Dr. Ranajit Sahu, acknowledged as much during histestimony. Nonetheless, Sierra Club'switness Neil Carman-Sierra Club's clean air program director for the State ofTexastestified that Sierra Club sought to have the Court disregard the TCEQ's investigations and findings and instead rely on Sierra Club's investigation. 7Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 8 of 55



### IV. Big Brown Plant's EmissionsControl Equipment 22. Mr. Freeman Jarrell has been employed by Luminant for 47 years. He is currently the Senior Director for Regional Support for Luminant's Southern Region, which includes the Big Brown Plant. Mr. Jarrell was the plant manager at Big Brown Plant from 2001 to 2012. During that time period, Mr. Jarrell was responsible forthe dailyoperation and maintenance ofBig Brown. 23. Mr. Jarrell testified that the Big Brown Plant controls opacity from the stacks atthe plant by collecting fly ash in the plant's gas stream using two pieces of equipment-an electrostatic precipitator ("ESP") and a Compact Hybrid Particulate Collector ("COHPAC") baghouse. 24. Each of Big Brown's two generating units has its own ESP and baghouse. The ESPs were part ofthe original construction ofthe units in the early 1970s. Both units were retrofitted in the mid-1990s to add pulse-jet baghouses to the end oftheiremissions-control trains. 25. The plant's current CAA operating permits-Permit No. 065 [Exhibit D-8], which was renewed by TCEQ on January 15, 2014, and Permit No. 56445 [Exhibit D-5], which was revised in December 2011-specify this emissions control equipment and how it must be operated during MSS events.3

3 Permit No. 065 is Big Brown Plant'sTitleV permit. TitleV ofthe Clean AirAct, 42 U.S.C. §§ 7661-7661f, establishes an operating permit program for majorsources of air emissions. A Title V permit compiles all the various applicable requirements for a facility into a single federally-enforceable air permit. See UnitedStates v. Cemex, Inc., 8Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 9 of 55

26. Big Brown's ESPs and the baghouses operate in series. In other words,
as combustion of coal in each ofthe two boilers produces flue gas, the flue gas exits the boiler and then is routed sequentially through the ESP first and the baghouse second before being sentthrough the stack. 27. An ESP is a device with three primary functions: 1) electrostatic charging of the fly ash particles in the gas stream from the boiler; 2) collection of the charged ash particles, and 3) removal ofthe ash from the ESP. Fly ash in the gas stream entering the ESPs is first energized with a charge by electricallycharged wires and then attracted to a collecting plate of the opposite charge. The plates are "rapped," or shaken, in sequence, and the fly ash falls into collection hoppers and is removed from the plant by a pressurized ash collection system. 28. Once cleaned by the ESP, the flue gas enters the baghouse for final treatment. The baghouse removes fly**a~h** that may remain in the flue gas stream following the ESP. The ash is collected on fabric bags inside the baghouse. The bags are cleaned automatically and in sequence by a pulse-jetof air, and the fly ash is collected and removed. Fly ash removed bythe ESPs and
864 F. Supp. 2d 1040, 1045 (D. Colo. 2012); 42 U.S.C. §§ 7661c(a), (b). The permit is crucial to the implementation ofthe Act: it contains, in a single, comprehensive set of documents, all CAA requirements relevant to the particular emission source. Com. of Va. v. Browner, 80 F.3d 869, 873 (4th Cir. 1996). A Title V permit has been described as a "source-specific bibleforClean AirAct compliance." Id. Big Brown'sTitleV permit, like all ofits airpermits, is issued bytheTCEQ. 9Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 10 of 55
baghouses is collected in hoppers and pneumatically conveyed to storage silos priorto loadingfor recycling, disposal, orsale. 29. As explained by Mr. Jarrell, the ESPs and baghouses must be disengaged during periods of MSS and upset in order to ensure their effective operation during the 98.5 percent ofthe time that the plant is operating in normal mode to generate electricity. This process occurs because, in orderto operate safely and
ensure their reliable operation during the unit's normal full-load operation, Big Brown's ESPs and baghouses must operate within certain temperature parameters during startup and shutdown that temporarily decrease their collection efficiency and lead to briefopacity events. 30. The need to periodically engage in the processes of shutting down and starting up a coal-fueled electric generating unit is an unavoidable feature of operating a coal-fueled electric generating unit that is beyond the control ofthe unit's owner or operator. All coal-fueled power plants must engage in the process of unit shutdown and unit startup, as Big Brown Plant does, for unit maintenance and repair. Sierra Club also acknowledges that shutdowns at coalfired power plants are an unavoidable occurrence ofplantoperation.4 31. Startup and shutdown are the most critical phases during the operation of
a coal-fueled electric generating unit such as Big Brown. Both startup and

4 During the critique ofone of Defendants' expert report attrial, expertfor Sierra Club, Mr. Mark Ewen, noted that a power plant is unable to continuously operate as shutdownsfor maintenance and otheractivities are necessary and unavoidable. 10Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 11 of 55

shutdown require precise coordination of a multitude of working parts and conditions in order to assure safe and reliable operation of the unit. Plant personnel follow detailed written procedures when starting up or shutting down the units. [Exhibit D-11.6, D-11.7]. It is because the emissions control equipment is disengaged during periods of MSS and upsetthat opacity readings atthe stack rise above 30 percentfor briefperiods oftime. 32. As explained by Mr. Jarrell, the Big Brown Plant operated during this time period, and continues to operate today, according to its Standard.Operating Procedures. [Exhibit D-11.6, D-11.7]. These procedures are designed to minimize opacity by placing the ESP and baghouse into service as soon as practical during startups, and removing these pieces of equipment from service
as late as possible during shutdowns, within certain temperature parameters. Big Brown's operating procedures prohibit the ESPs and baghouses from being engaged before, and require thatthe ESPs and baghouses be disengaged bythe time, the ESP inlettemperature reaches 250 degrees Fahrenheit. Id. 33. If Big Brown engaged the ESPs and baghouses earlier in the startup process, or left them engaged longer during the shutdown period, Mr. Jarrell testified that it would cause a condition known as plugging or caking due to the additional moisture in the flue gas at lowertemperatures. The moisture and ash would set-up like concrete on the ESP internals, which would impact the ESP's collection efficiency critique criticism and cause higher opacity during normal operations and in the long-term. This type ofcaking would occur on the bags in 11Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 12 of 55

the baghouses as well. Further, early energizing, or late de-energizing, ofthe ESP could lead to more serious issues, such as an explosion causing property damage or personal injury, dueto sparking and carry-over un-combustedfuel. 34. Big Brown's current Permit No. 56445 requires that the plant operate according to its Standard Operating Procedures, which have not changed over this time period. Mr. Jarrell and Mr. Eric Chavers,5 the Chemical and Environmental Supervisoratthe plant, both testified that Big Brown complieswith its standard operating procedures and the terms ofthe permit when starting up and shutting down. 35. Big Brown Plant's startup and shutdown procedures are consistent with guidance from EPA. As EPA explains in its ESP training manual, "[i]fan ESP is used on a coal-fired boiler, the ESP should not be started until coal firing can be verified.

. . . [and] [a]fter gas at temperature of 200°F has entered ESP for 2 hours[.]" U.S. Environmental Protection Agency, Air Pollution Training Institute, SI 412B, Lesson 6: ESP Operation and Maintenance, at 6-5 

### &Table 6-2 [Exhibit D-11.3]. See also U.S. Environmental Protection Agency, Electrostatic Precipitator Malfunctions in the Electric Utility Industry, EPA-600/2-77-006, at 4- 19 to -20 (Jan. 1977) ("About 8 hours is required to bring a unit on line, i.e. when

5 Mr. Chavers has worked for Luminant for nearly 9 years. His responsibilities include monitoring opacity, maintaining the plant's COMS in good working order, collecting the data, and making reports to TCEQ on opacity events in coordination with Luminant's Environmental Services department. 12Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 13 of 55

the steam pressure reaches the design range, which is about 107-135°C (225- 2750F) for cold-side ESP's. The precipitator is turned on manually, usually 1 hour afterthe unit is firing coal.

. . . Times required to bring the boilerto proper operating temperature vary, butthe described procedure is representative ofthat foracoal-fired boiler.") [Exhibit D-11.2]. 36. If the minimum-temperature restriction is not observed, EPA has explained, "sticky particulate and sparking" in the ESP can "lead to unburned carbon, hydrocarbons, and [carbon monoxide] in the ESP."6 The presence of sticky particulate, unburned carbon, hydrocarbon, and carbon monoxide in the ESP is problematic for two reasons. First, the sticky particulate, unburned carbon, hydrocarbon, and carbon monoxide "may be set afire or result in an explosion that endangers personnel."7 EPA's regulatory guidance on ESPs instructs that "[p]ersonnel safety should be the foremost consideration in any startup procedure." 8 Second, consistent with Mr. Jarrell's testimony, EPA guidance states that the collection of sticky particulate, unburned carbon,

6 U.S. Environmental Protection Agency, Operation and Maintenance Manual for Electrostatic Precipitators, EPA/625/1-85/017, at 5-3 through 5-4 (Sept. 1985) [Exhibit D-11.1]. 7 Id. 8 Id. at5-1. 13Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 14 of 55
hydrocarbon, and carbon monoxide in the ESP "could also permanently destroy the ESP's performance potential."9 37. Mr. Jarrell furthertestified as to the maintenance and upkeep ofBig Brown Plant's ESPs and baghouses. The plant addresses necessary maintenance through the use of on-site plant staff as well as third-party contractors who are experienced in ESP and baghouse inspection and maintenance. The plant regularly commissions front-to-back inspections and repairs of the ESPs and baghouses by specialized contractors. [Exhibit D-42]. These third-parties inspect the ESPs and baghouses and recommend and conduct the necessary repairs and maintenance. During the time period at issue, many maintenance items were addressed during a longer maintenance outage, which requires scheduling and coordination with ERCOT, but some items that needed more immediate attentionwere addressed during shorterand/or unscheduled outages. 38. Sierra Club's expert witness, Dr. Ranajit Sahu, an engineer by training, testified about his opinions of Big Brown Plant's emissions control equipment. Dr. Sahu testified that it was his opinion that these opacity events could have been avoided because it is technically feasible for the ESPs and baghouses at Big Brown to be engaged earlier in the startup process, and remain engaged longerin the shutdown process.

9 Id. at5-3through 5-4. 14Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 15 of 55

39. Dr. Sahu noted that Big Brown's boilers were designed to burn 100 percent locally-mined Texas lignite. However, since roughlythe mid-1990's, the plant has been blending lignite with coal brought in from the Powder River Basin ("PRB"),
an area in the western United States. Dr. Sahu testified thatwhile PRB coal has certain benefits in terms of sulfur dioxide emissions, its use at the Big Brown Plant exacerbates opacity levels caused bythe undersized ESPs. 40. Dr. Sahu testified that the ESPs installed at Big Brown utilize an undersized Specific Collection Area ("SCA"), or collection plate, which does not sufficiently capture the particulate matter from the lignite coal that the plant was originally designed to burn. Given the factthatthe plant is now burning a mixture ofTexas lignite and PRB coal, Dr. Sahu explained that a larger SCA is required to properly capturethe smaller-sized PM. 41. Dr. Sahu also stated that the ESPs and baghouses at Big Brown could have been replaced with new larger baghouses that, in his opinion, would have reduced the number of opacity events. Dr. Sahu further criticized the maintenance and design of the ESPs and baghouses, relying in large part on summaries of reports ofthird-party contractors that Luminant hired to inspectthe equipment. He testified thatthe plant should have spent an additional $5 million in maintenance each year.

15Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 16 of 55



### V. Luminant's Reporting of the Opacity Events and TCEQ's Investigations 42. Ms. Shawn Glacken, Luminant's Senior Vice President for Environmental Services during this time period, testified regarding the company's reporting of the opacity events to the TCEQ. Luminant is required to monitor and measure opacity levels at Big Brown and report those levels to TCEQ, and Ms. Glacken's department handled thattask in coordination with plant staff. 43. Luminant submits two differenttypes ofreports to TCEQ related to opacity: 1) reports through the STEERS reporting system and 2) quarterly reports. STEERS stands for "State ofTexas Environmental Electronic Reporting System" and is an online portal through which facility operators report certain opacity events to TCEQ. Luminant submits a report to TCEQ through its STEERS reporting system when opacity at Big Brown is, or is expected to be, 15 percent
over the relevant opacity reporting threshold, which in this case is 30 percent. Luminant's STEERS Reports detail the facts surrounding each reported opacity event, the cause, duration, corrective action taken, and other information. Luminant also submits quarterly reports to TCEQ in a collective report called an "Excess Emission Report, Continuous Emission Monitoring System (CEMS) Downtime Report, and Deviation Report, and Title V Deviation Report." Sierra Club relies exclusively on these publicly-filed reports to make its allegations that there were violations. [Exhibit D-33.1
- D-33.16; D-34.1
- D-34.204].

16Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 17 of 55

44. Ms. Glacken presented a summary of voluminous documents regarding the opacity events at issue, pursuant to Federal Rule of Evidence 1006, for each unit at Big Brown Plant. [Exhibit D-1, D-2]. The summaries provide the date, time, nature, intensity, frequency, duration, cause, and contemporaneous documentation and reporting made by Luminant with regard to all ofthe opacity events at issue. 45. Sierra Club did not object to the summaries, and the Court accepts them
as correct descriptions ofthe events at issue. 46. As presented in the summaries, and as further evidenced by certified copies ofthe reports issued bythe TCEQ, for each and every one ofthe reported opacity events at Big Brown for the period July 2007 through December 2010, the TCEQ made an investigation and issued a written determination as to whether the affirmative defense criteria in 30 Texas Administrative Code 

### § 101.222 were satisfied. [Exhibit D-3]. In each and every instance, the TCEQ found that the criteria had been met and no violation ofthe opacity limitation had occurred. [Exhibit D-3]. 

### VI. AirQualityand LackofHarmtoSierra Club's Members 47. Dr. Lucy Fraiser, a Ph.D. toxicologist, testified on behalf of Defendants regarding any harm to public health or welfare as a result ofthe opacity events and, specifically, whether they caused or contributed to "a condition of air pollution," which is criteria number ten under the affirmative defenses. Sierra Club offered the testimony of Dr. Andrew Gray, an air modeler, and rebuttal 17Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 18 of 55
testimonyofDr. GeorgeThurston, a Professorof Environmental Medicine at New York University. 48. All of these individuals agreed that, based on air quality modeling conducted by Mr. Robert Paine and relied on by Dr. Fraiser, the reported opacity events at Big Brown for the period July 2007 through December 2010 did not result in particulate matter ("PM") concentrations sufficientto cause orcontribute to aviolation ofthe primary or secondary National AmbientAir Quality Standards ("NAAQS")for PM. 49. As explained by Dr. Fraiser, EPA sets the NAAQS at a level adequate to protect human health and the environment with an adequate margin of safety. There are three different NAAQS for PM. For PM 10 (which refers to particlesthat
are less than or equal to ten microns in size), there is a 24-hour average standard of 150 micrograms 

### I cubic meter (μg/m3). For PM2.5 (which refers to particles that are less than or equal to 2.5 microns in size), there was a 24-hour average standard of 35 μg/m3 and an annual average standard of 15 μg/m3 (which was later revised by EPA to 12 μg/m3 after the events at issue in this lawsuit). 50. Dr. Fraisertestified that, in heropinion, the PM NAAQS levels set by EPA were, as intended, protective ofhuman health and environmentwith an adequate margin ofsafety and this would include protection of sensitive populations such
as children, the elderly, and peoplewith respiratory problems.

18Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 19 of 55

51. Dr. Thurston and Dr. Graytestified that, in theiropinion, any amount ofPM in the air can cause the risk ofadverse health effects, even ifbelowthe NAAQS. In their opinion, there is no safe level of PM in the air even from common human activities such as cooking. Neither Dr. Thurston nor Dr. Gray, however, attempted to analyze or apply criteria numberten underthe affirmative defenses. Both admitted that they were not familiar with criteria number ten or the Texas definition of"air pollution." 52. Dr. Fraiser, on the other hand, specifically analyzed criteria number ten under the affirmative defenses. She focused on the Texas definition of "air pollution" and concluded the events at issue did not cause or contribute to a condition of air pollution. She determined that the events at issue did not adversely affect human health or welfare, animal life, vegetation, or property. And she further concluded thatthe events did not interferewith the normal use or enjoyment ofanimal life, vegetation, or property. 53. In addition to relying on EPA's NAAQS for PM and the lack of any violations of those NAAQS, Dr. Fraiser further examined other factors such as the surrounding land use, the time ofday ofthe events, the event duration, and the percentage of total time of the opacity events. She also determined that, based on her investigation, there were no complaints from members of the public, including from Barbara Lawrence, to TCEQ regarding any ofthe events at issue. She further relied on the deposition testimony of Barbara Lawrence, in which Ms. Lawrence testified that she had no physical injury or harm as a result 19Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 20 of 55

of Big Brown's emissions. Based on all of these factors, in addition to the air modeling that showed no violation of the NAAQS, Dr. Fraiser concluded that
none ofthe events at issue in the lawsuit caused orcontributed to a condition of airpollution, as defined byTexas law. 

### VII. The Permitting ofBig Brown Plant's MSS Emissions 54. As testified to by Ms. Glacken and Mr. Chavers, in December2011, TCEQ approved a revision to Big Brown's Air Permit No. 56445. [Exhibit D-5]. The revised Permit No. 56445, which remains in effect, requires that Big Brown's ESPs and baghouses only be operated during certain times and under certain operating conditions. The permit states: "Opacity greaterthan 20 percent from [the plant's stacks] is authorized when the permit holder complies with the MSS duration limitations and otherapplicablework practices identified below." Id. 55. Among those required work practices, Permit No. 56445 states that Big Brown "will comply with the boiler and ESP manufacturer's operating procedures
orthe permittee'swritten Standard Operating Procedures manual during planned MSS, and will operate in a manner consistent with those procedures to minimize opacity by placing the ESP and baghouse ·into service as soon as practical during planned startups or removing the ESP and baghouse from service as late
as possible during planned shutdowns, once the baghouse inlet gas temperature is between 200 and 300 degrees F, but not longerthan the durations identified in Special Condition No. 8(A)." Id.



### 20Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 21 of 55

56. The permit further limits the duration of MSS events. It provides that a "planned startup" "shall not exceed 24 hours," except that the plant may have a combined 600 hours on an annual calendar basis during which "[t]he total amount of incremental time the extended startups exceed 24 hours."10 

### Id. It further provides that a "planned shutdown" "shall not exceed 24 hours," except that the plant may have a combined 600 hours on an annual calendar basis during which "[t]he total amount of incremental time the extended shutdowns exceed 24 hours."11 

### Id. Permit No. 56445 further provides that "planned online and offline maintenance activities" listed in the permit "are authorized for no more 

### I than 535 hours in a calendaryear per unit." 

### Id. 57. In the Source Review and Technical Analysis it conducted in connection with the issuance ofamended Permit No. 56445 [Exhibit D-6], TCEQ determined that emissions during the permitted MSS events, which are identical to the MSS events at issue in this case except that they occurred during a prior time period, would be de minimis and "would not cause an exceedance ofthe NAAQS" and that "no adverse impacts to public health and the environment are anticipated as

10 The permit defines a "planned startup" "as the period that begins when the induced draft booster fans start operation and ends when the utility boiler reaches stable load and ESP/baghouseoperation has been fully optimized."
11 The permit defines a "planned shutdown" "as the period that begins when the electrostatic precipitator is partially or completely de-energized due to reaching its minimum operating temperature and ends when a temperature has been reached that allows personnel to enterthe structure and conduct maintenanceactivities." 21Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 22 of 55

a result of quantifying and permitting emission rates for" the permitted MSS events. 

### Id. The TCEQ further determined thatthe work practices required bythe permitwere "BestAvailable Control Technology" or "BACT." 58. Ms. Glacken testified that, as part of this permitting process, TCEQ reviewed the plant's overall environmental compliance and assigned Big Brown a "High" performance rating, which is the best possible rating. [Exhibit D-6]. 59. Ms. Glacken testified that, in accordance with 30 Texas Administrative Code 

### § 122.217, Luminant submitted the requirements of revised Permit No. 56445 to the TCEQ as a revision to the plant's Title Vfederal operating permit on December 12, 2011. [Exhibit D-7]. The submission was made prior to final issuance of the revised Permit No. 56445 (issued on December 16, 2011), as instructed by TCEQ, so there would be no gap in the regulatory requirements applicable to the plant. Luminant's application identified the revised requirements of Permit No. 56445 as provisional terms and conditions of the plant's Title V permit and stated "Luminant will comply with the amended requirements of Permit No. 56445 as provisional terms and conditions of the Federal Operating Permit." 

### Id. 60. Ms. Eva Hernandez, a senior organizing managerfor Sierra Club, testified at trial by deposition that the plant's permits, including Permit No. 56445, are binding requirements on the operation ofthe plant. 61. Ms. Glacken and Mr. Chavers testified about the plant's implementation of this permit revision. The plant did not change the way it operates the ESPs and 

### 22Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 23 of 55
baghouses, but instead changed its method oftracking MSS activity, as required by the permit, to ensure compliance with the new duration limitations in the permit. As to be expected, the number of reportable events has decreased to a negligible amount because the permit revision now requires tracking of MSS activity in relation to the new duration limitations in lieu of reporting all opacity exceedances during MSS. 62. Ms. Glacken testified that the amendment to Permit No. 56445 authorizes and regulates the kinds of MSS activities at issue in this case. Ms. Glacken testified that if the MSS activities that Sierra Club challenges (which occurred between July 2007 and December 2010) had occurred after the issuance of amended Permit No. 56445, or if Permit No. 56445 had been amended before July2007, then all ofthose MSS activities would have been covered, authorized, and regulated by amended Permit No. 56445. 63. In 2012 and 2013, Big Brown'stwo units complied with the new MSS hours restrictions, and in fact used only a small fraction ofthe allotted hours. [Exhibit D-9, D-10]. As confirmed by Mr. Chavers' testimony, the plant's data showed that the plant was engaging the ESPs and baghouses in accordance with the temperature ranges in the permit. To the extent the plant operates outside the terms ofthe permit, those events would still be reported to the TCEQ as before and reviewed byTCEQ forcompliance with the demonstration criteria. 64. Ms. Glacken and Ms. Hernandeztestified aboutthe regulatory and judicial proceedings following the issuance of the revisions to Permit No. 56445 in 23Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 24 of 55

December 2011. Upon issuance, the TCEQ announced that any person who sought to challenge the permit had two avenues for doing so: 1) a motion to overturn with the Chief Clerk of TCEQ; and 2) judicial review in Travis County district court. [Exhibit D-5]. Sierra Club pursued both avenues of relief and requested that the permit be overturned. Sierra Club filed its motion to overturn
on January 9, 2012 [Exhibit D-13], and filed a petition for judicial review on January 17, 2012 [Exhibit D-14]. The TCEQ denied the motion to overturn on February 10, 2012. And, on July 3, 2012, Sierra Club voluntarily non-suited its requestforjudicial reviewofthe permitwith prejudice. [Exhibit D-15]. CONCLUSIONS OF LAW 

### I. Statutoryand Regulatory Background 1. The Clean AirAct ("CAA") creates "a comprehensive national program that ma[kes] the States and the Federal Government partners in the struggle against air pollution." Gen. Motors Corp. v. United States, 496 U.S. 530, 532 (1990). Under the Act, "air pollution prevention

... and air pollution control at its source is the primary responsibility of States and local governments." 42 U.S.C. 

### § 7401(a)(3). See also Luminant Generation Co. v. EPA, 675 F.3d 917, 932 (5th Cir. 2012) ("[The Clean Air Act's] cooperative federalism regime 

## Daffords sweeping discretiontothe states[.]"). Texas exercises its primaryauthority in this regard through theTexas Commission on Environmental Quality ("TCEQ"), which promulgates and enforces the Texas CAA State Implementation Plan ("SIP"). See40 C.F.R. 

### § 52.2270 (Texas SIP). 24Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 25 of 55

2. As the Fifth Circuit has recognized, the Texas SIP has always acknowledged and accounted forthe fact that even well-designed, well-operated, and well-maintained ESPs cannot be safely and effectively operated during periods of MSS. See Luminant Generation Co., 714 F.3d at 847 (5th Cir. 2013) ("Since the creation of its first SIP in 1972, Texas has provided for special treatmentofSSM activity."). 3. The affirmative defenses come into play only when the Big Brown Plant's boiler units or associated pollution control equipment are either being shut down, started up, undergoing maintenance, or experiencing a malfunction (or "upset"). As previously determined by the Court (Doc. 162), the affirmative defenses are applicable in this casefortwo reasons. First, TCEQ renewed Big Brown's Title V Permit No 065 in 2008. As part ofthat permitting process, TCEQ revised Permit No. 065 and incorporated and applied to the plant all ofthe affirmative defenses for startup, shutdown, maintenance, and upset in 30 Texas Administrative Code §§ 101.222(a)-(h). [Exhibit D-4]. TCEQ issued public notice of the 2008 revisions of Permit No. 065 and provided a 30-day opportunity for the public to comment. EPA did not objectto the 2008 revised permit, and Sierra Club did not submit comments to TCEQ or petition EPA to object to the permit. The Court lacks jurisdiction to hear claims collaterally attacking the contents ofthe Title V permit, which includes all defenses in§ 101.222. Doc. 162 at 15; 42 U.S.C. § 7607(b)(2). Second, even ifthey had not been expressly incorporated into the plant's permits, §§ 101.222(b)-(e) were approved by EPA into the Texas SIP 

### 25Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 26 of 55

effective January 

### 1O, 2011, and the Court will apply the federal law that is currently in effectforthe reasons stated in its priorOrder. Doc. 

### 162 at 

### 16-19. 4. Thus, as Sierra Club's counsel stated in closing arguments, for purposes of this case, there is no "SIP Gap"-i.e., no period during which Defendants cannot avail themselves ofthe affirmative defenses. 

### II. Defendants Have Met Their Burden of Proving the Affirmative Defense CriteriaforAll Opacity Events 5. The question for the Court, then, is whetherthe affirmative defense criteria
are metforthe opacity events that occurred at Big Brown Plantfrom July

### 2007to December 

### 2010. For the reasons discussed below, the Court finds that the defense criteria are met in all instances. 

### A. TCEQ's FindingsAre Entitledto Deference 6. First, Luminantdemonstratedto the TCEQ, and the TCEQ found, that all of the events at issue meet the affirmative defense criteria in 30 Texas Administrative Code 

### § 

### 101.222. Sierra Club argues that the Court should reach
a different conclusion based on the opinion testimony of Dr. Sahu, Dr. Gray, and Dr. Thurston. 7. While there may certainly be circumstances where a court should step in despite contrary findings of a state agency, the Court finds no such circumstances are present here. The Court will not second-guess the TCEQ's written, contemporaneous determinations, given the complete lack of evidence offered by Sierra Club regarding any error or deficiency in those determinations.Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 27 of 55

Courts should provide proper deference to an administrative agency's legal and factual determinations. An agency's interpretation of, orfinding offacts under, a regulation it is charged with enforcing is entitled to deference because "[a]dministrative agencies are simply better suited than courts to engage in such
a process." FordMotorCreditCo. v. Mi/ho/Jin, 444 U.S. 555, 569 (1980); see also 3 Charles H. Koch, Jr., Administrative Law and Practice§ 12.24[3] (2d ed. 1997) ("It is readily recognized that many conclusions reached by the agency are the result ofatechnical competencethat even the most arrogant nonexpertcould not hope to replicate."); United States 

### v. BP Products North America Inc., 610 F.Supp.2d 655, 709 (S.D. Tex. 2009). This deference extends to an agency's application of its own regulations to a set of facts. CoeurAlaska, Inc., 

### v. Se. Alaska Conservation Council, 557 U.S. 261, 283 (2009) ("[W]e do find that agency interpretation and agency application of the regulations are instructive and to the point.") (citing Auer

### v. Robbins, 519 U.S. 452, 461 (1997)) (emphasis added); see also United States 

### v. Alcoa, Inc., No 1:03-cv-222, 2007 WL 5272187, at *7 (W.D. Tex. Mar. 14, 2007), aff'd, 533 F.3d 278 (5th Cir. 2008) ("a district court reviews the actions of a state agency administering federal programs as itwould review the actions ofafederal agency, including deference to reasoned administrative action" (citing lndep. Nursing Home v. Simmons, 732 F. Supp. 684, 688 (D. Miss. 1990)). 8. Courts are at their most deferential in reviewing the agency's findings where an agency's particular technical expertise is involved. Texas v. EPA, 690 27Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 28 of 55

F.3d 670, 677 (5th Cir. 2012); Medina County Environmental Action Ass'n v. Surface Transp. Bd., 602 F.3d 687, 699 (5th Cir. 2010); Center for Marine Conservation v. Brown, 917 F. Supp. 1128, 1143 (S.D. Tex. 1996) (When an agency is acting within its "own sphere ofexpertise," the Court's review "must be verydeferential."). 9. Here, the TCEQ is the regulatory agency that promulgated the affirmative defenses and is charged by federal law with the primary responsibility of enforcing the CAA in the State. As Dr. Sahu testified, the TCEQ possesses the technical expertise that is required to apply the criteria. And the criteria themselves contemplate a demonstration to, and finding by, the TCEQ. The Court will defer to TCEQ's application of 30 Texas Administrative Code 

### § 101.222to the opacity events at issue here, especially given the lack ofevidence offered by Sierra Club regarding any errorordeficiency in those determinations. 10. In the case at hand, the Court finds no circumstances that would warrant reaching a different conclusion than TCEQ reached. "[T]here is a strong public policy against a federal court's interference in state agency determinations absent some finding that the agency has violated federal law." Alcoa, 2007 WL 5272187, at *7. Here, the strong public policies of comity for State determinations and respect for administrative agency expertise weigh in favor of deferring to TCEQ's determinations in this case. TCEQ's determinations are further supported bythe weight ofthe evidence adduced attrial and documented in contemporaneous reports by the agency. The Sierra Club has provided no 28Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 29 of 55

evidence of any factual, legal, or procedural errors whatsoever in TCEQ's findings, and the Courtfinds none. 11. Further, not only do TCEQ's findings not violate federal law, they are fully consistent with EPA's guidance on MSS events and proper operation of ESPs. EPA has repeatedly recognized that ESPs, like those at Big Brown Plant, must be disengaged during the startup and shutdown process. 12. In fact, in approving the affirmative defenses at issue in this case, EPA explained that "[w]e can understand that there may be excess opacity emissions in certain situations from operation of power generators equipped with ESPs."12 EPA also expressed the view "that imposition of a penalty for sudden and unavoidable malfunctions, startups or shutdowns caused by circumstances entirely beyond the control ofthe owner or operator may not be appropriate."13 TCEQ's findings with respect to the events at issue in this case are fully consistentwith EPA'sviews and guidance. 13. Because TCEQ determined that the affirmative defenses were met for all opacity events at issue, and the Court finds no error in those determinations, no penaltywill be assessedfor any ofthe events.

12 75 Fed. Reg. 68,989, 68,996 (Nov. 10, 2010) (final approval). 1375 Fed. Reg. 26,892, 26,894 (May 13, 2010) (proposed approval) 29Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 30 of 55



### B. Defendants Have Independently Proven All of the Affirmative Defense Criteria for All Opacity Events by a Preponderance of the Evidence 14. Second, even if the TCEQ had not made contemporaneous regulatory findings, the Court finds as a matter of fact that Defendants have met their burden of proving by a preponderance of the evidence that all ten of the affirmative defense criteria are metforall ofthe events at issue. 15. The Court credits the testimony of Mr. Jarrell, Mr. Chavers, and Ms. Glacken as to the criteria that relate to reporting and documentation of the opacity events contained in 30 Texas Administrative Code 

### § 101.222{d){1), {d){8), {e){1), and {e){9). Each and every one ofthe events was documented by the plant in its logs and reported to the TCEQ in either a STEERS report or a quarterly report, or both. Sierra Club offers no evidencethat criteria {d){1), {d){8), {e){1), and {e){9) were not met, and Sierra Club does not dispute the reporting procedures ofthe plant. As such, the Courtfinds those criteria are satisfied. 16. The Court credits the testimony of Mr. Chavers that "all emissions monitoring systems were kept in operation if possible" as required by criteria {d){7) and {e){8). As the reports indicate, all ofthe events were recorded by the plant's COMS, which is maintained and calibrated by Mr. Chavers and his staff. Again, Sierra Club offers no evidence that criteria {d){7) and (e)(8) are not met, and the Courtfinds thatthose criteria are met. 17. The Court credits the testimony of Mr. Jarrell as to criteria (d)(2), {d)(4), (e)(2), {e){5), and (e)(6), and finds those criteria are met. All ofthe events were 

### 30Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 31 of 55

caused by a sudden, unavoidable breakdown ofequipment or a process beyond the control ofthe operator. As Mr. Jarrell testified, and Dr. Sahu conceded, the vast majority ofthe opacity events were the result ofstarting up orshutting down
one ofthe units and the process ofengaging the plant's ESPs and baghouses in accordance with the Standard Operating Procedures, which require bypass during MSS and upsets. [Exhibit D-5]. This process is unavoidable and beyond the control of Luminant. The equipment that is permitted at the plant must be disengaged (or bypassed, to use the terminology of criteria (e)(5)) unless the temperature of the flue gas is above minimum operating temperatures. If the equipment is operated outside ofthese required ranges, itwill result in caking or plugging, which will degrade the equipment's performance during normal operations, and further create the risk of explosion and harm to human life and property. [Exhibit D-11.6]. 14 18. Dr. Sahu testified that itwas technically feasible forthe ESPs to be turned
on earlier in the startup process and left on longer in the shutdown process. But Dr. Sahu offered no factual support or analysis to support this opinion, and the Court finds his testimony not to be credible or convincing on these points. Moreover, technical feasibility is not a consideration under the MSS affirmative defense criteria in 

### § 101.222(e). Dr. Sahu's opinions are also contrary to the EPA guidance discussed above, and, indeed, contrary to his own prior opinions
14 "The precipitator inlettemperature should be above 250° (gas from air heater. This should helpto assurethatthe collecting plates in the precipitatordo not 'coat up.m 31Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 32 of 55

submitted to EPA. In "Technical Comments" submitted to EPA on August 4, 2011, Dr. Sahu stated: "During periods ofstartup, shutdown etc., when exhaust gas temperatures are low and other gas properties may not be optimum (i.e., its moisture content, etc.), it is quite common for ESPs to not be energized until proper operating conditions occur. . . . Based on discussions with various equipment manufacturers and review of operating manuals, there are often minimum temperature requirements for ESPs in order to avoid issues such as moisture condensation and potential damage[.]"15 Although at trial he cited one example ofa plantwhere ESPswere being energized atthe beginning ofstartup, he stated that the plant was deviating from the recommendations of the equipment manufacturer in doing so. 19. As confirmed by Mr. Jarrell and Mr. Chavers, the ESPs and baghouses are operated in a manner that would avoid damage to and degradation of the equipment and avoid the risk ofexplosion and harm to human life. and property. As Mr. Jarrell and Mr. Chavers testified, the plant operates its equipment according to an established process that is consistent with its permit, EPA guidance, and manufacturer recommendations, and did so during the events at issue. For all these reasons, the Court finds that criteria (d)(2), (d)(4), (e)(2), (e)(5), and (e)(6) are satisfied.

15 Dr. Ranajit Sahu, Technical Comments on Certain Aspects ofEPA's Proposed EGU MACT Rule, at 3-4 & n.2, submitted with comments of Environmental Integrity Project, EPA Docket EPA-HQ-OAR-0044-0001 (Aug. 4, 2011) [Exhibit D-52]. 32Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 33 of 55

20. The Court credits the testimony ofMr. Jarrell as to criteria (d)(3) and (e)(3), which, although not identical, relate to the prevention of the opacity through planning and design, and finds that those criteria are met. As discussed above, the opacity events are an unavoidable aspect ofoperating the equipment at Big Brown in the manner in which it is designed and permitted to be operated. The ESPs and baghouses operate in series, and both must be disengaged during startup and shutdown. As Mr. Jarrell testified, the plant's current permits both specify that this is the equipment the plant is to operate and that it must be operated in this manner (i.e., disengaged until minimum temperatures are achieved). Dr. Sahu himselfstated previouslythis is "common" practice. And Dr. Sahu pointed to no specific design flaws in the ESPs or baghouses at the plant that preventthem from being engaged during startup and shutdown. 21. In the view of Dr. Sahu, the electrostatic precipitators used at Big Brown Plant are undersized for the amount offlue gases containing PM that they treat. Dr. Sahu testified thatthe baghouses atthe plantwere never designed to handle
more than a small fraction of the particulate matter in the flue gases from the boilers, which results in the flue gases being bypassed when the ESPs are not energized. It is Dr. Sahu's opinion that the baghouses were never intended by the Defendants to control. opacity during startups or shutdowns, or during maintenance activities when the fans are still on causing emissions to exit the smokestack. Dr. Sahu continued noting that ifthe plant completely replaced the currently-permitted equipment with a baghouse-only arrangement, these opacity 33Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 34 of 55

events would not occur or would not occur as frequently. But this view, even if true, has no factual bearing on the affirmative defenses, given that Dr. Sahu himselftestified that the permitting and installation of new equipment would take up to two years and the affirmative defense criteria analysis applies to what is in place currently. 22. The C6urt creditsthetestimony ofMr. Jarrell as to criteria (d)(9) and (e)(4), which require that the opacity was not part of a recurring pattern indicative of inadequate design, operation, or maintenance. As discussed above, the Court finds that none ofthe events was the result of inadequate design and operation ofthe ESPs and baghouses. As to maintenance, the Court finds, based on the testimony of Mr. Jarrell, the third-party inspections and repairs that were conducted, and other evidence, that the equipment is well-maintained. The Court finds no instances in which an opacity event was caused by poor maintenance. Although Dr. Sahu gave the opinion that the plant should have spent $5 million more in maintenance each year, he did not indicate what essential maintenance work should have been done or how that money should be spent. For instance, Dr. Sahu opined that Defendants' lax maintenance and operating practices contributed to equipment problems and compounded the problems posed bythe plant's "inadequately-sized" ESPs and baghouses. While admitting that proper maintenance and operation would not have entirely eliminated opacity exceedances, Dr. Sahu believed thatthere would have been a reduction in the duration and levels of some ofthe exceedances. However, for 34Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 35 of 55

many ofthe items that Dr. Sahu cited from the third-party inspection reports as examples of "poor maintenance" (like ESP expansion joints), the very same report indicated that the maintenance issue had been satisfactorily addressed. Given the many omissions and errors in Dr. Sahu's testimony, the Court does not find credible his assessment of the maintenance history of the ESPs and baghouses. As Mr. Jarrell testified, Luminant spent between approximately $4M to $8M on combined capital and O&M expenditures on Big Brown's ESPs and baghouses each yearfrom 2005 to 2012. The work is scheduled and conducted during an outage at the plant in coordination with ERCOT and in light of electricity needs for the grid. The Court finds that adequate maintenance was timely performed on the ESPs and baghouses and that criteria (d)(9) and (e)(4)
are metforall events. 23. The Court also finds that criteria (d)(5), (d)(6), and (e)(7), which address the operator's efforts to minimize opacity, are met for all events, based on the testimony of Mr. Jarrell and a review of the reports at issue. The 6,520 sixminute readings that Sierra Club challenges comprise only about 1.5 percent of the plant's total operating time during this period. In other words, during about 98.5 percent of the time, the plant is operating with opacity below 30 percent, usually around 10 percent. As Mr. Jarrell testified, these limited startup and shutdown opacity events are necessary to ensure effective operation of the equipment when it is needed most-during the 98.5 percent ofthe time that the plant is in normal operation mode. During normal operations, the opacity at the 

### 35Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 36 of 55
plant is generally 10 percent or less, which is a clear stack. Ifthe plantoperated in a different manner, the ESPs and baghouses would experience caking or plugging, decreasing their collection efficiency and increasing opacity overall. The Sierra Club offered no competent evidence to the contrary. The Courtfinds thatcriteria (d)(5), (d)(6), and (e)(7) are met. 24. Finally, based on the testimony of Dr. Lucy Fraiser, the Court finds that criteria (d)(10) and (e)(10) are met because none ofthe opacity events at issue caused or contributed to "a condition ofair pollution." "Air pollution" is defined in Texas as "the presence in the atmosphere of one or more air contaminants or combination ofaircontaminants in such a concentration and ofsuch durationthat either (A) are or may tend to be injurious to or adversely affect human health or welfare, animal life, vegetation, orproperty; or (B) interferewith the normal useor enjoyment ofanimal life, vegetation, or property." TEX. HEALTH & SAFETYCODE§ 382.003(3). Analyzing both aspects ofthe definition of air pollution, Dr. Fraiser concluded thatthe events atissue did not cause orcontribute to a condition ofair pollution as determined bytheTCEQ. The Courtagrees. 25. To begin with, the air quality modeling relied on by Dr. Fraiser, which was conducted by Mr. Paine, demonstratesthatthe impactto ambientairqualityfrom these shortduration opacity eventswas minimal and did notcause anyviolations of the relevant NAAQS levels. As recognized by Sierra Club's expert, Dr. Thurston, the NAAQS are the cornerstone of the nation's air pollution control program and are aimed at establishing air quality requirements sufficient to 36Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 37 of 55
protect public health and welfare. The experts from both sides agree that the primary NAAQS are set at a level designed to protect human health with an adequate margin of safety, including protecting sensitive populations such as children, the elderly, and individuals suffering from respiratory diseases. The secondary NAAQS are designed to provide public welfare protection, including protection against decrease visibility and damage to animals, crops, vegetation, and buildings. Sierra Club's own experts agree with Dr. Fraiserthatthere are no violations ofthe primary or secondary PM NAAQS relating to the events at issue in this case. Based on the air modeling, an analysis of the NAAQS, and an analysis of possible health effects caused by the opacity events, Dr. Fraiser concluded that the events at issue did not adversely affect human health or welfare. 26. Additionally, Dr. Fraiser considered several other factors in determining whetherthe opacity events interfered with the normal use orenjoyment ofanimal life, vegetation, or property. For example, Dr. Fraiser analyzed the surrounding land use, thetime ofdayofthe events, the duration ofthe events, the percentage oftime ofthe events, and whetherthere were complaints to the TCEQ relating to the events. Based on these additional factors as well as the secondary NAAQS, Dr. Fraiser further concluded that the events at issue did not interfere with the normal use orenjoymentofanimal life, vegetation, or property. 27. Unlike Dr. Fraiser, Sierra Club's experts - Dr. Gray and Dr. Thurston
- did not analyze or consider criteria (d)(10) and (e)(10) of the affirmative defenses. 37Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 38 of 55

Both ofthem confirmed thatthey were notfamiliarwith the Texas definition ofair pollution, were not familiar with criteria (d)(10) and (e)(10), and were not attempting to express an opinion on criteria (d)(10) and (e)(10). 28. Still, Dr. Thurston testified that even ifBig Brown Plant complied with area NAAQS standards, the emissions it was producing based on the opacity exceedances at issue, were still having short- and long-term adverse health effects for humans in the area surrounding the plant. Dr. Thurston disagreed with Dr. Frazier, who concluded thatair pollution levels ator below NAAQS levels
were safe. Dr. Thurston conceded, however, that he does not know how the TCEQ defines air pollution or how it interprets the application ofthe affirmative defense factors. Dr. Thurston also acknowledged that he has no evidence that Big Brown violated any NAAQS levels and is unable to cite a specific instance where an opacityviolation atthe plantdirectly harmed a person. 29. Dr. Gray examined the emission readings from the stacks at Big Brown Plant and analyzed air modeling reports based on dispersion scenarios with respect to the plant's emissions and opacity levels and its effects on the local environment. Dr. Gray opined that the opacity exceedances at the plant had a significant impact on the air quality of the local environment and for individuals who lived downwind from the plant. Pointing to a2011 TCEQ Emission Inventory chart, Dr. Gray explained that Big Brown Plant's two units are listed as the second and third largest producer of PM2.5 emissions among 2,000 facilities in the state ofTexas. {Exhibit P-290, P-291]. He further noted that this was the 38Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 39 of 55

case notwithstanding the fact that MSS events accountfor less than two percent ofthetotal annual time ofoperation at any given yearat Big Brown Plant. 30. Dr. Gray testified that compliance with the current NAAQS levels will not eliminate all health risks to humans. However, Dr. Grayconceded that he did not. consider the affirmative defenses and is unable to opine on the suitability ofthe NAAQS levels as implemented by EPA. Still, Dr. Gray believesthatany increase ofPM above a level ofzero increases health risk and admits that his definition of airpollution is differentthan the definition considered bytheTCEQ. 31. Thus, even absent deference to TCEQ's contemporaneous findings, the Court concludes that the evidence adduced at trial supports a finding that all of the ten criteria (in subsection (d) for upsets and subsection (e) for MSS) are satisfiedforall ofthe opacityevents at issue. 32. In sum, based on the testimony adduced attrial and the exhibits admitted, for all ofthe events on Luminant's reports for the period July 2007 to December 2010 thatwere designated as "excess opacity events dueto an upset," the Court finds: (1) The events were properly reported to TCEQ in either a STEERS report ora quarterly reportor both. (2) The opacity was caused by a sudden, unavoidable breakdown of equipmentor process beyond the control ofthe owneroroperator. (3) The opacity did not stem from any activity or event that could have been foreseen and avoided or planned for, and could not have been avoided by better operation and maintenance practices or by technically feasible design consistentwith good engineering practice.
39Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 40 of 55
(4) The air pollution control equipment or processes were maintained and operated in a manner consistent with good practice for minimizing opacity. (5) Prompt action was taken to achieve compliance once the operator knew or should have known that applicable opacity limitations were being exceeded and any necessary repairs were made as expeditiously as practicable. (6) The amount and duration of the opacity event and any bypass of pollution control equipment were minimized and all possible steps were taken to minimizethe impactofthe opacity on ambientairquality. (7) All emission monitoring systemswere kept in operation ifpossible. (8) The owneroroperatoractions in response to the opacity eventwere documented by contemporaneous operation logs or other relevant evidence. (9) The opacity event was not part of a frequent or recurring pattern indicativeofinadequatedesign, operation, ormaintenance. (10) The opacity event did not cause or contribute to a condition of air pollution. See 30TEX. ADMIN. CODE§ 101.222(d). 33. And, based on the testimony adduced attrial and the exhibits admitted, for all of the events on Luminant's reports for the period July 2007 to December 2010thatwere designated as MSS, the Courtsimilarlyfinds: (1) The events were properly reported to TCEQ in either a STEERS reportora quarterly reportor both. (2) The opacity was caused by a sudden, unavoidable breakdown of equipment orprocess beyond the control ofthe owneroroperator.

(3) The periods of opacity could not have been prevented through planning and design. (4) The opacity was not part of a recurring pattern indicative of inadequate design, operation, or maintenance.
40Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 41 of 55
(5) Ifthe opacity event was caused by a bypass of control equipment, the bypass was unavoidable to prevent loss of life, personal injury, or severe propertydamage.

(6) The facility and air pollution control equipment were operated in a mannerconsistentwith good practicesfor minimizing opacity.

(7) The frequency and duration of operation in a startup or shutdown mode resulting in opacitywere minimized. (8) All emissions monitoring systems were kept in operation ifpossible. (9) The owner or operator actions during the opacity event were documented by contemporaneous operating logs or other relevant evidence.

(10) The opacity event did not cause or contribute to a condition of air pollution. See 30 TEX.ADMIN. CODE§ 101.222(e). 34. The Court concludes that no penalty should be awarded for any of the opacity events at Big Brown Plantfrom July2007 to December2010 becausethe Defendants have proven the applicable affirmative defense for each event by a preponderance of the evidence. Thus, judgment will be entered in favor of Defendants on Sierra Club's requestfor civil penalties (including civil penalties to be designatedfora beneficial mitigation project). Ill. Sierra Club Is NotEntitledtoAny Injunctive Relief 35. The Court further concludes that Sierra Club is not entitled to any injunctive relief, and its requestforapermanent injunction will be denied. A. The ConductSierra Club Seeksto Enjoin is NowPermitted 36. As noted above, TCEQ amended Big Brown's Air Permit No. 56445 in December 2011 to specifically permit and regulate the type of MSS emissions
41Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 42 of 55

events at issue in this case. Ms. Hernandezconfirmed thatthe plant mustfollow this permit. And Mr. Chavers testified, and the reports indicate, that the MSS activity of which Sierra Club complains is now regulated and limited by the permit. Thus, the current version ofAir Permit No. 56445 authorizes and makes lawful the very MSS activity that Sierra Club asks this Court to enjoin. Sierra Club has offered no evidencetothe contrary. 37. Further, because Luminant has applied for a revision of its Title V permit and identified the revised Permit No. 56445 as a provisional term and condition, Texas's EPA-approved Title V regulations make this currentversion ofthe permit federally enforceable in this case. 30 TEX. ADMIN. CODE§ 122.217; see also45 TEX. PRAC., ENVTL. LAW§ 5:10 (2d ed. 2013-2014) (when a "Title V permit holder submits an application for a minor permit revision . . . , the permit holder can operatethe change beforethe issuance ofthe revised permit"). 38. "Equitable relief is a prospective remedy, intended to prevent future injuries, and for that reason the sole function of an action for injunction is to forestall future violations." Sierra Club v. TVA, 592 F. Supp. 2d 1357, 1375 (N.D. Ala. 2009) (internal citations and quotations omitted). An injunction will not be issued for only alleged past infractions because such prospective equitable relief will not redress the plaintiff's injury. See SteelCo. v. Citizens fora BetterEnv't, 523 U.S. 83, 109 (1998) ("Because respondent alleges only past infractions

... and not a continuing violation or the likelihood of a future violation, injunctive reliefwill not redress its injury."). 42Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 43 of 55

39. It is well settled that a court has no authority to enjoin lawful conduct. See Laufv. E.G. Shinner

### &Co., 303 U.S. 323, 328 (1938) (a federal districtcourt may not "enjoin acts declared

...to be lawful"); Senn v. Tile Layers Protective Union, LocalNo. 5, 301 U.S. 468, 483 (1937) (injunctive reliefwill not issue "againstthe lawful conduct ofanother''); Sierra Club v. Peterson, 228 F.3d 559, 571 (5th Cir. 2000) (a district court may not enter an injunction that fails "to distinguish between legal and illegalfuture [conduct]"). 40. As Mr. Chavers testified, the plant is operating now in accordancewith that permit and its MSS duration limitations, and Sierra Club has offered no contrary evidence or evidence to suggestthis will change in the future. Because "there is
atotal lack ofevidence that [Defendants are operating Big Brown] in violation of existing law," an injunction, which would govern future operation ofthe plant, is not warranted. TVA, 592 F.Supp.2d at 1375 (denying Sierra Club request for injunction based on past opacity events) (emphasis in original). Because Permit No. 56445 now authorizes and regulates the MSS emissions, the Court will not enjoin them as Sierra Club requests. 41. Further, even if the revised Permit No. 56445 were not federally enforceable as Sierra Club argues, the Courtwill not substitute itsjudgmentasto how Big Brown should operate its ESPs and baghouses forthejudgment ofthe regulatory agency charged with making those determinations. TCEQ has reviewed the plant's operations and concluded how the emissions control equipment should be operated to reduce emissions overall·and has determined 43Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 44 of 55

that the currently-permitted method reduces emissions to de minimis levels and does not negatively impact air quality. This Court, in its discretion, will not issue
an injunction that conflictswith TCEQ'stechnical assessment. 

### B. Application of the Traditional Four-Factor Test for Injunctive ReliefDemonstratesthatan Injunction is NotWarranted 42. Even without considering the revised Permit No. 56445, the Court concludes that Sierra Club is not entitled to an injunction. Injunctive relief is not awarded automatically in all cases, even where a violation of the law is established. Winter v. NRDC, Inc., 555 U.S. 7, 32 (2008) ("[a]n injunction is a matter ofequitable discretion; it does notfollow from success on the merits as a matter of course."); Simmons v. Conger, 86 F.3d 1080, 1085 (11th Cir.1996) ("Simply because prospective injunctive relief is available

... does not mean that such equitable relief is appropriate."); Weinberger v. Romero-Barcelo, 456 U.S. 305, 320, 313 (1982) (the "exercise of equitable discretion

... must include the ability to deny as well as grant injunctive relief' and "a federal judge sitting as chancellor is not mechanically obligated to grant an injunction for every violation oflaw"). 43. "It is well-established that the party seeking a permanent injunction must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest


### 44Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 45 of 55

would not be disserved by a _permanent injunction." Abraham v. Alpha Chi Omega, 708 F.3d 614, 626-27 (5th Cir.) cert. denied, 134 S. Ct. 88 (2013) (citing eBayInc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006) (citations omitted)). 44. Here, Sierra Club has not shown that these factors warrant an injunction. First, Sierra Club has notdemonstrated a_ny irreparable harm, and the Courtfinds there is no irreparable harm. 45. Second, the TCEQ and EPA are charged by the Clean AirActwith issuing the permits for the plant, and Sierra Club has access to other legal remedies to challenge the terms ofthe permit and the operation ofthe plant. Sierra Club has failed to showthat it has no other remedies at law. 46. Third, the balance of hardship weighs heavily in favor of Defendants. On the one hand, Sierra Club has provided no credible evidence of any adverse impact, curtailed activities, orparticular hardship as a result ofthe events at issue
or events in the future. Defendants, on the other hand, have invested millions of dollars in the installation and maintenance of the ESPs and baghouses at Big Brown. Sierra Club's requested injunction is unwarranted, impracticable, and would cause substantial hardship and disruptions to the plant's business and its abilityto provide reliable electricity. 47. The Court further finds that the public interest would not be served by an injunction. Big Brown generates enough electricity to power about 575,000 homes in Texas. This is much-needed electricityforthe State. Electricity is nota convenience; it is a necessity. Threatening the supply ofelectricity is not in the 45Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 46 of 55
public interest and is another ground for denial of injunctive relief. See Sierra Club v. Georgia Power Co., 180 F.3d 1309, 1311 (11th Cir. 1999) (affirming denial ofinjunction sought by Sierra Club over power plantoperations as adverse to the public interest because "a steady supply of electricity during the summer months, especially in.the form ofair conditioning to the elderly, hospitals and day
care centers is critical"). 48. Forthese reasons, Sierra Club's request for injunctive relief is denied and judgment will be entered in favor of Defendants on Sierra Club's request for injunctive relief. 

### IV. Sierra Club has not Proven that the Opacity Events at Issue Caused any Injuryto Barbara Lawrence oranyOther Person 49. For an independent and additional reason, the Court concludes that Sierra Club has failed to demonstrate its entitlement to any relief. As the Fifth Circuit has held, "[Plaintiffs] must ultimately establish causation ifthey are to prevail on the merits" oftheir Clean Air Act claims. See Texans United fora Safe Econ. Educ. Fund v. Crown Central Petroleum Corp., 207 F.3d 789, 793 (emphasis added); Tex. Campaign for the Env1t v. LCRA, No. 4:11-cv-791, 2012 WL 1067211, at*5 (S.D. Tex. Mar. 28, 2012). This showing, as the Fifth Circuit held, is separate and apart from the minimal showing of "traceability" needed to demonstrate Article Ill standing. Texans United, 207 F.3d at 793. Thus, as the Court explained in its prior Order, "[t]o ultimately prevail in its lawsuit, Plaintiffwill

46Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 47 of 55

need to prove causation and explicitly link opacity violations to Lawrence's injuries[.]" Doc. 202 at 11. 50. Sierra Club failed to prove any link between an alleged opacity violation and injuryto Ms. Lawrence orany other person. 16 51. Sierra Club offered no expert testimony to establish a**caus~I** connection between the specific opacity events at issue in this case and any aesthetic or other injury Ms. Lawrence may have suffered. 52. To the extent Sierra Club was offering the testimony of Dr. Gray or Dr. Thurston to establish causation, the Court concludes that their testimony was inadequate on this point. The Court finds that any alleged increase in PM is de minimis and did not cause a material increase in health risk to Ms. Lawrence or any other resident ofthe area near Big Brown. 53. Moreover, the Court concludes that even if Dr. Thurston's testimony were accepted at face value, it would be inadequate as a matter of law to establish a causal connection between the opacity events at issue and any legally cognizable injury. Dr. Thurston's opinion is that any amount of PM above zero increases the risk of health problems. However, Dr. Thurston provided no evidence that Ms. Lawrence (orany otherspecific, individual person) has actually experienced any health problems. The Fifth Circuit has held that in the absence of"a presently existing injury,"the mere factthat a person has been exposed to a

16 In fact, Sierra Club did noteven call Ms. Lawrenceas awitness attrial. 

### 47Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 48 of 55
potentially hazardous substance is not a legally cognizable injury: '"the requisite element of causation is lacking until separate prospective injuries materialize.'" Adams v. Johns-Manville Sales Corp., 783 F.2d 589, 591-92 (5th Cir. 1986) (quoting Adams v. Johns-Manville Sales Corp., 727 F.2d 533, 537 (5th Cir. 1984)); accord Metro-North Commuter R. Co. v. Buckley, 521 U.S. 424, 432 (1997) ("with only afew exceptions, common-law courts have denied recovery to those who

...are disease and symptom free"). Thus, even ifthe testimonyfrom Dr. Gray and Dr. Thurston had established that the opacity events at issue had caused an increased risk of health problems, that evidence would not enable Sierra Clubto carry its burden on causation. 54. Sierra Club, in its trial brief, contends that the CAA citizen suit provision does not require proof of causation. But the Fifth Circuit, which this Court must follow, has stated otherwise, as discussed above. Further, even if causation
were not a separate element of proof, the Court finds that the complete lack of any link between these opacity events and Ms. Lawrence or any other Sierra Club member (oreven any memberofgeneral public) would call for denial ofany injunctive or monetary relief, which are matterswithin the Court's discretion. V. No Penalty isAppropriate undertheStatutory Factors 55. Even ifthe affirmative defense criteria had not been met or did not apply, the Court finds, after hearing the evidence, that civil penalties are not "appropriate" under 42 U.S.C 

### § 7604(a) considering the penalty criteria in 42 U.S.C. 

### § 7413(e)(1). For this additional and alternative reason, the Court 48Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 49 of 55

declines to assess any penalty, and judgment will be entered in Defendants' favoron Sierra Club's claim forcivil penalties. 56. As the Fifth Circuit has held, "[t]he assessment ofcivil penalties underthe [CAA] is left to the district court's discretion." U.S. EPA v. CITGO Petroleum Corp., 723 F.3d 547, 551 (5th Cir. 2013). In general, "[i]n assessing the amount ofa civil penalty in

... [a CAA] citizen suit, the court must consider the penalty assessment criteria outlined in section 7413(e)." Luminant Generation Co., 714 F.3d at 846. 57. Looking to the factors in 42 U.S.C. 

### § 7413(e), in light of the evidence adduced at trial, the Court finds that no penalty is "appropriate" in this case. As the Fifth Circuit has instructed, the economic benefitto the defendant is a "critical factor'' in determining whethera penalty is appropriate. CITGO, 723 F.3d at 552. However, the evidence showed that Defendants did not obtain an economic benefit from the opacity events, and the Court finds that Defendants did not obtain an economic benefit. 58. Sierra Club offered the opinions of Mr. Ewen in rebuttal to the opinions of Defendants' expert, Dr. Anne Smith. As Mr. Ewen testified, Dr. Smith analyzed any "economic benefit" Defendants would have incurred from the alleged CAA violations at the Big Brown plant and concluded that Defendants suffered a net economic loss from the events. 59. At trial, Mr. Ewen testified as to his criticisms of Dr. Smith's opinion. For example, Mr. Ewen disagreed with Dr. Smith's characterization of a period of 49Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 50 of 55
opacity compliance to a period of opacity exceedancy because a power plant cannot operate in a manner suggested by Dr. Smith. However, even accepting such criticisms, his rebuttal opinion does not show a positive economic benefitto Defendants. 60. Mr. Ewen.recognized attrial that an economic benefitanalysis can result in
a negative or zero number, indicating no economic benefit. Here, the evidence adduced at trial supports the conclusion that Defendants obtained no economic benefit from the opacity events. The evidence before the Court was that Luminant expended significant sums to install and maintain at the plant both ESPs and baghouses, in series. The evidence also shows that Luminantspends millions ofdollars each year in maintaining the equipment in good working order. Sierra Club did not identify any specific repair or maintenance work that was not done and would have prevented the opacity events at issue. The evidence further shows that electricity cannot be stored and that plants already have an incentive to minimize the outages that result in the opacity events. At trial, Mr. Ewen agreed that plants have an incentive and motivation to decrease unplanned outages likethe onesthatcause higheropacity readings. 61. Moreover, as Mr. Ewen testified at trial, in considering economic benefit, the proper methodology considers the least costly method ofcompliance. Thus,
even if there were an economic benefit, the Court would consider as the economic benefit the least costly compliance option, not "solutions [that are] considerably overpriced." United States v. Allegheny Ludlum Corp., 366 F.3d 50Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 51 of 55
164, 185 (3rd Cir. 2004) ("We

... hold that [the] economic benefit analysis should be based on the least costly method of compliance."). As Mr. Ewen further testified, in some instances, the least costly compliance option will be applying for and obtaining a permitto authorize the activity at issue, and the cost of obtaining the permit, though perhaps "negligible," is the correct measure of economic benefit. See U.S. EPA, A Framework for Statute-Specific Approaches to Civil Penalty Assessments, EPA General Enforcement Policy #GM-22, at 7 (Feb. 16, 1984) [Exhibit D-128]. 62. Here, the least costly compliance option would not have been the new baghouse that Dr. Sahu proposed, butwould have been the option that Luminant actually pursued-applying for and obtaining a revision to Permit No. 56445 in December 2011 to authorize and regulate the events. The evidence shows that the application fee that Luminant paid to TCEQ in orderto obtain the permit was $900. [Exhibit D-12.15]. While this amount is certainly negligible, it would nonetheless be the correct measure ofany delay in compliance that might have existed under Sierra Club's legal theory. 63. Economic benefit is notthe onlyfactorthe Court must consider. The other factors also indicate that no penalty is appropriate. As Dr. Fraiser testified, the opacity events at issue were not "serious" from an environmental or human health perspective. There is no evidence of impact to the environment or any**i~dividual.** The events were not serious enough to generate any complaints to the TCEQ from nearby residents or any other person. The events were properly 51Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 52 of 55
reported by Luminant to the TCEQ, which determined the events were not "excessive" and notviolations. 64. In addition, the opacity at issue occurred for only a minimal amount oftime and did not interfere with air quality standards or cause any harm to any individual. Defendants were simply operating the control equipment in accordance with EPA and industry standards in order to ensure human safety and effective operation ofthe equipment. Operating the equipment in any other
manner is not advisable. This particularequipmentwas selected and installed as part ofa prior settlement with the Texas Air Control Board (now TCEQ) and the Lone Star Chapter of the Sierra Club [Exhibit D-28, D-29], and it would hardly make sense to penalize the company for operating the equipment as it was designed and installedwith Sierra Club's involvement. 65. Further, as testified to by Ms. Glacken, the plant has a long and welldocumented history of excellent compliance and good faith efforts to meet and outperform all requirements ofthe Clean AirAct, the Texas State Implementation Plan, the plant's permits, and other applicable environmental laws, which weighs in factor of no penalty being imposed. Sierra Club offered no contrary evidence. The events that are the subject of Sierra Club's complaint were fully reported to both TCEQ and EPA, and both determined that no enforcement action was warranted. TCEQ specifically investigated each eventand determined therewas no violation. Finally, the MSS events at issue are now expressly permitted under Permit No. 56445, which is a provisional condition to Title V Permit No. 065. 

### 30 52Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 53 of 55

TEX. ADMIN. CODE§ 122.217. Thus, a penalty would serve no deterrent effect in thefuture. 66. The Court therefore concludes, based on its analysis of all ofthe factors enumerated in 42 U.S.C. § 7413{e){1) and the evidence adduced at trial, that under42 U.S.C. § 7604{a) no penalty is appropriateforany ofthe opacity events that are the subject ofthis lawsuit. Thus, for this additional reason, judgmentwill be entered in favorofDefendants on Sierra Club's requestfor civil penalties. 

### VI. Sierra Club's Claim is Mootasto MSS Activities 67. Alternatively, and independently, Sierra Club's claim with respect to MSS eventswill be dismissed as moot. 68. As the Court explained in dismissing Sierra Club's PM claim, it has long been settled that '"[a] case seeking injunctive relief based on conduct that has become lawful due to a change in the law is rendered moot by the change in law."' Doc. No. 240 at 17 {quoting TVA, 592 F. Supp. 2d at 1376); accordSawyer


### v. Whitley, 945 F.2d 812, 814 n.1 {5th Cir. 1991). 69. For this reason, injunctive relief is not available to remedy past opacity exceedances at a plant that is in compliance with its current permit. See TVA, 592 F. Supp. 2d at 1376-77. Here, excess opacity during MSS has become lawful due to the change in Permit No. 56445. Sierra Club does not dispute that Big Brown presently operates in compliance with the duration and work-practice requirements {and all otherterms and conditions) ofamended Permit No. 56445, and the testimony of Mr. Chavers confirms that Big Brown does comply with its 

### 53Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 54 of 55

new permit. As the Court has already explained, where, as here, "the threat ofa future violation or harm has been nullified by an approved permit, 'there is no factual or legal ground to impose injunctive relief, and the case has become moot."' Doc. 240 at 17 (quoting 

### TVA, 592 F. Supp. 2d at 1377). 70. As for Sierra Club's request for a civil penalty, a citizen suit seeking civil penalties is mooted by the issuance ofa permit that authorizes the activities for which the suit seeks penalties. Doc 240 at 16-17 ("Once a Title V permit is issued, a civil action seeking civil penalties for conduct allowed by the permit becomes moot."); accord Miss. River Revival, Inc. v. City ofMinneapolis, 319 F.3d 1013, 1015-16 (8th Cir. 2003) ("Because permits have now issued,

... plaintiffs' civil penalties claims are moot
...."); see also WildEarth Guardians v. Pub. Serv. Co. ofColo., 690 F.3d 1174, 1186-87 (10th Cir. 2012) (claim for civil penalties mooted by a change in the governing regulations). This rule is the logical consequence ofthe remedial purpose ofa civil penalty, which is to deter future misconduct. See, e.g., Friends ofthe Earth, Inc. v. Laidlaw Envtl Servs. (TOG), Inc., 528 U.S. 167, 185-86 (2000). Where the conduct that would be penalized has become lawful and permitted, that conduct is no longer misconduct, and a "claim for civil penalties, even if successful, would have no deterrentvalue." WildEarth Guardians, 690 F.3d at 1187. CONCLUSION For all of these reasons, the Court will enter judgment in favor of Defendants on all claims and will deny all relief requested by Sierra Club. Based 54Case 6:12-cv-00108-WSS Document 273 Filed 03/28/14 Page 55 of 55

on the findings offact above,the Court further concludes, pursuant to 42 U

.S.C. 

### § 7604(d),that an award ofthe costs of litigation (including reasonable attorney and expert witness fees) to Defendants is appropriate

. Pursuantto Federal Rule of Civil Procedure 54(d)(2) and Local Rule CV-7U), and in compliance with the requirements ofthose rules, Defendants may file their claim for fees by motion not laterthan 14 days after entry ofjudgment, atwhich time the Courtwill take up such motion

. Accordingly, it is ORDERED that judgment is entered in favor of Defendants and Sierra Club's requestfor civil penalties and injunctive relief is DENIED. It is also ORDERED that any motion still pending in this lawsuit is DENIED AS MOOT. It isfurther ORDEREDthatthe Clerk shall enterfinal judgment in accordancewith this Memorandum Opinion and Order

. SIGNED on this

### :J.~'" day ofMarch,2014.

WALTER S.SMITH,JR. UNITED STATES DISTRICTJUDGE

55