1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-3-1999

Duquesne Light Co v. EPA

Precedential or Non-Precedential:

Docket 98-3071

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Recommended Citation

"Duquesne Light Co v. EPA" (1999). 1999 Decisions. Paper 28.

http://digitalcommons.law.villanova.edu/thirdcircuit_1999/28
Filed February 3, 1999 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

NO. 98-3071 

DUQUESNE LIGHT CO., 

 Petitioner 

v. 

UNITED STATES ENVIRONMENTAL PROTECTION 

AGENCY, 

 Respondent 

COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF 

ENVIRONMENTAL PROTECTION, 

 Intervenor-Respondent 

On Petition for Review of 

Environmental Protection Agency 

Submitted Under Third Circuit LAR 34.1(a) 

January 25, 1999 

Before: SLOVITER, McKEE and RENDELL, Circuit Judges

(Filed February 3, 1999) 

 John P. Proctor 

 Margaret A. Hill 

 Andrew H. Leskovsek 

 Washington, D.C. 20005 

 Attorneys for Petitioner 
 Lois J. Scuiffer 

 Assistant Attorney General 

 Environmental Defense Section 

 Stephen R. Herm 

 United States Department of Justice 

 Environmental Defense Section 

 Washington, D.C. 20026 

 Attorneys for Respondent 

 Paul A. Tufano 

 Terry R. Bossert 

 M. Dukes Pepper, Jr. 

 Joyce E. Epps 

 Commonwealth of Pennsylvania 

 Department of Environmental 

 Protection 

 Attorneys for Intervenor- 

 Respondent 

OPINION OF THE COURT 

SLOVITER, Circuit Judge. 

Before us is a Petition for Review filed by Duquesne Light 

Company, a Pennsylvania investor-owned electric utility in 

the Greater Pittsburgh area ("Duquesne"), of afinal rule of 

the United States Environmental Protection Agency ("EPA") 

approving, pursuant to section 110 of the Clean Air Act, 42 

U.S.C. S 7410, a revision to the New Source Review of the 

State Implementation Plan of the Commonwealth of 

Pennsylvania. We have jurisdiction to review suchfinal 

agency actions pursuant to section 307(b) of the Clean Air 

Act, 42 U.S.C. S 7607(b). 

EPA argues first that Duquesne lacks both constitutional 

and prudential standing. This is an issue that we must 

address at the outset. See Steel Co. v. Citizens for a Better 

Env't, 118 S. Ct. 1003, 1012-13 (1998). However, to

understand EPA's contention that Duquesne cannot meet 

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the causation and redressability requirements for standing, 

it is necessary to understand the statutory framework. 

Under the Clean Air Act, EPA has the obligation to 

establish national ambient air quality standards ("NAAQS") 

for certain pollutants. Because the Act establishes a joint 

federal and state program to control air pollution and to 

protect public health, the states are required to prepare 

implementation plans, or SIPs, for each designated"air 

quality control region" within their borders. 42 U.S.C. 

S 7410. The SIP must specify emission limitations and other 

measures necessary for that region to meet and maintain 

the required NAAQS. Id. S 7410(a)(2)(A)-(K). Each SIP must 

be submitted to EPA for its review and approval. The Act 

requires a public notice and comment period, and the SIP 

must be approved if it is found to meet the minimum

requirements of the Clean Air Act. 42 U.S.C. S 7410(k)(3); 

see also Union Elec. Co. v. EPA, 427 U.S. 246, 265 (1976). 

The Clean Air Act expressly provides that the states may 

adopt more stringent air pollution control measures than 

the Act requires with or without EPA approval. See 42 

U.S.C. S 7410(k)(3). 

In 1990, the Clean Air Act was amended to address the 

failure of some states to meet their required NAAQS. 

Pursuant to the 1990 Amendments, all SIPS must contain 

a New Source Review program, which establishes 

procedures for state regulation of proposed new sources of 

pollutants. Id. S 7410(a)(2)(C). Further, New Source Review 

programs for what the EPA characterizes as 

"nonattainment" regions must require that the entities 

seeking to construct new major sources of regulated

pollutants, or to make significant modifications to such 

existing sources, must obtain a preconstruction permit 

obligating them to obtain "sufficient offsetting emissions 

reductions" so as to represent "reasonable further progress 

towards attainment." Id. S 7503(a)(1)(A). 

EPA has promulgated regulations regarding minimum 

criteria for EPA approval of New Source Review SIPs for 

nonattainment areas which contain a number of definitions 

which must be used by the states for this purpose. 

However, the EPA regulations also provide that a state may 

deviate from those definitions "only if the state specifically 

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demonstrates that the submitted [state] definition is more 

stringent, or at least as stringent, in all respects as the 

corresponding [federal] definition . . . ." 40 C.F.R. 

S 51.165(a)(1). 

Duquesne has a non-operational electric generating 

station currently in cold- reserve status which it hopes to 

use to generate Emission Reduction Credits ("ERCs"). ERCs 

are recognized by the regulatory agencies as reductions in 

pollutants. ERCs are determined as the difference between 

(1) emissions after an entity's action (e.g., shut ting down or 

modernizing polluting equipment) and (2) a baselin e of 

prior "actual emissions." Although ERCs are initially 

assigned to the entity responsible for the reduction, they 

may be bought and sold. Apparently, it is Duquesne's 

interest in preserving ERCs from its dormant plant that is 

the basis for its challenge to the SIP revision. 

The SIP revision to which Duquesne objects relates to the 

definition of "actual emissions," which, as noted, form the 

baseline for the determination of ERCs. EPA regulations 

define "actual emissions" as generally equaling the average 

rate at which the source "actually emitted the pollutant 

during a two-year period which precedes the particular date 

and which is representative of normal source operation." 40 

C.F.R. S 51.165(a)(1)(xii)(B). They further provide that "[t]he 

reviewing authority shall allow the use of a different time 

period upon a determination that it is more representative 

of normal source operation." Id. 

The Pennsylvania New Source Review program at issue, 

adopted in January 1994, effects what Duquesne terms a 

de facto definition of the term "actual emissions," and what 

EPA prefers to refer to as "Pennsylvania's definition." In any 

event, Pennsylvania provides that "actual emissions or 

allowable emissions, whichever is lower, shall be calculated 

over the 2 calendar years immediately preceding the

emissions reduction which generates the ERCs," 25 Pa. 

Code S 127.207(4)(i)(A), thus mirroring the federal scheme. 

Pennsylvania further provides, however, that should the 

reviewing agency determine that the period immediately 

preceding is "not representative of the normal emission 

rates or characteristics of the existing facility," it may 

specify a different, more representative, 2-year period 

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occurring within the preceding 5 calendar years. Id. 

S 127.207(4)(i)(B). Unlike the federal definition, this 

definition limits the "look-back" period. 

In February 1994, the Pennsylvania Department of 

Environmental Protection ("PDEP") submitted the New

Source Review regulations to EPA as revisions to the 

Pennsylvania SIP. EPA's notice of proposed rulemaking to 

grant limited approval was published in May 1997. During 

the public comment period, Duquesne complained that

what it described as Pennsylvania's "de facto" definition of 

actual emissions was more stringent than the federal 

definition. It also complained that (1) contrary to its own 

regulations, EPA had not required Pennsylvania to 

demonstrate the definition's stringency, and (2) the 

Pennsylvania Air Pollution Control Act prohibited PDEP 

from promulgating a more stringent Clean Air Act-related 

rule. EPA responded that applicable federal regulations 

permit more stringent state requirements and that, because 

the Pennsylvania Environmental Quality Board expressly 

found the New Source Review rules necessary to achieve or 

maintain NAAQS, state law authorized the adoption of rules 

more stringent than the federal minimum.1 Duquesne

alleges in its Petition for Review that (1) EPA ac ted 

arbitrarily, capriciously, and contrary to law in approving 

Pennsylvania's definition of "actual emissions" without 

requiring a demonstration of stringency, and (2) EPA 

violated the Administrative Procedure Act in failing to 

respond reasonably to Duquesne's comments regarding the 

Pennsylvania definition. 

With this background before us, we turn to consider

Duquesne's standing. The constitutional standing inquiry 

requires a three-fold showing: the party asserting 

jurisdiction must demonstrate (1) an "injury in fact," 

(2) that the injury is "fairly traceable" to the action or 

actions complained of, and (3) that the injury wil l likely be 

redressed by a favorable decision. Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560-561 (1992). 

_________________________________________________________________ 

1. Duquesne has filed a request for administrative reconsideration of 

EPA's final approval of the revised SIP. This request, which is pending, 

does not affect the finality of the action for purposes of judicial 

review. 

See 42 U.S.C. S 7607(b). 

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There is no serious question with respect to Duquesne's 

injury-in-fact. Duquesne has come to court complaining 

that it will lose ERCs as a result of the EPAs approval of the 

PDEP's action. These ERCs are of tangible value to 

Duquesne; they would permit Duquesne to operate less 

expensively, and they are even fungible. Hence, Duquesne 

has met the first requirement for standing, inasmuch as 

the loss of valuable credits constitutes an imminent 

concrete injury. 

Duquesne's claim to jurisdiction, however, founders on 

the other two prongs of the standing test: causation and 

redressability. The causation requirement is only satisfied 

where the injury is "fairly traceable to the challenged action 

of the defendant, and not the result of the independent 

action of some third party not before the court." Bennett v. 

Spear, 520 U.S. 154, 167 (1997). In this case, Duquesne's 

injury is manifestly the product of the independent action 

of a third party -- Pennsylvania's Department of 

Environmental Protection. It is PDEP's action -- redefining 

the SIP in such a way that Duquesne may not receive ERCs 

for its dormant plant -- that results in the reduction of 

credits below the level that Duquesne urges would be the 

result if the Pennsylvania definition did not go beyond the 

minimum level of stringency required by federal law. 

However, the EPA, whose action in approving the plan 

forms the asserted basis for federal jurisdiction here, only 

has power to disallow state plans that fail to be stringent 

enough -- that is, plans that fall below the level of 

stringency provided by federal law. See 42 U.S.C. S 7416 

("[N]othing in this chapter shall preclude or deny the right 

of any State or political subdivision thereof to adopt or 

enforce (1) any standard or limitation respecting emissions 

of air pollutants or (2) any requirement respectin g control 

or abatement of air pollution; except that if an emission 

standard or limitation is in effect under an applicable 

implementation plan . . . such State or political subdivision 

may not adopt or enforce any emission standard or 

limitation which is less stringent than the standard or 

limitation under such plan or section."). EPA thus has no 

power to require Pennsylvania to make its plan the same as 

the federal requirement, provided Pennsylvania's is more 

 6 
stringent than required by the Clean Air Act; rather, EPA by 

statutory directive must approve a plan when it conforms to 

the federal minimum. See 42 U.S.C. S 7410(k)(3) ("[T]he 

Administrator shall approve such submittal as a whole if it 

meets all of the applicable requirements of this chapter."). 

Therefore, the EPA's action in approving the plan is not 

"fairly traceable" to the injury of which Duquesne 

complains. 

For similar reasons, Duquesne's claim against the EPA 

fails the redressability requirement. To be "redressable" for 

standing purposes, it must "be likely, as opposed to merely 

speculative, that the injury will be redressed by a favorable 

decision." Bennett, 117 S. Ct. at 1163. It is Duquesne's 

hope that it can have this action set aside by the EPA on 

the ground that its stringency -- required to be at or above 

the level mandated by federal law -- was not sufficiently 

addressed by the EPA. But again, as the foregoing 

demonstrates, EPA may not require less stringency--

which is the outcome Duquesne hopes to achieve -- in its 

review of whether the definition is adequately stringent. 

And, it should be added, Duquesne does not argue that the 

PDEP's definition is insufficiently stringent; in fact, 

Duquesne stated in its comments on the EPA's proposed 

approval of the Pennsylvania New Source Review SIP that, 

"PA DEP's approach is, in effect, more stringent than EPA's 

definitions." App. at 718. 

Consequently, Duquesne cannot through this action 

secure an order from EPA or this court requiring PDEP to 

make its requirements more lax. Rather, what Duquesne 

seeks is to compel EPA to engage in a formalistic exercise 

by conducting a fuller demonstration of the stringency of 

PDEP's definition. Such a "demonstration" would be a 

technical formality as the stringency of that definition is not 

only apparent on the face of the definition, but also 

conceded by Duquesne. At best, if Duquesne were 

successful in this court, it would get a second opportunity 

to convince PDEP that its definition is too strict, an exercise 

that is wholly inconsistent with the asserted ground for 

maintaining that the regulation was improperly approved 

by EPA. Such a speculative contingency cannot support 

Article III standing. 

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Accordingly, we will dismiss this Petition for Review for 

lack of standing. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

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