PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 12-1022

_____________

GENON REMA, LLC,

 Petitioner 

v.

UNITED STATES ENVIRONMENTAL PROTECTION 

AGENCY,

 Respondent 

___________

On Petition for Review of Final Agency Action 

of the United States Environmental Protection Agency 

(EPA-HQ-OAR-2011-0081)

____________

Argued March 18, 2013

Before: FUENTES, CHAGARES, and BARRY, 

Circuit Judges

(Opinion Filed: July 12, 2013)
2

William M. Bumpers, Esq. [ARGUED]

Brook Detterman, Esq.

Debra J. Jezouit, Esq. 

BAKER BOTTS L.L.P.

1299 Pennsylvania Ave., NW

Washington, D.C. 20004 

Walter Stone, Esq. 

GenOn Energy Inc.

601 13th Street, N.W.

Suite 850N

Washington, D.C. 20005 

Counsel for Petitioner, GenOn REMA, LLC 

George P. Sibley, III, Esq. [ARGUED]

HUNTON & WILLIAMS LLP

951 E. Byrd Street

Richmond, VA 23219

Andrea B. Field, Esq. 

Elizabeth L. Horner, Esq. 

HUNTON & WILLIAMS LLP

2200 Pennsylvania Avenue, N.W.

Washington, D.C. 20037 

Counsel for Petitioner-Intervenor, Utility Air 

Regulatory Group 

Thomas A. Lorenzen, Esq. 

U.S. Department of Justice

Environmental Enforcement Section 
3

P.O. Box 7611

Washington, D.C. 20044

T. Monique Peoples, Esq. [ARGUED]

U.S. Department of Justice

Environmental Defense Section

Suite 8000

601 D. Street, N.W. 

Washington, D.C. 20004 

Stephanie L. Hogan, Esq. 

Office of General Counsel (2344A)

United States Environmental Protection Agency

1200 Pennsylvania Ave., N.W.

Washington, D.C. 20460

Counsel for Respondent, United States Environmental 

Protection Agency 

Jon C. Martin, Esq.

Ruth E. Musetto, Esq. [ARGUED]

Lisa J. Morelli, Esq.

Office of Attorney General of New Jersey

Division of Law

Richard J. Hughes Justice Complex

P.O. Box 093

25 Market Street 

Trenton, NJ 08625

Counsel for Respondent-Intervenor, State of New 

Jersey 
4

Joseph O. Minott, Esq. 

Clean Air Council

135 South 19th Street, Suite 300

Philadelphia, PA 19103

Zachary M. Fabish, Esq. [ARGUED]

The Sierra Club 

50 F Street NW, 8th Floor

Washington, D.C. 20001

Counsel for Respondent-Intervenors, Greenpeace, 

Clean Air Council and The Sierra Club 

____________

OPINION OF THE COURT

____________

FUENTES, Circuit Judge:

Portland Generating Station (―Portland‖) is a 427-

megawatt, coal-fired, electricity generating plant located in 

Upper Mount Bethel Township in Northampton County, 

Pennsylvania. Portland is directly across the Delaware River 

within 500 feet of Knowlton Township in Warren County, 

New Jersey. The EPA has found that Portland emits sulfur 

dioxide in amounts that significantly interfere with the control 

of air pollution across state borders. Sulfur dioxide is a toxic 

air pollutant that endangers life and health, causing burning of 

the nose and throat, difficulty breathing, and obstruction of 
5

the lungs and airways.1 Because of its location, Portland‘s 

sulfur dioxide emissions travel directly across the river into 

areas of New Jersey. In response to a petition under the 

Clean Air Act, the EPA issued a rule imposing direct limits 

on Portland‘s emissions and a schedule of restrictions to 

reduce its contribution to air pollution within three years. 

GenOn REMA, LLC (―GenOn‖), the owner and operator of 

Portland, challenges the EPA‘s rule as inconsistent with the 

agency‘s authority under the Clean Air Act and as arbitrary 

and capricious. We will uphold the rule and deny GenOn‘s 

petition for review. 

I. BACKGROUND 

A. Statutory Background 

The Clean Air Act authorizes the Environmental 

Protection Agency (the ―EPA‖) to establish air quality 

standards and empowers the states to achieve those standards. 

Concerned Citizens of Bridesburg v. EPA, 836 F.2d 777, 779 

(3d Cir. 1987) (internal citations omitted). This ―cooperative 

federalism‖ structure is a defining feature of the statute. 

Appalachian Power Co. v. EPA, 249 F.3d 1032, 1046 (D.C. 

Cir. 2001). The Clean Air Act gives the EPA authority to 

establish national ambient air quality standards (―NAAQS‖)

for certain pervasive air pollutants to protect public health and 

welfare. 42 U.S.C. §§ 7408, 7409. Under Section 110 of the 

 

1 See Sulfur Dioxide FAQS, AGENCY FOR TOXIC SUBSTANCES 

AND DISEASE REGISTRY, (1999), http://www.atsdr.cdc.gov/

tfacts116.pdf.
6

Clean Air Act, states are required to implement NAAQS 

through state implementation plans (―SIPs‖) that specify how 

NAAQS will be achieved and maintained in the state. Id. §§ 

7407, 7410. States must adopt and submit SIPs to the EPA 

that provide for the ―implementation, maintenance, and 

enforcement‖ of NAAQS within their borders no later than 

three years after the EPA promulgates a particular NAAQS.2 

Id. § 7410(a)(1). 

If the EPA approves the SIPs, they become 

enforceable as federal law. Id. § 7413. If the EPA finds that 

a SIP is inadequate to attain or maintain a NAAQS or 

otherwise does not comply with the Clean Air Act, the EPA 

issues a ―SIP call‖ requiring the state to submit a revised SIP

to correct the inadequacies. Id. § 7410(k)(5). The EPA may 

also promulgate a Federal Implementation Plan (―FIP‖) to

establish direct federal controls on sources of air pollution if 

the EPA disapproves a SIP in whole or in part, or finds that a 

 

2 After the promulgation of a new or revised NAAQS, the 

EPA designates a list of areas in each state that are in 

―nonattainment,‖ ―attainment,‖ or ―unclassifiable‖ with the 

NAAQS. 42 U.S.C. § 7407(d)(1)(B). An area designated as 

in ―nonattainment‖ is one ―that does not meet (or contributes 

to ambient air quality in a nearby area that does not meet)‖ 

the NAAQS for the pollutant. Id. § 7407(d)(1)(A)(i). An 

area in ―attainment‖ meets the NAAQS for the pollutant. Id.

§ 7407(d)(1)(A)(ii). An area designated as ―unclassifiable‖ is 

one that ―cannot be classified on the basis of available 

information as meeting or not meeting‖ the NAAQS for the 

pollutant. Id. § 7407(d)(1)(A)(iii). 
7

state has failed to submit either a SIP or SIP revision. Id. § 

7410(c). 

Section 126(b) of the Clean Air Act allows downwind 

states to petition the EPA for a finding that a source in an 

upwind state affects the petitioning state‘s attainment or

maintenance of NAAQS due to air pollution emanating from 

the source in the upwind state. See id. § 7426(b). Section

126(b) of the Clean Air Act provides: 

Any State or political subdivision may petition 

the [EPA] for a finding that any major source or

group of stationary sources emits or would emit 

any air pollutant in violation of the prohibition 

of section 7410(a)(2)(D)(ii)3of this title or this 

section. Within 60 days after receipt of any 

petition under this subsection and after public 

hearing, the [EPA] shall make such a finding or 

deny the petition.

Id.

 

3 The cross-reference to ―section 7410(a)(2)(D)(ii)‖ in Section 

126(b) has been determined to be a scrivener‘s error and the 

correct cross-reference in this provision is to Section 

7410(a)(2)(D)(i) of the Clean Air Act. See Appalachian 

Power Co. v. EPA, 249 F.3d 1032, 1040-44 (D.C. Cir. 2001). 

We agree with this determination, and the parties do not 

dispute it. Accordingly, we will refer to Section 126(b) of the 

Clean Air Act as referencing Section 7410(a)(2)(D)(i) of the 

Clean Air Act. 
8

In turn, Section 7410(a)(2)(D)(i), also known as the 

―good neighbor provision,‖ prohibits sources or emissions 

activity within a state from emitting air pollutants in amounts 

that will:

(I) contribute significantly to nonattainment in, or 

interfere with maintenance by, any other State with 

respect to any such national primary or secondary 

ambient air quality standard, or

(II) interfere with measures required to be included in 

the applicable implementation plan for any other State 

. . . to prevent significant deterioration of air quality or 

to protect visibility.

Id. § 7410(a)(2)(D)(i). 

If the EPA finds, pursuant to a Section 126(b) petition,

that the upwind state is violating the good neighbor provision 

of the Clean Air Act, the polluting source must cease 

operations within three months of the EPA‘s finding. Id. §

7426(c). The EPA may, however, allow the source to 

continue operations beyond three months if the source 

―complies with such emission limitations and compliance 

schedules (containing increments of progress)‖ as the EPA 

deems necessary to reach the compliance requirements. Id. 

B. NAAQS Regulating Sulfur Dioxide 

Emissions

Sulfur dioxide, or SO2, is a ―highly reactive colorless

gas‖ that derives mainly from fossil fuel combustion. Am. 
9

Lung Ass‘n v. EPA, 134 F.3d 388, 389 (D.C. Cir. 1998). It 

smells like rotten eggs and causes acid rain at elevated 

concentrations in the air. Id. The presence of sulfur dioxide 

in the air creates adverse health effects, especially for people 

with asthma. Id. On June 22, 2010, the EPA revised the 

NAAQS that had previously regulated sulfur dioxide 

emissions to enact stricter standards and ensure the continued 

protection of public health with an ―adequate margin of 

safety.‖ Primary National Ambient Air Quality Standard for 

Sulfur Dioxide, 75 Fed. Reg. 35,520, 35,521 (June 22, 2010) 

(to be codified at 40 C.F.R. pts. 50, 53, 58) (―1-hour SO2 

NAAQS‖). Specifically, the EPA replaced the 24-hour and 

the annual standards that had been in place with a new shortterm, more stringent standard that sets the level of sulfur 

dioxide emissions at 75 ppb (parts per billion) per the hour. 

Id. 1-hour SO2 NAAQS became effective on August 23, 

2010. As part of the implementation process of the 1-hour 

SO2 NAAQS, states are required to submit their SIPs by June 

2013 and to achieve attainment, implementation, 

maintenance, and enforcement of the NAAQS by August 

2017. Id. at 35,577. 

C. The New Jersey Department of

Environmental Protection’s Section 126(b) 

Petition 

On September 17, 2010, the State of New Jersey 

Department of Environmental Protection (the ―NJ 

Department‖) filed a petition under Section 126(b) of the 

Clean Air Act, 42 U.S.C. § 7426(b), (the ―Section 126(b) 

petition‖), requesting that the EPA issue an order restricting 

sulfur dioxide emissions from Portland. Specifically, the NJ 

Department requested that the EPA make a finding that the 
10

trans-boundary sulfur dioxide emissions from the nearby 

Portland plant significantly contribute to nonattainment 

and/or interfere with maintenance of the 1-hour SO2 NAAQS

in New Jersey. In support of its petition, the NJ Department 

submitted air quality and aerial dispersion modeling analyses4

to show that emissions from Portland cause violations of the 

1-hour SO2 NAAQS in Warren, Sussex, Morris, and 

Hunterdon Counties in New Jersey. 

On April 7, 2011, the EPA published a proposed 

response to the NJ Department‘s Section 126(b) petition, 

finding that sulfur dioxide emissions from Portland violate 

the interstate air pollution transport provisions of the Clean 

Air Act and suggesting emissions limitations and compliance 

schedules to remedy the problem. See Response to Petition 

from New Jersey Regarding SO2 Emissions from the Portland 

Generating Station, 76 Fed. Reg. 19,662 (Apr. 7, 2011) (to be 

codified at 40 C.F.R. pt. 52) (―Proposed Rule‖). The EPA 

invited public comments on the Proposed Rule and 

 

4 Dispersion modeling simulates air pollutant emissions as 

they are carried throughout the atmosphere. These models 

replicate the conditions of the atmosphere, providing ―an 

estimate of the concentration of pollutants as they travel away 

from an emission source‖ and can be used ―to determine 

whether a new source will adversely impact an area or to 

predict whether the control of an individual source will have a 

beneficial effect.‖ Dispersion Modeling , AIR QUALITY 

MANAGEMENT ONLINE PORTAL, EPA, 

http://www.epa.gov/oaqps001/aqmportal/management/modeli

ng/dispersion.htm (last visited June 19, 2013). 
11

announced a public hearing to be held on April 27, 2011 in 

Warren County, New Jersey. The EPA received numerous 

public comments from inter alia, individuals, government 

officials, environmental groups, the Pennsylvania Department 

of Environmental Protection, the NJ Department, GenOn, and 

the American Lung Association of the Mid-Atlantic. Many 

of these comments favored the Proposed Rule. The 

Pennsylvania Department of Environmental Protection 

submitted a comment in which it acknowledged that residents 

of Pennsylvania would realize public health and 

environmental benefits from a reduction in sulfur dioxide 

emissions but suggested some alterations to the proposed 

compliance schedule. 

On November 7, 2011, the EPA issued its final rule 

granting the NJ Department‘s Section 126(b) petition, which 

finds that Portland‘s sulfur dioxide emissions significantly 

contribute to nonattainment and interfere with maintenance of 

the 1-hour SO2 NAAQS in New Jersey. See Final Response 

to Petition from New Jersey Regarding SO2 Emissions from 

the Portland Generating Station, 76 Fed. Reg. 69,052, 69,053 

(Nov. 7, 2011) (to be codified at 40 C.F.R. pt. 52) (―Portland 

Rule‖). The EPA authorized the continued operation of 

Portland but imposed emissions limits and compliance 

schedules to bring Portland into compliance as expeditiously 

as practicable. 

The EPA based its finding on a review of the NJ 

Department‘s air quality modeling, its independent 

assessment of the American Meteorological 

Society/Environmental Protection Agency Regulatory Model 

(AERMOD) dispersion modeling, and other highly technical 

analyses. Portland Rule, 76 Fed. Reg. at 69,053. The 
12

Portland Rule requires Portland to reduce its sulfur dioxide 

emissions by approximately 81% at its two coal-fired 

generating units within three years of the rule‘s effective date 

and to adhere to interim sulfur dioxide emissions limits to 

ensure that Portland demonstrates the requisite increments of 

progress towards achieving final compliance. Portland Rule, 

76 Fed. Reg. at 69,053, 69,064. 

GenOn petitioned for our review of the Portland Rule, 

challenging the EPA‘s authority to impose direct regulations 

on Portland before the time that Pennsylvania is required to 

complete its Section 110 SIP process for the 1-hour SO2 

NAAQS. GenOn contends that this action offends the 

cooperative federalism structure of the Clean Air Act by 

undermining a state‘s power to determine how to achieve air 

control standards. 

II. ANALYSIS 

This Court has jurisdiction pursuant to Section 

307(b)(1) of the Clean Air Act, which allows us to review a 

final EPA action that is locally or regionally applicable within 

our Circuit. 42 U.S.C. § 7607(b)(1); see Harrison v. PPG 

Indus., Inc., 446 U.S. 578, 584-94 (1980); W. Penn Power 

Co. v. EPA, 860 F.2d 581, 584 (3d Cir. 1988). Because the 

Portland Rule affects a facility located in the Commonwealth 

of Pennsylvania and its repercussions affect counties in the 

State of New Jersey, we have jurisdiction to review this 

matter. Although Section L of the Portland Rule, entitled 

―Judicial Review,‖ indicates that petitions for review must be 

filed in the D.C. Circuit, the parties agree that this was noted 

in error. Jurisdiction in the D.C. Circuit is appropriate only 

for specifically enumerated EPA actions and for regulations 
13

with national scope or impact. Id. The Portland Rule neither

fits into the enumerated EPA actions nor is of nationwide 

scope or effect that would make jurisdiction in the D.C. 

Circuit proper. 

We are asked to consider whether the prohibition 

against transmitting interstate air pollutants that is referenced 

in Section 126(b) relates to emissions limitations that are 

specifically contained in the Section 110 SIP of the upwind 

state or, more generally, to all interstate air pollution. GenOn 

and the Utility Air Regulatory Group (―UARG‖),

5

contending 

the former, view the Section 126(b) petition process as 

expressly linked to the SIP requirement of Section 

110(a)(2)(D)(i), arguing that there can be no valid Section 

126(b) petition until Pennsylvania is afforded an opportunity 

to establish its SIP for the 1-hour SO2 NAAQS and has failed 

to do so. The EPA, however, agrees with the latter approach, 

claiming that it can make a finding on a Section 126(b) 

petition without regard to the Section 110 SIP process. 

We follow the Chevron two-step framework when 

reviewing an administrative agency‘s construction of a 

statute. Hagans v. Comm‘r of Soc. Sec., 694 F.3d 287, 294 

(3d Cir. 2012). If the statute is clear, we give effect to the 

unambiguous expressed intent of Congress. De Leon–Ochoa 

v. Att‘y Gen. of U.S., 622 F.3d 341, 348 (3d Cir. 2010) 

(citing Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 

Inc., 467 U.S. 837, 842-43 (1984)). However, if the statute is 

 

5 UARG has submitted an amicus brief in support of GenOn 

as petitioner-intervenor. 
14

silent or ambiguous regarding a specific issue, we move to 

step two and give deference to the implementing agency‘s 

reasonable construction of the statute. Id.

A. Chevron Step One 

We begin by determining whether Congress has 

―unambiguously expressed [its] intent‖ by examining the 

―plain‖ and ―literal‖ language of the statute. United States v. 

Geiser, 527 F.3d 288, 294 (3d Cir. 2008) (internal citations 

omitted). ―To determine whether the statutory language is 

ambiguous, we must examine  ̳the language itself, the specific 

context in which that language is used, and the broader 

context of the statute as a whole.‘‖ Rosenberg v. XM 

Ventures, 274 F.3d 137, 141 (3d Cir. 2001) (internal citations 

omitted). We ―must not be guided by a single sentence or 

member of a sentence, but look to the provisions of the whole 

law, and to its object and policy.‖ Prestol Espinal v. Att‘y 

Gen. of U.S., 653 F.3d 213, 217 (3d Cir. 2011) (internal 

citations and quotations omitted). 

The operative language of Clean Air Act Section 

126(b) is that a petition under this section may be granted 

when a major source or group of stationary sources emits air 

pollutants ―in violation of the prohibition of section 

7410(a)(2)(D)[(i)].‖ 42 U.S.C. § 7426(b). The language of 

Section 7410(a)(2)(D)(i) states that each SIP for primary or 

secondary NAAQS ―shall contain adequate provisions 

prohibiting . . . emissions activity within the [s]tate from . . . 

contribut[ing] significantly to nonattainment in, or 

interfer[ing] with maintenance by, any other [s]tate‖ with 

respect to such NAAQs or ―interfer[ing] with measures 

required to be included in the applicable [SIP] for any other 
15

[s]tate . . . to prevent significant deterioration of air quality or 

to protect visibility.‖ Id. § 7410(a)(2)(D)(i). 

While GenOn contends that the ―prohibition‖ refers to 

a violation of an emissions limitation specific to the Section 

110 SIP of the upwind state, its argument fails to take into 

account the entirety of the statutory scheme. When we 

consider the applicable language of the Clean Air Act in light 

of the overall statute and its interplay with other related 

sections, we conclude that the relevant language of the statute 

is unambiguous.

 

Section 126(b) contains no temporal limitation on a 

state‘s right to petition the EPA. This section obligates the 

EPA to grant or deny a Section 126(b) petition ―[w]ithin 60 

days after receipt . . . and after public hearing.‖ Id. § 7426(b). 

This language demonstrates that the EPA must act quickly on 

a Section 126(b) petition—and not wait the potential several 

years that it would take for states to fully adopt SIPs 

implementing new NAAQS. As the EPA has correctly

expressed, ―nothing in the statutory language in section 126 

prohibits a downwind state from filing a section 126 petition

until after an upwind state, in which the source or sources are 

located, has submitted, or is required to submit, a section 

110(a)(2)(D) SIP to the EPA for approval.‖ Portland Rule, 76 

Fed. Reg. at 69,055. We also agree with the EPA that there is 

no indication anywhere in the text of Section 126 that a 

Section 126(b) petition is conditional upon the initiation or 

completion of the SIP process. If such a condition were 

present, Section 126(b) petitions could stand still for several 

years until the SIP relating to a new NAAQS is adopted by a 

state, approved by the EPA, and all necessary revisions to it 

have been made. Such a result violates the statute‘s 
16

requirement that the EPA act on Section 126(b) petitions 

within sixty days. 

The language of Section 126(c) also supports our view. 

This section provides that it ―shall be a violation of this 

section and the applicable implementation plan in such State . 

. . for any major existing source to operate more than three 

months after such [Section 126(b)] finding has been made 

with respect to it.‖ 42 U.S.C. 7426(c) (emphasis added). We 

agree with the EPA that the underlined language would serve

no purpose if we were to adopt GenOn‘s view since there 

would have been no need for Congress to separately state 

under Section 126(c) that a Section 126(b) finding constitutes 

a SIP violation if operation of the polluting source continues. 

―It is a cardinal principle of statutory construction that a 

statute ought, upon the whole, to be so construed that, if it can 

be prevented, no clause, sentence, or word shall be 

superfluous, void, or insignificant.‖ TRW Inc. v. Andrews, 

534 U.S. 19, 31 (2001) (internal citations and quotations 

omitted). 

Our conclusion that the language of the statute is 

unambiguous is also supported by the D.C. Circuit‘s 

examination of three specific provisions of Section 126(b) in 

Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir. 

2001). In Appalachian, several states submitted Section 

126(b) petitions requesting that the EPA regulate sources 

emitting nitrogen oxide that contributed significantly to 

downwind air pollution in those states. Id. at 1036-37. The 

EPA ultimately issued a rule under Section 126(b) requiring 

upwind sources to conform to certain emissions limits and 

engage in an emissions trading program. Id. at 1039. At the 

time that the EPA issued this rule, the upwind states were also 
17

subject to an ongoing Section 110 nitrogen oxide SIP call 

previously issued by the EPA, requiring deadlines by which 

these states had to revise their SIPs to comply with nitrogen 

oxide emissions reductions. Id. at 1037-38. Certain 

petitioners contested the EPA‘s Section 126(b) rule and, 

specifically, the EPA‘s interpretation of the interplay between 

Sections 110 and 126(b) of the Clean Air Act. Id. at 1045-46. 

The petitioners contended that Sections 110 and 126(b) 

prevented the EPA from making any Section 126(b) findings 

while the nitrogen oxide SIP call was ongoing because 

allowing the EPA to act in these circumstances would amount 

to a violation of the ―cooperative federalism‖ structure of the 

Clean Air Act that gives states primary responsibility to 

address interstate transport in the first instance. Id. The D.C. 

Circuit rejected this argument. Recognizing that states indeed 

retain the power under Section 110 to determine how to 

achieve NAAQS and that the EPA may not ―dictate‖ to a state 

a specific means to do so, the D.C. Circuit held that ―this 

principle . . . cannot be absolute in the face of § 126, which 

contemplates that in at least some circumstances the EPA will 

directly regulate sources within a state.‖ Id. at 1046. 

The court in Appalachian reasoned that ―three critical 

provisions of § 126 would lose their force if, as the petitioners 

suggest, the lengthened timetable of the nitrogen oxide SIP 

call were to suspend the § 126 process.‖ Id. at 1047. First, 

Section 126‘s requirement that a source contributing to 

downwind nonattainment may not operate for more than three 

years after such finding would be eliminated if the EPA had 

to wait for completion of the SIP process to make Section 126 

findings. Id. The second reason is that Section 126 provides 

for relief independent of any action by the upwind state, while 

a SIP revision requires action from that state. Id. Third, 
18

relief under Section 126, unlike SIP calls, is independent of 

the discretionary policy preferences of the EPA since it must 

act on a petition within sixty days. Id. These provisions 

support our view that the statute unambiguously allows the 

EPA to make a Section 126 finding independently of the 

Section 110 SIP process. 

In response to the petitioners‘ argument that the EPA‘s 

construction would effectively deprive Section 110 of its 

force by binding states to emissions limits set by the EPA and 

not by their own SIP, the court in Appalachian responded that 

it has never been suggested that under Section 110, states may 

―develop their plans free of extrinsic legal constraints.‖ Id. 

―SIP development, like any environmental planning process, 

commonly involves decisionmaking subject to various legal 

constraints. That § 126 imposes one such limitation—and it is 

surely not the only independent provision of federal law to do 

so—does not affect a state‘s discretion under § 110.‖ Id. 

This line of reasoning supports our conclusion that the 

language of the Clean Air Act regarding the interplay of 

Section 126(b) and Section 110 is unambiguous. The plain 

language of the relevant portions of the statute and the 

context in which such language is used convey that Congress 

intended Section 126(b) as a means for the EPA to take 

immediate action when downwind states are affected by air 

pollution from upwind sources. Any other interpretation 

would defeat the underlying objective of the Section 126(b) 

petition process. For these reasons, we conclude that the 

plain language of the statute is unambiguous and supports the 

EPA‘s issuance of the Portland Rule. 
19

Given the novelty of the issue before us, we find it 

appropriate to engage in an ―in the alternative‖ analysis where 

we conduct step two of Chevron to determine whether the 

EPA has reasonably construed the statute. See Pennsylvania 

Dep‘t of Pub. Welfare v. U.S. Dep‘t. of Health & Human 

Servs., 647 F.3d 506, 512 (3d Cir. 2011) (conducting the 

second step of the Chevron analysis even after finding the 

statute unambiguous). Even if the relevant language of the 

Clean Air Act were deemed ambiguous, we still find that the 

EPA‘s action was proper. 

B. Chevron Step Two 

Under step two of the Chevron framework, we 

consider whether the EPA‘s interpretation is reasonable in 

light of the language, policies, and legislative history of the 

Clean Air Act. United States v. Riverside Bayview Homes, 

Inc., 474 U.S. 121, 131 (1985). While GenOn and UARG 

argue that the Clean Air Act‘s legislative history emphasizes 

the concept of cooperative federalism, including states‘ 

primary responsibility in implementing regulations 

promulgated by the EPA, this view is not dispositive to our 

determination of reasonableness. We neither disagree that the 

Clean Air Act is structured on cooperative federalism nor 

seek to minimize the essential role that the states play in this 

process. Rather, we believe that reliance on the Clean Air 

Act‘s legislative history that promotes the concept of 

cooperative federalism does not assist us in examining the 

rationale behind the enactment of Section 126(b) itself. 

Congress enacted Section 126(b) as part of the Clean 

Air Act Amendments of 1977. Pub. L. No. 95-95, 91 Stat. 

685, § 123 (1977). In a report accompanying its version of 
20

the bill, the House of Representatives recognized that the law 

prior to 1977 had inadequately addressed the problem of 

interstate air pollution and that an effective program must rely 

on the state that actually receives the pollution and has an 

―incentive and need to act.‖ H.R. REP. NO. 95-294, at 330 

(1977), reprinted in 4 1977 LEGISLATIVE HISTORY OF THE 

CLEAN AIR ACT AMENDMENTS OF 1977, at 2797. The House 

of Representatives report states that Section 126(b) would 

remedy this problem so that any state could petition the EPA 

for a finding that ―any new, modified, or existing stationary 

source in any other [s]tate is (or would be) emitting pollutants 

which cause or contribute to impermissible interstate air 

pollution.‖ Id. In doing so, the House of Representatives 

acknowledged that the Section 126 mechanism would be a 

separate and alternative method for states to address interstate 

air pollution. Id. at 331. 

[A Section 126] petition process is intended to 

expedite, not delay, resolution of interstate 

pollution conflicts. . . . [T]he committee intends 

to create a second and entirely alternative method

and basis for preventing and abating interstate 

pollution. The existing provision prohibiting any 

stationary source from causing or contributing to 

air pollution which interferes with timely 

attainment or maintenance or a national ambient 

air standard (or a prevention of significant 

deteriorating or visibility protection plan) in 

another State is retained. A new provision 

prohibiting any source from emitting any 

pollutant after the Administrator has made the 

requisite finding and granted the petition is an 
21

independent basis for controlling interstate air 

pollution. 

Id. (emphasis added). 

Additionally, the House of Representatives report 

indicated that an effective program addressing the problem of 

interstate air pollution ―must include a Federal mechanism for 

resolving disputes which cannot be decided through 

cooperation and consultation between the States or persons 

involved.‖ Id. at 330. 

A report of the Senate Committee on Environment and 

Public Works accompanying the 1977 Clean Air Act

amendments similarly explained that the previous structure

that had been in place to address interstate pollution created a 

disadvantage for states that had stricter air pollution control 

requirements. S. REP. NO. 95-127, at 42 (1977), reprinted in

3 1977 LEGISLATIVE HISTORY OF THE CLEAN AIR ACT 

AMENDMENTS OF 1977, at 1415. The Senate Committee 

offered the example of the State of Ohio, which, despite being 

ordered by the 1970 amendments to the Clean Air Act to 

implement a plan to reduce emissions that would interfere 

with air quality standards, had not done so by 1976. Id. at 41-

42. This situation caused emissions from plants in Ohio to be 

transported across the Ohio River to West Virginia, which 

was forced to cope with pollution ―not generated by a source 

under its own control; [requiring] more stringent control of 

West Virginia sources to attain the ambient air quality 

standards.‖ Id. at 42. The Committee concluded: 

In the absence of interstate abatement 

procedures, those plants in States with more 

stringent control requirements are at a distinct 
22

economic and competitive disadvantage. 

[Section 126(b)] is intended to equalize the 

positions of the States with respect to interstate 

pollution by making a source at least as 

responsible for polluting another State as it 

would be for polluting its own State. 

Id.

This legislative history demonstrates that Congress 

viewed the Federal government as continuing to play an 

essential role in the fight against interstate pollution despite 

the fact that the states are the primary actors for implementing 

NAAQS and formulating SIPs. Congress recognized the 

importance of ensuring that the Federal government maintain 

its role in managing interstate air pollution, as the entity that 

―can and must provide the technical information and 

enforcement assistance that States and localities need.‖ Id. at 

10. Thus, we conclude that Section 126(b) was intended to 

allow the EPA, as a federal regulator, to intervene when states 

fail to adhere to the air pollution control process. This 

interpretation supports the EPA‘s construction of the statute. 

Existing case law also supports the notion that the EPA 

has reasonably construed the statute. In New York v. EPA, 

852 F.2d 574 (D.C. Cir. 1988), the D.C. Circuit interpreted a 

Section 126(b) petition to not obligate the EPA to review 

existing SIPs as part of the EPA‘s Section 126(b) 

enforcement process, as the ―language of §126(b) is quite 

specific and focuses on  ̳major sources,‘ not the validity of a 

state‘s SIP.‖ Id. at 578. This case supports the idea that the 

―prohibition‖ referred to in Section 126(b) is not dependent 
23

on a standard established in a SIP that has already been 

approved or is in the process of being revised.

Similarly, in Connecticut v. EPA, 656 F.2d 902, 907 

(2d Cir. 1981), the Second Circuit held that where a state files 

a Section 126(b) petition to challenge a proposed SIP revision 

of a neighboring state, completion of the Section 126(b) 

procedure is ―not a prerequisite to EPA approval‖ of the SIP 

revision. Although it recognized that Sections 126(b) and 

110 call for the same substantive inquiry, the court held that 

the two provisions are intended to be used in differing 

procedural settings and that one need not be a prerequisite to 

another. Id. at 907-08. Although the court also held that 

Section 126(b) ―appears to have been primarily designed as a 

means for resolving interstate pollution disputes in situations 

where [a] SIP is not being revised,‖ id. at 907 (emphasis 

added), we believe that the court was merely stating the 

primary intent of Section 126(b) and not necessarily its full 

scope and extent. 

GenOn and UARG rely on EME Homer City 

Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), cert. 

granted, 570 U.S. __ (2013) for support, where the D.C. 

Circuit found that the EPA had exceeded its authority by 

issuing FIPs without first giving states the opportunity to 

implement the required reductions through SIPs or SIP 

revisions. Id. at 28-30. However, far from helping GenOn 

and UARG, language in this case actually supports the EPA‘s 

construction of the statute. See EME Homer, 696 F. 3d at 34 

(stating that Section 126 is ―a separate provision [from 

Section 110] that explicitly contemplates direct EPA 

regulation of specific sources that generate interstate 

pollution.‖). 
24

 The foregoing examination of the Clean Air Act‘s 

legislative history and applicable legal precedent support our

finding that the EPA‘s construction of the statute is both 

permissible and reasonable so as to merit our deference under 

Chevron. For these reasons, we will deny the petition for 

review of the Portland Rule. 

C. The EPA’s Prior Interpretation of Section 

126(b) 

GenOn and UARG also argue that the EPA‘s prior

interpretation of the meaning of the ―prohibition‖ referenced 

in Section 126(b) related to a SIP‘s failure to address 

interstate nonattainment and ran contrary to the EPA‘s current 

position. GenOn and UARG cite the EPA‘s issuance of a 

final rule in May 1999 governing ozone transport (the ―May 

1999 Rule‖), where the EPA stated that it ―interprets Section 

126 to provide that a source is emitting in violation of the 

prohibition of section 110(a)(2)(D)(i) where the applicable 

SIP fails to prohibit . . . a quantity of emissions from that 

source that [the] EPA has determined contributes significantly 

to nonattainment or interferes with maintenance in a 

downwind state.‖ Findings of Significant Contribution and 

Rulemaking on Section 126 Petitions for Purposes of 

Reducing Interstate Ozone Transport, 64 Fed. Reg. 28,250, 

28,272 (May 25, 1999) (emphasis added). 

The May 1999 Rule is not necessarily inconsistent 

with the EPA‘s current position. As part of the Portland 

rulemaking process, the EPA responded to this alleged 

inconsistency by noting that the May 1999 Rule was 
25

prompted by an EPA determination that the elimination of 

excessive trans-boundary emissions would be obtained 

through a pending SIP call that was in play. Unlike the 

circumstances surrounding the issuance of the May 1999 

Rule, there is no guarantee that an imminent SIP submission 

will manage the interstate sulfur dioxide transport problem 

stemming from Portland within the three-year time period 

required by Section 126. Therefore, immediate action under 

Section 126(b) is warranted in this case because no other 

mechanism, such as a pending SIP call, exists in these 

circumstances that would remedy the Portland problem. 

Even if the May 1999 Rule is deemed inconsistent 

with the EPA‘s current interpretation, it does not undermine 

our decision to grant Chevron deference to the EPA‘s action. 

See generally Smiley v. Citibank, 517 U.S. 735, 742 (1996). 

A revised agency interpretation is still worthy of Chevron

deference because ―[a]n initial agency interpretation is not 

instantly carved in stone and the agency, to engage in 

informed rulemaking, must consider varying interpretations 

and the wisdom of its policy on a continuing basis.‖ Rust v. 

Sullivan, 500 U.S. 173, 186 (1991) (internal quotations

omitted) (citing Chevron, 467 U.S. at 863-64). The EPA is 

not forever held to its prior interpretations, as the continued 

validity and appropriateness of the agency‘s rules is an 

evolving process. For these reasons, we hold that the 

existence of a prior conflicting EPA interpretation does not 

have the effect of rendering the agency‘s current construction 

of the statute unreasonable in these circumstances. 

D. Whether the Portland Rule is Arbitrary, 

Capricious, or Abusive of the EPA’s 

Discretion 
26

Lastly, GenOn contends that the Portland Rule is 

arbitrary and capricious because it requires a reduction in 

sulfur dioxide emissions at Portland before requiring similar 

reductions from sources in New Jersey and prior to the time 

that SIPs addressing the new NAAQS are required. GenOn 

argues that it is arbitrary and capricious to require a single 

facility to address out-of-state nonattainment issues before 

other facilities are required to address the same problems. 

We review the contents of the EPA‘s Portland Rule to 

determine whether it is ―arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with the law.‖ 42 

U.S.C. § 7607(d)(9)(A); North Carolina v. EPA, 531 F.3d 

896, 906 (D.C. Cir. 2008). This is a narrow standard of 

review in which a court cannot substitute its judgment for that 

of the agency. Motor Vehicle Mfrs. Ass‘n v. State Farm Mut. 

Auto Ins. Co., 463 U.S. 29, 42-43 (1983). In reviewing 

agency action, we must ensure that, in reaching its decision, 

the agency ―examined the relevant data and articulated a 

satisfactory explanation for its action, including a rational 

connection between the facts found and the choice made.‖ 

Prometheus Radio Proj. v. FCC, 373 F.3d 372, 389-90 (3d 

Cir. 2004) (internal quotations omitted). Therefore, our 

review of an administrative agency‘s action is highly 

deferential, especially in the context of reviewing a federal 

agency‘s scientific determinations. New Jersey Envtl. Fed‘n 

v. U.S. Nuclear Regulatory Comm‘n, 645 F.3d 220, 228 (3d 

Cir. 2011). 

Here, the Portland Rule was issued pursuant to the 

EPA‘s authority to find that ―any major source or group of 

stationary sources‖ is emitting air pollution that violates 
27

interstate pollution controls. 42 U.S.C. § 7426(b) (emphasis 

added). This language clearly dictates that direct federal 

regulation of a single source or facility is justified when the 

EPA makes a Section 126(b) finding. Once the EPA 

independently determined that Portland was contributing to 

nonattainment and interfering with New Jersey‘s air quality, it 

reasonably abided by the Clean Air Act in enacting the 

Portland Rule to require emissions reductions ―as 

expeditiously as practicable, but in no case later than three 

years after the date of such finding.‖ Id. § 7426(c). We find 

nothing arbitrary, capricious, or abusive about the EPA‘s 

discretion in imposing emissions reductions on a single 

source like Portland. 

Further, we are satisfied after a review of the record 

that the EPA thoroughly examined the relevant scientific data 

and clearly articulated a ―satisfactory explanation for its 

action, including a rational connection between the facts 

found and the choice made.‖ Prometheus Radio, 373 F.3d at 

389-90 (internal quotations omitted). The EPA examined the 

dispersion modeling results that New Jersey submitted with 

its Section 126(b) petition to show that emissions from 

Portland alone caused downwind violations of the 1-hour SO2 

NAAQS in New Jersey. Portland Rule, 76 Fed. Reg. at 

69,057-59. The EPA also conducted its own modeling results 

and, in doing so, considered various components such as 

model selection and meteorological data, which supported its

conclusion that the imposition of emissions limits on Portland 

would address New Jersey‘s nonattainment issues. Id. at 

69,059-63. The portions of the EPA‘s Portland Rule that 

describe its methodology for the establishment of emissions 

limits and the increments of progress are extensive and welldocumented. The EPA carefully calculated the emissions 
28

reductions that were needed to eliminate Portland‘s 

contribution to nonattainment in New Jersey; the technical 

and economic feasibility of the emissions limits; and the 

appropriateness of imposing interim emissions limits towards 

achieving the final remedy.6 Portland Rule, 76 Fed. Reg. at 

69,063-75.

Moreover, the EPA published a proposed response to 

New Jersey‘s Section 126 petition on April 7, 2011. 

Proposed Rule, 76 Fed. Reg. at 19,662. The EPA solicited 

and received many public comments, and considered such 

comments during the course of conducting its findings. The 

EPA‘s responses to these public comments further elaborate

the underlying technical details and justifications for its final 

plan of action, including the imposition of emission limits and 

the timing required for the changes. In the final Portland 

Rule, the EPA provided a thorough summary of the 

―significant changes‖ that it made since its initial proposal, 

 

6 Section 126(c) of the Clean Air Act gives the EPA authority 

to include ―increments of progress‖ in the emissions 

limitations and compliance schedules required for a source 

subject to a Section 126(b) finding to continue operating 

beyond three months after such finding. 42 U.S.C. § 7426(c). 

Although ―increments of progress‖ is not defined in the 

statute, it can only be interpreted to mean interim measures in 

the context of the emission limitations and compliance 

schedules. In any event, GenOn offers nothing to undermine 

the reasonableness of this interpretation of ―increments of 

progress.‖ Therefore, it is accorded deference under 

Chevron. 
29

demonstrating that it took all suggestions into consideration 

to establish an effective remedy. Portland Rule, 76 Fed. Reg. 

at 69,053.

Based on the foregoing, the EPA set forth ample 

support that explains its rationale in promulgating the 

Portland Rule, establishing a rational connection between the 

facts that it found and the choice that it made. For these 

reasons, we hold that the EPA‘s action of promulgating the 

Portland Rule was neither an abuse of discretion nor arbitrary 

or capricious. 

III. CONCLUSION 

For the foregoing reasons, we will uphold the EPA‘s 

Portland Rule and deny the petition for review. We hold that 

it was reasonable for the EPA to interpret Section 126(b) to 

be an independent mechanism for enforcing interstate 

pollution control, thereby giving it authority to promulgate 

the Portland Rule. We also hold that the contents of the 

Portland Rule are not arbitrary, capricious, or abusive of the 

EPA‘s discretion.