Opinion ID: 722370
Heading Depth: 2
Heading Rank: 1

Heading: AMP-Ohio

Text: 28 Section 405(c)(2) of the 1990 Amendments to the Clean Air Act directs the EPA to grant certain fossil-fueled utility units a number of emission allowances equal to the product of the unit's baseline multiplied by the lesser of its actual 1985 emissions rate or its allowable 1985 emissions rate, divided by 2,000. 42 U.S.C. § 7651d(c)(2). Section 402(16) of these amendments defines the term actual 1985 emission rate for an electric utility unit to mean the annual sulfur dioxide ... emission rate in pounds per million Btu as reported in the NAPAP Emissions Inventory, Version 2, National Utility Reference File. 42 U.S.C. § 7651a(16). No statutory provision, however, suggests how the EPA should define an existing unit's actual emission rate should the unit not appear in the NURF-NAPAP database named in § 402(16). 29 The EPA addressed this gap in the statutory scheme through a notice published along with the second version of the National Allowance Data Base (NADB), the national database that catalogs the number of allowances granted to a particular unit. See Acid Rain Provisions, 56 Fed.Reg. 33,278 (July 19, 1991). This July 1991 Notice allowed a utility to submit a claim for allowances for a unit that was not listed in the NURF-NAPAP database, but it required that the utility also submit certain information, including the unit's actual emission rate and some supporting data, including the sulfur content and ash retention of the fuel burned at the unit, that could be used to verify the submitted rate. See id. at 33,283-85. 30 In response to this July 1991 Notice, AMP-Ohio submitted to the EPA a request for allowances for one of its facilities--the Richard Gorsuch generating station--accompanied by various information about that unit. This information included an actual emission rate for the facility, but did not include the other data required by the July Notice. Though AMP-Ohio later supplemented its submission with additional information, it again omitted the critical supporting data. Nonetheless, EPA included the Gorsuch facility in its third proposed version of the NADB. See Acid Rain Allowance Allocations and Reserves, 57 Fed.Reg. 29,940, 30,000 (July 7, 1992). In this version, the EPA granted some allowances to the Gorsuch facility, but far fewer than AMP-Ohio had expected. 31 AMP-Ohio protested this result during the appropriate comment period, and alleged a number of errors that the EPA made in calculating its allowances. The EPA corrected several computational and other errors. AMP-Ohio, however, still did not submit the supporting data that was necessary to confirm the emission rate it had asserted in its application, and the EPA did not specifically encourage AMP-Ohio to submit this information. 32 In its final version of the NADB, the EPA granted the Gorsuch facility a total of almost 20,000 allowances, see Acid Rain Allowance Allocations and Reserves, 58 Fed.Reg.15,634, 15,684 (Mar. 23, 1993), which was roughly half of the number of allowances AMP-Ohio expected from the data it had submitted. EPA subsequently informed AMP-Ohio that it had received fewer allowances because the EPA had based the allowances, not on the emission rate submitted byAMP-Ohio, but on an emission rate calculated using the average sulfur content of the fuel burned by utilities in Ohio in 1985. The EPA stated that it used this calculated rate because it did not have the supporting data necessary to verify the accuracy of AMP-Ohio's claimed emission rate. The EPA has since explained that this rate was calculated according to a technique used to compute emission rates for other databases, including the NURF-NAPAP database that § 402(16) specified was to be used for defining a unit's actual emission rate. See 42 U.S.C. § 7651a(16). 33 AMP-Ohio challenges this result on both substantive and procedural grounds.
34 Substantively, AMP-Ohio protests the EPA's decision to use an emission rate that the EPA calculated in part from the statewide average of sulfur content in utility fuel instead of the emission rate that AMP-Ohio submitted (albeit without the necessary supporting data). AMP-Ohio contends that this substitution of a calculated emission rate for the submitted rate was an impermissible construction of the applicable statutory sections, or, alternatively, was unlawfully arbitrary and capricious. See 5 U.S.C. § 706. 35 a. Did the EPA's interpretation of the term actual emission rate run contrary to the statute or to reason under Chevron? 36 Because the EPA is the agency that administers the relevant elements of the Clean Air Act, we review its interpretation of § 402(16) under the familiar two-step analysis of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-44, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). Under Chevron, we first must determine  'whether Congress has directly spoken to the precise question at issue.'  Nuclear Information Resource Serv. v. NRC, 969 F.2d 1169, 1173 (D.C.Cir.1992) (in banc) (quoting Chevron, 467 U.S. at 842, 104 S.Ct. at 2781.) If Congress has unambiguously expressed its intent in the statute, our inquiry ends. See id. If the statute is instead silent or ambiguous, we must then  'defer to the agency's interpretation of the statute if it is reasonable and consistent with the statute's purpose.'  Id. (quoting Chemical Mfrs. Ass'n v. EPA, 919 F.2d 158, 162-63 (D.C.Cir.1990)). 37 In this case, we have little difficulty concluding that the statute does not address the precise question at issue. The statute makes no mention of how the EPA should treat a utility unit whose emission rates were not included in the NURF-NAPAP database. Although courts have, on rare occasion, managed to divine some meaning from silence, see, e.g., Chisom v. Roemer, 501 U.S. 380, 396 & n. 23, 111 S.Ct. 2354, 2364 & n. 23, 115 L.Ed.2d 348 (1991) (rejecting an interpretation of a statute because if Congress had such an [unorthodox] intent, congress would have made it explicit in the statute), a silent statute cannot preclude its reasonable interpretation by the agency that administers it. See Nuclear Information Resource Serv., 969 F.2d at 1173 (quoting Chevron, 467 U.S. at 843, 104 S.Ct. at 2781-82). In view of its silence on the point at issue, we must hold the statute ambiguous. 38 Having held the statute ambiguous, we must examine whether the agency's interpretation was reasonable. In its July 1991 Notice, the EPA announced that it understood the statute to permit the EPA to allocate allowances to a utility unit missing from the NURF-NAPAP database specified in § 402(16). In this Notice, the EPA also declared that it would not necessarily allocate allowances to these units unless a utility submitted a missing unit's 1985 emission rate and certain information so that the EPA might verify this rate. See 56 Fed.Reg. at 33,283-85. The Notice, however, did not describe the EPA's proposed methodology for determining the emission rate in case all of the required information was not submitted. 39 That omission, however, does not make the EPA's subsequent conduct irrational. In the absence of a rule or stated policy on point, the EPA must possess a reasonable amount of discretion to implement its own regulations. See, e.g., NRDC, Inc. v. EPA, 22 F.3d 1125, 1148 (D.C.Cir.1994); cf., Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. 633, 653-56, 110 S.Ct. 2668, 2679-81, 110 L.Ed.2d 579 (1990) (holding that agency must have discretion to adopt procedures to execute tasks left to it). In this case, it would have made little sense for the EPA to allow AMP-Ohio, which failed to submit the supporting data, to benefit from its sin of omission and simply receive all the allowances that AMP-Ohio claimed the Gorsuch units should receive. On the other hand, it may have seemed unduly harsh for the EPA to deny all allowances to the Gorsuch facility, given that the statutory scheme probably intended units like Gorsuch to receive some fair number of allowances. Instead, navigating between these extremes, the EPA calculated an emission rate for the Gorsuch facility that it could confirm had at least some basis in a verifiable fact: the statewide average of the sulfur content of fuel burned by Ohio utilities. This approach was not unprecedented--the EPA had previously relied on such calculated rates in compiling other databases, including the NURF-NAPAP database that § 402(16) explicitly indicates should be used to determine the actual emission rate of a facility included in that database. And though the EPA did not explain its precise method for calculating a rate based on a statewide average that was used in this case until after the close of general proceedings before the agency, the failure of an agency to identify every detail of a process before it is used does not automatically require judicial interference in matters that must be thought to lie within the agency's expertise. See American Meat Institute v. EPA, 526 F.2d 442, 457 & n. 28 (7th Cir.1975). In light of these considerations, we conclude that the EPA's decision to use the calculated rate for determining the allowances allotted to the Gorsuch unit was reasonable and consistent with the statute. 40 b. Did the EPA otherwise act in an arbitrary or capricious manner? 41 Similarly, applying the Administrative Procedures Act, we cannot find that the EPA acted arbitrarily in substituting an emission rate based on statewide averages for the emission rate submitted, without the necessary supporting data, by AMP-Ohio. The EPA may, within reasonable bounds, specify what data is necessary for it to determine how many allowances a facility should receive. See, e.g., Alabama Power Co. v. Costle, 636 F.2d 323, 351-52 (D.C.Cir.1979) (permitting the EPA to specify the data necessary for a PSD application under the Clean Air Act). The EPA may then refuse to act if the data submitted is of uncertain authenticity. See Kennecott v. EPA, 780 F.2d 445, 458 (4th Cir.1985), cert. denied, Secondary Lead Smelters Ass'n, Inc. v. Thomas, 479 U.S. 814, 107 S.Ct. 67, 93 L.Ed.2d 25 (1986). 42 In this case, the EPA published a general notice as to the information it needed to allocate any allowances to a utility unit missing from the then-current version of the NADB, and AMP-Ohio's submission did not comply with these requirements. That AMP-Ohio may not have understood what was required does not excuse its omissions. It is the duty of a party seeking agency action to press its claim; see, e.g., Northside Sanitary Landfill, Inc. v. Thomas, 849 F.2d 1516, 1519-20 (D.C.Cir.1988), cert. denied, 489 U.S. 1078, 109 S.Ct. 1528, 103 L.Ed.2d 833 (1989); the agency need not repeatedly warn the party that its submission did not satisfy publicly announced guidelines. Nor, as previously discussed, did the EPA improperly substitute an emission rate calculated according to its established method for determining unknown rates in lieu of the unverifiable rate submitted by AMP-Ohio. Because EPA acted within its discretion in specifying what information a utility had to submit to receive allowances and in determining how the EPA should handle a submission that did not fulfill these requirements, the EPA was neither unreasonable nor impermissibly arbitrary in using a rate based on a statewide average in order to calculate the appropriate emission level of AMP-Ohio's Gorsuch facility.
43 In addition to its substantive challenges, AMP-Ohio makes a number of procedural attacks. The only three that require some discussion are that the EPA failed to respond to significant comments as required by statute, to request additional supporting data from AMP-Ohio soon enough for AMP-Ohio to provide such information, and to explain how it arrived at the emission rate it used to calculate Gorsuch's final allowances. None of these concerns merit reversal. 44 a. Did EPA err when it did not affirmatively act to correct AMP-Ohio's deficient submission as to the emission rate? 45 The first two of these significant challenges may be considered together. After the third proposed version of the NADB was published, AMP-Ohio commented that that version did not appear to use the emission rate it had submitted. EPA, however, neither explained its decision not to use the submitted rate nor promptly notified AMP-Ohio of the utility's failure to include the necessary supporting data in its submission. AMP-Ohio argues that the EPA erred when it did not indicate why it chose not to use the submitted emission rate and when it did not more quickly request the necessary supporting information. 46 Neither claim establishes error. Precedent has established that an agency need not respond to comments if that response would mainly restate what had already been set forth in some published notice. See NRDC, Inc. v. EPA, 859 F.2d 156, 188-89 (D.C.Cir.1988). As the EPA had already declared what information was necessary for a submitted emission rate to be considered, see 56 Fed.Reg. at 33,283-85, it did not have to take additional steps to inform AMP-Ohio individually of these requirements. Similarly, the EPA, as noted, does not bear some general duty to seek out information that an applicant has omitted in a submission, especially when the applicant has some notice that the data was essential. Thus, the EPA did not err when it did not remind AMP-Ohio that it should submit all the data required by the July 1991 Notice. 47 b. Did the EPA err when it did not explain its method of substituting a calculated emission rate for a submitted rate that was not verifiable? 48 AMP-Ohio's third set of procedural complaints must also be denied. AMP-Ohio argues that the EPA did not explain how it determined the emission rate eventually used to calculate the Gorsuch unit's final allowances. According to the applicable review provision in the Clean Air Act, however, we have no jurisdiction to hear a claim until it has been raised with reasonable specificity before the EPA, either during the period for public comment or in a separate petition for reconsideration. 42 U.S.C. § 7607(d)(7)(B). AMP-Ohio has not demonstrated that it ever brought this specific complaint to the attention of the agency during an appropriate comment period. Nor did AMP-Ohio ever demonstrate that it was impracticable for it to do so in a petition for reconsideration. In accordance with § 7607(d)(7)(B), then, we must dismiss review of this procedural challenge. For similar reasons, we must also decline review as to whether the EPA's failure to include the statewide average on which it relied in the record violated 42 U.S.C. § 7607(d)(6)(C).