Opinion ID: 501652
Heading Depth: 2
Heading Rank: 3

Heading: The NSPS Presumption for Above-Formula Stacks.

Text: 75 In developing a baseline emissions rate for demonstrations to justify above-formula stacks, EPA initially proposed that sources assume either (1) the existing, approved emission limit; (2) any applicable technology-based emission limit, such as the new source performance standards (NSPS); or (3) the emission limit that would result from the use of GEP formula stack height, whichever is applicable to the source being modeled. 49 Fed.Reg. 44,882/1. The last phrase clearly indicates that NSPS would be used only for plants to which it applied by virtue of Sec. 111. The final rule was dramatically different. It required each source to assume NSPS emission levels, or, if it could show those to be infeasible, the lowest achievable levels. 40 C.F.R. Sec. 51.1(kk)(1). Industry petitioners strenuously object to this conditional-NSPS assumption on both substantive and procedural grounds. 14 76 1. Substantive objections. Petitioners raise three distinct challenges to the agency's decision to adopt the NSPS presumption. 15 First, they argue that because Congress did not prescribe the use of a technology-based emissions limit for GEP fluid modeling demonstrations, the Administrator lacks the authority to mandate its use. Alabama Power Brief at 19. As we have already noted in our discussion of NRDC's control-first argument, Congress imposed technology-based emission limitations--NSPS, BACT, LAER, RACT and BART--in a variety of situations. Two of these, BART and RACT, govern pre-1971 sources. 42 U.S.C. Secs. 7502(b), 7491(b)(2)(A). Industry petitioners would have us infer from the contrast between those express conferrals of authority, and the absence of any such reference here, that Congress denied EPA the authority to assume such an emissions rate. 77 We find the attempt of industry to bar control-first here no stronger than NRDC's effort to require it in the within-formula context. As we noted in discussing NRDC's theory, the record raised considerable doubt whether anyone in Congress even recognized the issue. The silence alone seems to support neither a requirement nor a prohibition. What Congress did in Sec. 123 was to grant broad discretion to the agency, requiring owners of above-2.5H stacks to demonstrate the necessity for the higher stacks to the satisfaction of the Administrator. 42 U.S.C. Sec. 7423(c). In Sierra Club we read the section to mean above-2.5H credit should be granted only with the utmost caution, 719 F.2d at 447, which the selection of the NSPS baseline seems to reflect. 78 Second, industry petitioners assert that the use of the NSPS presumption only for above -formula stack height demonstrations will unfairly prejudice sources located in mountainous terrain, since it is in such areas that above-formula stacks are most likely to be found. Industry petitioners argue that this contravenes the will of Congress. Alabama Power Brief at 34. In Sierra Club, however, we found a congressional recognition that the tall stacks provision would have a disproportionately heavy impact on polluters in mountain areas. 719 F.2d at 455. In fact, the court found an affirmative intent to discourage utilities from locating in hilly terrain, because such locations tend to require very tall stacks, leading to greater dispersion of pollutants. Id. at 445. The court adopted that construction in the context of rejecting EPA's claim that it could consider plume impaction in computing excessive concentrations. Id. at 452-56. As that decision applied even to plants constructed before the adoption of Sec. 123, whose owners were obviously not free to respond to its discourag[ing] influence, Sierra Club 's interpretation of congressional non-solicitude for plants in hilly terrain was a strong one. Any disadvantages inflicted on such plants by EPA's choice of the NSPS baseline fit readily within our prior reading of the law. 79 Finally, the industry petitioners assert that in order to use the NSPS presumption, EPA must be able to point to substantial evidence that it is attainable by most of the affected sources. But as EPA allows any source to use a higher emissions rate when NSPS is infeasible, there is no need for any sort of generic demonstration that it is normally feasible. Nor was it improper for EPA to place the burden of showing infeasibility on the source owner, rather than assuming the burden of showing feasibility. Congress appears to have intended that above-formula stack height be approved only in rare circumstances. House Report at 93, U.S.Code Cong. & Admin.News 1977, p. 1171. Cf. Sierra Club, 719 F.2d at 450 (utmost caution to be exercised in granting above-formula credit). EPA's location of the burden is thus rationally related to the purposes of the statute and well within the Administrator's discretion. 80 2. Procedural challenges. As described above, EPA initially outlined a scheme through which each source would assume its applicable emissions rate for purposes of above-formula demonstrations: (1) sources subject to technology-based emission limits would assume those rates; (2) sources not subject to such limits would assume their existing, approved SIP limits; and (3) sources not subject to either of the above would assume the limit that would result if they were to operate with the stack height credit that the formula would produce. 49 Fed.Reg. 44,882/1. Less than two weeks before promulgating the final regulations, the agency informed industry representatives of its decision to adopt instead a uniform (but conditional) NSPS presumption. Because time was short, industry representatives were only able to respond with two short letters strongly urging reconsideration of the new rule. J.A. 1483, 1491 (letters from the Utility Air Regulatory Group (UARG) and American Electric Power Company). Industry petitioners now assert that this abrupt shift denied them the opportunity to comment afforded by Sec. 4 of the Administrative Procedure Act, 5 U.S.C. Sec. 553. 81 In the preamble to its Final Rule, the agency sought to undermine this claim by characterizing its 1984 proposal as presenting three distinct alternatives, rather than a coherent three-part scheme. 50 Fed.Reg. 27,89 8/2. This is quite disingenuous. Nothing in the initial formulation suggested that EPA intended to adopt one of the three rates for universal use. And where EPA was offering alternatives from which it intended to make a choice in its final rule, it said so. See, e.g., 49 Fed.Reg. 44,881/1 (proposing and soliciting comments on two alternatives for the definition of excessive concentrations); 44,884/1 (proposing and soliciting comments upon three approaches for modeling nearby terrain features). 82 The EPA can obviously promulgate a final regulation that differs in some respects from its proposed regulation. We recognized in International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 632 n. 51 (D.C.Cir.1973), that a contrary rule would lead to the absurdity that ... the agency can learn from the comments on its proposals only at the peril of starting a new procedural round of commentary. Thus, this court has held under both the APA and the Clean Air Act that the agency's final rule must only be a logical outgrowth of its proposed rule. Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 547 (D.C.Cir.1983) (citing circuit precedent on this matter). 83 We think the agency's ultimate choice qualifies--if barely--as a logical outgrowth of the original proposal. Obviously the germ of NSPS was there, as one of the possibly-applicable technology-based limits. Moreover, the primary concern that drove EPA away from allowing sources to use existing SIP limits (and thus towards NSPS) was obvious at an early stage: NRDC's constantly asserted control-first theme. See 51 Fed.Reg. 27,898/2 (agency rejects use of existing SIP emissions limits because to the extent that [a source's limit] relied on greater than formula height, it would be using a tall stack to justify itself). 84 To be sure, EPA never explained in the administrative proceeding why it rejected use of the emissions rate that would flow from use of the formula. In fact, in its Response to Comments the agency defended this option against environmentalist charges that it was incurably circular. J.A. 314-15. Here the agency's lawyer explained that the formula emissions level assumption was inappropriately strict. EPA Brief in Ohio Power, Nos. 86-1331, 86-1362, at 28-29. However valid this critique may be, it is little help in showing the agency's intellectual path to the NSPS choice. However, as neither the industry petitioners nor anyone else in this litigation advocates that choice, it can hardly have been so attractive that its disappearance came as a shock. 85 Further, the public comments raised the possibility of adopting a single, technology-based limit. The New York State Attorney General's Office suggested an NSPS assumption for all demonstrations. J.A. 434. This gave industry participants a clear opportunity to shoot the idea down. NRDC attacked each of the three limits set forth in the 1984 proposal, J.A. 829-33, and advocated use of the rate that would result from use of the maximum degree of control available to the source. Id. at 832 n. 6. Though the target raised by this contention was broader than NSPS, it certainly gave industry critics an opportunity both to shore up the non-NSPS components of the original proposal and to attack any form of control-first. Nor was industry free to discount these proposals merely because they came from parties favoring a control-first reading of the statute, see Alabama Power Reply Brief at 15; there was a clearly foreseeable risk that EPA would reject the environmentalists' reading of the law but proceed to adopt control-first as a matter of choice. This, in essence, is what it did in a limited sphere. 86 Finally, EPA's warning of the NSPS threat, communicated two weeks before promulgation, gave industry petitioners at least a limited opportunity to focus a direct attack on NSPS. Though severely pressed, they managed to file objections 7-10 days before the final regulations were signed. J.A. 1483, 1491. 87 Although this case stretches the concept of logical outgrowth to its limits, we think it does not reach the breaking point. The NSPS assumption appears to have emerged from the agency's notice and comment process, as the agency responded to others' comments by stripping away the components of the original proposal that it concluded were more vulnerable. Of course, our affirmance of EPA on this point does not require it permanently to resist useful suggestions or critiques that may emerge.