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

Heading: IMPA and Wyandotte

Text: 49
50 Section 405(g)(3) of the 1990 Amendments to the Clean Air Act permits the EPA to allocate allowances to utility units that commence operation between October 1, 1990, and December 31, 1992 (1992 units). 42 U.S.C. § 7651d(g)(3). Because these units did not have an actual or allowable 1985 emission rate used to calculate allowances for units operating in 1985, however, the section instructed the EPA to determine the unit's allowances based on the unit's annual fuel consumption and allowable sulfur dioxide emission rate. Id. Of course, as these units had not previously existed, the EPA was largely unaware of the proper number of allowances they should receive. 51 In a notice published along with the second version of the NADB (July 1991 Notice), the EPA established guidelines by which utilities could seek allowances for any units that were not included in the EPA's second version of that database. See Acid Rain Provisions, 56 Fed.Reg. 33,278, 33,279 (July 19, 1991). This July 1991 Notice warned all applicants that: 52 In order to finalize the database in a timely manner, EPA will not accept requests for data corrections following the comment period [which ended September 3, 1991], except when the utility can demonstrate that the correct data were unavailable during the comment period. No data will be changed or added after publication of the final database in December, 1991.... Units eligible for allowances will not be allocated allowances if the final database does not include the information necessary. 53 Id. at 33,283. The Notice also stated that any unit seeking to add data must submit a data change request form and necessary supporting documentation. See id. The form itself listed 36 items of information that a utility had to supply, ranging from the name and location of the plant, general design specifications of the plant, to the allowable emission rate of the plant. See id. at 33,283-86. The Notice, however, did not explicitly state that it intended to govern allocation requests for 1992 units, though a number of such units were absent from the second version of the database. 54 On May 13, 1992, IMPA first contacted the EPA about four utility units that were to become imminently operational. Though none of the units were in the second version of the NADB, IMPA had not previously notified the EPA about these units. IMPA explained that it had not submitted information earlier, despite the July 1991 Notice's statement that the EPA would not make corrections after the end of that year, because IMPA did not think the July 1991 Notice applied to 1992 units, as some data required by the Notice may not have been available until a unit commenced operations. IMPA thus had not submitted any data about these units, even though IMPA's own correspondence made clear that IMPA had known much basic information about the units prior to the end of 1991. 55 Another utility that was constructing a new unit slated to become operational in 1992, the Wyandotte Municipal Services Commission (Wyandotte), also notified the EPA later than any deadline named in the July Notice, in August 1992. Like IMPA, Wyandotte did not show that the data on its 1992 unit was unavailable in 1991. In fact, Wyandotte's own late submission, like IMPA's, indicated that much information was known before the close of the July 1991 Notice's comment period. Wyandotte, however, explained that the utility had not sent information on its new boiler earlier because it had interpreted the local instructions for data correction as not allowing submissions for units under construction. 56 In a document published in March 1993, the EPA denied both IMPA's and Wyandotte's requests for allowances for these 1992 units because they did not comply with the submission deadlines in the July 1991 Notice. Neither IMPA nor Wyandotte had submitted information clearly available to each utility on their respective 1992 units prior to September 3, 1991, as, according to the EPA, the July Notice required, and neither had submitted all necessary data by the end of December 1991. IMPA and Wyandotte now protest their exclusions.
57 IMPA contends that the EPA was arbitrary and capricious in denying IMPA's new facility allowances simply because IMPA did not comply with the deadlines established in the July 1991 Notice. IMPA does not challenge the EPA's authority to define when and how a utility must request allowances for its units under the Clean Air Act. Instead, IMPA argues that we should not interpret the July 1991 Notice to have applied to units, like the ones at issue, that were still under construction in 1991. 58 Although we normally extend great deference to an agency's interpretation of its own regulations, see, e.g., Consarc Corp. v. Office of Foreign Assets Control, 71 F.3d 909, 914 (D.C.Cir.1995), IMPA observes that our precedent has refused to extend this deference to an unclear agency policy that would, if applied, result in a drastic penalty to the private party. See General Elec. Co. v. EPA, 53 F.3d 1324, 1328-29 (D.C.Cir.1995); Radio Athens, Inc. v. FCC, 401 F.2d 398, 404 (D.C.Cir.1968). Instead, in these drastic cases, we have generally accepted the threatened petitioner's reasonable interpretation of the agency's policy, see, e.g., Satellite Broadcasting Co., Inc., v. FCC, 824 F.2d 1, 3-4 (D.C.Cir.1987); Gates & Fox Co., Inc. v. OSHRC, 790 F.2d 154, 156 (D.C.Cir.1986), unless the petitioner, through a good-faith review of the statements issued by the agency, should have been able to determine, with ascertainable certainty, the criteria that the agency expected the petitioner to satisfy. General Elec. Co., 53 F.3d at 1329 (citation and internal quotations omitted). Consequently, IMPA contends that we should accept its interpretation that the Notice did not apply to its units because a decision to deny all allowances to its 1992 units would constitute an unfairly severe penalty, because the Notice was not clear, and because IMPA's interpretation, that the Notice did not apply to units not yet in operation, was reasonable. 59 Assuming that the loss of all allowances would be a drastic penalty, and that the scope of the July 1991 Notice was not clear, we still cannot conclude that IMPA's interpretation of the July 1991 Notice was reasonable in light of the contents and context of that Notice. The text of the Notice specified that the EPA would complete the final version of the allowance database by December 31, 1991. See, e.g., 56 Fed.Reg. at 33,279. The Notice, however, also implied that it contained the last directions the EPA would issue prior to the publication of this final database. See id. A party interpreting the July 1991 Notice at the time of the Notice thus could either conclude that the Notice applied to 1992 units, or that the EPA had decided to offer no guidance at all as to how these units should seek allocations prior to the imminent publication of the finalized database. 60 The latter reading was not reasonable. No sensible party could have thought that the EPA would specify 36 types of information necessary for an existing unit to add to or correct the data to be used for calculating its allowance without saying one word about what a 1992 unit had to submit. Yet, that is what IMPA claims. Accordingly, we conclude that, given these facts, IMPA was unreasonable to think the July Notice did not apply to 1992 units. 61 Having concluded that IMPA could not have reasonably thought that the July 1991 Notice did not apply to 1992 units, we must deny IMPA's claim. IMPA clearly did not meet the standards of the July Notice. IMPA did not submit available information on the unit--such as the plant name or certain technical or design data--by September 3, 1991. Nor did IMPA demonstrate that this or other data was unavailable as of September 3, 1991, which, under the July 1991 Notice, would have allowed IMPA to submit the data until December 1991. Nor did IMPA even submit any data to the EPA by December 1991. In short, IMPA did not comply with any aspect or reasonable interpretation of the July 1991 Notice. As that Notice must have applied to IMPA's 1992 units, we cannot overrule the agency's decision not to award these units any allowances.
62 Having determined that any reasonable interpretation of the July 1991 Notice would apply to 1992 units, we must also reject Wyandotte's claim for allowances for its 1992 unit. Wyandotte, like IMPA, did not submit any information until well after the deadlines specified in the July Notice, even though at least some information on its 1992 units was available well before that date. That Wyandotte wrongly interpreted local instructions on whether and when a utility should submit information on 1992 units also does not excuse the tardiness of its allocation request. The July Notice repeatedly forbade utilities from submitting entirely new claims for allowances after 1991. We thus also conclude that the EPA may deny allowances to Wyandotte's 1992 unit.