Opinion ID: 768833
Heading Depth: 4
Heading Rank: 5

Heading: Definition of EGU

Text: 124 More persuasively, CIBO contends that EPA revised the definition of EGU without adequate notice. Throughout the rulemaking, EPA defined an EGU as it did under the acid rain program, which excludes from the category of utility units those cogeneration units that sell less than one-third of their potential electrical output capacity or less than 25 MW per year. See 42 U.S.C. S 7651a(17)(C). However, two months after the promulgation of the rule, EPAredefined an EGU as a unit that serves a large generator (greater than 25MW) that sells electricity. CIBO contends that EPA did not provide sufficient notice and opportunity to comment on this revision, especially considering that the industrial boilers have relied on the previous definition for a number of years. We agree. 125 EPA maintains that it provided adequate notice in the May 1998 supplemental notice, stating that deregulation of electric utilities means that it is not clear how ownership of the electricity generating facilities will evolve. Supplemental Notice of Proposed Rule, 63 Fed. Reg. at 25,923. Given that there is no relevant physical or technological difference between utilities and other power generators, EPA proposed, all large electricity generating sources, regardless of ownership, should be treated the same. Id. There are several problems with EPA's response. First, it is undisputed that EPA was departing from the definition of EGUs as used in prior regulatory contexts, and EPA was not explicit about the departure from the prior practice until two months after the rule was promulgated. Neither the proposed rulemaking in November 1997 nor the final rule in October 1998 introduced the new definition. EPA waited until the December 1998 correction notice to announce that it will classify as an EGU any boiler ... that is connected to a generator greater than 25 M We from which any electricity is sold.Correction and Clarification to the Finding of Significant Contribution and Rulemaking for Purposes of Reducing Regional Transport of Ozone (Correction Notice to Final Rule), 63 Fed. Reg. 71,220, 71,223 (1998). After the December correction notice, EPA reopened the comment period for sixty days for comments on this and other issues. In EPA's May 1999 response to the comments, EPA, for the first time, discussed why the change was necessary and offered a justification largely based on recent changes in the electric power industry. See Responses to the 2007 Baseline Sub-Inventory Information and Significant Comments for the Final NOx SIP Call 10-12 (May 1999) (Responses to Final Comments). 126 As to the statement in the May 1998 supplemental notice that EPA claims constitutes notice, this statement was given in EPA's discussion of how the core group of sources for the model trading rule should be defined, and not in the context of a discussion about the general distinction between EGUs and non-EGUs for the purposes of calculating state budgets. Cf. Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 550 (D.C. Cir. 1983). Moreover, EPA also explicitly observed in the same May notice discussion about the model trading rule that [m]any of the definitions ... are the same as those used in ... the Acid Rain Program regulations, in order to maintain consistency among programs. Supplemental Notice of Proposed Rule, 63 Fed. Reg. at 25,923.Given the vague and conflicting signals that EPA was sending, it is an exaggeration to state that some general theme of the regulatory consequences of deregulation of the utility industry throughout rulemaking meant that EPA's lastminute revision of the definition of EGU should have been anticipated by industrial boilers as a logical outgrowth of EPA's earlier statements. See American Water Works Ass'n. v. EPA, 40 F.3d 1266, 1274-75 (D.C. Cir. 1994). 127 EPA contends that even assuming that CIBO did not have adequate notice and opportunity to comment on the EGU definition, the error has been cured because it reopened the comment period on this issue after its announcement of the revision. See Correction Notice to Final Rule, 63 Fed. Reg. at 71,221-23. This response is to no avail. During the new comment period, some commenters complained that there had not been sufficient notice and opportunity to comment on the EGU redefinition. See Responses to Final Comment, at 12. EPA's response to this charge primarily relied on the claim that there had beenadequate notice prior to the redefinition, see id., and we have already rejected that argument. 128 Therefore, we conclude EPA did not provide sufficient notice and opportunity to comment for its redefinition of EGUs and remand the rulemaking to EPA for further consideration in light of this opinion.