Opinion ID: 3180012
Heading Depth: 4
Heading Rank: 2

Heading: The SIP’s Visibility Analysis

Text: As part of its BART analysis, a state must analyze “the degree of improvement in visibility which may reasonably be anticipated to result from the use” of alternative control technologies. 40 C.F.R. § 51.308(e)(1)(ii)(A). EPA found no problems with the “technical adequacy of [Arizona’s visibility] modeling.” 77 Fed. Reg. at 72,519. Rather, EPA found Arizona’s interpretation of the visibility modeling for all three plants “problematic.” Id. The problems, EPA contends, resulted in Arizona understating the visibility benefits associated with installing SCR at Coronado. We conclude that EPA’s assessment of Arizona’s visibility analysis considered the appropriate factors rationally, and so defer to its conclusions. See Motor Vehicle Mfrs., 463 U.S. at 43. 14 EPA also disapproved the cost analysis for failing to use the “overnight method” required by the Cost Manual. The “overnight” method “treats the costs of a project as if the project were completed ‘overnight,’ with no construction period and no interest accrual.” 77 Fed. Reg. at 72,530. “Since assets under construction do not provide service to current customers,” utilities for ratemaking purposes use an alternative, “levelized” methodology, to “capitalize[] the interest and return on equity that would accrue over the construction period and adds them to the rate base when construction is completed and the assets are used.” Id. Because EPA had a sufficient alternative basis for disapproving the Coronado cost analysis, we do not here decide whether it could require Arizona to employ the overnight method. We discuss EPA’s use of the overnight method in its FIP infra, at 39–40. ARIZONA EX REL. DARWIN V. USEPA 29 For Coronado, Arizona used a “visibility index” averaging the visibility benefits at the closest nine Class I areas, but did not evaluate such benefits separately at the most impacted Class I area, the Gila Wilderness Area. 77 Fed. Reg. at 72,519; see also 77 Fed. Reg. at 42,850–51. EPA’s regulations “do not prescribe a particular approach to calculating or considering visibility benefits across multiple Class I areas,” 77 Fed. Reg. at 42,841; states have the “flexibility to assess visibility improvements due to BART controls by one or more methods,” Guidelines at 39,170. The indexing approach therefore “could be acceptable in itself as part of assessing multiple area impacts and improvements.” 77 Fed. Reg. 72,519. But, EPA concluded, “without any consideration of particular area improvements, the averaging process causes especially large benefits at some individual areas to be diluted or lost, effectively discounting some of the more important effects of the controls.” Id. (emphasis added). Moreover, regardless of the methodology used, EPA maintains, Arizona’s visibility analysis in its SIP was unreasonable because it used “two contrasting, yet equally incomplete, approaches to assessing visibility improvements.” Arizona used a visibility index average to analyze visibility benefits at Coronado, but its analyses for Apache and Cholla considered visibility improvements “only at the single Class I area with the greatest modeled impact from a facility,” rather than at all impacted Class I areas. 77 Fed. Reg. at 72,519. That is, the cumulative averaging approach taken by Arizona in its analysis for Coronado “is counter to [Arizona’s] emphasis elsewhere in the SIP on the importance of considering the visibility improvement at the single area having the largest impact from a given facility.” Id. The upshot is the appearance that the State selectively 30 ARIZONA EX REL. DARWIN V. USEPA chose for each plant a methodology that minimized the visibility improvement achieved by the more stringent emission controls at each location. Arizona made no attempt in its SIP, nor in its briefing in this appeal, to counter this appearance by explaining why it chose differing approaches to visibility analysis for different facilities. SRP may be correct that “[t]he Guidelines allow states to use either or both approaches.” But, as described above, a state must include in its SIP “an explanation of the CAA factors that led [the State] to choose that option over other control levels.” Guidelines at 39,170–71 (emphasis added). Adopting inconsistent — indeed, contradictory — approaches without providing any explanation for that decision frustrated EPA’s ability to “review the substantive content of the BART determination.” N. Dakota, 730 F.3d at 761. Arizona also contends that the outcome of its BART determinations would not have changed even if it had adopted the approach to visibility analysis EPA prescribed. The visibility improvements resulting from installing SCR, the State maintains, would in any event be “imperceptible” to the human eye. EPA expressly, and reasonably, rejected this argument when it promulgated the Haze Regulations and Guidelines in 2005: Even though the visibility improvement from an individual source may not be perceptible, it should still be considered in setting BART because the contribution to haze may be significant relative to other source ARIZONA EX REL. DARWIN V. USEPA 31 contributions in the Class I area. Thus, we disagree that the degree of improvement should be contingent upon perceptibility. Failing to consider less-than-perceptible contributions to visibility impairment would ignore the CAA’s intent to have BART requirements apply to sources that contribute to, as well as cause, such impairment. 70 Fed. Reg. at 39,129. In sum, EPA rationally determined that Arizona’s BART visibility analysis for Coronado was unsupported by explanation and inconsistent with the CAA and its regulations. We defer to its conclusions.