Court Opinion

ID: 5136189
Source: CourtListenerOpinion
Date Created: 2021-12-17 23:01:15.07238+00
Date Added: 2024-06-11T08:23:53.843836
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 21-1131

 CITY OF QUINCY, MASSACHUSETTS; TOWN OF HINGHAM, MASSACHUSETTS;
TOWN OF BRAINTREE, MASSACHUSETTS; DOROTHY ANDERSON; ALICE ARENA;
   MARGARET BELLAFIORE; WENDY CULLIVAN; SUSAN GREENE; ANDREA
HONORE; MICHAEL LANG; CURTIS NORDGAARD, M.D.; THOMAS PENDERGAST;
   JUDY ROBERTS; BETSY SOWERS; BERNADETTE WILSON; KENNETH J.
   DIFAZIO; JANE HACKETT, Councilor at Large; ED HARRINGTON,
 District Five Councilor; REBECCA HAUGH; GEORGE LORING; ARTHUR
 MATHEWS; PATRICK M. O'CONNOR; FRANK SINGLETON; THOMAS TANNER,

                          Petitioners,

                               v.

     MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION,

                          Respondent,

                ALGONQUIN GAS TRANSMISSION, LLC,

                          Intervenor.

               PETITION FOR REVIEW OF AN ORDER OF
    THE MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION

                             Before

                  Thompson, Lipez, and Kayatta,
                         Circuit Judges.

     Michael H. Hayden, with whom Morrison Mahoney LLP, Nicole I.
Taub and Crystal Huff, Office of the Town Solicitor, Town of
Braintree, Kerry T. Ryan, and Bogle, DeAscentis & Coughlin, P.C.,
were on brief, for petitioner.
     Seth Schofield, Senior Appellate Counsel, Office of the
Attorney General of Massachusetts, with whom Maura Healey,
Attorney General for the Commonwealth of Massachusetts, was on
brief, for respondent.
     Jeremy C. Marwell, with whom Joshua S. Johnson and Vinson &
Elkins LLP were on brief, for intervenor.

                       December 17, 2021
           KAYATTA, Circuit Judge.          The City of Quincy, the Towns

of Braintree and Hingham, and a group of citizens (collectively,

"the City") challenge the final decision of the Massachusetts

Department    of   Environmental    Protection    (DEP)   reaffirming      the

issuance of an air permit to Algonquin Gas Transmission, LLC

(Algonquin)   for   a   natural    gas   compressor   station    located   in

Weymouth, Massachusetts.       DEP had previously approved Algonquin's

plans to power the Weymouth station using a natural-gas-fired

turbine, which emits some amount of nitrogen oxides (NOx).                 The

City and other petitioners convinced this court in a prior appeal

that DEP did not follow its own established procedures when it

eliminated an electric motor as a possible alternative to the gas-

fired turbine. See Town of Weymouth v. Mass. Dep't of Env't Prot.,

961 F.3d 34 (1st Cir.), modified on reh'g, 973 F.3d 143 (1st Cir.

2020).   We remanded to DEP to assess whether an electric motor was

in fact what Massachusetts regulations call the "best available

control technology" (BACT) for the new station.           After holding a

hearing and considering additional record evidence, DEP again

concluded that an electric motor was not BACT for the Weymouth

compressor    station    and   reaffirmed      Algonquin's      air   permit.

Satisfied that the agency's actions on remand were not arbitrary

and capricious, we now deny the City's petition for further review

and affirm DEP's decision after remand.

                                    - 3 -
                                       I.

            Our opinion in Town of Weymouth recounts the factual

background and circumstances leading up to the proceedings on

remand that form the basis of this petition.             See 961 F.3d at 38–

41.   We repeat only the essential details, beginning with a brief

description of the applicable regulatory framework.

                                       A.

            Pursuant to the Natural Gas Act (NGA), 15 U.S.C. § 717

et seq., the Federal Energy Regulatory Commission (FERC) oversees

the certification of interstate natural gas pipeline projects.             As

part of FERC's review of proposed pipelines, the agency must ensure

that each project complies with all relevant federal permitting

requirements, including those under the federal Clean Air Act

(CAA), 42 U.S.C. § 7401 et seq.               See 15 U.S.C. § 717b(d)(2).

Congress expressly reserved in the NGA the rights of states to

issue or deny permits under the CAA for interstate natural gas

projects.    See id. (providing that the NGA does not "affect[] the

rights of States under . . . the Clean Air Act"); see also Town of

Weymouth, 961 F.3d at 39.

            For    its   part,   the        CAA   embraces    a   "cooperative

federalism"       approach   "such     that       DEP,   in   enforcing    the

Massachusetts CAA, is in fact acting pursuant to the federal CAA."

Town of Weymouth, 961 F.3d at 40 n.4; see also id. at 39 n.2.

Under its authority, DEP has issued comprehensive regulations

                                     - 4 -
governing the control of air pollutants, including regulations

regarding the issuance of air permits for stationary sources of

air pollution like the Weymouth compressor station at issue in

this appeal.     See 310 Mass. Code Regs. § 7.02.

            In order to obtain an air permit from DEP, an applicant

must show that the proposed facility employs the "best available

control technology" for each regulated air pollutant, including

NOx.    Id. § 7.02(8)(a)(2); see also Town of Weymouth, 961 F.3d at

41.     BACT is defined as "an emission limitation based on the

maximum degree of reduction of any regulated air contaminant

emitted from or which results from any regulated facility" that

DEP    "determines       is   achievable     for   such   facility     through

application of production processes and available methods, systems

and techniques for control of each such contaminant."                310 Mass.

Code Regs. § 7.00; see also 42 U.S.C. § 7479(3).            Simply put, BACT

is the most effective emissions control technology for a pollutant

that is technologically and economically feasible for the given

project.

            The Environmental Protection Agency (EPA) has developed

a five-step, "top-down" process for determining BACT.                See EPA,

New    Source   Review    Workshop   Manual:   Prevention    of   Significant

Deterioration and Nonattainment Area Permitting B.5–B.6 (1990),

https://www.epa.gov/sites/default/files/2015-

                                     - 5 -
07/documents/1990wman.pdf [hereinafter NSR Workshop Manual].    The

five steps are as follows:

  •   Step 1:    The applicant identifies and lists all available

      control technologies that have "a practical potential for

      application to the emissions unit and the regulated pollutant

      under evaluation." Id. at B.5. However, a control technology

      may be excluded at Step 1 of the BACT analysis if it would

      "redefine the source."    Helping Hand Tools v. EPA, 848 F.3d

      1185, 1194 (9th Cir. 2016); see also Town of Weymouth, 961

      F.3d at 43.1

  •   Step 2:   The applicant eliminates any "technically infeasible

      options" from the list generated at Step 1.      NSR Workshop

      Manual, supra, at B.7.2

  •   Step 3:     The applicant "rank[s]" the "remaining control

      alternatives not eliminated in [S]tep 2" based on their

      1 A control alternative "redefines the source" and is
properly excluded from the BACT analysis if using the technology
essentially "requires a complete redesign of the facility."
Helping Hand Tools, 848 F.3d at 1194. As a "classic" example, "a
coal-burning power plant need not consider a nuclear fuel option
as a 'cleaner' fuel because it would require a complete redesign
of the coal-burning power-plant." Id. (citing Sierra Club v. EPA,
499 F.3d 653, 655 (7th Cir. 2007)); see also NSR Workshop Manual,
supra, at B.13–B.14.
      2 A control option is "technically infeasible" if, "based on
physical, chemical, and engineering principles, . . . technical
difficulties would preclude the successful use of the control
option on the emissions unit under review." Id.

                                - 6 -
       effectiveness in reducing controlled pollutant emissions.

       Id. at B.7–B.8.

  •    Step 4:    The applicant evaluates "the energy, environmental,

       and economic impacts" of each control option and eliminates

       any controls that do not meet certain effectiveness criteria.

       Id. at B.8–B.9.

  •    Step 5:    The "most effective control option" that has not

       been eliminated is selected as BACT.              Id. at B.9.

            DEP   has     adopted       EPA's     five-step   approach    for   BACT

analysis in its guidance, which incorporates the NSR Workshop

Manual by reference.           See DEP, Best Available Control Technology

(BACT)     Guidance:      Air         Pollution     Control    Requirements     for

Construction,         Substantial        Reconstruction       or   Alteration    of

Facilities        that         Emit      Air       Contaminants       3     (2011),

https://www.mass.gov/files/documents/2016/08/oo/bactguid.pdf

[hereinafter DEP BACT Guidance].                An applicant for an air permit

must     submit   a     BACT    assessment        to   DEP,   which   the   agency

independently reviews before making a final determination with

respect to BACT.         See id. at 1; see also 310 Mass. Code Regs.

§ 7.02(8)(a)(2). DEP assesses BACT "on a case-by-case basis taking

into account energy, environmental, and economic impacts and other

costs."    310 Mass. Code Regs. § 7.00.

                                          - 7 -
                                       B.

              In 2015, Algonquin, a natural gas transmission company,

proposed to construct and operate the Atlantic Bridge Project, an

infrastructure project designed to deliver natural gas to the

northeastern United States.           As part of the project, Algonquin

sought   to    build   several   natural    gas    compression      facilities,

including the compressor station in Weymouth.            Compressor stations

are necessary for the delivery of natural gas through the Atlantic

Bridge Project pipeline because they increase the system pressure

inside the pipeline to ensure that gas flow remains at the required

rates.     See Town of Weymouth, 961 F.3d at 38–39.              A compressor

station is powered by a "driver," which can include, among other

things, a gas-fired turbine or an electric motor.

              For the Weymouth compressor station, Algonquin proposed

to use a "SoLoNOx" Solar Taurus 60 natural-gas-fired combustion

turbine as the station's driver.            The basic idea is that the

Weymouth      compressor   station,    which      is   co-located    with   the

pipeline, burns a small amount of the natural gas in the pipeline

as fuel in order to generate the pressure necessary to allow the

rest of the gas to flow through the pipeline to its ultimate

destinations. See id. at 39. However, because the SoLoNOx turbine

burns natural gas, it emits NOx, an air pollutant covered by federal

                                   - 8 -
and Massachusetts state environmental regulations.3                   An electric

motor does not emit NOx.

               Initially, Algonquin's air permit application did not

assess whether an electric motor, rather than the gas-fired SoLoNOx

turbine, was BACT.            Id. at 42.     But after nearby municipalities

and citizen groups, including the City, raised the potential of an

electric motor as an alternative to the SoLoNOx turbine, Algonquin

revised its application to account for the electric motor option.

Algonquin's assessment of the electric motor proposed several

reasons for excluding it from the BACT analysis, including the

high       costs    of   installing   and    operating    an   electric    motor.

Crucially, however, Algonquin did not submit a detailed BACT

analysis evaluating the electric motor option in its revised

application.          Nonetheless, DEP accepted Algonquin's exclusion of

the electric motor without conducting its own independent BACT

analysis.          See id.   DEP subsequently issued an air permit for the

Weymouth station in January 2019, approving Algonquin's proposal

to use the SoLoNOx turbine.

               Unhappy       with   the    decision,     the   same    group   of

municipalities and citizen groups filed an administrative appeal,

raising, among other things, DEP's failure to consider an electric

       3The SoLoNOx is a proprietary model of dry low NOx turbine,
which is designed to reduce, although not eliminate, NOx emissions
by operating as a lower combustion temperature.

                                          - 9 -
motor as BACT. See id. at 40. As relevant to that issue, Algonquin

and DEP argued to the Presiding Officer of the appeal that an

electric motor could be eliminated at Step 1 of the BACT analysis

because it would involve a complete redesign of the Weymouth

station    project.      Id.   at    42–43.      The    Presiding   Officer    was

unpersuaded by this argument, at least as then presented.                  Id. at

43.     Instead, the Presiding Officer found that an electric motor

would not be cost-effective for the Weymouth station because it

would      require    substantial      infrastructure        investment       and,

therefore, was excludable at Step 4 of the BACT analysis.                     Id.

Accordingly, on       the Presiding Officer's recommendation,              DEP's

Commissioner affirmed the issuance of the Weymouth station air

permit.     These prior administrative proceedings culminated in a

petition for review before this court and our decision in Town of

Weymouth.     In that opinion, we held that DEP's decision to exclude

an    electric   motor   as    not   BACT     without   performing   the   cost-

effectiveness calculations required by the agency's established

procedures was arbitrary and capricious.                  See id. at 47.        We

therefore remanded to DEP to redo the BACT analysis.4                Id. at 59.

       4In our initial opinion, we also vacated the grant of the
air permit for the Weymouth compressor station.      See Town of
Weymouth, 961 F.3d at 58–59. However, after a panel rehearing, we
revised our opinion to reflect that the remedy granted was remand
without vacating the air permit. Town of Weymouth v. Mass. Dep't
of Env't Prot., 973 F.3d 143, 145 (1st Cir. 2020).

                                      - 10 -
          On remand, Algonquin submitted a detailed technical

addendum to its air permit application laying out a more extensive

BACT analysis.   Algonquin concluded that an electric motor could

be excluded at either Step 1 (because it would redefine the source)

or Step 4 (because it was not cost-effective).         DEP's Regional

Office agreed with Algonquin's analyses and reaffirmed its prior

BACT determination.   The City and other interested parties again

requested an adjudicatory hearing before DEP's Office of Appeals

and Dispute Resolution and submitted its own testimony, including

a BACT analysis conducted by its expert Dr. Ranajit Sahu.            Dr.

Sahu concluded that an electric motor was BACT because it would

not redefine the source at Step 1 and would be cost-effective at

Step 4.

          On   January 11,   2021,   after   holding   a   hearing   and

considering additional filings from the parties, the Presiding

Officer for the matter issued a "Recommended Final Decision After

Remand," finding that DEP properly determined that an electric

motor is not BACT and recommending that DEP's Commissioner reaffirm

the air permit for the Weymouth compressor station.        The Presiding

Officer found that an electric motor could be excluded either at

Step 1 of the BACT analysis because it would redefine the source

or at Step 4 of the BACT analysis because it was not a cost-

effective control. The Commissioner issued a "Final Decision After

Remand" on January 19, 2021, adopting the Presiding Officer's

                               - 11 -
recommendations.     The Commissioner noted in his decision that the

exclusion of an electric motor at Step 1 and Step 4 provided

"independent bases for affirming the air permit."

           The City now challenges DEP's decision after remand to

reaffirm the air permit for the Weymouth compressor station.                        As

it did before, Algonquin intervened as a respondent.                      See Town of

Weymouth, 961 F.3d at 41.         We have original jurisdiction over this

petition for review under the NGA.                     Id. at 40–41; 15 U.S.C.

§ 717r(d)(1).

                                          II.

           As we noted in Town of Weymouth, the NGA does not provide

a   standard   of   review    for    a    state       agency's    final    permitting

decisions.      See 961 F.3d at 41.              The City and DEP previously

maintained     differing      positions         as    to   whether       the   federal

Administrative      Procedure       Act    or        instead     the    Massachusetts

Administrative Procedure Act should apply, but as we explained

before, the standards do not vary materially, at least with respect

to this case.    See id.     The parties do not now raise any objections

to this approach.          Thus, as before, we will review formally

adjudicated     findings     of   fact    for    "substantial          evidence,"   and

reverse agency decisions if they are "arbitrary and capricious."

Id.

                                     - 12 -
                                   III.

                                    A.

          We begin our analysis of the merits of the City's

petition with the City's principal claim:      that DEP's exclusion of

an electric motor as not BACT was arbitrary and capricious.         There

is no dispute that an electric motor would be technically feasible

at Step 2 and would be ranked higher in control effectiveness than

the SoLoNOx turbine at Step 3.      So, if the City is correct that an

electric motor survives exclusion in both Step 1 and Step 4, an

electric motor should be selected as BACT at Step 5.         If, however,

we conclude that DEP reasonably eliminated an electric motor at

either Step 1 or Step 4, we will affirm DEP's determination that

an electric motor is not BACT.      As we will explain in more detail

below, because we conclude that DEP did not act arbitrarily and

capriciously when it eliminated an electric motor at Step 4 of the

BACT analysis, we need not resolve the parties' disagreement as to

Step 1.

          At   Step   4,   DEP   assesses,   among   other   things,   the

"economic impacts" of the control alternatives remaining after

Step 3.   NSR Workshop Manual, supra, at B.26.               The economic

feasibility of a control option is measured by the technology's

cost-effectiveness at reducing emissions of regulated pollutants

-- with effectiveness "measured in terms of tons of pollutant

emissions removed" and cost "measured in terms of annualized

                                  - 13 -
control costs."       Id. at B.36; see also DEP BACT Guidance, supra,

at    4.   Agency     guidance    explains      that   "[c]ost     effectiveness

calculations can be conducted on an average[] or incremental

basis."    NSR Workshop Manual, supra, at B.36.                  Here, DEP and

Algonquin assessed the average cost-effectiveness of an electric

motor in its BACT analysis.

            According to the NSR Workshop Manual, average cost-

effectiveness, which measures the dollar value of each ton of

pollutant removed, is calculated as:

            control option annualized cost / (baseline
            emissions rate - control option emissions
            rate)

Id. at B.37 (mathematical notations reformatted).

            The   numerator,      the    annualized    cost   of    the   control

option, is "the capital cost of the control technology or technique

amortized over its expected lifetime, plus annual operating and

maintenance costs."      DEP BACT Guidance, supra, at 4.            To determine

the    annualized    capital     cost,    total   capital     investments     are

multiplied by the capital recovery factor, which is calculated as:

            [real interest rate * (1 + real interest
            rate)^(economic life of equipment in years)]
            / [(1 + real interest rate)^(economic life of
            equipment in years) - 1]

See id., app. B, at b.10 (representing the formula symbolically).

            The     denominator    of     the   average   cost-effectiveness

formula is the difference between the baseline emission rate --

                                    - 14 -
which   "represents    a   realistic       scenario    of     upper     boundary

uncontrolled   emissions      for   the   source,"    NSR    Workshop    Manual,

supra, at B.37 -- and the emissions rate of the control option

being evaluated.      This figure indicates the annual reduction in

tons of regulated pollutant that is expected to result from

adopting the control option under consideration.                 See DEP BACT

Guidance, supra, at 6.          For the Weymouth station, because an

electric motor does not emit NOx, the control option emissions rate

is zero.

           Applying     the     average      cost-effectiveness          formula

described above produces a measure of the cost per ton of pollutant

(in this case, NOx) controlled per year by using the control

alternative.       For NOx, DEP has established that technologies

falling in (or below) the range of $11,000 to $13,000 per ton of

NOx removed per year will be considered cost feasible.                  See DEP

BACT Guidance, supra, at 5.         Control technologies with an average

cost-effectiveness that is more costly than this range may be

excluded as not BACT at Step 4.

           After     completing      the     average        cost-effectiveness

calculations, DEP concluded that an electric motor was not BACT

for the Weymouth station because its average cost-effectiveness

far exceeded the range set by DEP.           As inputs to the denominator,

DEP considered two alternative baseline emissions rates for the

                                    - 15 -
gas-fired turbine: 9 ppmvd5 (or 10.03 tons per year) and 25 ppmvd

(or 30.32 tons per year).

            For the numerator, DEP adopted Algonquin's estimate of

the   total    capital   cost     of     installing    an   electric    motor

($12,242,077), measured as the net additional cost of an electric

motor over a gas-fired turbine.6               As for the capital recovery

factor, DEP applied an interest rate of 10.137% and assumed a

fifty-year economic life for the electric motor, resulting in

annualized capital costs of $1,250,993.             The final component DEP

considered for the numerator was annual operating costs.                    To

calculate     this   figure,    DEP    determined     the   annual   cost   of

electricity to fuel the proposed electric motor ($7,943,500) and

subtracted annual operating costs uniquely associated with a gas-

fired turbine ($2,106,763), arriving at annual operating costs of

$5,836,737.     Summing the annualized capital costs and the annual

      5 The unit ppmvd stands for parts per million by volume (dry
basis), which is a measure of the concentration of a specified
substance in air. Emissions in ppmvd are converted into tons of
pollutant per year for purposes of the Step 4 cost-effectiveness
calculations.
      6 All parties assume that the relevant control option costs
in the numerator of the formula are the net costs associated with
the use of an electric motor over a gas-fired turbine.        Going
forward, references to "capital costs" represents the capital
costs unique to installing an electric motor reduced by the capital
costs unique to a gas-fired turbine and references to "operating
costs" represents the operating costs unique to running an electric
motor reduced by the operating costs unique to a gas-fired turbine.

                                      - 16 -
operating costs, DEP determined that the total annualized control

cost was $7,087,730.

             Dividing the total annualized control cost ($7,087,730)

by the respective baseline emissions rates (10.03 tons per year

and 30.32 tons per year), DEP found that an electric motor's

average cost-effectiveness was significantly higher than DEP's

cost-feasibility range of $11,000 to $13,000 per ton of NOx removed

per year.7    Indeed, according to DEP's calculations, even entirely

excluding the capital costs required to install an electric motor

at the Weymouth station, the average cost-effectiveness of an

electric motor still greatly exceeded the upper bound of DEP's

guideline range.8

             In its briefing before this court, the City argues that

DEP's conclusion that an electric motor should be excluded at

Step 4 of the BACT analysis as cost-infeasible was erroneous for

several reasons.     First, the City asserts that DEP erred by using

incorrect baseline emissions rates for a gas-fired turbine in the

     7  According to DEP's calculations, the average cost-
effectiveness of an electric motor was $706,653 per ton of NOx
controlled (assuming a 9 ppmvd baseline emissions rate) or $233,764
per ton of NOx controlled (assuming a 25 ppmvd baseline emissions
rate).
     8  Excluding capital costs entirely, DEP calculated the
average cost-effectiveness of an electric motor to be $581,928 per
ton of NOx controlled (assuming a 9 ppmvd baseline emissions rate)
or $192,505 per ton of NOx controlled (assuming a 25 ppmvd baseline
emissions rate).

                                - 17 -
denominator of the cost-effectiveness calculation (9 and 25 ppmvd)

and should have used a higher baseline emissions rate (120 ppmvd)

instead.    The City explains that 120 ppmvd is a more accurate

representation of the upper-bound emissions expected from a gas-

fired turbine during non-standard conditions like low-load and

sub-zero temperature operation.         Second, the City contends that

DEP improperly considered the cost of electricity in the numerator

of the formula as an annual operating cost of an electric motor.

The City argues that DEP should have written off an electric

motor's    annual   operating   costs    because      Algonquin    could    have

completely recovered the cost of electricity used by the motor

from its consumers.9       Third, as to the annual capital costs

component of the numerator, the City asserts that DEP's acceptance

of   Algonquin's     calculations       for     the    total      capital    and

infrastructure costs of installing an electric motor was not

supported by substantial evidence.            Fourth, the City argues that

DEP applied an unrealistic interest rate of 10.137% to calculate

     9  The City's expert, Dr. Sahu, argued in testimony before
the Presiding Officer that the natural gas costs Algonquin used in
its calculation of the annual operating cost of the gas-fired
turbine were underestimated to make the operating costs for the
electric motor look comparatively more expensive. In his own BACT
Step 4 calculations, Dr. Sahu used the retail rate of natural gas
as opposed to the lower wholesale rate proposed by Algonquin, which
drastically reduced the total annual control cost in the numerator
of the cost-effectiveness calculations.      However, it does not
appear that the City attempts to renew this contention on appeal.
We, therefore, consider it waived.

                                 - 18 -
the annualized capital costs of an electric motor and should have

used the bank prime interest rate of 3%.                      Finally, the City

contends   that      DEP   improperly    relied   on    its    own    guidance    by

evaluating     an    electric    motor's     cost-effectiveness        against    an

outdated average cost-effectiveness range that was unadjusted for

inflation.10    In proceedings before the agency, the City proposed

an   inflation-adjusted         cost-effectiveness     range     of    $20,350    to

$24,050.

           It       is   unnecessary    to    delve    too    deeply    into     the

labyrinthine ledgers of Algonquin's and DEP's cost-effectiveness

calculations.        Algonquin in its brief (and DEP at oral argument)

contend that even if we were to agree with the City as to all its

other proposed figures, an electric motor would still be properly

eliminated at Step 4 unless we also agree with the City that the

cost of electricity should be excluded.                The City in its reply

brief offered no cogent response to this contention.                   And our own

review of the record does indeed indicate that the City's critical

path to demonstrating that an electric motor is cost-effective at

Step 4 runs through the City's claim that the cost of electricity

to fuel an electric motor should be excluded from the electric

motor's annual operating costs.

      10DEP's BACT Guidance, issued in 2011, explains that the
cost-effectiveness range applied here has been in use "[s]ince
1990." DEP BACT Guidance, supra, at 5.

                                       - 19 -
          As an illustration, let us assume that the City is

correct that the proper baseline emissions rate for the gas-fired

turbine is 120 ppmvd (or 145.54 tons per year NOx), the highest

estimated rate proposed by the City's expert.11   We can also assume

that we should adopt the City's proposed interest rate of 3%.12

Calculating the average cost-effectiveness based on these figures

results in an estimate of $43,373 per ton of NOx reduced.13       This

well exceeds the City's proposed higher cost-effectiveness range

     11  The City's expert, Dr. Sahu, proposed a baseline emissions
rate of 120 ppmvd for a gas-fired turbine. From that rate, Dr.
Sahu converted the emissions rate from ppmvd to tons per year based
on two different conversion rates.      For the purposes of this
illustration, we assume the higher of the converted baseline
emissions rates: 145.54 tons per year NOx. This represents the
upper-bound of the City's proposed baseline emissions rate.
     12 Adopting the City's proposed interest rate of 3% results
in annualized capital costs of $475,794 based on Algonquin's
estimate of $12,242,077 in total capital costs of installing an
electric motor over a gas-fired turbine, and an assumption that
the economic life of an electric motor is 50 years (an assumption
both parties accept).
     Annualized capital costs = $12,242,077       *   [0.03   *   (1   +
0.03)^50] / [(1 + 0.03)^50 - 1] = $475,794.
     13 Annual operating costs = $7,943,500 (annual operating
costs of an electric motor) - $2,106,763 (unique annual operating
costs of a gas-fired turbine) = $5,836,737.
     Annualized cost of an electric motor = $5,836,737 (annual
operating costs) + $475,794 (annualized capital costs) =
$6,312,531.
     Reduction in NOx emissions from an electric motor = 145.54
tons per year (baseline emissions rate of a gas-fired turbine) -
0 tons per year (emissions rate of an electric motor).
     Average cost-effectiveness of an electric motor = $6,312,531
per year / 145.54 tons per year = $43,373 per ton.

                              - 20 -
of $20,350 to $24,050 per ton of NOx reduced. To take this further,

suppose we also agree with the City that DEP's estimates for the

total capital costs of installing an electric motor are wholly

inaccurate.    Although the City does not provide its own figure, we

can proceed under the assumption that the additional capital costs

of installing an electric motor over a gas-fired turbine are $0,

a number that is likely lower than any the City could have

provided.     The average cost-effectiveness of an electric motor in

this scenario is still nearly double the City's proposed range.14

            Only if we accept the City's argument that the annual

operating costs of an electric motor should be completely written

off does the cost of an electric motor become low enough so that

the other alleged errors to which the City points could make a

difference in the outcome.      Thus, the City's argument turns on

whether the annual operating costs -- i.e., the cost of electricity

necessary each year to operate an electric motor -- should be set

at $0 in the cost-effectiveness calculation at Step 4 of the BACT

analysis.15

     14 Annualized cost of an electric motor = $5,836,737 (annual
operating costs) + $0 (annualized capital costs) = $5,836,737.
     Average cost-effectiveness of an electric motor = $5,836,737
per year / 145.54 tons per year = $40,104 per ton.
     15 The City presents, in the statement of the case section
of its opening brief, a potential alternative argument:      that
Algonquin inflated the annual cost of electricity to power an
electric motor.   The City proposes that a more accurate figure
would be $6,574,775 per year. This argument is waived because the

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           The City asserts that the annual electricity costs of an

electric motor should be $0 because Algonquin can simply pass along

its utility costs to its consumers and completely recoup these

costs each year.         The City's argument focuses on a supposed

admission from one of Algonquin's witnesses, Christopher Harvey,

that Algonquin or its parent company could recover the electricity

costs   required    to   power     an   electric    motor      by   including    an

additional charge in the rates negotiated with its customers.                     If

the City is correct and annual operating costs should be set at

$0, it would significantly shrink the numerator in the cost-

effectiveness    formula     and    make   an    electric      motor's    economic

feasibility a closer question.

           The Presiding Officer, though, found that Christopher

Harvey's   testimony     only      established     that    Algonquin's      parent

company could negotiate electric power costs into the rates it

charges its customers as a general matter, not that it could be

done for the Weymouth station or the Atlantic Bridge Project in

particular.        Indeed,   Harvey's      testimony      explained      that    the

recovery   of   electricity      costs     "varie[d]      by   contract    and   by

individual pipeline."

City failed to develop it outside of a casual mention in the
background section of its brief. See United States v. Zannino,
895 F.2d 1, 17 (1st Cir. 1990). In any event, adopting the City's
proposed figure would still not make an electric motor cost-
effective.

                                     - 22 -
            Additionally, even assuming that Algonquin could recover

all   of   the    electricity   costs    of     an   electric    motor   from   its

customers,       the   City   points    to    no     authority   supporting     its

contention that recoverable utility costs must be excluded from

the cost-effectiveness analysis.                Nor do we see any basis for

finding this contention so compelling as to make its rejection by

DEP arbitrary and capricious.            It is not self-evident why pass-

along costs must, as a categorical matter, be excluded from the

annual operating costs of a control technology simply because they

can be recouped from consumers.              Unless a business is to run at a

loss, all costs are presumably passed along to customers in some

form or another.

            Relevant EPA guidance, which DEP has adopted, expressly

contemplates that electricity and other utility costs be factored

into the assessment of the operating costs of a proposed control

technology.       For instance, the NSR Workshop Manual explains that

when assessing the "energy requirements of the control technology"

in Step 4, "the energy impacts analysis can, in most cases, simply

be factored into the economic impacts analysis" because energy

consumption "can usually be quantified in terms of additional cost

or income to the source."          NSR Workshop Manual, supra, at B.29–

B.30; see also id., app. B, at b.9 (considering electricity as a

direct cost in an example cost estimate).                Similarly, DEP's BACT

Guidance makes clear that "[a]s a matter of course, energy impacts

                                       - 23 -
and costs are considered in the economic impacts assessment of

Top-Down BACT."      DEP BACT Guidance, supra, at 4; see also id. at

5 (listing "[f]uel and electricity costs" as line items to include

in the economic impacts analysis).       Finally, the EPA Air Pollution

Control Cost Manual, which DEP expressly references in its BACT

Guidance,     contemplates   including     the   electricity    costs   of   a

control as an operating cost.        See EPA, Office of Air Quality

Planning and Standards, EPA Air Pollution Control Cost Manual,

ch. 2, § 2.4.1, at 9 (2017) (categorizing utility costs as an

operating cost and including electricity as a utility cost); see

also id. § 2.6.5.4, at 33 (describing electricity as an example of

an   annual    utility   cost).    Thus,    in   including     the   cost    of

electricity as an annual operating cost for an electric motor, DEP

simply followed its established guidance and procedures.             See DEP

BACT Guidance, supra, at 4 (incorporating the EPA Air Pollution

Control Cost Manual by reference).

              For all of these reasons, the City has not convinced us

that DEP inappropriately considered the cost of electricity as a

component of the annual operating cost of an electric motor.            And,

as we have explained, that decision obviates any need to consider

the collectively inconsequential other alleged errors in DEP's

BACT analysis.

              Because DEP's finding that an electric motor could be

excluded at Step 4 of the BACT analysis was neither arbitrary nor

                                  - 24 -
capricious, we have no need to also decide whether an electric

motor could also be excluded at Step 1.             Therefore, we decline to

address whether an electric motor would "redefine the source" at

Step 1.

                                      B.

            The City's only other argument is that DEP failed to

comply with Massachusetts's Environmental Justice Policy (the "EJ

Policy").       We previously rejected a nearly identical claim based

on this policy brought by the City and other petitioners in Town

of Weymouth.      See 961 F.3d at 54.       Although the City points us to

intervening changes to the EJ Policy since our decision, we see

nothing in those changes that disturbs our prior reasoning.                 In

any event, in Town of Weymouth we remanded to DEP to conduct

further proceedings "limited to the purposes we [had] identified."

Id.   at   59    (remanding   to   that    agency   to   reconduct   the   BACT

analysis).      A reassessment of the air permit under the EJ Policy

was not one of those purposes.

                                      IV.

            We deny the City's petition for review and affirm DEP's

final decision after remand.

                                    - 25 -