ELR Citation: ELR 20635
No(s). 99-1200 et al (D.C. Cir. May 15, 2001)

The court remands two aspects of a final U.S. Environmental Protection Agency (EPA) rule that requires many nitrogen oxide-emitting facilities in several midwestern and southeastern states to conform to emission limits set by EPA and to participate in an emissions trading program. Petitioners challenged the rule as inconsistent with the Clean Air Act (CAA), arbitrary and capricious, and technically deficient. The court first holds that EPA's use of growth rates generated by a computer model for 2001-2010 to estimate facility utilization growth for the period 1996 to 2007 was arbitrary. EPA's resulting projections significantly underestimated growth rates in some states, yet EPA never explained why it adopted this particular methodology. The electric-generating unit (EGU) growth factor determinations were therefore remanded so that EPA could engage in reasoned decisionmaking on how to set EGU growth factors and explain why results that appear arbitrary on their face are, in fact, reasonable determinations. The court then holds that EPA's classification for large cogenerators that sell electricity to the electric grid as EGUs must be remanded. Classifying the cogenerators as EGUs rather than non-EGUs requires the cogenerators to comply with more stringent standards, but the Agency failed to justify the new classification. The court, however, upholds all other aspects of the rule.

[Related decisions in this litigation are published at 28 ELR 20521 and 31 ELR 20670.]

Counsel for Petitioners
Norman W. Fichthorn
Hunton & Williams
1900 K St. NW, Washington DC 20006
(202) 955-1500

Counsel for Respondent
David J. Kaplan
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Williams, Ginsburg, and Sentelle, JJ.^*

* Judge Williams wrote Parts II.C, III.B-C, and V; Judge Ginsburg wrote Parts II.A-B and II.D.5; Judge Sentelle wrote Parts I, II.D.1-4, II.E-F, III.A., and IV.