ELR Citation: ELR 20151
No(s). 81-4202 (2d Cir. Dec 1, 1982)

The court upholds the Environmental Protection Agency's (EPA's) approval of a revision to the Connecticut state implementation plan (SIP) for sulfur dioxide (SO₂) that allows sources to burn fuel with higher-than-otherwise-allowable sulfur content if they burn less fuel to conserve energy. Applying the arbitrary and capricious standard of review, the court first rules that EPA did not abuse its discretion by failing to consider whether approval of the SIP revision establishing this "Energy Trade Program" would contribute to the state's nonattainment of air quality standards for particulate matter. As explained in the court's companion decision, 13 ELR 20146, EPA's interpretation of the Clean Air Act allowing separate consideration of the SIPs for different pollutants is not unreasonable. In addition, each application of the Energy Trade Program must be reviewed and approved by the state and EPA as a separate SIP revision. Connecticut rules require that this analysis must address the trade's impact on attainment and maintenance of both the SO₂ and particulate standards. EPA did not err in approving that portion of the Connecticut rule that would allow de minimis increases in particulate emissions, because it need not have considered the program's impact on such emissions at all. Moreover, the Agency has some discretion to disregard de minimis emission increases, and it was reasonable to conclude that they would not interfere with attainment of the particulate standard in light of other applicable particulate control rules.

The court next rejects petitioners' argument that the Energy Trade Program violates the holding of NRDC v. Gorsuch, 12 ELR 20942, that the bubble policy may not be used with sources of pollutants in areas in violation of the national ambient air quality standards for those pollutants. The court finds that nonattainment pollutants (particulates) are not involved in the energy trades themselves, but only in the air quality analysis that follows an individual trade.

The court also holds that the Energy Trade Program satisfies the requirements of the prevention of significant deterioration (PSD) program by providing for PSD review of applications that will affect areas for which baselines have been established, even though no such baselines have been set for the state. Finally, the court rules that defects in Connecticut's notice of the proposed rule were not sufficiently serious to justify overturning EPA's approval where the issues obscured in the notice were fully addressed at each stage of the proceedings and petitioners were not prejudiced.

[Related decisions are reported at 13 ELR 20135 and 20146 — Ed.]

Counsel for Petitioners
Prof. E. Donald Elliott
Yale Law School, Drawer 401 A Yale Sta., New Haven CT 06520
(203) 436-2211

Counsel for Intervenor-Petitioner
Francis H. O'Neill, City Attorney
P.O. Box 1300, Middletown CT 06457
(203) 344-3422

Counsel for Respondents
Diane L. Donley, Donald W. Stever Jr.
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-1066

Jeffrey Fowley
Office of Regional Counsel
Region I, Environmental Protection Agency, J.F. Kennedy Fed. Bldg., Boston MA 02203
(617) 223-6307

Catherine A. Cotter, Lydia N. Wegman; Robert M. Perry, General Counsel
Environmental Protection Agency, Washington DC 20460
(202) 382-4134

Counsel for Intervenor-Respondent
Kenneth N. Tedford, Robert A. Whitehead Jr., Ass't Attorneys General
165 Capitol Ave., Hartford CT 06115
(203) 566-2090

Joined by Friendly and Kaufman, JJ.