ELR Citation: ELR 21217
No(s). 93-1197 (D.C. Cir. Jun 23, 1995)

The court upholds U.S. Environmental Protection Agency (EPA) regulations under Clean Air Act (CAA) §404(d) that base the calculation and allocation of extension allowances for sulfur dioxide emissions under the acid rain program on a utility unit's actual emissions data for 1988-1989. The court rejects petitioner utility's arguments that the CAA obliges EPA to adjust a unit's 1988-1989 emissions data to account for an unexpected prolonged outage during those years. Applying standards under the Administrative Procedure Act and Chevron U.S.A., Inc. v. Natural Resources Defense Council, 14 ELR 20507 (U.S. 1984), the court first holds that the language of §404(d), which provides that extension allowances are to be allocated in part on the "average annual emissions in calendar years 1988 and 1989," cannot be read to compel EPA to adjust emissions data. The provision does not define "average annual emissions," nor does it explicitly authorize or prohibit adjustment of a unit's 1988-1989 emissions data for any reason including an unexpected prolonged outage. The court holds that the statute is silent on the issue and upholds, as a permissible construction of the statute, EPA's decisions not to adjust emissions data. EPA reasonably concluded that allowing adjustments to emissions data could significantly reduce the incentives to participate in the voluntary extension allowance program. The court rejects petitioner's argument that §404(d)(3) indicates that Congress intended EPA to base its extension allowance calculations on emissions data adjusted to reflect "normal" operating circumstances. The provision does not refer to outages, emissions, or adjustments, and relates only to whether a utility qualifies for the extension allowance program, not to the allocation of extension allowances to utilities that qualify for, and participate in, the program. The court notes that Congress did not need to specify "average annual actual emissions" for the court to uphold EPA's decision. If Congress had intended EPA to use only emissions data that took into account the time a unit was not in operation in 1988 or 1989, it could have expressly mandated that extension allowances be calculated according to adjusted data as it did in determining fuel consumption during the baseline years under §404.

Counsel for Petitioner
Stephen E. Roady
Andrews & Kurth
1701 Pennsylvania Ave. NW, Ste. 200, Washington DC 20006
(202) 662-2700

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

Before: SILBERMAN, SENTELLE, and HENDERSON, Circuit Judges.