Federal Court Denies Review of Okla. Regional Haze EPA Case

A divided three-judge panel of the 10th U.S. Circuit Court of Appeals on Friday rejected Oklahoma State’s challenge to the Environmental Protection Agency’s (EPA’s) implementation of a regional haze rule to limit emissions from power plants in the state.

Oklahoma’s Attorney General Scott Pruitt—on behalf of the state, Oklahoma’s largest generator, Oklahoma Gas & Electric (OG&E), and Oklahoma Industrial Energy Consumers—had petitioned the Denver appellate court in April 2012 to stay a final regional haze rule promulgated in December 2011 by the EPA under the Clean Air Act. The 10th Circuit in June 2012 granted a request by Oklahoma for a stay on the final rule, but the court panel’s 2–1 decision on Friday lifts that stay order.

Oklahoma argued that the agency usurped the state’s authority when it rejected a State Implementation Plan (SIP) to limit emissions of sulfur dioxide (SO2) and replaced it with its own more stringent federal implementation plan (FIP). The FIP imposes stricter SO2 limits on six Oklahoma emission sources, including three coal-fired plants: two owned by OG&E and one by American Electric Power (AEP).

The OG&E-affected units are Units 4 and 5, each 500 MW, at the Muskogee plant, near Muskogee, Okla., and Units 1 and 2, each 500 MW, at the Sooner Generating Station, near Red Rock, Okla. AEP’s Northeastern plant is near Oologah. Last year, AEP’s Public Service Company of Oklahoma (PSO) agreed to retire two coal-fired power plants over the next 14 years under an agreement with the EPA, Oklahoma State, and the Sierra Club.

But writing for the court’s majority on Friday, Chief Judge Mary Beck Briscoe rejected claims that the EPA "impermissibly rejected" the state’s plan to limit SO2 emissions. "We conclude that the EPA has authority to review the state’s plan and that it lawfully exercised that authority in rejecting it and promulgating its own," she wrote.

In a five-page dissenting opinion, however, Judge Paul Kelly Jr. said he disagreed with respect to whether certain EPA actions were arbitrary and capricious, specifically as they concerned the EPA’s calculations of baseline emissions and its determination regarding the technical feasibility of smaller scrubbers on which it based its cost/benefit analysis. "The EPA rejected Oklahoma’s evidentiary support with no clear evidence of its own to support its contrary conclusion," Judge Kelly wrote. "Usually the court grants deference

to the EPA’s technical determinations. The EPA deserves no such deference, however, where it does not support a conclusion contradicting Oklahoma’s first, reasonable, detailed technical conclusion."

Oklahoma Attorney General Scott Pruitt expressed disappointment with the court’s 2-1 decision on Friday, but he noted the state was reviewing the decision and considering its options. "We will continue to fight to preserve the ability of Oklahoma stakeholders to create an Oklahoma solution and to protect Oklahoma consumers from excessive and unnecessary utility costs," he said.

The case is State Of Oklahoma vs. EPA (No. 12-9526).

Sources: POWERnews, 10th U.S. Circuit Court of Appeals, EPA

Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)

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