A federal appeals court last week vacated the Environmental Protection Agency’s (EPA’s) Sept. 15, 2010 disapproval of Texas’ State Implementation Plan (SIP), saying the federal agency overreached in its interpretation of portions of Texas state rules used to implement the Clean Air Act.

In the case, Luminant Generation Co. v. EPA, 5th Cir. No. 10-60891, the U.S. Court of Appeals for the Fifth Circuit court was asked to review the EPA’s disapproval more than three years after the time within which it was statutorily required to act on three rules promulgated by Texas: Texas’s Standard Permit for Pollution Control Projects (PCP) and two general standard permit provisions.

“At issue was the portion of Texas’ standard air permit that addresses pollution control projects (PCP), which are projects that reduce a plant’s pollution on a voluntary basis and consequently allow the plant to qualify for a less stringent version of the [Clean Air Act’s] New Source Review (NSR) program,” explained law firm Van Ness Feldman. “After a long delay, the EPA denied the PCP section of Texas’ program, arguing that it was inconsistent in its application and could not ensure that all projects were treated in the same manner.”

“Pursuant to Texas’s duty under the Clean Air Act to adopt and administer a statewide plan for implementing federal air quality standards, those regulations provide for a standardized permit for certain projects that reduce or maintain current emissions rates. Because the EPA had no legal basis on which to disapprove those regulations, we vacate the agency’s disapproval of Texas’s regulations and remand with instructions,” wrote Circuit Judge Jennifer W. Elrod in the court’s opinion.

The court concluded that the EPA did not disapprove the PCP Standard Permit based on the exclusive, applicable factors for approving or denying proposed SIP revisions expressly set forth in the Clean Air Act. Instead, the agency improperly disapproved the PCP Standard Permit “based on its purported nonconformity with three non-statutory standards that EPA created out of whole cloth,” the court said.

In remanding the decision to the EPA for reconsideration, the court also noted that it is “difficult to conceive … how [the EPA] could disapprove the PCP Standard Permit under the appropriate statutory factors.”

Sources: POWERnews, Van Ness Feldman, U.S. Court of Appeals for the Fifth Circuit