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Duquesne Light Co. v. Environmental Protection Agency

as amended september 3 1975.: August 21, 1975.

DUQUESNE LIGHT COMPANY, PENNSYLVANIA POWER COMPANY AND OHIO EDISON COMPANY, PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT



ON PETITION FOR REVIEW OF THE ORDER OF THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY.

Adams, Rosenn and Hunter, Circuit Judges.

Author: Adams

Opinion OF THE COURT

ADAMS, Circuit Judge.

Resolution of this appeal requires us to address two principal issues with respect to the approval by the Administrator of the Environmental Protection Agency of the sulfur oxide emission limitations in the implementation plan adopted by Pennsylvania in response to the Clean Air Act Amendments of 1970:*fn1

(1) Did the Administrator act arbitrarily in concluding that compliance with the challenged emission limitations within the time allowed by the plan is economically feasible for the petitioning utilities' coal-burning electric generating plants through the use of flue gas desulfurization devices?

(2) Did the Administrator act arbitrarily when he concluded that conformity with the sulfur oxide emission limitations by the petitioners' coal-burning generators was technologically feasible?

The Statutory Scheme

Essential to an understanding of the issues in this case is a brief overview of the program established by the 1970 amendments to the Clean Air Act for purging the nation's atmosphere of detrimental amounts of synthetically produced substances. The Administrator of the Environmental Protection Agency (EPA) is directed to fix national primary*fn2 and secondary*fn3 standards governing the permissible concentration in the ambient air throughout the country of each pollutant deemed by the Administrator to have an adverse impact upon the national health or welfare.*fn4

Each state is required to design an air pollution control scheme, called an implementation plan, by which the emissions from existing stationary sources*fn5 of impurities will be controlled at least to the degree necessary to attain the national standards. Thus the extent of the controls to be imposed on different types of polluters so as to achieve the mandated overall level of purity was left, in the first instance, to the states.

Each implementation plan must be submitted to the Administrator. He is to approve or disapprove each plan within four months of its submission. Before sanctioning a plan the EPA must determine, inter alia, that it provides for achieving the primary air quality standards "as expeditiously as practicable but . . . in no case later than three years from the date of approval of such plan."*fn6 This Court has indicated that in deciding whether to approve an implementation plan the agency must review its technological and economic feasibility.*fn7

Upon the Administrator's approval of an implementation plan, he may enforce the plan, presumably already enforceable by the state, as a federal regulation. The Administrator is to notify any person known to be in violation of the applicable implementation plan. If the violation persists more than 30 days after the issuance of a notice of violation, the EPA may enter an order requiring compliance by the polluter, or may bring an action in the district court to enjoin further disobedience. In addition, any person who knowingly violates the provisions of the applicable implementation plan more than 30 days after the issuance of a notice of violation, or who fails to conform to the requirements of a compliance order, is subject to a $25,000 fine or imprisonment.*fn8

Any person aggrieved by the Administrator's action in approving an implementation plan may, within 30 days after the Administrator's approval of the plan, petition the appropriate court of appeals for review of that decision.

With one limited exception,*fn9 the statute provides that "action of the Administrator with respect to which review could have been obtained [in a court of appeals within 30 days after the approval] shall not be subject to judicial review in civil or criminal proceedings for enforcement."*fn10 In Getty Oil Co. v. Ruckelshaus,*fn11 this Court interpreted the statute as barring the courts from entertaining claims regarding the technological or economic infeasibility of an implementation plan after the expiration of the 30 day period.

The Controversy Before The Court

Petitioners - Duquesne Light Co., Pennsylvania Power Co. and Ohio Edison Co. - are electric utility companies operating coal-fired generating plants in Pennsylvania.

The Administrator designated sulfur oxides as a pollutant hazardous to the public health and welfare, and then promulgated primary and secondary ambient air standards regulating the maximum permissible concentration of the sulfur oxides in the atmosphere. Nearly 60% of the sulfur oxides polluting the nation's air, estimates the EPA, result from the generation of electricity.

During December, 1971, Pennsylvania held four days of hearings focused on the control of sulfur oxides. In January of the following year Pennsylvania submitted to the Administrator an implementation plan which provided that, because of their size and location, the coal-burning generators owned by these electric companies must restrict their discharge of sulfur oxides to 0.6 pounds of pollutants per million BTU's of heat input to the combustion equipment.*fn12 On May 31, 1972, the Administrator, without holding any additional hearings, approved the emission limitation.*fn13

The Pennsylvania plan restricts the amount of sulfur oxides which may be emitted from the smokestacks of the generating stations. It does not specify the means by which the emission restrictions must be met. Theoretically the utilities have three alternative methods by which to reduce the volume of sulfur oxides released into the atmosphere: (1) burn low-sulfur coal; (2) obtain high-sulfur coal and clean it before burning it; and (3) burn high sulfur coal and cleanse the exhaust gases through use of flue gas desulfurization devices, commonly referred to as scrubbers. The EPA and the utilities agree that low-sulfur coal is presently scarce and will not be available to satisfy the needs of the utility industry for at least five years. Nor will it be feasible until the 1980's, EPA admits, to clean coal before burning it, because the necessary technology for coal liquification or gasification is not available. The Administrator therefore has predicated his sulfur oxide control strategy on purifying flue gases through the use of scrubbers.

In 1970 Duquesne Light began experimenting with a flue gas desulfurization device for a 400-megawatt generator at its Phillips power station. After an expenditure of approximately $42 million on the project, the Phillips scrubber was not, at the time of the Administrator's decision, operating on a reliable basis. It had been shut down for modifications much of the time since operations had begun.

The three petitioners are joint owners of a new 1650-megawatt coal-burning generating plant at Shippingport, Pa., which is also designed to incorporate flue gas desulfurization equipment. That facility, however, had not reached the operational stage at the time of the EPA's decision.

Because of the high concentration of pollutants in the air in the regions in which the generators operated by these companies are located, conformity with the Pennsylvania implementation plan would require that they - unlike most coal-burning electric companies across the country - install scrubbers on each of their generating plants. Construction of the necessary facilities would cost Duquesne Light an estimated $202 million.*fn14 Annual operating and maintenance expenses for the scrubbers would total $56 million. If Duquesne Light installed all the scrubbers required by the Pennsylvania plan and passed the additional cost on to the consumers, as EPA recommends, an average 23% increase in cost of electric service would result. For customers of Pennsylvania Power the increase in cost is estimated at 34.91%.

Prior Proceedings

Duquesne Light, Pennsylvania Power and Ohio Edison timely petitioned this Court to review the Administrator's initial approval of the Pennsylvania plan. The utilities alleged at that time that the Administrator had not fulfilled certain procedural requirements and asked that the case be remanded to the agency. On January 22, 1973, we granted the motion for a remand without specifying the type of proceedings to be conducted by the EPA. The Administrator then asked the Court for clarification of the order or for a rehearing. After scrutinizing the records of the state proceedings we were not convinced that the utilities had been afforded "a truly meaningful hearing" with respect to the technological and economic feasibility of the plan. In addition, we stated that in the lapse of time since the state hearings, events had occurred which might render the plan obsolete. Accordingly, the Administrator was ordered (a) to suspend enforcement of the plan against these three utilities while they presented their infeasibility claims in the available state administrative and judicial forums or (b) to convene a hearing at which these companies could substantiate their assertions regarding the infeasibility of the plan.*fn15

The EPA elected to conduct a hearing. The utilities were permitted to make written submissions as well as to present oral testimony. Although the hearing schedule suggested by the Court specifically afforded the Commonwealth of Pennsylvania an opportunity to provide the Administrator with comments and information in support of the implementation plan,*fn16 the Commonwealth advised the Administrator that it declined to do so.*fn17 The staff of the EPA thereupon undertook to defend the feasibility of the plan.

On March 15, 1974, the Administrator reaffirmed his approval of the Pennsylvania plan. He concluded that the sulfur oxide emission limitations applicable to these utilities are technologically and economically feasible. His determination relied in large part upon the Report of the EPA Hearing Panel of the National Public Hearings on Power Plant Compliance with Sulfur Oxide Air Pollution Regulations [the Arlington Report]. That report was the product of a special hearing called by the EPA to review nationwide progress in compliance with sulfur oxide emission standards.

As a result of the Administrator's decision, Duquesne Light, Pennsylvania Power and Ohio Edison moved on April 10, 1974 for a second remand to the agency. The utilities argued that although at least some of them had been summoned to present certain evidence to the Arlington panel, the companies had not been parties to the Arlington hearings, and had not fully participated in them. In addition, the power companies asserted that the decision of the Arlington panel had not been filed until after the record of the agency's proceedings with respect to the ...


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