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Powder River Basin Resource Council v. Wyoming Dep't of Environmental Quality

March 5, 2010

POWDER RIVER BASIN RESOURCE COUNCIL AND SIERRA CLUB, APPELLANTS (PETITIONERS),
v.
WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, AND BASIN ELECTRIC POWER COOPERATIVE, APPELLEES (RESPONDENTS).



Rule 12.09(b) Certification from the District Court of Laramie County The Honorable Edward L. Grant, Judge.

The opinion of the court was delivered by: Kite, Justice.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

[¶1] The Wyoming Department of Environmental Quality (DEQ) issued an air quality permit to Basin Electric Power Cooperative (Basin Electric) for a new coal-fired electric power plant, called the Dry Fork Station, to be built in Wyoming‟s Powder River Basin. The Powder River Basin Resource Council and the Sierra Club (collectively the PRBRC) challenged that air quality permit before the Wyoming Environmental Quality Council (Council). After hearings on the PRBRC‟s different claims, the Council upheld the DEQ‟s issuance of the permit. The PRBRC appealed the Council‟s decision to the district court, which certified the appeal directly to this Court pursuant to W.R.A.P. 12.09(b). The Northern Cheyenne Tribe was granted leave to file an amicus curiae brief. We will affirm the issuance of the air quality permit.

ISSUES

[¶2] The PRBRC presents these issues for our consideration:

1. Whether the Wyoming Environmental Quality Council ("Council") and the Wyoming Department of Environmental Quality ("DEQ") violated the law by authorizing construction of the Dry Fork Station coal-fired power plant despite modeled violations of Class I air quality standards at the Northern Cheyenne Indian Reservation;

2. Whether the Council and DEQ violated the law by finding that DEQ was not required to consider more efficient supercritical technology as part of its best available control technology ("BACT") analysis for the Dry Fork Station and that the permit applicant alone defines the emission source DEQ may consider; and

3. Whether the Council and the DEQ violated the law by finding that DEQ did not have to consider greenhouse gas emissions as part of the BACT analysis for the Dry Fork Station.

FACTS

[¶3] Because the facts in this case are largely undisputed, we will present a very general background here, and provide more detailed facts as they arise in the discussion below. On November 10, 2005, Basin Electric submitted an application to the DEQ for an air quality permit for the Dry Fork Station, a new 422 megawatt coal-fired electric power plant proposed to be constructed near the Dry Fork coal mine, approximately seven miles north of Gillette, Wyoming. To obtain this permit, Basin Electric was required to demonstrate, among other things, that emissions from Dry Fork will not cause significant deterioration of existing air quality, and the power plant will use the best available control technology for each regulated pollutant.

[¶4] The DEQ reviewed the permit application, asking Basin Electric to provide additional information on several issues. The DEQ also considered public comments from interested parties, including the PRBRC and the Northern Cheyenne Tribe. The DEQ issued the permit on October 15, 2007. The PRBRC appealed to the Council. The Council granted a motion to dismiss the PRBRC‟s claim regarding greenhouse gases (listed above as Issue 3). It granted motions for summary judgment on PRBRC‟s claims regarding increment consumption and best available control technology (listed above as Issues 1 and 2). The PRBRC‟s appeal has now made its way before us for review, and the amicus curiae brief filed by the Northern Cheyenne Tribe supports the PRBRC on Issue 1.

STANDARD OF REVIEW

[¶5] Our standard of review for appeals from administrative agency decisions is governed by the Wyoming Administrative Procedure Act, which provides in pertinent part:

To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall: . . . .

(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:

(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

(B) Contrary to constitutional right, power, privilege or immunity;

(C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;

(D) Without observance of procedure required by law; or

(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

Wyo. Stat. Ann. § 16-3-114 (LexisNexis 2007). As we have further explained:

When reviewing a case certified to us from district court pursuant to W.R.A.P. 12.09(b), we apply the appellate standards applicable to a reviewing court of the first instance. Williams Prod. RMT Co. v. State Dep't of Revenue, 2005 WY 28, ¶ 7, 107 P.3d 179, 182-183 (Wyo. 2005). We review factual determinations for substantial evidence, meaning we consider whether there is relevant evidence in the entire record which a reasonable mind might accept in support of the agency‟s conclusions. Dale v. S & S Builders, LLC, 2008 WY 84, ¶ 21, 188 P.3d 554, 561 (Wyo. 2008). Importantly, our review of any particular decision turns not on whether we agree with the outcome, but on whether the agency could reasonably conclude as it did based upon all of the evidence presented. Id., ¶ 23, 188 P.3d at 561. . . . We review an agency‟s conclusions of law de novo, and will affirm an agency‟s legal conclusion only if it is in accordance with the law. Dale, ¶ 27, 188 P.3d at 562.

Kennedy Oil v. Dep't of Revenue, 2008 WY 154, ¶ 7, 205 P.3d 999, 1002 (Wyo. 2008).

[¶6] While the interpretation of statutes and their implementing regulations is a question of law that we review de novo , it is also settled that we defer to an agency‟s interpretation of its own rules and regulations unless that interpretation is clearly erroneous or inconsistent with the plain language of the rules. Pinther v. Wyoming Dep't of Admin. and Info. , 866 P.2d 1300, 1302 (Wyo. 1994); RME Petroleum Co. v. Wyoming Dep't of Revenue , 2007 WY 16, ¶ 44, 150 P.3d 673, 689 (Wyo. 2007). Accordingly, when we review the DEQ‟s interpretations of regulations promulgated under Wyoming‟s Environmental Quality Act, we apply the same standard the Council was required to use: we accept those interpretations unless they are clearly erroneous or inconsistent with the plain language of the rules.

DISCUSSION

[¶7] The DEQ administers and enforces the Wyoming Environmental Quality Act, Wyo. Stat Ann. §§ 35-11-101 through 35-11-1904 (LexisNexis 2009). The DEQ‟s Air Quality Division is responsible for the air quality program, and it operates under the Wyoming Air Quality Standards and Regulations (WAQSR). The federal Environmental Protection Agency has approved of Wyoming‟s air quality regulatory program, 40 C.F.R. part 52, subpart ZZ, and so the DEQ is the primary regulatory authority for air quality in Wyoming. See 42 U.S.C. § 7410(a). However, because the state program is intended to be compatible with, and at least as stringent as, the federal Clean Air Act, federal precedent and regulatory guidance is persuasive authority in Wyoming air quality cases.

Issue 1. Increment Protection

[¶8] Before reaching the heart of this issue, it is helpful to review the applicable law and introduce some key terms. Wyoming‟s Environmental Quality Act states that "No person shall cause, threaten or allow the discharge or emission of any air contaminant in any form so as to cause pollution which violates rules, regulations and standards adopted by the council." Section 35-11-201. The rules and regulations require the DEQ to review permit applications for proposed major sources of air emissions. It issues a permit only if the proposed source demonstrates that its emissions will not cause significant deterioration of ambient air quality. 6 WAQSR §§ 2 and 4.

[¶9] More specifically, the regulations provide that the DEQ‟s review must include analysis of the predicted impact of the allowable and secondary emissions from the stationary source. . . . Such analysis shall identify and quantify the impact on the air quality in the area of all emissions not included in the baseline concentrations including, but not limited to, those emissions resulting from the instant application and all other permits issued in the area. The purpose of this analysis is to determine the total deterioration of air quality from the baseline concentrations. . . . A permit to construct . . . shall be issued only . . . if the predicted impact (over and above the baseline concentration) of emissions defined above is less than the maximum allowable increment shown in Table 1 for the classification of the area in which the impact is predicted.

6 WAQSR § 4(b)(i)(A)(I). To predict whether the impacts of a proposed source‟s emissions will exceed the increments shown in Table 1, one tool available to the DEQ is a computer model that estimates what the impacts will be. The results of the computer model are based on information that includes the emissions from the proposed source and other sources in the area, air dispersion over time and distance, varying terrain, and meteorological data such as wind direction, wind speed, and temperatures.

[¶10] The DEQ‟s review includes two separate phases to determine whether emissions from the proposed source and other area sources will cause or contribute to increment exceedances. In the first phase, which we will refer to as the screening phase, the computer model is run to estimate the impacts of emissions from the proposed source alone. Results from this model run are compared to Significant Impact Levels, which are a very small percentage (generally 4%) of the increments. If the computer model indicates that the estimated impacts of emissions from the proposed source alone are below the Significant Impact Levels, then the DEQ can determine that the cumulative impacts of emissions from the proposed source and other area sources will not exceed the increments, and no further analysis is necessary. In this case, the computer model indicated that the estimated impacts of emissions from Dry Fork were below the Significant Impact Levels for particulate matter and nitrogen dioxide, but above the Significant Impact Levels for sulfur dioxide. The DEQ therefore required Basin Electric to proceed to the second phase of review for sulfur dioxide emissions.

[¶11] In the second phase, which we will refer to as the cumulative phase, the computer model is run to estimate the impacts of the combined emissions from the proposed source along with emissions from other area sources. The model results are compared to the increments. As the regulation provides, a permit is issued for the proposed source only if the estimated impacts are less than the maximum allowable increments.

[¶12] The other area sources of particular significance in this case are the coal-fired electric power plants known as Colstrip Units 3 and 4, located in Montana approximately 120 miles north of the proposed Dry Fork location. The Colstrip Units are only about fifteen miles from the Northern Cheyenne Indian Reservation (Reservation). The Reservation is a Class I area which, in air quality terms, is an area where existing air quality is considered pristine. See 42 Fed. Reg. 40,695 (Aug. 5, 1977). Air quality in Class I areas is more stringently protected than air quality in Class II areas. For example, the 24-hour increment for sulfur dioxide is 5 micrograms per cubic meter in Class I areas, and 20 micrograms per cubic meter in Class II areas. 6 WAQSR § 4(b)(i)(A)(I), Table 1. Given the proximity of the Colstrip Units to the Reservation, their emissions can have a significant influence on the ...


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