Ninth Circuit: EPA rule 'invalid,' but work on plant must continue

Jessica M. Karmasek Aug. 7, 2012, 2:40pm

Ninth Circuit Chief Judge Alex Kozinski

SAN FRANCISCO (Legal Newsline) - A federal appeals court has remanded without vacatur a case over a federal Environment Protection Agency final rule, so that construction of power plant can proceed without delay.

In its July 26 ruling, the U.S. Court of Appeals for the Ninth Circuit said the "delay" and "trouble" vacatur would cause are "severe."

"Sentinel is scheduled to come on line in November, but vacatur would pave the road to legal challenges to Sentinel's construction that could well delay a much needed power plant," according to the Ninth Circuit's per curiam opinion.

The federal Clean Air Act requires the EPA to set national ambient air quality standards for air pollutants. States are responsible for developing plans to implement those standards.

The states' plans, and any revisions, must be approved by the EPA.

As part of the plans, states must establish a permitting program for new polluters in areas that don't meet the EPA's standards. Those programs must ensure any emission increases be offset by corresponding emission reductions.

The South Coast Air Quality Management District regulates the air quality in the South Coast Air Basin and the Riverside portions of the Salton Sea Air Basin.

Because these areas don't meet the EPA's air quality standards, the district is responsible for developing a plan that ensures new emission increases are offset by reductions.

When reductions exceed increases, the excess reductions take the form of "credits," which are traded in an open market to entities seeking to meet their offset requirements.

The district maintains a stock of these credits in an internal bank for distribution to entities like schools and hospitals.

In 2009, California passed Assembly Bill 1318, which requires the district to transfer credits to a soon-to-be completed power plant named Sentinel.

Since the bill changed the state plan, the district sought the EPA's approval.

The petitioners -- California Communities Against Toxics and Communities for a Better Environment -- challenge the EPA's final rule approving the district's revision, alleging that the EPA committed "procedural errors" during the rulemaking process and that the substance of the revised state plan violates the Clean Air Act.

The two environmental groups and the EPA have already agreed that the case should be remanded.

The only dispute is whether vacatur is appropriate.

The Ninth Circuit agreed that the agency's final rule is invalid. However, it noted, that is not the end of the analysis.

"In considering whether vacatur is warranted, we must balance these errors against the consequences of such a remedy," the court explained in its eight-page ruling.

"Without Sentinel, the region might not have enough power next summer, resulting in blackouts. Blackouts necessitate the use of diesel generators that pollute the air, the very danger the Clean Air Act aims to prevent."

Stopping construction of the power plant also would be "economically disastrous," the Ninth Circuit said.

"This is a billion-dollar venture employing 350 workers," it wrote. "In addition, vacatur would likely require the California Legislature to pass a new bill to allow the district to transfer credits from its internal bank to Sentinel, which would create needless and duplicative legislative effort.

"While we have only ordered remand without vacatur in limited circumstances, if saving a snail warrants judicial restraint, so does saving the power supply."

The Ninth Circuit noted that its decision does not authorize commencement of Sentinel's operation without a new and valid EPA rule in place.

From Legal Newsline: Reach Jessica Karmasek by email at

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