In December 2017, the EPA approved revisions to the Louisiana State Implementation Plan (“SIP”) addressing regional haze. Neither environmental groups—Sierra Club and National Parks Conservation Association—nor affected utility companies—Entergy and Cleco—are satisfied with the EPA’s rule, and they are now petitioning the Fifth Circuit as intervenors on behalf of the EPA. Both sides filed briefs on October 30, 2018.

By way of background, Congress added regional haze provisions to the Clean Air Act (“CAA”) in 1977. The Act requires pollution sources that emit any air pollutant that may reasonably be anticipated to cause or contribute to visibility impairment to operate with the best available retrofit technology (“BART”).

In evaluating BART, the CAA requires states to balance cost with 1) the energy and non-air quality environmental impacts of compliance; 2) existing pollution control technology in use at the source; 3) the source’s remaining useful life; and 4) the visibility improvements that may reasonably be anticipated to result from the use of such technology.

The EPA issued BART Guidelines in 2005. The Guidelines help states determine whether BART applies to a particular source of pollution. In June 2008, Louisiana submitted its first Regional Haze SIP. The EPA did not approve the plan because it relied on the Clean Air Interstate Rule, which was judicially invalidated before the EPA ruled on the plan. The EPA also found deficiencies in BART determinations for four non-electrical generating units.

Louisiana submitted a revised SIP in July 2017, which the EPA approved in December 2017. The revised SIP was based on analysis conducted by the EPA and Entergy. The Fifth Circuit litigation primarily addresses the BART for Entergy’s Nelson power plant and Cleco’s Brame Energy Center, which both emit large amounts of sulfur dioxide.

Entergy persuaded Louisiana to classify low-sulfur coal as the BART for the Nelson plant and dry sorbent injection (“DSI”) as the BART for Brame. The Sierra Club and National Parks Conservation Association, however, argue a dry scrubber is the BART for both plants. They also lament the EPA’s approval of Louisiana’s SIP because it permits status quo pollution control for Nelson and Brame— those plants already use low-sulfur coal and DSI, respectively.

Louisiana’s SIP submittal acknowledges potentially greater visibility benefits from a dry scrubber. Ultimately, however, Louisiana was more persuaded by Entergy’s cost analysis than the EPA’s. For example, while Entergy estimated the cost of low-sulfur coal to be $597/ton, one-eighth the cost of a dry scrubber, EPA estimated it to be $2,957/ton.

As Entergy, Cleco, and Utility Air Regulatory Group explain in their brief supporting their petition for review, “Entergy’s cost estimates were based on information specific to the application of controls to Nelson Unit 6, as compared to EPA’s more generic cost estimates and flawed analysis of Entergy’s past coal purchases.” Further, the dry scrubber “results in additional waste due to spent reagent and has some power demands to run the equipment.”

To prevail in the Fifth Circuit, Sierra Club and National Parks Conservation Association must show the EPA’s decision to approve the SIP was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

The utilities want the Fifth Circuit to overrule the EPA for a different reason. They argue Nelson and Brame are not even subject to BART. They present the merits of their own CAMx modeling as stronger than those of CALPUFF and attack Louisiana’s use of “worst-case scenario” maximum 24-hour actual emissions, rather than average emissions, to determine whether a unit is subject to BART. The CAA requires BART be required for each source that “emits any air pollutant which may reasonably be anticipated to cause or contribute to any impairment of visibility in any such area.”

Sierra Club and National Parks Conservation Association classify the BART coverage question raised by the utilities as an untimely attack on the 2005 BART Guidelines themselves. Since the CAA required challenges to those Guidelines to be filed in the D.C. Circuit within sixty days of publication, Sierra and National Parks Conservation Association argue the challenges are time-barred. Even if the claims are not time-barred, the environmental groups argue the EPA’s use of CALPUFF was proper because the CAA endorses it and “virtually every state” uses it.

Both sides must submit appendices compiling the documents referenced in their respective briefs before the case is formally submitted to the Fifth Circuit. To date, neither side has submitted appendices, which means oral argument is not imminent.

The Fifth Circuit’s resolution will test the degree of deference the CAA’s regional haze regulations provide states when evaluating BART. If Sierra Club and National Parks Conservation Association persuade the Fifth Circuit that status quo pollution control is unacceptable, they could secure leverage in future litigation and notice and comment periods. The next SIPs are due in 2021, and then 2028 and every ten years thereafter.