WisBar News: Appeals court decides Sierra Club-DNR dispute on permit for coal-fired power plant:

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    Appeals court decides Sierra Club-DNR dispute on permit for coal-fired power plant

    Joe Forward
    Legal Writer

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    May 18, 2010 – On review to the District 4 court of appeals, the Wisconsin Department of Natural Resources (DNR) survived all but one Sierra Club challenge to an air pollution permit for operations at a coal-fired power plant.

    In Sierra Club v. Wisconsin Department of Natural Resources, 2009AP648 (May 13, 2010), the court of appeals upheld as reasonable the DNR’s determinations regarding emissions limits and technology use but held against the DNR with regard to visible emissions standards.

    In September of 2003, the Wisconsin Public Service Corporation (WPSC) applied for an air pollution control permit for operations at Weston 4, a major coal-fired power plant near Wausau. The DNR modified a draft permit in light of public comments, and issued a final permit in October of 2004.

    However, the Sierra Club challenged the adequacy of the permit on several grounds. After a week-long contested case hearing that resulted in more permit modifications, the Sierra Club appealed the modified permit to the Division of Hearings and Appeals, which affirmed. On review, the Dane County Circuit Court also affirmed, and this appeal followed.

    Process for BACT determination

    When an applicant seeks DNR approval for emission sources, like a coal-fired power plant, the applicant must conduct an analysis to determine the best available control technology (BACT) to minimize pollutant emissions.

    Wis. Stat. section 285.01(12) generally defines BACT as “an emission limitation for an air contaminant based on the maximum degree of reduction achievable as specified by the department on an individual case-by-case basis taking into account energy, economic and environmental impacts and other costs related to the source.”

    Defining “achievability,” the appeals court concluded, “is a determination left to the permitting agency because the agency possesses the technical expertise and experience to determine what is achievable at a particular source.”

    Citing a Missouri case, the court noted that achievability is not determined by the “lowest possible emission rate ever achieved in practice.”

    The issue on appeal was whether the DNR’s BACT determinations regarding the emissions limit and control technology for sulfur dioxide, the emissions limit for nitrogen oxide, and the visible emissions standard for opacity were reasonable.

    Standard of review

    The appeals court rejected the Sierra Club’s argument that DNR’s decisions warranted no deference by the appeals court because DNR decisions were based on federal law – the Clean Air Act.

    However, the court noted that Wisconsin’s statute and regulation defining BACT, though largely based on the Clean Air Act, is still state law.

    Interpretation and application of Wis. Stat section 285.01(12) relating to BACT is entitled the “great weight deference,” the court concluded. That is, the DNR’s decisions are upheld unless unreasonable. The DNR’s interpretation of its own regulation − Wis. Admin. Code section NR 405.02(7), which defines BACT in greater detail – is entitled to controlling weight deference, the court concluded. That means the DNR’s interpretation is upheld “if it is reasonable and is not inconsistent with the language of the regulation or clearly erroneous.”

    The BACT determinations

    The Sierra Club argued that the final air pollution permit was flawed in four respects − emissions limit and control technology for sulfur dioxide, the emissions limit for nitrogen oxide, and the visible emissions standard for opacity.

    The sulfur content of coal determines the emission level of sulfur dioxide. The DNR considered two technologies to limit emissions – wet and dry flue gas desulfurization (FGD) systems. The Sierra Club argued that the DNR should have selected the wet FGD system based on efficiency. Noting minimal efficiency differences, the court upheld the DNR’s decision as reasonable.

    The Sierra Club also challenged the permit’s limit on the sulfur content of coal to be burned, asserting this limit is higher than what is achievable. Noting the permit’s rebuttable presumption that WPSC will use low sulfur coal from Wyoming’s Powder River basin, the court also held the sulfur content limit to be reasonable.

    The court also concluded that the DNR’s emissions limit for nitrogen oxide “was based on a reasonable interpretation and application of the definition of BACT” set forth in the applicable statutes, “and “substantial evidence supports this determination.”

    However, the Sierra Club prevailed in challenging the DNR’s failure to set visible emissions standards for opacity – limits on visibility of particulate matter and sulfuric acid mist. The DNR argued that setting limits on the pollutants that make up visible emissions “achieves the same result as establishing a visible emissions standard.”

    But section NR 405.02(7) plainly requires a visible emissions standard, the court concluded, and the “DNR may not interpret its own rules in a manner that disregards the plain meaning of the rules.” The case was remanded for further proceedings.

    By Joe Forward, Legal Writer, State Bar of Wisconsin