United States of America v. Ameren Missouri
MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Ameren's Motion for Summary Judgment No. 1: On the Missouri SIPs Construction Permitting Rule # 539 is DENIED. Signed by District Judge Rodney W. Sippel on 1/21/16. (ARL)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
UNITED STATES OF AMERICA,
Case No. 4:11 CV 77 RWS
MEMORANDUM AND ORDER
Plaintiff the United States of America, acting at the request of the Administrator of the
United States Environmental Protection Agency (“EPA”), filed this suit against defendant
Ameren Missouri (“Ameren”) on January 12, 2011. In its complaint, EPA alleges that Ameren
committed various violations of the Clean Air Act, 42 U.S.C. § 7401 et seq. (“CAA”), the
Missouri State Implementation Plan (“SIP”), and Ameren’s Rush Island Plant Title V Permit,
when it allegedly undertook major modifications at the Rush Island Plant in Festus, Missouri
without obtaining the requisite permits.
The parties have filed ten separate motions for summary judgment and partial summary
judgment. In this memorandum and order, I will address the only motion for full summary
judgment, Ameren’s Motion for Summary Judgment No. 1: On the Missouri SIP’s Construction
Permitting Rule. In this motion, Ameren asks me to find that, in addition to proving that Ameren
undertook “major modifications” as defined by the federal regulations, EPA must also prove that
Ameren undertook “modifications” as defined by the Missouri SIP. Despite their semantic
similarity, “modification” and “major modification” appear to have different meanings.
According to Ameren, to be a “modification” under the Missouri SIP, the project must cause an
increase in potential emissions; to be a “major modification” the project must cause an increase
in actual emissions.
I heard oral argument on this motion and have carefully considered the arguments and
authorities provided in the parties’ briefs. For the reasons stated below, I will deny Ameren’s
motion for summary judgment.
A. Factual Allegations
EPA filed this lawsuit against Ameren asserting various violations of the Clean Air Act’s
Prevention of Significant Deterioration program, Title V of the CAA, the Missouri SIP, and
Ameren’s Title V permit for its Rush Island Plant. EPA seeks equitable and injunctive relief.
EPA makes the following factual allegations in its Third Amended Complaint.
Coal-fired electric units utilize boilers that burn coal to generate heat that converts water
into steam. The steam in turn spins a generator to produce electricity. Major components of a
coal-fired boiler include the superheater, economizer, reheater, lower slope tubes, and air
preheater. When a major component breaks down, it causes the unit to be taken out of service
for repairs (known as a “forced outage”). Forced outages prevent the unit from generating
electricity. Replacing worn-out major components that cause forced outages improve the unit’s
availability to operate for more hours, increase capacity and/or efficiency, and cost-effectiveness
of operations. As a result, when worn-out major components are replaced, increased amounts of
coal might be burned and more annual pollution is emitted from the unit’s smokestack.
Units 1 and 2 of the Rush Island Plant are coal-fired electric generating units that operate
nearly continuously when available. EPA alleges that Ameren performed major modifications
on Unit 1 from approximately February 2007 to May 2007 (“2007 Project”) when it replaced the
Unit’s economizer, reheater, lower slope tubes, and air preheater. EPA also alleges that Ameren
performed major modifications on Unit 2 from approximately January 2010 to April 2010
(“2010 Project”) when it replaced the Unit’s economizer, reheater, and air preheater.
EPA asserts violations of PSD requirements for both of the projects. EPA alleges that
each major modification enabled and caused the affected unit to burn more coal and release
greater amounts of sulfur dioxide (SO2) by increasing the capacity of the unit to burn more coal
per hour of operation, increasing the availability of the unit to operate for more hours, and/or
increasing the efficiency of the unit to operate more cost-effectively and for more hours of
operation and/or at higher levels of operation. EPA alleges, for each project, that Ameren
violated the PSD requirements in the CAA and the Missouri SIP because it (1) did not obtain a
PSD permit for construction and operation of the modified unit; (2) did not undergo a BACT
determination; (3) did not install BACT for control of SO2 emissions; (4) failed to operate
BACT for control of SO2 emissions; (5) failed to operate in compliance with BACT emissions
limitations; and (6) operated the units after undergoing an unpermitted major modification.
EPA also alleges that Ameren violated Title V of the CAA because Ameren failed to
submit an accurate and complete Title V permit application and by commencing major
modifications at Units 1 and 2 without obtaining a PSD permit.
B. Statutory and Regulatory Background
1. The Prevention of Significant Deterioration Program
The factual allegations underlying this lawsuit arise out of the CAA’s Prevention of
Significant Deterioration (“PSD”) program and the related regulations. The United States Court
of Appeals for the Eighth Circuit has exhaustively examined the applicable statutory and
Congress enacted the Clean Air Act Amendments of 1970 seeking to
guarantee the prompt attainment and maintenance of specified air quality
standards. To that end, it directed EPA to devise National Ambient Air Quality
Standards (NAAQS) limiting various pollutants, which the States were obliged to
implement and enforce.
A central part of the CAA's regulatory scheme was the New Source
Performance Standards (NSPS) program, which required EPA to develop
“technology-based performance standards” designed to limit emissions from
major new sources of pollution. “New sources” include both newly constructed
facilities and those that have been modified such that their emissions increase. It
is unlawful for any owner or operator of any new source to operate such source in
violation of applicable performance standards.
The Supreme Court has pointed out that the NSPS program did too little to
achieve the ambitious goals of the 1970 amendments. Merely setting emissions
limits failed to improve air quality in those areas that had already attained the
minimum standards of the NAAQS because polluters had no incentive to diminish
emissions below the established limits. Congress therefore amended the CAA
again in 1977 to add the “Prevention of Significant Deterioration” (PSD)
program, which seeks to ensure that the “air quality floor” established by the
NAAQS does not in effect become a ceiling.
Under the PSD program, no major emitting facility . . . may be constructed
or modified unless it meets certain preconditions. Among the preconditions
relevant here are that the facility must obtain a permit setting forth applicable
emission limitations, and that it must be subject to “best available control
technology” (BACT). BACT, despite what the term implies, is not a particular
type of technology. Rather, it is an emission limitation based on the maximum
degree of reduction of each pollutant subject to regulation which the permitting
authority, on a case-by-case basis, taking into account energy, environmental, and
economic impacts and other costs, determines is achievable for the facility in
Sierra Club v. Otter Tail Power Co., 615 F.3d 1008, 1011-12 (8th Cir. 2010) (internal citations
and quotations omitted).
The PSD program’s central provision as stated in the CAA is worth re-emphasizing. It
provides that “[n]o major emitting facility . . . may be constructed in any area to which [the PSD
provisions] appl[y] unless” various requirements are met. 42 U.S.C. § 7475(a). Under this
provision, “[t]he term ‘construction’ … includes the modification (as defined in Section 7411(a)
of this title) of any source or facility.” 42 U.S.C. § 7479(2)(C) (emphasis added). Section
7411(a) defines the crucial term “modification” as “any physical change in, or change in the
method of operation of, a stationary source which increases the amount of any air pollutant
emitted by such source or which results in the emission of any air pollutant not previously
emitted.” 42 U.S.C. § 7411(a)(4).
EPA promulgated regulations to implement the CAA’s PSD program in 1978 and
significantly revised them in 1980, 1992, and 2002. Each of these revisions focused, in part, on
the difference between measuring emissions increases based on potential emissions, versus
measuring actual emissions increases. The difference between using a test focused on potential
emissions and a test focused on actual emissions has important practical consequences. Potential
emissions, or in other words, a unit’s maximum design capacity, are measured by the amount of
emissions that a unit could emit if it were running at full design capacity all day every day.1
However, sources of pollution, and utilities in particular, do not usually run at full capacity all
day every day. This occurs for many reasons, most commonly because of unit age or
breakdowns. Under an actual emissions analysis, if a plant that is not running at full capacity
pre-project undergoes repairs that enable it to operate at closer to full capacity and/or for more
hours post-project, and therefore emit significantly more pollution, the project would be subject
to the PSD rules. That is so even though the unit’s maximum capacity might not have increased.
Under this same scenario, however, if the test focused on potential emissions, a source would not
be required to obtain a PSD permit.
In Alabama Power Co. v. Costle, 636 F.2d 323, 399-400 (D.C. Cir. 1979),2 the United
For example, if a unit is designed with a capacity to emit 10 tons of sulfur dioxide, and undergoes modifications to
increase its capacity to be able to emit 20 tons of sulfur dioxide, its potential emissions would increase.
Section 307(b) of the Clean Air Act grants the D.C. Circuit exclusive jurisdiction to decide challenges to EPA rules
with nationwide applicability. 42 U.S.C. 7607(b); see 67 Fed. Reg. at 80,244 (Dec. 31, 2002).
States Court of Appeals for the D.C. Circuit heard a challenge to the 1978 rules. Under the 1978
rules, to determine whether a “major modification” would occur, operators were required to use a
potential-to-potential test to calculate whether a project would increase potential emissions by at
least a minimum threshold, was permissible. Id. at 399-400. The Alabama Power court found
that the CAA’s statutory definition of “modification,” covering “any physical change . . . ,”
indicated that Congress intended that the PSD program have broad applicability. Id. at 399-400
(emphasis added). Because of this, the court reasoned, EPA only had “discretion, in
administering the statute’s ‘modification’ provision, to exempt from PSD review some emission
increases on grounds of de minimis or administrative necessity.” Id. at 400. By limiting PSD
review to modifications that increase potential emissions by at least a minimum threshold, EPA
was essentially exempting from review many modifications that increased the source’s actual
emissions. The Alabama Power court found that such a provision unreasonably departed from
the CAA’s broad provisions, and it struck down EPA’s definition of “major modification.” Id.
In response to the Alabama Power decision, EPA revised the PSD rules in 1980 to
include a new definition of “major modification.” Under the 1980 definition, which remains the
standard today, a “major modification” involves two criteria: (1) there must be a physical change
or change in method of operation that (2) would result in a significant net emissions increase.
40 C.F.R. § 52.21(b)(2). As EPA explained in promulgating the 1980 revisions, the new
definition of “major modification” focuses on actual, rather than potential, emissions. See 45
Fed. Reg. 52,680, 52,700 (Aug. 7, 1980).3 Under this new definition, the test to be employed in
As EPA explained when it promulgated the final 1980 rule:
The Following the lead of the [Alabama Power] court, EPA has also shifted the focus of its regulatory
definitions from "potential to emit" to "actual emissions." For both PSD and nonattainment purposes, a
"major modification" is now any significant "net emissions increase" at a major stationary source that
results from certain changes. "Net emissions increase" is, in turn, roughly any net increase in "actual
emissions." Not only are those definitions consistent with the court's view of section 111(a)(4), but they
also avoid the "paper offset" problem described above, thereby better serving PSD and nonattainment
determining whether a major modification would occur was an actual-to-potential test, which
compared actual baseline emissions to future potential emissions. 45 Fed Reg. at 52,680; see
also Environmental Defense et al. v. Duke Energy Corp., 549 U.S. 561, 577-78 (2007) (“Duke
In 1990, the PSD rules came under scrutiny again, this time by the United States Court of
Appeals for the Seventh Circuit in Wisconsin Electric Power Co. v. Reilly, 893 F.2d 901 (7th Cir.
1990) (“WEPCO”). In WEPCO, the court held, in part, that an actual-to-potential test was not
supported by the regulations for an existing source of emissions because it unrealistically
assumed continuous operations post-project. Id. at 917-18. In 1992, in response to WEPCO, the
EPA amended the PSD rules again. Under the 1992 revisions, EPA required the use of an
actual-to-projected-actual test. 56 Fed. Reg. 27,630, 27,633 & n.10 (June 14, 1991); see also 57
Fed. Reg. at 32,323. The actual-to-projected actual test requires sources to compare actual
baseline emissions to projected actual emissions post-project. This is the test that remains the
standard today and was the standard at the time of Ameren’s alleged violations. 67 Fed. Reg. at
80,186, 80,275 (Dec. 31, 2002).
EPA amended the PSD rules again in 2002, but the 2002 amendments did not change the
requirement that operators apply an actual-to-projected actual test as relevant here. 67 Fed. Reg.
80,186, 80,275 (Dec. 31, 2002). Notably, in 2005, the D.C. Circuit reviewed a challenge to
EPA’s 2002 PSD rule in New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005). In its opinion, the D.C.
Circuit emphasized numerous times that the CAA itself requires emissions increases to be
measured using actual emissions. The court reasoned that “the plain language of the CAA
indicates that Congress intended to apply NSR to changes that increase actual emissions instead
45 Fed. Reg. at 52,700.
of potential or allowable emissions,” that “EPA lacks authority to promulgate [a contrary
provision],” and that the CAA “unambiguously defines ‘increases’ in terms of actual emissions.”
Id. at 39, 40.
The New York v. EPA Court also specifically considered industry’s argument that
individual states should be free to allow sources to use a baseline other than the actual emissions
baseline as required by EPA’s PSD rules. Id. at 21. The court rejected that argument,
concluding that “[w]hile states are responsible for writing SIPs, the Act gives EPA responsibility
for developing basic rules for the NSR program, a responsibility that clearly includes choosing a
methodology for calculating baseline emissions.” Id. (internal citation omitted).
2. Missouri’s State Implementation Plan
“The PSD program is primarily implemented by the states through “state
implementation plans” (“SIPs”). States have broad discretion in designing their SIPs, but
the plans must include certain federal standards and are subject to EPA review and
approval.” Sierra Club, 615 F.3d at 1011-12 (internal citations and quotations omitted).
In 2006, Missouri adopted and incorporated by reference EPA’s PSD rules, set forth at 40
C.F.R. § 52.21, directly into the Missouri SIP, which is part of Missouri Rule 10 C.S.R.10-6.060.
EPA subsequently approved the Missouri SIP. 47 Fed. Reg. 26,833.
3. The Title V Program
In addition to alleging violations of the CAA’s PSD program, EPA also alleges that
Ameren has violated Title V of the CAA. The Title V program is an operating permit program
requiring covered sources of pollution to obtain permits for source operation. 42 U.S.C. §§ 7661
et seq.; 40 C.F.R. Part 70. As the Eighth Circuit has described:
In 1990 Congress again amended the CAA to require each covered facility
to obtain a comprehensive operating permit setting forth all CAA standards
applicable to that facility. These “Title V” permits do not generally impose any
new emission limits, but are simply intended to incorporate into a single
document all of the CAA requirements governing a facility. Similar to other
CAA programs, Title V is implemented primarily by the states under EPA
oversight. In states with EPA approved programs, Title V permits are issued by
the state permitting authority, but are subject to EPA review and veto.
Sierra Club, 615 F.3d at 1012 (internal citations and quotations omitted). Under Title V, major
sources are prohibited from operating without a Title V permit and from operating in
contravention of any term or condition of a permit. 42 U.S.C. §§ 7661a(a).
Missouri’s operating permit program under Title V of the CAA was also approved by the
EPA and is codified at 10 C.S.R. 10-6.065 and incorporated into the Missouri SIP.
Summary judgment is appropriate if the evidence, viewed in the light most favorable to
the nonmoving party, demonstrates that there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law. Lynn v. Deaconess Medical Center,
160 F.3d 484, 486 (8th Cir. 1998) (citing Fed. R. Civ. P. 56(c)). The party seeking summary
judgment bears the initial responsibility of informing the court of the basis of its motion and
identifying those portions of the affidavits, pleadings, depositions, answers to interrogatories,
and admissions on file which it believes demonstrates the absence of a genuine issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When such a motion is made and
supported by the movant, the nonmoving party may not rest on his pleadings but must produce
sufficient evidence to support the existence of the essential elements of his case on which he
bears the burden of proof. Id. at 324. In resisting a properly supported motion for summary
judgment, the plaintiff has an affirmative burden to designate specific facts creating a triable
controversy. Crossley v. Georgia-Pacific Corp., 355 F.3d 1112, 1113 (8th Cir. 2004).
Ameren argues that the Missouri SIP requires EPA to prove that the challenged projects
were both “major modifications,” meaning the projects would cause significant increases in
actual emissions, and “modifications,” meaning the source’s potential emissions would
significantly increase. As EPA has never alleged that the projects increased the units’ potential
emissions, Ameren argues that it is entitled to full summary judgment.4
Ameren’s argument is based on language it finds in Section (1), Applicability, of the
Missouri SIP, which governs all of the state’s air quality construction permit programs, of which
the PSD program is one subsection. This general Applicability section of the Missouri SIP
provides, in relevant part:
10 C.S.R. 10-6.060 Construction Permits Required
PURPOSE: This rule defines sources which are required to obtain permits
to construct. It establishes requirements to be met prior to construction or
modification of any of these sources . . . .
(1) Applicability. . . .
* * *
(C) Construction/Operation Prohibited. No owner or operator shall
commence construction or modification of any installation subject to this rule,
begin operation after that construction or modification, or begin operation of any
installation which has been shut down longer than five (5) years without first
obtaining a permit from the permitting authority under this rule.
10 C.S.R. 10-6.060(1)(C) (emphasis added).
The general Definitions section of the Missouri SIP defines the key term “modification”
as “[a]ny physical change, or change in method of operation of, a source operation or attendant
air pollution control equipment which would cause an increase in potential emissions of any air
It is undisputed that the projects were not expected to and did not increase the units’ potential emissions.
pollutant emitted by the source operation.”5 10 C.S.R. 10-6.020(2)(M)(10) (2005) (emphasis
added). “Potential emissions,” (defined in the definition section by “potential to emit”) means
the unit’s ability to emit at full design capacity “assuming continuous year-round operation.” Id.
EPA disputes Ameren’s interpretation of the SIP and the implications that such an
interpretation would have, and urges me to find that the SIP does not limit PSD applicability to
only those projects that are both “major modifications” and “modifications,” as defined by
For the reasons that follow, I agree with EPA that the SIP does not limit PSD
applicability to only those projects that increase both actual and potential emissions. In other
words, a project need not qualify as a “modification” as interpreted by Ameren to trigger PSD
First, the PSD rules impose their own independent, stand-alone applicability provisions in
Section (8) of the Missouri SIP (incorporating EPA’s PSD rules set out at 40 C.F.R. 52.21). As
“it is a commonplace of statutory construction that the specific governs the general,” the PSDspecific applicability language should trump the general applicability language in Section (1) of
the SIP. See RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct. 2065, 2071, 182 L.
Ed. 2d 967 (2012) (internal quotation omitted). Here, it is clear that the specific PSD
applicability language provides, in relevant part, that applicability turns only on whether a
project is a “major modification”:
(a)(2) Applicability procedures.
(ii) the requirements of paragraphs (j) through (r) of this section apply to
the construction of any new major stationary source or the major modification of
any existing major stationary source . . .
It is undisputed that the projects at issue were not “construction” as defined by the Missouri SIP or the PSD rules.
(iii) No new major stationary source or major modification to which the
requirements of  this section apply shall begin actual construction without a
permit . . . . (1) . . . any owner or operator of a source or modification subject to
this section who commences construction . . . without applying for and receiving
approval hereunder, shall be subject to appropriate enforcement action.
10 C.S.R. § 10-6.060(8) (incorporating 40 C.F.R. 52.21) (emphasis added).
EPA’s approval of the SIP illustrates why the specific PSD rules control. In the final
rule, which contains EPA’s approval of the Missouri SIP, EPA expressly stated that it was
approving the SIP “because the revisions incorporate, by reference, the Federal New Source
Review reforms.” 71 Fed. Reg. 36,486 (June 27, 2006). As discussed above, the regulatory and
statutory history of the PSD rules is well-established and there can be no doubt that the federal
PSD rules are focused on “major modifications” which are based on actual emissions
determinations. Moreover, and perhaps most persuasively, EPA’s approval of the SIP provided
that the CAA and the program requirements as set out in 40 C.F.R. 52.21 would supersede any
conflicting provisions in the state SIP: “This revision incorporates by reference the other
provisions of 40 C.F.R. 52.21 as in effect on July 1, 2003, which supersedes any conflicting
provisions in the Missouri rule.” 71 Fed. Reg. 36,489 (June 27, 2006) (emphasis added).6
In addition, Ameren’s interpretation would render a portion of the PSD rules superfluous.
The United States Supreme Court has rejected an argument similar to Ameren’s in Duke Energy.
549 U.S. at 581 (2007). There, the defendant power company argued that “before a project can
become a ‘major modification’ under the PSD regulations . . . it must meet the definition of
‘modification’ under [other New Source Performance Standards] regulations.” Id. at 581, n.8.
As the Supreme Court explained:
See also 71 Fed. Reg. at 36,487 (June 27, 2006) (“As we explained in the proposed rulemaking, to the extent that
these provisions or similar provisions are addressed by § 52.21, the provisions of § 52.21 supersede the state
provisions for purposes of the PSD program.”) (emphasis added).
That sounds right, but the language of the regulations does not support it. For
example, it would be superfluous for PSD regulations to require a “major modification”
to be a physical change in or change in the method of operation . . . if they presupposed
that the NSPS definition of ‘modification,’ which contains the same prerequisite . . . had
already been satisfied.
The same is true here. If the SIP first requires, as Ameren argues, that a threshold
determination be made that a project is a “modification,” meaning “[a]ny physical change, or
change in method of operation of, a source operation or attendant air pollution control equipment
which would cause an increase in potential emissions of any air pollutant emitted by the source
operation,” 10 C.S.R. 10-6.020(2)(M)(10), then that makes the first half of the PSD rules’
definition of “major modification” superfluous, which starts with the exact same language:
“[a]ny physical change or change in the method of operation at an installation or in the attendant
air pollution control equipment . . .” 40 C.F.R. § 52.21(b)(2); see also United States v. Jicarilla
Apache Nation, 131 S. Ct. 2313, 2330, 180 L. Ed. 2d 187 (2011).
For all of these reasons, I find that, consistent with principles of statutory and regulatory
interpretation, the specific PSD rules trump the general SIP rules. That is especially true where,
as here, the final SIP rule expressly provides that the specific PSD rules set out in 40 C.F.R.
52.21 should do just that, and the alternate interpretation would render a portion of the PSD
rules’ definition of “major modification” superfluous. See 71 Fed. Reg. 36,489 (June 27, 2006).
Moreover, such a finding is consistent with EPA’s own interpretation of the Missouri
SIP. To the extent that the general Applicability language in Section (1) means what Ameren
contends, it at best inserts ambiguity into the meaning of the PSD rules. Under the standards of
Chevron and Auer, EPA’s interpretation of the SIP, which I find is based on a permissible
construction of both the CAA and the PSD rules, is entitled to deference.7 Auer v. Robbins, 519
U.S. 452, 461 (1997) (deference to an agency’s interpretation of its own regulations is
“controlling unless ‘plainly erroneous or inconsistent with the regulation.’”) (internal citations
omitted); Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–
843 (1984); see also United States v. Duke Energy Corp., 981 F. Supp. 2d 435, 454-55
(M.D.N.C. 2013) (“EPA's interpretation of SIP regulations controls when it conflicts with [the
state agency’s] interpretation, particularly when, as here, the state SIP adopts the relevant federal
regulation without additional explanation, modification, or change.”).
Ameren relies heavily on United States v. Cinergy, 623 F.3d 455 (7th Cir. 2010), for
support. Cinergy involved an EPA enforcement action against several coal-fired power plants in
which EPA alleged, as it does here, that the plants undertook projects that were major
modifications and required a PSD permit. Cinergy argued that no permit was required because
the projects did not increase the units’ potential emissions. Under the plain language of the
Indiana SIP in place at the time of the projects, applicability turned on increases in potential, not
actual emissions, similar to what Ameren alleges is the case here.
Following a jury trial, the Seventh Circuit reversed the verdict against the utility and
entered judgment as a matter of law for Cinergy. It rejected EPA’s arguments that the Indiana
SIP’s provisions were contrary to the CAA itself, case law, EPA’s long-standing interpretations
of the Act, and the then-existing federal regulations, calling that argument “untenable.” The
court held that “[t]he Clean Air Act does not authorize the imposition of sanctions for conduct
For the reasons outline above, see supra, Section I.B. Statutory and Regulatory Background, EPA’s interpretation
of the SIP as requiring PSD review for major modifications, without further limitation, is reasonable because it
conforms to the requirements of the CAA’s broad language as interpreted by D.C. Circuit in, e.g., Alabama Power,
636 F.2d at 379, 399-400 (D.C. Cir. 1979); New York v. EPA, 413 F.3d 3, 39-40 (D.C. Cir. 2005). In contrast,
Ameren’s reading of the SIP as limiting PSD applicability to projects that are both “major modifications” and
“modifications” essentially exempts from PSD review any major modification that does not also increase a source’s
potential to emit, or maximum capacity – which would likely exempt from review a large portion of major
that complies with a State Implementation Plan that the EPA has approved.” Id. (citing 42
U.S.C. § 7413(a)(1)). While recognizing that the imposition of a potential-to-potential standard
on top of an actual emissions standard was likely a “blunder,” the court reasoned that EPA’s
approval of the SIP language was binding, stating:
[W]hat was Cinergy “on notice” of? It was on notice that a straightforward
reading of section 43 permitted the company without fear of sanctions to make
modifications without a permit as long as they would not increase a plant’s
potential generating capacity, even if they would increase its annual output by
enabling it to be operated for more hours without having to be shut down for
repairs and component replacements. … What Cinergy was not on notice of was
that the EPA would treat approval of section 43 as rejection of it.
The agency’s frustration is understandable. It embraced the actualemissions standard … before section 43 was presented for its approval. [EPA]
should have disapproved it; it didn’t; but it can’t impose the good standard on a
plant that implemented the bad when the bad one was authorized by a state
implementation plan that the EPA had approved. The blunder was unfortunate but
the agency must live with it.
Cinergy, 623 F.3d at 458-59.
Ameren argues that here, as in Cinergy, when EPA approved the Missouri SIP, it said
nothing about the SIP’s general Applicability provision, even though it commented on many
other SIP provisions. Likewise, EPA does not directly challenge Ameren’s “straightforward
reading” of the SIP language – it only argues that the SIP cannot mean what it says. Following
the Cinergy defendants’ footsteps, Ameren argues that it was not on notice that EPA would treat
its approval of Sections 10-6.060(1)(C) (Applicability) and 10-6.020(2)(M)(10) (definition of
“modification”) as a rejection of them, and allowing EPA to impose liability when it is
undisputed no modification has occurred would violate basic principles of due process and fair
Although many of the same considerations that the Seventh Circuit relied on are present
here, this case is distinguishable in three ways. First, unlike here, the Indiana SIP did not adopt
and incorporate by reference EPA’s PSD rules, nor does it appear that the PSD section of the
Indiana SIP contained independent applicability language. 47 Fed. Reg. 6621-01
(Feb. 16, 1982). Second, unlike here, EPA’s approval of the Indiana SIP did not expressly
provide that the PSD rules as set out in the Code of Federal Regulations supersede any
conflicting provisions in the state SIP. Id. Third, it is not clear that Ameren had actual notice of
the SIP provision, whereas in Cinergy there is no doubt that there was actual notice. In fact, as
outlined in EPA’s brief, there is evidence here showing that Ameren had actual notice that the
controlling standard is that of a “major modification.” The express terms of Ameren’s Title V
Permit provide that “[t]he permittee shall not commence construction, modification, or major
modification of any installation subject to this rule . . . without first obtaining a permit . . . .” See
also, e.g., Joint Brief of Industry Petitioners, New York v. EPA, No. 02-1387, 2004 WL 5846387,
at *28-29 (D.C. Cir. Oct. 26, 2004). Finally, to the extent that this case is indistinguishable from
Cinergy in these or any other aspects, for the reasons stated above, I disagree with the Seventh
Accordingly, I find that Ameren has not established as a matter of law that PSD
applicability is limited to only those circumstances where there is a both a “modification” and a
“major modification.” The same reasons for my conclusion that there is no additional
“modification” requirement under the PSD rules apply to Ameren’s Title V argument. As a
result, Ameren’s motion for summary judgment will be denied in its entirety.
IT IS HEREBY ORDERED that Ameren’s Motion for Summary Judgment No. 1: On
the Missouri SIP’s Construction Permitting Rule # is DENIED.
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 21st day of January, 2016.
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