Litigation and petitions update

1. Litigation and petitions update Presented by Vera Kornylak October 25, 2012

2. Recent D.C. Circuit Activity • American Petroleum Institute v. EPA • Decided July 17, 2012 • Upheld NO2 NAAQS promulgated in Feb 2010 • Nat’l Environmental Development Association’s Clean Air Project v. EPA • Decided July 20, 2012 • Upheld SO2 NAAQS promulgated in June 2010 • EME Homer City Generation v. EPA • Decided Aug. 21, 2012 • Oct. 5, 2012 EPA filed a petition for rehearing en banc – additional briefing ordered by Court • UARG v. EPA – GHG/PSD SIPs litigation - ongoing • Briefing ongoing (EPA filed a brief in mid-June) • Responses were filed

3. Recent Circuit Court Opinions • US Magnesium v. EPA • Decided Aug. 6, 2012 – 10th Circuit Court of Appeals • Upheld EPA’s SIP-call on the Utah SIP for its “Unavoidable Breakdown Rule.” • Provision did not treat all exceedances as violations • Provision included director’s discretion potentially impacting enforcement authorities of parties other than State • Provision allowed for exemption to apply to federal technology-based standards (e.g., NSPS and NESHAPs) due to delegation status of Utah

4. Recent Circuit Court Opinions • Luminant Generation Co. v. EPA • Revised Decision issued Oct. 12, 2012 – 5th Circuit Court of Appeals • Reviewed Jan. 2011 final rulemaking by EPA partially approving and partially disapproving a TX SIP revision establishing an affirmative defense for emissions associated with SSM events – EPA’s disapproval focused on excuses for “planned” SSM events. • Petitions for review filed by both environmental groups (regarding partial approval) and industry groups (regarding partial disapproval).

5. SSM Petition for SIP Call Update • Petition dated June 2011 by Sierra Club seeking SIP-call for 39 states including all Region 4 states and some local areas (Jefferson Co., KY; Forsyth Co., NC; Knox Co., TN; and Memphis/Shelby Co., TN) • EPA was sued for failure to respond to SIP call (Sierra Club v. Jackson, N. Dist. Calif.) • Settlement agreement recently modified • Dec. 14, 2012 – date for EPA to propose action to grant/deny petition • Will include opportunity for public comment • June 28, 2013 – date for EPA to take final action granting/denying petition • If EPA grants petition, EPA will either issue final SIP-call or correction notice by June 28, 2013

6. Other Region 4 Litigation Developments • Court order issued by N. D. of Calif. in WildEarth Guardians v. Jackson – case involving EPA’s failure to take action on certain infrastructure SIPs for the 2008 ozone NAAQS including: • NC – EPA failed to find that NC did not submit a SIP • TN and KY – EPA failed to take final action on submitted SIPs • Court granted motions for summary judgment while case was stayed and after it was informed that a settlement had been reached. • Court ordered EPA to take action on NC finding of failure to submit by Jan. 4, 2013 and final action on TN and KY SIPs by Jan. 4, 2013. • EPA/DOJ planning to seek amendment to order to make it consistent with actual facts and seek revised deadlines consistent with settlement agreement.

7. Recent CAA Title V Petitions Issued in Region 4 • In Region 4 States • June 22, 2012 – two orders granting in part and denying in part petitions regarding two facilities in Kentucky (Cash Creek Generation and Kentucky Syngas LLC). • Orders responded to wide range of issues including PSD/BACT, public process, sourcewide/synthetic minor limits, monitoring, and ozone modeling, among others. • Aug. 31, 2012 – Order denying petition for TVA Shawnee facility

8. Recent CAA Title V Petitions Issued for Non-Region 4 States • CF&I Steel (a/k/a Rocky Mountain Steel) (R8 state) • Order granting in part/denying in part dated May 31, 2012. • Georgia Pacific Consumer Products (R5 state) • Order denying petition issued July 23, 2012. • Cheyenne Light Fuel & Power (Wygen) (R8 state), • Order denying petition issued Aug. 23, 2012.