11/14/2013 Litigation Trends: What Businesses Need to Know - - PDF document

11/14/2013 1

Litigation Trends: What Businesses Need to Know

Wisconsin Manufactures and Commerce Clean Air Act Update 2013

Attorney Todd Palmer Michael Best & Friedrich LLP One South Pinckney Street, Suite 700 Madison, WI 53703 (608) 283-4432 tepalmer@michaelbest.com www.michaelbest.com 2

Overview

• New Source Review - Legacy Liability
• New Source Review – Future Projections
• Title V Petitions
• Permitting Issues
• SIP
• Enforcement
• Interstate Pollution Transport

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3

Legacy Liability - New Source Review

• Is the failure to obtain a pre-construction permit a one-

time violation, or do violations occur every day the facility operates?

• Four federal appellate courts, including the 7th Cir., and a

majority of district courts have held such a failure is a one-time violation and the five year Statute of Limitations begins at the commencement of construction.

• Wisconsin district courts still split on the question
• The Sixth Circuit and a minority of district courts have held that

such failure constitutes an ongoing violation.

4

Legacy Liability – One Time Violation

• United States v. Murphy Oil USA, Inc. (W.D. Wis.

2001)

• United States v. Midwest Generation LLC (7th Cir., July

2013)

• The discovery rule does not operate to extend the statute of

limitations in CAA actions; and

• the failure to obtain a PSD permit is a one-time violation
• United States v. EME Homer City Generation LP (3rd
• Cir. August 2013)
• Sierra Club v. Otter Tail Power Co. (8th Cir. August

2010)

• Nat'l Parks & Conservation Ass'n v. TVA (11th Cir. Oct.

2007)

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5

Legacy Liability – Continuing Violation

• Sierra Club v. Dairyland Power Cooperative (W.D. Wis.

Oct 2010)

• Decision issued prior to 7th Cir. Midwest Generation
• Court pointed to Wisconsin SIP language to conclude failure to
• btain PSD permit is an ongoing violation
• Overturned prior decision in Murphy Oil
• Nat'l Parks Conservation Ass'n v. TVA (6th Cir. March

2007)

• 6th Circuit relied on specific language in the Tennessee SIP

that requires sources to obtain pre-construction permits

6

Legacy Liability - New Source Review

• Does Midwest Generation overrule Dairyland?
• To the extent Dairyland relied upon CAA policy principles, case

law from other jurisdictions and its own interpretation of §7475 to conclude that PSD violations are ongoing, Dairyland is

• verruled by Midwest Generation.
• It is not so clear whether Dairyland’s analysis of the Wisconsin

SIP would also be overruled by Midwest Generation.

• Sierra Club and others will likely tee up the next case for the 7th

Circuit to opine on the specific provisions of the Wisconsin SIP.

• One case appears to be heading that direction.

11/14/2013 4 EPA/ENGO Tactics To Avoid SOL

• Alternative tactics that may be used to avoid the

preclusive effect of these SOL decisions:

• Rely on SIP specific language that might suggest that BACT is

an on-going requirement for operating a facility

• Raise PSD issues in objections to Title 5 permits
• ENGOs may rely on the discovery rule
• EPA and ENGOs may promptly pursue NSR claims
• EPA may appeal one or more of the Courts of Appeals rulings

to the United States Supreme Court

7

Collateral Permitting Impacts of Midwest Generation?

• One paragraph from the decision is worth particular

attention:

"Plaintiffs’ contention that a continuing injury from failure to get a preconstruction permit (really, from failure to use BACT) makes this suit timely is unavailing. What these plants emit today is subject to ongoing regulation under rules other than §7475. Today’s emissions cannot be called unlawful just because of acts that occurred more than five years before the suit began. Once the statute of limitations expired, Commonwealth Edison was entitled to proceed as if it possessed all required construction permits. That’s the point of decisions such as United Air Lines, Inc. v. McMann, 434 U.S. 192 (1977), and Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), which hold that enduring consequences of acts that precede the statute of limitations are not independently wrongful."

8

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Legacy Liability of New Owners

• New owner liability for prior CAA violations?
• Midwest Generation – District Court
• Held an asset transfer does not result in the transfer of CAA

liability to the purchaser.

• Noted that sec. 113 only provides enforcement against a

person, not a source, and the “person” who violated the CAA in this case was no longer the owner of the facility.

• Court did not hold one way or another about the ability of a

transaction to transfer liability to a new owner, and instead noted that the allegations did not support such a transfer.

10

Legacy Liability New Owners

• New owner liability for prior CAA violations?
• Midwest Generation – 7th Cir
• New owner liability issue was presented to the 7th Cir. but the

court did not answer the question

• Court concluded that because the prior owner couldn’t be held

liable due to the one-time violation and statute of limitations, the subsequent owner couldn’t be liable

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Legacy Liability of New Owners

• New owner liability for prior CAA violations?
• EME Homer City - 3rd Cir.
• This issue was also raised, but the court did not address

successor liability because:

• EPA did not argue that the CAA imposes successor liability
• n the current owner,
• Nor did EPA argue that the former owners’ liability

transferred to the current owner by operation of the sale transaction documents

12

Legacy Liability of Prior Owners

• Prior owner liability for prior CAA violations?
• EME Homer City
• Held “The text of the Clean Air Act does not authorize an

injunction against former owners and operators for a wholly past PSD violation, even if that violation causes ongoing harm.”

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New Source Review – US v. Detroit Edison

• Can an NSR enforcement action can be maintained

based on EPA’s pre-project emission projections?

• District Court ruled in favor of industry on summary judgment,

holding that NSR enforcement actions cannot be initiated based

• n EPA’s pre-project emission projections.
• 6th Cir. reversed and remanded, concluding the district court’s

sweeping reading of the regulations is inconsistent with the CAA.

• 6th Cir. held EPA is not categorically prevented from

challenging even blatant violations of its regulations until long after modifications are made.

14

New Source Review – US v. Detroit Edison

• May be a pyric victory for EPA.
• Court suggests that a company can intentionally limit

emissions in the future – without a synthetic minor limit – to avoid triggering PSD.

• Directly contrary to the position taken by EPA with respect

to the WPL - Columbia Power Plant.

• Court warned EPA that it was not endorsing a pre-

construction enforcement approach.

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15

Title V Petitions

• Citizens can ask EPA to object to Title 5 permits that

are proposed for issuance by the WDNR

• EPA has a large backlog.
• Processes 12- 15 petitions per year.
• Delay often leads to “deadline lawsuits.”

16

Title V Petitions

• Lack of modeling.
• Improper modeling.
• Sources causing “air pollution”.
• Legacy NSR projects.
• PM2.5 precursor emissions.
• Averaging of emission rates.

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17

Title V Petitions – Georgia Pacific

• Sierra Club Title V petition focusing on legacy boiler

projects.

• WDNR had concluded that the projects were RMRR or lacked

evidence to suggest that PSD had been triggered.

• Increment analysis improperly performed in 2004 PSD permit.
• EPA order denied the petition citing Sierra Club’s

failure to develop an adequate demonstration that PSD had been triggered:

• Lacked a netting analysis.
• Lacked an adequate project emission baseline.

18

Title V Petitions – Georgia Pacific

• Midwest Environmental Defense Center and Clean

Water Act Council appealed the EPA Order to the Seventh Circuit.

• Appeal limited to the single issue of whether DNR

correctly calculated increment consumption when it issued a PSD permit in 2004.

• Oral arguments held in August 2013.
• Decision expected early 2014.
• Industry argued that Title 5 is not a proper mechanism

to challenge older PSD permitting actions.

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Title V Petitions –Legacy PSD Arguments

• On October 30, 2013, Sierra Club and others petitioned

EPA to object to a Title V permit, citing incorrect RMRR determinations by DNR in 2005.

• EPA was asked to provide its opinion in 2005.
• EPA responded in 2012.
• EPA has 60 days to respond to the Title V petition, but

historically takes much longer to respond.

• Appears to be an effort by the Sierra Club to avoid the

preclusive effect of the 7th Circuit’s Midwest Generation decision barring enforcement actions under the five year statute of limitations.

Title V Petitions - Emission Limit Averaging

• Issue: Whether compliance with an emission rate

expressed as “lbs. per unit” is determined on an instantaneous or average basis?

• WDNR has successfully argued that compliance with

NR 415 PM limits is instantaneous.

• Utility has petitioned EPA challenging its own Title 5

permits arguing that an averaging period must be included in the permit.

• Open question as to averaging of BACT, NSPS and
• ther limits.

20

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21

Wisconsin SIP – Regional Haze

• In 2012, EPA approved Wisconsin’s Regional Haze SIP,

which contains BART requirements for Wisconsin power plants and specifically the Georgia-Pacific Broadway Mill.

• Sierra Club has petitioned the 7th Circuit for review of EPA’s

approval of the Wisconsin SIP.

• Likely premised on reliance on transport rules.
• In November 2012, the court ordered the case be held in

abeyance pending the Supreme Court’s review of the CSAPR appeal - EME Homer City v. EPA, 696 F.3d 7 (D.C.

• Cir. 2012).

Wisconsin PM2.5 SIP

• Center for Biological Diversity has filed a citizen suit

against EPA challenging EPA’s failure:

• To find that Wisconsin failed to timely submit an adequate

2006 PM2.5 NAAQS SIP for the Milwaukee-Racine non- attainment area.

• Timely approve, disapprove or partially approve the Wisconsin

2006 PM2.5 NAAQS SIP for the Milwaukee-Racine non- attainment area.

22 Center for Biological Diversity v. McCarthy, Case No. 3:13-cv-05142 (N.D. Cal. Nov. 5, 2013)

11/14/2013 12 “Consultation” Lawsuits

• Many environmental laws require EPA to consult and

coordinate with local units of government in making final agency decisions.

• Legal theories are being advanced that EPA has

largely failed to meet these obligations when promulgating rules implementing environmental statutes, including the CAA.

23

Aggregation of Facilities

• WDNR/EPA practice of relying on the functional

interrelatedness of two facilities to consider them one stationary source.

• Rejected by the US Court of Appeals for the Sixth

Circuit in Summitt Petroleum v, EPA.

• EPA memo dated Dec. 21, 2012 asserts that the

Summitt decision is limited to those states within the Sixth Circuit (MI, OH, KY and TN).

• Pending legal challenge to the EPA’s memo.
• WDNR’s position appears to have changed.

24

11/14/2013 13 Biogenic Deferral Rule

• Center for Biological Diversity v. EPA – D.C. Circuit

held that the CAA does not allow for distinguishing biogenic CO2 emissions from other sources of CO2.

• The court’s order is still not effective.
• Wisconsin SIP exclusion is still in place
• EPA is expected to propose a new rule in early 2014

that will establish a CO2 accounting process that will address biomass emissions.

25

SIP Gap Litigation

• April 2013 - Indiana Court of Appeals held that a state

cannot rely on a federal rule until incorporated into a SIP.

• Case involved an ethanol plant and EPA’s revision of the 28

source categories that are subject to a 100 TPY PSD major source threshold.

• Ethanol plants were removed from the list of 28 and thereby

became subject to the 250 TPY PSD major source threshold.

• IDEM issued a permit to an ethanol plant using the new federal

definition before EPA had approved the definition for inclusion in the Indiana SIP.

• NRDC challenged the permit and won.
• Decision on appeal to Indiana Supreme Court.

26

11/14/2013 14 Sufficiency of Air Permit Applications

• United States v. Murphy Oil USA, Inc. – Must disclose

information if material effect on air permit evaluation.

• What about changes to the electric output of an

installed emergency generator?

• PTE lower for all pollutants except VOCs (0.05 increase) and

NOx (0.18 tpy increase)

• WDNR has issued an NOV
• Nameplate capacity vs. field tested heat input

capacity?

• Low heat range vs. high heat range (accounting for heat from

condensation)

• WDNR issued an NOV

27

Heat Input Ratings As Enforceable Limits

• WDNR has concluded that heat input ratings are not

limits unless expressly described as such in a permit.*

“The Department does not believe that in this case the total heat inputs of the boilers are incorporated into the Wisconsin SIP or into the construction permit #87-AJH-027. As will be discussed below in more detail, the total boiler heat inputs were not relied on in making rule applicability decisions for the construction permit. The construction permit covered installation of natural gas burners in existing boilers. In this context, for this permit, the inclusion of the overall heat inputs of the existing boilers in the permit application was descriptive, not prescriptive. The important thing was that the facility construct and operate the natural gas-fired burners in conformity with the explicit conditions in the construction

• permit. As we will show below, limiting the total boiler heat input is not necessary or

sufficient for complying with the conditions of the construction permit.”*

28

* September 16, 2011 Preliminary Determination for Permit Revision No. 405031990-P21, pp. 15-18.

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Heat Input Ratings As Enforceable Limits

• EPA agreed with WDNR’s reasoning:*

“The Petitioner claims that the heat input limits are applicable requirements for title V purposes because they were in the 1987-88 construction permit applications and therefore incorporated by reference into the 1987-88 construction permits by the language of the permits themselves. Petition at 7…. *** WDNR’s position is consistent with the plain text of the Wisconsin SIP NR 406.10, which defines violations to include when an owner or operator “fails to construct and operate a stationary source in accordance with conditions imposed by [WDNR].” As mentioned above, WDNR clarified that it did not include the heat inputs as conditions in the 1987 construction permit.”

* US EPA Order In The Matter of Permit No. 405031190-P21, Petition No. V2012-01 (January 7, 2013).

Aggressive Region 5 Theory

• NSPS and NESHAPs contain very prescriptive

requirements for specific source categories.

• Also include general provisions that require, among
• ther things, that “air pollution control equipment be
• perated in a manner consistent with good air pollution

control practices”

• Region 5 is focusing on this general requirement to

enforce very prescriptive requirements on flaring devices

30

11/14/2013 16 Aggressive EPA Theory

• EPA NOV cites to published literature which explains

the negative effects that steam can have on flares if applied in excessive amounts.

• Literature dates back to 1983.
• Based on a synthesis of this literature, EPA is

enforcing a steam-to-vent gas ratio of 3.45 %.

• This ratio is not found in any regulation, permit,

inspection report, Previous NOV, or previous enforcement complaint/settlement issued to the facility.

31

List of Documents Establishing this Requirement

32

11/14/2013 17 NAAQS

• SO2 1-hour NAAQS
• July 2012 – D.C Circuit rejected challenges.
• January 2013 – Supreme Court denied review.
• Litigation continues over attainment designations.
• NO2 1-hour NAAQS
• July 2012 – D.C. Circuit rejected challenges.
• April 2013 – Supreme Court denied review.
• PM2.5 NAQQS
• Litigation on-going.

33

NAAQS

• Ozone NAAQS
• June 2013- ENGOs file a lawsuit in to force EPA’s review and

reissuance of the ozone NAAQS (EPA’s deadline to review was March 2013).

• July 2013 – D.C. Circuit rejects challenges to the primary

NAQQS, but remands secondary NAAQS to EPA.

• CO NAAQS
• Lawsuits are pending in the D.C. Circuit.

34

11/14/2013 18 Facilities with a Full Compliance Inspection (Wis.)

35 Approximately 1,660 facilities

Inspected Facilities with an Alleged Violation (Wis.)

36

11/14/2013 19 Facilities Subject to Enforcement (Wis.)

37

Facilities with an HPV (Wis.)

38

11/14/2013 20 Enforcement Actions That Include a Penalty

39

Total Penalties Assessed

40

11/14/2013 21 Average Penalties Assessed (Wisconsin)

41

Average Penalties Assessed (Minnesota)*

42 * This EPA data is suspect and does not appear accurate.

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43

Goldilocks and the Three Interstate Pollution Rules

44

NOx SIP Call

• In 1998, EPA promulgated the “NOx SIP Call” which

capped NOx emissions in eastern states to achieve compliance with the 1-hour and 8-hour ozone NAAQS.

• Modeling identified “upwind” states that contributed more than a

set percentage to ozone non-attainment problems in at least

• ne downwind area.
• EPA deemed “significant” that portion of each identified upwind

states emissions that could be eliminated using “highly cost- effective” controls (i.e., $2,000/ton).

• Presumably applied to utility and non-utility boilers, but states

given the autonomy to decide.

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45

NOx SIP Call – This One is Just Right?

• The Court upheld EPA’s methodology:
• Generic downwind contribution threshold to define which

upwind states required emission controls.

• The cost effectiveness of controls was used to define the

amount of significant contribution (i.e., the amount of pollution each state was required to control).

46

NOx SIP Call – Wisconsin

• With respect to Wisconsin’s inclusion in the NOx SIP

Call, the Court:

• Vacated Wisconsin’s inclusion premised on contributions to

downwind 1-hour ozone concentrations.

• Stayed the litigation concerning Wisconsin’s contribution to

downwind 8-hour ozone concentrations.

• Appeal has been pending over 10 years.
• The NOx SIP Call may become a rekindled priority for

EPA given the litigation underlying the NOx SIP Call replacement rules (i.e., CAIR and CSAPR).

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47

Clean Air Interstate Rule (CAIR)

• In 2005, EPA promulgated the Clean Air Interstate

Rule to address residual ozone and PM2.5 non- attainment problems attributable to EGUs.

• CAIR used an approach similar to the NOx SIP Call –

since the NOX SIP Call methodology had been largely upheld in the previous litigation.

48

CAIR – This One is Too Small

• The Court vacated CAIR holding that the rule failed to

ensure that upwind states adequately controlled EGU emissions to mitigate their contribution to downwind non-attainment areas.

• In other words, CAIR did not control upwind emissions

enough.

• It was too small….

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49

EPA’s Response to the CAIR Vacature

• Transport SIPs for the 2006 PM2.5 NAAQS were due

September 2009.

• On June 9, 2010, EPA found that Wisconsin failed to submit or
• therwise disapproved its SIP.1
• EPA promulgated CSAPR in partial response to the SIP

deficiency finding.

1 75 Fed. Reg. 32,673 (June 9, 2010).

50

Cross State Air Pollution Rule

• In 2011, EPA promulgated the Cross State Air Pollution

Rule (a/k/a “CSAPR” or “Transport Rule”) to replace CAIR.

• CSAPR included trading restrictions to ensure that

upwind states adequately mitigated impacts to downwind non-attainment.

• CSAPR included Federal Implementation Plans

(“FIPs”) because the CSAPR states had failed to submit, or EPA disapproved, their transport SIPs.

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51

CSAPR – This One is Too Big

• Court vacated CSAPR on two grounds.
• EPA improperly issued FIPs before allowing states to develop their own

SIPs to manage air pollution transport.

• CSAPR failed to ensure that upwind states did not over-control their

emissions to mitigate impacts to downwind non-attainment.

• In other words, CSAPR controls were too burdensome
• CSAPR was too big….

52

Lawyers – Start Your Engines

• The U.S. Supreme Court granted the United States’

petition for certiorari.

• Briefing is still underway.
• Oral argument December 10, 2013.
• Decision expected by mid-summer 2014.

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53

So…Now What?

• CAIR remains in place.
• The NOx SIP Call Rule still threatens to impose

controls on Wisconsin EGU and non-utility boilers.

• If CSAPR invalidation is affirmed by the Supreme

Court:

• EPA could craft a CSAPR replacement.
• Wisconsin could face Section 126 petitions or a revised SIP

Call which may not be limited to EGUs.

• The NOx SIP Call may become the primary interstate transport

rule.

• SIP reliance on CSAPR and/or CAIR.

Regulating CO2 Emissions

54

11/14/2013 28 Three Paths to Regulating CO2

• Legislative Branch – Purposefully designed program to

deal with the issue of climate change

• Judicial Branch - Court rulings in lawsuits
• Executive Branch - EPA regulation under the Clean Air

Act

• Triggered off US v. Massachusetts Supreme Court

decision (2007)

• EPA determined that GHG from light duty vehicles

endangers the public health and environment of this and future generations (2009)

55

Congress Has Consistently Refused to Regulate CO2

• Debated and rejected by Congress when enacting the

1990 Amendments to the Clean Air Act.

• In early years of President Obama’s administration, a

Congress controlled by Democrats would not pass a comprehensive regulatory program targeting CO2.

56

11/14/2013 29 Where Are We Today?

• President’s Climate Action Plan – June 2013
• Goal is to reduce GHG emissions “in the range of 17

percent”

• Baseline of 2005
• Target date of 2020

57 500 1000 1500 2000 2500 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Coal CO2 Energy Sector

2005 - Baseline 17% Goal for 2020

CO2 Emissions - Energy Generation Using Coal

58

Source: EIA

11/14/2013 30 Convergent EPA Efforts for NSR

T iming Rule Standards F

• r L

ig ht Duty Ve hic le s

CAA Per mitting

Co ntributio n F inding § 202 E ndang e rme nt F inding § 202

T ailo ring Rule

Override SIPs

Supreme Court Review of GHG Rules

• Accepted 6 of 9 petition asking for review
• Limited review to “whether EPA permissibly determined

that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

• Timing Rule
• Tailoring Rule?
• Decision expected June 2014.
• Impacts on Utility NSPS for GHG?

60

11/14/2013 31 Utility NSPS

• Presidential Directive to Use NSPS Authority
• EPA to re-propose GHG emission standards for new electric

generating units by September 30, 2013.*

• EPA to issue regulations for existing power plants.
• Proposed guidelines no later than June 1, 2014.
• Final guidelines no later than June 1 2015

61

*NOTE: New rules are to replace EPA’s April 2012 proposal for new power plants (1000 pounds CO2 per MW hour of output). EPA submitted new proposal to OMB on July 1, 2013.

Schedule for EGU C02 NSPS Regulations

Source Type Action Date Standard (lbs/MWh) Comment New Sources Proposal March 27, 2012 1,000

• Applies April 27, 2013.
• 30 Averaging Option.
• Force CCS or fuel switch.

Reissued Proposal

• Sept. 20, 2013

Coal – 1,100 NG – 1,000 Final “in timely fashion”

• Likely final in Fall 2014.

Existing Sources Proposed Guidelines June 1, 2014

• Proposed state guidance

and directives.

• Model rules are possible.

Final Guidelines June 1, 2015

• Final state guidance and

directives.

• Model rules are possible.

SIPs Due June 30, 2016

• EPA can impose federal

program if state’s miss deadline.

• Partial SIPs?

11/14/2013 32 NSPS For Existing EGUs Using Section 111 (d)

• States have first crack at establishing limits.
• Essentially the SIP process.
• EPA to provide “guideline documents.”
• Flexibility is the foundation of President’s plan:
• Trading/market based systems
• Fuel switching/co-firing
• Dispatch priority for low carbon units
• Renewable sources/RPS
• Energy Efficiency
• Exemptions/delayed compliance deadlines for older units
• Credit for early actions by states
• Credit for early action by sources???

63

Important Limitations on Using Section 111 (d)

• Can EPA simultaneously regulate EGU sources under

the NSPS and NESHAP provisions?

“establishes standards of performance for any existing source for any air pollutant… for which air quality criteria have not been issued or which is not included on a list published under section 7408(a) of this title or emitted from a source category which is regulated under section 7412 of this title…”

• The D.C. Circuit has already said no:

“Because coal-fired EGUs are listed sources under section 112, regulation of existing coal fired EGUs’ mercury emissions under section 111 is prohibited, effectively invalidating CAMR’s regulatory approach.”*

• But…

64

*State of New Jersey v. EPA, 517 F.3d 574, 578 (D.C. 2008)

11/14/2013 33 Important Limitations on Using Section 111 (d)

• Standard of performance must reflect emission limits

achievable through the application of:

• 1. The “best system of emission reduction;”
• 2. That is “adequately demonstrated.”
• Yet, BACT must be as stringent as NSPS.
• NSPS as the floor for BACT.
• Is the necessary corollary that NSPS cannot be

more stringent than BACT?

65

What Has Been “Adequately Demonstrated?”

• 22 New Units since 2007
• 90% of operating days at or below these values:
• Subcritical and Lignite – 2,200 lbs/MWh
• Supercritical – 2,000 lbs/MWh
• Roughly 98% of operating days are at
• r below 2,400 lbs/MWh

66

Source: “Use of CO2 Emission Rate Data to Derive Achievable NSPS for Coal-Fired EGUs”, ACCCE July 31, 2013.

11/14/2013 34 CO2 BACT Limits for Coal-Fired EGU Boilers

Plant BACT Limit (lbs/MWh) Technology Notes Ottumwa Gen Station – IA 2,927 EE George Neal North – IA 2,437 EE George Neal South– IA 2,599 EE Oak Creek– WI 2,570 EE Wolverine Sumpter – MI 2,100 EE Coal and biomass

67

Possible EGU C02 NSPS Regulations

Source Type Fuel Possible Limit (lbs/MWh) Source New Sources Coal - General 1,100 EPA proposal Coal - Subcritical 2,080 ACCCE Coal – Lignite 2,150 ACCCE Coal - Supercritical 1,915 ACCCE Natural Gas 1,000 EPA Proposal Natural Gas 1,100 GE and GTA Existing Sources All Types Trading from state specific baselines NRDC Coal 2,100 – 2,900 BACT Coal 1,915 – 2,150 ACCCE

11/14/2013 35

QUESTIONS?

Attorney Todd Palmer Michael Best & Friedrich LLP One South Pinckney Street, Suite 700 Madison, WI 53703 (608) 283-4432 tepalmer@michaelbest.com www.michaelbest.com