Town of Weymouth v. MA Dept. of Envir. Protection ( 2020 )

United States Court of Appeals
For the First Circuit
No. 19-1794
TOWN OF WEYMOUTH, MASSACHUSETTS; ROBERT HEDLUND, Mayor of Town
of Weymouth; PATRICK M. O'CONNOR, State Senator; MICHAEL SMART,
Vice President District Six; KENNETH J. DIFAZIO, District Three
Councilor; JANE HACKETT, Councilor at Large; ED HARRINGTON,
District Five Councilor; REBECCA HAUGH, District One Councilor;
ARTHUR MATHEWS, District Four Councilor; MICHAEL MOLISSE,
Councilor at Large; SCOTT DOWD, Conservation Commissioner;
GEORGE LORING, Conservation Commissioner; THOMAS TANNER,
Conservation Commissioner; FRANK SINGLETON, Conservation
Commissioner; JOHN REILLY, Conservation Commissioner; CITY OF
BRAINTREE, MASSACHUSETTS; TOWN OF HINGHAM, MASSACHUSETTS; CITY
OF QUINCY, MASSACHUSETTS,
Petitioners,
v.
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Respondent,
ALGONQUIN GAS TRANSMISSION, LLC,
Intervenor.
No. 19-1797
ELIZABETH MOULDS; JENNIFER MATHIAN; OLIVIA LANNA; PRIYA HOWELL;
KATHERINE ROGERS; MICHAEL MULLALEY; HEATHER KAAS; KATIE MCBRINE;
JANICE DEYOUNG; A. SILVIA FABRIZIO; KATHLEEN CRONIN,
Petitioners,
v.
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Respondent,
ALGONQUIN GAS TRANSMISSION, LLC,
Intervenor.
No. 19-1803
DOROTHY ANDERSON; ALICE ARENA; MARGARET BELLAFIORE; WENDY
CULLIVAN; SUSAN GREENE; REBECCA HAUGH; ANDREA HONORE; MICHAEL
LANG; CURTIS NORDGAARD, M.D.; THOMAS PENDERGAST; JUDY ROBERTS;
FRANK SINGLETON; BETSY SOWERS; BERNADETTE WILSON,
Petitioners,
v.
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Respondent,
ALGONQUIN GAS TRANSMISSION, LLC,
Intervenor.
PETITIONS FOR REVIEW OF AN ORDER OF
THE MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION
Before
Thompson, Lipez, and Kayatta,
Circuit Judges.
Brian F. Bertram, J. Raymond Miyares, Katherine E. Stock,
Miyares and Harrington, LLP, Joseph Callanan, Town Solicitor, Town
of Weymouth, Nicole I. Taub, Town Solicitor, Town of Braintree,
Kerry T. Ryan, Special Counsel, Town of Hingham, Bogle, DeAscentis
& Coughlin, P.C., and Janet Petkun, Assistant City Solicitor, City
of Quincy, on brief for petitioners Town of Weymouth, et. al.
Lawrence K. Kolodney, Adam J. Kessel, Natalie Galley, Eda
Stark, Kayleigh E. McGlynn, and Fish & Richardson P.C. on brief
for petitioners Moulds, et. al.
Michael H. Hayden and Morrison Mahoney LLP on brief for
petitioners Anderson, et. al.
Seth Schofield, Senior Appellate Counsel, Office of the
Attorney General of Massachusetts, Maura Healey, Attorney General
for the Commonwealth of Massachusetts, Julie E. Green, Assistant
Attorney General, Office of the Attorney General of Massachusetts,
and Joshua Olszewski-Jubelirer, Assistant Attorney General, Office
of the Attorney General of Massachusetts, on brief for respondent.
Jeremy C. Marwell, Joshua S. Johnson, Vinson & Elkins LLP,
James T. Finnigan, and Rich May, P.C. on brief for intervenor.
June 3, 2020
KAYATTA, Circuit Judge. These consolidated cases
involve a proposed natural gas compressor station set to be built
in Weymouth, Massachusetts, as part of Algonquin Gas Transmission,
LLC's "Atlantic Bridge Project," a natural gas pipeline connecting
the Northeastern United States and Canada. The Massachusetts
Department of Environmental Protection (DEP) approved Algonquin's
non-major comprehensive plan application for the station and
granted the station's air permit, certifying its compliance with
the Massachusetts Clean Air Act (CAA), Mass. Gen. Laws ch. 111,
§§ 142A–142F. Nearby municipalities and two citizen-petition
groups challenge DEP's decision in this court, invoking original
jurisdiction pursuant to the Natural Gas Act, 15 U.S.C.
§ 717r(d)(1). The petitioners raise a slew of arguments that DEP
violated the Massachusetts CAA and related laws and regulations.
Because we find that DEP did not follow its own established
procedures for assessing whether an electric motor was the Best
Available Control Technology (BACT), we vacate the air permit and
remand to the agency to redo that analysis. We resolve the
remaining issues in favor of DEP. See, e.g., Swajian v. Gen.
Motors Corp., 916 F.2d 31, 35 (1st Cir. 1990) ("The remainder of
this opinion will discuss other issues raised by the parties which
are likely to recur [on remand] and should therefore be passed
upon by us.").
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I.
Algonquin, a natural gas transmission company based in
Houston, Texas, proposed its Atlantic Bridge Project in response
to rising demand for natural gas in the Northeastern United States
and Canada. See Algonquin Gas Transmission, LLC v. Weymouth, 919
F.3d 54, 59 (1st Cir. 2019). Algonquin submitted its proposal for
the project to the Federal Energy Regulatory Commission (FERC) in
October 2015, id., and at the same time filed its air-permit
application with DEP seeking the agency's approval of the project,
see 310 Mass. Code Regs. § 7.02.
As with all natural gas pipelines, the Atlantic Bridge
Project needs "[c]ompressor stations" to be "strategically placed
along the pipeline to boost the system pressure to maintain
required flow rates." FERC, An Interstate Natural Gas Facility on
My Land?: What Do I Need to Know? 28 (2015),
http://bit.ly/2PBe0Tz. One of the compressor stations that
Algonquin plans to build will be located in Weymouth,
Massachusetts, near the Fore River Energy Center (an unrelated
power plant) and King's Cove recreation area (a public park).
Algonquin proposed to operate the Weymouth station using a
"SoLoNOx" Solar Taurus 60 combustion turbine, which is a
proprietary model of a Dry Low Nitrogen Oxide (NOx) combustion
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turbine owned by Solar.1 Dry Low NOx turbines burn natural gas and
reduce emissions of NOx by operating at a lower combustion
temperature. In layman's terms, the Weymouth station will burn a
small amount of natural gas in order to generate pressure that
will allow the bulk of the gas to flow through the pipeline.
FERC, for its part, approved Algonquin's plans for the
Atlantic Bridge Project, including the Weymouth Station, and
issued a "certificate of public convenience and necessity" under
15 U.S.C. § 717f(c) in January 2017. Algonquin Gas Transmission,
919 F.3d at 57, 59 (citing Algonquin Gas Transmission, LLC Mars.
& Ne. Pipeline, LLC, 158 FERC ¶ 61061, 2017 WL 383829, at *1
(Jan. 25, 2017)); see also Town of Weymouth v. FERC, No. 17-1135,
2018 WL 6921213, at *1 (D.C. Cir. Dec. 27, 2018) (per curiam)
(denying Weymouth's petition challenging FERC's certificate).
This approval came after FERC completed its environmental
assessment pursuant to the National Environmental Policy Act
(NEPA), 42 U.S.C. § 4332(2)(C), finding that, "with appropriate
mitigating measures," the project "would not constitute a major
federal action significantly affecting the quality of the human
environment." FERC's approval, however, is conditioned on
Algonquin's compliance with the CAA (state and federal2) as
1"Solar" is a turbine manufacturer owned by Caterpillar,
Inc. "Taurus" is a family of turbines that Solar manufactures.
2 The Environmental Protection Agency (EPA) has approved the
Massachusetts CAA and accompanying regulations as a State
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determined by DEP. Algonquin Gas Transmission, 2017 WL 383829, at
*45; see also 15 U.S.C. § 717b(d)(2) ("[N]othing in this chapter
affects the rights of States under . . . the Clean Air
Act . . . ."); cf. Algonquin Gas Transmission, 919 F.3d at 57–60,
63–66 (dealing with DEP's approval under the Coastal Zone
Management Act).
DEP staff reviewed Algonquin's air-permit application
and issued a "draft permit" in March 2017 stating that the proposed
Weymouth station was "in conformance with the Air Pollution Control
regulations and current air pollution control engineering
practice." DEP provided a public comment period on the draft
permit, and in response to public concerns, Massachusetts Governor
Charles Baker directed DEP and the Massachusetts Department of
Public Health to prepare a health impact assessment (HIA) of the
Weymouth station.
Frustrated by the protracted approval process, Algonquin
sued DEP in the D.C. Circuit under 15 U.S.C. § 717r(d)(2) seeking
to hurry along DEP's final decision. See Petition for Review,
Algonquin Gas Transmission, LLC v. Mass. Dep't of Envtl. Prot.,
No. 18-1045 (D.C. Cir. Feb. 16, 2018). The result of that lawsuit
Implementation Plan (SIP) under the federal CAA. See 40 C.F.R.
§§ 52.1119–52.1169; see also 42 U.S.C. § 7410(a). As such, "[t]he
EPA has delegated authority to the Massachusetts DEP to administer
the [federal] CAA in Massachusetts." Algonquin Gas Transmission,
2017 WL 383829, at *45.
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was an out-of-court agreement between DEP and Algonquin to the
following timeline: DEP promised to complete the HIA by January
2019 and to limit any subsequent adjudicatory hearings on the air
permit to six months.
In keeping with the established timeline, DEP completed
the HIA on January 4, 2019, "predict[ing] no substantial changes
in health from direct exposures from the station itself with the
exception of estimated sound levels during construction." The
following week, DEP's regional Air Quality Section Chief issued a
"Non-Major Comprehensive Air Quality Plan Approval" (i.e., air-
permit approval) for the Weymouth station.
Petitioners in this case (described below) filed an
administrative appeal to DEP's Office of Appeals and Dispute
Resolution, raising a number of claims that the permit violated
Massachusetts law. The Presiding Officer of that appeal dismissed
some of these claims without opinion on April 11, 2019, and then,
after a hearing, issued a full "Recommended Final Decision" on
June 27, 2019. That decision affirmed the air permit with some
revisions. On July 12, 2019, the DEP Commissioner issued a "Final
Decision" adopting in full the Presiding Officer's Recommended
Final Decision. In response to the Commissioner's request for
clarification (on issues not relevant to this case), the Presiding
Officer issued a "Recommended Final Decision on Reconsideration"
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on August 5, 2019, and the Commissioner adopted this decision in
full on August 7, 2019.
The three groups of petitioners all challenge DEP's
approval of the Weymouth station air permit. In case 19-1794
(docketed Aug. 8, 2019), petitioners include the Town of Weymouth,
several nearby municipalities, and state and local officials. In
cases 19-1797 and 19-1803 (both docketed Aug. 9, 2019),
petitioners are eleven and fourteen (respectively) residents of
these nearby municipalities. See Mass. Gen. Laws ch. 30A, § 10A
(authorizing "not less than ten persons [to] intervene in any
adjudicatory proceeding . . . in which damage to the
environment . . . is or might be at issue"). We have original
jurisdiction3 under the Natural Gas Act, which states that:
The United States Court of Appeals for the
circuit in which a facility subject to [15
U.S.C. § 717f] is proposed to be constructed,
expanded, or operated shall have original and
exclusive jurisdiction over any civil action
for the review of an order or action of a
Federal agency (other than [FERC]) or State
administrative agency acting pursuant to
Federal law to issue, condition, or deny any
permit, license, concurrence, or
approval . . . required under Federal law,
other than the Coastal Zone Management Act of
1972 . . . .
3 No party has argued that any justiciability barrier
(mootness, ripeness, finality, standing, etc.) precludes our
review of these cases. See generally Berkshire Envtl. Action Team,
Inc. v. Tenn. Gas Pipeline Co., 851 F.3d 105 (1st Cir. 2017)
(addressing the finality requirement under 15 U.S.C.
§ 717r(d)(1)). We are satisfied that there are no such barriers.
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15 U.S.C. § 717r(d)(1). Here, we review "an order" of a "State
administrative agency" (DEP) "acting pursuant to Federal law" (the
CAA4) "to issue" a "permit" required by that federal law. We
consolidated these cases, and Algonquin intervened as a
respondent. As required by the Natural Gas Act, we expedited our
review. See 15 U.S.C. § 717r(d)(5).
II.
A. Standard of Review
The Natural Gas Act does not provide a standard of
review, so we are left to look elsewhere. The parties dispute,
however, where we should look. According to petitioners, we can
consult the federal Administrative Procedure Act (APA), 5 U.S.C.
§ 706(2), and "borrow" its standards of review. And several other
circuits have done so in reviewing state approval of natural-gas
facilities. See Del. Riverkeeper Network v. Sec'y Pa. Dep't of
Envtl. Prot., 833 F.3d 360, 377 (3d Cir. 2016); AES Sparrows Point
4 As indicated, see supra note 2, the CAA adopts a
"cooperative federalism" approach, see Berkshire Envtl. Action
Team, 851 F.3d at 113, such that DEP, in enforcing the
Massachusetts CAA, is in fact acting pursuant to the federal CAA.
This also provides the federal "ingredient" for purposes of
Article III jurisdiction. See Osborn v. Bank of U.S., 22 U.S. (9
Wheat.) 738, 823 (1824) ("[W]hen a question to which the judicial
power of the Union is extended by the constitution, forms an
ingredient of the original cause, it is in the power of Congress
to give the Circuit Courts jurisdiction of that cause, although
other questions of fact or of law may be involved in it."); see
also Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 494–
95 (1983) (describing Article III "arising under" jurisdiction).
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LNG, LLC v. Wilson, 589 F.3d 721, 727 (4th Cir. 2009); Islander E.
Pipeline Co. v. Conn. Dep't of Envtl. Prot., 482 F.3d 79, 94 (2d
Cir. 2006). But DEP says the Massachusetts APA, Mass. Gen. Laws
ch. 30A, § 10A, applies. This makes some sense, as we will be
mostly looking to Massachusetts substantive law to resolve the
issues in this case, and because the federal APA by its terms does
not apply to states. See 5 U.S.C. § 551(1).
Fortunately, the issue appears to be strictly academic
in this case, for no party has demonstrated how it would make any
difference whether the Massachusetts APA or federal APA applies.
As relevant here, the standards do not vary materially, so we will
apply those standards without worrying about their source. Cf.
Friends of Buckingham v. State Air Pollution Control Bd., 947 F.3d
68, 80–82 (4th Cir. 2020) (likewise avoiding the issue where the
Virginia standards matched the federal standards). As in most
cases involving a decision of an administrative agency, we review
formally adjudicated findings of fact for "substantial evidence,"
and reverse agency decisions if they are "arbitrary and
capricious." Cent. Me. Power Co. v. FERC, 252 F.3d 34, 40 n.3
(1st Cir. 2001); accord Friends & Fishers of Edgartown Great Pond,
Inc. v. Dep't of Envtl. Prot., 848 N.E.2d 393, 399 (Mass. 2006).
We will defer to an agency's otherwise lawful interpretation of
its own regulation unless the regulation unambiguously forecloses
that interpretation. See Kisor v. Wilkie, 139 S. Ct. 2400, 2414–
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23 (2019) (reaffirming and clarifying Auer v. Robbins, 519 U.S.
452 (1997)); Town of Brookline v. Comm'r of Dep't of Envtl. Quality
Eng'g ("Brookline II"), 497 N.E.2d 9, 15 (Mass. 1986).
B. Discussion
1. Best Available Control Technology
All parties agree that, under Massachusetts regulations,
the Weymouth station, a non-major source of air pollution, must
employ the Best Available Control Technology (BACT) for reducing
NOx emissions. See 310 Mass. Code Regs. § 7.02(8)(a)(2). BACT is
defined as:
[A]n emission limitation based on the maximum
degree of reduction of any regulated air
contaminant emitted from or which results
from any regulated facility which the
Department, on a case-by-case basis taking
into account energy, environmental, and
economic impacts and other costs, determines
is achievable for such facility through
application of production processes and
available methods, systems and techniques for
control of each such contaminant. The best
available control technology
determination . . . may include a design
feature, equipment specification, work
practice, operating standard, or combination
thereof.
Id. § 7.00; see also 42 U.S.C. § 7479(3). BACT is distinct from
more stringent standards, like Lowest Achievable Emission Rate
(LAER), in that BACT takes into consideration economic factors
(i.e., costs). See 310 Mass. Code Regs. § 7.00.
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The Environmental Protection Agency (EPA) has
established a five-step "top-down" approach for determining BACT,
see EPA, New Source Review Workshop Manual: Prevention of
Significant Deterioration and Nonattainment Area Permitting B.5–
B.6 (1990)5 [hereinafter NSR Workshop Manual], and DEP has adopted
this approach, see DEP, Best Available Control Technology (BACT)
Guidance: Air Pollution Control Requirements for Construction,
Substantial Reconstruction or Alteration of Facilities that Emit
Air Contaminants 3 (2011) [hereinafter BACT Guidance]. The five
steps are:
• STEP 1: IDENTIFY ALL CONTROL
TECHNOLOGIES.
• STEP 2: ELIMINATE TECHNICALLY INFEASIBLE
OPTIONS.
• STEP 3: RANK REMAINING CONTROL
TECHNOLOGIES BY CONTROL
EFFECTIVENESS.
• STEP 4: EVALUATE MOST EFFECTIVE CONTROLS
AND DOCUMENT RESULTS.
• STEP 5: SELECT BACT.
NSR Workshop Manual, supra, at B.6.
Algonquin's air permit application applied the five-step
approach and concluded that the SoLoNOx turbine was the BACT for
NOx for the Weymouth station. DEP agreed. Petitioners argue that
5 Despite being marked as a "draft," this document is
frequently cited by courts as authoritative on BACT issues. See,
e.g., Sierra Club v. EPA, 499 F.3d 653, 654 (7th Cir. 2007).
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that conclusion (or at least the analysis getting there) was flawed
in two respects: (1) it excluded consideration of using an
electric motor instead of the SoLoNOx turbine, and (2) it wrongly
determined that a Dry Low NOx turbine plus a selective catalytic
reduction (SCR) was not cost feasible. We address each argument
in turn.
a. Electric Motor
Algonquin's air-permit application initially made no
mention of an electric-motor option. But during the adjudication
process, petitioners asserted that an electric motor would be a
more effective and economically feasible alternative to the
SoLoNOx turbine. Essentially, the petitioners proposed that the
compressor station could be hooked up to the existing electrical
grid and create the necessary pressure without burning any natural
gas. This would eliminate all emissions of NOx from the Weymouth
station. And at least some compressor stations in other parts of
the country operate with such an electric motor.
Algonquin revised its application in May 2018 to address
the feasibility of an electric motor. Algonquin explained that
this option was excluded for several reasons, including the high
cost of upgrading the existing power infrastructure. Algonquin
also cited the fact that FERC's environmental assessment concluded
that an electric motor would not offer a significant environmental
advantage over the proposed gas-fired turbine. DEP staff accepted
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Algonquin's exclusion, relying on FERC's assessment and concededly
not making an independent determination for purposes of BACT.
Algonquin and DEP refocused their position before the
Presiding Officer, arguing that the electric-motor option was
properly excluded from Step 1 of the BACT analysis as a project
"redesign." Per the NSR Workshop Manual, Step 1 is a wide-ranging
process, in which applicants "should initially identify all
control options with potential application to the emissions unit
under review." NSR Workshop Manual, supra, at B.7 (emphasis
added). However, a technology may be excluded from Step 1 if it
would "redefine the source." Helping Hand Tools v. EPA, 848 F.3d
1185, 1194 (9th Cir. 2016). "In a classic and simple example, a
coal-burning power plant need not consider a nuclear fuel option
as a 'cleaner' fuel because it would require a complete redesign
of the coal-burning power-plant." Id. (citing Sierra Club v. EPA,
499 F.3d 653, 655 (7th Cir. 2007)); see also Friends of Buckingham,
947 F.3d at 74, 82–85 (analyzing whether an electric motor would
redefine the source of a proposed gas-fired compressor station
turbine).
The Presiding Officer was not persuaded by the
"redesign" argument. She stated that DEP erred in relying on
FERC's environmental assessment and that DEP should have included
"all control technologies in the BACT analysis" (emphasis in
original). She left unresolved whether the electric motor would
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in fact constitute a redesign if properly analyzed as such by DEP
staff.6 Instead, she determined that, "even assuming use of an
electric driven compressor would not redefine the source," the
electric motor would properly be excluded at Step 4 of the BACT
analysis as not cost feasible.
The support for the Presiding Officer's cost-feasibility
conclusion came largely from the testimony of Algonquin witness
William Welch. Welch testified, with respect to the redesign
issue, that an electric motor at the Weymouth station would require
substantial infrastructure investment, including construction of
a new substation and the laying of half a mile of underground
electric transmission line. In total, Welch estimated that these
upgrades could cost between $9 million and $12 million. The
Presiding Officer acknowledged that "there is no corroboration of
these numbers, and [that] they seem to be based on several
conversations or meetings at which no notes apparently were taken."
However, she stated, "there is no evidence disputing them," since
petitioners' witness did not take into account these
Neither DEP nor Algonquin argue on this appeal that we can
6
affirm on the ground that an electric motor would constitute a
redesign. Nor could they, since DEP's final decision does not
rest on that ground. See Motor Vehicle Mfrs. Ass'n of U.S., Inc.
v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983) (citing
SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)); NSTAR Elec. Co.
v. Dep't of Pub. Utils., 968 N.E.2d 895, 900–01 (Mass. 2012).
Algonquin reserves the right to reassert its redesign argument on
remand to DEP.
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infrastructure costs in his own cost estimates. She thus
"infer[red] that the total cost for this infrastructure would be
substantial." So, she concluded, Algonquin's evidence, "though
scant and uncorroborated by any documentation, at least provides
some basis to infer that" the electric motor would not be cost
feasible.
Petitioners challenge that conclusion on three grounds:
(1) they assert that "scant and uncorroborated" evidence of
infrastructure costs cannot be considered "substantial evidence,"
as would be needed for us to affirm an agency's finding of fact;
(2) they argue that neither the Presiding Officer nor anyone else
at DEP ever provided a full Step 4 analysis as required by DEP's
BACT Guidance; and (3) they contend that the Presiding Officer
raised the Step 4 issue sua sponte after the hearing without
providing an opportunity for the parties to weigh in, thus denying
them their Due Process rights and violating Massachusetts law.
We easily dispatch with the first of these arguments.
Welch offered an estimate that does not seem irrational on its
face, and petitioners offered no contrary estimate of what must be
a real cost. So while the Presiding Officer fairly noted the
unimpressive support for the estimate, we cannot say that the
evidence was insubstantial as a matter of law. See Bath Iron Works
Corp. v. U.S. Dep't of Labor, 336 F.3d 51, 56 (1st Cir. 2003)
(recognizing that, under the "substantial evidence" standard, "we
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will accept the findings and inferences drawn" by an agency so
long as they are not "irrational," meaning that "the record
contains 'such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion'" (quoting Barker v. U.S. Dep't
of Labor, 138 F.3d 431, 434 (1st Cir. 1998), and Sprague v. Dir.,
Office of Workers' Comp. Programs, U.S. Dep't of Labor, 688 F.2d
862, 865 (1st Cir. 1982))).
Petitioners' second argument fares better.7 According
to the NSR Workshop Manual, "[c]ost effectiveness is the economic
criterion used to assess the potential for achieving an objective
at least cost. Effectiveness is measured in terms of tons of
pollutant emissions removed." NSR Workshop Manual, supra, at B.36.
So at Step 4 of the BACT analysis, the agency (or the applicant)
must calculate the cost effectiveness of the most effective
technology remaining after Step 3 and eliminate that technology if
it falls above a predetermined cost-feasibility threshold. For
NOx, DEP has established that technologies falling in (or below)
the range of $11,000 to $13,000 per ton of NOx removed per year
will be considered cost feasible. BACT Guidance, supra, at 5.
DEP never calculated cost effectiveness for an electric
motor, nor did it compare that figure to the range established in
7Because we vacate DEP's decision on this ground, see infra
subpart II(C), we need not address petitioners' third argument or
Algonquin's response that petitioners waived that particular
argument by not moving for reconsideration.
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its BACT Guidance. And even in their briefs before us, DEP and
Algonquin do not attempt to perform the required mathematical
calculations. Instead, DEP states that "the full calculation was
unnecessary because the infrastructure costs were so obviously
substantial." Effectively, DEP argues that a $9–12 million
infrastructure cost is so high that the cost effectiveness, if
calculated, would necessarily exceed the $13,000-per-ton cutoff.
Without a more detailed explanation by DEP, we cannot be
so sure. According to the NSR Workshop Manual, "[c]ost
effectiveness calculations can be conducted on an average, or
incremental basis." NSR Workshop Manual, supra, at B.36. Starting
with average cost effectiveness, the manual provides us with the
following formula:
Average cost Effectiveness (in dollars per
ton removed) =
(Control option annualized cost) /
(Baseline emissions rate – Control option
emissions rate)
Id. at B.37 (mathematical notations reformatted). And, to
annualize costs for capital investments, the manual tells us to
multiply up-front costs by:
(real interest rate) *
(1 + real interest rate)^(economic life of
equipment in years) /
((1 + real interest rate)^(economic life of
equipment in years) - 1)
Id. at b.10 (mathematical notations reformatted).
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When we attempt to solve for average cost effectiveness,
it becomes apparent that the record before us does not contain
enough information. As to the numerator, we are assuming that the
infrastructure costs of the electric motor would be between
$9 million and $12 million based on Welch's testimony. But we
cannot annualize that figure because we do not know the lifespan
of the equipment. The NSR Workshop Manual tells us that "[t]he
economic life of a control system typically varies between 10 to
20 years and longer," id., but that hardly narrows things. We
also do not know what interest rate DEP would use. The manual
says that "[t]he value used in most control analyses is
10 percent," id. at b.11, but again this is not a categorical
pronouncement. So we cannot tell what the annualized cost of the
electric motor infrastructure would be. We also have no
information on the annual operating expenses for the electric
motor, although anything above zero would be helpful to DEP in
this exercise.
Even more difficult is the denominator. We know that
the emissions rate for the electric motor is zero, but the record
is incomplete as to what the baseline emissions rate would be.
According to Algonquin's air-permit application, the "Base Case"
is "Good Combustion Practices" (presumably a gas-fired turbine
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that, unlike SoLoNOx, employs no control of NOx emissions).8 But
the application does not give a value for "Potential NOx Emissions"
for this option. The control technology just above "Good
Combustion Practices" is "Water Injection," which the application
tells us has an emissions rate of "20 to 42 ppm (water)." So, it
is probably safe to assume that the baseline emissions rate is at
least that high, and probably higher. We are also not provided
with a formula for converting ppm (parts per million) to tons per
year. We know that the SoLoNOx turbine will result in 10.03 tons
of NOx per year and that it has an emissions rate of 9 ppm, so for
ballparking purposes a one-to-one conversion would seem to be good
enough (although we must accept a wide margin of error, especially
since we do not know what "(water)" means).
So, if we assume, reasonably, that the interest rate is
10% and that the lifespan of the electric motor infrastructure is
twenty years, then the average cost effectiveness of a $12 million
electric motor would be below $13,000 per ton per year if the "Good
Combustion Practices" emissions exceed 108 tons per year.9 For a
The electric motor, unlike the SCR discussed below, is a
8
process-control technology, rather than an add-on technology
(i.e., the compressor station needs either an electric motor or a
SoLoNOx turbine, but not both). As such, the baseline emissions
rate is not the emissions rate of the SoLoNOx turbine.
9 $13,000 per ton ≥ ($12,000,000 * 0.1 * (1.120) /
(1.120 - 1)) / (Baseline emissions rate - 0).
Baseline emissions rate ≥ ($12,000,000 * 0.1 * (1.120) /
(1.1 - 1)) / ($13,000 per ton).
20
Baseline emissions rate ≥ 108.42 tons.
- 21 -
$9 million motor, that value would drop to 81 tons per year.10
These values are higher than the 42 ppm for "Water Injection" (as
we expected they would be), but not so high as to be unthinkable,
given what we know from this incomplete record.11
Turning to incremental cost effectiveness, we run into
similar, though different, problems. The NSR Workshop Manual gives
us this formula:
Incremental Cost (in dollars per incremental
ton removed) =
(Total costs (annualized) of control option –
Total costs (annualized) of next control
option) /
(Next control option emission rate – Control
option emissions rate)
Id. at B.41 (mathematical notations reformatted).
Here the "control option" is the electric motor, and the
"next control option" is the SoLoNOx turbine. And we know the
denominator will be 10.03 tons (10.03 minus zero). But we run
10 $13,000 per ton ≥ ($9,000,000 * 0.1 * (1.120) /
(1.120 - 1)) / (Baseline emissions rate - 0).
Baseline emissions rate ≥ ($9,000,000 * 0.1 * (1.120) /
(1.1 - 1)) / ($13,000 per ton).
20
Baseline emissions rate ≥ 81.32 tons.
11 To illustrate how much wiggle room there is in these
numbers, we can adjust our assumptions to a 1% interest rate and
a fifty-year equipment lifespan. At that point, a $9 million
electric motor would be cost feasible if the uncontrolled emissions
rate is above 17.7 tons per year (which, based on the "Water
Injection" figures, it almost certainly is).
$13,000 per ton ≥ ($9,000,000 * 0.01 * (1.0150) /
(1.0150 - 1)) / (Baseline emissions rate - 0).
Baseline emissions rate ≥ ($9,000,000 * 0.01 * (1.0150) /
(1.01 - 1)) / ($13,000 per ton).
50
Baseline emissions rate ≥ 17.66 tons.
- 22 -
into the same problems as before with annualizing the costs of the
electric motor, and more importantly, we have no information from
the record of what the costs -- annual or capital -- are for the
SoLoNOx turbine. Indeed, Algonquin's application includes a
line-item cost breakdown of the SCR (discussed below), but in the
column for SoLoNOx, the fields are all blank. Sticking with our
ballparking approach and assuming a 10% interest rate and twenty-
year lifespan on the electric motor (and zero costs for the
electric motor beyond capital expenses), a $9 million electric
motor would be cost feasible if the annualized SoLoNOx costs
(factoring in capital investments and operating costs) are
$926,747 or higher.12 The actual costs for SoLoNOx may in fact be
far less than that, but not so "obviously" that we can shrug off
the lack of data in the record. And, in any event, it is DEP's
job, not ours, to do these calculations properly. See Motor
Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins.
12 $13,000 per ton ≥ (($9,000,000 * 0.1 * (1.120) /
(1.120 - 1)) - annualized SoLoNOx costs) / (10.03 tons - 0).
Annualized SoLoNOx costs ≥ ($9,000,000 * 0.1 * (1.120) /
(1.1 - 1)) - ($13,000 per ton * 10.03 tons).
20
Annualized SoLoNOx costs ≥ $926,746.62.
With a 1% interest rate and a fifty-year lifespan, see
supra note 11, the $9 million motor would be cost feasible if the
annualized SoLoNOx costs exceed $99,225.
$13,000 per ton ≥ (($9,000,000 * 0.01 * (1.0150) /
(1.0150 - 1)) - annualized SoLoNOx costs) / (10.03 tons - 0).
Annualized SoLoNOx costs ≥ ($9,000,000 * 0.01 * (1.0150) /
(1.01 - 1)) - ($13,000 per ton * 10.03 tons).
50
Annualized SoLoNOx costs ≥ $99,224.58.
- 23 -
Co., 463 U.S. 29, 50 (1983) ("It is well-established that an
agency's action must be upheld, if at all, on the basis articulated
by the agency itself." (citing SEC v. Chenery Corp., 332 U.S. 194,
196 (1947))); NSTAR Elec. Co. v. Dep't of Pub. Utils., 968 N.E.2d
895, 900–01 (Mass. 2012).
Algonquin tries to paper over the gaps in the record by
pointing to something for which there is ample evidence: the costs
for the SCR. As will be discussed in the next section, the
Presiding Officer found that the SCR/turbine combination was not
cost feasible. And, based on Algonquin's line-item analysis in
its application, the total capital costs for SCR were $1,432,058,
which Algonquin translated into $135,176 annualized. So,
Algonquin reasons, a technology with a $9–12 million capital cost
must be even more infeasible.
We consider the comparison to the SCR unhelpful for two
reasons. First, SCR is an add-on technology, and, as will be
discussed shortly, the calculations for cost effectiveness for
add-on technologies differ from those for process-control
technologies like the electric motor. See also supra note 8.
Second, Algonquin compares only one variable -- capital
costs -- where the formulae encompass multiple variables. Even
assuming the lifespan and annual operating costs of each technology
are identical, we know that the electric motor is more effective
at reducing NOx emissions than the SCR. So the denominator of each
- 24 -
formula (average and incremental cost effectiveness) would be
higher for the electric motor, thus offsetting (at least in part)
the higher numerator.
We concede that our own calculations are not obviously
correct. The problem for the DEP and Algonquin is that no one has
provided a basis for concluding that our calculations are so
obviously incorrect as to obviate the need for any calculation at
all by Algonquin or DEP. The record does not even contain a Fermi
estimate13 fixing the magnitude of the quotient above the
regulatory cost-effectiveness cut-off.
The bottom line is this: DEP's established BACT protocol
requires a cost-effectiveness analysis before eliminating a
technology at Step 4, and the results of such an analysis do not
strike us as so obvious as to overlook as harmless DEP's failure
either to follow that protocol or at least do enough to make it
clear that following the protocol would eliminate the electric
motor as a cost-effective option. "An agency may not . . . depart
from a prior policy sub silentio or simply disregard rules that
are still on the books." FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009); see also Nat'l Envtl. Dev. Ass'n's Clean
Air Project v. EPA, 752 F.3d 999, 1009 (D.C. Cir. 2014) ("[A]n
13 See Robert N. Ronau, Number Sense, 81 Mathematics Tchr.
437, 439–40 (1988). See generally Hans Christian von Baeyer, The
Fermi Solution: Essays on Science (1993).
- 25 -
agency action may be set aside as arbitrary and capricious if the
agency fails to 'comply with its own regulations.'" (quoting
Environmentel, LLC v. FCC, 661 F.3d 80, 85 (D.C. Cir. 2011)));
Tofias v. Energy Facilities Siting Bd., 757 N.E.2d 1104, 1111
(Mass. 2001); Town of Northbridge v. Town of Natick, 474 N.E.2d
551, 556 (Mass. 1985). Thus, we find that DEP's final decision
excluding the electric motor on this ground was arbitrary and
capricious.
b. Selective Catalytic Reduction
Unlike the electric motor, the SCR was analyzed in
Algonquin's application. According to the application, "SCR is a
post-combustion gas treatment process in which NH3 [ammonia] is
injected into the exhaust gas upstream of a catalyst bed." SCR
can reduce NOx emissions from a gas-fired turbine like SoLoNOx by
up to 90%.
In Step 3 of the BACT analysis, Algonquin's application
ranked the SCR as the most effective technology at reducing NOx
emissions, and the only technology included that outranked
SoLoNOx. However, Algonquin excluded the SCR at Step 4 as not
cost feasible. Using the 9-ppm SoLoNOx emissions rate as a
baseline, Algonquin calculated the SCR's cost effectiveness at
$41,541 per ton of NOx removed, which well exceeded DEP's $11,000–
$13,000 range. DEP agreed, leaving SoLoNOx as the BACT.
- 26 -
Petitioners argued before the Presiding Officer, and now
before us, that Algonquin incorrectly calculated the SCR's cost
effectiveness. They claim that Algonquin should have used a
baseline emissions rate of 25 ppm, which represents the emissions
rate of older models of Dry Low NOx turbines. Put differently,
petitioners fault Algonquin for considering only the SCR added to
its preferred technology, SoLoNOx, without considering the
combination of SCR plus a cheaper, less effective turbine.
According to petitioners, the SCR-plus-older-turbine
combination would be more effective at reducing emissions than
SoLoNOx alone and would have a cost effectiveness of $14,483. That
value is still over the $13,000 threshold, but petitioners go on
to argue that DEP set that threshold in 1990 and that it should be
updated for inflation at a minimum.14 So adjusting, petitioners
claim, would make the SCR/turbine combination cost feasible.
We need not reach the inflation issue because we agree
with DEP that 9 ppm was the correct baseline under the applicable
BACT guidance.15 The NSR Workshop Manual addresses this situation
under the instructions for average cost effectiveness: "When
calculating the cost effectiveness of adding post process
14 The Presiding Officer rejected petitioners' argument in
this case but recommended that DEP consider updating its thresholds
for inflation going forward.
15 Petitioners do not argue that an inflation adjustment
alone would make $41,541 per ton cost feasible.
- 27 -
emissions controls to certain inherently lower polluting
processes, baseline emissions may be assumed to be the emissions
from the lower polluting process itself. In other words, emission
reduction credit can be taken for use of inherently lower polluting
processes." NSR Workshop Manual, supra, at B.37. The SCR is a
post-process emissions control, and SoLoNOx is an inherently lower
polluting process (as compared to other Dry Low NOx turbines), so
SoLoNOx's 9-ppm emissions rate is the proper baseline.
If there was any doubt as to whether the above rule
applies here, DEP's 2011 BACT Guidance offers an even more on-
point case study. It says:
In the recent past, boiler manufacturers have
developed "ultra-low NOx burners" (UNLBs)
which can achieve an oxides of nitrogen
emission rate of 9 parts per million (ppm).
Before the advent of UNLBs, BACT for NOx for
boilers with capacity above approximately
50 million British thermal units per hour was
achieved by the use of Selective Catalytic
Reduction (SCR) to reduce NOx emissions to
5 ppm, accompanied by a 5 ppm ammonia (NH3)
slip. When analyzing the incremental cost of
using SCR to reduce the 9 ppm NOx emission
rate attained by UNLB to reach a 5 ppm NOx
emission limit, it became readily apparent
that requiring SCR with added NH3 emissions
would be economically infeasible, on a
dollar-per-ton-of-pollutant-removed basis.
Therefore, NOx BACT for this category of
emission units is now 9 ppm, with no NH3
emissions.
- 28 -
BACT Guidance, supra, at 5 (footnote omitted). Algonquin and DEP
followed this guidance to a T, so we can hardly call DEP's decision
arbitrary and capricious.16
Petitioners argue that DEP's approach yields undesirable
results. "Algonquin's 9-ppm turbine may be state-of-the-art,"
they say, "but the BACT process is focused not on technological
progress for its own sake. . . . If pairing two older or less
effective technologies will achieve a better result than cutting
edge, standalone technology, BACT favors the former."
Perhaps. But on the other hand, there may be good policy
reasons for DEP's current approach. Requiring applicants to fully
analyze every combination of add-on technology and process-control
technology, including different models of the same technology,
would make an already drawn out and expensive process even more
so. And, as the case study shows, exclusion of the SCR in this
situation may result in slightly higher NOx emissions, but it also
results in lower emissions of ammonia, another air pollutant.
16Petitioners attempt to distinguish the NSR Workshop Manual
rule by arguing that the phrase "inherently lower polluting
processes" does not apply to newer models of an existing technology
like SoLoNOx, which provide "incremental refinement." But as the
BACT Guidance case study suggests, that is not necessarily the
case. See also 310 Mass. Code Regs. § 7.00 ("The best available
control technology determination . . . may include a[n] . . .
equipment specification . . . ."). The better understanding of
the phrase "inherently lower polluting processes," as DEP has
interpreted it, is any control technology yielding a lower
emissions rate that is not an add-on technology (i.e., a process-
control technology).
- 29 -
Lastly, promoting technological development of cleaner
technologies may indeed be a goal of the BACT framework. Even if
the application of that technology in the instant case does not
reduce emissions, the fact that there is an economic incentive for
manufacturers to develop cleaner technologies may benefit the
state as a whole by, for example, improving the New Source
Performance Standards (NSPS) applicable to other facilities. See
42 U.S.C. § 7411; 310 Mass. Code Regs. § 7.00 (citing 40 C.F.R.
pt. 60).
In any event, our task is not to pick the better policy.
As DEP points out, nothing in its rules or regulations requires
applicants to consider every possible combination of older,
dirtier technologies in order to achieve the lowest possible
emissions outcome.
Finally, we note that petitioners argue that Algonquin
used the wrong formula in calculating the SCR's cost effectiveness,
saying that Algonquin "focused only on incremental costs when the
analysis required demands a focus on average cost." Petitioners
miss the point. The NSR Workshop Manual says that, for add-on
technologies, the baseline for the average-cost-effectiveness
calculation is the emissions rate for the technology to which it
is being added (here, SoLoNOx). Incremental cost effectiveness
compares one control technology to the next most effective
technology (again, SoLoNOx). So for the SCR, the two formulae
- 30 -
would yield the same result of $41,541 per ton. It matters not
whether Algonquin called this "average" or "incremental" cost
effectiveness.
2. Toxic Emissions
Petitioners raise two arguments concerning the Weymouth
station's emissions of toxic air pollutants. According to DEP,
the Weymouth station's SoLoNOx turbine may emit up to 0.91 tons of
toxic pollutants (combined) per year, with up to 0.41 tons of that
being attributable to formaldehyde emissions. Formaldehyde is a
genotoxic carcinogenic chemical that can form from incomplete
combustion of natural gas. Incomplete combustion can occur at
lower temperatures, so formaldehyde can be a particular problem
for Dry Low NOx turbines.
Since the 1980s, DEP has handled air toxics through
Allowable Ambient Limits (AAL) and Threshold Effects Exposure
Limits (TEL).17 See DEP Office of Research & Standards, Methodology
for Updating Air Guidelines: Allowable Ambient Limits (AALS) and
Threshold Effects Exposure Limits (TELS) 1–2 (2011); see also DEP,
Ambient Air Toxics Guidelines, https://www.mass.gov/files/
documents/2017/11/07/Ambient%20Air%20Toxics%20Guidelines.pdf. TEL
17 For context, EPA regulates air toxics at the federal level
through the National Emission Standards for Hazardous Air
Pollutants (NESHAP). See 42 U.S.C. § 7412. Petitioners do not
argue that the Weymouth station will exceed or in any way implicate
the NESHAP for formaldehyde or any other pollutant.
- 31 -
is a 24-hour-based measurement reflecting toxic concentrations at
a low-enough level that no health effects at all, even
noncarcinogenic effects like eye irritation, "are expected in the
population, including sensitive populations, over a lifetime of
continuous exposure." In common parlance, the record labels the
risk at these levels "de minimis; i.e., the added risk is so small
that it makes no meaningful difference." AAL is an annual
measurement focused on risks of cancer in humans and is determined
by the lower of the TEL and the Non-Threshold Effects Exposure
Limits (NTEL). For certain air toxics, scientists consider any
non-zero concentration in the air to produce some risk of cancer
in humans, see Brookline II, 497 N.E.2d at 11, so NTEL represents
a de minimis cancer risk rather than no risk at all.
We turn now to each of the petitioners' arguments
concerning AAL and TEL.
a. Background Toxic Levels
Petitioners claim that DEP violated the Massachusetts
CAA and associated regulations because it failed to account for
background levels of air toxics near the Weymouth station when
considering AAL and TEL. They point to three chemicals:
formaldehyde, benzene, and acrolein. They accept, for purposes of
this argument, but see infra section II(B)(2)(b), that the
marginal emissions from the Weymouth station for each of these air
toxics fall below the AAL and TEL, but they contend that the
- 32 -
Weymouth emissions plus the already-existing background
concentrations exceed those values. In fact, even without the
Weymouth emissions, background levels from other sources in that
area already exceed the AAL and TEL for these three air toxics,
such that any additional emissions would, as petitioners argue,
contribute to an exceedance. Since Algonquin and DEP ignored this
cumulative effect and only compared the marginal increase to the
AAL and TEL, petitioners claim the air permit violates
Massachusetts law.
In support of their position, petitioners point us to
two Massachusetts regulations. First, they point us to the
definition of "air pollution," which says in full:
AIR POLLUTION means the presence in the
ambient air space of one or more air
contaminants or combinations thereof in such
concentrations and of such duration as to:
(a) cause a nuisance;
(b) be injurious, or be on the basis of
current information, potentially injurious to
human or animal life, to vegetation, or to
property; or
(c) unreasonably interfere with the
comfortable enjoyment of life and property or
the conduct of business.
310 Mass. Code Regs. § 7.00 (second emphasis added). Second, the
"General Regulations to Prevent Air Pollution" state:
No person owning, leasing, or controlling the
operation of any air contamination source
shall willfully, negligently, or through
failure to provide necessary equipment or to
take necessary precautions, permit any
emission for said air contamination source or
- 33 -
sources of such quantities of air
contaminants which will cause, by themselves
or in conjunction with other air
contaminants, a condition of air pollution.
Id. § 7.01(1) (emphasis added). Because these regulations
contemplate "combinations" of air contaminants, or contaminants
"in conjunction" with one another, petitioners say that DEP is
mandated to consider background levels of air toxics.
DEP responds that its "longstanding policy" is to
compare only emissions from the new source to the applicable AAL
and TEL, without regard to background levels. According to its
1989 policy statement, DEP requires new or modified sources of air
contaminants to "assess, through computer modeling, the ambient
concentrations caused solely by that source's emissions," and
"[t]hese modelled concentrations are then compared to the AALs to
determine whether there may be potentially unacceptable risks
associated with that particular source." DEP Div. of Air Quality
Control, Air Toxics Implementation Update 2 (1989) [hereinafter
1989 Air Toxics Update] (emphasis added). DEP calls the AAL and
TEL "screening guidelines," whereby new sources that exceed these
values are subject to "further evaluation" and new sources below
these values receive no further scrutiny. And, DEP points out,
most states have a similar two-step approach to air toxics, whereby
- 34 -
step one (here AAL and TEL comparison) is for screening purposes
only.18
Petitioners argue, in substance, that to interpret the
regulation's "in conjunction with" language as not requiring an
assessment of the cumulative level of background and proposed new
emissions would be to adopt an irrational or absurd interpretation
of the regulation. We disagree, finding it perfectly rational to
use a low threshold to identify those instances in which
additional, cumulative impacts need be examined. Consider, for
the sake of analogy, a baking hobbyist who plans on making a pie
for a family reunion. The baker knows he has sugar, but he is not
certain how much, and he may not even have the full cup needed for
the recipe. Before he can start baking, his neighbor knocks on
his door and asks to borrow some sugar. And, to make this analogy
more like this case, imagine that measuring the baker's current
supply of sugar would be "resource intensive" for the baker and
his neighbor at that particular moment when the neighbor needs the
sugar.
It would be a perfectly reasonable response in this
scenario for the baker to ask his neighbor how much sugar he needs.
If the neighbor wants only a teaspoon, the baker might simply give
18 In practice, it appears, that applicants regard surviving
step-one screening as essential, given that DEP Air Quality Section
Chief Thomas Cushing could recall no instance in which DEP received
an application for a project that exceeded an AAL or TEL.
- 35 -
it to the neighbor without first measuring his own supply. A
teaspoon is likely too little to make a difference between having
and not having a cup, and even if it would, the practical effect
will not be noticeable. But if the neighbor wants a quarter cup,
then the baker might decide to spend the resources to measure his
supply before agreeing to the neighbor's request.
This is in essence the purpose of AAL and TEL. Before
deciding whether to require that the resources be spent to measure
the current cumulative amount of air toxics, DEP asks whether the
amount to be produced by the new source is like the teaspoon or
like the quarter cup. If it is like the teaspoon, DEP decides
that it is unlikely to make a practical difference. And here DEP's
case is perhaps even stronger than the pie example, because
petitioners have not pointed us to any other cap on how much
pollutant is too much cumulatively (other than NESHAP, see supra
note 17, and petitioners do not allege that the Weymouth station
is even close to violating that standard). In other words, it
would be as if the pie recipe said "roughly one cup, depending on
how sweet you want it."
Petitioners, for their own analogy, point us to
California's rules for automobile tailpipe emissions. See Motor
Vehicle Mfrs. Ass'n of U.S., Inc. v. N.Y. Dep't of Envtl.
Conservation, 17 F.3d 521, 524–25 (2d Cir. 1994) (explaining
California's unique exemption from federal preemption over mobile-
- 36 -
source regulations). "[P]rior to the creation of California's
stringent air pollution regulations," petitioners tell us, "daily
emissions from millions of . . . vehicles resulted in a chronic
condition of air pollution -- smog -- in the City of Los
Angeles . . . even though the incremental emissions from each of
those individual vehicles undoubtedly represented a tiny
contribution to the overall problem, and a de minimis risk to human
health."
The tailpipe example would be like our hypothetical
example if the baker had twelve neighbors at his door all asking
for sugar. In that case, he might want to measure his supply even
if each neighbor wanted only a teaspoon. But surely there are not
"millions" of proposed stationary sources of formaldehyde,
benzene, and acrolein around Weymouth. It is completely rational
for DEP to treat this limited number of sources differently for
screening purposes than California treats personal automobiles.
Cf. 310 Mass. Code Regs. § 7.02(2)(b)(7) (excluding stationary
sources not capable of emitting one ton or more of any pollutant
from the air-permit requirement). Moreover, there are plenty of
other examples of air-pollution regulatory schemes that similarly
screen out de minimis sources. In addition to other states' rules
on air toxics, DEP points us to the Significant Impact Limits
(SILs) used by EPA when assessing compliance with the National
Ambient Air Quality Standards (NAAQS). See Sierra Club v. EPA,
- 37 -
705 F.3d 458, 461 (D.C. Cir. 2013) (explaining SILs); see also
Sierra Club v. EPA, 955 F.3d 56, 58–60 (D.C. Cir. 2020); 40 C.F.R.
§ 51.166(b)(23)(i) (setting net-emissions-increase levels deemed
"[s]ignficant" for purposes of Prevention of Significant
Deterioration (PSD)). The fact that some regulatory programs take
a different approach does not make these programs irrational.
Of course, the fact that DEP's two-step approach is
rational does not dispense with petitioners' argument that the
Massachusetts regulations compel consideration of background
levels. Nevertheless, we defer to the agency's interpretation.
The regulations to which petitioners point us, 310 Mass. Code Regs.
§§ 7.00, 7.01(1), are broad regulations concerning all air
pollution generally, not just air toxics. See Town of Brookline
v. Comm'r of Dep't of Envtl. Quality Eng'g ("Brookline I"), 439
N.E.2d 792, 799 (Mass. 1982) (giving DEP discretion to interpret
310 Mass. Code Regs. § 7.01); see also Brookline II, 497 N.E.2d at
13 ("The Legislature has granted [DEP] broad authority."). And we
do not think that the language from those general regulations
unambiguously forecloses DEP's approach to air toxics. The phrases
"in conjunction with other air contaminants," 310 Mass. Code Regs.
§§ 7.01(1), and "combinations thereof," id. § 7.00, might mean, as
petitioners argue, that DEP should consider background levels of
a given pollutant. Or they might reasonably be read as referring
to situations where two different air pollutants produce a chemical
- 38 -
reaction in the air, as with ozone precursors, see Ill. State
Chamber of Commerce v. EPA, 775 F.2d 1141, 1143 & n.3 (7th Cir.
1985), in which case the regulations do not compel petitioners'
approach. Since the text is ambiguous, and traditional tools of
construction do not resolve that ambiguity, we defer to DEP's
reasonable interpretation. See Kisor, 139 S. Ct. at 2414–18;
Brookline II, 497 N.E.2d at 15.
b. Startup Emissions
Petitioners also argue that the formaldehyde emissions
solely from the Weymouth station will, in fact, exceed the
applicable AAL and TEL. They argue that Algonquin's air-dispersion
model, which showed that formaldehyde emissions would be no more
than 70% of the AAL, underestimated the actual emission rate
because it did not include emissions during intermittent startup
events.
The proposed SoLoNOx turbine will not run continuously.
Instead, it will be shut down and restarted up to 416 times per
year. Normally, the turbine will employ an oxidation catalyst to
reduce formaldehyde emissions, but during the time it takes the
turbine to start up, this catalyst will not be fully operational,
meaning formaldehyde emissions will be higher. Algonquin
estimates that startups will usually last only nine minutes, though
the time may be longer if a startup fails initially.
- 39 -
The air permit as initially drafted by DEP staff allowed
for startup times up to thirty minutes. Petitioners opposed the
allowed startup period before the Presiding Officer. Their
witness, John Hinckley, performed his own dispersion modeling
that, unlike Algonquin's initial modeling,19 accounted for startup
emissions -- one model representing thirty-minute startups, and
another representing nine-minute startups. Hinckley's thirty-
minute model showed that formaldehyde emissions from the Weymouth
station would exceed the AAL and TEL when measured at the property
line as required by DEP guidance. See 1 DEP, The Chemical Health
Effects Assessment Methodology and the Method to Derive Allowable
Ambient Limits 21 (1990). Hinckley's nine-minute model showed an
exceedance of the AAL, but not the TEL, at the property line. In
response, Algonquin's witness, Justin Fickas, put together a model
representing eighteen-minute startups, which also showed an
exceedance of the AAL.
The Presiding Officer acknowledged that EPA's guidance
does not require modeling of intermittent startups at all, but
nevertheless expressed concern over the modeled exceedances. As
19 DEP policy requires an applicant to model emissions of air
toxics only for sources subject to PSD, plus a few other types of
facilities. See 1989 Air Toxics Update, supra, at 3. The Weymouth
Station does not meet any of these criteria, but DEP exercised its
discretion to request that Algonquin perform this modeling. See
310 Mass. Code Regs. § 7.02(5)(c)(6) (requiring applicants to
furnish air-dispersion modeling "upon request by" DEP).
- 40 -
such, she recommended reducing the allowable startup time from
thirty minutes to eighteen minutes, and the Commissioner adopted
this recommendation. As to the fact that even the eighteen-minute
model showed a concentration above the AAL, the Presiding Officer
stated that "[t]he slight exceedance shown in the revised modeling
beyond the fence line . . . does not, in my opinion, justify
denying the permit."
Petitioners' main argument before us is straightforward:
the Weymouth station will, even under the revised air permit,
create an exceedance of the AAL for formaldehyde, and so the permit
should have been denied, and we should vacate DEP's contrary
decision as arbitrary and capricious. As its name suggests, AAL
is meant to be a "limit," petitioners argue, so an exceedance
should not be allowed, no matter how "slight."
DEP counters that under the applicable policy, there was
no exceedance here. EPA's guidance explains that "the intermittent
nature of the actual emissions associated with . . .
startup/shutdown [operations] in many cases, when coupled with the
probabilistic form of the standard, could result in modeled impacts
being significantly higher than actual impacts would realistically
be expected to be for these emission scenarios." Memorandum from
Tyler Fox, Leader, Air Quality Modeling Grp., EPA, to Reg'l Air
Div. Dirs., Additional Clarification Regarding Application of
Appendix W Modeling Guidance for the 1-Hour NO2 National Ambient
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Air Quality Standard 8 (Mar. 1, 2011), https://www.epa.gov/sites/
production/files/2015-07/documents/appwno2_2.pdf. EPA thus
advises against using startup modeling. See id. at 9–10; see also
DEP, Modeling Guidance for Significant Stationary Sources of Air
Pollution 1 (2011) (noting that DEP generally follows EPA's
guidance on air modeling); cf. 40 C.F.R. § 60.8(c) ("Operations
during periods of startup, shutdown, and malfunction shall not
constitute representative conditions for the purpose of a
performance test . . . ."). DEP relied on this guidance in not
requiring Algonquin to account for startups in its application,
and petitioners have not pointed to anything in DEP policy
requiring a contrary rule. Although Algonquin provided additional
(non-mandatory) modeling to explore the effects of startup events,
such models have not been adopted into official department policy
or regulations. Thus, DEP acted within its discretion when it
relied on a model excluding startup emissions to find, without
further evaluation, that there was no exceedance of AAL or TEL.
3. Environmental Justice Policy
Petitioners claim that DEP failed to comply with the
Massachusetts Environmental Justice (EJ) Policy.
The EJ Policy, first implemented in 2002 by the
Massachusetts Executive Office of Energy and Environmental
Affairs, states that "all people have a right to be protected from
environmental pollution and to live in and enjoy a clean and
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healthful environment," regardless of "race, ethnicity, class,
gender, or handicap." Environmental Justice Policy of the
Executive Office of Environmental Affairs 2–3 (2002),
https://www.mass.gov/files/documents/2017/11/29/ej%20policy%2020
02.pdf; see City of Brockton v. Energy Facilities Siting Bd., 14
N.E.3d 167, 171 n.9 (Mass. 2014) (describing the various iterations
of the EJ Policy prior to 2014). The EJ Policy requires that
agencies subject to it, including DEP, engage in "enhanced public
participation" for projects that meet two criteria: (1) the
project site is located within five miles (for air pollutants) of
an "EJ population,"20 and (2) emissions will exceed the
Environmental Notification Form (ENF) threshold under the
Massachusetts Environmental Protection Act (MEPA), Mass. Gen. Laws
ch. 30, §§ 61–62I. City of Brockton, 14 N.E.3d at 172. The policy
requires "enhanced analysis and review of 'impacts and
mitigation'" for projects that meet the first of these criteria
and where emissions will exceed the Environmental Impact Report
(EIR) threshold under MEPA. Id.
DEP and Algonquin acknowledge that the Weymouth station
is located within five miles of EJ populations. However, they
20 An EJ population is "a neighborhood where 25 percent of
the households have an annual median household income that is equal
to or less than 65 percent of the statewide median or 25% of its
population is Minority or identifies as a household that has
English Isolation." Environmental Justice Policy of the Executive
Office of Energy and Environmental Affairs 3 (2017).
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argue, the Weymouth station's emissions exceed neither the ENF nor
the EIR thresholds, so the EJ Policy is not implicated. Seeing no
rejoinder from petitioners on this point, we agree.
Petitioners nevertheless argue that DEP was required to
do something more. They cite City of Brockton, which stated in
dicta that "[t]he EJ policy does impose a general, but affirmative,
requirement on all agencies covered by it . . . to develop
strategies designed 'to proactively promote environmental justice
in all neighborhoods' in a manner tailored to and consistent with
that agency's 'specific mission.'" Id. at 174 n.17. The City of
Brockton court said there "may be an argument that under this
general requirement," agencies must incorporate EJ principles into
certain agency decisions for projects not implicating the enhanced
public participation or enhanced analysis criteria, but the court
ultimately left the question unresolved. Id. (emphasis added).
Since DEP has not, in petitioners' view, developed any special
"strategies," petitioners say we should invalidate the air permit
for noncompliance with the EJ Policy.
We decline to do so. City of Brockton does not mandate
that agencies go beyond the two requirements set out in the EJ
Policy, only that there "may" be such a requirement. In this case,
there is no real need to resolve this issue of Massachusetts law.
Even assuming DEP is required to go beyond the two stated
requirements, here DEP allowed for enhanced public participation
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even though there was no exceedance of the ENF threshold. City of
Brockton also recognized that agencies would need time to implement
any special strategies, id., and the 2017 updated EJ Policy (issued
after City of Brockton) says that all agency strategies "will be
consolidated into one Secretariat EJ Strategy and will be finalized
by a date established by the Secretary [for Energy and
Environmental Affairs]," Environmental Justice Policy of the
Executive Office of Energy and Environmental Affairs 9 (2017). So
we can hardly blame DEP for the fact that this future date has not
arrived yet. Petitioners also do not explain what special
procedures they have in mind, only that DEP should have implemented
something more than it did. We are unwilling to disturb DEP's
decision in this case with only the vague admonition that it needed
to do more, without saying what more is needed.21
Petitioners point us to Brockton Power Co.,
Nos. 2011-025, 2011-026, 2016 WL 8542559 (Mass. DEP July 29,
2016), in which DEP "performed an enhanced substantive review" of
a power plant even though the relevant MEPA thresholds were not
21 Petitioners also argue, in one sentence, that the
Presiding Officer's decision to dismiss the EJ Policy claim prior
to the hearing was "arbitrary, capricious, an abuse of discretion,
otherwise not in accordance with law, contrary to constitutional
right or short of statutory right." To the extent petitioners
attempt to raise a separate challenge -- constitutional or
otherwise -- to the Presiding Officer's procedure, we deem this
argument waived for lack of development. See United States v.
Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
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triggered. Id. at *57. So, petitioners say, the EJ Policy does
not prevent DEP from voluntarily doing more, and the unexplained
departure from what DEP did in Brockton Power was arbitrary and
capricious. We disagree. As Brockton Power recognizes, DEP can,
in its discretion, engage in further review "on a case-by-case
basis," id., and in this case it chose not to do so (except for
the enhanced public participation).
Finally, petitioners draw our attention to Friends of
Buckingham, in which the Fourth Circuit vacated Virginia's
approval of a compressor station because the agency failed to
comply with Virginia's EJ requirements. 947 F.3d at 87–92.
Friends of Buckingham is easily distinguishable, though, because
Virginia's EJ requirements are not Massachusetts's EJ
requirements. A violation of the former, even on similar facts,
would not necessarily be a violation of the latter, and as we have
determined, there was no violation of Massachusetts's EJ policy
here.
4. Noise
Petitioners argue that noise from the Weymouth station
will cause a nuisance, and hence an impermissible "condition of
air pollution," in violation of 310 Mass. Code Regs. §§ 7.00,
7.01(1) (quoted supra section II(B)(2)(a)).22
Petitioners also mention "unpleasant odors" from the
22
Weymouth station, but do not explain how such odors would create
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According to the HIA, the Weymouth station will produce,
under normal nighttime operating conditions, up to 47 dB(A)
(A-weighted decibels) of noise as measured at King's Cove
recreation area. When combined with background noise, the
nighttime noise at one nearby residence will be 46 dB(A). While
the station is under construction, noise is estimated to be up to
113 dB(A). The HIA also noted that "EPA recommends an average
24-hr exposure limit of 45 dB(A) indoors and 55 dB(A) outdoors,"
and that the World Health Organization (WHO) recommends nighttime
exposure of "45 dB(A) or less." Petitioners argue in effect that,
because the estimated noise levels will exceed EPA's and WHO's
recommendations, the station will create a nuisance. They present
no other argument for how the noise would be considered a nuisance,
nor do they cite to any case or statute pertaining to Massachusetts
nuisance law.
DEP regulations specifically address noise. See Morales
v. Trans World Airlines, Inc., 504 U.S. 374, 384 (1992) ("[I]t is
a commonplace of statutory construction that the specific governs
the general . . . ."). 310 Mass. Code Regs. § 7.10(1) states:
"No person owning, leasing, or controlling a source of sound shall
willfully, negligently, or through failure to provide necessary
a nuisance. We consider this argument waived for lack of
development. See Zannino, 895 F.2d at 17. To the extent
petitioners claim that the Weymouth station will in any other way
cause a nuisance, those arguments are likewise waived.
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equipment, service, or maintenance or to take necessary
precautions cause, suffer, allow, or permit unnecessary emissions
from said source of sound that may cause noise." Id. (emphasis
added).23 DEP has established a "Noise Policy" interpreting when
emissions of sound are unnecessary. See Mass. Exec. Office of
Envtl. Affairs, Dep't of Envtl. Quality Eng'g, Division of Air
Quality Control Policy 90-001 (1990),
https://www.mass.gov/doc/massdep-noise-policy/download. Under
that policy, a source of sound will violate the noise regulation
if the source "[i]ncreases the broadband sound level by more than
10 dB(A) above ambient" or "[p]roduces a 'pure tone' condition."
Id.
Petitioners do not argue that DEP's Noise Policy is an
unreasonable interpretation of 310 Mass. Code Regs. § 7.10(1), so
we give deference to that policy. See Kisor, 139 S. Ct. at 2414–
18; Brookline II, 497 N.E.2d at 15. Petitioners also do not argue
that the Weymouth station will create a "pure tone" condition or,
except for the construction period and "emergency blowdowns,"24
increase broadband sound by more than 10 dB(A) above ambient.
Thus, there is no violation of the Noise Policy. The fact that
23"Noise" is defined as "sound of sufficient intensity
and/or duration as to cause or contribute to a condition of air
pollution." 310 Mass. Code Regs. § 7.00.
24 A "blowdown" is a venting of gas. Emergency blowdowns
"will be extremely rare after initial commissioning" of the
Weymouth station and would last no more than five minutes.
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EPA or WHO might recommend a lower level of noise would presumably
be of interest to DEP. But that fact provides no basis for saying
that DEP has violated any relevant law.
As to the construction period, the HIA estimated that
sound from construction equipment will increase ambient sound
levels by 12 dB(A), which is over the Noise Policy's 10-dB(A)
limit.25 However, DEP says that it has a "longstanding
practice" -- to which its witnesses testified at the
hearing -- "not to apply the Noise Policy to temporary construction
sound" for purposes of air permitting, and "instead to require
appropriate noise mitigation measures." And DEP required just
such mitigating measures for construction of the Weymouth station,
including limited construction hours, mufflers for heavy
equipment, quieter backup alarms, portable noise barriers, and a
noise complaint hotline. Similarly, DEP says that it does not
apply the Noise Policy to "unplanned emergency events" like
blowdowns, which could increase ambient sound by up to 17 dB(A),
and it instead required a "blowdown silencer" to muffle the noise
from such an event. Petitioners do not argue that DEP's
"longstanding practice[s]" regarding construction and emergency
events are unreasonable, nonexistent, or in any other way invalid,
so we will again defer to those practices. See Doe v. Leavitt,
DEP contends that the actual increase will be closer to
25
8 dB(A), below the limit.
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552 F.3d 75, 80–81 (1st Cir. 2009) (describing deference based on
Skidmore v. Swift & Co., 323 U.S. 134 (1944)).
5. Manufacturer Guarantee
Petitioners fault the Presiding Officer's finding that
"[t]he Solar turbine specified for the proposed Project has a
guaranteed emission rate for NOx of 9 ppm," given that the
technical proposal from Solar Turbines contains no guarantee of
emissions rate. Therefore, petitioners reason, the Presiding
Officer's finding was not supported by substantial evidence, or
DEP's decision based on that finding was otherwise arbitrary and
capricious.
Algonquin contends that the record does otherwise
contain evidence of a guaranteed emissions rate from Solar. But
even assuming it does not, we see no merit in petitioners'
argument. Petitioners point us to nothing in Massachusetts law
suggesting that a guarantee from the equipment manufacturer is
required for approval of Algonquin's air permit. And, more
importantly, if the SoLoNOx turbine does not work as claimed in
the permit, that will be Algonquin's problem, not petitioners' or
even DEP's. Simply put, Algonquin could be fined and ordered to
reduce operations to eliminate any violation of its permitted
limits. See Mass. Gen. Laws ch. 111, § 142B. Whether or not Solar
could be liable to Algonquin for such a violation affects only the
allocation of costs as between those parties. See Catlin v. Bd.
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of Registration of Architects, 604 N.E.2d 1301, 1305 (Mass. 1992)
("The appealing party has the burden of showing that his
'substantial rights . . . may have been prejudiced' by the
agency's error." (quoting Mass. Gen. Laws ch. 30A, § 14(7))); see
also Sasen v. Spencer, 879 F.3d 354, 366 (1st Cir. 2018).
6. Insurance Requirement
Petitioners claim that DEP violated Mass. Gen. Laws
ch. 21C, § 4 by granting Algonquin's air permit without requiring
Algonquin to obtain liability insurance or a surety bond. That
statute states:
The department shall require that a licensee
obtain and maintain in effect a contract of
liability insurance, a surety bond or other
evidence of financial responsibility in favor
of the commonwealth sufficient to assure
financial responsibility in the event of
damages resulting from accidents, negligence,
misconduct, or malfunctioning in the
construction, maintenance and operation of a
facility, or from any other circumstances
reasonably foreseeable occurring during or
after construction or in the course of the
maintenance and operation of hazardous waste
facilities.
Mass. Gen. Laws ch. 21C, § 4.
Petitioners' argument lacks merit because Mass. Gen.
Laws ch. 21C, the Massachusetts Hazardous Waste Management Act,
has nothing to do with air permitting. Indeed, petitioners do not
even attempt to argue that the Weymouth station is a "hazardous
waste facilit[y]" subject to the insurance requirement. See id.
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§ 2 (defining "facility" and "hazardous waste"); see also 310 Mass.
Code Regs. §§ 30.131–30.136 (listing hazardous wastes). We thus
reject petitioners' argument.
C. Remedy
Having determined that DEP erred in one regard, see supra
section II(B)(1)(a), we finally must determine the appropriate
remedy. Algonquin urges us to remand to DEP to address the defects
in the permitting process without vacating the permit approval.
Petitioners say we should vacate and remand.
Whether to vacate an agency's flawed decision or remand
without vacatur is within our discretion as the reviewing court,
and "depends inter alia on the severity of the errors, the
likelihood that they can be mended without altering the order, and
on the balance of equities and public interest considerations."
Cent. Me. Power, 252 F.3d at 48. Algonquin argues that these
factors favor remand without vacatur. It says that DEP's failure
to fully explain the BACT result could be easily remedied by DEP
providing the missing explanation. And Congress has already
expressed a preference for the speedy resolution of matters
concerning natural-gas facilities, see 15 U.S.C. § 717r(d)(5),
particularly where FERC has already declared the facility to be
required by considerations of "public convenience and necessity."
So, Algonquin argues, the balance of equities favor a narrow
remedy.
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Petitioners say that, under the federal APA, vacatur is
the default remedy, see 5 U.S.C. § 706(2) (requiring reviewing
courts to "hold unlawful and set aside" defective agency actions),
and that remand without vacatur is a limited exception that should
apply mainly to agency rulemaking, see generally Note, Kristina
Daugirdas, Evaluating Remand Without Vacatur: A New Judicial
Remedy for Defective Agency Rulemakings, 80 N.Y.U. L. Rev. 278
(2005). And they argue that the Central Maine Power factors favor
vacatur because the BACT error was severe, correcting the error
may potentially alter DEP's final decision (i.e., DEP might decide
that the electric motor is the BACT), and the interests of the
public in being protected against harmful air pollution tip the
balance of equities.
Both sides' arguments are persuasive, but we decide to
vacate based on three additional considerations. First, we believe
the administrative record as it exists now is insufficient for DEP
to complete the BACT analysis. As shown by our attempts to perform
the missing calculations, see supra section II(B)(1)(a), it is
impossible even to calculate the magnitude of the cost
effectiveness of an electric motor without more information about
either SoLoNOx's costs or the base-case emissions rate. By
vacating, we allow DEP to reopen the administrative record for the
purpose of filling these evidentiary gaps. DEP may also wish to
elicit more evidence on the actual costs of the electric motor.
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Second, Algonquin has expressed a desire to pursue its redesign
argument, see supra note 6, and vacating will allow DEP to fully
consider that issue as well. Third, we expect and anticipate that
any further proceeding before the DEP will be limited to these
purposes and will be expedited.
III.
For the foregoing reasons, we vacate the air permit and
remand to DEP for it to conduct further proceedings, limited to
the purposes we have identified. We further order that if and
when DEP determines that it cannot reasonably conclude those
proceedings and issue a decision within seventy-five days of the
date of this opinion, then DEP will consult with the other parties
and make a filing with this court in this action showing cause why
such additional time is reasonably required. Any opposition to
the show-cause filing must be filed within seven calendar days of
DEP's filing. We retain jurisdiction for the limited purpose of
receiving and responding to such a filing.
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