GenOn Mid-Atlantic v. Dept. of the Environment ( 2020 )

GenOn Mid-Atlantic, LLC, et al. v. MDE, et al., Nos. 883, 884 & 885, September Term,
2019. Opinion by Nazarian, J.
ADMINSTRATIVE LAW — QUASI-JUDICIAL AGENCY DISCRETION
The agency’s permitting decisions were not arbitrary and capricious where the agency
followed existing federal regulations to set compliance deadlines for coal-powered steam
electric power plant point sources instead of holding regulations in abeyance until further
rulemaking is held.
Circuit Court for Charles County, Case No. 08-CV-18-872
Circuit Court for Montgomery County, Case No. 454414V
Circuit Court for Prince George’s County, Case No. CAL18-31471
REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
Nos. 883, 884, 885
September Term, 2019
_________________________
CONSOLIDATED CASES
______________________________________
GENON MID-ATLANTIC, LLC, ET AL.
v.
MARYLAND DEPARTMENT OF THE
ENVIRONMENT, ET AL.
______________________________________
Nazarian,
Reed,
Truffer, Keith R.
(Specially Assigned),
JJ.
______________________________________
Opinion by Nazarian, J.
______________________________________
Pursuant to Maryland Uniform Electronic Legal Materials Act
(§§ 10-1601 et seq. of the State Government Article) this document
is authentic.
Suzanne Johnson
Filed: October 28, 2020
2020-10-28 15:30-04:00
Suzanne C. Johnson, Clerk
“The rabbit-hole went straight on like a tunnel for some way,
and then dipped suddenly down, so suddenly that Alice had
not a moment to think about stopping herself before she found
herself falling down a very deep well.”1
GenOn Mid-Atlantic, LLC, NRG Chalk Point, LLC, and GenOn Chalk Point, LLC
(collectively “GenOn”) operate three coal-powered steam electric generating power plants
in Maryland. Burning coal produces pollutants, and GenOn needs a permit for each plant
from the Maryland Department of the Environment (the “Department”) to discharge
pollutants into Maryland’s waters. GenOn applied for renewed permits to replace permits
that were expiring. The Department analyzed the applications under existing federal
environmental regulations and issued permits that, everyone agrees, comply with these
regulations in force at the time of issuance.
Why, then, are we here? Well, the federal regulations in place at the time the permits
were issued were promulgated by the United States Environmental Protection Agency
(“EPA”) during an earlier presidential administration, and the current EPA had expressed
an intention to revisit the applicable federal regulation (and, to acknowledge the elephant
in the room, loosen them). At the time the case arose, the EPA had not actually begun the
rulemaking process that is required to act on that intention, but GenOn asked the
Department to issue permits with terms that reflected the (later, hypothetical) compliance
deadlines at which the EPA had hinted but, again, had not yet begun the process of
adopting. 2 After the Department issued permits consistent with the regulations existing at
1
Lewis Carroll, Alice in Wonderland (Colonial Press).
2
Since oral argument, the EPA has issued a final rule (the “2019 Rule”), to take effect
December 14, 2020, revising the effluent limitation guidelines (“ELGs”) governing
the time, GenOn sought judicial review in the circuit courts of the plants’ respective
counties, and contended that each permit was arbitrary and capricious because the
Department did not await or anticipate the not-yet-revised regulations or give GenOn
additional opportunities to show they couldn’t comply with the deadlines in the existing
regulations. The courts affirmed the Department’s permitting decisions, GenOn appeals,
we consolidated the appeals, and we affirm.
I. BACKGROUND
A. Statutory Framework.
Generally speaking, the federal Clean Water Act (“the Act”) prohibits the
“discharge of any pollutant by any person” into our “navigable waters.” 33 U.S.C.
§§ 1311(a), 1362(7), (12) (2018); see Md. Dept. of Env’t v. Anacostia Riverkeeper, 447
Md. 88, 96 (2016). Some businesses, like GenOn’s coal-powered plants, seek authority
from the EPA to discharge pollutants into the water. See Md. Dept. of Env’t v. Cnty.
Comm’rs of Carroll Cnty., 465 Md. 169, 184–85 (2019). Through the National Pollution
Discharge Elimination System (“NPDES”), the EPA is authorized to issue (or to delegate
to state environmental agencies to issue) discharge permits. But that authority, once
granted, isn’t unfettered—the permits contain restrictions “on the type and quantity of
pollutants that can be released” in order to serve the purpose of the Act. Anacostia
Riverkeeper, 447 Md. at 96 (quoting S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe, 541
discharges of bottom ash transport water and flue gas desulfurization (“FDG”) wastewater.
Steam Electric Reconsideration Rule, 85 Fed. Reg. 64,650 (Oct. 13, 2020) (to be codified
at 40 C.F.R. pt. 423). The new rule shall be considered “issued” as of October 27, 2020,
followed by a 120-day period for judicial review. Id. 2
U.S. 95, 102 (2004)); see 33 U.S.C. § 1342 (2018).
The EPA has the power to delegate its permitting authority to a state so long as the
state establishes “a parallel permitting program” as required under the Act. Carroll Cnty.,
465 Md. at 185; see 33 U.S.C. § 1342(b). The EPA has done this in Maryland, and the
permitting authority is the Department. Anacostia Riverkeeper, 447 Md. at 96; see Md.
Code (1987, 2014 Repl. Vol.), § 9-253 of the Environment Article (“EN”); see COMAR
26.08.04.01. Permits are valid for fixed periods of five years or less, subject to renewal. 33
U.S.C. § 1342(b)(1)(B); EN § 9-328(b). The Act also contains an “anti-backsliding”
prohibition that forbids later permits from containing more lenient conditions than their
predecessors. 33 U.S.C. § 1342(o); see Carroll Cnty., 465 Md. at 185.
The Act defines “water quality standards” that set limits on the concentration of
pollutants in water for public use. Carroll Cnty., 465 Md. at 186; see 33 U.S.C.
§ 1313(c)(2)(A) (2018). To achieve the Act’s water quality standards, permits place
restrictions on pollutants. “Effluent limitation[s]” are “any restriction established by a State
or the Administrator on quantities, rates, and concentrations of chemical, physical,
biological, and other constituents which are discharged . . . into navigable waters . . . .” 33
U.S.C. § 1362(11). The Department incorporates effluent limitation guidelines (“ELGs”)
into the permits it issues. See 40 C.F.R. § 125.3 (2019). ELGs, in turn, address different
classes of pollutants. 33 U.S.C. § 1314(b). Instead of targeting the quantity of pollutants
pushed into our waters by dischargers, ELGs focus on the technology the discharger uses
to clean the types of pollutants discharged into the environment. Id.3
GenOn’s coal-fired power plants produce two types of pollutants that are at issue
here: flue gas desulfurization (“FGD”) wastewater and bottom ash transport water. Coal-
fired power generating units produce flue gas, which contains “large quantities of
particulate matter, sulfur dioxide, and nitrogen oxides,” that would be released into the
atmosphere unless they were cleaned first. Effluent Limitations Guidelines and Standards
for the Steam Electric Power, 80 Fed. Reg. 67,838, 67,846 (Nov. 3, 2015) (codified at 40
C.F.R. pt. 423). The units are equipped with air pollution control systems that clean the air
and remove sulfur dioxide. However, FGD systems produce wastewater that contains
pollutants, including “chemical precipitation, biological treatment, and evaporation.”
Effluent Limitations Guidelines, 80 Fed. Reg. at 67,846. Bottom ash transport water
contains heavy ash particles that fall to the bottom of coal-fired furnaces. Normally, the
bottom ash is cooled in a water-filled hopper that produces two byproducts, the ash itself
and the transport water. Id. Technology exists for bottom ash to be cleaned and produce
zero discharge. Id.
The relevant ELGs require GenOn to use the highest standard of technology it can
reasonably acquire, the “best available technology” (“BAT”), to limit the environmental
impact of pollutants. The EPA (or here, the Department) determines the BAT for a
particular industry by assessing a number of factors:
Factors relating to the assessment of best available technology
shall take into account the age of equipment and facilities
involved, the process employed, the engineering aspects of the
application of various types of control techniques, process
changes, the cost of achieving such effluent reduction, non-
water quality environmental impact (including energy
requirements), and such other factors as the [Department]
4
deems appropriate.
33 U.S.C. § 1314(b)(2)(B) (2018). The BAT standard is “more stringent” than others, and
“reflect[s] the intention of Congress to use the latest scientific research and technology in
setting effluent limits, pushing industries toward the goal of zero discharge as quickly as
possible.” Kennecott v. EPA, 780 F.2d 445, 448 (4th Cir. 1985).
B. The EPA Remarks On Steam-Powered Electric Plants.
On November 3, 2015, the EPA issued a final rule establishing the ELGs for coal-
burning steam plants such as GenOn’s (the “2015 Final Rule”). Effluent Limitations
Guidelines, 80 Fed. Reg. at 67,838. In its preamble, the Rule states that “[s]team electric
power plants contribute the greatest amount of all toxic pollutants discharged to surface
waters by industrial categories regulated under the Act.” Id. Citing the health risks to
minority and low-income communities housed near these plants, the EPA stated that the
2015 Final Rule was intended to “establish[] the first nationally applicable limits on the
amount of toxic metals and other harmful pollutants that steam electric power plants are
allowed to discharge in several of their largest sources of wastewater.” Id. The 2015 Final
Rule imposed stricter limitations on FGD wastewater and required the elimination of
pollutants from bottom ash transport water. Effluent Limitations Guidelines, 80 Fed. Reg.
at 67,894–96 (listing new standards for mercury, selenium, arsenic, and total dissolved
solids in the discharge of FGD wastewater and allowing “no discharge of pollutants in
bottom ash transport water”).
The 2015 Final Rule was challenged, ultimately unsuccessfully, in cases
consolidated in the United States Court of Appeals for the Fifth Circuit. See Clean Water
5
Action v. EPA, 936 F.3d 308 (5th Cir. 2019). On April 25, 2017, the EPA (now under a
new administration) announced in a letter that it planned to reconsider the 2015 Final Rule,
and it postponed the effective date of the 2015 Final Rule “pending judicial review” before
the Fifth Circuit. Postponement of Certain Compliance Dates, 82 Fed. Reg. 19,005 (Apr.
25, 2017) (codified at 40 C.F.R. pt. 423). A few months later, on September 18, 2017, the
EPA issued a final rule lifting the stay and postponing the compliance dates for some types
of wastewater (the “2017 Postponement Rule”). Postponement of Certain Compliance
Dates, 82 Fed. Reg. 43,494–500 (Sept. 18, 2017) (codified at 40 C.F.R. pt. 423). But 40
C.F.R. § 423.13, which contains the relevant deadlines for implementation of the 2015
Final Rule, had not been revised at the time the permits were issued.3
C. The Department’s Permits To GenOn.
GenOn, through the separate LLCs named in the caption of this case, operates three
steam electric power plants in Maryland: Chalk Point Generating Station in Prince
George’s County, Morgantown Generating Station in Charles County, and Dickerson
Generating Station in Montgomery County. GenOn needs permits from the Department to
discharge wastewater in Maryland’s waterways. See 33 U.S.C. § 1311(a). The permits
contain ELGs controlling the technology GenOn must use for FGD and bottom ash
transport water. See Effluent Limitations Guidelines, 80 Fed. Reg. at 67,838.4
3
EPA submitted a proposed rule modifying the standards in the 2015 Final Rule, and its
proposed rule has just been finalized. Steam Electric Reconsideration Rule, 85 Fed. Reg.
at 64,650. The public comment period for this new rule, the 2019 Rule, ran from November
22, 2019–January 21, 2020. Id.
4
“[F]lue gas desulfurization (FGD) wastewater means any wastewater generated
specifically from the wet flue gas desulfurization scrubber system that comes into contact
6
GenOn applied to renew each plant’s permit, and on July 5, 2017, the Department
issued a tentative determination. The tentative determinations were drafts and stated as
much. The drafts indicated that the 2015 Final Rule “required new standards to be
met . . . ‘as soon as possible’ beginning November 1, 2018, but no later than December 31,
2023.” They noted that the EPA had issued a letter on April 12, 2017 “announc[ing] a
decision to reconsider the terms of the new regulations and implement[ing] a stay on the
deadlines in the [2015 Final Rule].” The drafts stated that the letter created “uncertainty as
to whether the standards required . . . [would] be altered and what deadlines [would]
ultimately be applicable.” The Department’s drafts then outlined the changes to the
wastewater standards required under the 2015 Final Rule and noted that “should the actual
limitation be adjusted in a final rule,” the Department would reopen the permit. (emphasis
added). Compliance would be required by the dates set forth in 40 C.F.R. § 423.13(k) and
(g), or no later than November 1, 2020, the updated deadline for FGD wastewater and
bottom ash transport water. Also, the discharger had an option to submit a detailed report
requesting a permit modification “within twelve months of the date when the [2015 Final
Rule] bec[ame] effective again.”
The draft permits underwent a public comment period. GenOn submitted a two-
page letter stating that it approved of “the approach that [the Department] ha[d] taken in
[the draft] permit regarding language concerning” FGD and bottom ash transport water and
with the flue gas or the FGD solids . . . .” Effluent Limitations Guidelines, 80 Fed. Reg. at
67,893. “[B]ottom ash means the ash, including boiler slag, which settles in the furnace or
is dislodges from furnace walls.” Id.
7
that waiting for further rulemaking would serve the EPA’s “intention to avoid any actions
to meet limits that may change as a result of further rulemaking.”5 The Sierra Club, along
with other environmental groups,6 submitted comments arguing that GenOn could and
should meet the delayed November 1, 2020 deadline. They provided a detailed expert
opinion by Dr. Ranajit Sahu to support their contention that GenOn had the capacity to
meet the guidelines.7 GenOn didn’t specify whether it could meet the ELGs or not in its
comments (or in its original application materials), and it raised no objections about
feasibility.
The Department issued its final determinations renewing GenOn’s permits on July
27, 2018. In the final permits, the Department required GenOn’s plants to meet ELG
requirements for FGD wastewater and bottom ash transport water no later than November
1, 2020.8
D. Circuit Court Review.
GenOn sought review of the Department’s July 27, 2018 final determination in the
circuit courts for Prince George’s County, Charles County, and Montgomery County, the
5
GenOn submitted substantively similar comments for all three permits.
6
Sierra Club, Environmental Integrity Project, Chesapeake Climate Action Network,
Chesapeake Physicians for Social Responsibility, Clean Water Action, and Patuxent
Riverkeeper all joined in the comments.
7
Dr. Sahu stated in his opinion that [GenOn] “could install technically-proven treatment”
to the wastewater to meet the 2015 Final Rule’s guidelines.
8
For FGD wastewater only, the Department provided an option for GenOn to comply no
later than December 31, 2023, if it “elected to comply with the voluntary effluent limitation
guidelines at 40 C.F.R. 423.13(g)(3)(i).” GenOn has not indicated any intention to meet
voluntary FGD guidelines.
8
counties where GenOn operates their plants. Each circuit court determined that the relevant
records contained substantial evidence supporting the Department’s permitting decisions
and that the Department’s decisions to issue the final permits were not arbitrary or
capricious.
Here is the timeline of critical events:
Date Event
Nov. 3, 2015 The EPA issued 2015 Final Rule.
Apr. 25, 2017 The EPA stayed 2015 Final Rule.
July 5, 2017 The Department issued draft permits for GenOn’s plants, public
comment period opened after drafts were published.
Sept. 18, 2017 The EPA issued 2017 Postponement Rule.
Sept. 26-28, 2017 Public hearings on draft permits held.
Oct. 5-6, 2017 GenOn submitted written comments to the Department;
Environmental groups submitted written comments; Public
comment window closed.
July 27, 2018 The Department issued final determinations.
Sept. 10, 2018 GenOn filed for judicial review in the Circuit Courts for Prince
George’s County, Montgomery County, and Charles County.
May 23, 2019 Prince George’s County issued order denying GenOn’s petition.
June 5, 2019 Montgomery County issued order denying GenOn’s petition.
June 23, 2019 Charles County issued order denying GenOn’s petition.
GenOn appeals all three decisions, and we consolidated the appeals. We supply
additional facts as necessary below.
II. DISCUSSION
GenOn raises two issues that we rephrase. First, were the Department’s final
determinations, both grounded in the 2015 Final Rule and 2017 Postponement Rule,
arbitrary and capricious? Second, did the Department’s final determinations lack
substantial evidence in the record?
9
Judicial review of administrative actions begins in the circuit court. See Md. Rule
7-201 et seq. On appeal, though, an appellate court “looks through the circuit
court’s . . . decision[] . . . and evaluates the decision of the agency.” Kor-Ko Ltd. v. Md.
Dept. of Env’t, 451 Md. 401 (2017) (quoting People’s Counsel for Balt. Cnty. v. Suria, 400
Md. 663, 682 (2007)). As such, we review the Department’s decision to issue the renewed
permits directly. Md. Dept. of Env’t v. Cnty. Cmm’rs of Carroll Cnty., 465 Md. 169, 201
(2019). “[W]here an ‘organic statute’ authorizes judicial review without a contested case
hearing and does not set forth a standard of review[,]” we apply the substantial evidence
and arbitrary and capricious standards of review. Kor-Ko, 451 Md. at 411 (quoting Md.
Dept. of Env’t v. Anacostia Riverkeeper, 447 Md. 88, 118 (2016)).
When we review an agency’s factual findings, we assess whether substantial
evidence in the record supports the agency’s finding. Id. An appellate court reviewing for
substantial evidence asks “whether a reasoning mind reasonably could have reached the
factual conclusion the agency reached.” Anacostia Riverkeeper, 447 Md. at 120 (quoting
Najafi v. Motor Vehicle Admin., 418 Md. 164, 173 (2011)). We defer to the agency’s fact-
finding and any inferences that the record supports. Id. We review in the light most
favorable to the agency and we grant the agency “great deference regarding factual
questions involving scientific matters in its area of technical expertise.” Id.We apply the arbitrary and capricious standard to matters falling within the agency’s
discretion. Carroll Cnty., 465 Md. at 202. This standard too is “extremely deferential”:
To determine whether the agency’s actions were “arbitrary and
capricious,” we consider whether the agency ‘relied on factors
which Congress has not intended it to consider, entirely failed
10
to consider an important aspect of the problem, offered an
explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency
expertise.
Anacostia Riverkeeper, 447 Md. at 121 (quoting Nat. Res. Def. Council v. EPA, 808 F.3d
556, 569 (2d Cir. 2015)). We must be satisfied from the record that the agency “examined
the relevant data and articulated a satisfactory explanation for its action.” Id. (cleaned up)
(quoting Nat. Res. Def. Council, 808 F.3d at 569).
All told, then, our review of the Department’s permitting decisions follows three
steps:
Whether by statute or by common law, courts look for three
things when reviewing a quasi-judicial decision: (1) were the
findings of fact made by the agency supported by substantial
evidence in the record made before the agency; (2) did the
agency commit any substantial error of procedural or
substantive law in the proceeding or in formulating its
decision; and (3) did the agency act arbitrarily or capriciously
in applying the law to the facts—in essence, whether a
reasoning mind could reasonably reach the conclusion reached
by the agency from the facts in the record. With respect to the
findings of fact, judicial review is highly deferential. With
respect to determining legal error, it is much less so.
Kor-Ko, 451 Md. at 411–12 (quoting Md. Bd. of Pub. Works v. K. Hovnanian’s Four
Seasons, LLC, 425 Md. 482, 514 n.15 (2012)). Permitting decisions involve conclusions
of law, requiring reviewing courts to consider the agency’s expertise in the field:
An agency decision based on regulatory and statutory
interpretation is a conclusion of law. Even when reviewing an
agency’s legal conclusions, an appellate court must respect the
agency’s expertise in its field. When an agency interprets its
own regulations or the statute the agency was created to
administer, we are especially mindful of that agency’s
11
expertise in its field.
Kor-Ko, 451 Md. at 412 (quoting Carven v. State Ret. & Pension Sys., 416 Md. 389, 406
(2010)). Judicial review of the Department’s final determinations ordinarily “shall be on
the administrative record before the [Department] and limited to objections raised during
the public comment period.” Potomac Riverkeeper, Inc. v. Md. Dept. of Env’t, 238 Md.
App. 174, 203 (2018).
A. The Department’s Final Determinations Were Not Arbitrary And
Capricious.
GenOn argues that the Department failed to consider an “important aspect of the
problem” in its permitting decisions, see Anacostia Riverkeeper, 447 Md. at 120, when it
didn’t follow the “EPA’s guidance that the regulated industry should not be bound to
effluent limitations that were soon to change.” The Department responds that the
compliance date included in the final permits was the default compliance date required
under the operative EPA regulations and that GenOn’s arguments rely improperly on a
legally ineffectual regulatory preamble. We hold that the permitting decisions were not
arbitrary and capricious.
These permits implicate a mixture of federal and state statutes and regulations.
“[T]he interpretation of an agency rule is governed by the same principles that govern the
interpretation of a statute.” Kor-Ko, 451 Md. at 416 (quoting Carven, 416 Md. at 407). The
Court of Appeals recently summarized the rules governing statutory interpretation in cases
involving an agency’s permitting decisions:
When interpreting statutes, we seek to ascertain and implement
the will of the Legislature. Our first step toward that goal is to
12
examine the text. If the language of the statute is
unambiguous and clearly consistent with the statute’s
apparent purpose, our inquiry as to legislative intent ends
ordinarily and we apply the statute as written, without resort
to other rules of construction. If ambiguities are found, other
indicia of legislative intent are consulted, including the
relevant statute’s legislative history, the context of the statute
within the broader legislative scheme, and the relative
rationality of competing constructions.
Id. at 417 (emphasis added) (quoting Harrison-Solomon v. State, 442 Md. 254, 265–66
(2015)). We give the words in the statute their ordinary meaning. Id. (quoting Scheve v.
Shudder, Inc., 328 Md. 363, 372 (1992)). “[W]e begin ‘with the plain language of the
statute, and ordinary, popular understanding of the English language dictates interpretation
of its terminology.’” Blackstone v. Sharma, 461 Md. 87, 113 (2018) (quoting Schreyer v.
Chaplain, 416 Md. 94, 101 (2010)). We don’t “read statutory language in a vacuum, nor
do we confine strictly our interpretation of a statute’s plain language to the isolated section
alone.” Johnson v. State, 467 Md. 362, 372 (2020).
We apply these same principles when interpreting agency regulations:
We [] do not read [regulatory] language in a vacuum, nor do
we confine strictly our interpretation of a [regulation’s] plain
language to the isolated section alone. Rather, the plain
language must be viewed within the context of the [regulatory]
scheme to which it belongs, considering the purpose, aim, or
policy of the [agency] in enacting the [regulation]. We presume
that the [agency] intends its enactments to operate together as
a consistent and harmonious body of law, and, thus, we seek to
reconcile and harmonize the parts of a [regulation], to the
extent possible consistent with the [regulations] object and
scope.
Lockshin v. Semsker, 412 Md. 257, 275–76 (2010). “[W]e are especially mindful of [an]
agency’s expertise in its field” when considering an agency’s own regulations. Kor-Ko,
13
451 Md. at 412 (quoting Carven, 416 Md. at 406). “When the construction of an
administrative regulation rather than a statute is in issue, deference is even more clearly in
order.” Id. (quoting Md. Transp. Auth. v. King, 369 Md. 274 (2002)). We accord agencies
deference in interpreting their own regulations because of their expertise in their regulatory
space:
[A]gency rules are designed to serve the basic needs of the
agency, are promulgated by the agency, and are utilized on a
day-to-day basis by the agency. A question concerning the
interpretation of an agency’s rule is as central to its operation
as an interpretation of the agency’s governing statute. Because
an agency is best able to discern its intent in promulgating a
regulation, the agency’s expertise is more pertinent to the
interpretation of an agency’s rule than to the interpretation of
its governing statute.
Kor-Ko, 451 Md. at 412–13 (quoting King, 369 Md. at 289).
Moreover, our examination of legislative intent “contemplates ‘the consequences
resulting from one construction rather than another.’” Johnson, 467 Md. at 364 (quoting
Blaine v. Blaine, 336 Md. 49, 69 (1994)). We avoid any interpretation that would lead to
illogical or absurd results. Goshen Run Homeowners Assoc., Inc. v. Cisneros, 467 Md. 74,
109 (2020).
1. The ELGs in the 2015 Final Rule and the Department’s permits
remain valid, and the 2017 Postponement Rule is not an indefinite
stay.
GenOn argues that, “[s]ince 2017, the EPA has consistently maintained that the
regulated industry not be subject to the new 2015 ELG limits until the EPA completes
another round of rulemaking.” It argues further that the Department ignored the EPA’s
“guidance” when it set the November 1, 2020 deadline in its final permits. The Department
14
responds that the plain language of the 2015 Final Rule and the 2017 Postponement Rule
supports its final permits to GenOn and contends that GenOn conflates preamble language
with the body of the regulations to support its arguments. As we explain, we agree with the
Department.
The difference in the two positions reflects the difference between how things
actually were at the relevant time and how GenOn wanted them to be. It wasn’t pure
wishcasting on GenOn’s part—the EPA had expressed an intention to modify the
regulations, foreshadowed the direction it intended to take, and just now has issued a new
rule. All the same, the rules GenOn wanted didn’t exist. The EPA’s 2015 Final Rule was
enacted on November 3, 2015 and its provisions, including the provisions relevant to this
case, were in effect when the permit was issued. 80 Fed. Reg. at 67,838. The rule provided
updated ELGs, forming stricter rules over coal plants’ handling of FGD wastewater and
bottom ash transport water. The 2015 Final Rule stated that these new, stricter ELGs would
become effective “as soon as possible” within a set date range unless the Department
established a different date after receiving the necessary information from the discharger:
The phrase “as soon as possible” means November 1, 2018,
unless the permitting authority establishes a later date,
after receiving information from the discharger, which reflects
a consideration of the following factors:
(1) Time to expeditiously plan (including to raise capital),
design, procure, and install equipment to comply with the
requirements of this part.
(2) Changes being made or planned at the plant in response to:
(i) New source performance standards for greenhouse
gases from new fossil fuel-fired electric generating
units . . . ;
15
(ii) Emission guidelines for greenhouse gases from
existing fossil fuel-fired electric generating units . . . ;
or
(iii) Regulations that address the disposal of coal
combustion residuals as solid waste . . . .
(3) For FGD wastewater requirements only, an initial
commissioning period for the treatment system to optimize the
installed equipment.
(4) Other factors as appropriate.
Effluent Limitations Guidelines, 80 Fed. Reg. at 67,894 (codified at 40 C.F.R. § 423.11(t)
(2016)) (emphasis added).
GenOn argues, though, that the EPA expressed an intention to revisit the 2015 Final
Rule, and the Department should have considered the EPA’s intent in setting the deadline
for compliance under the “other factors” catch-all in 40 C.F.R. § 423.11(t)(4). In support,
it cites preamble language from the administrative stay and the 2017 Postponement Rule.
But the plain language doesn’t indicate any intent to defer compliance indefinitely and does
not have any legal effect in any event.
In April 2017, the EPA issued a notice staying the 2015 Final Rule. Postponement
of Certain Compliance, 82 Fed. Reg. 19,005. The notice indicated in its supplementary
background information that “the Administrator announced his decision to reconsider the
Rule” and that “the Agency [found] that justice require[d] it to postpone the compliance
dates of the Rule that ha[d] not yet passed, pending judicial review.” Id. In making the
decision to stay the 2015 Final Rule, the EPA indicated that it was considering “the capital
expenditures that facilities incurring costs under the Rule will need to undertake in order
to meet” the updated ELGs. Id. The stated effect of the stay, again in the supplemental
16
information, was to “preserve the regulatory status quo with respect to wastestreams
subject to the Rule’s new, and more stringent, limitations and standards, while the litigation
is pending and reconsideration is underway.” Id.But the EPA lifted the administrative stay five months later when it issued the 2017
Postponement Rule on September 18, 2017. Postponement of Certain Compliance Dates,
82 Fed. Reg. 43,494. And critically, the 2017 Postponement Rule lifting the stay preserved
the 2015 Final Rule instead of nullifying it or modifying it substantively, as GenOn
suggests. And rather than extending compliance deadlines out to 2023, as GenOn would
like, the 2017 Postponement Rule pushed compliance deadlines for FGD wastewater and
bottom ash transport water to November 1, 2020:
The phrase ‘as soon as possible’ means November 1, 2018
(except for purposes of § 423.13(g)(1)(i) [FGD wastewater]
and (k)(1)(i) [bottom ash transport water] . . . , in which case it
means November 1, 2020), unless the permitting authority
establishes a later date, after receiving information from the
discharger . . . .
Postponement of Certain Compliance Dates, 82 Fed. Reg. at 43,500. Nothing in the revised
regulatory language indicated that the 2015 Final Rule is invalid. To the contrary, it made
no other substantive changes to the 2015 Final Rule. Instead, it provided a delay in the date
range for compliance but not an indefinite deferral or a reinstatement of the administrative
stay.
Still, GenOn cites language from the preamble to the 2017 Postponement Rule and
argues that this preamble conveys the EPA’s intent to conduct another rulemaking and
postpone all compliance until then. 82 Fed. Reg. 43,494. But EPA’s then-unrequited intent
17
doesn’t affect our analysis of these permits. Our review of a regulation ends ordinarily
where the plain language of a statute or regulation is unambiguous. Kor-Ko, 451 Md. at
416. Where the plain meaning of a statute is unambiguous, we do not need to venture to
other sources or indicia to glean intent. See id. (articulating that our inquiry ends where the
plain language is unambiguous and that ambiguity requires review of other indicia); see
also Chesapeake Ranch Club, Inc. v. Garczynski, 71 Md. App. 224, 228 (1987) (stating
that where the statutory language was unambiguous, “it was unnecessary that the trial court
refer to the preamble”). And “although a preamble may be resorted to in aid of the
construction of a statute if its meaning is doubtful, it forms no part of the statute,” Clarke
v. Cnty. Comm’rs for Carroll Cnty., 270 Md. 343, 349 (1973), and it certainly shouldn’t be
read to undercut the substance of the regulation it introduces.
Here, the plain meaning of the operative regulation is unambiguous—“as soon as
possible” means November 1, 2020 for FGD wastewater and bottom ash transport water,
unless the permitting authority chooses a later date based on the materials filed by the
discharger. Postponement of Certain Compliance Dates, 82 Fed. Reg. at 43,500.
Accordingly, the only change to the 2015 Final Rule in the 2017 Postponement Rule is the
November 1, 2020 compliance date for the wastestreams relevant here. This delay, along
with the administrative lifting of the stay, preserved the 2015 Final Rule.9 82 Fed. Reg. at
43,500. In light of the rule’s unambiguous language, we don’t need to look beyond it to
9
The Fifth Circuit agreed: in issuing the 2017 Postponement Rule, “EPA went out of its
way to issue a narrow reconsideration decision, leaving intact the bulk of the 2015
Rule . . . .” Clean Water Action, 936 F.3d at 312 (emphasis added).
18
ascertain the agency’s intent. See Kor-Ko, 451 Md. at 416. And again, we accord
substantial deference to an agency’s interpretation of its own rules. Id. at 412–13. Because
the Department’s final determinations on these permits hew closely to the language of the
unambiguous regulation, the November 1, 2020 deadline for GenOn’s compliance with the
2015 ELGs is not arbitrary and capricious.
2. Other indicia of the EPA’s intent do not change our plain meaning
interpretation of the 2017 Postponement Rule on the 2015 Final Rule.
Although we have determined that the plain meaning interpretation of the regulation
controls, for the sake of completeness we address GenOn’s arguments regarding the
preamble language of the 2017 Postponement Rule.
GenOn points to the portion of the preamble stating that the “action to postpone
certain compliance dates in the 2015 [Final] Rule is intended to preserve the status quo for
FGD wastewater and bottom ash transport water until the EPA completes its next
rulemaking . . . .” Postponement of Certain Compliance Dates, 82 Fed. Reg. 43,494–95. It
also cites a footnote stating that “[i]f EPA does not complete a new rulemaking by
November, 2020, it plans to further postpone the compliance dates such that the earliest
compliance date is not prior to the completion of a new rulemaking.” 82 Fed. Reg. at 43,498
n.6.
At the same time, the EPA reiterated that the 2015 Final Rule was being preserved.
And because it’s preserved, the 2015 Final Rule remained controlling over the
Department’s permitting decisions under the EPA’s regulations.
19
The 2017 Postponement Rule notes that the compliance deadline was being
postponed for a set period of two years:
Under the Clean Water Act (“CWA”), The Environmental
Protection Agency (EPA) intends to conduct a rulemaking to
potentially revise certain best available technology
economically achievable (“BAT”) effluent limitations and
pretreatment standards for existing sources (“PSES”) for the
steam electric power generating point source
category . . . . EPA is, accordingly, postponing compliance
dates in the 2015 Rule. In particular, EPA is postponing the
earliest compliance dates for the new, more stringent, BAT
effluent limitations and PSES for flue gas desulfurization
(“FGD”) wastewater and bottom ash transport water in the
2015 Rule for a period of two years. . . . EPA’s action to
postpone certain compliance dates in the 2015 Rule is intended
to preserve the status quo for FGD wastewater and bottom ash
transport water until EPA completes its next rulemaking
concerning those wastestreams, and it thus does not otherwise
amend the effluent limitations guidelines and standards for the
steam electric power generating point source category.
82 Fed. Reg. 43,494–95 (emphasis added). Yet the preamble states as well that despite the
postponement, the 2015 Final Rule was being “maintain[ed]”:
EPA intends to conduct a new rulemaking regarding the
appropriate technology bases and associated limits for
the . . . requirements applicable to FGD wastewater and
bottom ash transport water discharged from steam electric
power plants. . . . EPA finds it appropriate to postpone the
earliest compliance dates for the new, more stringent, BAT
effluent limitations and PSES applicable to FGD wastewater
and bottom ash transport water in the 2015 [Final] Rule until it
completes the new rulemaking. This maintains the 2015 Rule
as a whole at this time, with the only change being to
postpone specific compliance deadlines for two
wastestreams. Thus, the earliest compliance dates for plants
to meet the new, more stringent FGD wastewater and bottom
ash wastewater limitations and standards in the 2015 Rule,
which were to be determined by the permitting authority as a
date “as soon as possible beginning November 1, 2018[,]” are
20
now to be determined by the permitting authority as a date
“as soon as possible beginning November 1, 2020[.]”10
82 Fed. Reg. at 43,496 (emphasis added). The EPA repeats the preservation of the 2015
Final Rule a second time, writing later that “[t]his action maintains the 2015 [Final] Rule
as a whole at this time, with the only change being to postpone specific compliance
deadlines for two wastestreams.” 82 Fed. Reg. at 43,499 (emphasis added).
Thus, even if we were to consider other manifestations of the EPA’s intent, which
we are not required to do, we view the preamble of the 2017 Postponement Rule as a whole
to indicate an intent to maintain the 2015 Final Rule until a new rulemaking took place and
a new rule takes effect. The preamble acknowledges the potential for a new rulemaking,
but reaffirms the efficacy of the 2015 Final Rule, at least in the interim. The preamble
merely re-states the EPA’s intent to conduct a new rulemaking and that the earliest
compliance dates would be delayed for two years:
This is a final rule to delay action, and it does not change the
requirements of the effluent limitations guidelines and
standards published in 2015.
82 Fed. Reg. at 43,499 (emphasis added).
10
In 2017, 40 C.F.R. § 423.11(t) was amended to conform to the 2017 Postponement Rule
and reflect the modified compliance dates for certain types of waste, including FGD and
bottom ash transport water:
The phrase “as soon as possible” means November 1, 2018
(except for purposes of [FGD and bottom ash transport
water] . . . , in which case it means November 1, 2020), unless
the permitting authority establishes a later date . . . .
40 C.F.R. § 423.11(t) (2017); see 40 C.F.R. § 423.13(g)(1)(i) (FGD wastewater), (k)(1)(i)
(bottom ash transport water).
21
Intent notwithstanding, at the time the permits were issued the EPA had yet to
initiate any new rulemaking, so to ignore the 2015 Final Rule in favor of a rulemaking that
had not yet started undermines the plain meaning of the 2017 Postponement Rule.
Moreover, preambles deserve less substantive weight than the regulations they
introduce, and “[t]o the extent that the preamble collides with the plain and unambiguous
language of the ordinance, the latter must prevail.” Clarke, 270 Md. at 349. Compare
Pomeranc-Burke, LLC v. Wicomico Env’t Trust, Ltd., 197 Md. App. 714, 748 (2011)
(finding that where a statement of purpose is included in the body of the ordinance, and not
a separate preamble, and where that purpose is not inconsistent with the ordinance, the
purpose may be considered). Even if GenOn’s interpretation were correct, the language of
the preamble cannot be applied indefinitely to postpone the 2015 Final Rule because it
would conflict with the plain meaning of the regulations. The EPA could have modified
the 2015 Final Rule outright and did not, conspicuously. Instead, it chose to keep the
existing regulations in place, except to extend the compliance deadline by two years. The
unambiguous substantive regulation prevails over a preamble that anticipates its future
amendment.
GenOn’s reading of the regulations would take a clear, unambiguous regulation and
construe it in a way that reaches an absurd, illogical result. See Goshen Run, 467 Md. at
109. Its approach leaves the Department unable to enforce a current rule, in anticipation of
a future rule that does not exist (and for which the rulemaking process has not even started),
and puts aside GenOn’s request that we ignore the EPA’s stated intent to maintain the 2015
Final Rule for now. It’s not hard to think of ways in which this would lead to regulatory
22
chaos. And we wonder too if this anticipatory regulation principle is meant to apply
consistently. Imagine, for example, that a future administration comes to Washington
promising to reduce pollution and accelerate compliance deadlines—would GenOn be
asking the Department and the courts to incorporate the EPA’s promised-but-unmade rules
into their next permit? Whatever the answer, we decline to attempt the advanced analytical
gymnastics necessary to reach the result GenOn seeks. The Department was correct to
apply the regulations in place at the time of the permit, and its decisions to issue permits
that track the 2015 Final Rule and 2017 Postponement Rule were not arbitrary and
capricious.
3. The Department was not required to maintain language from its draft
permits in its final determinations.
In a related point, GenOn argues by extension that the Department’s decisions to
issue the final permits are arbitrary and capricious because the Department made a “drastic
and unforeseeable change” in the permit language between its draft permits and the final
permits. It contends that the differences between the draft permits and the final
determinations “resulted in significant harm to GenOn.” GenOn seems, in essence, to be
arguing that it developed a reliance interest in the terms of the draft permits and that it was
harmed when the Department issued final permits with a set deadline instead of a “flexible”
deadline.
The draft permits were issued on July 5, 2017, during the stay of the 2015 Final
Rule. The Department explained the state of the permitting deadlines during that uncertain
period:
23
On September 30, 2015, EPA finalized revisions to the
regulations for the Steam Electric Power Generating category
at 40 CFR 423. . . . The updated rule required new standards to
be met for [FGD wastewater and bottom ash transport water]
“as soon as possible” beginning November 1, 2018, but no later
than December 31, 2023.
In a letter dated April 12, 2017, the EPA administrator
announced a decision to reconsider the terms of the new
regulations and implemented a stay on the deadlines in the final
rule. There is now uncertainty as to whether the standards
required under the September 30, 2015 promulgation will
be altered and what deadlines will ultimately be applicable.
The following requirements . . . automatically adjust the
applicable implementation deadline dates if the dates remain
the same (as in the 2015 rule promulgation) or if these dates
are changed. However, should the actual limitations be
adjusted in a final rule, the Department shall reopen the
permit . . . .
After providing this context about the uncertainty surrounding the compliance dates at that
time, the Department provided the following requirements for implementation of the new
ELGs:
1. Bottom Ash Transport Water. The permittee must cease the
discharge of bottom ash transport water no later than the date
specified at 40 CFR 423.13(k) once the stay is lifted or the rule
terms are altered (originally specified as November 1, 2018 in
the 2015 promulgation) unless a request for major permit
modification (i.e. including public participation) is submitted
by the permittee within twelve months of the date when the
rule becomes effective again. Any such request must include
a report which analyzes potential methods for stopping
discharges of bottom ash transport water, selects the method
most appropriate for this facility, explains reasoning for the
selected method, and proposes a timeline for ceasing
discharges as soon as possible.
24
The draft permits indicated that if a proper request was received within the twelve-month
timeframe, the compliance dates would default to the latest allowable date under 40 C.F.R.
423.13(k) or December 31, 2023. The language relating to the FGD compliance date was
similar:
2. FGD Wastewater. Within 12 months of the date when the
rule becomes effective again, the permittee may submit a
request for major permit modification (i.e. including public
participation) to change the effective date of the new limits for
arsenic, mercury, selenium, and nitrate-nitrate at [the
monitoring point]. Such a request must include a report
analyzing potential treatment options, selection of the option(s)
deemed most appropriate for the facility, and a proposed
timeline for meeting the new limits. If the Department receives
such a request within the allotted 12-month timeframe, the date
for transitioning from the limits . . . shall default to the latest
allowable completion date according to 40 CFR
423.13(g)(1)(i) (originally specified as December 31, 2023 in
the 2015 promulgation) until the modification is issued or
denied.
The final determinations, though, were issued after the stay was lifted and set the
compliance deadline as November 1, 2020.11
11
The permits state as follows:
X. COMPLIANCE WITH NEW EFFLUENT LIMITATION
GUIDELINES
1. Bottom Ash Transport Water. The permittee must
cease the discharge of bottom ash transport water no
later than November 1, 2020 pursuant to the effluent
limitation guidelines at 40 CFR 423.13(k)(1)(i).
2. FGD Wastewater. The permittee must comply with
the limits for arsenic, mercury, selenium, and nitrate-
nitrite promulgated in the new effluent limitation
guidelines at 40 CFR 423.13(g)(1)(i) no later than
November 1, 2020.
25
GenOn argues that the change in the permit language between the draft permits and
the final determinations was “drastic and unforeseeable.” We disagree.
First, GenOn cites no precedent, and we have not found any, to suggest that the
Department cannot make changes between its drafts and final determinations. Indeed, one
purpose of issuing drafts and requesting public comment is to determine whether to make
any changes before issuing a final determination. Final permits do not need to be
“identical” to the draft permit. Potomac Riverkeeper, 238 Md. App. at 204. “That would
be antithetical to the whole concept of notice and comment. Indeed, it is the expectation
that the final rules will be somewhat different—and improved—from the rules originally
proposed by the agency.” Id. (quoting Nat. Res. Def. Council v. EPA, 279 F.3d 1180, 1186
(9th Cir. 2002) (cleaned up). Second, GenOn had been on notice that it would face stricter
compliance standards since November 3, 2015, when the 2015 Final Rule was issued. It
has known, at least since then, that (1) the EPA intended to increase the ELG standards
relevant to GenOn’s businesses and (2) that the compliance window could begin as early
as November 1, 2018 (later amended to November 1, 2020). GenOn cannot argue credibly
that it was blindsided by any of this.
B. The Department’s Final Determinations Were Supported By
Substantial Evidence.
GenOn argues that the Department’s permitting decisions are not supported by
substantial evidence in the record because GenOn couldn’t conduct and submit its own
feasibility study on whether it could comply with the 2015 Final Rule ELGs by November
1, 2020. It argues that without its own feasibility study, the record before the Department
26
was incomplete, and the permitting decisions should be “remanded to [the Department] to
consider feasibility evidence.” The Department responds that it had enough information on
GenOn’s capacity to meet the ELG requirements to issue the permits and that it was
GenOn’s responsibility to inform the Department during the comment period if it was
unable to meet the guidelines. The Department responds further that GenOn cannot raise
feasibility concerns now because it failed to do so during the comment window. We agree
with the Department.
Ordinarily, our review of the Department’s final determinations “shall be on the
administrative record” before the Department and is “limited to objections raised during
the public comment period.” Potomac Riverkeeper, 238 Md. App. at 203 (emphasis added).
Maryland Code (1987, 2013 Repl. Vol.), EN § 1-601(d) provides that:
(1) Judicial review shall be on the administrative record before
the Department and limited to objections raised during the
comment period, unless the petitioner demonstrates either that:
(i) The objections were not reasonably ascertainable
during the comment period; or
(ii) Grounds for the objections arose after the comment
period.
If a party meets the exceptions, “[t]he court shall remand the matter to the Department for
consideration[.]” EN § 1-601(d)(2). In 2018, this Court explained the Department’s
permitting process, as outlined in the Environment Article:
The statutory scheme for public comment on the [Department]-
issued permits listed in EN § 1-601(a) contemplates published
notice of permit applications (EN § 1-602), informational
meetings (EN § 1-603), and publication of [Department’s]
tentative determination (EN § 1-604(a)). If the tentative
determination is to grant the application, EN § 1-604(a)(3)
27
requires [the Department] to prepare a draft permit and
“publish a notice of the tentative determination” that provides
30 days for public comment, and, if requested, hold a public
hearing pursuant to EN § 1-604(a)(4).
Potomac Riverkeeper, 238 Md. App. at 204. After the public comment window, though,
the statute doesn’t provide for another comment window without special exception:
There is no statutory provision for additional public comment
on [the Department’s] final determination and revised final
permit; [the Department] is simply required to publish a
“notice of final determination” pursuant to EN § 1-604(2), after
which an eligible party may petition for judicial review . . . .
At that point, the judicial review is limited to the
administrative record and “limited to objections raised
during the public comment period” unless the petitioning
party can demonstrate that there are new objections that
“were not reasonably ascertainable during the comment
period,” or “arose after the comment period” ended. EN §
1-601(d)(1).
Id. (emphasis added). The petitioning party, then, must demonstrate “that there are
genuinely new objections that are materially different” from what the Department had
considered already. Id. Indeed, if there were no materially different objections, then
“remand would serve no purpose, and would only introduce unnecessary delay . . . .” Id. at
205.
Here, GenOn argues that remand is necessary because it was unable to submit its
own feasibility information. That’s nonsense. All of the information regarding GenOn’s
ability to meet the new ELGs is in GenOn’s possession and was reasonably ascertainable
during the comment period (and long before). GenOn simply failed to submit it. We need
not speculate as to why GenOn decided not to conduct a feasibility study and supply that
information—whatever its reasons, GenOn could have developed and provided a study
28
during the comment period and did not, and it is not entitled to a do-over.
GenOn contends in its brief that the “flexible” draft permit language, combined with
its interpretation of the status of the EPA’s rules, provided the basis for its decision to
“focus[]” its comments “on the legal status of the 2015 ELG Rule” and to request that the
Department state that compliance would only be due “‘after the ELG is revised.’” Perhaps,
but that explains GenOn’s tactical decisions—it does not establish a basis to vacate the
permits and allow GenOn to try another tactical approach. GenOn, a sophisticated company
with sophisticated advisors, chose not to provide feasibility information in favor of an all-
or-nothing interpretive argument aimed at extending the compliance deadlines indefinitely.
GenOn may have swung for the fences and missed, but that doesn’t change the fact that
the information GenOn needed to demonstrate feasibility was reasonably ascertainable
during the comment period. We know this too because the Environmental Groups did
supply feasibility information in the form of an expert report.
GenOn argues that it didn’t focus on feasibility at that time because it “was operating
under the impression that it would have an opportunity to submit feasibility data” after the
final permits were issued and asserts that it wasn’t on notice that the Department would
impose different terms than were included in the draft permits. But GenOn was on notice.
The terms of the final permits were lifted directly from the 2015 Final Rule and the 2017
Postponement Rule. GenOn had years to absorb the information included in these
regulations and assess whether it would, in fact, be subject to them. GenOn claims that it
“had no opportunity to respond to the technical aspects” raised during the comment period
as to feasibility, but that’s just wrong. GenOn had the very same comment window as other
29
organizations to submit feasibility information, but it passed on that opportunity in favor
of its interpretive argument. Any wounds GenOn suffered as a result were self-inflicted
and do not supply a basis to blow up these fully compliant permits.
JUDGMENT OF THE CIRCUIT COURT
FOR CHARLES COUNTY, CASE NO. 08-
CV-18-872, AFFIRMED.
JUDGMENT OF THE CIRCUIT COURT
FOR MONTGOMERY COUNTY, CASE
NO. 454414V, AFFIRMED.
JUDGMENT OF THE CIRCUIT COURT
FOR PRINCE GEORGE’S COUNTY, CASE
NO. CAL18-31471, AFFIRMED.
APPELLANT TO PAY COSTS.
30