Sierra Club v. EPA

Despite agreeing that equities favored an applicant who waited more than three years for EPA to issue an air permit for a natural gas-fired power plant, the Ninth Circuit Court of Appeals concluded that the Clean Air Act’s plain language required vacating the permit, which did not require compliance with regulatory standards in effect at the time the permit was issued. The case involved an application for a plant in Avenal, California, for which a permit application was submitted in 2008. Although the Clean Air Act requires permit determinations to be made within one year of an application, EPA did not issue its final determination until 2011, after a federal district court ordered it to do so. In the course of its deliberations on the permit application, EPA at first contended that it was required to apply new standards promulgated after the application was submitted, including the best available control technology standard for greenhouse gases, but the agency later reversed course and said that it could waive standards that became effective after the statutory one-year deadline for permit determinations. The Ninth Circuit ruled that the Clean Air Act clearly required EPA to apply the regulations in effect at the time of its permit determination and that the Clean Air Act did not allow EPA discretion to grandfather a permit application in under old air standards. The Ninth Circuit noted that this case involved an “ad hoc waiver” of applicable regulations and that its decision did not affect EPA’s ability to grandfather permits through rulemaking (for example, by setting an operative date for new regulations so that a waiver for pending applications was built into the regulation itself).

Several environmental groups filed a lawsuit challenging EPA’s decision to grant an air permit to a planned 600 MW power plant in California. The permit exempted the facility from complying with permitting requirements for, among other things, greenhouse gas emissions because EPA received the permit application before greenhouse gas standards were proposed.