IN THE FIRST DISTRICT COURT OF APPEAL FIRST DISTRICT OF FLORIDA. Case No. 1D Final Permit No. PSD-FL-375 Project No AC.

Transcription

1 IN THE FIRST DISTRICT COURT OF APPEAL FIRST DISTRICT OF FLORIDA Case No. 1D Final Permit No. PSD-FL-375 Project No AC SOUTHERN ALLIANCE FOR CLEAN ENERGY vs. Appellant, STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION, and SEMINOLE ELECTRIC COOPERATIVE, INC., Appellees. / APPELANT S AMENDED INITIAL BRIEF George Cavros, Esq. Counsel for Southern Alliance for Clean Energy 120 East Oakland Park Boulevard, Suite 105 Fort Lauderdale, Florida (954) (954) (facsimile) gcavros@att.net

2 TABLE OF CONTENTS Page Number Table of Contents... Table of Authorities... Preliminary Statement... i iii vii Statement of the Case and Facts... 1 Summary of Argument... 5 Standard of Review... 6 Argument One: The Court Has Subject Matter Jurisdiction... 8 A. Background on DEP s federally delegated authority... 9 B. SACE perfected party status under R (3), F.A.C. and under Chapter 120, Fla. Stat C. The APA does not provide an adequate remedy for DEP s failure to follow required procedures for public participation in processing the Seminole permit Argument Two: The Seminole Permit should be remanded because DEP s procedure for processing the permit violated federal rules adopted by DEP Argument Three: The Court should remand the permit because DEP did not include emission limits for mercury required by the Clean Air Act A. The Clean Air Act requires a case-by-case determination of Maximum Achievable Control Technology determination for mercury emitted from Electric Generating Units, such as the proposed Seminole Unit B. The Seminole Permit does not contain the required MACT analysis C. Compliance with MACT would likely force changes in other permit conditions in the PSD permit... 28

3 D. The permit should be remanded to DEP for a MACT determination and broad review of the entire permit Argument Four: The Seminole permit should be remanded to DEP to consider carbon dioxide limits in the permit A. The Clean Air Act requires BACT for each pollutant subject to regulation B. Carbon dioxide is a pollutant subject to regulation under the Clean Air Act Carbon dioxide is currently regulated under the Clean Air Act Carbon dioxide is subject to further regulation under the Clean Air Act C. The permit should be remanded back to DEP to consider limits for carbon dioxide emissions Conclusion Certificate of Service Certificate of Compliance... 40

4 Table of Authorities United States Supreme Court Cases Mass. v. EPA, 127 U.S. 1438, 167 L.Ed.2d 248 (2007) 12, 29, 32, 37 Federal Appellate Cases Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855 (D.C. Cir 2001) 25 Mossville Environmental Action Now v. EPA, 370 F.3d 1232 (D.C. Cir 2004).. 25 N.J. v. EPA, 517 F.3d 574 (D.C. Cir. 2008).. 12, 23, 25 National Lime Ass n v. EPA, 233 F.3d 625, 634 (D.C. Cir. 2000). 25, 27 National Min. Ass n v. EPA, 59 F.3d 1351 (D.C. Cir. 1995) 25 Natural Resources Defense Council v. EPA, 489 F.3d 1364 (D.C. Cir. 2007).. 25 Sierra Club v. EPA, 353 F.3d 976 (D.C. Cir. 2004) 25 Florida Supreme Court Cases Engle v. Liggett Group, 945 So. 2d, 1246 (Fla. 2006)... 7 Odham v. Foremost Dairies, Inc, 128 So.2d 586, 593 (Fla. 1961). 17 Town of Palm Beach v. Palm Beach County, 460 So.2d 879, 882 (Fla. 1984).. 7 Florida Appellate Cases Bankers Ins.Co. v. Fla. Residential Prop.and Casualty Joint Underwriting Assoc., 689 So.2d 1127 (Fla. 1 st DCA 1997). 15

5 Comtys. Fin. Corp v. Fla. Dep t of Envtl. Regulation, 416 So.2d 813, 816 (Fla. 1 st DCA 1982) Daniels v. Fla. Parole and Probation Comm n, 401 So. 2d 1351, (Fla. 1 st DCA 1981)... 13, 14 Dep't of Envtl. Reg. v. Falls Chase Special Taxing Dist., 424 So. 2d 787, 796 (Fla. 1st DCA 1982) Fairbanks, Inc v. State of Fla. Dep t of Transp., 635 So.2d 58, 59 (Fla. 1 st DCA 1994) Sullivan v. Fla. Dep t of Envtl. Prot., 890 S. 2d 417 (Fla. 1 st DCA 2004)... 7, 17 Federal Statutes 2 U.S.C , U.S.C , U.S.C , 30, U.S.C U.S.C U.S.C U.S.C U.S.C Florida Statutes , Fla. Stat. (2008) 6, 11, 13, 15, 18, 19, , Fla. Stat.(2008) 6, 8, 9, 11, 13, 15 19, , Fla. Stat. (2003) 13, 19, 20

6 120.68(1), Fla. Stat. (2003)... 8, (7), Fla. Stat.(2003)... 8, , Fla. Stat. (2008) , et seq. Fla. Stat. (2008)... 3, 9 Code of Federal Regulations 40 C.F.R , 10, 11, 30, 31, CFR Part C.F.R C.F.R , 10, 11, 18, C.F.R , 21, C.F.R , 21, C.F.R C.F.R , 3, 12, C.F.R C.F.R , 12, 20, 24, C.F.R , 3, 12 Federal Register 73 Fed. Reg (June 27, 2008) 4 61 Fed. Reg July 23, 1996) Fed. Reg (Nov. 27, 2001)... 35

7 65 Fed. Reg (Dec. 20, 2000) Fed. Reg Florida Administrative Code Fla. Admin. Code R (2006) Fla. Admin. Code R (3) (2006).... 9, 10 Fla. Admin. Code R (11)(d)2 (2006) Fla. Admin. Code R (5)(2008) Other Authority Florida Constitution Art. V, 4(b)(2), Fla. Const Environmental Appeals Board In re Encogen Cogeneration Facility, 8 E.A.D. 244, 250 n.8 (EAB 1999).. 12 Superior Court of Fulton County Friends of the Chattahoochee v. Couch, Docket No. 2008CV146398, Superior Court of Fulton County (June 30, 2008) EPA Memo Interpretation of Industrial Wastewater Discharge Exclusion from the Definition of Solid Waste at 2, (Feb. 17, 1995) 35 PRELIMINARY STATEMENT Citations to the record will be noted as R. Vol. #, p. ## denoting the volume number and page number. For ease of reference, appellant Southern Alliance for Clean Energy ( SACE ) has attached appendices of key federal law and state and

8 federal codes used in the brief. These will be referred to as App. and will follow the record or legal citation.

9 STATEMENT OF THE CASE AND FACTS This is an appeal of a Final Order by the Florida Department of Environmental Protection ( DEP ), pursuant to rules 9.190, 9.030(b)(1)(C) and of the Florida Rules of Appellate Procedure. On March 9, 2006, Seminole Electric Cooperative ( Seminole ) applied for a permit to construct a large coal-fired power plant, Seminole Unit 3, at its facility in Palatka, Florida. R. Vol. 3, p. 412 through Vol. 5, p Seminole sought a Prevention of Significant Deterioration ( PSD ) permit 1 for the plant under the federal Clean Air Act ( CAA ) and DEP rules implementing the federal law. DEP issued a Written Notice of Intent to Issue Air Permit on August 24, 2006, and on September 8, 2006 a public notice of the draft Seminole permit was published in the Palatka Daily News. R. Vol. 9, p. 1,511-13; R. Vol. 9, p. 1,557-1,558. At the time, Florida operated a delegated PSD program for power plants. The federal 1 A PSD permit limits the amount of air pollution that may be released by a source and details what construction is allowed, what emission limits must be met, and often how the equipment that is causing the pollution must be operated. The PSD program is designed to protect public health and welfare and to assure that any decision to permit increased air pollution... is made only after a careful evaluation of all the consequences... and after adequate procedural opportunities for informed public participation in the decision making process. See 42 U.S.C. 7470; PSD permits may be issued by EPA, by a state to which EPA has delegated partial authority to review what are essentially federal PSD permits, or by a state given full EPA powers to issue permits under its own procedures. The draft permit in this case was issued under the former partial authority while the final permit was issued by DEP after it was given full authority by EPA

10 Environmental Protection Agency ( EPA ) had delegated some of its authority under the federal CAA to Florida to review and evaluate PSD permits for power plants and to ensure public participation. App. A. In the PSD Delegation Letter, EPA makes clear that the extent of the State s authority is to administer and apply the federal PSD program, which is embodied in EPA s regulations at 40 C.F.R (substantive provisions) and 40 C.F.R (procedural provisions). App. A at 3. In keeping with these federal requirements, Florida adopted and incorporated by reference 40 C.F.R. Part52 Subpart A, which includes subsection 40 C.F.R (q). App. B. The requirements of 40 C.F.R are included in 40 C.F.R (q) and adopted by the state of Florida in Fla. Admin. Code R (2006). App. C. The federal PSD procedural rules incorporated by DEP include the following provisions: they afford all interested persons the opportunity for an appeal within 30 days of the final permit 2 ; they allow the introduction of previously unascertainable issues after the comment period 3 ; they allow for participation by all interested persons 4 ; they require public notice of PSD public 2 40 C.F.R C.F.R C.F.R

11 hearing to all interested parties 5 ; and they requires a statement of basis 6, or a fact sheet C.F.R , 8, 9, 10, 11, 13, 19. App. D. The Notice of Intent to Issue Air Permit had two inconsistent deadlines: (1) it provided a period of 30 days from publication for the submission of public comments on the Notice of Intent; and (2) stated that substantially affected persons opposing permit issuance could file a petition for administrative hearing within 14 days of the notice. R. Vol. 9, p.1, DEP did not issue the permit after the 30-day notice period. Instead, DEP conducted a siting review process under the Florida Electrical Power Plant Siting Act, , et seq., Fla. Stat. (2008), from July 26, 2006, until August 18, 2008, when Final Order DEP was issued approving the site certification for the project. 8 On July 28, 2008, twenty-three months after Seminole s notice of draft permit had been published, and one month before the final permit was issued, EPA s approval of DEP s electric power plant PSD program became effective and DEP assumed EPA s full permitting powers under the CAA. See Approval and 5 40 C.F.R C.F.R C.F.R The Site Certification Permit is an umbrella permit for all affected state, regional and local agencies, and includes any regulatory activity which would be applicable under these agencies regulations for the facility. The federal air permit process in separate from the site certification process

12 Promulgation of Implementation Plans Florida: Prevention of Significant Deterioration, 73 Fed. Reg. 36,435 (June 27, 2008). App. E. Thus, for nearly the entire time that the Seminole air permit application was pending, DEP was required to use the federal procedures for PSD permits. Florida s state administrative procedures now apply to new permits going forward. Id., 73 Fed. Reg. at 36,437. During the two years that the permit application was under consideration by DEP, SACE submitted two sets of substantive and procedural comments to the DEP. On August 21, 2007, SACE and other conservation organizations filed joint comments on the proposed air permit with DEP, pointing out, among other things, the inconsistent procedures followed by DEP in issuing the Notice of Intent to Issue Air Permit for Seminole Unit 3 and calling for a reopening of the PSD air permit process. R. Vol. 12 pp. 2, DEP did not respond to the comments or the request to reopen the process. On July 3, 2008, SACE once again submitted written comments to DEP citing the inconsistent procedures and calling for a reopening of the PSD air permit process in light of information that was not reasonably ascertainable at the time of the issuance of the draft permit. R. Vol. 12, pp. 2,197 2,232. DEP, once again, did not respond to the comments or the request to reopen the PSD air permit process

13 DEP issued the Notice of Final Permit on September 5, 2008; two years after the issuance of the draft permit, more than one year after the initial SACE comments and more than two months after the second set of SACE comments. R. Vol. 12, pp. 2,259-2,283. SACE received a copy of the Notice, and was listed on the service list for the Notice. R. Vol. 12, p. 2,260. SACE filed its timely Notice of Appeal on October 6, 2008, pursuant to the judicial review provision of the Notice of Final Permit. R. Vol. 13, pp. 2, SUMMARY OF THE ARGUMENT The Florida Department of Environmental Protection ( DEP ) violated its delegated federal CAA authority, adopted by reference in the Florida Administrative Code, in issuing a PSD permit for the construction of a 750 MW coal burning unit by Seminole. DEP utilized public participation procedures that were in direct contradiction to its adopted federally delegated procedures for consideration of PSD permits. At best, DEP was operating a hybrid PSD permitting system that was confusing to parties and constituted an invalid procedure for issuing federal permits. SACE was a party to the permit proceeding below in accordance with the DEP-adopted federal rules by submitting two sets of written comments prior to the issuance of the Final Permit. This Court s subject matter jurisdiction over this appeal under the Administrative Procedure Act ( APA ) is not dependent upon an - 5 -

14 administrative hearing having been held under or , Fla. Stat., nor was SACE required to exhaust an administrative remedy that was contrary to the applicable law for the consideration of the Seminole PSD permit application. The Court should remand the permit to DEP, not only because the procedures utilized were improper, but also because the permit review omitted two substantive requirements under federal law as incorporated into DEP rules that became applicable during the permit application process. The permit should be remanded for DEP to conduct a public process to make a Maximum Achievable Control Technology ( MACT ) determination for hazardous air pollutants, including mercury, and this remand should be broad enough to address the changes to the design of the power plant and other emissions limits that will likely result from the MACT determination. The permit should also be remanded for DEP to determine emissions limits for carbon dioxide to be included in the permit now that the United States Supreme Court has determined that greenhouse gases are pollutants under the CAA. STANDARD OF REVIEW The standard of review for this case regarding the agency s invalid permitting procedure is de novo and the standard of review of the agency s incorrect technical analysis is de novo. The de novo standard is utilized when there are generally no undisputed facts and the questions before the court is deciding the - 6 -

15 which applicable law to apply to the set of facts. As such, questions of statutory interpretation are reviewed under a de novo standard of review. Sullivan v. Fla. Dep t of Envtl. Prot., 890 S.2d 417, (Fla. 1 st DCA 2004). Sullivan centered on a final order, issued by DEP, denying a property owner the right to participate in an underground storage tank remediation program. This Court found that DEP misinterpreted the federal and state statutory scheme, misinterpreting applicable provisions, contrary to their plain meaning and found the de novo standard of review to be appropriate. Id at 420. The Florida Supreme Court has held that pure questions of law require a de novo standard. Engle v. Liggett Group, 945 So. 2d, 1246 (Fla. 2006) citing Town of Palm Beach v. Palm Beach County, 460 So.2d 879, 882 (Fla. 1984) (where the facts are essentially undisputed, the legal effect of the evidence will be a question of law). In our case, DEP has incorrectly applied the law as delegated to it by EPA and has utilized an incorrect procedure and incorrect substantive technical analysis in issuing a PSD permit for Seminole. The question of whether DEP utilized the correct law in implementing its PSD process and evaluating the PSD permit application is the squarely a question of law and the focus of this appeal

16 ARGUMENT I. THE COURT HAS SUBJECT MATTER JURISDICTION. This Court has subject matter jurisdiction in this case based on its jurisdiction to hear appeals of final agency actions. The Florida Constitution and the Florida Rules of Appellate procedure permit appellate review of administrative actions if provided by general law. 9 The APA contemplates that there may be times where agency action occurs without a hearing and that it is appropriate for the Court to exercise jurisdiction where there has been a material error to follow prescribed procedure. The APA provides that a party who is adversely affected by final agency action is entitled to judicial review (1), Fla. Stat. The APA contemplates that this Court can review final agency actions where: (1) there has been an administrative hearing pursuant to an evidentiary hearing under , Fla. Stat.; (2) there has been no hearing prior to agency action and the reviewing court finds that the validity of the action depends on disputed facts (7)(a), Fla. Stat.; and (3) where the fairness of the proceedings or the correctness of the action may have been impaired by a material error in procedure or a failure to follow prescribed procedure (7)(c), Fla. Stat. 9 Fla. R. App. P (b)(1)(c); Art. V, 4(b)(2), Fla. Const. ( District courts of appeal shall have the power of direct review of administrative action, as prescribed by general law )

17 In the instant case, the DEP utilized a confusing hybrid process of contradictory state and federal rules. The process was a cross between the Florida APA and federal PSD permit rules adopted by reference in Fla. Admin. Code R (3). Under that hybrid framework, SACE was a party in the administrative proceeding below and exhausted the only administrative remedy that was lawfully available. A. Background on DEP s federally delegated authority In practice, the CAA s PSD program is typically administered by state permitting agencies. This can happen in one of two ways. First, a state may have its own PSD program, adopted under state law that U.S. EPA has approved as part of a State Implementation Plan that the CAA requires of each state. Second, a state without an approved state PSD implementation program can arrange with U.S. EPA to take delegation of the federal PSD program, and issue federal PSD permits essentially standing in the shoes of the U.S. EPA. In a few states, Florida included, there is a combination of these two approaches whereby PSD permits for some sources are issued under state law, and permits for other sources are issued under the federal PSD permit program pursuant to a delegation of federal authority. Florida s state PSD program, as it existed during most of the pendency of the Seminole permit application, extended to all new major sources and major modifications except sources subject to the State s Power Plant Siting Act - 9 -

18 ( PPSA ), , Fla. Stat. (2008). As a result, for any source subject to the PPSA, the state of Florida (through DEP) issued federal PSD permits under a delegation agreement with the U.S. EPA. This fact is made clear by EPA s October 26, 1993, letter granting full delegation of the federal PSD program for sources subject to the PPSA. DEP adopted the federal rules by reference in Fla. Admin. Code R (3). In the PSD Delegation Letter, EPA makes clear that the extent of the State s authority is to administer and apply the federal PSD program, which is embodied in EPA s regulations at 40 C.F.R (substantive provisions) and 40 C.F.R. 124 (procedural provisions). In particular, EPA states: [W]e hereby delegate our authority for all portions of the federal PSD program, as described in 40 C.F.R , to the State of Florida for sources subject to review under the PPSA... as follows: A. * * * B. EPA delegates to the State of Florida its authority and procedures for technical review and evaluation of new sources and public participation pursuant to 40 C.F.R , and its authority under 40 C.F.R to take final action on an application (emphasis added). C. For purposes of and in accordance with paragraph B above, the State of Florida shall follow the procedures in 40 C.F.R , except that the word Director and the phrase Regional Administrator shall mean State Director.... (emphasis added). D. This Delegation is based on the following conditions: 1. * * * 2. In accomplishing the delegated PSD review, the State of Florida will apply all applicable federal air permitting rules and follow the applicable federal permitting process. If at any time it is determine that the state rules or statutes prohibit the

19 department from applying any such standard or procedure, the pertinent portion of the delegation may be revoked. * * * * 5. Public availability of information shall be in accordance with 40 C.F.R (q). Furthermore, 40 C.F.R (q), part of the federal rules adopted by reference in Fla. Admin. Code R (3), makes it clear that the procedures of 40 C.F.R. Part 124 apply to the issuance of PSD air permits in Florida. This section, as well as the EPA delegation letter referenced above, requires DEP to follow the applicable procedures of 40 CFR Part 124 in processing PSD permit applications. DEP did not follow the federal rules that it had adopted by reference into Florida rules when issuing the Seminole PSD permit, instead opting for a contradictory and confusing hybrid permit process that was wholly inconsistent with its delegated authority from EPA. SACE attempted to follow the DEPadopted federal procedures in filing written comments on the draft permit and became a party to the proceedings by virtue of filing written comments that raised issues that were not reasonably ascertainable at the time of the Notice to Issue Air Permit. B. SACE perfected party status under DEP Rules and under Chapter 120, Fla. Stat. While SACE did not become a party to the process by filing a petition for administrative hearing under or , Fla. Stat., within 14 days after

20 the air permit was proposed in August 2006, it did become a party to the final permit process under the applicable federal rules adopted by reference by DEP by filing two sets of comments before the final permit was approved that raised both substantive and procedural issues with the draft permit. SACE submitted comments after the initial 30-day comment period that addressed issues that were not reasonably ascertainable during the 30 day comment period. 40 C.F.R Persons who filed comments are considered parties to the proceeding entitled to appeal the issuance of the final permit. 40 C.F.R SACE submitted comments after the initial 30-day comment period focused on issues that were not reasonably ascertainable during the initial 30-day comment period, such as changes in the law for mercury emissions following a federal court decision invalidating EPA s weakening of mercury emission rules for coal-fired power plants 11, and the requirement to include limits for carbon dioxide emissions following the U.S. Supreme Court s decision in Massachusetts v. EPA. 12 R. Vol. 12, pp DEP acknowledged SACE s 10 In re Encogen Cogeneration Facility, 8 E.A.D. 244, 250 n.8 (EAB 1999)(A petitioner may demonstrate that an issue was not reasonably ascertainable during the public comment period). 11 New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008), reh. en banc denied (D.C. Cir. 2008). 12 Massachusetts v. EPA, 549 U.S. 497 (2007)

21 participation in the proceeding by including SACE on the service list for the Notice of Final Permit, published September 5, Additionally, SACE can become a party to a state administrative proceeding without petitioning for an administrative hearing under or , Fla. Stat., where agency action is finalized under procedures not providing for such a hearing , Fla. Stat., the judicial review provision of the APA, anticipates that there are circumstances in which agency action is appealable without the agency conducting an administrative hearing. For instance, (7)(a) provides: (7) The court shall remand a case to the agency for further proceedings consistent with the court s decision or set aside agency action, as appropriate, when it finds that: (a) There has been no hearing prior to agency action and the reviewing court finds that the validity of the action depends upon disputed facts... (emphasis added). Nor is there a requirement that the agency action have resulted from a or hearing for a party s participation to allow them to appeal the agency action under Fla. Stat. As the First District Court of Appeal stated in Daniels v. Florida Parole and Probation Commission, 401 So.2d 1351, (Fla. 1 st DCA 1981). It is immaterial that the action appealed may not have the characteristics of a Section order. Our ultimate task under Section is to review action, not agency judgments,... Such action may include a rule or order, or the equivalent,... Section (2) (case citation omitted)

22 A [person] is not denied party status simply because he appears before an agency at a proceeding which is not specifically recognized under Chapter 120 (proceedings established, for examples, by Sections ,.56,.565 or.57). This conclusion is made evident by reference to the APA s definition of party. Section (10)(a), (b) and (c) recognizes three classes of parties: (1) persons whose substantial interests are determined in a proceeding; (2) other persons who are authorized as a matter of constitutional right, provision of statute, or rule to participate in a proceeding as parties, and, finally, (3) still other persons who are permitted by the agency to intervene or participate in a proceeding as parties. Section (10) s reference to proceeding does not limit or restrict the word to proceedings that are cognizable only under the APA. Therefore, by reason of the general, unrestricted usage of the word proceeding in Section (10), we conclude that the legislature intended that a person may be a party to any proceeding or legal action which is recognized by law. (emphasis added) In Daniels, this Court expressed its willingness to look beyond the conventional trappings of an evidentiary hearing per se and concluded that the Legislature took a broader view of party status to include persons in any proceeding or legal action recognized by law. It is clear that DEP had agreed to and had incorporated federal rules for issuing a federal PSD permit and the written comment proceeding is recognized by law. SACE properly submitted comments as part of this proceeding, and therefore has party status to bring this appeal in this Court. By arguing that SACE did not perfect its party status under rules that became applicable after EPA s approval of DEP s PSD program for power

23 plants became effective in July 2008, Seminole is now trying to place SACE in a classic Catch-22 by arguing that even if DEP followed the improper notice and wrong procedure, the only way to appeal the permit is to have complied with the improper notice and followed an invalid procedure when the permit was proposed in C. The APA does not provide an adequate remedy for DEP s failure to follow required procedures for public participation in processing the Seminole permit. Alternatively, should this Court conclude that the only administrative route to party status was through an administrative hearing under or , the Court has subject matter jurisdiction to remand the case back to the agency for failure to follow required procedures for public participation in processing the Seminole permit. While it is well settled law that administrative remedies must be exhausted prior to seeking relief in the courts, this Court has identified exceptions to the exhaustion doctrine. In Bankers Insurance Co., the First District set forth the criteria that must be met before an administrative remedy is considered inadequate: (1) the complaint must demonstrate some compelling reason why the APA (Chapter 120, Florida Statutes) does not avail the complainants in their grievance against the agency; or (2) the complaint must allege a lack of general authority in the agency and, if it is shown, that the APA has no remedy for it; or (3) illegal conduct by the agency must be shown and, if that is the case, that the APA cannot remedy that illegality; or (4) agency ignorance of the law, the facts, or public good must be shown and, if any of that is the case, that the Act provides no

24 remedy; or (5) a claim must be made that the agency ignores or refuses to recognize related or substantial interests and refuses to afford a hearing or otherwise refuses to recognize that the complainants grievance is cognizable administratively. Bankers Ins. Co. v. Fla. Residential Property and Casualty Joint Underwriting Assoc., 689 So. 2d 1127, 1129 (Fla. 1 st DCA 1997) (citing Comtys. Fin. Corp. v. Fla. Dep t of Envtl. Regulation, 416 So. 2d 813, 816 (Fla. 1st DCA 1982)). Here, the DEP exercised lack of authority by virtue of its facially invalid hybrid process with no corresponding redress for SACE. The conflicting administrative procedures offered by DEP in the notice of the draft permit could not have provided an adequate remedy for SACE. A review of Chapter 120, Fla. Stat., indicates no provision that could have halted the rushed and invalid procedure to cut-off the Seminole PSD permit comment and appeal process. Provisions that include rule making and declaratory statements could not have been utilized within the 14-day time window to provide relief to SACE. The DEP procedure cut off comment and appeal of a draft permit for over two years. SACE submitted comments outlining both procedural and substantive concerns, yet those comments were ignored by DEP. The procedural process outlined by DEP in its notice was invalid and did not offer a forum for addressing procedural irregularities, including the lack of response from DEP. Appellant could not have addressed procedural concerns and substantive concerns raised after the 14-day appeal period because the procedural framework adopted by DEP for

25 issuing the draft permit did not allow for challenges to procedure and cutoff all issues, even unascertainable ones, at 14 days after the issuance of the PSD permit in direct violation of DEP s federally delegated authority. A second similar exception to the exhaustion doctrine exists when an agency acts without colorable statutory authority that is clearly in excess of its delegated powers, Odham v. Foremost Dairies, Inc, 128 So.2d 586, 593 (Fla. 1961); Fla. Dep t of Envtl. Reg. v. Falls Chase Special Taxing Dist., 424 So. 2d 787, 796 (1st DCA 1982); see also State of Fla. Dep t of Revenue v. Brock, 576 So. 2d 848, 850 (1st DCA 1991); Sullivan v. Fla. Dep t of Envtl. Prot., 890 S. 2d 417 (Fla. 1 st DCA 2004) ( judicial adherence to the agency s view is not demanded when it is contrary to the statute s plain meaning ). DEP acted in excess of its delegated powers in this permit proceeding by ignoring the federal procedures that were required by its delegation agreement with the EPA. The agency s invalid deviation from the federal source of its authority for issuing federal PSD permits, and adopted by reference in its own rules, undermined an administrative process where Appellant s substantive claims should have been heard. As such, the agency violated the source of its federal authority that had been adopted into the agency s own rules. In the instant case, the invalidity of DEP s administrative acts is clearly evident from a comparison of the process followed by DEP to the federal process

26 delegated to DEP via federal rules, as discussed in detail infra. The invalidity of the DEP process is clear on its face. II. THE SEMINOLE PERMIT SHOULD BE REMANDED BECAUSE DEP S PROCEDURES FOR PROCESSING THE PERMIT VIOLATED FEDERAL RULES ADOPTED BY DEP. DEP was clearly required to follow federal procedures in processing and analyzing the Seminole Unit 3 PSD air permit. It is DEP s failure to follow the substantive and procedural requirements of the EPA delegation letter and the federal procedures incorporated into DEP rules for issuance of the Seminole Unit 3 PSD air permit that is one basis of SACE s appeal of the permit and its request for remand. DEP s Notice of Intent to Issue Air Permit for Seminole Unit 3 did not even mention the federal CAA, the State s delegation agreement with U.S. EPA, or the applicable federal PSD regulations and procedures. Rather, the Letter and the attached Notices refer only to Florida Statutes and the Florida Administrative Code. R. Vol. 9, pp While the Florida Administrative Code liberally cross references or incorporates the requirements of the federal regulations for PSD permitting, there are some glaring inconsistencies in DEP s handling of Seminole s permit application when compared to the procedures required under EPA s regulations in 40 C.F.R. Part

27 Most significantly, DEP s Public Notice of Intent failed entirely to identify the correct procedure for pubic participation in the permitting process and for administrative challenge of the PSD permit. The Notice stated: A person whose substantial interests are affected by the proposed permitting decision may petition for an administrative hearing in accordance with Sections and , Fla. Stat. The petition must contain the information set forth below and must be filed with (received by) the Department s Agency Clerk in the Office of General Counsel of the Department of Environmental Protection, 3900 Commonwealth Boulevard, Mail Station #35, Tallahassee, Florida (Telephone: 850/ ; Fax: 850/ ). Petitions filed by any person other than those entitled to written notice under Section (3), F.S., must be filed within fourteen (14) days of publication of this Public Notice or receipt of a written notice, whichever occurs first (emphasis added). Under Section (3), F.S., however, any person who asked the Permitting Authority for notice of agency action may file a petition within fourteen (14) days of receipt of that notice, regardless of the date of publication. A petitioner shall mail a copy of the petition to the applicant at the address indicated above, at the time of filing. The failure of any person to file a petition within the appropriate time period shall constitute a waiver of that person s right to request an administrative determination (hearing) under Sections and , F.S., or to intervene in this proceeding and participate as a party to it (emphasis added). Any subsequent intervention will be only at the approval of the presiding officer upon the filing of a motion in compliance with Rule , F.A.C. R. Vol. 9, p. 1,512. This notice is inconsistent with the express procedures of 40 C.F.R (as agreed upon by DEP in its federal delegation agreement) by establishing the and Fla. Stat. petition for administrative hearing process as the sole procedure for appealing the permit and by cutting off

28 any appeal process even before the end of the 30-day comment period on the draft permit. The DEP procedures specified in the Notice are not even arguably equivalent to the procedural requirements embodied in the federal regulations. Under the federal PSD air permit procedures, any interested person has the right to file comments on a draft permit for which public notice has been provided. 40 C.F.R The term interested person under the federal rules is clearly broader than Florida s interpretation of substantially affected interests under the APA. Under Florida law to establish that the substantial interests of a party will be determined by an agency, for purposes of the APA, requires a showing that: (1) the proposed action will result in injury-in-fact which is of sufficient immediacy to justify a hearing; and (2) the injury is of the type that the statute pursuant to which the agency has acted is designed to protect. Fairbanks, Inc. v. State Dept. of Transp., 635 So.2d 58, 59 (Fla. 1 st DCA 1994). DEP s process contains no express provision, as do the federal rules, allowing for the introduction of new issues after the close of the period for public comment where such issues were not reasonably ascertainable during the comment period. See 40 C.F.R This constitutes another major departure that has the effect of limiting meaningful public participation. We note as well that the Public Notice appears to have been published only in the Palatka Daily News, a paper with a small regional readership (with a circulation of only about 12,

29 15,000) that does not reach all the potentially interested persons in the State of Florida. Thus, the adequacy of the public notice itself is in question. DEP s Notice of Intent to Issue Air Permit also suggests that the PSD permitting process has been (or will be) merged with the state s Power Plant Siting Act process. The Notice states, that [f]or the purposes of judicial review, the Department may, when possible, consolidate a request for administrative hearing on this draft permit within a Power Plant Certification Hearing. R. Vol. 9, p As a result, it is not even entirely clear whether an independent PSD permit hearing, focusing specifically on PSD issues, would have been available. Under the federal rules, upon issuing a draft PSD permit, the permitting authority is required to also issue either a statement of basis, a Fact Sheet, or both. 40 C.F.R , 8. A statement of basis must briefly describe the derivation of the conditions for the draft permit and the reasons for them. 40 C.F.R A fact sheet must briefly set forth the principal facts and the significant factual, legal, methodological and policy questions considered in preparing the draft permit, including a description of the facility, the types and quantities of pollutant, the degree of PSD increment consumption, a brief summary of the basis for the draft permits conditions (including legal citations), reasons for denying requested variances, and a description of the procedures for reaching a final decision. 40 C.F.R Any fact sheet or statement of basis must be

30 sent to the applicant and, on request, to any other person. 40 C.F.R (b), 124.8(a). The statement of basis and/or fact sheet (as well as all documents cited therein) are also specifically required to be a part of the administrative record under 40 C.F.R However, there is no indication in DEP s Notice of Intent or Public Notice Document that any fact sheet or statement of basis was ever prepared. Clearly, DEP did not follow the appropriate federal procedural rules in handling this permit application. Indeed, it is difficult to determine whether in fact the permit notice was intended to effectuate the issuance of a federal PSD permit at all -- and regardless of intent, the process that DEP has followed cannot effectuate the issuance of a federal PSD permit. This failure to comply with applicable law has limited involvement in the administrative process, and created significant and impermissible barriers to public participation. SACE has no position about whether DEP could have offered a choice between both the federal process and the state administrative hearing process for public participation in consideration of the Seminole PSD permit. It is facially evident that the procedure offered by its notice was inconsistent with the required federal procedures

31 III. THE COURT SHOULD REMAND THE PERMIT BECAUSE DEP DID NOT INCLUDE EMISSION LIMITS FOR MERCURY REQUIRED BY THE CLEAN AIR ACT. A. The Clean Air Act requires a case-by-case determination of Maximum Achievable Control Technology for mercury emitted from Electric Generating Units, such as the proposed Seminole Unit 3. On December 2000, the EPA added Electric Generating Units ( EGUs ) to the CAA 112(c) (42 U.S.C. 7412(c)) list of source categories for hazardous air pollutants ( HAPs ) for which compliance with section 112 of the Act, including that section s prohibition on construction without a Maximum Achievable Control Technology ( MACT ) determination, is mandatory. See 65 Fed. Reg. at Although EPA purported to remove EGUs from the Section 112(c) list in 2005, through its Clean Air Mercury rule ( CAMR ) the removal was ruled unlawful in 2008 by the D.C. Circuit Court of Appeals. Therefore, a MACT determination for mercury is required for the Seminole permit at issue, and the permit should be remanded to DEP for proper procedure. On February 8, 2008, the D.C. Circuit Court of Appeals held that EPA improperly attempted to remove coal-fired power plants from the section 112 (c) list of source categories subject to CAA requirements for hazardous air pollutant emission reduction standards. New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008), reh. en banc denied (D.C. Cir. 2008). The court s decision was issued prior to the DEP final approval of the Seminole permit and was a main focus of SACE s

32 substantive comments. The court s decision made clear that because EPA s attempted delisting was illegal, relevant sources of hazardous air pollutants remain listed under section 112 of the CAA. 13 As a result, permitting agencies, including DEP, must perform a full case-by-case MACT analysis for all new and modified EGU s, like Seminole Unit 3, to ensure appropriate MACT level control of mercury and other HAPs. In vacating EPA s CAMR, the court held that the Agency had illegally attempted to remove EGUs from the list of source categories established pursuant to CAA 112(c). Accordingly, EPA s purported delisting was ineffectual, and the December 2000 source category listing of EGUs remains in effect. Specifically, in vacating EPA s delisting decision and the associated CAMR, the court concluded: [I]n view of the plain text and structure of section 112, we grant the petitions and vacate the Delisting Rule. See Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm n, 988 F.2d 146, (D.C. Cir. 1993). This requires vacation of CAMR s regulations for both new and existing EGUs. EPA promulgated the CAMR regulations for existing EGUs under section 111(d), but under EPA s own interpretation of the section, it cannot be used to regulate sources listed under section 112; EPA thus concedes that if EGUs remain listed under section 112, as we hold, then the CAMR regulations for existing sources must fall. See also Delisting Rule, 70 Fed. Reg. at 16,031. Because EGUs are a listed category of major source under CAA 112(c), because 13 The court s decision constituted an intervening and previously unascertainable event pursuant to 40 C.F.R

33 EPA s attempt to delist this source category was illegal and ineffectual, and because the triggering criteria for applicability of CAA 112(g) has been satisfied (i.e., the effective date of a permit program under subchapter V ), it is clear that the proposed Seminole coal plant may not move forward unless and until DEP performs a comprehensive MACT analysis, and establishes case-by-case emission limitations for each HAP that the facility would emit, and ensures that the facility will meet those limits. App F. Consistent with the express requirements of section 112(d), these standards must reduce emissions of HAPs to the maximum degree achievable, and may be no less stringent than the emission control that is achieved in practice by the best controlled similar source. 14 In this case, the D.C. Circuit s decision vacating the CAMR means that coal- and oil-fired EGUs, like Seminole Unit 3, were never effectively removed from the CAA 112(c) list. Therefore, since December 2000, when they were first listed, EGUs have been subject to the requirements of CAA 112, including Section 112(g) s prohibition on constructing a major source of HAPs without a formal 14 The D.C. Cir. has issued numerous opinions that directly address the Agency s obligations when adopting standards under section 112(d). See National Min. Ass'n v. E.P.A., 59 F.3d 1351 (D.C. Cir. 1995); National Lime Ass'n v. E.P.A., 233 F.3d 625 (D.C. Cir. 2000); Cement Kiln Recycling Coalition v. E.P.A., 255 F.3d 855 (D.C. Cir. 2001); Sierra Club v. E.P.A., 353 F.3d 976 (D.C. Cir. 2004); Mossville Environmental Action Now v. E.P.A., 370 F.3d 1232 (D.C. Cir. 2004); Natural Resources Defense Council v. E.P.A., 489 F.3d 1364 (D.C. Cir. 2007). DEP s identification of MACT limitations for the Seminole facility must be consistent with the D.C. Circuit s guidance regarding the establishment of MACT standards under section 112(d) as expressed in these cases

34 MACT determination. SACE provided extensive comments on the requirement for a case-by-case MACT determination for the Seminole permit. R. Vol. 12, p. 2, Seminole applied for the Unit 3 permit in 2006, and DEP did not issue a final air permit until September 5, 2008, a full 6 months after the court s decision rejecting EPA s delisting decision. R. Vol. 12, p. 2, Therefore, the requirement should have been applied to the Seminole application. In fact, DEP s own rules adopt the requirements of section 112(g) in stating 40 CFR Part 63, Subpart B, Requirements for Control Technology Determinations for Major Sources in Accordance with Clean Air Act Sections, Sections 112(g) and 112(j); amended April 5, 2002, at 67 FR 16581; is adopted and incorporated by reference (emphasis added) Fla. Admin. Code R (11)(d)(2). Thus, Seminole is unquestionably bound by the preconstruction obligations of section 112(g) and DEP rule (11)(d)(2). Additionally, Florida law specifically provides for public notice and comment of all section 112(g) determinations. See Fla. Admin. Code R (5). B. The Seminole permit does not contain the required MACT analysis. Neither the Notice of Intent to Issue an Air Permit for the Seminole plant, nor any of DEP s supporting materials, include a MACT analysis or purport to address the Act s MACT-related provisions. Nor does the Notice of Intent to Issue Air Permit or any DEP supporting material incorporate any MACT emission

35 limitations or other requirements applicable to mercury and other HAPs. R. Vol. 9, 1,510-1,556. We note that the EPA Regulatory Finding upon which EPA s listing decision was based states that Coal- and oil-fired electric utility steam generating units emit a significant number of the 188 HAP on the section 112(b) list. 65 Fed. Reg.79825, (Dec. 20, 2000) (emphasis added). EPA has developed a selected listing of approximately 67 hazardous air pollutants emitted by coal-fired power plants that includes, in addition to mercury, toxics like arsenic, beryllium, cadmium, chromium, dioxins, lead, and manganese. 65 Fed. Reg , (Dec. 29, 2000). The D.C. Circuit Court of Appeals has specifically recognized EPA s clear statutory obligation to set emissions standards for each... HAP [listed in CAA 112(b)]. National Lime Ass n v. EPA, 233 F.3d 625, 634 (D.C. Cir. 2000). Thus, the DEP must specifically address all of the 67 (or more) hazardous air pollutants the Seminole plant may emit, including mercury. C. Compliance with MACT would likely force changes in other permit conditions in the PSD Permit. MACT is a more stringent emission requirement than the Best Available Control Technology ( BACT ) standard that applies under the PSD program. Therefore, the controls required under Section 112 may require significant changes to the planned facility configuration or operation, which may have significant

36 implications for what level of control, is considered BACT. A MACT determination could very well affect other related Final Permit provisions in the Seminole PSD air permit. Therefore, the Court s remand of the permit to address MACT for mercury and other HAPs should be a broad remand requiring DEP to conduct a public process to review other provisions of the permit as well. D. The permit should be remanded to DEP for a MACT determination and broad review of the entire permit. Because the PSD permit process cannot be viewed as having satisfied Seminole s obligation to obtain a final and effective MACT determination prior to commencing construction, and because Seminole has not otherwise submitted a MACT analysis or requested or obtained a final and effective MACT determination, it is clear that neither Seminole nor DEP have taken the action necessary to fulfill the obligations of section 112(g). Therefore, the permit should be remanded back to DEP by this Court to be made consistent with the substantive provisions of the law governing a case-bycase MACT analysis and to determine how the MACT-related controls could also affect the facility s water use profile, change energy demands, facilitate greater control of non-hap emissions, and require or preclude the use of certain design criteria, fuel, pollution control equipment, work practices and other provisions of the PSD permit

37 IV. THE SEMINOLE PERMIT SHOULD BE REMANDED TO DEP TO CONSIDER CARBON DIOXIDE LIMITS IN THE PERMIT. On April 2, 2007, the Supreme Court s issued its landmark ruling in Massachusetts v. EPA, overturning EPA s impermissible interpretation of the CAA, which that Agency had relied upon to avoid regulating greenhouse gases. Mass. v. EPA, 127 U.S. 1438, 167 L.Ed.2d 248 (2007). The Court explained: Because EPA believes that Congress did not intend it to regulate substances that contribute to climate change, the agency maintains that carbon dioxide is not an air pollutant within the meaning of the provision. The statutory text forecloses EPA s reading. The Clean Air Act s sweeping definition of air pollutant includes any air pollution agent or combination of such agents, including any physical, chemical... substance or matter which is emitted into or otherwise enters the ambient air (g) (emphasis added). On its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word any. Carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are without a doubt physical [and] chemical... substance [s] which [are] emitted into... the ambient air. As a result of the Court s finding that CO 2 and other global warming pollutants are pollutants for purposes of the CAA, these substances are pollutants subject to regulation under the Act as this phrase is used in the PSD provisions of the Act. Therefore, the Supreme Court s decision triggers the obligation for permitting agencies, including state agencies, such as DEP, to consider whether