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Apr 2013
April 25, 2013

Sierra Club and NRDC lose Court of Appeals Challenges to Coal Plant Permits

The Court of Appeals recently found in favor of the Michigan Department of Environmental Quality in two cases pertaining to permitting for coal-fired power plants.

The MDEQ issued two Prevention of Significant Deterioration (PSD) permits for two coal-fired power plant projects in 2011. One permit, issued to the City of Holland, authorized construction of new coal-fired generation capacity at Holland’s James DeYong plant. The second permit authorized Wolverine Power Supply Cooperative to construct a new coal plant in Rogers City, Mich.

Environmental groups initially challenged both permits in the Ingham County Circuit Court through petitions for judicial review of the MDEQ’s decision-making under MCL 600.631. In both matters, the Sierra Club and the Natural Resources Defense Council (NRDC) claimed that the permits were “unauthorized by law” on multiple grounds. In each instance the Circuit Court affirmed the permitting decision of the MDEQ.

Relative to Holland, the Sierra Club and NRDC narrowed the issues on appeal to whether the MDEQ had adequately considered “clean fuels” as part of its “best available control technology” analysis required under both Michigan and federal PSD provisions. The Court of Appeals concluded in NRDC v Mich. Dep’t Env. Quality, No. 310036, March 21, 2013 that as long as the MDEQ conducts a “reasoned analysis” regarding each fuel considered, citing the decision in Alaska v USEPA, 540 US 461(2004), it had discharged its statutory and regulatory obligations.

The Court of Appeals also found that the MDEQ had conducted an adequate analysis and, therefore, determined that the permitting decision was not “unauthorized by law.”  The court also clarified that an appeal from a circuit court upon a petition for review filed under MCL 600.631 is an appeal “by right” and not “by leave.”  The court’s analysis was based upon a determination that a petition for review under MCL 600.631 is an original action and not an appeal from an administrative tribunal.

In Sierra Club v Mich. Dep’t Env. Quality, No. 309843, March 14, 2013, the Court of Appeals did not even reach the substantive merits of the MDEQ’s permit decision making. The Sierra Club and NRDC asserted on appeal the MDEQ’s action was unauthorized by law because the MDEQ had failed to conduct an adequate “case-by-case” maximum achievable control technology determination under 42 U.S.C. 7412(g) for the Wolverine plant.

Both the MDEQ and Wolverine, represented by Warner Norcross & Judd, contended that the arguments being raised had been rendered moot by the USEPA’s issuance of the EGU MATS rule, 77 Fed. Reg. 9304(Feb. 16, 2012), which superseded the “case-by-case” standards established by the permit. The Court of Appeals agreed and dismissed the appeal as moot. 

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