A Win for Texas: Fifth Circuit Finds EPA’s Disapproval of State Implementation Plan Arbitrary and Capricious

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The Fifth Circuit Court of Appeals vacated the U.S. Environmental Protection Agency’s (EPA) disapproval of Texas’ State Implementation Plan (SIP), finding that the EPA’s action was arbitrary and capricious. In Luminant Generation Co., et al. v U.S. Environmental Protection Agency, No. 10-60891, slip op. (5th Cir. March 26, 2012), the court remanded the decision to the EPA for reconsideration and granted the states greater flexibility in creating SIPs for their needs.

The Clean Air Act (CAA) Grants States the Power to Create SIPs

Under the CAA, the states must adopt SIPs that meet certain criteria. Among other requirements, SIPs must include permitting programs, new source review (NSR), for the construction or modification of stationary sources. The CAA allows for major and minor NSR programs, with major NSR applying to sources that meet certain threshold emissions levels and minor NSR governing sources that do not meet those levels. While the CAA established detailed rules for major NSR, the Act prescribes only the barest of requirements for minor NSR.

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