McKAY, Circuit Judge.
Petitioner WildEarth Guardians seeks review of an order of the Environmental Protection Agency denying in part Petitioner's petition for an objection to a Title V operating permit issued by the Colorado Department of Public Health and Environment (CDPHE) to Intervenor Public Service Company of Colorado, d/b/a Xcel Energy, for its coal-fired power station located in Morgan County, Colorado. In its petition for an objection, Petitioner argued, among other things, that the permit needed to include a plan to bring the power station into compliance with the Clean Air Act's Prevention of Significant Deterioration requirements. Petitioner contended these PSD requirements, which apply to the construction or "major modification" of a stationary source of air pollution, 40 C.F.R. § 51.166(a)(7)(ii), had been triggered when the station underwent major modifications in 1994, 1997, and possibly other years. For support, Petitioner relied in part on a Notice of Violation issued to Intervenor by the EPA in 2002. However, the EPA denied Petitioner's petition for an objection on this ground, holding that the NOV was insufficient to demonstrate noncompliance with the Clean Air Act and that Petitioner's additional evidence also failed to demonstrate a violation. The EPA further held the state agency had adequately responded to Petitioner's comments regarding the PSD requirements before it issued the permit. The EPA thus denied the petition for an objection on this ground as well. Petitioner now seeks review of the EPA's denial of the petition on these two grounds.
Under Title V of the Clean Air Act, a "major source" of air pollution, such as the power station at issue in this case, must obtain an operating permit from the applicable state agency. See 42 U.S.C. § 7661a. After providing the public with an opportunity to comment on a proposed permit, the state agency submits the permit to the EPA, which has 45 days to review it. See Sierra Club v. U.S. EPA, 557 F.3d 401, 403 (6th Cir.2009) (citing 42 U.S.C. §§ 7661a(b)(6), 7661d(b)(1)). If the EPA does not file a written objection during this time period, "any person may petition the Administrator within 60 days after
In 2009, the applicable state agency in this case, CDPHE, published a proposed renewal permit for Intervenor's Pawnee power station in Morgan County, Colorado. Petitioner submitted comments on the proposed permit. Among other things, Petitioner raised a concern regarding the proposed permit's alleged failure to include a plan to bring the power station into compliance with the Clean Air Act's PSD requirements, as implemented in the Colorado State Implementation Plan. Petitioner contended these PSD requirements were triggered when the power station "underwent major modifications in 1994 and 1997 without obtaining the required PSD permit." (J.A. at 2.) For support, Petitioner relied on a Notice of Violation the EPA issued to Intervenor in 2002, which included the following allegations:
(J.A. at 173-74.)
Petitioner contended this Notice of Violation demonstrated the Pawnee power station was not in compliance with PSD requirements, and thus the Title V Permit needed to include a PSD compliance plan. Petitioner argued "[t]he 2002 NOV is sufficient to demonstrate noncompliance with PSD for the purposes of a Title V Permit," relying for support on a Second Circuit case that found a state agency notice of violation sufficient to demonstrate noncompliance under Title V. (J.A. at 2 (citing N.Y. Pub. Interest Research Grp. v. Johnson, 427 F.3d 172 (2d Cir.2005)).)
In response, CDPHE stated it considered the NOV to be "only an allegation of a violation and not a determination that violations actually occurred." (J.A. at 17.) CDPHE also noted that Intervenor and the EPA had disagreed as to whether a major modification had occurred, and the EPA had not initiated any related enforcement action since issuing the NOV seven years previously. Citing for support to an EPA order and a Colorado state court case, CDPHE concluded that the NOV alone did not demonstrate noncompliance with PSD. As for the other documents submitted by Petitioner, CDPHE concluded that these documents did not prove a major modification had occurred. The mere fact that the word "major" was used in the phrases "major turbine overhaul" and "major boiler overhaul" did not demonstrate that "major modifications" had occurred for purposes of PSD requirements. (J.A. at 21.) "A major modification is a physical change or change in the method of operation, or addition to, a major stationary source that would result in a significant net emissions increase using the actual to potential test." (J.A. at 21.) Moreover, CDPHE noted that "routine maintenance, repair and replacement" is not considered to be a modification for purposes of this definition, and the fact that turbine and boiler overhauls "have occurred frequently over the time periods addressed in the exhibits support[s] the inference that these activities are routine." (J.A. at 21.) CDPHE thus concluded that Petitioner had not shown the PSD requirements had been triggered.
After making certain other revisions not relevant to this appeal, CDPHE submitted the proposed final permit to the EPA, which did not file any written objections during its 45-day review period. Petitioner then petitioned for an objection to the issuance of the permit. In its petition,
The EPA rejected these arguments. The EPA explained that "the issuance of an NOV and reference to information contained therein are not sufficient to satisfy the demonstration requirement under section 505(b)(2)." (J.A. at 198.) The EPA then concluded that Petitioner had "failed to provide sufficient additional information to `demonstrate' that PSD applies." (J.A. at 200.) The agency explained:
(J.A. at 200-01 (citation omitted).) Because Petitioner had not demonstrated that the test for PSD applicability had been met, the EPA denied the petition on this issue. As for CDPHE's response to Petitioner's comments, the EPA concluded that CDPHE had given an adequate response since the state agency explained
Petitioner now seeks review of these decisions, arguing again that the NOV was sufficient in itself to demonstrate PSD noncompliance, that the other documents further demonstrate noncompliance, and that CDPHE failed to adequately respond to Petitioner's comments.
Our review of the EPA's order is governed by the Administrative Procedure Act, and we accordingly will not set aside the agency's decision "unless it is procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute." Ariz. Pub. Serv. Co. v. U.S. EPA, 562 F.3d 1116, 1122 (10th Cir.2009) (internal quotation marks omitted).
Id. at 1123 (internal quotation marks omitted).
As discussed above, the EPA must issue an objection if a "petitioner demonstrates to the [agency] that the permit is not in compliance with the requirements of [the Clean Air Act], including the requirements of the applicable [state] implementation plan." 42 U.S.C. § 7661d(b)(2). A central dispute in this case is the question of what is required for a petitioner to "demonstrate" noncompliance. To resolve this dispute, we must first consider whether the agency's interpretation of this requirement is entitled to any deference.
To the extent a statute "speaks clearly to the precise question at issue, we must give effect to the unambiguously expressed intent of Congress." Barnhart v. Walton, 535 U.S. 212, 217, 122 S.Ct. 1265, 152 L.Ed.2d 330 (2002) (internal quotation marks omitted). "If, however, the statute is silent or ambiguous with respect to the specific issue," id. at 218, 122 S.Ct. 1265 (internal quotation marks omitted), the agency's interpretation of the statute is entitled to some degree of deference, see United States v. Mead Corp., 533 U.S. 218, 227-29, 234-35, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001).
Here, Petitioner contends the EPA's interpretation is entitled to no deference because the term "demonstrate" is unambiguous. However, whether or not this term is ambiguous, deference is warranted based on the statute's silence about the
The exact degree of deference we should apply is less clear. The parties both assume that Chevron deference applies, to the extent any deference is warranted. However, an argument could be made that the agency interpretation in this case, which was not the result of a formal adjudication or notice-and-comment rulemaking, should instead be reviewed under the less deferential Skidmore standard, under which an agency's "informal interpretations are entitled to respect, ... but only to the extent that those interpretations have the power to persuade," McGraw v. Barnhart, 450 F.3d 493, 501 (10th Cir.2006) (internal quotation marks omitted). Cf. MacClarence v. U.S. EPA, 596 F.3d 1123, 1131 (9th Cir.2010) (discussing both Chevron and Skidmore deference in resolving the same issue that is before us in this case); Sierra Club v. Johnson, 541 F.3d at 1265 n. 3 (noting that "Chevron deference ... does not necessarily apply to every interpretation offered by an agency," but declining to "identify the precise level of deference in the instant matter since we are persuaded that the EPA's position would survive even the least deferential degree of review"). We need not resolve this potential issue in this case, since we conclude that the EPA's interpretation is persuasive even under Skidmore's less deferential standard of review, and this interpretation would thus prevail under either standard.
Here, the EPA stated that a petitioner cannot rely solely on the existence of a previously issued NOV to demonstrate noncompliance, although an NOV may be "a relevant factor when determining whether the overall information presented by Petitioner — in light of all the factors that may be relevant — demonstrates the applicability of a requirement for the purposes of title V." (J.A. at 198-99.) "Other factors that may be relevant in this determination include the quality of the information, whether the underlying facts are disputable, the types of defenses available to the source, and the nature of any disputed legal questions...." (J.A. at 199.) The agency then explained: "If, in any particular case, these factors are relevant and Petitioner does not present information concerning them, then the EPA may find that Petitioner has failed to present sufficient information to demonstrate that the requirement is applicable." (J.A. at 199.) The agency noted that it had similarly explained in several previous Title V orders that an NOV alone is not sufficient to demonstrate noncompliance under § 7661d(b)(2). We find this interpretation of the demonstration requirement persuasive and thus defer to the agency's interpretation.
The EPA is directed to issue an NOV "[w]henever, on the basis of any information available to the Administrator,
If the agency were required to find that a previous NOV demonstrated noncompliance under Title V, as Petitioner suggests, "the agency would have to cling to an initial conclusion reached months or years earlier ... based on `any information available' to it at the time," even if further evidence had disproved the agency's initial allegations. Id. (quoting 42 U.S.C. § 7413(a)(1)). "Besides giving short shrift to the truth-seeking function of litigation, this interpretation could discourage the EPA from engaging in discretionary enforcement actions in the first place." Id. Moreover, as the Eleventh Circuit has explained:
Sierra Club v. Johnson, 541 F.3d at 1269 (citation omitted).
We are not persuaded by the Second Circuit's contrary conclusion that an NOV suffices to demonstrate non-compliance, see N.Y. Pub. Interest Research Grp., Inc., 427 F.3d at 181-82, since this conclusion fails to adequately take into account the preliminary nature of an NOV. Instead, like the Sixth and Eleventh Circuits, we find the EPA's interpretation of the demonstration requirement to be persuasive and thus entitled to deference. Nothing about the statute requires the EPA to find that a petitioner has demonstrated noncompliance simply by pointing to the existence of an NOV, and we will defer to the EPA's persuasive conclusion that an NOV alone is insufficient to meet this burden of demonstration.
Petitioner further suggests that once a petitioner has submitted evidence regarding the existence of a previously issued NOV, this creates in effect a presumption of noncompliance, which the agency must affirmatively rebut with a persuasive explanation of the reasons why it now concludes that the source is in compliance. (See, e.g., Pet'r's Opening Br. at 36 ("EPA also provides no discussion or explanation for its inconsistency.... Because EPA must determine whether the Petition demonstrates sufficient information, EPA failed in its affirmative duty to refute or confirm the information in the
We further conclude that the agency did not act arbitrarily or capriciously in concluding that Petitioner failed to demonstrate noncompliance in this case. The agency held that Petitioner had not demonstrated PSD noncompliance because Petitioner's evidence failed to show there had been a major modification as defined by the Colorado SIP, which requires, among other things, consideration of the actual emissions increase resulting from a particular modification, as well as "a determination of any other increases and decreases in actual emissions at the source that are contemporaneous with the particular change and are otherwise creditable." (J.A. at 200-01.) As the agency explained, Petitioner's evidence did not address key parts of this test, particularly the question of net emissions increases. The table of annual emission levels submitted by Petitioner fell far short of the proof required to demonstrate that a major modification had occurred under the Colorado SIP, and none of Petitioner's other evidence, besides the bare allegations in the 2002 NOV, addressed the question of actual emissions. Viewing the record as a whole, we are not persuaded that the EPA acted arbitrarily or capriciously in holding that Plaintiff had not demonstrated noncompliance. Thus, under our deferential standard of review, we affirm the EPA's denial of the petition on this ground.
Finally, Petitioner argues the EPA erred in concluding that CDPHE adequately responded to Petitioner's comments during the public comment period. For support, Petitioner relies mainly on a prior EPA order where the EPA held that a state agency had failed to adequately respond to a petitioner's comments. However, the state agency's response in the previous case contained only two sentences referring vaguely to "the rules that existed at the time of each modification." (J.A. at 229.) Here, the state agency gave a much more thorough explanation in its response, and we are not persuaded that the EPA acted arbitrarily or capriciously in concluding this response was adequate. We therefore affirm the EPA's denial of the petition on this ground as well.
For the foregoing reasons, we