HIGGINBOTHAM, J.
¶ 1 This case involves a dispute over an air pollution permit for the construction of a coal-fired power plant in Marathon County. The Wisconsin Department of Natural Resources (DNR) issued the air pollution permit to Wisconsin Public Service Corporation and Dairyland Power Cooperative (collectively, WPSC) for the Weston Generating Station Unit 4 power plant (Weston 4). Sierra Club appeals the circuit court's decision affirming the DNR's "best available control technology" (BACT) determinations for the air emissions construction permit.
¶ 2 Sierra Club challenges four of the BACT determinations made by an administrative
¶ 3 Applying great weight deference to the DNR's interpretation and application of the pertinent statutes, and controlling weight deference to its interpretation and application of the pertinent administrative regulations, we uphold as reasonable the BACT limits set by the DNR for sulfur dioxide emissions and nitrogen oxide emissions, and the selection of dry FGD technology to control sulfur dioxide emissions. Moreover, to the extent that Sierra Club's arguments challenge the factual basis for the DNR's BACT emissions limits and its selection of dry FGD technology, we conclude that these determinations are supported by substantial evidence. We further conclude, however, that the failure of the ALJ and the DNR to establish a BACT visible emissions limit, expressed as a percentage of opacity, for those pollutants that are visible was based on an unreasonable interpretation of WIS. ADMIN. CODE § 405.02(7) and is inconsistent with the language of the regulation. We therefore affirm in part, and reverse in part, the circuit court's decision upholding the DNR's decision, and remand for DNR to reopen the permit to establish a BACT visible emissions limit for those emissions that are visible.
¶ 4 WPSC applied to the DNR for an air pollution control construction permit for the coal-fired power plant known as Weston 4 in September 2003. The DNR, under its authority conferred by WIS. STAT. §§ 285.60 through 285.69; WIS. STAT. § 285.01(13); and the Clean Air Act (Act), 42 U.S.C. §§ 7470-7479, issued a draft air permit for the plant and complied with public participation requirements. The DNR considered all relevant public comments, including those received from Sierra Club and the U.S. Environmental Protection Agency (EPA), and prepared a detailed responsive memorandum. In October 2004, the DNR modified the permit in response to the comments and issued WPSC a final permit to construct and operate the coal-fired power plant.
¶ 5 Sierra Club challenged the adequacy of the BACT emissions limits
¶ 6 Sierra Club filed a petition for judicial review of the ALJ's order under WIS. STAT. ch. 227, which was dismissed by the circuit court on the ground that the ALJ's order was not final and therefore not subject to judicial review. Sierra Club appealed, and we affirmed the circuit court's dismissal. See Sierra Club v. DNR, 2007 WI App 181, ¶¶ 20, 28, 304 Wis.2d 614, 736 N.W.2d 918.
¶ 7 DNR subsequently issued a modified permit pursuant to the ALJ's order. Sierra Club appealed to the Division of Hearings and Appeals, and the ALJ concluded that the DNR correctly interpreted and implemented its order, and affirmed the issuance of the permit as modified. Sierra Club once again sought certiorari review of the ALJ's final order, which incorporated both the February 2006 and November 2007 decisions. The circuit court affirmed the ALJ's order. Sierra Club appeals.
¶ 8 The Clean Air Act creates a partnership between the states and the federal government for the regulation of air pollution. See 42 U.S.C. § 7410.
¶ 9 Thus, under the regulatory scheme established by the Act, both the United States Congress and the Wisconsin Legislature have delegated authority to the DNR to issue and enforce air pollution permits. See Approval and Promulgation of Implementation Plans for Wisconsin, 64 Fed.Reg. 28,745 at 28,746 (May 27, 1999) (granting Wisconsin's Prevention of Significant Deterioration program approval into the State Implementation Plan); WIS. ADMIN. CODE § NR 405.02(7). The DNR's authority, however, is subject to federal oversight by the EPA. See, e.g., 42 U.S.C. § 7413(a)(2) (granting EPA authority to issue an order, administrative penalty or civil action to enforce compliance with a state implementation plan or a permit); 42 U.S.C. § 7475(d)(1) (requiring states to provide EPA with draft and final permit language); 42 U.S.C. § 7477 (granting EPA authority to issue an order or seek injunctive relief to prevent the construction or modification of a major emitting facility).
¶ 10 The Weston 4 project is a major modification to an existing permitted emission source. As such, it is subject to Wisconsin's Prevention of Significant Deterioration program (PSD). See WIS. ADMIN. CODE § NR 405.01(1). The PSD requires the DNR to determine BACT emissions limits for each specifically listed pollutant subject to regulation under the Act. WIS. ADMIN. CODE § NR 405.02(7).
¶ 11 When seeking DNR approval for a new primary source or process, the permit applicant must conduct an analysis to determine the best available control technology (BACT). The Act defines BACT as:
42 U.S.C. § 7479(3). This definition served as the model for the definition of BACT set forth in WIS. STAT. § 285.01(12), which provides that BACT is:
WISCONSIN ADMIN. CODE § NR 405.02(7) defines BACT in greater detail as
¶ 12 The ALJ's order explains that the DNR evaluates a permit applicant's BACT determinations under the so-called "top down" approach utilized by EPA. The ALJ's decision explains that the following analysis is used to evaluate BACT for a permit:
¶ 13 After the permit applicant submits its BACT analysis to the DNR, the Department evaluates the analysis and establishes the BACT emissions limit that is "achievable" in the permit. What is "achievable" is not defined by federal or state statutes or regulations. Defining achievability at a particular source (here, the Weston 4 plant) is a determination left to the permitting agency because the agency possesses the technical expertise and experience to determine what is "achievable" at a particular source. See In re: Masonite Corp., 5 E.A.D. 551, 560-61, 1994 WL 615380 (EAB 1994).
¶ 14 A Missouri court examining a regulation comparable to Wisconsin's regarding "achievability" recently explained that what is "`achievable' does not mean a permit limit that mirrors the lowest possible emission rate ever achieved in practice."
Id.
¶ 15 At issue in this appeal are three BACT determinations by the DNR: the emissions limit and control technology for sulfur dioxide, the emissions limit for nitrogen oxide, and the visible emissions standard for opacity.
¶ 16 Sulfur dioxide is a pollutant caused by the sulfur content in coal. The DNR considered two basic pollution control technologies to limit sulfur dioxide emissions at Weston 4 to a level that represents BACT. The two technologies were wet and dry flue gas desulfurization (FGD) systems, respectively. The DNR determined that the two technologies could meet the same BACT emissions rate, and concluded that the choice of either control technology would not change the BACT emissions rate. Accordingly, it determined that the applicant's selection of one of the two technologies to control sulfur dioxide emissions could be made based on the consideration of other energy, environmental, and economic factors, consistent with the top-down analysis. WPSC chose, and the DNR approved, dry FGD technology as the BACT for purposes of determining the emissions limit for sulfur dioxide.
¶ 17 The permit also limits the amount of sulfur that the coal burned at Weston 4 may contain to 1.23 pounds per million British Thermal Units ("lbs./mmBtu") averaged over any consecutive thirty-day period. Additionally, pursuant to the ALJ's order to modify the permit, the DNR included a rebuttable presumption that the permit holder would continue to use low sulfur coal, the fuel Weston 4 was designed to use, from the Powder River Basin in Wyoming. For purposes of the Weston 4 permit, the ALJ determined that Powder River Basin coal is low sulfur coal. The ALJ found that the BACT sulfur dioxide emissions limit for Weston 4, based on the selected coal sulfur content and control technology, is generally consistent with sulfur dioxide emissions limits set for similar facilities that were permitted around the same time as Weston 4.
¶ 18 Nitrogen oxide is a pollutant that forms in coal-fired boilers like Weston 4 when nitrogen in coal combines with the air during combustion. The BACT emissions limit for nitrogen oxide is based on a combination of three pollution control technologies. The permit establishes the BACT emissions limits for nitrogen oxide to an annual limit of 0.07 lb./mmBtu, including periods of startup and shutdown, and a thirty-day average of 0.06 lb./
¶ 19 The ALJ ruled that "[t]o the extent a visible emissions standard is required, the permit establishes BACT for [particulate matter] and [sulfuric acid mist] visible emissions by setting specific emissions limits for these pollutants." Particulate matter and sulfuric acid mist are the pollutants that cause visible emissions. The permit established an overall opacity limit of 20% for the main boiler of the Weston 4 plant.
¶ 20 When a party appeals a circuit court order reviewing an agency decision, we review the agency's decision, not the circuit court's, and the scope of our review is the same as the circuit court's. Hilton v. DNR, 2006 WI 84, ¶ 15, 293 Wis.2d 1, 717 N.W.2d 166. In this case, we review the ALJ's decision as the DNR's decision by operation of WIS. STAT. § 227.46(3)(a)
¶ 21 An agency's interpretation and application of a statute to undisputed facts is a question of law, subject to de novo review by this court. See Racine Harley-Davidson, Inc. v. State, 2006 WI 86, ¶¶ 13-14, 292 Wis.2d 549, 717 N.W.2d 184. However, a reviewing court may accord one of three levels of deference to an agency's interpretation and application of statutes: great weight, due weight, or no weight. Id., ¶ 12.
¶ 22 Great weight deference is appropriate when: (1) the agency has been charged by the legislature with the duty of administering the statute; (2) the agency's interpretation is one of long-standing; (3) the agency employed its expertise or specialized knowledge in forming the interpretation; and (4) the agency's interpretation will provide uniformity and consistency in the application of the statute. Harnischfeger Corp. v. LIRC, 196 Wis.2d 650, 660, 539 N.W.2d 98 (1995). Under the great weight standard, we will uphold an agency's interpretation as long as it is reasonable
¶ 23 We apply due weight deference "when the agency has some experience in the area, but has not developed the expertise which necessarily places it in a better position to make judgments regarding the interpretation of the statute than a court." Id. at 286, 548 N.W.2d 57. Under the due weight standard, we will uphold the agency's interpretation if it is reasonable, and no other interpretation is more reasonable than the agency's, and the agency's interpretation comports with the purpose of the statute. Id. at 286-87, 548 N.W.2d 57. The de novo standard of review is appropriate when the issue is a matter of first impression or when the agency's position has been so inconsistent so as to provide no real guidance. Id. at 285, 548 N.W.2d 57.
¶ 24 An agency's interpretation and application of its own regulations are entitled to controlling weight deference. See DOR v. Menasha Corp., 2008 WI 88, ¶¶ 44, 53, 311 Wis.2d 579, 754 N.W.2d 95. Under controlling weight deference, we uphold an agency's interpretation if it is reasonable and is not inconsistent with the language of the regulation or clearly erroneous. Id., ¶ 54. The standard embodies the principle that an administrative agency is in the best position to interpret and apply its own regulation because it knows the specific purposes of the regulations it has promulgated and has a certain expertise in the area it is charged with regulating. See Pfeiffer v. Board of Regents, 110 Wis.2d 146, 155, 328 N.W.2d 279 (1983).
¶ 25 We review an administrative agency's findings of fact applying the "substantial evidence" standard. Hilton, 293 Wis.2d 1, ¶ 16, 717 N.W.2d 166. Substantial evidence is evidence which, "after considering all the evidence of record, reasonable minds could arrive at the same conclusion." Id. Accordingly, we will uphold the agency's findings if they are supported by credible and substantial evidence. Id., ¶ 16. We may not substitute our judgment for the agency's judgment regarding the weight of the evidence. WIS. STAT. § 227.57(6).
¶ 26 The parties dispute the level of deference we should accord the DNR's interpretation and application of the relevant statutes and rules in setting the BACT emissions limits. Sierra Club argues that the DNR's decision is not entitled to any deference. Specifically, Sierra Club contends that deference should be given to the EPA, not the DNR, because the interpretation and application of the Clean Air Act and federal regulations administering the Act are at issue in this case. The DNR and WPSC maintain that the DNR's decision is entitled to great weight deference because the DNR is charged with the responsibility of administering the air pollution permit statutes and regulations, it has extensive expertise in administering these laws, and the DNR's interpretation and application of the applicable statutes and regulations are uniform and consistent with its prior decisions. For the reasons provided below, we conclude
¶ 27 Before considering the present case in light of the four criteria for great weight deference, we note, as a general matter, that a high level of deference is frequently applied in complex environmental cases such as this where the legislature has charged the DNR with administering the applicable statute and highly technical, scientific issues are involved. See, e.g., Hilton, 2006 WI 84, ¶ 17, 293 Wis.2d 1, 717 N.W.2d 166; Borsellino v. DNR, 2000 WI App 27, ¶ 6, 232 Wis.2d 430, 606 N.W.2d 255; Sea View Estates Beach Club, Inc. v. DNR, 223 Wis.2d 138, 148-49, 588 N.W.2d 667 (Ct.App.1998). Such deference is appropriate in these cases because DNR is generally more competent than the courts at making legal determinations based on technical and scientific facts. See Brown v. LIRC, 2003 WI 142, ¶ 13, 267 Wis.2d 31, 671 N.W.2d 279 (stating that "[t]he appropriate level of scrutiny a court should use in reviewing an agency's decision on questions of law depends on the comparative institutional capabilities and qualifications of the court and the agency to make a legal determination on a particular issue").
¶ 28 Applying the present case to the four-pronged test for great weight deference, we first note that the legislature has charged the DNR with the administration of the laws that govern environmental regulation under WIS. STAT. ch. 285 in general, see Wis. STAT §§ 285.11, 285.13, and with the administration of the air permitting program in particular. See WIS. STAT. § 285.60-69.
¶ 29 Second, the DNR's interpretation and application of the statutes codifying BACT is clearly one of long-standing. The DNR has administered the Prevention of Significant Deterioration air permit program, which requires BACT determinations, since 1980. See Approval and Promulgation of Implementation Plans for Wisconsin, 64 Fed.Reg. 28,745 at 28,746 (May 27, 1999). Since 1996, the DNR has determined BACT for approximately fifty power plants using the same "top-down" approach developed by the EPA and applied in this case.
¶ 30 Third, we conclude that the DNR has also employed its extensive expertise and specialized knowledge in determining BACT for the Weston 4 permit. After WPSC conducted the top-down BACT analysis, air-modeling experts, engineers, and permit writers at the DNR analyzed the technical, scientific information and set BACT in the draft permit. The DNR modified the permit after it reviewed comments from EPA, Sierra Club, and others. Further, the ALJ considered detailed, technical information from all of the parties during a week-long contested-case hearing and ordered further modifications to the BACT emissions limits. The DNR adjusted the permit to comply with the ALJ's orders. After Sierra Club challenged the DNR's permit modifications, the ALJ again reviewed the permit and BACT analysis to ensure its compliance with the law.
¶ 31 Finally, we conclude that the DNR's decision will provide uniformity and consistency in setting BACT emissions limits. Sierra Club's assertion that the DNR's approach in this case was not consistent with its prior decisions ignores the fact that the top-down analysis is a case-by-case basis inquiry that necessarily results in varied outcomes. What matters is whether the DNR properly applied the BACT top-down analysis and reached a reasonable BACT determination based on the facts and circumstances of each pollution
¶ 32 Sierra Club's assertion that deference should be accorded to the EPA and not the DNR is not supported by the statutory and regulatory scheme governing the air pollution permitting process nor by the specific cases it cites in support of its arguments. Specifically, Sierra Club ignores the Prevention of Significant Deterioration permitting process contained in the Act. As we have explained, the Act directs the federal government to delegate to the states primary authority to approve air pollution permits. See 42 U.S.C. § 7410(a). In addition, the EPA specifically approved Wisconsin's permitting process plan, which authorizes the state to issue permits. See Approval and Promulgation of Implementation Plans for Wisconsin, 64 Fed.Reg. 28,745 (May 27, 1999). Moreover, contrary to Sierra Club's assertions, the DNR applied state law, not federal law, when it issued WPSC's air pollution permit. Even though Wisconsin's statute and regulation defining BACT are based on the Act, the definitions became state law when they were adopted by the Wisconsin Legislature and the DNR. The legislature charged the DNR with the responsibility for applying these definitions in the permitting process.
¶ 33 The cases that Sierra Club relies on do not support its assertion that a state agency is not entitled to deference when it interprets and applies a state statute or regulation that is based on a federal law. Sierra Club cites several cases where courts resorted to federal authority in interpreting a state law that was modeled after federal law. See State v. Poly-America, Inc., 164 Wis.2d 238, 245, 474 N.W.2d 770 (Ct.App.1991); see also State v. Harenda Enters., Inc., 2008 WI 16, ¶¶ 29-57, 307 Wis.2d 604, 746 N.W.2d 25; DILHR v. LIRC, 161 Wis.2d 231, 247-49, 467 N.W.2d 545 (1991). However, in Poly-America and DILHR, the appellate court turned to interpretations of the federal regulations merely for "guidance" or "assistance" in interpreting the state law analogue. Poly-America, Inc., 164 Wis.2d at 243, 245, 474 N.W.2d 770; DILHR, 161 Wis.2d at 247, 467 N.W.2d 545. The Poly-America and DILHR courts were not compelled to adopt the federal law interpretations. Harenda is inapposite, as well, because, unlike the statutes and rules applicable in this case, the DNR rules at issue there explicitly required the DNR to follow applicable federal regulations when measuring levels of asbestos contamination. See Harenda, 307 Wis.2d 604, ¶ 29, 746 N.W.2d 25. Contrary to Sierra Club's assertions, none of these cases stand for the novel proposition that a state court engaging in the interpretation of state law must follow interpretations of analogous federal statutes.
¶ 34 Moreover, we are not persuaded that the DNR's interpretation and application of the BACT definition conflicts with the EPA's. To insure compliance with federal law, the DNR is required to provide the EPA with a draft permit and final permit language. See 42 U.S.C. § 7475(d). The EPA has the opportunity to issue an order or seek injunctive relief if it concludes that the permit terms do not constitute BACT. 42 U.S.C. § 7477. If a conflict exists, the EPA may seek to prevent construction of a proposed facility. See Alaska Dep't of Envtl. Conservation v. E.P.A., 540 U.S. 461, 468-69, 124 S.Ct. 983, 157 L.Ed.2d 967 (2004). Tellingly, EPA did not exercise this power by objecting to the DNR's issuance of the final Weston 4 permit.
¶ 36 First, as we have explained, Congress has delegated authority to the states to administer their own clean air permitting programs. While the DNR has chosen to largely adopt the definition of BACT contained in the Clean Air Act, it was not required to do so. The rules at issue in this case are the DNR's own. In addition, Sierra Club's reliance on Gonzales is misplaced. In Gonzales, the Supreme Court concluded that the United States Attorney General lacked the authority to issue an Interpretive Rule directed at invalidating Oregon's assisted suicide statute where the Interpretive Rule merely "parrot[ted]" language in the federal Controlled Substances Act. Id. at 257, 126 S.Ct. 904. As the State argues, Gonzales is distinguishable because neither an Interpretive Rule nor a question of the DNR's authority is at issue in this case. It does not matter that the DNR rules "parrot" the Act because the EPA delegated the authority to the DNR to adopt its own rules.
¶ 37 Accordingly, we apply great weight deference to the DNR's interpretation and application of WIS. STAT. § 285.01(12) because the DNR was charged by the legislature to administer the statute, its interpretations are long-standing, it employed its expertise and specialized knowledge in interpreting and applying the statute, and the agency's interpretation provides uniformity and consistency in the statute's application. We also give the agency's application and interpretation of WIS. ADMIN. CODE § NR 405.02(7) controlling weight deference because it is interpreting its own regulation.
¶ 38 Sierra Club argues that the air pollution permit issued to WPSC made BACT determinations that were erroneous in four respects. Specifically, Sierra Club contends that: (1) the DNR improperly set the sulfur dioxide limit for the coal used at Weston 4 at a rate that is higher than is achievable; (2) the DNR improperly exercised its discretion by selecting dry FGD control technology rather than wet FGD technology to control sulfur dioxide emissions; (3) the DNR erroneously exercised its discretion by establishing a BACT emissions limit for nitrogen oxide that was higher than the lower emissions limit the record shows is achievable at Weston 4; and (4) the DNR erred by failing to include a visible emissions standard for opacity based on BACT. We address each argument in turn.
¶ 39 Sierra Club disputes two aspects of the DNR's BACT determination for sulfur dioxide. It first contends that the agency erroneously chose a limit on coal sulfur content that is higher than what is achievable. Secondly, it argues that the DNR should have chosen wet FGD technology rather than dry FGD technology as a basis
¶ 40 As noted, the permit sets the BACT emissions limit for sulfur dioxide at 1.23 lbs./mmBtu with a control efficiency of 90% based on a rolling thirty-day average. Sierra Club argues that this limit is higher than what the evidence shows is achievable, and therefore violates the definitions of BACT set forth in WIS. STAT. § 285.01(12) and WIS. ADMIN. CODE § NR 405.02(7). Sierra Club points out that WPSC's permit application provided that its anticipated BACT limit for sulfur dioxide would be 0.06 lb./mmBtu and that the Weston 4 plant was designed to burn low sulfur coal. Sierra Club contends that by setting BACT at 1.23 lbs./mmBtu, the DNR is permitting WPSC to burn coal with a higher sulfur content. As a result, Sierra Club argues, the DNR allowed WPSC to burn coal that is dirtier than what is achievable, contrary to the Act. We disagree.
¶ 41 We first observe that not only did the DNR consider the use of clean fuels as required by the Act, the agency required the use of clean fuel in the permit. Furthermore, the ALJ ordered the DNR to modify the permit to include a rebuttable presumption that WPSC continue to use low sulfur coal from the Powder River Basin in order "to ensure that the control efficiency requirement does not lead to the use of higher sulfur coal." The ALJ also ordered the DNR to modify the permit to include a provision that low sulfur coal would be used "unless there is some unexpected change in the availability of [Powder River Basin] coal." Moreover, in setting the sulfur dioxide BACT emissions limit for the Weston 4 boiler, the ALJ found that the emissions limit was consistent with and more stringent than the BACT sulfur dioxide emissions limits set for similar boilers with air permits issued contemporaneously with the Weston 4 permit.
¶ 42 What Sierra Club appears to argue is that, by setting the BACT limit for sulfur dioxide at a level higher than what WPSC anticipates burning and what in reality the plant will be burning, the ALJ is essentially setting the stage for the possibility that dirtier coal could be used in the future. The problem with this argument, however, is that the ALJ's decision also provides that WPSC will have to seek the DNR's permission to burn dirtier coal and that any DNR decision to allow the use of dirtier coal will be subject to a contested case hearing. Moreover, the ALJ's decision expressly states that the purpose for the rebuttable presumption is to prevent WPSC from using coal with a higher sulfur content.
¶ 43 Sierra Club also argues that the ALJ failed to provide an adequate explanation for setting BACT for sulfur dioxide at 1.23 lbs./mmBtu. We agree that the decision does did not fully explain the reasons for setting BACT for sulfur dioxide at this level. However, after reviewing the record, it appears that BACT was set at 1.23 lbs./mmBtu in order to accommodate the range of low sulfur coal found at the Powder River Basin. The 1.23 lbs./ mmBtu limit was based on the highest known sulfur value from the coal mines in the Powder River Basin. Apparently, this limit would allow for flexibility in the characteristics of the low sulfur coal from the Powder River Basin area, which has eleven different mines. According to petitioner's exhibit 18 concerning Sulfur Emissions Considerations, WPSC estimated its ability to meet the BACT emissions limits proposed
¶ 44 For the reasons explained above, we conclude that substantial evidence supports the sulfur dioxide BACT emissions limit determination, and that this determination was based on a reasonable interpretation of the definition of BACT set forth in WIS. STAT. § 285.01(12) and WIS. ADMIN. CODE § NR 405.02(7).
¶ 45 DNR considered two options for controlling sulfur dioxide emissions to meet BACT for this pollutant, wet and dry flue gas FGD systems. To determine which control technology would meet BACT, the DNR undertook an extensive investigation into both technologies, considered testimony from several technical experts, including Sierra Club's expert, and critically examined the efficacy of each technology contemporaneously used by other similar plants. Based on this information, the DNR determined that the emissions limits from both control systems was essentially the same, with the wet FGD technology achieving a 1% to 2% higher efficiency rating.
¶ 46 Because of the minimal difference in emissions efficiency between the two FGD technologies, the DNR looked to other factors under the top-down approach, including energy, environmental and economic factors, in selecting an FGD system to control sulfur dioxide emissions. After considering these qualitative factors, the DNR selected the dry technology.
¶ 47 Sierra Club argues that, under the BACT analysis, the DNR should have selected the wet FGD system rather than the dry system because the evidence shows that wet technology is more efficient. In other words, according to Sierra Club, dry FGD technology does not meet BACT based on evidence in the record that wet technology is more efficient in controlling sulfur dioxide emissions.
¶ 48 There are two flaws with this argument. First, at best, the difference in emissions efficiency is only 1% to 2%, which the DNR considered to be minimal. We cannot say that this determination is unreasonable. The DNR has the technical expertise to assess whether the difference in emission control is so minimal as to amount to no real difference at all. Second, the record clearly shows that the DNR properly applied the BACT analysis in deciding to use dry FGD technology.
¶ 49 Once the DNR compared the effectiveness of the "remaining control technologies," step 3 in the BACT analysis, it then evaluated "the remaining options taking into consideration energy, environmental and economic impacts," step 4 in the BACT analysis. The step 4 analysis revealed that wet FGD systems "require more electric energy to operate and are somewhat more expensive than [d]ry FGD systems as a matter of both capital and operating costs." The ALJ found that "[d]ry technology offers superior performance in controlling fine particulate and sulfuric acid mist emissions relative to Wet FGD," and the evidence showed that in "recent years wet FGD processes have seldom been applied to low sulfur [Powder
¶ 50 For the foregoing reasons, we conclude that the DNR's selection of dry FGD technology met BACT. We also conclude that substantial evidence supports the DNR's choice of the dry system. The DNR conducted a thorough investigation into the best technologies available, carefully considered testimony presented by both parties and materials submitted to the DNR regarding various emission control technologies, and reached a reasonable determination based on all of the above.
¶ 51 The air pollution permit establishes a BACT emissions limit for nitrogen oxide at 0.06 lb./mmBtu on a thirty-day average, not including start-up and shut-down, consistent with the BACT level for the permit's twelve-consecutive-month limit. Sierra Club contends that the DNR set the BACT limit for nitrogen oxide at a level that is not based on the maximum degree of reduction the DNR found achievable. It asserts that lower nitrogen emissions limits are achievable at Weston 4, based on evidence in the record showing other power plants similar to Weston 4 had achieved emissions limits lower than 0.06 lb./mmBtu.
¶ 52 In deciding BACT emissions limits for nitrogen oxide, the ALJ made the following findings:
¶ 53 We conclude that the DNR's BACT emissions limit determination for nitrogen oxide was based on a reasonable interpretation and application of the definition of BACT set forth in WIS. STAT. § 285.01(12) and WIS. ADMIN. CODE § NR 405.02(7), and that substantial evidence supports this determination. The DNR properly considered the emissions limits for coal-fired power plants that require lower nitrogen oxide emissions during peak ozone pollution seasons, as well as other facilities like Weston 4 that run on a continuous year-round basis. The record supports the ALJ's observation that ozone-season only units have lower nitrogen oxide emissions because they can more easily deal with a degradation of equipment by injecting more ammonia toward the end of the operating season and rehabilitating the equipment during the off-season. The DNR reasonably determined that these lower limits would be difficult for Weston 4 to meet because it is a year-round facility and did not have these same advantages. We note that the DNR found that the BACT
¶ 54 Further, the DNR considered what emissions limit would be achievable for the lifetime of the facility and allowed for operational difficulties at this particular facility because its analysis was done on a case-by-case basis under WIS. ADMIN. CODE § NR 405.02(7). The DNR considered the evidence of BACT emissions limits for nitrogen oxides at other similar coal-fired power plants, and had a rational basis for determining that the lower limits were not achievable at Weston 4.
¶ 55 Sierra Club asserts that 0.015 lb./ mmBtu represents BACT for nitrogen oxide based on the ALJ's own observation that the DNR's engineering expert miscalculated the selective catalytic reduction inlet concentration and the control efficiency rate. Sierra Club argues that after adjusting for the expert's miscalculation, the DNR determined that the true selective catalytic reduction inlet rate at Weston 4 was 0.15 lb./mmBtu, and when that number is multiplied by the true selective catalytic reduction efficiency rate of 90%, that results in an achievability rate of 0.015 lb./mmBtu. This number, according to Sierra Club, is the appropriate BACT limit for nitrogen oxide and the DNR erred by setting BACT at 0.06 lb./mmBtu. We reject this argument.
¶ 56 As the ALJ observed, Sierra Club ignores the evidence that 0.015 lb./mmBtu has not been achieved by any similar facility in operation at the time the permit was issued. While this rate may be theoretically achieved, there is no evidence in the record that this rate limit is achievable in practice. As we noted, the DNR compared the technology proposed at Weston 4 with that used at existing year-round facilities, and found that the BACT emissions limit established for Weston 4 was at least the same as, if not lower than, the limits for other facilities. Moreover, as we have noted, the DNR is vested with the discretion to consider a limit that will be achievable for the lifetime of the facility and allow for operational difficulties. See In re Newmont Nev. Energy Inv., LLC, 12 E.A.D. at 440. Sierra Club has not shown that the BACT limit for nitrogen oxide set by the DNR was not reasonably based on the evidence of record.
¶ 57 Therefore, for the reasons explained above, we conclude that the DNR's BACT emissions limit of 0.06 lbs./mmBtu for nitrogen oxide was based on a reasonable interpretation and application of the definition of BACT set forth in WIS. STAT. § 285.01(12) and WIS. ADMIN. CODE § NR 405.02(7), and that substantial evidence supports this determination.
¶ 58 Sierra Club argues that the ALJ and DNR erred by not including a BACT visible emissions limit for those pollutants that are visible, which include particulate matter, PM10 and sulfuric acid, for the main boiler at the Weston 4 plant. According to Sierra Club, because the definition of BACT in WIS. ADMIN. CODE § NR 405.02(7) includes a visible emissions standard, the DNR is required by law to include a visible emissions limit based on BACT for each visible pollutant in approving a new source. WPSC and the DNR argue that establishing BACT emissions limits for the pollutants that make up visible emissions exiting the Weston 4 main boiler smoke stack—particulate matter, sulfuric acid mist, and PM10—achieves the same result as establishing a BACT visible emissions limit for each visible pollutant, and therefore it is not necessary to set a visible emissions standard. Sierra Club responds by arguing that the definition of
¶ 59 As we have explained, the Clean Air Act requires all states to adopt an implementation plan mandating any major stationary pollution source to conduct an analysis to determine the best available control technology (BACT) as part of a state's implementation plan. See 42 U.S.C. §§ 7410(a), 7479(3). To review, WIS. ADMIN. CODE § NR 405.02(7) defines BACT as
A visible emissions standard for coal-fired plants limits the amount of opacity
¶ 60 In addressing Sierra Club's request for a visible emissions limit for particulate matter and sulfuric acid mist, the ALJ began by making the following factual findings relating to visible emissions:
In light of these findings, the ALJ concluded: "To the extent a visible emissions standard is required, the permit establishes BACT for [particulate matter] and [sulfuric acid] visible emissions."
¶ 61 There are several problems with the above analysis. First, and most importantly, it ignores the definition of BACT set forth in WIS. ADMIN. CODE § NR 405.02(7), which plainly requires "an emissions limitation, including a visible emissions standard." We conclude that this language unambiguously requires the DNR to establish a visible emissions limit based on BACT, expressed as a percentage of opacity, for those pollutants that are visible, which, in this case, includes particulate matter, PM10 and sulfuric acid. The DNR may not interpret its own rules in a manner that disregards the plain meaning of the rules. See Bar-Av v. Psychology Examining Bd., 2007 WI App 21, ¶ 10, 299 Wis.2d 387, 728 N.W.2d 722 (where language of a rule is clear and unambiguous, the manifest intent of the rules should be applied to the facts and circumstances of the question presented).
¶ 62 Second, the ALJ's decision and WPSC do not provide any authority for the proposition that the DNR may use BACT limits for the pollutants that make up visible emissions as a surrogate for a BACT visible emissions limit.
¶ 63 Third, while the experts for the DNR and Sierra Club both testified that limiting visible emissions will limit the emissions of particulate matter and sulfuric acid mist, none of the experts testified that limiting the emissions of these pollutants would bring visible emissions within the limits prescribed by law,
¶ 64 WPSC and the DNR contend that, under Wisconsin's regulatory scheme, there is no requirement for a separate BACT analysis for visible emissions, because visible emissions are not a "regulated air contaminant" under WIS. ADMIN. CODE § NR 405.02(25i); see also Sierra Club v. Georgia Power Co., 443 F.3d 1346, 1350 n. 4 (11th Cir.2006) ("[O]pacity . . . is not itself a regulated pollutant."). This argument about whether a BACT analysis is required for visible emissions, however, is not germane to the question of whether the DNR must establish a BACT visible emissions limit under its own regulations. If WPSC and the DNR mean to suggest that, because visible emissions are not a "regulated air contaminant," it is therefore unnecessary to establish an opacity standard for visible emissions, this argument is belied by the existence of other regulations
¶ 65 For the reasons provided above, we conclude that the DNR erred as a matter of law by failing to establish a BACT visible emissions limit for opacity, expressed as a percentage of opacity, for those pollutants that are visible for the Weston 4 plant main boiler.
¶ 66 In sum, we uphold as reasonable the DNR's BACT limits for sulfur dioxide and nitrogen oxide emissions in the Weston 4 permit, and its selection of dry FGD technology to control sulfur dioxide emissions. Moreover, we conclude that the DNR's determinations regarding BACT limits for sulfur dioxide and nitrogen oxide emissions and its selection of dry FGD technology are supported by substantial evidence in the record. We further conclude, however, that the failure of the DNR to establish a BACT visible emissions limit, expressed as a percentage of opacity for those pollutants that are visible for the Weston 4 main boiler was based on an unreasonable interpretation of WIS. ADMIN. CODE § 405.02(7) and is inconsistent with the language of the regulation. We therefore affirm in part, and reverse in part, the circuit court's decision upholding the DNR's decision, and remand for the DNR to reopen the permit to establish a BACT visible emissions limit for those emissions that are visible.
Order affirmed in part; reversed in part and cause remanded for further proceedings.
Sierra Club v. Georgia Power Co., 443 F.3d 1346, 1350 n. 4 (11th Cir.2006).
DNR's expert, Jeff Hanson, provided the following testimony:
