## Facts

- Illinois’s environmental agency, acting under delegated federal authority, issued a Prevention of Significant Deterioration (PSD) permit to Prairie State Generating Co. for a 1,500-megawatt coal-fired power plant in southern Illinois.
- The project was designed as a “mine-mouth” plant, sited to use nearby coal transported by a short conveyor from an adjacent mine.
- The locally available coal had high sulfur content, raising concerns about sulfur dioxide (SO₂) emissions.
- Sierra Club and other environmental organizations challenged the permit before EPA’s Environmental Appeals Board (EAB), arguing noncompliance with Clean Air Act (CAA) requirements for (1) best available control technology (BACT) for SO₂ and (2) national ambient air quality standards (NAAQS) compliance for ozone.
- The EAB declined to overturn the permit, and petitioners sought judicial review in the Seventh Circuit.

## Issues

1. Whether the CAA’s BACT requirement for a PSD permit required the permitting authority to consider mandating low-sulfur coal from distant mines, which would require redesign of the plant’s fuel-handling and receiving systems.
2. Whether EPA’s determination that the plant would not cause or contribute to an ozone NAAQS violation was arbitrary, capricious, or otherwise contrary to law.

## Decision

- The Seventh Circuit denied the petition for review and left the PSD permit in effect.
- The court held that EPA did not act unlawfully by declining to treat a shift to imported low-sulfur coal, with associated redesign, as a required BACT alternative.
- The court held that EPA’s ozone/NAAQS compliance determination was supported by the record and was not arbitrary or capricious.

## Legal Principles

- Under the CAA’s PSD program, BACT is applied to the emissions controls for the source as proposed and does not require a permitting authority to compel a fundamental redesign of the facility’s basic configuration or fuel-supply logistics, so long as the proposed design is lawful.
- A permitting authority may distinguish between add-on or process control measures (within BACT review) and changes that effectively transform the proposed project into a different facility (outside required BACT alternatives).
- Courts give substantial deference to EPA’s scientific and technical judgments, including air-quality modeling used to evaluate whether a new source will cause or contribute to NAAQS violations, absent a clear showing of irrationality or legal error.
- Under CAA judicial review standards, a PSD permit decision will be upheld if the agency’s reasoning is adequately supported and not arbitrary or capricious.

## Conclusion

The court upheld EPA’s approval of a PSD permit for a mine-mouth coal plant, concluding that BACT did not obligate the agency to require a redesign to burn imported low-sulfur coal and that EPA’s ozone NAAQS analysis rested on permissible, record-supported technical judgments.


Sierra Club v. EPA, 499 F.3d 653 (7th Cir. 2007)