West Suburban Recycling and Energy Center, L.P.

Plain-English summary

West Suburban Recycling and Energy Center, L.P. sought federal Prevention of Significant Deterioration permits for a proposed municipal solid waste facility in Illinois. The Illinois Environmental Protection Agency had denied permit applications on state-law grounds, while the Environmental Appeals Board found that the denials also operated to deny the federal PSD permits. The Board rejected abstention, held that the federal PSD issues were within its review authority, and found that IEPA had not completed the federal permit decision process required by 40 C.F.R. part 124. It remanded the matter to IEPA to issue a final federal PSD decision, address significant comments, explain changes from the draft permit, and complete the administrative record. The Board expressed no view on whether the final permit should be granted or denied.

Decision snapshot

• Cited authorities: Clean Air Act §§ 112, 160, and 165; 40 C.F.R. §§ 52.21 and 124.4, 124.15 through 124.19, and 124.41.
• Outcome: The federal PSD permit process was remanded to IEPA for a final decision and a response to significant public comments.
• Key point: A state agency acting under delegated federal PSD authority must follow the federal PSD permit procedures and provide a reviewable final decision.

Full text (EPA EAB public release)

692 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

IN RE WEST SUBURBAN RECYCLING AND
ENERGY CENTER, L.P.

PSD Appeal Nos. 95-1 & 96-1
REMAND ORDER

Decided December 11, 1996

Syllabus

By earlier order, the Board granted review of two petitions filed by West Suburban
Recycling and Energy Center, L.P. (WSREC), in which WSREC sought review of two decisions of
the Illinois Environmental Protection Agency (IEPA) denying WSREC a permit to construct a
municipal solid waste facility. Although IEPA’s denial decisions were premised on grounds relat-
ing only to state air permitting requirements, the Board concluded that the decisions also oper-
ated to deny WSREC a federal permit applied for pursuant to the Clean Air Act’s Prevention of
Significant Deterioration (PSD) program, 42 U.S.C. § 7470 et seq. Illinois does not have a feder-
ally approved State Implementation Plan for the PSD program; IEPA administers the federal PSD
program in Illinois pursuant to a Delegation Agreement with U.S. EPA Region V. Because IEPA
represented to the Board that it had identified no federal PSD deficiencies in WSREC’s applica-
tions, the Board ordered IEPA to show cause as to why it should not be required to issue, in
accordance with 40 C.F.R. Part 124, the federal PSD permit sought by WSREC.

In response to the Board's order, the Board has received briefs and argument from IEPA
and WSREC, as well as from several amici curiae, including Region V joined by U.S. EPA's Office
of General Counsel. IEPA now requests that the Board abstain from exercising its jurisdiction
over the PSD component of WSREC’s applications, because of the pendency of appeals filed by
WSREC under state law with the Illinois Pollution Control Board (IPCB) concerning IEPA’s denial
decisions. Alternatively, IEPA argues that its denial decisions were an appropriate exercise of the
federal PSD authority delegated to it by Region V. IEPA and some amici contend that one basis
for denying the permit under state law (an alleged discrepancy in source size between the
source identified in the construction permit application and the source described by WSREC in
obtaining local siting authorization) would also constitute grounds for denying the permit under
federal PSD regulations. Some amici request that the Board remand the permit to IEPA for com-
pletion of its PSD decisionmaking responsibilities.

Held: The Board will not abstain from exercising its jurisdiction, because the doctrine of
abstention, as advanced by IEPA, is inapplicable to this proceeding. As Region V’s delegatee,
IEPA “stands in the shoes” of the Region for purposes of the federal PSD program. The Board
has sole administrative authority for review of federal PSD permit decisions, and the PSD issues
involved in this proceeding are easily severable from the state-law challenges WSREC has raised
before the IPCB. Therefore, there is virtually no potential for the federal-state entanglement that
must exist before abstention becomes appropriate.

The Board rejects IEPA’s claim that its denial decisions (premised solely on state law) were
a proper exercise of its delegated responsibilities under the federal PSD program. The

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WEST SUBURBAN RECYCLING AND ENERGY CENTER, L.P. 693

Delegation Agreement requires IEPA to apply federal source review provisions and federal per-
mit issuance procedures to the PSD component of WSREC’s applications. The Board agrees that
a potential discrepancy between the source described in a PSD permit application and the
source which the applicant actually intends to build may be relevant to review of a federal PSD
permit application, but IEPA’s denial decisions did not address the relevance of the alleged dis-
crepancy to the federal PSD program, and did not include any of the elements required under
the PSD permit decisionmaking process set forth in 40 C.F.R. Part 124, such as a final PSD per-
mit decision that sets forth the procedures for appealing a PSD permit decision, and a response
to public comments. On the basis of the record before it, the Board concludes that IEPA has
failed to complete the federal PSD permit decisionmaking responsibilities delegated to it by
Region V. The Board therefore remands this matter to IEPA, and orders IEPA to expeditiously
complete the federal PSD permit process by issuing a final decision granting or denying the PSD
component of WSREC’s applications, as well as a response to comments received concerning
PSD issues and an explanation of changes, if any, between the draft permit issued by IEPA and
any final permit issued. The Board expresses no opinion with respect to the substance of the
final PSD permit decision to be issued by IEPA.

Before Environmental Appeals Judges Ronald L. McCallum,
Edward E. Reich and Kathie A. Stein.

Opinion of the Board by Judge McCallum:

These appeals are before the Board following an order issued by
the Board on April 26, 1996, granting two petitions for review filed by
West Suburban Recycling and Energy Center, L.P. WSREC), and
requiring the Illinois Environmental Protection Agency (IEPA) to show
cause as to why it should not be required to issue a Clean Air Act
Prevention of Significant Deterioration (PSD) permit decision on two
pre-construction permit applications submitted to it by WSREC, in
accordance with the rules set forth at 40 C.F.R. § 124 et seq.' As
explained in more detail below, the show cause order consolidated
two petitions for review, filed by WSREC pursuant to 40 C.F.R. §
124.19, seeking review of two decisions of IEPA denying WSREC a
state permit to construct a municipal solid waste combustion facility.
In the show cause order, the Board concluded that IEPA’s decisions
also operated to deny WSREC a permit under the federal PSD pro-
gram, Clean Air Act Title I, Part C, 42 U.S.C. § 7470 et seq. In response
to the show cause order and the public notice published by IEPA pur-
suant to 40 C.F.R. § 124.19(c), the Board has received numerous briefs
filed by the parties as well as amici curiae.’

' The April 26, 1996 order is referred to herein as the “show cause order”.

2 Specifically, the Board has received the following: IEPA’s Response to Show Cause Order
(filed June 17, 1996); WSREC’s Reply to IEPA’s Response to Show Cause Order (filed July 2,
1996); Amicus Brief of Lyons Incinerator Opponent Network (LION) (filed July 10, 1996),
WSREC’s Motion for Leave to File Response to Amicus Brief of LION, together with proposed
Response (filed July 24, 1996); LION’s Motion for Leave to File Reply to WSREC’s Response,

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694 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Upon consideration of the record before the Board, and for the
reasons set forth below, the Board concludes that IEPA has failed to
fulfill the PSD permit decisionmaking responsibilities delegated to it by
U.S. EPA Region V with respect to the permit applications underlying
WSREC’s petitions for review. In particular, although IEPA’s permit
decisions operated to deny WSREC a federal PSD permit, those deci-
sions did not comport with the permit decisionmaking procedures set
forth at 40 C.F.R. part 124. The Board is therefore requiring IEPA to
complete the PSD permit decisionmaking process, in accordance with
the federal authority delegated to it. In particular, IEPA must issue a
final permit decision relative to the grant or denial of the PSD compo-
nent of WSREC’s permit applications. See 40 C.F.R. § 124.15(a). Further,
IEPA must issue a response to all significant comments concerning the
PSD component of WSREC’s application that were previously received
during the public comment period and public hearing held by IEPA
following issuance of its draft permit decision, and IEPA must explain
changes, if any, between the previously issued draft permit decision
and the final permit decision issued pursuant to this remand order, in
accordance with 40 C.F.R. § 124.17. In accordance with 40 C.F.R. §
124.18, IEPA’s response to comments and any documents referenced
therein shall become part of the administrative record. The Board
expresses no opinion with respect to the substance of the final PSD
permit decision to be issued by IEPA. IEPA shall issue its final PSD per-
mit decision and response to comments expeditiously.’

together with proposed Reply (filed August 2, 1996), Motion of U.S. EPA Office of General
Counsel (OGC) and U.S. EPA Region V for Leave to File Amicus Brief in Response to Show
Cause Order (filed August 6, 1996), and OGC and Region V's Response to Show Cause Order
(received July 30, 1996); WSREC's Objection to OGC and Region V’s Motion for Leave to File
Amicus Brief, or in the Alternative, Motion for Leave to File Response to Amicus Brief, together
with proposed Response (filed August 14, 1996). In addition, the Board received several letters
from citizens and a member of the U.S. Congress generally supporting IEPA’s decisions denying
WSREC’s permit (although some letters concerned issues unrelated to WSREC’s permit applica-
tion). In the interest of having all of the parties’ and amici's views before it, the Board hereby
grants the above-described motions, and the above-described briefs and letters are accepted as
part of the Board’s record. The Board notes that WSREC opposes the filing of an amicus brief
by OGC and Region V, on the ground that the brief was not timely filed. We disagree. The pub-
lic notice announcing that the Board would accept amicus briefs (prepared by IEPA and pub-
lished in mid-June 1996) did not specify a particular deadline by which such briefs must be filed.
Moreover, WSREC has been afforded an opportunity to respond to the matters raised in the
OGC/Region V amicus brief, and therefore has suffered no prejudice as a result of its filing.

• OGC and Region V point out that IEPA has already greatly exceeded the time allowed (180
  days) under its Delegation Agreement with Region V for making a permit decision, and that
  WSREC has not waived the time limit imposed by the Delegation Agreement (which it may do
  under the terms of the Delegation Agreement). OGC/Region V Amicus Brief at 8. OGC and the
  Region also represent that “[ilf IEPA fails to complete the PSD permit review within a suitable

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WEST SUBURBAN RECYCLING AND ENERGY CENTER, L.P. 695

I. BACKGROUND

In April 1980 the Regional Administrator of U.S. EPA Region V del-
egated full authority to the State of Illinois to implement and enforce
the federal PSD program. See Prevention of Significant Deterioration;
Delegation of Authority to State Agencies, 46 Fed. Reg. 9580 Jan. 29,
1981) (setting forth Delegation Agreement between State of Illinois and
U.S. EPA). The Delegation Agreement expressly delegates to Illinois
the “administrative, technical and enforcement elements of the source
review provisions of 40 C.F.R. § 52.21 [Prevention of Significant
Deterioration].” Id. In turn, 40 C.F.R. § 52.21 obligates Illinois to “fol-
low the applicable procedures of 40 C.F.R. part 124 in processing
applications under this section.” See 40 C.F.R. § 52.21(q).*

On July 5, 1994, WSREC submitted an application to IEPA for a
permit to construct a municipal solid waste combustion facility. In
accordance with Illinois law, which provides for integrated permit
review when a facility must obtain construction approval under
various state and federal requirements, WSREC submitted a single per-
mit application addressing both state and federal requirements.
Specifically, WSREC sought approval under Illinois New Source
Review requirements concerning pollutants for which Illinois is
deemed “nonattainment” under the Clean Air Act, as well as approval
under the federal PSD program for pollutants for which Illinois is
deemed “attainment.”*

period of time, the Regional Administrator should determine whether it is appropriate to revoke
the delegation for this permit review and make a final decision to grant or deny the PSD permit.”
Id, at 29. OGC and the Region do not suggest what a “suitable” period of time might be. It will
be the Region's obligation to closely monitor the proceedings on remand, and take appropriate
action if they are not completed expeditiously. Given the length of time that has elapsed since
WSREC submitted its PSD permit applications (the most recent was submitted in May 1995), the
proceedings that have already been completed by IEPA, and the Delegation Agreement's provi-
sion that “IEPA will take final action upon a complete application * * * within 180 days of receipt,”
we would expect that the proceedings on remand could and should be completed within 90 days
of the date of this order, although we recognize the need for some flexibility in this regard.

4 Because IEPA only exercises such PSD authority as was delegated to it by EPA, IEPA
stands in the shoes of EPA for purposes of implementing the federal PSD permit program. See
40 C.F.R. § 124.41 (terms “EPA” and “Regional Administrator” mean the delegate agency when a
State exercises delegated authority to administer PSD permit program); 45 Fed. Reg. 33,413 (May
19, 1980) (‘For purposes of Part 124, a delegate State stands in the shoes of the Regional
Administrator [and must] follow the procedural requirements of part 124. * * * A permit issued
by a delegate is still an ‘EPA-issued permit’; * * *.”); In re SET Birchwood, Inc., 5 E.A.D. 25, 26
(EAB 1994).

5 Pursuant to Parts C and D of the Clean Air Act, 42 U.S.C. §§ 7470-7515, the New Source

Review (NSR) program requires new major stationary sources of air pollution and major modi-
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696 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

In accordance with an ongoing dialogue between WSREC and
IEPA, WSREC subsequently submitted a revised application and sup-
plements to its application. Following its consideration of WSREC’s
application, IEPA denied WSREC’s application by letter dated
February 27, 1995. Among other reasons, IEPA denied the applica-
tion for failure to demonstrate compliance with certain requirements
of Illinois law, including a demonstration of “best available control
technology” (BACT), “lowest achievable emission rate” (LAER), and
compliance with emissions offset requirements for certain pollutants
regulated under Illinois State Implementation Plan (SIP) require-
ments for nonattainment area pollutants.® IEPA’s February 27, 1995
denial letter did not reference any failure by WSREC to comply with
federal PSD requirements. On March 29, 1995, WSREC filed PSD
Appeal No. 95-1 with the Board, seeking review of IEPA’s denial of

its permit application.’ In its petition, WSREC contends, inter alia,
that IEPA “failed to comply with the applicable federal regulations

governing IEPA’s PSD permit decisionmaking process.” PSD Appeal

fications to such sources to be permitted prior to construction. Under Part D of the Clean Air
Act, “nonattainment areas” are those that do not meet the National Ambient Air Quality
Standards (NAAQS) for certain pollutants. Permits issued in such areas are generally known as
NAA or NSR permits, and most NAA or NSR permits are issued by states in accordance with State
Implementation Plans (SIPs) approved by EPA pursuant to the Clean Air Act. Illinois’ SIP with
respect to the nonattainment requirements of Part D was approved by U.S. EPA, and accordingly
Illinois is fully authorized to implement and enforce the nonattainment new source permit
requirements of its SIP. See 40 C.F.R. § 52.722 (setting forth SIP approval status). In contrast,
under Part C of the Clean Air Act, “attainment areas” are areas where the NAAQS are met for
certain pollutants, and a new source must demonstrate compliance with Prevention of
Significant Deterioration (PSD) requirements in order to obtain a permit. The Illinois SIP has not
been approved with respect to a PSD program, and therefore the federal PSD program remains
in force and effect in Illinois. See 40 C.F.R. § 52.738(a) (“The requirements of [Part C] of the Clean
Air Act are not met, since the plan does not include approvable procedures for preventing the
significant deterioration of air quality.”). As explained supra, U.S. EPA Region V delegated its
authority to issue permits in accordance with the federal PSD program to the State.

° The “BACT” review referred to in IEPA’s denial letter concerned only pollutants regulat-
ed pursuant to the Illinois SIP (dioxin/furans and mercury), but not pursuant to federal PSD
requirements. See Clean Air Act § 112(b)(6), 42 U.S.C. § 7412(b)(6) (excluding dioxin/furans and
mercury from federal PSD requirements); see also In re Robbins Resource Recovery Co., 3 E.A.D.
648, 653 (Adm'r 1991).

7 WSREC specifically sought review of IEPA's decision concerning WSREC’s BACT analysis
for dioxin/furans and mercury, as well as contending that IEPA had not followed applicable reg-
ulatory requirements in processing the federal PSD component of WSREC’s permit application.
See Petition No. 95-1 at 8-18. As explained supra note 6, dioxin/furans and mercury are not reg-
ulated under the federal PSD program, and therefore that aspect of IEPA’s permit denial is not
reviewable before the Board. See In re Spokane Regional Waste-to-Energy Project, 3 E.A.D. 68,
70 (Adm’r 1990); In re Robbins Resource Recovery Co., 3 E.A.D. 648, 653 (Adm'r 1991).

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WEST SUBURBAN RECYCLING AND ENERGY CENTER, L.P. 697

No. 95-1 at 89. WSREC also sought review before the Illinois
Pollution Control Board.®

Following discussions with IEPA, WSREC submitted a second con-
struction permit application for the same project (again addressing
both state and federal requirements) on May 19, 1995.° In September
1995, IEPA issued a draft permit decision and public notice indicating
that IEPA was proposing to issue a permit to WSREC, including
approval to construct under the federal PSD program. IEPA accepted
comments from the public on the draft permit, and held a public hear-
ing on the draft permit in November 1995. In the notice for the pub-
lic hearing, IEPA stated that the application satisfied certain air pollu-
tion control laws, including the federal PSD rules. See IEPA’s “Notice
of Proposed Issuance of a Construction Permit” (attached as Exhibit B
to Petition No. 96-1). On December 22, 1995, IEPA denied the second
application. The basis for the denial concerned WSREC’s alleged fail-
ure to obtain necessary local siting approvals for the facility described
in the permit application. In particular, IEPA’s denial stated that “the
application does not demonstrate that the facility for which a permit
has been applied is the pollution control facility for which approval
was granted” pursuant to local siting requirements. IEPA Denial Letter
(Dec. 22, 1995). IEPA’s December 22, 1995 denial letter did not refer-
ence any failure by WSREC to comply with federal PSD requirements.
On January 11, 1996, WSREC filed PSD Appeal No. 96-1 with the
Board, seeking review of IEPA’s second permit denial. WSREC also
sought review of the second denial before the Illinois Pollution
Control Board.’

On January 19 and February 21, 1996, IEPA moved the Board to
dismiss PSD Appeal Nos. 95-1 and 96-1, respectively. As grounds for
its motions, IEPA argued that the Board lacks jurisdiction to consider
WSREC’s petitions, because IEPA’s denials were based entirely on
WSREC’s alleged failure to comply with state requirements. The Board
rejected IEPA’s argument, and denied the motions to dismiss. The
Board held that:

® On October 17, 1996, the Illinois Pollution Control Board affirmed IEPA’s decision deny-
ing a state construction permit to WSREC.

° IEPA states that “{iJn the second construction permit application, WSREC cured the defi-
ciencies identified in the IEPA’s February 27, 1995 denial.” IEPA Response to Show Cause Order
at 3, 39 n.32.

” To date, the Illinois Board has not issued a decision with respect to WSREC’s second
appeal.

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698 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

The part 124 regulations confer upon this Board the
authority to review “any condition of [a final PSD] per-
mit decision.” 40 C.F.R. § 124.19(a). Pursuant to the
part 124 rules, “final permit decision” includes a final
decision to deny a permit. Id. § 124.15(a).

It is apparent that IEPA’s denials, although premised
on state-law grounds, operated to deny the permit
applications in their entirety, including the federal PSD
portion. As explained above, the Board has jurisdiction
to consider any condition of a final PSD permit deci-
sion, including a decision to deny a permit. 40 C.F.R.
§§ 124.15(a) & 124.19(a). While the Board does not
have jurisdiction to address the substance of IEPA’s
denials as they affect WSREC’s rights under state law,
see In re Spokane Regional Waste-to-Energy Project, 3
E.A.D. 68, 70 (Adm’r 1990), the rules do confer upon
the Board the authority to entertain WSREC’s claim that
IEPA has erroneously refused to issue it a federal PSD
permit when all federal requirements have apparently
been met. We therefore deny IEPA’s motions to dismiss
WSREC’s petitions for review.

Show Cause Order at 8.'' Because, in the course of pursuing its
motions to dismiss, IEPA represented to the Board that it did not deny
the permit requested by WSREC on the basis of WSREC’s failure to
comply with federal PSD regulations, and because IEPA took pains to
represent to the Board that it had, in fact, identified no federal PSD-
related deficiencies in the permit application, the Board granted
WSREC’s petitions for review of IEPA’s denial decisions, and ordered
IEPA to show cause as to why it should not be required to issue, in
accordance with the governing regulations at 40 C.F.R. Part 124, the
PSD permit. Id. at 9-11 (citing IEPA’s Reply to WSREC’s Response to
IEPA’s Motion to Dismiss at 5-6 (April 10, 1996)).!2 The order further

IEPA now concedes that its denial decisions operated to deny the federal PSD compo-
nent of the permit applications, and has abandoned its challenge to the Board’s jurisdiction over
WSREC’s petitions for review. IEPA's Response to Show Cause Order at 4-5, 6 n.10.

" In its oppositions to IEPA’s motions to dismiss, WSREC provided the Board with testi-
mony from the proceeding before the Illinois Pollution Control Board in which a representative
of IEPA testified that the federal PSD component of WSREC’s permit application had been “inter-
nally approved” by IEPA. See WSREC’s Supplemental Response to IEPA’s Motion to Dismiss at

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WEST SUBURBAN RECYCLING AND ENERGY CENTER, L.P. 699

required IEPA to publish a public notice of the Board’s grant of
review, advising the public that the Board would accept amicus briefs
from interested persons. Id. at 11."°

IEPA submitted a lengthy response to the show cause order.
IEPA’s response urges two alternative courses of action upon the
Board. First, IEPA requests that the Board “abstain” from exercising its
jurisdiction to review WSREC’s petitions until the Illinois Pollution
Control Board (PCB) has completed its review of WSREC's state
appeals. Second, IEPA urges the Board in the alternative to “affirm the
IEPA’s permitting determinations made pursuant to its delegated
authority under the federal [PSD] provisions of the Clean Air Actl.]”
IEPA’s Response to Show Cause Order (hereafter “IEPA Response”) at
1-2. The basis for IEPA’s abstention request is its claim that WSREC’s
petitions “involve[] the complex interrelationship between State and
federal law and bear] upon the IEPA’s future administration of the
[Clean Air Act] and State permitting programs.” Id. at 5. IEPA argues
that the issues raised by WSREC before the IPCB are “deeply entwined
in the issues being considered” by the Board. fh 4 IEPA contends that:

[T]he exercise of jurisdiction by the [Board] could seri-
ously disrupt the administration of environmental per-
mitting programs by the IEPA if doing so results in an
order requiring the IEPA to bifurcate its review of per-
mits involving both federal PSD and other CAA and
state air quality issues, particularly if the programs
involveld| impose separate procedural requirements
and review procedures.

3-4 (March 5, 1996). Although IEPA contended that the testimony was not relevant to the
Board's deliberations, IEPA provided the Board with additional testimony from the State pro-
ceeding in which a representative of IEPA testified to having found no federal PSD deficiencies
in WSREC’s application. See IEPA’s Reply to WSREC’s Response to IEPA’s Motion to Dismiss at
5-6 (April 10, 1996).

3 The rules governing review of PSD permit decisions require public notice of a grant of
a petition for review. 40 C.F.R. § 124.19(c). The rule provides that “[plublic notice shall set forth
a briefing schedule for the appeal and shall state that any interested person may file an amicus
brief.” Id.

4 As noted supra, note 8, the Illinois Board affirmed IEPA’s February 27, 1995 decision
denying a state construction permit to WSREC. IEPA argued in its abstention request that “lif the
IEPA secures a judgment in its favor, the (Board] will be able to consider WSREC’s claims regard-
ing the propriety of the IEPA’s denial of its PSD permit application.” IEPA Response at 6.
Therefore, IEPA’s abstention request appears to be moot with respect to Petition No. 95-1.
However, no decision has been rendered with respect to WSREC’s second state appeal, and
therefore [EPA’s abstention request is not moot with respect to Petition No. 96-1.

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700 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Id. at 13. IEPA relies particularly on the abstention doctrines elucidat-
ed by the U.S. Supreme Court in Burford v. Sun Oil Co., 319 U.S. 315
(1943) and Colorado River Water Conservation Dist. v. U'S., 424 US,
800 (1976).'5

As to its alternative course of action, IEPA contends that its denial
of WSREC’s permit applications for reasons relating to state law
requirements is not inconsistent with the federal PSD rules or the
Illinois PSD Delegation Agreement with EPA. Although IEPA’s argu-
ments are somewhat unclear, the essence of its claim is that the
Delegation Agreement grants IEPA the authority to apply the state
integrated permit review provisions contained in the Illinois SIP to
applications for federal PSD permits. According to IEPA, because the
provisions of Illinois law incorporated in the SIP prevent it from issu-
ing a permit that does not demonstrate compliance with all applica-
ble state requirements, it was within its delegated authority to deny a
federal PSD permit to WSREC for failure to demonstrate compliance
with requirements imposed by Illinois New Source Review regulations
(the first denial decision). See id. at 29-32, 40-47. IEPA contends that
it was similarly within its delegated authority to deny a federal PSD
permit to WSREC for failure to comply with local siting requirements
(the second denial decision), See id. at 47-53.

In its reply to IEPA’s Response, WSREC argues that the federal
abstention doctrines relied upon by IEPA are inapplicable because the
Board is not an Article III federal court with wide-ranging equitable
powers, but only has the authority to exercise the jurisdiction con-
ferred on it by regulation to review permit appeals and render EPA’s
final decision on those appeals. As such, in WSREC’s view, “this Board
does not risk excessive entanglement with state proceedings by the
potential exercise of equitable powers.” WSREC’s Reply to IEPA’s
Response to Show Cause Order at 3-4 (hereafter “WSREC’s Reply”).
WSREC further argues that even if the Board has the authority to
abstain from exercising its jurisdiction “there are no state issues of law
or policy which could possibly be affected by the [Board's] ruling
here,” because the Board’s jurisdiction concerns only the federal PSD

'’ As explained in more detail below, the Burford doctrine requires a federal court to
decline to exercise its equitable powers to interfere with a state’s regulatory proceedings when
timely and adequate state-court review is available, and to exercise such powers would poten-
tially implicate difficult questions of state law or policy. See New Orleans Public Serv., Inc. v.
Council of the City of New Orleans, 491 U.S. at 359. The Colorado River doctrine allows a fed-
eral court, in limited circumstances, to decline to exercise its jurisdiction for reasons of judicial
economy when a parallel proceeding is pending in a state forum. See Colorado River Water
Conservation Dist. v. U.S., 424 U.S. at 817-18.

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WEST SUBURBAN RECYCLING AND ENERGY CENTER, L.P. 701

issues raised by WSREC, and therefore Burford abstention is inappro-
priate. Id. at 4. Nor, in WSREC’s view, is Colorado River abstention
appropriate, because there is no “parallel” state proceeding, since
WSREC’s state appeals raise no federal PSD issues. Id. at 12-13.

WSREC also disputes IEPA’s claim that it has the authority pur-
suant to the Clean Air Act, the Illinois SIP, and the Delegation
Agreement to deny a federal PSD permit for alleged permit deficien-
cies arising only under state law. Id. at 18-19. WSREC contends that
IEPA’s claim is:

[E]xtraordinary, and without basis in fact or in law.
Taken to its logical endpoint, the IEPA asks this Board
to conclude that by mere virtue of being a delegated
agency under the federal PSD program, the IEPA may
deny a PSD permit for any reason (or no reason) at all.
According to the IEPA, any purported deficiency in a
state construction permit application bars issuance of
the federal PSD, permit simply because IEPA processes
all applications at once under its “integrated” state con-
struction permit program.

This is simply not the law * * *.

Id. WSREC urges the Board to order IEPA to immediately issue
WSREC’s PSD permit, which it says IEPA has admitted to approving.
Id. at 31.

II. DISCUSSION
A. Abstention

We first consider IEPA’s request that the Board abstain from exer-
cising its jurisdiction over these petitions because of the pendency of
WSREC’s appeal before the IPCB. We need not decide if the Board
possesses the power to abstain from exercising its jurisdiction in an
appropriate case, because we conclude that the doctrine as advanced
by IEPA is inapplicable to the case at bar, therefore, we must reject
IEPA’s request.'°

16 The “abstention doctrine” has been succinctly defined as permitting “a federal court, in
the exercise of its discretion, to relinquish jurisdiction where necessary to avoid needless con-
flict with the administration by a state of its own affairs.” Black’s Law Dictionary, 5th ed, OGC
and Region V state that “we believe that the Board has equitable authority to grant such a
request when circumstances warrant. Such circumstances may exist where pending, parallel

Continued

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Abstention, as construed by the Supreme Court, applies only in
limited circumstances. The Supreme Court has explained that “[wle
have carefully defined * * * the areas in which * * * ‘abstention’ is per-
missible, and it remains ‘the exception, not the rule.’ * * * [T]he feder-
al courts’ obligation to adjudicate claims within their jurisdiction [is]
‘virtually unflagging.’” New Orleans Public Serv., Inc. v. Council of the
City of New Orleans, 491 U.S. 350, 359 (1989) (citations omitted)
(hereafter cited as “NOPSTI’); Colorado River Water Conservation Dist.,
424 U.S. at 813 (‘The doctrine of abstention, under which a District
Court may decline to exercise or postpone the exercise of its jurisdic-
tion, is an extraordinary and narrow exception to the duty of a District
Court to adjudicate a controversy properly before it. Abdication of the
obligation to decide cases can be justified under this doctrine only in
the exceptional circumstances where the order to the parties to repair
to the State court would clearly serve an important countervailing
interest."") (quoting County of Allegheny v. Frank Mashuda Co., 360
U.S. 185, 188-89 (1959)). It is unnecessary to engage in lengthy dis-
course concerning the types of cases or circumstances in which the
Board might abstain from exercising its jurisdiction, because the
threshold elements necessary to consider abstention under either
Burford or Colorado River are wholly lacking in this case.

The Supreme Court has explained the Burford doctrine as follows:

Where timely and adequate state-court review is avail-
able, a federal court sitting in equity must decline to
interfere with the proceedings or orders of state
administrative agencies: (1) when there are “difficult
questions of state law bearing on policy problems of
substantial public import whose importance transcends
the result in the case then at bar’; or (2) where the
“exercise of federal review of the question in a case
and in similar cases would be disruptive of state efforts
to establish a coherent policy with respect to a matter
of substantial public concern.”

state proceedings addressing the same or similar issues are expected to be completed in the near
term.” OGC/Region V Brief at 17. We note that the Board has, in this case and in other cases,
stayed consideration of an appeal where, for example, the parties were engaged in settlement
negotiations and jointly requested such a stay. The issue of whether the Board has the power
to “relinquish”, or to decline to exercise, its jurisdiction solely because an exercise of jurisdic-
tion would allegedly interfere with related state proceedings has not, to our knowledge, previ-
ously been raised. Because we conclude that the doctrine would not, in any event, be applica-
ble to this case, it is unnecessary for us to decide whether we possess such power.

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NOPSI 491 U.S. at 361 (quoting Colorado River, 424 U.S. at 814). The
Colorado River doctrine, under which a court may decline to exercise
jurisdiction for reasons of judicial economy when there is a pending
state proceeding, is even more narrow; the Court has explained that
“[gliven * * * the absence of weightier considerations of constitutional
adjudication and state-federal relations, the circumstances permitting
dismissal of a federal suit due to the presence of a concurrent state
proceeding for reasons of wise judicial administration are consider-
ably more limited than the circumstances appropriate for abstention.”
Colorado River, 424 U.S. at 817-18. Moreover, the Colorado River doc-
trine depends upon the existence of a “parallel” state proceeding; that
is, one in which “substantially the same parties are contemporane-
ously litigating substantially the same issues in another forum.”
LaDuke v. Burlington Northern Co., 879 F.2d 1556, 1558-59 (7th Cir.
1989); see Colorado River, 424 U.S. at 817-18.

WSREC’s petitions for review before this Board and the penden-
cy of its remaining appeal before the IPCB raise none of the concerns
underlying the Burford or Colorado River doctrines, and IEPA’s
protestations to the contrary apparently stem from a misinterpretation
of its obligations under the PSD Delegation Agreement, and the scope
of this Board’s authority to review its PSD permit decisions. As
explained supra, notes 4-5, IEPA’s authority to review PSD permit
applications stems solely from its Delegation Agreement with Region
V. The State of Illinois does not have an approved SIP for the PSD
program, and therefore IEPA acts only to implement federal PSD
requirements. The Delegation Agreement makes plain that IEPA was
delegated only “authority for the administrative, technical and
enforcement elements of the source review provisions of 40 C.F.R. §
52.21.” 46 Fed. Reg. 9580. Although the Delegation Agreement allows
IEPA to conduct its federal PSD permit review “as an integral part of
the Illinois construction permit program,” see id. nothing in the
Delegation Agreement alters the fact that the federal substantive PSD
regulations and the federal procedures for processing PSD permit
applications apply to the PSD component of any “integrated” applica-
tion that IEPA may review. See id.; 40 C.F.R. § 52.21(q) & part 124; 45
Fed. Reg. 33,413 (May 19, 1980)(“For purposes of Part 124, a delegate
State stands in the shoes of the Regional Administrator [and must] fol-
low the procedural requirements of part 124.”). In the same vein, in
accordance with the federal regulations, review of IEPA’s PSD permit
decisions must be had in accordance with the procedures set forth at
40 C.F.R. § 124.19, which vest sole authority to review such decisions
in the Board. See 40 C.F.R. § 124.19(a); In re Robbins Resource
Recovery Co., 3 E.A.D. 648, n.2 (Adm’r 1991) (“Because of the dele-
gation, IEPA’s authority to issue PSD permits is subject to the review

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704 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

provisions of 40 C.F.R. § 124.19, and any permit it issues will be an
EPA issued permit for purposes of federal law.”).!7

In light of the foregoing, IEPA’s contention that “[als set forth in
the [Delegation Agreement], IEPA’s role in reviewing PSD precon-
struction permit applications is controlled by the substantive and pro-
cedural review requirements of [Illinois law]” (IEPA Response at 35) is
both inexplicable and plainly erroneous. We find nothing in the
Delegation Agreement that would so expand IEPA’s federal PSD per-
mit review authority; indeed, as explained above, the Delegation
Agreement plainly limits IEPA to exercising only the federal PSD
authority contained in 40 C.F.R. § 52.21. To read the Delegation
Agreement as IEPA suggests would be to equate IEPA’s delegated PSD
authority with a state PSD program that has been duly authorized by
EPA as part of a state SIP. This we cannot do.

For these reasons, IEPA’s claim that the Board “does not enjoy
exclusive jurisdiction over the IEPA’s PSD permitting decisions” is
patently wrong.'* For the same reasons, the Board and its predeces-
sors have made clear that even where a permit proceeding involves
requirements under both state and federal law, the scope of the
Board's review is limited to issues relating to the federal PSD program
and the Board will not assume jurisdiction over permit issues unrelat-
ed to the federal PSD program. 40 C.E.R. § 124.19: see In re Spokane
Regional Waste-to-Energy Project, 3 E.A.D. 68, 70 (Adm’r 1990); In re
American Ref-Fuel Co., 2 E.A.D. 280 (Adm’r 1986). In American Ref-
Fuel, a petitioner sought review of a preconstruction PSD permit
issued by the State of New Jersey. The PSD permit was one of four
permits issued in a consolidated permit proceeding in which the New
Jersey Department of Environmental Protection (DEP) reviewed the
permit application for compliance with both state and federal require-

' WSREC points out that there are significant disparities in the federal PSD permit review
requirements and the state construction permit program. See WSREC Reply at 30 (noting that
federal and state programs have different requirements concerning what decisions may be
appealed, when public notice of a proposed decision is required, the extent of public partici-
pation in the process, and issuance of permits by default). Although we need not reach the issue
of the nature and extent of such disparities, we do note that it is the federal PSD regulations,
not the provisions of Illinois taw, that apply here.

'* IEPA argues that the Illinois Environmental Protection Act empowers the IPCB to review
all IEPA permit decisions. IEPA Response at 11 n.11 (citing 415 ILCS 5/40). The provision cited
by IEPA authorizes the IPCB to review IEPA permit decisions made under section 39 of the
Illinois Environmental Protection Act. 415 ILCS $/40(a)(1). Our review of section 39 of the
Illinois Act indicates that it makes no specific mention of permits issued pursuant to delegated
authority under the federal PSD program. See 415 ILCS 5/39.

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ments. Like Illinois, New Jersey had an approved SIP with respect to
Clean Air Act nonattainment requirements, but exercised only dele-
gated authority with respect to the federal PSD program. On appeal,
the Administrator expressly refused to consider a request for review
of a permit condition relating to New Jersey nonattainment require-
ments. Although the petitioner argued that its challenge to the per-
mit’s nonattainment requirements were related to the permit’s attain-
ment (PSD) requirements, the Administrator stated:

Without disputing the existence of such a relationship,
I do not believe that it is sufficiently strong to warrant
federal intrusion into what Congress, upon EPA’s
approval of New Jersey’s SIP for nonattainment areas,
clearly intended as a State matter. Congress expressed
its intent, in section 101(a)Q) of the Clean Air Act, that
“the prevention and control of air pollution at its
source is the primary responsibility of states and local
governments”; therefore, absent special circumstances,
EPA should not risk undermining that intent by sec-
ond-guessing the state’s new source determination
under the guise of reviewing a PSD permit. * * *

The [nonattainment] issue * * * is easily severed from
the PSD determination. * * * [Dlespite the existence of
a nexus between the PSD and non-PSD provisions of
the [Clean Air] Act, EPA can keep the two separate in
this instance for purposes of review under 40 C.F.R. §
124.19, while also accommodating the important con-
gressional goal of placing primary responsibility for
clean air in the hands of the State.

American Ref-Fuel, 2 E.A.D. at 283.

Because IEPA’s PSD permit decision is easily severable from the
state-law based challenges WSREC has raised to the denial decisions,
and because authority to review the PSD component of those deci-
sions rests solely with the Board, there is virtually no potential for the
federal-state entanglement complained of by IEPA, and that must exist
before the Burford and Colorado River doctrines become applicable.
Further, because of the clear dichotomy of review authority, there can
be no “timely and adequate state-court review” of WSREC’s federal
PSD permit; and thus the Burford doctrine is inapplicable. See NOPST,
491 U.S. at 361. WSREC’s appeals before the IPCB are plainly not “par-
allel” to this proceeding, because this is the only forum in which
WSREC’s PSD appeals may properly be considered, and thus the same

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706 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

issues cannot be properly adjudicated by the IPCB. See La Duke v.
Burlington Northern, 879 F.2d at 1559.1” We therefore reject IEPA’s
request that the Board abstain from considering WSREC’s petitions for
review.””

B. IEPA’s Denial Decisions

In support of its motions to dismiss, IEPA vigorously argued to
the Board that its denial decisions did not in any respect relate to the
federal PSD program, and that it had in fact identified no deficiencies
in the PSD component of WSREC’s application. See Show Cause Order
at 9-10; IEPA’s Reply to WSREC’s Response to IEPA’s Motion to
Dismiss at 5-6 (April 10, 1996). IEPA now argues that its denial deci-
sions were an appropriate exercise of its delegated PSD authority. See,
e.g., IEPA Response at 38. In support of its argument, IEPA engages in
lengthy discourse concerning the state/federal balance of authority
under the Clean Air Act, the permit review provisions and require-
ments of the Illinois SIP, and its interpretation of the Delegation
Agreement. See IEPA Response at 18-38. It is this latter interpretation
upon which IEPA relies in defending its denial of a federal PSD per-
mit for reasons relating only to state law requirements, and we will
therefore focus on that aspect of IEPA’s argument.

As noted above, the Delegation Agreement provides that IEPA
will conduct its delegated federal PSD permit review authority “as an
integral part of the Illinois construction permit program.” 46 Fed. Reg.
9580. IEPA contends that this phrase “clearly contemplated [State law
permitting requirements] as part of the ‘integral’ permitting scheme
incorporated into the IEPA’s PSD permitting review.” IEPA Response
at 32. IEPA relies on principles of state contract law to interpret the

' We have reviewed the abstention cases relied on by IEPA in its argument, and find them
to be inapplicable to the present proceeding. For example, IEPA relies substantially on Sugarloaf
Citizens Ass'n v. Montgomery County, 33 F.3d 52 (table), 1994 U.S. App. LEXIS 21985 (4th Cir.
1994), an unpublished decision. That case involved the grant of a state air permit that was
appealed by a citizens’ association to state court. Within a few days after filing the state appeal,
the association filed a federal court collateral challenge to the same permit under the Clean Air
Act’s citizen suit provisions, raising the very same allegations as in the state proceedings. See
Sugarloaf, 1994 U.S. App. LEXIS at 4-5. The district court applied the Burford doctrine,
abstained in favor of the pending state proceeding, and dismissed the complaint. Id. at 6. The
Fourth Circuit affirmed the district court’s abstention. Id. at 25-*26. Plainly, none of the circum-
stances warranting Burford abstention in the Sugarloaf case are present here, where this Board,
not the IPCB, has exclusive authority to review IEPA’s federal PSD permit decisions.

*” Our rationale for refusing to abstain in these appeals appears to have been borne out in
the IPCB decision rendered on October 17, 1996. Our review of that decision indicates that the
IPCB did not in any fashion consider or address federal PSD issues in that appeal.

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Delegation Agreement as allowing IEPA to deny a federal PSD permit
in instances where IEPA would deny a permit because an application
failed to demonstrate compliance with, for example, Illinois NSR
requirements. See id. at 32-36. In sum, IEPA claims that “USEPA has
essentially instructed IEPA to perform its delegated PSD authority in a
manner consistent with the Illinois statutes and rules that implement
the SIP.” Id. at 37. ,

IEPA’s interpretation of the Delegation Agreement is unsupported
by the plain terms of the document.”! While the Delegation Agreement
does allow IEPA to conduct its delegated PSD review authority as “an
integral part of the Illinois construction permit program,” nothing in
that phrase can be reasonably read as abrogating the delegatee’s
responsibility to conduct its review and make its decisions on the
basis of the federal PSD program contained in 40 C.F.R. § 52.21.
Rather, the Delegation Agreement expressly requires IEPA to apply the
source review provisions of 40 C.F.R. § 52.21, which in turn encom-
pass the permit issuance procedures of 40 C.F.R. Part 124. We have
explained that a permit issuer exercising delegated PSD permit
authority only “stands in the shoes” of U.S. EPA. Obviously, U.S. EPA
would not be free to deny a federal PSD permit solely on the basis of
failure to comply with state permitting requirements.” Therefore, IEPA
may not do so.

IEPA expresses dissatisfaction that the result of the Board's inter-
pretation of the Delegation Agreement will be a cumbersome, bifur-
cated permit review involving separate permit review procedures. As
WSREC points out (see WSREC’s Reply at 20), the fact is that Illinois
does not currently have a SIP authorization to administer the federal
PSD program, so, to the extent that the programs differ, there is some
inevitable duality in its administration of state permit programs and
exercise of delegated authority to administer the federal PSD program.
It appears that the Delegation Agreement attempts to alleviate the

21 We note that the amicus brief of OGC and Region V did not address this part of IEPA’s
argument, but instead appears to (correctly) assume that permit denial decisions under state law
do not automatically constitute grounds for denying a federal PSD permit.

2 The PSD regulations provide that “[alpproval to construct shall not relieve any owner or
operator of the responsibility to comply fully with applicable provisions of the State implemen-
tation plan and any other requirements under local, State or Federal law.” 40 C.F.R. § 52.2113).
Conversely, the potential that a permittee may not be able to construct a proposed facility
because it fails to fulfill state or local requirements unrelated to the PSD program does not pro-
vide a basis for the Agency to refuse to issue a federal permit where the permittee has demon-
strated compliance with federal requirements. See, e.g., In re Beckman Prod., 5 E.A.D. 10, 23
(EAB 1994).

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708 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

administrative burdens imposed by the existence of this dual system,
by allowing IEPA to review PSD permit applications in conjunction
with state construction permit applications. This accession to admin-
istrative convenience does not, however, diminish the importance of
carrying out the PSD review obligations imposed by the Delegation
Agreement in a manner that is timely and consistent with the federal
PSD regulations, regardless of whether the PSD review obligations
mesh perfectly with the state permit review process.”

For the foregoing reasons, we reject IEPA’s contention that the
state-law grounds for its denial decisions, as articulated in the denial
letters, were valid grounds upon which to deny WSREC a federal PSD
permit. However, IEPA now argues that the alleged discrepancy in
source size between the proposed source and the allegedly smaller
source for which WSREC obtained local siting approval (which
formed the basis of IEPA’s second denial decision) would also provide
a basis for denying WSREC a permit under the federal PSD program,
although IEPA did not reference the implications for the federal PSD
program in its denial letter. IEPA Response at 47-54. WSREC disagrees
that any discrepancy exists, and further argues that the discrepancy as
alleged by IEPA would be harmless since, if true, it would mean that
the air impacts analyzed in the PSD application were overestimated.
WSREC Reply at 22-23 n. 11. While expressing no view on the merits
of this dispute, OGC/Region V agree with IEPA that such an alleged
discrepancy may be relevant to a federal PSD permit decision, and
therefore must be resolved before a lawful permit decision can be
made. OGC/Region V Amicus brief at 18.24

** We note that this concept is embodied in the Part 124 permit review regulations. Under
certain circumstances, the Part 124 regulations allow for consolidation of permit processing
when an applicant seeks permits under multiple federal statutes. See 40 C.F.R. § 124.4. However,
EPA may not (without the written consent of the applicant) consolidate the processing of a PSD
permit with any other permit when to do so “would delay issuance of the PSD permit more than
one year from the effective date of the application * * *." Id. § 124.4(e); see Clean Air Act § 165(c),
42 U.S.C. § 7475(c) (“Any completed permit application * * * to which this part applies shall be
granted or denied not later than one year after the date of filing of such completed applica-
tion.”). As explained supra note 3, IEPA agreed in the Delegation Agreement to further limit the
time for making a PSD permit decision to 180 days, a limitation which WSREC has not waived.

• OGC and Region V argue that:

Statements in local siting approvals that are inconsistent
with those in a PSD permit application are highly relevant in
assessing whether a proposed source will actually be con-
structed consistent with its PSD permit, and are not merely
harmless error. Among other concerns, such overestimates
undermine the permitting authority’s ability to ensure effective

Continued

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WEST SUBURBAN RECYCLING AND ENERGY CENTER, L.P. 709

We agree that a discrepancy between the source described in a
federal PSD permit application and the source which the applicant
actually intends to build may be relevant in determining compliance
with federal PSD requirements. See In re CertainTeed Corp., 1 E.A.D.
743, 747-49 nn.11-12 (Adm’r 1982) (explaining that federal PSD per-
mits and BACT determinations are “tailor-made for each pollutant
emitting facility” and that PSD permit decisions must be based on
detailed, accurate, and _ site-specific information); In re Hibbing
Taconite Co., 2 E.A.D. 838, 844 (Adm’r 1989) (same). The Agency has
explained that “the ‘case-by-case’ evaluation of economic costs and
energy and environmental impacts that has to be performed as part of
a [federal] BACT determination is inextricably tied to a specific set of
assumptions * * *.” CertainTeed Corp., 1 E.A.D. at 747° However, as
explained above, IEPA’s December 22, 1995 denial letter did not in
any way address whether the alleged discrepancy in source size also
constituted grounds to deny WSREC a federal PSD permit. Neither of
IEPA’s denial decisions include any of the elements required under
the PSD permit-decisionmaking process set forth in 40 C.F.R. Part 124,
such as a final PSD permit decision that sets forth the procedures for
appealing a PSD permit decision, see 40 C.F.R. § 124.15(a), and a
response to comments (specifying changes, if any, between the draft
and final permit and describing and responding to all significant com-
ments), see id. § 124.17. Further, the response to comments and any
documents referenced therein must be included in the administrative
record. See id. § 124.18.

The issue thus becomes what remedy is appropriate in light of
IEPA’s failure to carry out its obligations to complete the processing
of WSREC’s PSD permit application and issue a PSD permit decision
in accordance with the Part 124 regulations, pursuant to the
Delegation Agreement. Several amici have argued that the appropri-
ate action for the Board to take is to remand this matter to IEPA so

increment management. The overestimates would reserve for
the proposed new source a portion of the available air quali-
ty increment that the permitting authority might otherwise
allocate to other economic activity, or reserve for the benefit
of the public. Thus, unresolved discrepancies about a source's
design are independently reviewable under the PSD program.

OGC/Region V Brief at 19.

In In re Inter-Power of New York, Inc., 5 E.A.D. 130 (EAB 1994), the Board required a
PSD permit applicant “to affirm that it is presently committed to construct the * * * facility for
which it received a PSD permit,” on the basis of an allegation that the permittee had submitted
a filing with the state siting board that suggested differences in design between the permitted
facility and the facility described to the siting board. See Inter-Power, 5 E.A.D. at 142-43.

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710 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

that it can complete the PSD permit review procedures set forth at 40
C.F.R. Part 124. In particular, the Lyons Incinerator Opponent Network
(LION) and OGC/Region V contend that there has been incomplete
public participation with respect to IEPA’s review of WSREC’s permit
application, because IEPA has not issued a final permit decision that
addresses the merits of the PSD component of WSREC’s application,
including providing a description and response to all significant com-
ments received on the draft permit, and explaining the basis for any
revisions from the draft to the final permit. See LION Amicus Brief at
4, OGC/Region V Amicus Brief at 2-3 (citing 40 C.F.R. §§ 124.17 &
124.18). WSREC opposes a remand, on the basis that IEPA considered
the merits of the PSD component of WSREC’s application, and IEPA’s
representatives have stated that IEPA “internally approved” it. WSREC
argues that the Board should simply require IEPA to issue the applied-
for PSD permit to WSREC, and “respond to public comment on PSD
issues consistent with IEPA’s acknowledgment that the permit should
be issued.” WSREC’s Response to LION Amicus Brief at 5. WSREC
argues that “[tlhe failure by IEPA to identify any PSD deficiencies in its
denial letters is an ‘affirmative’ decision that WSREC’s application sat-
isfied the PSD rules. Region V and [OGC’s] argument that the [denial]
letters are somehow not ‘affirmative’ ignores the governing standards
of Illinois and federal permitting law.” WSREC’s Response to
OGC/Region V Brief at 3.

Based on the record now before us, we conclude that IEPA has
articulated no final PSD decision of record in this matter in accor-
dance with all applicable requirements of the Part 124 regulations.
This conclusion, combined with IEPA’s claim that the alleged source-
size discrepancy that formed the basis of its second denial decision
could affect its analysis of the PSD component of WSREC’s applica-
tion, convinces us that the appropriate course is to remand this mat-
ter so that IEPA can complete the Part 124 permit decision process.?°
While WSREC may be correct that IEPA’s denial letters would consti-
tute affirmative determinations under state law, we cannot agree that
they satisfy the Part 124 requirements as final PSD permit decisions
that meet the applicable requirements of federal law. The decisions
contain none of the elements necessary to show the basis and ratio-

• OGC and Region V expressed concern that, in their view, the Board’s show cause order
  suggested that the Board would truncate the Part 124 procedures, and assume IEPA’s role by
  summarily issuing the PSD permit sought by WSREC. See OGC/Region V Amicus Brief at 4. We
  note that the show cause order expressly required IEPA to “show cause as to why it should not
  be required to issue a federal PSD permit to WSREC * * * in accordance with the rules set forth
  at 40 C.F.R. part 124,” in light of IEPA’s representations to the Board that it had identified no
  PSD deficiencies in WSREC’s application. Show Cause Order at 2, 10-11 (emphasis added).

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nale for a decision on the merits of a PSD permit application. As such,
they provide a wholly inadequate basis on which to review a PSD per-
mit decision, should a commenter, if the permit is issued as request-
ed by WSREC, seek review before the Board pursuant to 40 C.F.R.
§ 124.19. Moreover, while IEPA represented to the Board that it iden-
tified no PSD deficiencies in WSREC’s application, it would have been
free to reach a different conclusion prior to actual issuance of a final
decision addressing the merits of the PSD application, particularly if
the public comments disclosed a potentially relevant issue (as was the
case with the alleged siting discrepancy). Thus, while the Board fully
supports WSREC’s right to a timely PSD permit decision from IEPA,
and recognizes the need for these proceedings to be concluded expe-
ditiously, it is important that we ensure that IEPA’s decision is ground-
ed in a full and complete public record and is fully consistent with the
applicable PSD regulations. As stated nearly two decades ago in
another EPA permit proceeding:

The Agency is the representative of the public interest
and is not “an umpire blandly calling balls and strikes
for adversaries appearing before it; the right of the
public must receive active and affirmative protection”
at the hands of the Agency. [quoting Scenic Hudson
Preservation Conference v. FPC, 354 F.2d 608, 620 (2d
Cir. 1965), cert. denied, 384 US. 941 (1966).] The
courts have made it clear that the Agency must take
affirmative steps to obtain the information necessary to
sound decisions under the statutes it administers, even
at the cost of delay * * *.

In re Public Service Company of New Hampshire, 1 E.A.D. 332, 344
(Adm’r 1977)(NPDES permit); In re Honolulu Resource Recovery
Facility, 2 E.A.D. 375, 379 n.11 (Adm’r 1987) (PSD permit, quoting /n
re Public Service Company of New Hampshire, supra). As the Agency's
delegatee, IEPA has a similar responsibility to obtain information nec-
essary to sound decisions.

Accordingly, IEPA is hereby ordered to expeditiously issue a final
decision granting or denying WSREC’s federal PSD permit application,
as well as a response to all significant comments received during the
public comment period and public hearing with respect to the PSD
component of WSREC’s application, and an explanation of any
changes between the draft and final permit.27 IEPA’s response to com-

2 A recommended time frame for the action ordered herein is discussed supra note 3.

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712 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

ments, and any documents cited therein, shall become part of the
administrative record for its decision. See 40 C.F.R. §§ 124.15(a),
124.17, & 124.18. The Board expresses no opinion with respect to the
substance of the final PSD permit decision to be issued by IEPA.
Following issuance of IEPA’s final decision, the decision may be
appealed to this Board in accordance with the requirements of 40
C.F.R. § 124.19.

So ordered.

“* WSREC contends that it will be denied due process if IEPA is given an opportunity to
issue a final decision denying WSREC a federal PSD permit. WSREC’s Response to OGC/Region
V Brief, at 4-5. The appeal procedures of 40 C.F.R. § 124.19 are intended to insure that WSREC
is afforded due process in the PSD permit decisionmaking process, and will allow further review
of IEPA's decision, if necessary.

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