N.W. Natural Gas Co. v. Environ. Quality Comm.

ORS 468A.327(1) provides: Prior to the adoption, amendment or repeal of any rule pursuant to ORS chapter 183 that applies to any facility required to pay fees under ORS 468A.315, the Environmental Quality Commission (EQC) shall include with the notice of intended action required under ORS 183.355(1) a statement of whether the intended action imposes requirements in addition to the applicable federal requirements and, if so, shall include a written explanation of: (a) the commission’s scientific, economic, technological, administrative or other reasons for exceeding applicable federal requirements; and (b) any alternatives the commission considered and the reasons that the alternatives were not pursued.

N.W. Natural Gas Co. challenged the administrative rules establishing the Climate Protection Program (the CPP rules). The CPP rules aimed to reduce greenhouse gas emissions by creating a cap-and-reduce system, under which they impose a technology and operations-based standard on certain large stationary sources and take steps to achieve reductions in emissions. N.W. Natural Gas Co. argued that the CPP rules were invalid because they were not adopted in compliance with disclosure requirements for rulemaking in ORS 468A.327(1). ORS 468A.327(1) provides: “Prior to the adoption, amendment or repeal of any rule pursuant to ORS chapter 183 that applies to any facility required to pay fees under ORS 468A.315, the Environmental Quality Commission (EQC) shall include with the notice of intended action required under ORS 183.355(1) a statement of whether the intended action imposes requirements in addition to the applicable federal requirements and, if so, shall include a written explanation of: (a) the commission’s scientific, economic, technological, administrative or other reasons for exceeding applicable federal requirements; and (b) any alternatives the commission considered and the reasons that the alternatives were not pursued.” EQC acknowledged that the notice that it submitted did not include an explicit statement about additional federal requirements for large stationary sources, but contended that they still substantially complied with ORS 468A.327. Specifically, EQC asserted that the notice of proposed rulemaking contained what was staturorily required. The Court determined that although EQC engaged in a robust process that provided the public with a great deal of transparency, it did not substantially comply because the notice that was provided did not explain or attempt to explain why alternatives to the CPP rules were not pursued. Because EQC did not substantially comply, the CPP rules were deemed invalid.