Sierra Club v. Wisconsin Department of Natural Resources

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
May 15, 2025
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2024AP673 Cir. Ct. No. 2023CV2379

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV

SIERRA CLUB,

PETITIONER-APPELLANT,

V.

WISCONSIN DEPARTMENT OF NATURAL RESOURCES,

RESPONDENT-RESPONDENT,

WISCONSIN PUBLIC SERVICE CORPORATION AND
WISCONSIN ELECTRIC POWER COMPANY,

INTERESTED PARTIES-RESPONDENTS.

APPEAL from an order of the circuit court for Dane County:
FRANK D. REMINGTON, Judge. Affirmed in part, reversed in part and cause
remanded with directions.

Before Kloppenburg, P.J., Graham, and Taylor, JJ.
No. 2024AP673

¶1 KLOPPENBURG, P.J. The Department of Natural Resources
(Department) issued to Wisconsin Public Service Corporation and Wisconsin
Electric Power Company (collectively, Applicants) an air permit allowing
Applicants to build and operate a natural gas-fired electric generation plant at the
existing Weston Generating Station in Kronenwetter, Marathon County.1 Sierra
Club, which submitted comments on the draft permit during the public comment
period, challenged several aspects of the permit in a petition for a contested case
hearing, which the Department granted. The parties filed motions for summary
judgment, and the Administrative Law Judge (ALJ) issued an order granting
Applicants’ and the Department’s motions in part and denying Sierra Club’s
motion. The ALJ held a hearing on the remaining issue and subsequently issued
an order affirming the permit. The Department adopted the ALJ’s decision
without change as its own final decision, see WIS. ADMIN. CODE § NR 2.155(1)
(through Nov. 2024), and Sierra Club petitioned for judicial review. 2 The circuit
court affirmed the ALJ’s decision.

¶2 On appeal, Sierra Club argues that: (1) the ALJ erred when it
concluded that the Department was not required to consider supplemental battery
storage as a pollution mitigation measure in step one of the best available control
technology (BACT) analysis; and (2) the procedure the Department employed for
setting background pollutant concentrations for the permit (the Background

1
The permit authorized Applicants “to construct seven (7) natural-gas fired reciprocating
internal combustion engine [RICE] electric generating units, a natural gas-fired emergency
generator, natural gas-fired space and water heaters, and natural gas piping.” For ease of reading,
we will refer to these collectively as “RICE units” or as “the Project.”
2
All references to WIS. ADMIN. CODE § NR are to the November 2024 register unless
otherwise noted.

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Concentration Protocol) is invalid as an unpromulgated rule. Applicants and the
Department argue that Sierra Club’s challenges lack merit, and the Department
also argues that Sierra Club lacks standing to bring its challenges.

¶3 We first conclude that Sierra Club has standing to bring these
challenges, as it sufficiently alleged injuries to its members caused by the
Department’s action in granting the permit. Second, we conclude that the ALJ’s
decision that the Department appropriately excluded supplemental battery storage
from step one of the BACT analysis is supported by substantial evidence and
consistent with applicable law. Third, we conclude that the Background
Concentration Protocol is invalid because it meets the statutory definition of a rule
and, therefore, should have been but was not promulgated in compliance with the
statutory rulemaking procedures set forth in WIS. STAT. ch. 227 (2023-24).3

¶4 Accordingly, we affirm in part and reverse in part the circuit court’s
order affirming the ALJ’s decision. We remand to the circuit court to remand to
the Department to reopen the permit and to proceed consistent with this opinion,
and to keep the permit in place during remand proceedings.

BACKGROUND

¶5 We present a brief overview of the background here and provide
detailed facts pertinent to each issue in the discussion that follows.

¶6 In April 2021, Applicants applied to the Department for an air
pollution control permit, see WIS. STAT. §§ 285.60-.61, to construct and operate

3
All references to the Wisconsin Statutes are to the 2023-24 version unless otherwise
noted.

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the Project. In December 2021, the Department deemed the application complete
and, consistent with statutory procedures, prepared an “analysis and preliminary
determination” document along with a draft permit and noticed both for public
comment. See § 285.61(3)(a), (4).

¶7 During the public comment period, in January 2022, Sierra Club
submitted comments on the draft permit.4 Pertinent here, Sierra Club argued that:
(1) the Department was required to consider incorporating battery storage into the
Project as an identified pollution mitigation measure in step one of the BACT
analysis; and (2) the Background Concentration Protocol is “a ‘statement of
general policy’ that must be promulgated by rule, and also meet[s] the definition
of a rule.” At Sierra Club’s request, the Department held a public hearing on
February 2, 2022.

¶8 The Department considered the comments by Sierra Club and others
and responded in a detailed memorandum. Pertinent to the two arguments
identified above, the Department explained that it “determined that … adding
energy storage [including batteries] to the RICE [u]nits would constitute a
redefinition of the source and that therefore it was appropriate that such options
were not included in [s]tep [one] of its … BACT review for the RICE [u]nits.”
The Department also rejected Sierra Club’s argument that the Background
Concentration Protocol constitutes a rule required to be promulgated following
rulemaking procedures.

4
The comments were submitted on behalf of Sierra Club and Clean Wisconsin. For ease
of reading, and because only Sierra Club appeals, we refer only to Sierra Club.

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¶9 In March 2022, the Department issued final permit number 21-RAB-
082, authorizing Applicants to construct the Project.

¶10 In April 2022, Sierra Club petitioned for a contested case hearing on
the issuance of the permit, pursuant to WIS. STAT. §§ 227.42-.50 and 285.81. The
Department granted a contested case hearing with respect to three issues, including
the two issues raised in this appeal. Pertinent here, the ALJ determined on the
parties’ motions for summary judgment that there were disputes of fact as to
whether the Department was required to consider adding battery storage to the
RICE units as part of the BACT analysis, specifically as to whether adding battery
storage would “redefine the source.”5 The ALJ also determined that, based on the
undisputed facts, the Background Concentration Protocol is not a rule.

¶11 The ALJ held a contested case hearing on the BACT issue in May
2023. Following the hearing, the ALJ issued an order concluding that Sierra Club
had failed to establish that the Department erred by excluding the addition of
battery storage to the RICE units in the BACT analysis, and affirming the issuance
of the permit.

¶12 Sierra Club petitioned for judicial review in the circuit court,
challenging the ALJ’s decision upholding the permit and seeking a declaratory
judgment that the Background Concentration Protocol is an unpromulgated rule.
In a comprehensive written decision, the court rejected Sierra Club’s arguments,

5
In air pollution permitting statutes and rules, plants or facilities that emit air pollution
are referred as “sources.” See, e.g., WIS. STAT. § 285.01(24)-(25), (27), (41); WIS. ADMIN. CODE
§ NR 405.02(22)(a), (27m)-(28). Here, consistent with this usage, the word “source” in the
phrase “redefining the source” means the Project.

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concluded that the Department properly approved the permit, and affirmed the
Department’s decision.6

¶13 Sierra Club appeals.

DISCUSSION

¶14 As an initial matter, we clarify that, contrary to the Department’s
assertions, the agency action that Sierra Club challenged in its petition, and
continues to challenge on appeal, is the Department’s decision to issue the permit,
not the specific steps the Department took to get there, such as excluding battery
storage from its BACT analysis and creating the Background Concentration
Protocol. While Sierra Club argues that the Department took those steps in error,
Sierra Club’s challenge is to the agency action that resulted—the issuance of the
permit.

I. Standing

¶15 The Department argues that Sierra Club lacks standing to challenge
the issuance of the permit. Specifically, the Department argues that Sierra Club
has “failed to establish injury, causation, and that any alleged injury was to a
legally protected interest.” We reject this argument as unsupported by the law and
the record.

6
In its appellate briefing, the Department cites to the administrative record submitted to
the circuit court without including parallel cites to the appellate record that was compiled by the
clerk of the circuit court. We remind counsel that the rules of appellate procedure require parties
to include appropriate citations to the record that was compiled by the circuit court clerk. See
WIS. STAT. RULE 809.19(1)(d)-(e).

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¶16 Whether a party has standing is a question of law that we review de
novo. Friends of the Black River Forest v. Kohler Co., 2022 WI 52, ¶10, 402
Wis. 2d 587, 977 N.W.2d 342. “Because our state constitution lacks the
jurisdiction-limiting language of its federal counterpart, ‘standing in Wisconsin is
not a matter of jurisdiction, but of sound judicial policy.’” Id., ¶17 (quoting
McConkey v. Van Hollen, 2010 WI 57, ¶15, 326 Wis. 2d 1, 783 N.W.2d 855).
Accordingly, while federal law may be persuasive, Wisconsin courts need not
follow federal law on standing. See Teigen v. WEC, 2022 WI 64, ¶¶15-16, 403
Wis. 2d 607, 976 N.W.2d 519 (lead op.) (referring to “the inaccurate assumption
that Wisconsin courts follow federal law on standing”), overruled on other
grounds by Priorities USA v. WEC, 2024 WI 32, 412 Wis. 2d 594, 8 N.W.3d 429.

¶17 In Wisconsin, standing “should not be construed narrowly or
restrictively.” Wisconsin’s Env’t Decade, Inc. v. PSC (WED I), 69 Wis. 2d 1, 13,
230 N.W.2d 243 (1975). “Standing requirements in Wisconsin are aimed at
ensuring that the issues and arguments presented will be carefully developed and
zealously argued, as well as informing the court of the consequences of its
decision.” McConkey, 326 Wis. 2d 1, ¶16. “One has standing to seek judicial
review when one has a stake in the outcome of the controversy and is affected by
the issues in controversy.” Wisconsin Legislature v. Palm, 2020 WI 42, ¶12, 391
Wis. 2d 497, 942 N.W.2d 900.

¶18 “In the context of judicial review of an administrative decision,
standing is governed by WIS. STAT. §§ 227.52 and 227.53.” Friends of the Black
River Forest, 402 Wis. 2d 587, ¶20. Section 227.52 provides that
“[a]dministrative decisions which adversely affect the substantial interests of any
person … are subject to review as provided in this chapter.” Section 227.53(1)
provides that “any person aggrieved by a decision specified in [§] 227.52 shall be

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entitled to judicial review of the decision as provided in this chapter,” with certain
exceptions not relevant here. “A ‘person aggrieved’ is defined as ‘a person or
agency whose substantial interests are adversely affected by a determination of an
agency.’” Friends of the Black River Forest, 402 Wis. 2d 587, ¶25 (quoting WIS.
STAT. § 227.01(9)). An organization such as Sierra Club has standing “if it alleges
facts sufficient to show that a member of the organization would have had
standing to bring the action in [the member’s] own name.” WED I, 69 Wis. 2d at
20.

¶19 “Wisconsin uses a two-step test to determine whether a particular
petitioner has standing under [WIS. STAT. §§ 227.52 and 227.53(1)].” Friends of
Blue Mound State Park v. DNR, 2023 WI App 38, ¶25, 408 Wis. 2d 763, 993
N.W.2d 788. First, courts ask “‘whether the decision of the agency directly causes
injury to the interest of the petitioner.’” Friends of the Black River Forest, 402
Wis. 2d 587, ¶18 (quoted source omitted). Second, courts ask “‘whether the
interest asserted is recognized by law.’” Id. (quoted source omitted). While
courts construe standing liberally, “‘the claim asserted must be legally
recognizable in Wisconsin jurisprudence.’” Id., ¶19 (quoted source omitted).

¶20 To satisfy the first prong of Wisconsin’s standing test—referred to
as “injury in fact,” id., ¶21—the petitioner must “allege[] injuries that are a direct
result of the agency action.” WED I, 69 Wis. 2d at 13. “An alleged injury may be
sufficiently direct … even when it is ‘remote in time or … will [occur only] as an
end result of a sequence of events set in motion by the agency action challenged.’”
Applegate-Bader Farm, LLC v. DOR, 2021 WI 26, ¶17 n.7, 396 Wis. 2d 69, 955
N.W.2d 793 (quoted source omitted). “‘[A]llegations of injury to aesthetic,
conservational, recreational, health and safety interests will confer standing so
long as the injury is caused by a change in the physical environment.’” Friends of

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Blue Mound State Park, 408 Wis. 2d 763, ¶26 (quoting Milwaukee Brewers
Baseball Club v. DHSS, 130 Wis. 2d 56, 65, 387 N.W.2d 245 (1986)).

¶21 To satisfy the second prong of Wisconsin’s standing test—referred
to as “legally protectable interest,” Friends of Blue Mound State Park, 408
Wis. 2d 763, ¶36—the petitioner must show that the alleged injury was “‘to an
interest which the law recognizes or seeks to regulate or protect.’” Friends of the
Black River Forest, 402 Wis. 2d 587, ¶30 (quoting Waste Mgmt. of Wis., Inc. v.
DNR, 144 Wis. 2d 499, 505, 424 N.W.2d 685 (1988)). Our analysis on this prong
“centers on a textually-driven analysis of the language of the specific statute cited
by the petitioner as the source of its claim to determine whether that statute
‘recognizes or seeks to regulate or protect’ the interest advanced by the
petitioner.” Friends of the Black River Forest, 402 Wis. 2d 587, ¶28 (quoting
Waste Mgmt., 144 Wis. 2d at 505).

¶22 In its petition for judicial review, Sierra Club alleged that its
members “live, work, and recreate in Marathon County, downwind from the
permitted power plant, and will be affected by the environmental impacts of the
[Department]’s decision to permit the plant to construct and operate, including but
not limited to impacts on air quality.” The parties do not dispute that the
Department’s action of issuing the permit set in motion the construction of the
RICE units, and that the operation of those RICE units results in the emission of
“pollutants such as carbon monoxide, nitrogen oxides, and particulate matter.”
The alleged injuries to Sierra Club members living downwind from the plant,
namely, their exposure to increased air pollution from the RICE units, are
therefore “sufficiently direct[ly]” caused by the Department’s action of issuing the
permit. See Applegate-Bader Farm, LLC, 396 Wis. 2d 69, ¶17 n.7 (As to the
injury-in-fact prong of standing, “[a] party has standing to challenge an

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administrative decision when ‘the decision of an agency directly causes injury to
the interest of the petitioner.’” (quoted source omitted)). Accordingly, Sierra Club
satisfies the first prong of standing. See Sierra Club v. Franklin Cnty. Power of
Ill., LLC, 546 F.3d 918, 925 (7th Cir. 2008) (“‘likely exposure’ to pollutants”
satisfies the injury-in-fact prong of standing, “‘even if the ambient level of air
quality does not exceed [certain national limits]’” (quoted source omitted)); see
also WED I, 69 Wis. 2d at 10 (allegations of injury to “conservational and
recreational interests ha[ve] been readily accepted as sufficient to confer
standing”).

¶23 With respect to the second prong, Sierra Club argues that its
members’ interest in breathing clean air is legally protected by WIS. STAT. ch. 285
and the Department’s implementing regulations at WIS. ADMIN. CODE
chs. NR 400-499. We agree.

¶24 WISCONSIN STAT. ch. 285 and the implementing regulations govern
air pollution in Wisconsin. WISCONSIN STAT. § 285.60 requires persons seeking to
construct or modify stationary sources to obtain permits that comply with
promulgated rules and the federal clean air act, and to comply with the terms of
those permits. Sec. 285.60(1)(a), (7), (8). WISCONSIN STAT. § 285.63 creates
substantive criteria for permit approval, which include the requirement to meet
applicable emissions limitations and the requirement to use the best available
control technology. See, e.g., § 285.63(1)(a), (3)(a).

¶25 WISCONSIN STAT. § 285.60 also directs the Department to
promulgate rules for issuing such permits. Sec. 285.60(3)(a). The Department has
promulgated regulations, which include substantive requirements necessary for
obtaining a permit, in WIS. ADMIN. CODE ch. NR 406. Further, WIS. ADMIN.

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CODE ch. NR 404 contains substantive standards for ambient air quality in
Wisconsin, and WIS. ADMIN. CODE ch. NR 405 contains substantive standards for
measuring pollution emissions. See also Note, Nov. 2024, WIS. ADMIN. CODE ch.
NR 400 (“The objectives of these rules are to maintain standards of air quality at a
level which will provide adequate protection to public health and welfare, and
prevent detrimental effects on property and our environment.”).

¶26 Wisconsin law also recognizes citizens’ interests in ensuring that the
rules that the Department applies to air emissions permits are valid. Specifically,
WIS. STAT. § 227.40(2)(e) expressly provides that a party may challenge the
validity of a rule or guidance document in judicial proceedings under WIS. STAT.
§§ 227.52 and 227.53 “if the validity of the rule or guidance document involved
was duly challenged in the proceeding before the agency in which the order or
decision sought to be reviewed was made or entered.”

¶27 Together, the provisions in WIS. STAT. ch 285 and WIS. ADMIN.
CODE chs. NR 404-406 protect Wisconsinites’ interests in breathing clean air by
setting out the requirements that proposed sources that affect air quality must meet
and by creating substantive standards for preserving ambient air quality. These
statutes and regulations protect the interest in clean air asserted by Sierra Club
and, therefore, suffice to give Sierra Club standing to challenge the permit that
affects that interest. See Friends of Blue Mound State Park, 408 Wis. 2d 763,
¶¶37-38 (statute “which is intended to establish procedures to protect persons or
entities asserting environmental interests” sufficed to grant standing); Friends of
the Black River Forest, 402 Wis. 2d 587, ¶30 (injury must be “‘to an interest
which the law recognizes’” (quoted source omitted)).

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¶28 The Department makes several unavailing arguments to the contrary.
First, the Department argues that Sierra Club failed to identify “some direct, real,
and immediate injury it had suffered or was imminently facing” and instead
“stated nothing more than a vague and generalized interest in less air pollution.”
As stated, Sierra Club alleged that its members “live, work, and recreate in
Marathon County, downwind from the permitted power plant, and will be affected
by the environmental impacts of the [Department]’s decision to permit the plant to
construct and operate, including but not limited to impacts on air quality.” This
allegation that members living immediately downwind from the permitted plant
would have their conservational and recreational interests injured by the increased
air pollution caused by the construction of the RICE units, a direct result of the
Department’s issuance of the permit, provides adequate grounds for standing. See
WED I, 69 Wis. 2d at 10 (allegations of injury to conservational and recreational
interests sufficient for standing).

¶29 The Department next argues that Sierra Club “was required to do
more than simply allege any injuries and was instead required to submit evidence
to support those injuries.” See Murthy v. Missouri, 603 U.S. 43, 58 (2024)
(explaining that, in federal court, the plaintiff “must support each element of
standing ‘with the manner and degree of evidence required at the successive stages
of the litigation’” (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561
(1992))). The Department does not cite, and our research has not disclosed, a
published Wisconsin case that requires a plaintiff to present evidence to support its
standing beyond what the plaintiff alleged at the pleading stage. Because our
standing analysis differs from that of the federal courts, and because Sierra Club
sufficiently alleged in its petition for judicial review that it “has a stake in the
outcome of the controversy and is affected by the issues in controversy,”

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Wisconsin Legislature, 391 Wis. 2d 497, ¶12, we decline to apply this
requirement here.

¶30 However, even if we required Sierra Club to submit evidence to
support its members’ injuries, we would find that requirement satisfied here,
where the Department’s own analysis concluded that the project would result in
significant emissions of, among other things, carbon monoxide and particulate
matter. The Department’s conclusion also disposes of its arguments regarding
causation and redressability: that Sierra Club did not show how the agency action
caused its alleged injury, and that it did not explain how a favorable court decision
would redress its alleged air quality injuries. Specifically, the Department’s
issuance of the permit led directly to the construction of the RICE units, and the
Department’s analysis showed that this would lead directly to increased air
pollution from the Weston plant. If the permit were to be vacated in this
proceeding, the result would be a cessation or mitigation of that pollution.

¶31 The Department also argues that Sierra Club alleged only procedural
errors and that, therefore, Sierra Club must show that the procedural lapses were
personal to the organization, citing a federal case in support. Again, the
Department does not cite, and our research has not disclosed, a published
Wisconsin case setting forth this requirement, and we decline to create a new
barrier to standing in Wisconsin, given that our supreme court has clarified that
standing “should not be construed narrowly or restrictively.” See WED I, 69
Wis. 2d at 13.

¶32 Finally, the Department cites Friends of the Black River Forest in
support of its argument that Sierra Club “cannot establish that it has suffered an
injury to a legally protected interest.” But that case is patently distinguishable.

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The statutes and regulations cited by the petitioners in Friends of the Black River
Forest did not protect the interests that they alleged were harmed by the
Department’s land exchange with the Kohler Company. See Friends of the Black
River Forest, 402 Wis. 2d 587, ¶¶1-3. Specifically, those statutes and regulations
did not establish “substantive criteria” by which a person could challenge a
decision about park boundaries. Id., ¶¶33-34, 36, 42-43. In contrast, numerous
statutes and regulations protect Wisconsinites’ interest in breathing clean air and
in the promulgation of valid rules, which are the interests that Sierra Club alleged
were harmed by the Department’s issuance of the air permit here. See WIS. STAT.
§§ 227.40(2)(e), 285.60, 285.63; WIS. ADMIN. CODE chs. 404-406.

¶33 Provisions such as WIS. STAT. § 285.63(3) set forth the “‘substantive
criteria’ by which [Sierra Club] could challenge” the Department’s issuance of the
permit, which were missing in the statutes cited in Friends of the Black River
Forest. See Friends of the Black River Forest, 402 Wis. 2d 587, ¶¶33, 42-43.
These criteria include whether “[t]he source will be subject to the best available
control technology,” § 285.63(3)(a), and whether “[t]he source will not adversely
affect the air quality related values of any federal mandatory class I prevention of
significant deterioration area,” § 285.63(3)(c). In addition, as stated, WIS. STAT.
§ 227.40(2)(e) provides that a person may challenge the validity of a rule or
guidance document in judicial review proceedings if that person “duly challenged”
the validity in the proceeding before the agency. This statute signifies the
legislature’s recognition of Sierra Club’s interest in having rules validly
promulgated, when those rules underlie an agency decision that Sierra Club is
challenging. See Friends of the Black River Forest, 402 Wis. 2d 587, ¶18
(second prong is whether the interest is “recognized by law”).

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¶34 In sum on this issue, Sierra Club has sufficiently alleged both that it
suffered an injury to its members’ interest in breathing clean air, caused by the
Department’s issuance of the permit, and that the injury was to interests that
Wisconsin law “‘recognizes or seeks to regulate or protect.’” See id., ¶30 (quoting
Waste Mgmt., 144 Wis. 2d at 505). Accordingly, Sierra Club has standing to
challenge the permit.

II. Whether the Department Erred by Excluding Supplemental Battery
Storage in the BACT Analysis

¶35 Sierra Club argues that the Department erred by excluding
supplemental battery storage as a pollution mitigation measure in step one of the
BACT analysis.

Standard of Review

¶36 “The burden in a [WIS. STAT.] ch. 227 review proceeding is on the
party seeking to overturn the agency action, not on the agency to justify its
action.” City of La Crosse v. DNR, 120 Wis. 2d 168, 178, 353 N.W.2d 68 (Ct.
App. 1984). This court reviews the decision of the agency, not the decision of the
circuit court. Cholvin v. DHFS, 2008 WI App 127, ¶11, 313 Wis. 2d 749, 758
N.W.2d 118. In this case, pursuant to WIS. STAT. § 227.46(3)(a) and WIS. ADMIN.
CODE § NR 2.155(1), we review the ALJ’s decision as the Department’s decision
“because the [Department] adopted the ALJ’s decision as its own and did not seek
judicial review of the ALJ’s decision. Consequently, the ALJ’s decision becomes
the [Department]’s decision and will be accorded the same level of deference
given to the agency.” Sierra Club v. DNR, 2010 WI App 89, ¶20, 327 Wis. 2d
706, 787 N.W.2d 855 (citation omitted); Kohler Co. v. DNR, 2024 WI App 2, ¶14,
410 Wis. 2d 433, 3 N.W.3d 172 (2023).

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¶37 We will uphold the ALJ’s findings of fact “as long as they are
supported by substantial evidence in the record.” Kitten v. DWD, 2002 WI 54, ¶5,
252 Wis. 2d 561, 644 N.W.2d 649. “The test is whether, taking into account all of
the evidence in the record, ‘reasonable minds could arrive at the same conclusion
as the agency.’” Id. (quoted sources omitted). “‘Substantial evidence is less of a
burden than preponderance of the evidence in that any reasonable view of the
evidence is sufficient.’” Robles v. Thomas Hribar Truck & Equip., Inc., 2020
WI App 74, ¶8, 394 Wis. 2d 761, 951 N.W.2d 853 (quoted source omitted).
Accordingly, the question here is not whether Sierra Club proffered substantial
evidence, but whether the ALJ’s findings are supported by substantial evidence.
See Kohler Co., 410 Wis. 2d 433, ¶63 (not considering whether challenger
presented substantial evidence, but whether ALJ’s finding is supported by
substantial evidence). In other words, “‘when the issues basically involve a
dispute over conflicting testimony and a reasonable [person] could be convinced
by either side, it is within the administrative agency’s province to weigh it and
accept that which it finds more credible.’” Wisconsin Ass’n of Mfrs. & Com.,
Inc. v. PSC (WMC), 94 Wis. 2d 314, 322, 287 N.W.2d 844 (Ct. App. 1979)
(quoted source omitted).

¶38 On the other hand, the Department’s interpretation and application
of a statute are questions of law subject to de novo review, and this court “shall
accord no deference to the agency’s interpretation of law.” WIS. STAT.
§ 227.57(11); see Sierra Club, 327 Wis. 2d 706, ¶21. However, in considering the
agency’s arguments, “‘due weight shall be accorded [to] the experience, technical
competence, and specialized knowledge of the agency involved.’” Kohler Co.,
410 Wis. 2d 433, ¶17 (quoting § 227.57(10)).

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Legal Principles

¶39 Pertinent here, before the Department may issue an air pollution
control permit, it must determine that “[t]he source will be subject to the best
available control technology [BACT] for each applicable air contaminant.” WIS.
STAT. § 285.63(3)(a). Simply stated, BACT means pollution mitigation measures
that have been determined, after a source-specific analysis, to achieve the
maximum degree of reduction of air pollutants regulated by the federal Clean Air
Act. WIS. ADMIN. CODE § NR 405.02(7). The Department “evaluates a permit
applicant’s BACT determinations under the so-called ‘top down’ approach utilized
by EPA.” Sierra Club, 327 Wis. 2d 706, ¶12. There are five steps in the top-
down BACT analysis, but only the first two are pertinent to our analysis: step one,
“identifying all available control technologies for the proposed process or source”;
and step two, “evaluating the technical options for feasibility[,] taking into
consideration source specific factors.” See id.

¶40 In step one of the BACT analysis, the Department “consider[s] the
capabilities of add-on air pollution control technologies, inherently lower-emitting
processes/practices/designs, and combinations of the two that are potentially
available and applicable for use at the proposed facility.” In re Arizona Pub.
Serv. Co. Ocotillo Power Plant, 17 E.A.D. 323, 327, 2016 WL 4595563 (EAB
2016).7 This broad approach has limits: “[c]onsideration of fundamentally

7
“Although we are not bound by the Environmental Appeals Board’s (EAB) decisions,
its conclusions regarding the factors a permitting agency can consider when determining BACT
are instructive and provide guidance. The EAB is the final decision-maker on administrative
appeals under all major environmental statutes that the U.S. Environmental Protection Agency
administers, including the Clean Air Act.” Sierra Club v. DNR, 2010 WI App 89, ¶13 n.6, 327
Wis. 2d 706, 787 N.W.2d 855.

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different facility types than those proposed by permit applicants generally is not
required.” Id. at 328. Said differently, the Department may exclude from
consideration control technologies that would “‘redefine the design of the
source.’” Id. (quoting Office of Air Quality Planning and Standards, U.S. EPA,
New Source Review Workshop Manual (draft Oct. 1990)). “If a permitting
authority decides that a proposed alternative would constitute a redefinition of the
source, it will not list the alternative as a potential control option in [s]tep [one] of
its BACT analysis, and it will not consider that option further.”8 Id. at 335.

¶41 To determine whether a proposed control technology would redefine
the source, the Department “should begin by examining how the permit applicant
defines the proposed facility’s ‘end, object, aim, or purpose,’ i.e., its ‘basic
design.’” Id. at 336 (citations omitted). That information is typically set forth in
the permit application and administrative record. Id. The Department “should
then take a ‘hard look’ at the applicant’s ‘basic design,’ identifying design
elements that are ‘inherent’ to the applicant’s purpose and design elements that
possibly could be altered to achieve pollutant emissions reductions without
disrupting that purpose.” Id. Proposed mitigation measures that interfere with a
project’s basic purpose and design may be excluded as redefining the source. See,
e.g., In re Sierra Pac. Indus., 16 E.A.D. 1, 48-50, 2013 WL 3791510 (EAB 2013)
(excluding proposal from BACT analysis as “redefining the source” because it

8
Environmental Appeals Board decisions evaluating challenges to BACT analyses use
the phrases “redefine the source” and “redefine the design of the source” interchangeably. When
we are not quoting from those decisions, we use “redefine the source.”

For ease of reading, and following Sierra Club’s lead, we sometimes refer to the
“available control technology” or “potential control option” to be identified in step one of the
BACT analysis as a “mitigation measure.”

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No. 2024AP673

would disrupt one of the applicant’s primary purposes for the facility). This
requires a highly fact-specific analysis, and, “[a]ccordingly, previous permitting
decisions for similar sources are instructive but not controlling, and prior
determinations that particular emissions control options redefine proposed sources
are not necessarily relevant in subsequent analyses of unrelated projects.” In re
Arizona Pub. Serv. Co., 17 E.A.D. at 337.

¶42 In step two of the BACT analysis, the Department “eliminate[s]
‘technically infeasible’ options from the potentially available options identified at
step [one].” In re Prairie State Generating Co., 13 E.A.D. 1, 13, 2006 WL
2847225 (EAB 2006). One aspect that is generally considered in step two, space
constraints, may also be relevant to determining whether the proposed addition of
a control technology “would require redesign of the source”; accordingly, the
Department may appropriately consider the space needed as a result of the control
technology in the “redefining the source” analysis. See In re La Paloma Energy
Ctr., LLC, 16 E.A.D. 267, 288, 2014 WL 1066556 (EAB 2014) (“Technical
factors such as the availability of space and the physical location of the facility …
may also inform a permitting authority’s decision whether a proposed use of a
different [energy source] would require redesign of the source.”).

Additional Background

¶43 In their application, Applicants described the Project’s “purpose and
need” as follows: “This Project provides the capacity, base load, and peaking
generation [that Applicants] will need at the lowest cost, and provides additional
benefits such as ramping, dynamic voltage control, … inertia, and frequency

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No. 2024AP673

response necessary for electric system stability.”9 The application noted that the
Project’s purpose and need stem in significant part from the retirement of “older,
less efficient fossil-fuel generation” throughout Applicants’ portfolio and the
“substantial shift to renewable generation” that, Applicants asserted, “makes it
more difficult to provide continuous energy production and the reliability
customers require.” Applicants performed their own BACT analyses and
proposed BACT mitigation measures that did not include battery storage. As part
of its preliminary determination and draft permit, the Department reviewed
Applicants’ BACT analyses, performed its own BACT analyses, and similarly
selected BACT mitigation measures that did not include battery storage.

¶44 In its public comments on the draft permit, Sierra Club argued that
“[t]he Department must consider in [s]tep [one] of the BACT analysis whether
alternatives that incorporate energy storage could provide functionally equivalent
operation at a lower emission rate,” and “recommend[ed] that the Department
consider three additional alternatives” as BACT mitigation measures: (1) replacing
all of the RICE units with battery storage, (2) replacing some of the RICE units
with battery storage, and (3) adding battery storage to the RICE units “and altering
dispatch to minimize the number of startups and periods of partial load operation.”
Sierra Club noted that the application itself stated that the RICE units would
produce higher emissions during startup events, and Sierra Club asserted that
using battery storage instead of the RICE units “for some or all startup events”
could avoid those higher emissions.

9
Applicants also submitted a revised application, but the project purpose remained
unchanged.

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No. 2024AP673

¶45 In its “Summary of Changes and Comments” on the draft permit, the
Department responded to Sierra Club’s comment regarding considering battery
storage as a mitigation measure in step one of the BACT analysis as follows:

The [D]epartment has determined that replacing some or all
of the proposed RICE [u]nits with an energy storage unit or
units or adding energy storage to the RICE [u]nits would
constitute a redefinition of the source and that therefore it
was appropriate that such options were not included in
[s]tep [one] of its top-down [greenhouse gas] BACT review
for the RICE [u]nits.

The Department further explained that adding energy storage

constitutes a redefinition of the source because it alters the
facility’s basic design. The [D]epartment does not agree
with [Sierra Club’s] claim that the cleaner production
processes aspect of BACT can be read so broadly as to
include consideration of an energy storage unit … to
supplement energy generation units. Such changes as part
of BACT would go beyond what [the Department] or EPA
has previously determined to be a cleaner process and
certainly represent a far more substantial change “than
would be necessary whenever a plant switched from a
dirtier to a cleaner fuel.” [(quoting Sierra Club v. EPA, 499
F.3d 653, 656 (7th Cir. 2007)).]

In addition, the Department stated that replacing RICE units with battery storage
“would result in a project that would not meet the [A]pplicants’ stated business
needs,” namely, providing “continuous dispatchable energy.”

¶46 Consistent with the Department’s responses to comments, the final
permit did not include the addition of battery storage as a mitigation measure in
step one of the BACT analysis. After the Department granted Sierra Club’s
request for a contested case hearing, the ALJ ordered that “[t]he issues for
hearing” included “[w]hether the Department erroneously excluded the addition of
battery storage to the [RICE] units in the [BACT] analysis as ‘redefining the
source.’”

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No. 2024AP673

¶47 Sierra Club, the Department, and Applicants filed written direct and
rebuttal testimony of their witnesses before the hearing, and those same witnesses
testified at the hearing. In his pre-hearing testimony, Sierra Club’s witness,
Michael Goggin, a consultant on energy issues, opined that adding battery storage
to the proposed RICE units “would not disrupt the purpose of the [Project] defined
in the permit application,” and would in fact enhance the RICE units’ ability to
achieve Applicants’ stated purposes. In their pre-hearing testimony, the
Department’s witness and all of Applicants’ witnesses opined that adding battery
storage to the RICE units would redefine the source.

¶48 More specifically, in his pre-hearing testimony, the Department’s
witness, Ronald Binzley, an Advanced Air Management Engineer at the
Department, testified to the following. The Department, after reviewing Sierra
Club’s comments, “made its evaluation by taking a ‘hard look’ at the Project to
discern which design elements were inherent to the Project, by reviewing BACT
analyses conducted in other states for similar projects, and by evaluating the
merits of the paired storage options proposed by Sierra Club.” The Department
“attempted to assess the battery pairing proposals made by Sierra Club as
emissions control strategies but was frustrated by the vagueness of the proposals.”
The Department concluded that adding battery storage to the RICE units would
redefine the source because this option would “fundamentally change the Project’s
design and purpose by adding a new basic design element … that in no way serves
the business purposes of the applicants and has no demonstrable potential to
reduce emissions.”

¶49 In their pre-hearing testimony, Applicants’ witnesses focused on
Applicants’ position that adding battery storage would interfere with the Project’s

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No. 2024AP673

stated “additional benefit” of providing inertia, which they contended is a “critical
element,” or purpose, of the Project.

¶50 For clarity, we now provide a brief overview of the concepts of
inertia and frequency stabilization as they relate to electrical grids, based on the
testimony of the witnesses. An electrical grid consists of, in part, synchronous
generators that consist of spinning metal. The generators, of which RICE units are
one example, are synched to the grid and to each other, so when “the grid is
running at 60 hertz, all the generators are running roughly at 60 hertz and they’re
all spinning at that frequency.” The spinning of the generators creates inertia, an
inherent property that makes a moving object “oppose any force that would cause
a change in its motion.” See Inertia, MERRIAM-WEBSTER, https://www.merriam-
webster.com/dictionary/inertia (last visited May 12, 2025). In the context of the
electrical grid, inertia is “already existing spinning kinetic energy,” which helps
stabilize frequency on the grid during significant grid disturbances.

¶51 A grid disturbance, typically caused by “the loss of a large
transmission line or the loss of a large generator,” results in the rapid decline of
frequency on the electrical grid from the 60 hertz at which it was set. If the
frequency declines too much, it can result in major damage to equipment and
components on the grid, and, as a result, the equipment will begin to “trip offline,”
which can result in major blackouts. Accordingly, when a grid disturbance occurs,
“frequency stabilization” is required to prevent these negative outcomes. Inertia is
one method of frequency stabilization, and fast frequency response is another.
The grid “needs inertia to slow the rate of frequency decline in the seconds
following a grid disturbance…, because inertia provides time for synchronous
generators to begin increasing their output to return frequency to its normal level.”
Inertia is provided instantaneously because it comes from the existing spinning

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No. 2024AP673

kinetic energy on the grid. Fast frequency response, which can be provided by
battery storage, “provides a similar service by rapidly injecting power to slow the
rate of frequency decline in the seconds following a [grid] disturbance.” However,
the difference between the instantaneous frequency stabilization provided by
inertia and the “fast” frequency response provided by battery storage, although
only seconds, can be significant in terms of providing energy stability.

¶52 At the hearing, Sierra Club’s witness, Goggin, testified to the
following. Applicants do not need inertia for the grid and should not have listed it
as a project purpose; what Applicants actually need is frequency stabilization, and
inertia is only one of several ways to provide that. While battery storage cannot
provide inertia, it can provide “fast frequency response,” which is another method
of frequency stabilization and can be used “to stabilize frequency in better ways
than conventional generators.” Adding 26 megawatts (MW) of battery storage,
the typical amount for a project this size, would require some redesign of the
Project due to the additional space needed.

¶53 Applicants’ witnesses testified at the hearing that inertia is necessary
to the grid and to the Project. Jody Arendt, the director of planning for the holding
company that owns Applicants, testified as follows. Compared to fast frequency
response, which can be provided by battery storage and implemented “fast,”
inertia is instantaneous. Accordingly, fast frequency response does not provide
the same reliability benefit to the grid as inertia, and inertia, which is stated as a
project purpose in the application, is an essential aspect of the Project. As
Applicants and other utilities continue to shift the components of the grid away
from classic fossil fuel generators to intermittent renewable energy sources, there
will be less inertia on the grid, making the inertia provided by the Project more
important. And, running battery storage in place of the RICE units in the way

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No. 2024AP673

Sierra Club proposes would result in the RICE units providing less inertia to the
grid.

¶54 Another witness for Applicants, Scott Johnson, the asset manager for
RICE at Wisconsin Public Service Company, testified to the following. Adding
battery storage to the RICE units would prevent the RICE units from providing
flexibility, inertia, frequency control, and voltage control. The RICE units cannot
provide the same level of inertia when they are starting up, and inertia is needed in
a shorter amount of time than it would take for the RICE units to start up and
achieve full load, which time would pass if the RICE units were required to start
up from having been turned off because battery storage was running instead.
Therefore, adding battery storage to the RICE units would disrupt system
reliability.

¶55 Binzley, the Department’s witness, testified that, when reviewing
Applicants’ permit application, he understood inertia to be part of the purpose and
need for the Project.

¶56 Following the hearing, the ALJ issued findings of fact, conclusions
of law, and an order affirming the permit. Pertinent here, the ALJ concluded that
Sierra Club “failed to establish by a preponderance of the evidence that the
Department erroneously excluded the addition o[f] battery storage to the RICE
units in the BACT analysis” because the addition of battery storage would redefine
the source. The ALJ reached this conclusion for three overarching reasons: the
addition of battery storage would interfere with the Project’s fundamental purpose
of inertia; the space required by the addition of battery storage would require a
fundamental redesign of the Project; and the addition of battery storage would
change the Project’s purpose into “one of both energy production and energy

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No. 2024AP673

storage instead of solely … energy generation.” The ALJ also found that Sierra
Club failed to show “how the physical space required by 26 MW of battery storage
would not require a fundamental redesign.”

Analysis

¶57 We conclude that the Department’s exclusion of battery storage in
step one of the BACT analysis is supported by substantial evidence and consistent
with applicable law.

¶58 Interference with fundamental purpose of inertia. A proposed
mitigation measure that interferes with a project’s fundamental purpose may be
excluded in step one of the BACT analysis as redefining the source. See In re
Arizona Pub. Serv. Co., 17 E.A.D. at 336 (explaining that mitigation measures
that disrupt a project’s purpose and design may be excluded because they redefine
the source). The ALJ found that inertia was a fundamental purpose of the Project,
and that “not only would the batteries not provide inertia, … they would interfere
with the RICE units … providing [inertia] … because the reason to include [the
batteries] would be to reduce the RICE units’ use,” and “the RICE units would
only provide inertia if they were up and running at full speed.” Inertia was clearly
listed in the application’s section on project “purpose and need,” and several
witnesses testified that inertia was a fundamental purpose of the Project.
Witnesses also explained how the battery storage would interfere with that
purpose. The ALJ further found that fast frequency response is not a substitute for
inertia.

¶59 Sierra Club argues that the ALJ’s “factual premise,” that the addition
of batteries would reduce the amount of time the RICE units are up and running at
full speed, “is wrong and not supported by the evidence.” While Sierra Club’s

26
No. 2024AP673

witness testified that Applicants do not need inertia and that batteries could
provide the frequency stabilization Applicants actually need, witnesses for the
Applicants testified to the contrary. In addition, two of Applicants’ witnesses
testified that adding batteries would interfere with the RICE units providing
inertia. It was within the ALJ’s province to find more credible the testimony of
those witnesses over the testimony of Sierra Club’s witness. See WMC, 94
Wis. 2d at 322 (“[W]hen the issues basically involve a dispute over conflicting
testimony and a reasonable [person] could be convinced by either side, it is within
the administrative agency’s province to weigh it and accept that which it finds
more credible.” (quoted source omitted)).

¶60 In sum on this issue, there was substantial evidence in the record to
support the ALJ’s finding that adding batteries to the RICE units would reduce the
RICE units’ use, thereby reducing the amount of inertia on the grid, which would
interfere with a stated fundamental purpose of the Project. Sierra Club fails to
show that the Department’s exclusion of battery storage in step one of the BACT
analysis on this basis was unsupported by substantial evidence or contrary to
applicable law.

¶61 Space constraints. As stated, space constraints may be considered as
a basis for excluding a mitigation measure in step one of the BACT analysis. In
re La Paloma Energy Ctr., 16 E.A.D. at 288. There was substantial evidence in
the form of testimony by both Applicants’ witnesses and Sierra Club’s witness to
support the ALJ’s finding that adding batteries would require a redesign of the
Project due to the considerable amount of space required to house 26 MW of
battery storage. Sierra Club asserts that the Department’s reliance on spatial
constraints “refers to technical infeasibility in [s]tep [two] of the BACT process,
not ‘redefining the source’ in [s]tep [one].” However, Sierra Club does not

27
No. 2024AP673

support this assertion with relevant legal authority, or explain why the case law to
the contrary cited above does not apply. Sierra Club fails to show that the
Department’s exclusion of battery storage in step one of the BACT analysis on
this basis was unsupported by substantial evidence or contrary to applicable law.

¶62 Change of purpose. The ALJ’s third reason for its conclusion that
adding battery storage would redefine the source is that the addition of battery
storage would change the Project’s purpose into “one of both energy production
and energy storage instead of solely” energy production. The parties dispute
whether this reason creates the “automatic off-ramp [from BACT analysis] for
energy storage” that was rejected in In re Arizona Public Service Co., 17 E.A.D.
at 347. We need not reach this issue because our conclusion that the two reasons
noted above—interference with inertia and space constraints—are supported by
substantial evidence and legally sound suffices to affirm the Department’s
exclusion of battery storage in step one of the BACT analysis as redefining the
source. Cf. In re La Paloma Energy Ctr., 16 E.A.D. at 288-90 (concluding that
permitting authority’s rationale that it could exclude solar energy as redefining the
source because the applicant did not propose it in its application “comes very close
to suggesting that adding supplemental … generation is always redesign,” which
would constitute an “automatic BACT off-ramp,” but affirming the decision to
exclude solar energy on other grounds).

¶63 Exceeding authority. As to the two reasons that we uphold for the
Department’s exclusion of battery storage in step one of the BACT analysis as
redefining the source—interference with inertia and space constraints—Sierra
Club argues that the ALJ exceeded its authority by relying on post hoc rationales.
Specifically, Sierra Club argues that the Department, in its original permitting
decision, did not base its conclusion that adding battery storage would redefine the

28
No. 2024AP673

source on interference with inertia or space constraints. Therefore, Sierra Club’s
argument continues, the ALJ exceeded its authority when it considered and relied
on those rationales, rather than reviewing only the rationales stated by the
Department in its original decision. The question of whether the Department
exceeded its authority is a question of law, “and we owe no deference to an
agency’s determination of the scope of its powers.” Xcel Energy Servs., Inc. v.
LIRC, 2013 WI 64, ¶25, 349 Wis. 2d 234, 833 N.W.2d 665.

¶64 Under WIS. STAT. § 285.81(1)(a) and (2), a party that seeks a hearing
challenging a permit shall submit a petition in which it identifies the issues to be
reviewed, the reasons for the hearing, and the relief requested. Under
§ 285.81(1)(b), “[t]he hearing shall be a contested case under [WIS.
STAT.] ch. 227,” and “the petitioner shall present evidence in support of the
allegations made in the petition.” Under WIS. STAT. § 227.44(4)(b), the
Administrative Law Judge shall issue a pre-hearing memorandum that limits the
issues that may be addressed at the hearing to those set forth in the memorandum.
Also under § 285.81(1)(b), the ALJ may only affirm, modify, or withdraw the
Department’s decision. Sierra Club points to no language in these statutes that
cabins the ALJ to the evidence, arguments, and rationales proffered by the parties
and Department at the time of the original permitting decision.

¶65 The regulations confirm that the parties and ALJ are not so cabined.
WISCONSIN ADMIN. CODE § NR 2.11(2) provides that, in contested case hearings,
the ALJ “may allow prehearing discovery and the preservation of evidence.”
WISCONSIN ADMIN. CODE § NR 2.14 allows for the admission of evidence,
including documentary exhibits and prepared testimony, and clarifies that
“[e]vidence submitted at the time of hearing need not be limited to matters set
forth in pleadings, petitions or applications.” § NR 2.14(2).

29
No. 2024AP673

¶66 Here, in its original permitting decision, the Department stated that
battery storage “constitutes a redefinition of the source because it alters the
facility’s basic design” and represents a “substantial change” to the Project. The
Department granted Sierra Club’s petition for a hearing and identified as one of
the issues to be heard, “[w]hether the Department erroneously excluded the
addition of battery storage to the [RICE] units in the [BACT] analysis as
‘redefining the source.’” Consistent with the regulations cited above, the parties
presented evidence and made arguments pertinent to the issue to be heard, and the
ALJ affirmed the Department’s decision based on rationales arising from the
evidence and arguments presented.

¶67 Sierra Club does not cite any legal authority that precludes the
parties to the hearing from expanding on the evidence and arguments considered
by the Department in its original decision, and presenting additional evidence and
arguments for and against that decision, or that precludes the ALJ from relying on
rationales arising from the additional evidence and arguments presented. Indeed,
it would defeat the purpose of holding a contested case hearing on a permitting
decision if all the ALJ could do is review only the evidence and arguments before
the Department when it made the original decision and limit the ALJ’s decision to
the Department’s originally stated rationales; there would be nothing to “hear.”

¶68 The cases that Sierra Club cites in support of the proposition that the
ALJ “may only review the decision the [Department] actually made” based on the
evidence, arguments, and rationales presented at the time of the Department’s
original decision, are inapposite. Sierra Club cites Village of Thiensville v. DNR,
130 Wis. 2d 276, 283, 386 N.W.2d 519 (Ct. App. 1986), for the proposition that
“the scope of the ALJ’s authority under WIS. STAT. § 285.81 is to review the
decision [the Department] made; it is not to substitute a new decision on

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No. 2024AP673

alternative rationales.” But Village of Thiensville merely states that WIS. STAT.
§ 147.20 (1983-84), now WIS. STAT. § 283.63, requires the ALJ, on review of a
permit, “to limit [the ALJ’s] review … to events which had been considered by the
agency. Those [the ALJ] may ‘consider anew,’ but [the ALJ] may not examine
what the agency had no opportunity to examine.” Village of Thiensville, 130
Wis. 2d at 283. This case is distinguishable because, first, the applicable statute is
not the same, and, second, as explained above, WIS. ADMIN. CODE § NR 2.14
explicitly allows for the introduction and consideration of evidence not presented
in the permit or application. In addition, Sierra Club does not identify any
“events” considered by the ALJ that the Department did not consider, or explain
why the ALJ did something other than “‘consider anew’” the redefining-the-
source issue, consistent with the language in Village of Thiensville that it cites.
See id. Accordingly, Village of Thiensville does not bolster Sierra Club’s
argument.

¶69 Sierra Club cites Stas v. Milwaukee County Civil Service
Commission, 75 Wis. 2d 465, 474, 249 N.W.2d 764 (1977), for the proposition
that the scope of an ALJ’s review is analogous to the scope of judicial review,
which is limited to the grounds invoked by the agency. While Stas does limit a
reviewing court to the grounds invoked by the agency, it does not support Sierra
Club’s assertion that an ALJ presiding over a contested case hearing is confined in
the same way. Id.

¶70 Sierra Club cites Meteor Timber, LLC v. DHA, 2022 WI App 5, 400
Wis. 2d 451, 969 N.W.2d 746 (2021), and Kohler Co., 410 Wis. 2d 433, for the
proposition that it would “eviscerate the statutory process” to allow the
Department to introduce post-permit information during the review process. But
both of those cases involved attempts by permit applicants and the Department to

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No. 2024AP673

correct an omission in the administrative record by introducing new information at
the contested case hearing that was necessary to the decision on the permit before
the permit was granted. See Meteor Timber, 400 Wis. 2d 451, ¶64 (“It would
eviscerate the statutory process to allow conditions that … ‘address information
not otherwise available at the point of permit application,’ when that information
is necessary for the Department to assess whether it may issue the permit for the
proposed project under statutory standards.”); Kohler Co., 410 Wis. 2d 433, ¶¶75-
78 (explaining that additional evidence may be presented on an issue at a
contested case hearing unless the issue is whether the Department “had sufficient
information to issue a permit at the time the decision was made”). These cases do
not support Sierra Club’s argument that new evidence may never be considered at
a contested case hearing. To the extent that the Department’s “redefining the
source” rationale may have been vague or incompletely explained in its original
permitting decision, this differs significantly from Meteor Timber and Kohler Co.,
in which the Department explicitly stated that required information was missing at
the time the Department conducted its review of the permit.

¶71 In addition, as part of its exceeding authority argument, Sierra Club
contends that the ALJ exceeded the grant of the hearing and the issues identified in
the pre-hearing memorandum. By its terms, the ALJ granted a hearing on whether
battery storage redefines the source, and, accordingly, it was permitted to consider
evidence and arguments on that issue. As we have explained above, both
interference with inertia as a project purpose and space constraints were proper
considerations in the redefining-the-source analysis. Accordingly, the ALJ did not
exceed the grant of the hearing.

¶72 Also as part of its exceeding authority argument, Sierra Club
contends that the procedure here “undermines the statutory permitting procedures”

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No. 2024AP673

and is “fundamentally unfair” to Sierra Club. However, as we have explained
above, the Department and ALJ complied with the permitting and hearing
procedures, and Sierra Club had an opportunity to, and did, participate and present
evidence and make arguments throughout those proceedings.

III. Whether the Background Concentration Protocol Is a Rule

¶73 The Background Concentration Protocol is a document that sets
forth the procedure the Department employs for setting background pollutant
concentrations for air permit modeling. Sierra Club argues that the Protocol is a
rule. The parties agree that the Protocol was not promulgated following statutory
rulemaking procedures, and, accordingly, if it is a rule, it must be declared invalid.
See Cholvin, 313 Wis. 2d 749, ¶21 (“[A] court shall declare a rule invalid if it
finds that it was promulgated without complying with statutory rule-making
procedures.”). “‘Whether an agency’s action constitutes a rule under WIS. STAT.
§ 227.01(13) presents a question of law, which we review de novo.’” Lamar
Cent. Outdoor, LLC v. DHA, 2019 WI 109, ¶10, 389 Wis. 2d 486, 936 N.W.2d
573 (quoted source omitted).

¶74 Resolving this issue also requires that we interpret and apply
statutes, which are questions of law that we review de novo. Meyers v. Bayer AG,
2007 WI 99, ¶22, 303 Wis. 2d 295, 735 N.W.2d 448. When interpreting a statute,
we begin with its language, giving the statutory language “its common, ordinary,
and accepted meaning.” State ex rel. Kalal v. Circuit Ct. for Dane Cnty., 2004
WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. “‘If the meaning of the statute is
plain, we ordinarily stop the inquiry.’” Id. (quoted source omitted). Additionally,
“[p]revious cases construing a statute … become a part of our understanding of a
statute’s plain meaning.” Meyers, 303 Wis. 2d 295, ¶23.

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No. 2024AP673

¶75 “Rule” is defined in WIS. STAT. § 227.01(13) as follows:

“Rule” means a regulation, standard, statement of
policy, or general order of general application that has the
force of law and that is issued by an agency to implement,
interpret, or make specific legislation enforced or
administered by the agency or to govern the organization or
procedure of the agency.

“Wisconsin courts have distilled this statutory definition of a ‘rule’ under WIS.
STAT. ch. 227 into a five-element test: ‘(1) a regulation, standard, statement of
policy or general order; (2) of general application; (3) having the effect of law;
(4) issued by an agency; (5) to implement, interpret or make specific legislation
enforced or administered by such agency.’”10 Midwest Renewable Energy Ass’n
v. PSC (MREA), 2024 WI App 34, ¶44, 412 Wis. 2d 698, 8 N.W.3d 848 (quoting
Citizens for Sensible Zoning, Inc. v. DNR (CSZ), 90 Wis. 2d 804, 814, 280
N.W.2d 702 (1979)). The label the agency gives to the action is immaterial;
whether the action is a rule depends on its substance—specifically, whether it
meets all five elements of a rule. See, e.g., MREA, 412 Wis. 2d 698, ¶44;
Milwaukee Area Joint Plumbing Apprenticeship Comm. v. DILHR, 172 Wis. 2d
299, 320, 493 N.W.2d 744 (Ct. App. 1992).

10
As explained below, the Background Concentration Protocol was first issued in 2008,
and was updated in 2017 and 2021. The statute defining a rule has remained the same since 2008,
except that, in 2017, the legislature modified the definition of “rule” to require that an agency
action have the “force of law” rather than the “effect of law.” Midwest Renewable Energy Ass’n
v. PSC, 2024 WI App 34, ¶44 n.21, 412 Wis. 2d 698, 8 N.W.3d 848. Our supreme court has
interpreted these phrases synonymously, see id., and, accordingly, the distinction does not affect
our analysis.

The statutes in WIS. STAT. ch. 285 enforced and administered by the Department
regarding the permitting of sources of air pollution have also not changed since 2008 in any
respect pertinent to our analysis.

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No. 2024AP673

¶76 The parties here agree that the Background Concentration Protocol
satisfies the second and fourth elements of the test—that the Protocol is of general
application and that it was issued by an agency—but they dispute whether the
Protocol satisfies the first, third, and fifth elements. We next present additional
background regarding the Background Concentration Protocol and then address
the first, third, and fifth elements in turn.

Additional Background

¶77 Pursuant to WIS. STAT. § 285.63(1)(b), before issuing an air permit,
the Department must first find that the proposed source “will not cause or
exacerbate a violation of any ambient air quality standard or ambient air
increment,” such as the National Ambient Air Quality Standards (NAAQS).
Sec. 285.63(1)(b); see also WIS. ADMIN. CODE § NR 405.09. In order to make this
determination, the Department must add the anticipated pollution from the
proposed source to the existing, or background, concentrations of pollutants in the
area. At issue in this case is the Department’s procedure for determining the
background concentrations that will be used in this equation.11

¶78 The Department is guided in this effort to determine background
concentrations by federal regulations which implement the Clean Air Act,
specifically 40 C.F.R. part 51, which details what states must do to comply with

11
We clarify the key terms “ambient” and “background concentrations” as follows.
“‘Ambient air’ means the portion of the atmosphere external to buildings and to which the
general public has access.” WIS. ADMIN. CODE § NR 400.02(24). “Background concentrations,”
which are required to be calculated in a specific manner as explained in the text, are derived from
ambient monitoring data. See, e.g., 40 C.F.R. part 51, Appendix W, § 8.3.2(c)(i) (explaining that
when an “existing facility is determined to impact the ambient monitor, the background
concentration at each monitor can be determined by excluding” certain values).

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the Act. Appendix W, titled “Guideline on Air Quality Models,” “provides air
quality modeling techniques that should be applied to … air quality assessments”
and “should serve as a common measure of acceptable technical analysis when
supported by sound scientific judgment.” 40 C.F.R. part 51, Appendix W,
§ 1.0(a); see also WIS. ADMIN. CODE § NR 484.04 (incorporating Appendix W by
reference). “Section 8 [of Appendix W] makes recommendations for data inputs
to models including … background air quality….” 40 C.F.R. part 51,
Appendix W, § 1.0(h).

¶79 Subsection 8.3 of Appendix W specifically focuses on background
concentrations. In part, that subsection provides that “the air quality monitoring
data should be of sufficient completeness and follow appropriate data validation
procedures. These data should be adequately representative of the area to inform
calculation of the design concentration for comparison to the applicable NAAQS.”
40 C.F.R. part 51, Appendix W, § 8.3.1(b). The subsection provides additional
guidelines for air quality monitoring data but does not dictate a specific procedure
for setting background concentrations.12

12
See, e.g., 40 C.F.R. part 51, Appendix W, § 8.3.2(b) (For isolated sources, “the EPA
recommends using data from the monitor closest to and upwind of the project area…. If there are
no monitors located in the vicinity of the new or modifying source, a ‘regional site’ may be used
to determine background concentrations. A regional site is one that is located away from the area
of interest but is impacted by similar or adequately representative sources.”); § 8.3.2(c)(ii)
(“There may be … circumstances which would necessitate modifications to the ambient data
record. Such cases could include removal of data from specific days or hours when a monitor is
being impacted by activities that are not typical or not expected to occur again in the future….”);
§ 8.3.2(a) (“The application of the EPA’s recommended framework for determining an
appropriate background concentration should be consistent with appropriate EPA modeling
guidance and justified in the modeling protocol that is vetted with the appropriate reviewing
authority (paragraph 3.0(b)).”).

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¶80 Before 2008, the Department set background concentrations on a
county-by-county basis in Wisconsin. Because ambient air quality monitors were
not located in every county, the Department assigned representative values from
neighboring counties to counties without monitors. In 2007 and 2008, the
Department convened a group of stakeholders to develop a new procedure for
setting background concentrations in Wisconsin.

¶81 Pursuant to the Background Concentration Protocol, first introduced
in 2008 and still in effect today, the Department divides the state into “higher” and
“lower” background concentration areas based on municipal boundaries and
population. Cities and villages with a population of 25,000 or more, as well as
neighboring cities and villages with a population density of more than half of the
main city or village, are labeled “higher” background concentration areas.
Everywhere else is a “lower” background concentration area. If a proposed permit
source lies both inside and outside of a “higher” background concentration area,
the higher background concentration should be used. Thus, under the Protocol, a
proposed source may be allowed to emit a higher level of a pollutant if the source
is located in a lower background concentration area than if it is located in a higher
background concentration area, without violating the limit for the pollutant at
issue.

¶82 The Background Concentration Protocol states that the background
concentrations listed in the table in the Protocol “are the values to be used for air
dispersion modeling.” The table lists six pollutants, and higher and lower
concentrations for each of the pollutants. The Protocol contains a map that shows
“in what areas the higher background concentration[s] are to be used and in what
areas the lower concentration[s] are to be used.” The Protocol requires that “the
higher background concentrations must be used” for sources located in the

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identified higher background concentration areas, and that sources located in the
remainder of the state “should use the low background [concentrations].” The
Protocol contains formulas for background concentration values for both the
higher and lower background concentration areas.

¶83 We clarify that the Background Concentration Protocol that applied
to the permit at issue here differs from the 2008 and 2017 versions of the Protocol
in one respect. The prior two versions of the Protocol required that one of two
options be used for determining background concentrations: the option described
in the text (the concentrations identified by the Department for higher and lower
background concentration areas and listed in a table in the Protocol), or the
concentrations derived from monitors that the source installed “in an appropriate
location” and that provided “a minimum of two (2) full years of data.” As stated,
the current, applicable Protocol mandates only the first of these options.

Analysis

1. Regulation, standard, statement of policy, or general order

¶84 As stated, the first element that must be satisfied in order for an
agency action to constitute a rule is that the action is “a regulation, standard,
statement of policy, or general order.” WIS. STAT. § 227.01(13); MREA, 412
Wis. 2d 698, ¶46. We conclude that the Background Concentration Protocol is a
statement of policy.

¶85 The term “statement of policy” is not defined in WIS. STAT. ch. 227
or in the administrative statutes pertaining to agencies. Neither has case law
illuminated its meaning. Therefore, we turn to dictionary definitions to assist in
our determination of the meaning of this term. See MREA, 412 Wis. 2d 698, ¶47

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(relying on dictionary definition when term not defined in statutes). A
representative definition of “statement” is “[s]omething stated; a declaration.”
Statement, THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE,
https://ahdictionary.com/word/search.html?q=statement (last visited May 12,
2025). One definition of “policy” is “a definite course or method of action
selected from among alternatives and in light of given conditions to guide and
determine present and future decisions.” Policy, MERRIAM-WEBSTER,
https://www.merriam-webster.com/dictionary/policy (last visited May 12, 2025).
Another definition of “policy” is “[a] standard course of action that has been
officially established by an organization, business, political party, etc.” Policy,
BLACK’S LAW DICTIONARY (10th ed. 2014).

¶86 Putting these together, a “statement of policy” is a declaration of a
standard course of action established by an entity, selected from among
alternatives, to guide present and future decisions. As described, the Background
Concentration Protocol declares the course of action established by the
Department for setting background concentration values across the state by
dividing the state into “higher” and “lower” background concentration areas based
on population and population density, and identifying “higher” and “lower”
background concentration values for the two different areas based on a formula
described in the Protocol. This course of action was selected from among
alternatives, including the previous county-by-county determination of
background concentration values, and sets the procedure by which the Department
shall determine what background concentration values to use in permits and
permit applications for proposed source locations and, accordingly, the levels of
additional pollution allowed in the issued air permits before such pollution would

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No. 2024AP673

violate ambient air quality standards. Thus, the Protocol sets forth a course of
action that determines the Department’s air pollution permitting decisions.

¶87 The Department makes related arguments about this element, but
none are persuasive.13 It argues that the Background Concentration Protocol is not
a “regulation, standard, statement of policy, or general order” because the
attributes of the Protocol that Sierra Club cites in support of this proposition are
also “attributes of guidance documents.” The Department does not cite any law in
support of its implicit assertion that guidance documents and rules cannot share
any attributes. The Department does quote SEIU, Local 1 v. Vos, 2020 WI 67,
393 Wis. 2d 38, 946 N.W.2d 35, for its holding that guidance documents “contain
the executive’s interpretation of the laws, his judgment about what the laws
require him to do.” Id., ¶106. While this proposition is undoubtedly sound, the
Department fails to explain how it supports the Department’s assertion that the
Protocol is not a statement of policy, and we reject this argument on that basis.
See State v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633 (Ct. App. 1992)
(“Arguments unsupported by references to legal authority will not be
considered[,]” and “[w]e may decline to review issues inadequately briefed.”).

¶88 For these reasons, the Background Concentration Protocol is a
statement of policy and satisfies the first element of a rule in WIS. STAT.
§ 227.01(13).

13
Applicants do not address this element on appeal.

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No. 2024AP673

2. Effect of law

¶89 The third element that must be satisfied in order for an agency action
to constitute a rule is that the action has the “effect of law.” MREA, 412 Wis. 2d
698, ¶71. We conclude that the Background Concentration Protocol has the effect
of law.

¶90 “An agency regulation, standard, statement of policy or general
order has been held to have the ‘effect of law’ where criminal or civil sanctions
can result as a violation; where licensure can be denied; and where the interest of
individuals in a class can be legally affected through enforcement of the agency
action.” Cholvin, 313 Wis. 2d 749, ¶26. Mandatory language “in which the
agency ‘speaks with an official voice intended to have the effect of law’” will
satisfy this element, while materials “developed by an agency as a reference aid
for its staff” are not likely to have the effect of law. County of Dane v. Winsand,
2004 WI App 86, ¶11, 271 Wis. 2d 786, 679 N.W.2d 885.

¶91 However, the fact that an agency issues a document for the use of its
staff does not necessarily mean that the document does not have the effect of law.
See Cholvin, 313 Wis. 2d 749, ¶¶27-29 (concluding that instruction to Department
of Health and Family Services’ staff regarding screening of Medicaid applicants
had the effect of law). Instead, courts must look to whether the agency action
“uses ‘express mandatory language’ that is ‘more than informational,’” and
whether enforcement of the action can affect a class of persons’ legal rights.
MREA, 412 Wis. 2d 698, ¶71 (quoted source omitted).

¶92 In State ex rel. Clifton v. Young, 133 Wis. 2d 193, 200, 394 N.W.2d
769 (Ct. App. 1986), the Department of Health and Social Services “prepared and
disseminated a memorandum stating that it was ‘adopting procedures’ for

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determining good time forfeitures and directing the examiners to consider specific
criteria in making those determinations.” The memorandum “announce[d] the
general policies and the specific criteria under which all decisions on good time
for mandatory release parole violations are to be made, now and in the future,”
referring to promulgated rules and regulations containing those standards. Id.
This court concluded that the memorandum had the effect of law. Id.

¶93 Similarly, in Cholvin v. DHFS, 313 Wis. 2d 749, the Department of
Health and Family Services updated its internal instructions for employees
screening individuals for Medicaid waiver eligibility. Id., ¶13. The new
instructions stated that a certain box, which determined an individual’s eligibility
for a Medicaid waiver, was “to be checked if the person needs help at least one
third of the time.” Id., ¶18. In other words, the instruction provided, “[w]hen
frequency is at question, screeners should use a simple one-third rule.” Id. The
prior instructions had stated that the box was to be checked if the person needed
help “on a ‘bad’ day.” Id., ¶17. This court concluded that the instructions had the
effect of law because they removed the screening employees’ discretion and used
mandatory terms that were “not simply advisory.” Id., ¶29.

¶94 In contrast, in County of Dane v. Winsand, 271 Wis. 2d 786,
Winsand challenged the standards used to approve the use of a breath testing
instrument by a section chief at the Department of Transportation. Id., ¶5. A rule
whose validity was not at issue provided that the section chief “shall …
evaluate[]” all breath testing instruments, and that “[t]he procedure for evaluation
shall be determined by the” section chief. Id., ¶8. Winsand challenged a
document labeled as an “Evaluation Protocol,” which contained “procedures for
testing the instruments and consist[ed] largely of questions to be asked in
evaluating the instruments.” Id., ¶11. This court concluded as follows: “Materials

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No. 2024AP673

developed by an agency as a reference aid for its staff that are ‘couched … in
terms of advice and guidelines rather than setting forth law-like pronouncements’
are not a ‘rule’ within the meaning of WIS. STAT. § 227.01(13) because they are
not intended to have the effect of law.” Id. (quoted source omitted).

¶95 The Background Concentration Protocol states that the document
“does not contain any mandatory requirements except where requirements found
in statute or administrative rule are referenced,” and that “[t]his guidance does not
establish or affect legal rights or obligations and is not finally determinative of any
of the issues addressed.” The Department’s expressed intent notwithstanding, the
Protocol uses express mandatory language: “[t]he background concentrations
listed in [the table in the memo] are the values to be used for air dispersion
modeling”; permits “will be evaluated with the background concentrations noted
in this memo”; “the higher background concentrations must be used” in the
identified areas. (Emphasis added.)

¶96 Like the documents found to have the effect of law in Clifton and
Cholvin, the Background Concentration Protocol expressly tells the Department’s
staff how to determine a critical input to an ultimate determination—how much
pollutant a proposed source may be permitted to emit—that affects a class of
persons’ legal rights. In Cholvin, the challenged procedure expressly directed the
agency’s staff to enter a certain input on a form if a person needed assistance with
a certain activity of daily living less than one-third of the time. Cholvin, 313
Wis. 2d 749, ¶18. This entry could result in ineligibility for a Medicaid waiver.
Id., ¶14. Likewise, the challenged Protocol here expressly directs Department
staff to enter a certain input into their calculations to determine whether a
proposed source would violate ambient air quality standards. This input, when
combined with the modeled anticipated pollution from the proposed source, could

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result in the denial of a permit. See WIS. STAT. § 285.63(1)(b) (explaining that, in
order for the Department to approve a permit application, it must find, among
other things, that “[t]he source will not cause or exacerbate a violation of any
ambient air quality standard”).

¶97 Applicants and the Department argue that the Background
Concentration Protocol does not have the effect of law because it does not on its
own determine whether a permit will be approved or denied. However, as
explained above, the background concentration could result in the denial of a
permit for a proposed source whose modeled emissions, in combination with the
background concentration, violate ambient air quality standards. Moreover, if
background concentrations were calculated in a different manner, that might lead
to a different result. And, as Applicants themselves acknowledge, an agency
action has the force of law when it “could affect one’s legal interests.” Tavern
League of Wis., Inc. v. Palm, 2021 WI 33, ¶22, 396 Wis. 2d 434, 957 N.W.2d 261
(emphasis added).

¶98 Applicants also argue that the Background Concentration Protocol
does not have the effect of law because permit applicants may request to use
different background concentration data from monitors located in the vicinity of
the project. This argument does not accurately represent the requirement in the
Protocol applicable to the permit.14 The Protocol states that it “lists all the areas

14
As described above, the 2008 and 2017 Protocols limit the Department to determining
background concentration values based on data from either: (1) monitors across the state and
region and depending on whether a source is in a “higher” or “lower” background concentration
area based on population and population density; or (2) a monitor installed by the source “in an
appropriate area” and providing two years of data. The current, applicable Background
Concentration Protocol includes only the first option.

(continued)

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No. 2024AP673

where the higher background concentrations must be used.” Thus, the Protocol
contains mandatory language directing how Department staff are to select the
background concentration values for purposes of air permit modeling.

¶99 The Department also argues that “[w]ithout any showing that th[e]
[Background Concentration Protocol] would ever be enforced against someone or
how that enforcement would come about,” Sierra Club cannot satisfy this element.
However, we have explained above how the Protocol could be enforced to result
in denial of a permit.

¶100 Finally, both the Department and Applicants argue that “[t]he
touchstone of the requirement is agency intent, specifically whether the agency has
spoken with an ‘official voice intended to have the effect of law.’” Cf. MREA,
412 Wis. 2d 698, ¶71. However, as we explained above, agency intent is not
determinative of this element. See id. (touchstone is whether agency uses
mandatory language that is more than informational). Here, as noted, the Protocol
uses mandatory language to create a process that can affect legal rights.

3. Implement, interpret or make specific legislation

¶101 The fifth element of a rule is that the action is issued “to implement,
interpret, or make specific legislation enforced or administered by the agency.”
WIS. STAT. § 227.01(13). Sierra Club argues that the Department adopted the

Applicants argue that the second option still exists, relying on a statement in an affidavit
from the Department’s Coordinator of the Stationary Source Modeling Team in the Bureau of Air
Management. In that affidavit, the Coordinator avers that “[p]ermit applicants always have the
option of using air quality monitoring data they collect from monitors located in the vicinity of
the proposed project to determine the background concentrations.” However, he makes this
averment regarding the 2008 version of the Protocol. As explained in the text, that option is part
of the 2008 and 2017 versions, but not the Protocol applicable here.

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No. 2024AP673

Background Concentration Protocol “to implement, interpret or make specific the
requirements in WIS. STAT. § 285.63(1)(b), WIS. ADMIN. CODE § NR 405.10, and
40 C.F.R. Pt. 51, App[endix] W.” Specifically, Sierra Club argues that the
Protocol both “implements” and “interprets” § 285.63(1)(b). We conclude that the
Background Concentration Protocol implements legislation.

¶102 “An agency action implements a statute when it carries out or gives
practical effect to the statute.” MREA, 412 Wis. 2d 698, ¶74. An agency action
interprets a statute when it selects and puts into practice one meaning of an
ambiguous statute. See Schoolway Transp. Co. v. DMV, 72 Wis. 2d 223, 235-36,
240 N.W.2d 403 (1976) (no interpretation when statute unambiguous); Tavern
League, 396 Wis. 2d 434, ¶¶25, 33 (interpretation occurs when agency has to
adopt its own understanding of an undefined term in a statute). A single agency
action may both interpret and implement a statute. See Tavern League, 396
Wis. 2d 434, ¶33 (explaining that “by way of its implementation, DHS interpreted
the statute”).

¶103 WISCONSIN STAT. § 285.63(1)(b), the statute Sierra Club argues the
Background Concentration Protocol implements, provides: “The [D]epartment
may approve the application for a permit required or allowed under [WIS. STAT.
§] 285.60 if it finds: … The source will not cause or exacerbate a violation of any
ambient air quality standard or ambient air increment under [WIS. STAT.
§] 285.21(1) or (2)[.]” Section 285.21(1) and (2) provide that the Department
“shall promulgate by rule” ambient air quality standards that are not more
restrictive than the federal standards, “may promulgate” ambient air quality
standards for contaminants not regulated by federal standards if certain findings
are made, and “shall promulgate by rule ambient air increments for various air
contaminants in attainment areas.” Sec. 285.21(1), (2). The Department

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promulgated by rule ambient air quality standards and ambient air increments in
WIS. ADMIN. CODE § NR 404.04 and 404.05.

¶104 Accordingly, under WIS. STAT. § 285.63(1)(b), to issue a permit the
Department must find that the proposed source will not violate the ambient air
quality standards promulgated in WIS. ADMIN. CODE § NR 404.04 and 404.05. To
do so, as explained above, the Department must necessarily determine or set the
background concentrations for the proposed permit location and add the
anticipated pollution from the proposed source.

¶105 The Department also promulgated by rule WIS. ADMIN. CODE
§ NR 405.10, which provides: “All estimates of ambient concentrations required
under this chapter shall be based on the applicable air quality models, data bases,
and other requirements specified in the Guideline on Air Quality Models
(Revised) in Appendix W of 40 CFR part 51, incorporated by reference in [WIS.
ADMIN. CODE §] NR 484.04.” All parties agree that the Background
Concentration Protocol, at minimum, “explains” or “communicates guidance
about the application of” Appendix W.

¶106 The Applicants and the Department seem to be arguing that the fifth
element is not satisfied because the Protocol does not implement any statute, and
only implements regulations (that is, Appendix W). Neither cite any authority to
support the proposition, and the authority we found is to the contrary. See
Wisconsin Electric Power Co. v. DNR, 93 Wis. 2d 222, 287 N.W.2d 113 (1980).
Here, WIS. STAT. § 285.63(1)(b) requires the Department to find that permitting
the proposed source does not violate ambient air quality standards, and the
Department’s implementation of Appendix W also implements this statutory
requirement. In other words, the Protocol “carries out and gives practical effect

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to” the Department’s authority, delegated by the statute, to determine whether a
proposed source will cause a violation of an ambient air quality standard. See
MREA, 412 Wis. 2d 698, ¶76.

¶107 The Department also argues that Sierra Club’s challenge “is
forfeited, moot, and can have no effect on the permit.” Specifically, the
Department argues that, because Sierra Club focused its challenge on the current,
applicable Background Concentration Protocol in the circuit court, it forfeited any
argument based on the 2008 Protocol. The Department also argues that, to the
extent that Sierra Club challenges only the 2008 Protocol on appeal, that challenge
is moot because it has been “superseded” by the current Protocol. These
arguments mischaracterize Sierra Club’s challenge. It is clear from Sierra Club’s
briefing, both here and in the circuit court, that its challenge is to the language in
the current, applicable Protocol directing the Department how to select the
background concentration values to be used in air permit modeling. That language
directs the Department to select background concentration values based on
creating “higher” and “lower” background concentration areas, assigning cities
and villages to these areas based on population and population density, and
calculating a certain average of data from monitors across the state and region. It
is this procedure employed by the Department to select background concentrations
for air permit modeling that Sierra Club has challenged as an invalid rule, in both
the circuit court and this court. Accordingly, this challenge was not forfeited, and
it is not moot.

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¶108 In sum, the Background Concentration Protocol meets all five
elements of the statutory definition of a rule in WIS. STAT. § 227.01(13).15
Because Applicants and the Department concede that the Protocol was not
promulgated in accordance with statutory rulemaking procedures, “it is invalid and
unenforceable.” See MREA, 412 Wis. 2d 698, ¶78.

Remedy

¶109 Sierra Club asks us to “reverse the [Department’s] decision and
remand for a new determination of the plant’s impacts on air quality pursuant to
WIS. STAT. § 28[5].63(1)(b) and WIS. ADMIN. CODE § NR 405.09 based on source
specific background pollution rather than relying on the unpromulgated
Background [Concentration Protocol].” Applicants respond that Sierra Club
“never requested this remedy from either the ALJ or the circuit court and cannot
do so for the first time on appeal,” and that vacating the permit would prevent the
plant from operating and “leave a 128 MW hole in the grid.” Applicants ask that
we remand to the Department “to conduct air modeling in any manner permitted
by Appendix W, in [the Department’s] discretion.” The Department does not
address remedy.

¶110 We agree that the Department’s reliance on an invalid rule to set air
pollution limits in the permit at issue requires that we remand to the Department to

15
Sierra Club argues that, if the Background Concentration Protocol does not satisfy the
definition of a rule under WIS. STAT. § 227.01(13), it had to be promulgated as a rule pursuant to
WIS. STAT. § 227.10(1) because it is a “statement of general policy.” Because our conclusion that
the Protocol is a rule under § 227.01(13) is dispositive, we do not address this alternative
argument. See Barrows v. American Fam. Ins. Co., 2014 WI App 11, ¶9, 352 Wis. 2d 436, 842
N.W.2d 508 (2013) (“An appellate court need not address every issue raised by the parties when
one issue is dispositive.”).

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No. 2024AP673

reopen the permit. However, we decline to vacate the permit or to dictate to the
Department how to set the air pollution limits on remand. Instead, we believe that
the relief that is “appropriate” and “preserve[s] the interests of … the public
pending further proceedings or agency action,” WIS. STAT. § 227.57(9), is to
remand to the circuit court to remand to the Department to reopen the permit and
proceed consistent with this opinion, and to keep the permit in place during
remand proceedings.

CONCLUSION

¶111 For the foregoing reasons, we affirm the part of the circuit court’s
order concluding that the Department appropriately excluded battery storage in
step one of the BACT analysis as redefining the source and reverse that part of the
order concluding that the Background Concentration Protocol is not a rule.
Accordingly, we remand to the circuit court to remand to the Department to
reopen the permit and proceed consistent with this opinion.

By the Court.—Order affirmed in part, reversed in part and cause
remanded with directions.

Recommended for publication in the official reports.

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