Joint Appendix — West Virginia, et al., Petitioners v. Environmental Protection Agency, et al.

Nos. 20-1530, 20-1531, 20-1778, 20-1780

IN THE

Supreme Court of the United States

WEST VIRGINIA, ET AL.,

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

THE NORTH AMERICAN COAL CORPORATION,

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

WESTMORELAND MINING HOLDINGS LLC,

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

NORTH DAKOTA,

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

On Writ Of Certiorari

To The United States Court Of Appeals

For The District Of Columbia Circuit

JOINT APPENDIX (VOLUME IV OF IV)

(Pages 1445–2030)

LINDSAY S. SEE

ELIZABETH B. PRELOGAR

Solicitor General

Solicitor General

Counsel of Record

Counsel of Record

U.S. DEPARTMENT OF JUSTICE OFFICE OF THE W.V. ATT’Y GEN.

950 Pennsylvania Avenue, NW State Capitol Complex

Washington, DC 20530

Building 1, Room E-26

(202) 514-2217

Charleston, WV 25305

(304) 558-2021

supremectbriefs@usdoj.gov

lindsay.s.see@wvago.gov

Counsel for Federal

Respondents

Counsel for Petitioners

West Virginia, et al.

(additional counsel listed on inside cover)

PETITIONS FOR CERTIORARI FILED: APR. 29, 2021 (20-1530),

APR. 30, 2021 (20-1531), JUNE 18, 2021 (20-1778 & 20-1780)

CERTIORARI GRANTED: OCT. 29, 2021

(continued from front cover)

BETH S. BRINKMANN

Counsel of Record

COVINGTON & BURLING LLP

850 Tenth Street, NW

Washington, DC 20001

(202) 662-5312

bbrinkmann@cov.com

Counsel for Power Company

Respondents

YAAKOV M. ROTH

Counsel of Record

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

yroth@jonesday.com

Counsel for Petitioner

North American Coal

Corporation

SEAN H. DONAHUE

Counsel of Record

ANDREW M. GROSSMAN

Counsel of Record

DONAHUE, GOLDBERG &

BAKER & HOSTETLER LLP

LITTLETON

1008 Pennsylvania Ave., SE

1050 Connecticut Ave., NW

Washington, DC 20003

Washington, DC 20036

(202) 277-7085

(202) 861-1697

sean@donahuegoldberg.com

agrossman@bakerlaw.com

Counsel for Non-Governmental Counsel for Petitioner

Organization & Trade

Westmoreland Mining

Association Respondents

Holdings LLC

BARBARA D. UNDERWOOD

PAUL M. SEBY

Special Assistant

Solicitor General

Attorney General

Counsel of Record

Counsel of Record

OFFICE OF THE ATT’Y GEN.

GREENBERG TRAURIG, LLP

28 Liberty Street

1144 15th Street, Suite 3300

New York, NY 10005

Denver, CO 80202

(212) 416-8016

barbara.underwood@ag.ny.gov (303) 572-6500

sebyp@gtlaw.com

Counsel for Respondents

Counsel for Petitioner State

New York, States and

of North Dakota

Municipalities

(additional counsel listed on next page)

(continued from inside cover)

ELBERT LIN

Counsel of Record

HUNTON ANDREWS KURTH LLP

951 E. Byrd Street, E. Tower

Richmond, VA 23219

(804) 788-7202

elin@huntonak.com

Counsel for Respondent

America’s Power

EMILY C. SCHILLING

Counsel of Record

HOLLAND & HART LLP

901 K Street NW, Suite 850

Washington, DC 20001

(202) 393-6500

ecschilling@hollandhart.com

Counsel for Respondent Basin

Electric Power Cooperative

MISHA TSEYTLIN

Counsel of Record

TROUTMAN PEPPER HAMILTON

SANDERS LLP

227 W. Monroe St., Suite 3900

Chicago, IL 60606

(608) 999-1240

misha.tseytlin@troutman.com

Counsel for Respondent

National Mining Association

i

TABLE OF CONTENTS

Page

VOLUME I

Docket Entries,

American Lung Association, et al. v.

EPA, et al., No. 19-1140 (D.C. Cir.) ................... 1

Opinion of the United States Court of Appeals

for the District of Columbia Circuit

(Jan. 19, 2021) .................................................. 53

Respondents’ Motion for a Partial Stay of

Issuance of the Mandate (Feb. 12, 2021) ....... 256

Order of the United States Court of Appeals

for the District of Columbia Circuit

Granting the Motion for a Partial Stay of

Issuance of the Mandate (Feb. 22, 2021) ....... 270

Formal Partial Mandate of the United States

Court of Appeals for the District of

Columbia Circuit (Mar. 5, 2021) .................... 272

VOLUME II

Carbon Pollution Emission Guidelines for

Existing Stationary Sources: Electric

Utility Generating Units,

80 Fed. Reg. 64,662 (Oct. 23, 2015) ............... 273

VOLUME III

Carbon Pollution Emission Guidelines for

Existing Stationary Sources: Electric

Utility Generating Units, 80 Fed. Reg.

64,662 (Oct. 23, 2015) (cont.) ......................... 867

ii

TABLE OF CONTENTS

(continued)

Page

VOLUME IV

Carbon Pollution Emission Guidelines for

Existing Stationary Sources: Electric

Utility Generating Units, 80 Fed. Reg.

64,662 (Oct. 23, 2015) (cont.) ....................... 1445

EPA, Regulatory Impact Analysis for the

Repeal of the Clean Power Plan, and

the Emission Guidelines for Greenhouse

Gas Emissions from Existing Electric

Utility Generating Units (June 2019)

(Excerpted).................................................... 1669

Repeal of the Clean Power Plan; Emission

Guidelines for Greenhouse Gas

Emissions From Existing Electric Utility

Generating Units; Revisions to Emission

Guidelines Implementing Regulations,

84 Fed. Reg. 32,520 (July 8, 2019) ............... 1725

1445

By reducing millions of tons of CO2 emissions that

are contributing to global GHG levels and providing

strong leadership to encourage meaningful reductions

by countries across the globe, this rule is a significant

step to address health and economic impacts of climate

change that will fall disproportionately on vulnerable

communities.

By reducing millions of tons of

conventional air pollutants, the rule will lead to better

air quality and improved health in those communities.

We heard from many commenters who recognize and

welcome those benefits.

There are other ways in which the actions that

result from this rulemaking may affect communities

in positive or potentially adverse ways and we also

heard about these from commenters.

While the agency expects overall emission decreases

as a result of this rulemaking, we recognize that some

EGUs may operate more frequently, as a result of this

rulemaking. To the extent that we project increases

in utilization as a result of this rulemaking, we expect

these increases to occur generally in lower-emitting

NGCC units, which have minimal or no emissions of

SO2 and HAP, lower emissions of particulate matter,

and much lower emissions of NOX compared to higheremitting steam units. We acknowledge the concerns

that have been raised on this point but also the

difficulty in anticipating prior to plan implementation

where those impacts might occur. In addition to

providing for a robust state planning process with

opportunity for meaningful input, the EPA is

encouraging states to evaluate the actual impacts of

their plans once implemented and, as described below,

the EPA intends to conduct an assessment of whether

and where emission increases may that may result

1446

from plan implementation and to work with states to

mitigate adverse impacts, if any, in overburdened

communities.

In addition to the many positive anticipated health

benefits of this rulemaking, it also will increase the

use of clean energy and will encourage EE. These

changes in the electricity generation system, which

are already occurring but may be accelerated by this

program, are expected to have other positive benefits

for communities. The electricity sector is, and will

continue to be, investing more in RE and EE. The

construction of renewable generation and the

implementation of EE programs such as residential

weatherization will bring investment and employment

opportunities to the communities where they take

place. We recognize that certain communities whose

economies may be affected by changes in the utility

and related sectors may be particularly impacted by

the final rule. The EPA encourages states to make an

effort to engage with these communities, including

workers and their representatives in these sectors,

including EE. It is important to ensure that all

communities share in the benefits of this program.

And while we estimate that its benefits will greatly

exceed its costs (as noted in the RIA for this

rulemaking), it is also important to ensure that to the

extent there are increases in electricity costs, that

those do not fall disproportionately on those least able

to afford them.

The EPA has engaged with community groups

throughout this rulemaking, and we received many

comments on the issues outlined above from

community

groups,

environmental

justice

organizations, faith-based organizations, public

1447

health organizations, and others. 1014 This input has

informed this final rulemaking and prompted the EPA

to consider other steps that the agency can take in the

short and long term to assist states and stakeholders

to consider environmental justice and impacts to

communities

in

plan

development

and

implementation.

It has also prompted us to work with our federal

partners to make sure that states and communities

have information on federal resources available to

assist communities. We describe these resources

below, as well as resources that the EPA will be

providing to assist communities in accessing EE/RE

and financial assistance programs. In our discussion

below we also provide models of programs that other

states are currently using to assist communities in

accessing available resources that states could use

when developing their plans.

Finally, and importantly, we recognize that

communities must be able to participate meaningfully

in state plan development. In this section, we discuss

the requirements in the final rule for states, as they

develop their plans, to provide opportunities for public

involvement, and resources available to states and

communities to enhance the success of the public

process.

A. Proximity Analysis

The EPA is committed to assisting states and

communities to develop plans that ensure there are no

disproportionate, adverse impacts on overburdened

1014 Detailed information on the outreach conducted as part of

this rulemaking is provided in section I of this preamble.

1448

communities. To provide information fundamental to

beginning that process, the EPA has conducted a

proximity analysis for this final rulemaking that

summarizes demographic data on the communities

located near power plants.1015 The EPA understands

that, in order to prevent disproportionately, high and

adverse human health or environmental effects on

these communities, both states and communities must

have information on the communities living near

facilities, including demographic data, and that

accessing and using census data files requires

expertise that some community groups may lack.

Therefore, the EPA used census data from the

American Community Survey (ACS) 2008–2012 to

conduct a proximity analysis that can be used by

states and communities as they develop state plans

and as they later assess the final plans’ impacts. The

analysis and its results are presented in the EJ

Screening Report for the Clean Power Plan, which is

located in the docket for this rulemaking at EPA-HQOAR-2013-0602.

The

proximity

analysis

provides

detailed

demographic information on the communities located

within a 3-mile radius of each affected power plant in

the U.S. Included in the analysis is the breakdown by

percentage of community characteristics such as

income and minority status. The analysis shows a

higher percentage of communities of color and lowincome communities living near power plants than

national averages. It is important to note that the

impacts of power plant emissions are not limited to a

1015 The

proximity analysis was conducted using the EPA’s

environmental justice mapping and screening tool, EJSCREEN.

1449

3-mile radius and the impacts of both potential

increases and decreases in power plant emissions can

be felt many miles away. Still, being aware of the

characteristics of communities closest to power plants

is a starting point in understanding how changes in

the plant’s air emissions may affect the air quality

experienced by some of those already experiencing

environmental burdens.

Although overall there is a higher fraction of

communities of color and low-income populations

living near power plants than national averages, there

are differences between rural and urban power plants.

There are many rural power plants that are located

near small communities with high percentages of lowincome populations and lower percentages of

communities of color.

In urban areas, nearby

communities tend to be both low-income communities

and communities of color. In light of this difference

between rural and urban communities proximate to

power plants and in order to adequately capture both

the low-income and minority aspects central to

environmental justice considerations, we use the

terms “vulnerable” or “overburdened” when referring

to these communities. Our intent is for these terms to

be understood in an expansive sense, in order to

capture the full scope of communities, including

indigenous communities most often located in rural

areas, that are central to our environmental justice

and community considerations.

As stated in the Executive Order 12898 discussion

located in section XII.J of this preamble, the EPA

believes that all communities will benefit from this

final rulemaking because this action directly

addresses the impacts of climate change by limiting

1450

GHG emissions through the establishment of CO2

emission guidelines for existing affected fossil fuelfired power plants. The EPA also believes that the

information provided in the proximity analysis will

promote

engagement

between

vulnerable

communities and their states and will be useful for

states as they begin developing their plans. In

addition to providing the proximity analysis in the

docket of this rulemaking, the EPA will disseminate

the proximity analysis to states and will make it

publicly available on its Clean Power Plan (CPP)

Community Portal. Furthermore, the EPA has also

created an interactive mapping tool that illustrates

where power plants are located and provides

information on a state level. This tool is available at:

http://cleanpowerplanmaps.epa.gov/CleanPowerPla

n/.

Additionally, the EPA encourages states to conduct

their own analyses of community considerations when

developing their plans.

Each state is uniquely

knowledgeable about its own communities and wellpositioned to consider the possible impacts of plans on

vulnerable communities within its state. Conducting

state-specific analyses would not only help states

assess possible impacts of plan options, but it would

also enhance a state’s understanding of the means to

engage these communities that would most effectively

reach them and lead to valuable exchanges of

information and concerns. A state analysis, together

with the proximity analysis conducted by the EPA,

would provide a solid foundation for engagement

between a state and its communities.

Such state-specific analyses need not be exhaustive.

An examination of the options a state is considering

1451

for its plan, and any projections of likely resulting

increases in power plant emissions affecting lowincome populations, communities of color populations,

or indigenous communities, would be informative for

communities. The analyses could include available air

quality monitoring data and information from air

quality models, and, if available, take into account

information about local health vulnerabilities such as

asthma rates or access to healthcare. Alternatively, a

simple analysis may consider expected EGU

utilization in geographic proximity to overburdened

communities. The EPA will provide states with

information on its publicly available environmental

justice screening and mapping tool, EJ SCREEN,

which they may use in conducting a state-specific

analysis. The EPA will also provide states with

resources containing examples of analyses that other

states have conducted to examine the impacts of their

programs on overburdened communities. Additionally,

the EPA encourages states to submit a copy of their

analysis if they choose to conduct one, with their

initial and final plan submittals.

B. Community

Development

Engagement

in

State

Plan

In sections VIII.D–E of this preamble, the EPA

explains that states need to engage meaningfully with

communities and other stakeholders during the initial

and final plan submittal processes.

Meaningful

engagement includes outreach to vulnerable

communities, sharing information and soliciting input

on state plan development and on any accompanying

assessments such as those described above, and

selecting methods for engagement to support

communities’ involvement at critical junctures in plan

1452

formulation and implementation. This engagement

also includes providing the public the opportunity to

comment on the state’s initial submittal and

responding to significant comments received,

including comments from vulnerable communities, as

well as conducting a public hearing and responding to

comments before a final state plan is submitted.

Additionally, the EPA expects that states will conduct

outreach meetings, which could include public

hearings or listening sessions, before the initial

submittal is made. The EPA also encourages states to

provide background information about their proposed

final state plan or their initial state plan in the

appropriate languages in advance of their public

hearing and at their public hearing. The EPA

recommends that states provide translators and other

resources at their public hearings, to ensure that

members of the public can provide oral feedback.

In the initial submittal, the final rule requires that

states provide information to the agency about the

community engagement they have undertaken and

the means by which they intend to involve vulnerable

communities and other stakeholders as they develop

their final plan. Furthermore, as noted in section

VIII.E of this preamble, in determining if states are

eligible for a 2-year extension for submission of final

plans, the rule requires that states demonstrate how

they

are

meaningfully

engaging

vulnerable

communities and other interested stakeholders as

part of their public participation process. The EPA

consulted its May 2015, Guidance on Considering

Environmental Justice During the Development of

Regulatory Actions, when crafting this rulemaking

and recommends that states consult it to assist them

1453

in

engaging

meaningfully

with

vulnerable

communities. 1016 Additionally, states in their initial

submittal and 2017 update must show how they

identified the communities with whom they are

engaging as they develop their plans. Some suggested

actions that states could take to engage actively with

the public, including conducting meaningful

engagement with vulnerable communities, are

outlined in section VIII.E of this preamble.

Additionally, as outlined in section VIII.D, the final

plan submitted by states must include an overview of

the public hearing(s) conducted and information on

how the state ensured that the hearing(s) were

accessible to stakeholders including vulnerable

communities.

The EPA is committed to supporting states in

effectively engaging with communities as they develop

and implement their plans. The EPA will provide

training and other resources throughout the

implementation process that will assist states and

communities in understanding plan requirements and

options for plan development. These trainings will be

a continuation of those that the EPA has already

conducted with communities and states both pre- and

post-proposal. The EPA will reach out to a wide

variety of community stakeholders, including groups

representing environmental justice communities,

faith-based organizations, academic organizations

working with vulnerable and overburdened

1016 Guidance on Considering Environmental Justice During

the Development of Regulatory Actions. http://epa.gov/

environmentaljustice/resources/policy/considering-ej-in-rule

making-guide-final.pdf. May 2015.

1454

communities, affordable housing advocates, public

health professionals, public health organizations, and

other community stakeholders.

C. Providing Communities With Access to Additional

Resources

In addition to providing resources to states, the EPA

encourages states to be aware of existing efforts

undertaken by other states aimed at providing lowincome communities access to financial and technical

assistance programs for EE and RE, and to consider

similar approaches that may make sense for their own

states.

The EPA encourages states to consider

targeting economic development resources to

communities that are likely to be negatively affected

by ongoing changes in the utility and related sectors

in support of efforts to diversify their economies,

attract new sources of investment, and create new jobs.

One example of a program targeted at low-income

communities is the Maryland EmPOWER Low Income

Energy Efficiency Program (LIEEP).1017 The LIEEP

program administered by the Maryland Department

of Housing and Community Development (DHCD)

helps low-income households through free installation

of energy conservation materials (i.e., installation, hot

water system improvements, lighting retrofits,

furnace cleaning, tuning and safety repairs,

refrigerator retrofits, etc.). 1018 Funding for this

program is provided by EmPOWER Maryland

partners: Baltimore Gas and Electric, Southern

EmPOWER Maryland Low Income Energy Efficiency

Programs

(LIEEP).

http://www.mdhousing.org/Website/

Programs/lieep/Default.aspx.

1017

1018 Ibid.

1455

Maryland Electric Cooperative, Delmarva Power,

Allegheny Energy and Pepco. 1019 This program is

available to both homeowners and renters. 1020

Additionally, the Maryland Department of Housing

provides low-income families with home heating bill

assistance and furnace repairs and replacements

through the Maryland Energy Assistance Program

(MEAP). 1021 Maryland’s Electric Universal Service

Program (EUSP) helps low-income electric customers

with their electric bills.1022

Another example of a program is EmPower New

York, which provides no-cost energy solutions to lowincome populations. 1023 Currently there are about

100,000 people who are receiving assistance. Both

homeowners and renters are eligible to receive

assistance under this program.

The types of

assistance available include EE upgrades (plugging

leaks, adding insulation, replacing inefficient

refrigerators and freezers and new energy-efficient

lighting). Other states, like the State of Colorado’s

Energy Outreach Colorado program, offer similar

resources for low-income populations.1024

In 2013, the New York State Energy and Research

Development Authority (NYSERDA) was able to

1019 Ibid.

1020 Ibid.

1021 Energy Assistance. http://www.dhr.state.md.us/blog/

?page_id=4326.

1022 Ibid.

EmPower New York. http://www.nyserda.ny.gov/AllPrograms/Programs/EmPower-New-York.

1023

Energy Outreach

reach.org/about.

1024

Colorado.

http://www.energyout

1456

secure a triple-A rated financial guarantee from the

state’s Clean Water State Revolving Fund (SRF) for a

$24 million bond issue. Proceeds funded residential

EE loans that were available to all utility customers,

including low-income households. SRF eligibility was

based on the beneficial impact of EE investment in

reducing atmospheric deposition on impaired water

bodies consistent with Section 319 of the Clean Water

Act.

As discussed below, there are also many federal

programs that can help low-income populations access

the benefits of RE, EE, and the economic benefits of a

cleaner energy economy.

In the coming months, the EPA will continue to

provide information and resources for communities

and states on existing federal, state, local, and other

financial assistance programs to encourage EE/RE

opportunities that are already available to

communities. For example the EPA will provide a

catalog of current or recent state and local programs

that have successfully helped communities adopt

EE/RE measures. The goal of these resources is to

help vulnerable communities gain the benefits of this

rulemaking by encouraging that states use these types

of tools in their state plans. The use of these RE/EE

tools can also help low-income households reduce their

electricity consumption and bills.

The EPA recognizes the potential impacts that this

rulemaking could have on jobs in communities.

Therefore, in section VIII.G of this preamble, the EPA

has outlined that states, in designing their state plans,

should consider the effects of their plans on

employment and overall economic development to

1457

realize the opportunities for economic growth and jobs

that the plans offer. To the extent possible, states

should try to assure that communities that may be

expected to experience job losses can also take

advantage of the opportunities for job growth or

otherwise transition to healthy, sustainable economic

growth (e.g., with regard to delivering EE measures

and installing rooftop solar panels). Additionally, as

part of the resources that we will be providing to states

and low-income communities, the EPA will provide

information on the Administration’s Partnerships for

Opportunity

and

Workforce

and

Economic

Revitalization (POWER) Initiative and other

programs

that

specifically

target

economic

development assistance to communities affected by

changes in the coal industry and the utility power

sector.1025

D. Federal Programs and Resources Available to

Communities

Federal agencies have a history of bringing EE and

RE to low-income communities. Earlier this summer,

the Administration announced a new initiative to

scale up access to solar energy and cut energy bills for

all Americans, in particular low- and moderate-income

communities, and to create a more inclusive solar

workforce. As part of this new initiative, the U.S.

Department of Energy (DOE), the U.S. Department of

Housing and Urban Development (HUD), U.S.

Department of Agriculture (USDA), and the EPA

launched a National Community Solar Partnership to

unlock access to solar energy for the nearly 50 percent

of households and businesses that are renters or do not

1025 http://www.eda.gov/power.

1458

have adequate roof space to install solar systems, with

a focus on low- and moderate-income communities.

The Administration also set a goal to install 300

megawatts (MW) of RE in federally subsidized housing

by 2020 and plants to provide technical assistance to

make it easier to install solar energy on affordable

housing, including clarifying how to use federal

funding for EE and RE. To continue enhancing

employment opportunities in the solar industry for all

Americans, AmeriCorps is providing funding to deploy

solar energy and create jobs in underserved

communities, and DOE is working to expand solar

energy education and opportunities for job training.

These recent announcements build on the many

existing federal programs and resources available to

improve EE and accelerate the deployment of RE in

vulnerable communities. Some examples of these

resources include:

the Department of Energy’s

Weatherization Assistance Program, Health and

Human Service’s Low Income Home Energy

Assistance Program, the Department of Agriculture’s

Energy Efficiency and Conservation Loan Program,

High Cost Energy Grant Program, and the Rural

Housing Service’s Multi-Family Housing Program.

HUD supports EE improvements and the

deployment of RE on affordable housing through its

Energy Efficient Mortgage Program, Multifamily

Property Assessed Clean Energy Pilot with the State

of California, PowerSaver Program, and the use of

Section 108 Community Development Block Grants.

The Department of Treasury provides several tax

credits to support RE development and EE in lowincome communities, including the New Markets Tax

Credit Program and the Low-Income Housing Tax

1459

Credit. The EPA’s RE-Powering America’s Land

Initiative promotes the reuse of potentially

contaminated lands, landfills and mine sites—many of

which are in low-income communities—for RE

through a combination of tailored redevelopment tools

for communities and developers, as well as sitespecific technical support. The EPA’s Green Power

Partnership is increasing community use of renewable

electricity across the country and in low-income

communities. The EPA partners with EE programs

throughout the country that leverage ENERGY STAR

to deliver broad consumer energy-saving benefits, of

particular value to low-income households who can

least afford high energy bills. ENERGY STAR also

works with houses of worship to reduce energy costs—

savings that can then be repurposed to their

community mission, including programs and

assistance to residents in low-income communities.

The EPA will be working with these federal partners

and others to ensure that states and vulnerable

communities have access to information on these

programs and their resources.

The federal government also has a number of

programs to expand employment opportunities in the

energy sector, including for underserved populations.

Examples of these include HUD, DOE, and the

Department of Education’s “STEM, Energy, and

Economic Development” program; DOE’s Diversity in

Science and Technology Advances National Clean

Energy in Solar (DISTANCE-Solar) Program; Grid

Engineering for Accelerated Renewable Energy

Deployment (GEARED); the Department of Labor’s

Trade Adjustment Assistance Community College and

Career Training (TAACCCT), Apprenticeship USA

1460

Advancing Apprenticeships in the Energy Field, Job

Corps Green Training and Greening of Centers, and

YouthBuild; and the EPA’s Environmental Workforce

Development and Job Training (EWDJT) program.

E. Multi-Pollutant Planning and Co-Pollutants

As outlined in the final Clean Power Plan, states

and sources have continued obligations to meet all

other CAA requirements addressing conventional

pollutants. Because the CAA envisions control of

these other pollutants as a continuous process

(through provisions such as periodic review of the

NAAQS and residual risk requirements under the

MACT program), the EPA believes that the Clean

Power Plan provides an opportunity for states to

consider strategies for meeting future CAA planning

obligations as they develop their plans under this

rulemaking.

Multi-pollutant strategies that

incorporate criteria pollutant reductions over the

planning horizons specific to particular states, jointly

with strategies for reducing CO2 emissions from

affected EGUs needed to meet Clean Power Plan

requirements over the time horizon of this rule, may

accomplish greater environmental results with lower

long-term costs. Such strategies may also provide

opportunities for states, communities, and affected

facilities to consider the most effective means of

meeting these obligations while limiting or

eliminating localized emission increases that would

otherwise

affect

overburdened

communities.

Furthermore, this type of multi-pollutant approach

has been suggested by states and regulated sources in

past rulemakings as a tool to determine the best

system of emission reductions. The EPA recommends

that states consider such strategies in consultation

1461

with their communities, affected facilities, and other

stakeholders.

Air quality in a given area is affected by emissions

from nearby sources and may be influenced by

emissions that travel hundreds of miles and mix with

emissions from other sources. 1026 In the Cross-State

Air Pollution Rule the EPA used its authority to

reduce emissions that significantly contribute to

downwind exposures. The RIA for the final CrossState Air Pollution Rule anticipates substantial health

benefits for the population across a wide region.

Similarly, the EPA believes that, like the Cross-State

Air Pollution Rule, this rulemaking will result in

significant health benefits because it will reduce copollutant emissions of SO2 and NOX on a regional and

national basis. 1027 Thus, localized increases in NOX

emissions may well be more than offset by

NOX decreases elsewhere in the region that produce a

net improvement in ozone and particulate

concentrations across the area.

Another effect of the final CO2 emission guidelines

for affected existing fossil fuel-fired EGUs may be

increased utilization of other, unmodified EGUs—in

particular, high efficiency gas-fired EGUs—with

relatively low GHG emissions per unit of electrical

output. These plants may operate more hours during

the year and could emit pollutants, including

pollutants whose environmental effects would be

localized and regional rather than global as is the case

with GHG emissions. Changes in utilization already

1026 76 FR 48348.

1027 76 FR 48347.

1462

occur in response to energy demands and evolving

energy sources, but the final CO2 emission guidelines

for affected existing fossil fuel-fired EGUs can be

expected to cause more such changes. Increased

utilization of solid fossil fuel-fired units generally

would not increase peak concentrations of PM2.5, NOX,

or ozone around such EGUs to levels higher than those

that are already occurring because peak hourly or

daily emissions generally would not change; however,

increased utilization may make periods of relatively

high concentrations more frequent. It should be noted

that the gas-fired sources likely to be dispatched more

frequently have very low emissions of primary PM,

SO2, and HAP per unit of electrical output and that

they must continue to comply with other CAA

requirements that directly address the conventional

pollutants, including federal emission standards, rules

included in SIPs, and conditions in Title V operating

permits, in addition to the guidelines in this final

rulemaking. Therefore, local (or regional) air quality

for these pollutants is not likely to be significantly

affected.

For natural gas-fired EGUs, the EPA found that

regulation of HAP emissions “is not appropriate or

necessary because the impacts due to HAP emissions

from such units are negligible based on the results of

the study documented in the utility RTC.” 1028 Because

gas-fired EGUs emit essentially no mercury, increased

utilization will not increase methyl mercury

concentrations in water bodies near these affected

EGUs. In studies done by DOE/NETL comparing cost

and performance of coal- and NGCC-fired generation,

1028 65 FR 79831.

1463

they assumed SO2, NOX, PM (and Hg) emissions to be

“negligible.” Their studies predict NOX emissions from

a NGCC unit to be approximately 10 times lower than

a subcritical or supercritical coal-fired boiler.1029 Many,

although not all, NGCC units are also very well

controlled for emissions of NOX through the

application of after combustion controls such as

selective catalytic reduction.

F. Assessing Impacts of State Plan Implementation

It is important to the EPA that the implementation

of state plans be assessed in order to identify whether

they cause any adverse impacts on communities

already

overburdened

by

disproportionate

environmental harms and risks. The EPA will conduct

its own assessment during the implementation phase

of this rulemaking to determine whether the

implementation of state plans developed pursuant to

this rulemaking and other air quality rules are, in fact,

reducing emissions and improving air quality in all

areas or whether there are localized air quality

impacts that need to be addressed under other CAA

authorities. Furthermore, the EPA recommends that

states conduct evaluations of their own to determine

the impacts of their plans on overburdened

communities. An example of one such approach to

assessing a state plan for reducing GHGs is the

California Air Resources Board’s (CARB), First

Update on the Climate Change Scoping Plan:

Building on the Framework Pursuant to AB32: The

1029 ‘‘Cost and Performance Baseline for Fossil Energy Plants

Volume 1: Bituminous Coal and Natural Gas to Electricity’’ Rev

2a, September 2013 Revision 2, November 2010 DOE/NETL2010/1397.

1464

California Global Warming Solutions Act of 2006,

which outlines ongoing evaluations that it will conduct

to determine the impacts of its programs (throughout

the implementation stages) on overburdened

communities.1030 CARB’s Adaptive Management Plan

for the Cap-and-Trade Program is one particular

evaluation, which is intended to assess any localized

emissions increases resulting from the program so

that the state can appropriately respond.1031 The EPA

recommends that states consider CARB’s approaches

and other programs as models for conducting ongoing

assessments of the impacts of their state plans on

overburdened communities. The EPA will provide

training for states and communities on resources that

they can use to assess options for plan development

and implementation that appropriately consider

localized impacts, especially effects of co-pollutants, as

well as training on how to develop and carry out these

evaluations.

This training will include guidance in accessing the

publicly available information that sources and states

currently report that can help with ongoing

assessments of state plan impacts. For example, unitspecific emissions data and air quality monitoring

data are readily available. This information, together

with the assessment that the EPA will conduct in the

1030 First Update on the Climate Change Scoping Plan:

Building on the Framework Pursuant to AB32: The California

Global Warming Solutions Act of 2006. http://www.arb.ca.gov/

cc/scopingplan/2013_update/first_update_climate_change_scop

ing_plan.pdf. May 2014.

Adaptive Management Plan for the Cap-and-Trade

Regulation. http://www.arb.ca.gov/cc/capandtrade/adaptive_

management/plan.pdf. October 2011.

1031

1465

implementation phase of this rulemaking and other

analyses that states may develop, will enable states

and communities to monitor any disproportionate

emissions that may result in adverse impacts and to

address them.

G. EPA Continued Engagement

The EPA is committed to helping ensure that this

action will not have disproportionate adverse human

health or environmental effects on vulnerable

communities. Throughout the implementation phase

of this rulemaking, the agency will continue to provide

trainings and resources to assist communities and

states as they engage with one another. Additionally,

we will provide states with recommendations on best

practices for engaging with vulnerable communities.

The EPA, through its outreach efforts during

implementation, will continue to solicit feedback from

communities and states on topics for which they would

like additional trainings and resources.

The EPA will also provide states with resources

containing examples of analyses that other states have

conducted to examine the impacts of their programs

on vulnerable communities, as well as information on

its publicly available environmental justice screening

and mapping tool, EJ SCREEN.

States are

encouraged to use this preliminary information as well

as other available information to conduct their own

analyses. As described above, the EPA will assess the

impacts of this rulemaking during its implementation.

The EPA will house this assessment, along with the

proximity analysis and other information generated

throughout the implementation process, on its Clean

Power Plan (CPP) Community Portal that will be

1466

linked

to

this

rulemaking’s

Web

site

(www.epa.gov/cleanpowerplan). In addition, the EPA

has expanded its set of resources that are being

developed to help states and communities understand

the breadth of policy options and programs that have

successfully brought EE/RE to overburdened

communities. The EPA is committed to continuing its

engagement with states and communities from the

beginning of plan development through plan

implementation.

A more detailed discussion concerning the

application of Executive Order 12898 in this

rulemaking can be found in section XI.J of this

preamble. A summary of the EPA’s interactions with

communities is in the EJ Screening Report for the

Clean Power Plan, available in the docket of this

rulemaking. Furthermore, the EPA’s responses to

public comments, including comments received from

communities, are provided in the response to

comments documents located in the docket for this

rulemaking.

In summary, the EPA in this final rulemaking has

designed an integrative approach that helps to ensure

that

vulnerable

communities

are

not

disproportionately impacted by this rulemaking. The

proximity analysis that the agency has conducted for

this rulemaking is a central component of this

approach. Not only is the proximity analysis a useful

tool to help identify overburdened communities that

may be impacted by this rulemaking, states can use

this tool as they engage with communities in the

development of their plans, consider a multi-pollutant

approach, help low-income communities access EE/RE

and financial assistance programs and assess the

1467

impacts of their state plans. Additionally, in order to

continue to ensure that vulnerable communities are

not disproportionately impacted by this rulemaking,

the EPA will also be conducting its own assessment

during the implementation phase. Furthermore, the

EPA will continue to engage with communities and

states throughout the implementation phase of this

rulemaking to help ensure that vulnerable

communities are not disproportionately impacted.

X. Interactions With Other EPA Programs and

Rules

A. Implications for the New Source Review Program

The new source review (NSR) program is a

preconstruction permitting program that requires

major stationary sources of air pollution to obtain

permits prior to beginning construction.

The

requirements of the NSR program apply both to new

construction and to modifications of existing major

sources. Generally, a source triggers these permitting

requirements as a result of a modification when it

undertakes a physical or operational change that

results in a significant emission increase and a net

emissions increase. NSR regulations define what

constitutes a significant net emissions increase, and

the concept is pollutant-specific. As a result of the

decision in Utility Air Regulatory Group (UARG) v.

Environmental Protection Agency (EPA), 134 S. Ct.

2427 (2014), a modification that increases only GHG

emissions above the applicable level will not trigger

the requirement to obtain a PSD permit. Under

existing EPA regulations, a modifying major

stationary source would trigger PSD permitting

requirements for GHGs if it undergoes a change or

1468

change in the method of operation (modification) that

results in a significant increase in the emissions of a

pollutant other than GHGs and results in a GHG

emissions increase of 75,000 tons per year CO2 e as

well as a GHG emissions increase on a mass basis.

Once it has been determined that a change triggers the

requirements of the NSR program, the source must

obtain a permit prior to making the change. The

pollutant(s) at issue and the air quality designation of

the area where the facility is located or proposed to be

built determine the specific permitting requirements.

As part of its CAA section 111(d) plan, a state may

impose requirements that require an affected EGU to

undertake a physical or operational change to improve

the unit’s efficiency that results in an increase in the

unit’s dispatch and an increase in the unit’s annual

emissions. If the emissions increase associated with

the unit’s changes exceeds the thresholds in the NSR

regulations for one or more regulated NSR pollutants,

including the netting analysis, the changes would

trigger NSR.

While there may be instances in which an NSR

permit would be required, we expect those situations

to be few. As previously discussed in this preamble,

states have considerable flexibility in selecting varied

measures as they develop their plans to meet the goals

of the emission guidelines. One of these flexibilities is

the ability of the state to establish emission standards

in their CAA section 111(d) plans in such a way so that

their affected sources, in complying with those

standards, in fact would not have emissions increases

that trigger NSR. To achieve this, the state would

need to conduct an analysis consistent with the NSR

regulatory

requirements

that

supports

its

1469

determination that as long as affected sources comply

with the emission standards in their CAA section

111(d) plan, the source’s emissions would not increase

in a way that trigger NSR requirements.

For example, a state could decide to use demandside measures or increase reliance on RE as a way of

reducing the future emissions of an affected source

initially predicted (without such alterations) to

increase its emissions as a result of a CAA section

111(d) plan requirement. In other words, a state

plan’s incorporation of expanded use of cleaner

generation or demand-side measures could yield the

result that units that would otherwise be projected to

trigger NSR through a physical change that might

result in increased dispatch would not, in fact,

increase their emissions, due to reduced demand for

their operation. The state could also, as part of its

CAA section 111(d) plan, develop conditions for a

source expected to trigger NSR that would limit the

unit’s ability to move up in the dispatch enough to

result in a significant net emissions increase that

would trigger NSR (effectively establishing a synthetic

minor limit).1032

1032 Certain stationary sources that emit or have the potential

to emit a pollutant at a level that is equal to or greater than

specified thresholds are subject to major source requirements.

See, e.g., CAA sections 165(a)(1), 169(1), 501(2), 502(a). A

synthetic minor limitation is a legally and practicably enforceable

restriction that has the effect of limiting emissions below the

relevant level and that a source voluntarily obtains to avoid

major stationary source requirements, such as the PSD or Title

V permitting programs. See, e.g., 40 CFR 52.21(b)(4), 51.166(b)(4),

70.2 (definition of ‘‘potential to emit’’).

1470

In addition, in this final rule, we have also adjusted

the date of the period for mandatory reductions to

2022, instead of 2020, and provided states with

flexibility with respect to the glide path. This obviates

concerns that there is insufficient time for sources that

may need permits to obtain them and allows

additional planning time for these changes to be

undertaken in a manner that does not trigger PSD. As

a result of such flexibility and anticipated state

involvement, we expect that a limited number of

affected sources would trigger NSR when states

implement their plans.

B. Implications for the Title V Program

In the preamble to the June 18, 2014 proposal, the

EPA discussed the issue of excessive title V fees

resulting inadvertently as a consequence of the

promulgation of the first section 111 standard to

regulate GHGs. Specifically, the EPA explained that

when the first section 111 standard is promulgated for

GHGs, if we do not revise 40 CFR parts 70 and 71 (the

operating permit rule), then certain permitting

authorities would be required to charge emissionsbased fees for GHGs, resulting in fees that would be

far in excess of what is required to cover the

reasonable costs of the permitting programs. To avoid

this situation, the EPA proposed as part of the reproposed carbon pollution standards for newly

constructed fossil fuel-fired power plants (70 FR 1429–

1519; January 8, 2014) to exempt GHGs from the list

of air pollutants that are subject to fee calculation

requirements under the operating permit rules. Also,

we proposed several options to impose a smaller fee

adjustment for GHGs that would be reasonable and

1471

designed to recover the costs of addressing GHGs in

permitting without being excessive.

In a separate action in this issue of the Federal

Register, the EPA is finalizing changes to the

operating permits rules to address the title V fee issue.

In particular, we are taking final action to exempt

GHGs from emissions-based fee calculation

requirements under the operating permit rules. In

addition, we are also finalizing a modest GHG fee

adjustment to recover the costs of addressing GHGs in

permitting. The GHG adjustments we are finalizing

are based on accounting for the number of permit

actions that require a GHG assessment in a given

period, rather than accounting for emissions levels of

GHGs. Finally, the EPA is also finalizing the addition

of text within 40 CFR part 60, subpart TTTT, to clarify

that the fee pollutant for operating permit purposes is

GHG (as defined in 40 CFR 70.2 and 71.2) to add

clarity to our regulations and to avoid the potential

need for possible future rulemakings to adjust the title

V fee regulations if any constituent of GHG, other than

CO2, becomes subject to regulation under CAA section

111 for the first time.

This title V fee issue is a one-time occurrence

resulting from the promulgation of the first CAA

section 111 standard to regulate GHGs (the standards

of performance for new, modified, and reconstructed

EGUs, also promulgated in this issue of the Federal

Register). The title V fee issue is not an issue for any

other subsequent CAA section 111 regulations, such as

this section 111(d) standard; thus, there is no need to

address any title V fee issues in this final rule as part

of this action.

1472

In the proposal, the EPA discussed that the section

111 rules would have no effect on the applicability

thresholds for GHG under the operating permit rules.

After the proposal for this rulemaking was published,

the U.S. Supreme Court issued its opinion in UARG v.

EPA, 134 S.Ct. 2427 (June 23, 2014), and in

accordance with that decision, the D.C. Circuit

subsequently issued an amended judgment in

Coalition for Responsible Regulation, Inc. v.

Environmental Protection Agency, Nos. 09-1322, 10073, 10-1092 and 10-1167 (D.C. Cir., April 10, 2015).

Those decisions support the same overall conclusion,

as the EPA discussed in the proposal, with respect to

the effect of this final section 111 rule on the

applicability thresholds for GHGs under the operating

permits rules, though for different reasons.

With respect to title V, the Supreme Court said that

EPA may not treat GHGs as an air pollutant for

purposes of determining whether a source is a major

source required to obtain a title V operating permit.

In accordance with that decision, the D.C. Circuit’s

amended judgment vacated the title V regulations

under review in that case to the extent that they

require a stationary source to obtain a title V permit

solely because the source emits or has the potential to

emit GHGs above the applicable major source

thresholds. The D.C. Circuit also directed the EPA to

consider whether any further revisions to its

regulations are appropriate in light of UARG v. EPA,

and, if so, to undertake to make such revisions. These

court decisions make clear that promulgation of CAA

section 111 requirements for GHGs will not result in

EPA imposing a requirement that stationary sources

obtain a title V permit solely because such sources

1473

emit or have the potential to emit GHGs above the

applicable major source thresholds.

C. Interactions With Other EPA Rules

Fossil fuel-fired EGUs are, or potentially will be,

impacted by several other recently finalized or

proposed EPA rules. 1033 The EPA recognizes the

importance of assuring that each of the rules described

below can achieve its intended environmental

objectives in a commonsense, cost-effective manner,

consistent with underlying statutory requirements,

and while assuring a reliable power system. Executive

Order 13563, “Improving Regulation and Regulatory

Review,” issued on January 18, 2011, states that “[i]n

developing regulatory actions and identifying

appropriate approaches, each agency shall attempt to

promote . . . coordination, simplification, and

harmonization. Each agency shall also seek to identify,

as appropriate, means to achieve regulatory goals that

are designed to promote innovation.” Within the EPA,

we are paying careful attention to the interrelatedness

and potential impacts on the industry, reliability and

cost that these various rulemakings can have.

1. Mercury and Air Toxics Standards (MATS)

On February 16, 2012, the EPA issued the MATS

rule (77 FR 9304) to reduce emissions of toxic air

pollutants from new and existing coal- and oil-fired

EGUs. The MATS rule will reduce emissions of heavy

metals, including mercury, arsenic, chromium, and

nickel; and acid gases, including hydrochloric acid and

We discuss other rulemakings solely for background

purposes. The effort to coordinate rulemakings is not a defense to

a violation of the CAA. Sources cannot defer compliance with

existing requirements because of other upcoming regulations.

1033

1474

hydrofluoric acid. These toxic air pollutants, also

known as hazardous air pollutants or air toxics, are

known to cause, or suspected of causing, damage

nervous system damage, cancer, and other serious

health effects. The MATS rule will also reduce SO2

and fine particle pollution, which will reduce particle

concentrations in the air and prevent thousands of

premature deaths and tens of thousands of heart

attacks, bronchitis cases and asthma episodes.

New or reconstructed EGUs (i.e., sources that

commence construction or reconstruction after May 3,

2011) subject to the MATS rule are required to comply

by April 16, 2012 or upon startup, whichever is later.

Existing sources subject to the MATS rule were

required to begin meeting the rule’s requirements on

April 16, 2015. Controls that will achieve the MATS

performance standards are being installed on many

units. Certain units, especially those that operate

infrequently, may be considered not worth investing in

given today’s electricity market, and are closing. The

final MATS rule provided a foundation on which states

and other permitting authorities could rely in granting

an additional, fourth year for compliance provided for

by the CAA. States report that these fourth year

extensions are being granted. In addition, the EPA

issued an enforcement policy that provides a clear

pathway for reliability-critical units to receive an

administrative order that includes a compliance

schedule of up to an additional year, if it is needed to

ensure electricity reliability.

2. Cross-State Air Pollution Rule (CSAPR)

The CSAPR requires states to take action to

improve air quality by reducing SO2 and NOX

1475

emissions that cross state lines. These pollutants

react in the atmosphere to form fine particles and

ground-level ozone and are transported long distances,

making it difficult for other states to attain and

maintain the NAAQS. The first phase of CSAPR

became effective on January 1, 2015, for SO2 and

annual NOX, and May 1, 2015, for ozone season NOX.

The second phase will become effective on January 1,

2017, for SO2 and annual NOX, and May 1, 2017, for

Many of the power plants

ozone season NOX.

participating in CSAPR have taken actions to reduce

hazardous air pollutants for MATS compliance that

will also reduce SO2 and/or NOX. In this way these two

rules are complementary. Compliance with one helps

facilities comply with the other.

3. Requirements for Cooling Water Intake Structures

at Power Plants (316(b) Rule)

On May 19, 2014, the EPA issued a final rule under

section 316(b) of the Clean Water Act (CWA) (33 U.S.C.

1326(b)) (referred to hereinafter as the 316(b) rule.)

The rule was published on August 15, 2014 (79 FR

48300; August 15, 2014), and became effective October

14, 2014. The 316(b) rule establishes new standards

to reduce injury and death of fish and other aquatic

life caused by cooling water intake structures at

existing power plants and manufacturing facilities.1034

The 316(b) rule subjects existing power plants and

manufacturing facilities that withdraw in excess of 2

1034 CWA section 316(b) provides that standards applicable to

point sources under sections 301 and 306 of the Act must require

that the location, design, construction and capacity of cooling

water intake structures reflect the best technology available for

minimizing adverse environmental impacts.

1476

million gallons per day) of cooling water, and use at

least 25 percent of that water for cooling purposes, to

a national standard designed to reduce the number of

fish destroyed through impingement and a national

standard for establishing entrainment reduction

requirements. All facilities subject to the rule must

submit information on their operations for use by the

permit authority in determining 316(b) permit

conditions. Certain plants that withdraw very large

volumes of water will also be required to conduct

additional studies for use by the permit authority in

determining the site-specific entrainment reduction

measures for such facilities.

The rule provides

significant flexibility for compliance with the

impingement standards and, as a result, is not

projected to impose a substantial cost burden on

affected facilities. With respect to entrainment, the

rule calls upon the permitting authority to establish

appropriate entrainment reduction measures, taking

into account, among other factors, remaining useful

plant life and quantified and qualitative social

benefits and cost. The permit writer may also consider

impacts on the reliability of energy delivery within the

facility’s immediate area. Existing sources subject to

the 316(b) rule are required to comply with the

impingement requirements as soon as practicable

after the entrainment requirements are determined.

They must comply with applicable site-specific

entrainment reduction controls based on the schedule

of requirements established by the permitting

authority.

1477

4. Disposal of Coal Combustion Residuals From

Electric Utilities (CCR Rule)

On December 19, 2014, the EPA issued the final rule

for the disposal of coal combustion residuals from

electric utilities. The rule provides a comprehensive

set of requirements for the safe disposal of coal

combustion residuals (CCRs), commonly known as

coal ash, from coal-fired power plants. The CCR rule

is the culmination of extensive study on the effects of

coal ash on the environment and public health. The

CCR rule establishes technical requirements for

existing and new CCR landfills and surface

impoundments under the Resource Conservation and

Recovery Act, Subtitle D (42 U.S.C. 6941–6949a), the

nation’s primary law for regulating solid waste.

These regulations address the risks from coal ash

disposal—leaking of contaminants into ground water,

blowing of contaminants into the air as dust, and the

catastrophic failure of coal ash surface impoundments

by establishing requirements for where CCR landfills

and surface impoundments may be located, how they

must be designed, operated and monitored, when they

must be inspected, and how they must be closed and

cared for after closure. Additionally, the CCR rule sets

out recordkeeping and reporting requirements, as well

as the requirement for each facility to establish and

post specific information to a publicly-accessible Web

site. The final rule also supports the responsible

recycling of CCRs by distinguishing safe, beneficial

use from disposal.

1478

5. Steam Electric Effluent Limitation Guidelines and

Standards (SE ELG Rule)

The EPA is reviewing public comments and working

to finalize the proposed SE ELG rule which will impact

existing fossil fuel-fired EGUs. In 2013, the EPA

proposed the SE ELG rule (78 FR 34432; June 7, 2013)

to strengthen the controls on discharges from certain

steam electric power plants by revising technologybased effluent limitations guidelines and standards

for the steam electric power generating point source

category. The current regulations, which were last

updated in 1982, do not adequately address the toxic

pollutants discharged from the electric power industry,

nor have they kept pace with process changes that

have occurred over the last three decades. Existing

steam electric power plants currently contribute 50–

60 percent of all toxic pollutants discharged to surface

waters by all industrial categories regulated in the U.S.

under the CWA. Furthermore, power plant discharges

to surface waters are expected to increase as

pollutants are increasingly captured by air pollution

controls and transferred to wastewater discharges.

The proposed regulation, which includes new

requirements for both existing and new generating

units, would reduce impacts to human health and the

environment by reducing the amount of toxic metals

and other pollutants currently discharged to surface

waters from power plants. The EPA intends to take

final action on the proposed rule by September 30,

2015.

The EPA is endeavoring to enable EGUs to comply

with applicable obligations under other power sector

rules as efficiently as possible (e.g., by facilitating their

ability to coordinate planning and investment

1479

decisions with respect to those rules) and, where

possible, implement integrated compliance strategies.

For example, in the proposed SE ELG rule, the EPA

describes its thinking on how it might effectively

harmonize the potential requirements of that rule

with the requirements of the final CCR rule. Because

these two rules affect similar units and may be met

with similar compliance strategies, common-sense

implementation timeframes were established in the

CCR final rule so that utilities would not be required

to make major decisions about CCR units without first

understanding the implications that such decisions

would have for meeting the surface water protection

requirements of the final ELG rule. The EPA is taking

into account these new CCR requirements for coal ash

as it develops the final SE ELG rule. The EPA’s goal

in harmonizing the SE ELG and CCR rules is to

minimize the overall complexity of the two regulatory

structures and avoid creating unnecessary burden.

6. Other EPA Rules

In addition to the power sector rules discussed

above, the development of SIPs for criteria pollutants

(ozone, PM2.5, and SO2) and regional haze may also

have implications for existing fossil-fired EGUs.

Regarding ozone, the proposal included a discussion

of the June 6, 2013, proposed implementation rule for

the 2008 ozone National Ambient Air Quality

Standards (NAAQS), addressing the statutory

requirements for areas EPA has designated as

nonattainment for the 2008 ozone NAAQS. The final

implementation rule for the 2008 ozone NAAQS was

signed on February 13, 2015, and published on March

6, 2015, with an effective date of April 6, 2015. In

1480

general, the 2008 ozone NAAQS implementation rule

interprets applicable statutory requirements and

provides

flexibility

to

states

to

minimize

administrative burdens associated with developing

and implementing plans to meet and maintain the

NAAQS.

The rule establishes due dates for

attainment plans and clarifies attainment dates for

each ozone nonattainment area according to its

classification based on air quality thresholds, with

attainment dates starting in July 2015 through

July 2032 depending on an area’s classification.

On November 25, 2014, the EPA Administrator

signed the proposed rulemaking for the 2015 revisions

to the ozone NAAQS. The proposal was published in

the Federal Register on December 17, 2014 (79 FR

75234). The Administrator proposed to revise the

primary ozone standard to a level in the range of 0.065

to 0.070 ppm and took comment on lower levels

including 0.060 ppm and on retaining the current

standard of 0.075 ppm. Among other things, the ozone

NAAQS proposal also proposed to retain the current

indicator, averaging time, and form of the standard

and included a proposed secondary ozone NAAQS in

the 0.065 to 0.070 ppm range.

The proposal also outlined the key implementation

milestones requiring revised SIPs, with due dates

starting in October 2018 for infrastructure and

interstate transport SIPs, attainment plans due 2020–

21, and attainment dates of 2020–37. The EPA is

under a court order to finalize its review of the ozone

NAAQS by October 1, 2015.

Some commenters expressed concern with the

potential impact proposed revisions to the ozone

1481

NAAQS could have on state planning efforts and

affected entities’ ability to comply with any potentially

new requirements associated with a revised ozone

NAAQS and those related to the 111(d) emission

guidelines. In particular, commenters raised issues

with a potentially more stringent ozone standard and

the permitting and state planning implications this

may create. While there was no discussion of the

proposed revisions to the ozone NAAQS in the 111(d)

emission guidelines proposal, commenters expressed a

desire for the EPA to coordinate promulgation of the

final 111(d) emission guidelines (and any other

climate regulations) with the potential revision to the

ozone standard to provide certainty and flexibility for

states and affected sources.

While it is premature to speculate about the

outcome of the ozone NAAQS review and how a more

stringent ozone NAAQS may impact sources of ozone

precursor emissions, including EGUs, we believe the

planning and compliance timeframes that would

follow from a revised ozone NAAQS and the

timeframes we are finalizing today for submittal of the

CAA section 111(d) state plans will allow considerable

time for coordination by states in the development of

their respective plans, as needed. As stated in the

proposal, the EPA is prepared to work with states to

assist them in coordinating their efforts across these

planning processes.

Regarding PM2.5 NAAQS implementation, the

proposal stated that the EPA was developing a

proposed implementation rule to provide guidance to

states on the development of SIPs for the 2012 PM2.5

NAAQS. The proposed PM2.5 SIP requirements rule

was signed on March 10, 2015, and published on

1482

March 23, 2015 (80 FR 15340).

The proposal

addresses a number of requirements including

attainment plan due dates, attainment dates and

attainment date extension criteria for Moderate and

Serious nonattainment areas; determination criteria

for Reasonably Available Control Measures (RACM)

for Moderate areas and Best Available Control

Measures (BACM) for Serious areas; plans for

demonstrating reasonable further progress and for

meeting periodic quantitative milestones; and criteria

for reclassifying a Moderate nonattainment area to

Serious. The EPA is planning to finalize the PM2.5

implementation rule in early 2016.

There are currently only 9 areas designated

nonattainment for the 2012 PM2.5 NAAQS, with an

effective date of April 15, 2015. Since the attainment

plans for these areas must be completed and

submitted to the EPA in September 2016, we expect

that the four states with such areas should have

already decided on their approach to implementing the

2012 PM2.5 NAAQS when they begin to develop their

plans for implementing the 111(d) guidelines, and will

be able to coordinate the two.

Related to the SO2 NAAQS, and as stated in the

proposal, the SO2 NAAQS was revised in June 2010 to

protect public health from the short-term effects of

SO2 exposure. In July 2013, the EPA designated 29

areas in 16 states as nonattainment for the

SO2 NAAQS. The EPA based these nonattainment

designations on the most recent set of certified air

quality monitoring data as well as an assessment of

nearby emission sources and weather patterns that

contribute to the monitored levels. The date for

attainment plans for these areas to be completed and

1483

submitted to the EPA was April 2015. As such, we

expect states with such areas to have already decided

on their approach to implementing the SO2 NAAQS as

they start planning for implementation of the 111(d)

guidelines, which should allow for coordination and

consideration of SO2 related air quality measures into

their 111(d) planning. The EPA intends to address the

designations for all other areas in three separate

actions in the future.1035 These designations must be

completed by no later than July 2, 2016, December 31,

2017, and December 31, 2020 with attainment plans

due between 2018 and 2022.

Regarding requirements under the regional haze

program, several affected EGUs have deadlines in the

2016–2021 timeframe to install controls to comply

with the Best Available Retrofit Technology (BART)

and reasonable progress requirements of the Regional

Haze Rule. Soon after these deadlines, some of the

same affected EGUs may be required to reduce their

utilization, convert into natural gas-fired facilities, or

shut down entirely as a result of state 111(d) plans.

Some commenters have expressed concern that for

these affected EGUs, specifically those that choose to

retire, the capital equipment installed to comply with

the Regional Haze Rule would likely become stranded

assets.

1035 The EPA has developed a comprehensive implementation

strategy for these future actions that focuses resources on

identifying and addressing unhealthy levels of SO2 in areas

where people are most likely to be exposed to violations of the

standard. The strategy is available at http://www.epa.gov/

airquality/sulfurdioxide/implement.html, and the associated

area designations schedule is at http://www.epa.gov/

airquality/sulfurdioxide/designations/pdfs/201503Schedule.pdf.

1484

While the EPA is providing considerable flexibility

for states and sources under the final 111(d) emission

guidelines, the EPA acknowledges the possibility that

some sources could ultimately be faced with the

potential for stranded assets as a result of state 111(d)

plans. For these sources, however, states have the

option of developing BART alternatives that replace

control requirements that would otherwise result in

stranded assets at a particular EGU with the

aggregate emission reductions that will result from

retirements, fuel switching, reduced utilization, or

lesser controls at multiple EGUs.

In fact, the EPA already has experience working

with states to account for these very types of changed

circumstances.1036 The EPA will continue to work with

states to explore options for integrating compliance

requirements across multiple regulatory programs, as

warranted.

The EPA believes that CAA section 111(d) efforts

and actions will tend to contribute to overall air

1036 For example, Oregon replaced its BART determination for

the Boardman Coal Plant with a new requirement that accounted

for a planned shutdown before the EPA took action on the state’s

SIP submission (76 FR 12661). Washington similarly replaced its

BART determination for the TransAlta Centralia Power Plant

before the EPA took action on the state’s SIP submission (77 FR

72742). Oklahoma submitted a SIP revision with a new BART

determination for the AEP/PSO Northeastern Power Station,

which included enforceable requirements for reduced utilization

and early unit retirements, to replace a FIP that had been

promulgated by the EPA (79 FR 12944). Finally, the EPA

finalized a BART determination for Unit 3 at the Dave Johnston

Power Plant in Wyoming that included two compliance options,

one of which included a federally enforceable retirement date and

less costly controls.

1485

quality improvements and thus should be

complementary to criteria pollutant and regional haze

SIP efforts.

7. Final Rule Flexibilities

As discussed in Section VIII of this preamble, the

EPA is providing states flexibility in developing

approvable plans under CAA section 111(d), including

the ability to impose source-by-source limitations

reflecting the BSER performance rates to each

affected EGU or to adopt rate-based or mass-based

emission performance goals, and to rely on a wide

range of CO2 emission reduction measures, including

measures that are not part of the BSER. The EPA is

also providing states considerable flexibility with

respect to the timeframes for plan development and

implementation, with up to 3 years permitted for final

plans to be submitted after the GHG emission

guidelines are finalized, and up to 15 years for all

emission reduction measures to be fully implemented.

The EPA is establishing an 8-year interim period over

which to achieve the full required reductions to meet

the CO2 performance rates, and this begins in 2022,

more than seven years from the June 18, 2014 date of

proposal of the rulemaking. The 8-year interim period

from 2022 through 2029, is separated into three steps,

2022–2024, 2025–2027, and 2028–2029, each

associated with its own interim CO2 emission

performance rates.

In light of these broad flexibilities, we believe that

states will have ample opportunity, when developing

and implementing their CAA section 111(d) plans, to

coordinate their response to this requirement with

source and state responses to any obligations that may

1486

be applicable to affected EGUs as a result of the MATS,

CSAPR, 316(b), SE ELG and CCR rules, all of which

are or soon will be final rules. In addition, we believe

that states will be able to design CAA section 111(d)

plans that use innovative, cost-effective regulatory

strategies, that spark investment and innovation

across a wide variety of clean energy technologies, and

that will help reduce cost and ensure reliability, while

also ensuring that all applicable environmental

requirements are met. 1037 We also believe that the

broad flexibilities in this action will enable states and

affected EGUs to build on their longstanding,

successful records of complying with multiple CAA,

CWA, and other environmental requirements, while

assuring an adequate, affordable, and reliable supply

of electricity.

1037 It

should be noted that regulatory obligations imposed

upon states and sources operate independently under different

statutes and sections of statutes; the EPA expects that states and

sources will take advantage of available flexibilities as

appropriate, but will comply with all relevant legal requirements.

1487

XI. Impacts of This Action1038

A. What are the air impacts?

The EPA anticipates significant emission

reductions under the final guidelines for the utility

power sector. In the final emission guidelines, the

EPA has translated the source category-specific CO2

emission performance rates into equivalent state-level

rate-based and mass-based CO2 goals in order to

maximize the range of choices that states will have in

developing their plans. Because of the range of choices

available to states and the lack of a priori knowledge

about the specific choices states will make in response

to the final goals, the Regulatory Impact Analysis (RIA)

for this final action presents two scenarios designed to

achieve these goals, which we term the “rate-based”

illustrative plan approach and the “mass-based”

illustrative plan approach.1039

1038 The

impacts presented in this section of the preamble

represent an illustrative implementation of the guidelines. As

states implement the final guidelines, they have sufficient

flexibility to adopt different state-level or regional approaches

that may yield different costs, benefits, and environmental

impacts. For example, states may use the flexibilities described

in these guidelines to find approaches that are more cost-effective

for their particular state or choose approaches that shift the

balance of co-benefits and impacts to match broader state

priorities.

1039 It is important to note that the differences between the

analytical results for the rate-based and mass-based illustrative

plan approaches presented in the RIA may not be indicative of

likely differences between the approaches if implemented by

states and affected EGUs in response to the final guidelines. If

one approach performs differently than the other on a given

metric during a given time period, this does not imply this will

apply in all instances.

1488

Under the rate-based approach, when compared to

2005, CO2 emissions are projected to be reduced by

approximately 22 percent in 2020, 28 percent in 2025,

and 32 percent in 2030. Under the mass-based

approach, when compared to 2005, CO2 emissions are

projected to be reduced by approximately 23 percent in

2020, 29 percent in 2025, and 32 percent in 2030. The

final guidelines are projected to result in substantial

co-benefits through reductions of SO2, NOX and PM2.5

that will have direct public health benefits by lowering

ambient levels of these pollutants and ozone. Tables

15 and 16 show expected CO2 and other air pollutant

emissions in the base case and reductions under the

final guidelines for 2020, 2025, and 2030 for the ratebased and mass-based approaches, respectively.

1489

TABLE 15—SUMMARY OF CO2 AND OTHER AIR

POLLUTANT EMISSION REDUCTIONS FROM

THE BASE CASE UNDER RATE-BASED

ILLUSTRATIVE PLAN APPROACH

CO2

SO2

NOX

(millions (thousand (thousand

short

short

short

tons)

tons)

tons)

2020 Final Guidelines:

Base Case ......................

Final Guidelines ...........

Emissions Reductions ...

2025 Final Guidelines:

Base Case ......................

Final Guidelines ...........

Emissions Reductions ...

2030 Final Guidelines:

Base Case ......................

Final Guidelines ...........

Emissions Reductions ...

2,155

2,085

69

1,311

1,297

14

1,333

1,282

50

2,165

1,933

232

1,275

1,097

178

1,302

1,138

165

2,227

1,812

415

1,314

996

318

1,293

1,011

282

Source: Integrated Planning Model, 2015.

Note: Emissions may not sum due to rounding.

1490

TABLE 16—SUMMARY OF CO2 AND OTHER AIR

POLLUTANT EMISSION REDUCTIONS FROM

THE BASE CASE UNDER MASS-BASED

ILLUSTRATIVE PLAN APPROACH

CO2

SO2

NOX

(millions (thousand (thousand

short

short

short

tons)

tons)

tons)

2020 Final Guidelines:

Base Case ......................

Final Guidelines ...........

Emissions Reductions ...

2025 Final Guidelines:

Base Case ......................

Final Guidelines ...........

Emissions Reductions ...

2030 Final Guidelines:

Base Case ......................

Final Guidelines ...........

Emissions Reductions ...

2,155

2,073

81

1,311

1,257

54

1,333

1,272

60

2,165

1,901

265

1,275

1,090

185

1,302

1,100

203

2,227

1,814

413

1,314

1,034

280

1,293

1,015

278

Source: Integrated Planning Model, 2015.

Note: Emissions may not sum due to rounding.

The reductions in Tables 15 and 16 do not account

for reductions in hazardous air pollutants (HAPs) that

may occur as a result of this rule. For instance, the

fine particulate reductions presented above do not

reflect all of the reductions in many heavy metal

particulates.

B. Endangered Species Act

As explained in the preamble to the proposed rule

(79 FR at 34933–934), the EPA has carefully

considered the requirements of section 7(a)(2) of the

Endangered Species Act (ESA) and applicable ESA

regulations, and reviewed relevant ESA case law and

guidance, to determine whether consultation with the

1491

U.S. Fish and Wildlife Service (FWS) and/or National

Marine Fisheries Service (together, the Services) is

required by the ESA. The EPA proposed to conclude

that the requirements of ESA section 7(a)(2) would not

be triggered by promulgation of the rule, and we now

finalize that determination.

Section 7(a)(2) of the ESA requires federal agencies,

in consultation with one or both of the Services

(depending on the species at issue), to ensure that

actions they authorize, fund, or carry out are not likely

to jeopardize the continued existence of federally listed

endangered or threatened species or result in the

destruction or adverse modification of designated

critical habitat of such species. 16 U.S.C. 1536(a)(2).

Under relevant implementing regulations, section

7(a)(2) applies only to actions where there is

discretionary federal involvement or control. 50 CFR

402.03. Further, under the regulations consultation is

required only for actions that “may affect” listed

species or designated critical habitat. 50 CFR 402.14.

Consultation is not required where the action has no

effect on such species or habitat. Under this standard,

it is the federal agency taking the action that

evaluates the action and determines whether

consultation is required. See 51 FR 19926, 19949

(June 3, 1986). Effects of an action include both the

direct and indirect effects that will be added to the

environmental baseline. 50 CFR 402.02. Direct

effects are the direct or immediate effects of an action

on a listed species or its habitat.1040 Indirect effects

See Endangered Species Consultation Handbook, U.S.

Fish & Wildlife Service and National Marine Fisheries Service at

4–25 (March 1998) (providing examples of direct effects: e.g.,

driving an off road vehicle through the nesting habitat of a listed

1040

1492

are those that are “caused by the proposed action and

are later in time, but still are reasonably certain to

occur.” Id. To trigger the consultation requirement,

there must thus be a causal connection between the

federal action, the effect in question, and the listed

species, and if the effect is indirect, it must be

reasonably certain to occur.

The EPA notes that the projected environmental

effects of this rule are positive: Reductions in overall

GHG emissions, and reductions in PM and ozoneprecursor emissions (SO2 and NOX).

The EPA

recognizes that beneficial effects to listed species can,

as a general matter, result in a “may affect”

determination under the ESA. However, the EPA’s

assessment that the rule will have an overall net

positive environmental effect by virtue of reducing

emissions of certain air pollutants does not address

whether the rule may affect any listed species or

designated critical habitat for ESA section 7(a)(2)

purposes and does not constitute any finding of effects

for that purpose. The fact that the rule will have

overall positive effects on the national and global

environment does not mean that the rule may affect

any listed species in its habitat or the designated

critical habitat of such species within the meaning of

ESA section 7(a)(2) or the implementing regulations or

require ESA consultation. The EPA has considered

various types of potential effects in reaching the

species of bird and destroying a ground nest; building a housing

unit and destroying the habitat of a listed species). Available at

https://www.fws.gov/ENDANGERED/esa-library/pdf/esa_

section7_handbook.pdf.

1493

conclusion that ESA consultation is not required for

this rule.

With respect to the projected GHG emission

reductions, the EPA considered in detail in the

proposal why such reductions do not trigger ESA

consultation requirements under section 7(a)(2). As

explained in the proposal, in reaching this conclusion

the EPA was mindful of significant legal and technical

analysis undertaken by FWS and the U.S.

Department of the Interior (DOI) in the context of

listing the polar bear as a threatened species under

the ESA. In that context, in 2008, FWS and DOI

expressed the view that the best scientific data

available were insufficient to draw a causal connection

between GHG emissions and effects on the species in

its habitat.1041 The DOI Solicitor concluded that where

the effect at issue is climate change, proposed actions

involving GHG emissions cannot pass the “may affect”

test of the section 7 regulations and thus are not

subject to ESA consultation.

As described in the proposal, the EPA has also

previously considered issues relating to GHG

emissions in connection with the requirements of ESA

section 7(a)(2) and has supplemented DOI’s analysis

with additional consideration of GHG modeling tools

and data regarding listed species. Although the GHG

emission reductions projected for this final rule are

1041 See, e.g., 73 FR 28212, 28300 (May 15, 2008);

Memorandum from David Longly Bernhardt, Solicitor, U.S.

Department of the Interior re: ‘‘Guidance on the Applicability of

the Endangered Species Act’s Consultation Requirements to

Proposed Actions Involving the Emission of Greenhouse Gases’’

(Oct. 3, 2008). Available at http://www.doi.gov/solicitor/

opinions/M-37017.pdf.

1494

large (estimated reductions of about 415 million short

tons of CO2 in 2030 relative to the base case under the

rate-based illustrative plan approach—see Table 14

above), the EPA evaluated larger reductions in

assessing this same issue in the context of the lightduty vehicle GHG emission standards for model years

2012–2016 and 2017–2025.

There the agency

projected emission reductions over the lifetimes of the

model years in question 1042 which are roughly five to

six times those projected above and, based on air

quality modeling of potential environmental effects,

concluded that “EPA knows of no modeling tool which

can link these small, time-attenuated changes in

global metrics to particular effects on listed species in

particular areas. Extrapolating from global metric to

local effect with such small numbers, and accounting

for further links in a causative chain, remain beyond

current modeling capabilities.” 1043 The EPA reached

this conclusion after evaluating issues relating to

potential improvements relevant to both temperature

and oceanographic pH outputs. The EPA’s ultimate

finding was that “any potential for a specific impact on

listed species in their habitats associated with these

very small changes in average global temperature and

ocean pH is too remote to trigger the threshold for ESA

section 7(a)(2).” Id. The EPA believes that the same

conclusion applies to the present rule. See, e.g.,

1042 See 75 FR at 25438 Table I.C 2–4 (May 7, 2010); 77 FR at

62894 Table III-68 (Oct. 15, 2012).

EPA, Light-Duty Vehicle Greenhouse Gas Emission

Standards and Corporate Average Fuel Economy Standards,

Response to Comment Document for Joint Rulemaking at 4–102

(Docket

ID

EPA-OAR-HQ-2010-0799).

Available

at

http://www.epa.gov/otaq/climate/regulations/420r10012a.pdf.

1043

1495

Ground Zero Center for Non-Violent Action v. U.S.

Dept. of Navy, 383 F. 3d 1082, 1091–92 (9th Cir. 2004)

(where the likelihood of jeopardy to a species from a

federal action is extremely remote, ESA does not

require consultation).

The EPA’s conclusion is

entirely consistent with DOI’s analysis regarding ESA

requirements in the context of federal actions

involving GHG emissions.1044

With regard to non-GHG air emissions, the EPA

also projects substantial reductions of SO2 and NOX as

a collateral consequence of this final action. However,

CAA section 111(d)(1) standards cannot directly

control emissions of criteria pollutants. See CAA

section 111(d)(1)(i). Consequently, CAA section 111(d)

provides no discretion to adjust the standard based on

potential impacts to endangered species of reduced

1044 The EPA has received correspondence from a U.S. Senator

and a Member of the U.S. House of Representatives noting that

the Services have identified several listed species affected by

global climate change. See Letter from Rob Bishop, Chairman,

House Committee on Natural Resources, to Gina McCarthy,

Administrator, U.S. Environmental Protection Agency, dated

June 11, 2015; Letter from Rob Bishop, Chairman, House

Committee on Natural Resources, and James M. Inhofe,

Chairman, Senate Committee on Environment and Public Works,

to Gina McCarthy, Administrator, U.S. Environmental

Protection Agency, dated June 15, 2015. EPA’s assessment of

ESA requirements in connection with the present rule does not

address whether global climate change may, as a general matter,

be a relevant consideration in the status of certain listed species.

Rather, the requirements of ESA section 7(a)(2) must be

considered and applied to the specific action at issue. As

explained above, EPA’s conclusion that ESA section 7(a)(2)

consultation is not required here is premised on the specific facts

and circumstances of the present rule and is fully consistent with

prior relevant analyses conducted by DOI, FWS, and EPA.

1496

criteria pollutant emissions.

Section 7(a)(2)

consultation thus is not required with respect to the

projected reductions of criteria pollutant emissions.

See 50 CFR 402.03; see also, WildEarth Guardians v.

U.S. Envt’l Protection Agency, 759 F.3d 1196, 1207–10

(10th Cir. 2014) (EPA has no duty to consult under

section 7(a)(2) of the ESA regarding hazardous air

pollutant controls that it did not require—and likely

lacked

authority

to

require—in

a

federal

implementation plan for regional haze controls under

section 169A of the CAA).

Finally, the EPA has also considered other potential

effects of the rule (beyond reductions in air pollutants)

and whether any such effects are “caused by” the rule

and “reasonably certain to occur” within the meaning

of the ESA regulatory definition of the effects of an

action. 50 CFR 402.02. As the EPA noted in the

proposal, there are substantial questions as to

whether any potential for relevant effects results from

any element of the rule or would result instead from

separate decisions and actions made in connection

with the development, implementation, and

enforcement of a plan to implement the standards

established in the rule. Cf. American Trucking Assn’s

v. EPA, 175 F. 3d 1027, 1043–45 (D.C. Cir. 1999), rev’d

on different grounds sub nom., Whitman v. American

Trucking Assn’s, 531 U.S. 457 (2000) (National

Ambient Air Quality Standards have no economic

impact, for purposes of Regulatory Flexibility Act,

because impacts result from the actions of states

through their development, implementation and

1497

enforcement of SIPs). 1045 The EPA recognized, for

instance, that questions may exist whether decisions

such as increased utilization of solar or wind power

could have effects on listed species. The EPA received

comments on the proposal asserting that because

1045 One commenter questioned the EPA’s citation to American

Trucking Assn’s. As stated by the commenter, the statute at issue

in that case—the Regulatory Flexibility Act (RFA)—is

distinguishable from the ESA in that it addresses only direct

effects and does not consider indirect effects. The commenter

misreads the EPA’s citation to this case. The EPA cites this case

simply to reference a decision considering the impacts of an EPA

action—the revision of a NAAQS under the CAA—that in certain

respects provides a useful analogy to the present rule. A NAAQS

is implemented through a series of subsequent planning decisions

generally taken by states by means of adoption of SIPs. States

can choose to impose or avoid the types of impacts at issue in the

D.C. Circuit case through their planning decisions; thus such

impacts were not viewed as having been caused—for purposes of

the RFA—by the EPA’s promulgation of the revised NAAQS in

the first instance. The standard setting and implementation

mechanisms under section 111(d) are very similar. Under section

111(d), the EPA is required to establish ‘‘a procedure similar to

that provided by section 7410’’—the provision establishing the

SIP mechanism for implementing NAAQS. Thus, the D.C.

Circuit’s discussion provides a useful analogy to the present rule

and the various types of potential effects that may be attributable

to future implementation planning decisions by states and other

entities as they exercise their discretion in determining how to

implement the federal guidelines, but not to promulgation of the

rule itself. The EPA’s citation to this case was not intended to

address any comparison of the scope of effects covered by the RFA

and the effects cognizable under section 7(a)(2) of the ESA. The

EPA is aware that the ESA addresses both direct and indirect

effects as defined by the applicable ESA regulations. The

discussion supporting the EPA’s ESA conclusion expressly

acknowledges the relevance of indirect effects to the ESA analysis

and explains why such effects are not present here.

1498

potential increased reliance on wind or solar power

may be an element of building block 3, and because

wind and solar facilities may in some cases have

effects on listed species, the EPA must consult under

the ESA on this aspect of the rule. The EPA is also

aware of certain questions regarding potential effects

of the rule on the Big Bend Power Station located in

Florida, which discharges effluent that provides a

warm water refuge for manatees. The Big Bend Power

Station and another coal-fired facility located in

Florida—the Crystal River Plant—are, for example,

referenced in the June 11, 2015, and June 15, 2015,

congressional letters to EPA cited above.

The EPA has carefully considered the comments

and the correspondence from Congress as well as the

case law and other materials cited in those documents.

The EPA does not believe that the effects of potential

future changes in the energy sector—including

increased reliance on wind or solar power as a result

of future potential actions by states or other

implementing entities—or any potential alterations in

the operations of any particular facility are caused by

the current rule or sufficiently certain to occur so as to

require ESA consultation on the rule. The EPA

appreciates that the ESA regulations call for

consultation where actions authorized, funded, or

carried out by federal agencies may have indirect

effects on listed species or designated critical habitat.

However, as noted above, indirect effects must be

caused by the action at issue and must be reasonably

certain to occur. At this point, there is no reasonable

certainty regarding implementation of any planning

measures in any location, let alone in any location

occupied by a listed species or its designated critical

1499

habitat. The EPA cannot predict with reasonable

certainty where such measures may take effect or

which measures may be adopted. It is not clear, for

instance, whether a particular implementation plan

will call, if at all, for increased reliance on wind power,

as opposed to solar power, or on some other form of low

or zero carbon emitting generation. It is also entirely

uncertain how a future implementation plan for a

particular state might affect, if at all, operations at a

specific facility. 1046 he precise steps included in an

implementation plan cannot be determined or ordered

by this federal action, and they are not sufficiently

certain to be attributable to this final rule for ESA

purposes. These steps will flow from a series of later

in time decisions generally made by other entities—

usually states—in their distinct planning processes.

These later decisions cannot now be required by the

rule, are not caused by the rule, and are not

reasonably certain to occur. The EPA also notes that

the plans adopted for particular states may

themselves provide wide degrees of implementation

1046 A congressional letter of June 11, 2015, referenced above

asserts that EPA’s modeling suggests that the Big Bend Power

Station and Crystal River Energy Complex in Florida will be

prematurely retired as a result of the rule. EPA notes that any

such facility-level projections associated with the rule cannot be

stated with sufficient certainty to qualify as potential indirect

effects under the ESA. These projections are based on numerous

assumptions regarding a variety of planning and business

decisions yet to be made by the implementing governments

(usually states) and facility owners. Given the wide degrees of

discretion and flexibility and the numerous options available for

such decision making, the potential for such outcomes to be

realized as currently projected is at this point too uncertain to

qualify as an effect under the ESA.

1500

flexibility, thus further increasing the uncertainty

that any species-impacting activity will occur in any

particular location, if at all. The Services have

explained that section 7(a)(2) was not intended to

preclude federal actions based on potential future

speculative effects.1047 These are precisely the types of

speculative future activities and effects at issue

here.1048 For this additional reason, the EPA concludes

that the rule does not have effects on listed species

1047 See 51 FR at 19933 (describing effects that are ‘‘reasonably

certain to occur’’ in the context of consideration of cumulative

effects and distinguishing broader consideration that may be

appropriate in applying a procedural statute such as the National

Environmental Policy Act, as opposed to a substantive provision

such as ESA section 7(a)(2) that may prohibit certain federal

actions); Endangered Species Consultation Handbook, U.S. Fish

& Wildlife Service and National Marine Fisheries Service at 4–

30 (March 1998) (in the same context, describing indicators that

an activity is reasonably certain to occur as including

governmental approvals of the action or indications that such

approval is imminent, project sponsors’ assurance that the action

will proceed, obligation of venture capital, or initiation of

contracts; and noting that the more governmental administrative

discretion remains to be exercised, the less there is reasonable

certainty

the

action

will

proceed).

Available

at

https://www.fws.gov/ENDANGERED/esa-library/pdf/esa_

section7_handbook.pdf.

1048 EPA also notes that some of the future implementing

activities may involve federal actions that are subject to ESA

consultation, thus providing consideration of any impacts on

listed species at the appropriate point when particular activities

have become reasonably certain. Several commenters on the

proposal specifically noted that such future activities—e.g.,

development of additional RE facilities such as wind farms—may

call for ESA consultation. Further, EPA notes that section 9 of

the ESA, which prohibits the take of individuals of most listed

species, provides an additional protection for listed species as

future implementing activities become reasonably certain.

1501

that trigger the

requirement.1049

section

7(a)(2)

consultation

C. What are the energy impacts?

The final guidelines have important energy market

implications. Table 17 presents a variety of important

1049 The commenters cite certain cases that they assert support

consulting under ESA section 7(a)(2). The EPA has considered

these cases, each of which is distinguishable from the present

rule. By way of example, a commenter cites two cases involving

EPA actions: Defenders of Wildlife v. EPA, 420 F.3d 946 (9th Cir.

2005), rev’d, National Association of Homebuilders v. Defenders

of Wildlife, 551 U.S. 644 (2007); and Washington Toxics Coalition

v. EPA, 413 F.3d 1024 (9th Cir. 2005). In Defenders of Wildlife (a

decision that was reversed by the U.S. Supreme Court), a

principal relevant impact of the federal action at issue—the

EPA’s approval of a state’s permitting program under the Clean

Water Act—was that following the action, the relevant permitted

activities would no longer be subject to consultation under the

ESA. By contrast, promulgation of the present rule will result in

no change to any ESA requirements applicable to any future

activities directed by plans (either state or federal) implementing

the rule. The action at issue in Washington Toxics Coalition

involved the EPA’s registration of certain pesticide active

ingredients under the Federal Insecticide, Fungicide, and

Rodenticide Act. Such actions provide authorization for the sale

and distribution of those products, consistent with applicable

labelling requirements. The EPA also notes that under the EPA’s

regulations, registered pesticide labels must, among other things,

specify the product ingredients and the methods and sites of

product application. 40 CFR 156.10. By contrast, the present rule

only sets goals and describes potential pathways to meeting those

goals, all of which are subject to future considerations and

decisions involved in the implementation of plans (generally by

states). The rule neither authorizes, nor directs, any of the future

measures to meet the rule’s goals. Those activities remain subject

to the full range of future decision making addressing which

types of measures to implement, what emitting entities will be

affected, how much, and when.

1502

energy market impacts for 2020, 2025, and 2030 under

both the rate-based and mass-based illustrative plan

approaches.

1503

TABLE 17—SUMMARY TABLE OF IMPORTANT ENERGY MARKET IMPACTS FOR RATE-BASED AND

MASS-BASED ILLUSTRATIVE PLAN APPROACHES

[Percent change from base case]

Rate-based

Mass-based

2020

2025

2030

2020

2025

2030

Retail electricity prices ...................................

3

1

1

3

2

0

Price of coal at minemouth .............................

–1

–5

–4

–1

–5

–3

Coal production for power sector use .............

–5

–14

–25

–7

–17

–24

Price of natural gas delivered to power sector ........

5

−8

2

4

–3

–2

Natural gas use for electricity generation .....

3

–1

–1

5

0

–4

1504

These figures reflect the EPA’s illustrative modeling

that presumes policies that lead to generation shifts

and growing use of demand-side EE and renewable

electricity generation out to 2029. If states make

different policy choices, impacts could be different.

For instance, if states implement renewable and/or

demand-side EE policies on a more aggressive timeframe, impacts on natural gas and electricity prices

would likely be less.

Implementation of other

measures not included in the BSER calculation or

compliance modeling, such as nuclear uprates,

transmission system improvements, use of energy

storage technologies or retrofit CCS, could also

mitigate gas price and/or electricity price impacts.

Energy market impacts from the guidelines are

discussed more extensively in the RIA found in the

docket for this rulemaking.

D. What are the compliance costs?

The compliance costs of this final action are

represented in this analysis as the change in electric

power generation costs between the base case and the

final rule in which states pursue a distinct set of

strategies beyond the strategies taken in the base case

to meet the terms of the final guidelines. The

compliance costs estimates include cost estimates for

demand-side EE. The compliance assumptions—and,

therefore, the projected compliance costs—set forth in

this analysis are illustrative in nature and do not

represent the full suite of compliance flexibilities

states may ultimately pursue.

The illustrative

analysis is designed to reflect, to the extent possible,

the scope and the nature of the final guidelines.

However, there is considerable uncertainty with

1505

regards to the precise measures that states will adopt

to meet the final requirements, because there are

considerable flexibilities afforded to the states in

developing their state plans.

The incremental cost is the projected additional cost

of complying with the guidelines in the year analyzed

and includes the amortized cost of capital investment,

needed new capacity, shifts between or amongst

various fuels, deployment of demand-side EE

programs, and other actions associated with

compliance. These important dynamics are discussed

in more detail in the RIA in the rulemaking docket.

The EPA estimates the annual incremental

compliance cost for the rate-based approach for final

emission guidelines to be $2.5 billion in 2020, $1.0

billion in 2025 and $8.4 billion in 2030, including the

costs associated with monitoring, reporting, and

recordkeeping (MR&R). 1050 The EPA estimates the

annual incremental compliance cost for the massbased approach for final emission guidelines to be $1.4

billion in 2020, $3.0 billion in 2025 and $5.1 billion in

2030, including the costs associated with MR&R.

More detailed cost estimates are available in the

RIA included in the rulemaking docket.

E. What are the economic and employment impacts?

The final standards are projected to result in certain

changes to power system operation as a compliance

with the standards. See Table 16 above for a variety

1050 The MR&R costs estimates are $65 million in 2020, $15

million in 2025 and $15 million in 2030 and are assumed to be

the same for both rate-based and mass-based illustrative plan

approaches.

1506

of important energy market impacts for 2020, 2025,

and 2030 under both the rate-based and mass-based

illustrative plan approaches.

It is important to note that the EPA’s modeling does

not necessarily account for all of the factors that may

influence business decisions regarding future coalfired capacity. Many power companies already factor

a potential financial liability associated with carbon

emissions into their long term capacity planning that

would further influence business decisions to replace

these aging assets with modern, and significantly

cleaner, generation.

The compliance modeling done to support the final

rule assumes that overall electric demand will

decrease as states ramp up programs that result in

lower overall demand. Demand-side EE levels are

expected to increase such that they achieve about a 7.8

percent reduction on overall electricity demand levels

in 2030 under the final guidelines.

Changes in price or demand for electricity, natural

gas, and coal can impact markets for goods and

services produced by sectors that use these energy

inputs in the production process or supply those

sectors. Changes in the cost of production may result

in changes in prices, quantities produced, and

profitability of affected firms. The EPA recognizes

that these guidelines provide significant flexibilities

and states implementing the guidelines may choose to

mitigate impacts to some markets outside the utility

power sector. Similarly, demand for new generation

or demand-side EE as a result of states implementing

the guidelines can result in shifts in production and

1507

profitability for firms that supply those goods and

services.

Executive Order 13563 directs federal agencies to

consider the effect of regulations on job creation and

employment. According to the Executive Order, “our

regulatory system must protect public health, welfare,

safety, and our environment while promoting

economic growth, innovation, competitiveness, and job

creation. It must be based on the best available

science.” (Executive Order 13563, 2011) Although

standard benefit-cost analyses have not typically

included a separate analysis of regulation-induced

employment

impacts,

we

typically

conduct

employment analyses. While the economy continues

moving toward full-employment, employment impacts

are of particular concern and questions may arise

about their existence and magnitude.

States have the responsibility and flexibility to

implement policies and practices for compliance with

the final guidelines. Quantifying the associated

employment impacts is complicated by the wide range

of approaches that states may use. As such, the EPA’s

employment analysis includes projected employment

impacts associated with illustrative plan approaches

for these guidelines for the electric power industry,

coal and natural gas production, and demand-side EE

activities. These projections are derived, in part, from

a detailed model of the utility power sector used for

this regulatory analysis, and U.S. government data on

employment and labor productivity. In the electricity,

coal, and natural gas sectors, the EPA estimates that

these guidelines could result in a net decrease of

approximately 25,000 job-years in 2025 for the final

guidelines under the rate-based illustrative plan

1508

approach and approximately 26,000 job-years in 2025

under the mass-based approach. For 2030, the

estimates of the net decrease in job-years are 31,000

under the rate-based approach and 34,000 under the

mass-based approach. The agency is also offering an

illustrative calculation of potential employment effects

due to demand-side EE programs. Employment

impacts from demand-side energy EE programs in

2030 could range from approximately 52,000 to 83,000

jobs under the final guidelines.

By its nature, demand-side EE reduces overall

demand for electric power. The EPA recognizes as

more efficiency is built into the U.S. power system over

time, lower fuel requirements may lead to fewer jobs

in the coal and natural gas extraction sectors, as well

as in fossil-fuel fired EGU construction and operation

than would otherwise have been expected. The EPA

also recognizes the fact that, in many cases,

employment gains and losses that might be

attributable to this rule would be expected to affect

different sets of people. Moreover, workers who lose

jobs in these sectors may find employment elsewhere

just as workers employed in new jobs in these sectors

may have been previously employed elsewhere.

Therefore, the employment estimates reported in

these sectors may include workers previously

employed elsewhere. This analysis also does not

capture potential economy-wide impacts due to

changes in prices (of fuel, electricity, labor, for

example) or other factors such as improved labor

productivity and reduced health care expenditures

resulting from cleaner air. For these reasons, the

numbers reported here should not be interpreted as a

net national employment impact.

1509

F. What are the benefits of the final goals?

Implementing the final standards will generate

benefits by reducing emissions of CO2 and criteria

pollutant precursors, including SO2, NOX, and

directly-emitted particles.

SO2 and NOX are

precursors to PM2.5 (particles smaller than 2.5

microns), and NOX is a precursor to ozone. The

estimated benefits associated with these emission

reductions are beyond those achieved by previous EPA

rulemakings including the Mercury and Air Toxics

Standards rule. The health and welfare benefits from

reducing air pollution are considered co-benefits for

these standards. For this rulemaking, we were only

able to quantify the climate benefits from reduced

emissions of CO2 and the health co-benefits associated

with reduced exposure to PM2.5 and ozone. There are

many additional benefits which we are not able to

quantify, leading to an underestimate of monetized

benefits. In summary, we estimate the total combined

climate benefits and health co-benefits for the ratebased approach to be $3.5 to $4.6 billion in 2020, $18

to $28 billion in 2025, and $34 to $54 billion in 2030 (3

percent discount rate, 2011$). Total combined climate

benefits and health co-benefits for the mass-based

approach are estimated to be $5.3 to $8.1 billion in

2020, $19 to $29 billion in 2025, and $32 to $48 billion

in 2030 (3 percent discount rate, 2011$). A summary

of the emission reductions and monetized benefits

estimated for this rule at all discount rates is provided

in Tables 15 through 22 of this preamble.

1510

TABLE 18—SUMMARY OF THE MONETIZED GLOBAL CLIMATE

BENEFITS FOR THE FINAL GUIDELINES

[Billions of 2011$] a

Year

CO2 Reductions (million short tons) ...

CO2 Reductions (million short tons) ...

Discount rate (statistic)

Rate-based Approach

……………………………………………

5 percent (average SC-CO2) ..............

3 percent (average SC-CO2) ..............

2.5 percent (average SC-CO2) ...........

3 percent (95th percentile SC-CO2) ..

Mass-based Approach

……………………………………………

5 percent (average SC-CO2) ..............

3 percent (average SC-CO2) ..............

2.5 percent (average SC-CO2) ...........

3 percent (95th percentile SC-CO2) ..

Monetized climate

benefits

2020

2025

2030

69

$0.80

$2.8

$4.1

$8.2

232

$3.1

$10

$15

$31

415

$6.4

$20

$29

$61

81

$0.94

$3.3

$4.9

$9.7

265

$3.6

$12

$17

$35

413

$6.4

$20

$29

$60

a Climate benefit estimates reflect impacts from CO2 emission changes in the analysis years presented in

the table and do not account for changes in non-CO2 GHG emissions. These estimates are based on the global

social cost of carbon (SC-CO2) estimates for the analysis years and are rounded to two significant figures.

1511

TABLE 19—SUMMARY OF THE MONETIZED HEALTH CO-BENEFITS IN THE

U.S. FOR THE FINAL GUIDELINES, RATE-BASED APPROACH

[Billions of 2011$] a

Pollutant

National

emission

reductions

(thousands of

short tons)

Monetized

health cobenefits

(3 percent

discount)

Final Guidelines, Rate-based Approach, 2020

PM2.5 precursors: b

SO2 .............................................................................................................

14 $0.44 to $0.99….

NOX ............................................................................................................

50 $0.14 to $0.33….

Ozone precursor: c

NOX (ozone season only) ........................................

19 $0.12 to $0.52….

Total Monetized Health Co-benefits .................. ……………… $0.70 to $1.8

Total Monetized Health Co-benefits combined

with Monetized Climate Benefits d..................... ……………… $3.5 to $4.6

Monetized

health cobenefits

(7 percent

discount)

$0.39 to $0.89

$0.13 to $0.30

$0.12 to $0.52

$0.64 to $1.7

$3.5 to $4.5

1512

Pollutant

National

emission

reductions

(thousands of

short tons)

Monetized

health cobenefits

(3 percent

discount)

Monetized

health cobenefits

(7 percent

discount)

Final Guidelines, Rate-based Approach, 2025

PM2.5 precursors: b

SO2 ..........................................................................

178 $6.4 to $14……..

NOX .........................................................................

165 $0.56 to $1.3…...

Ozone precursor: c

NOX (ozone season only) ........................................

70 $0.49 to $2.1…...

Total Monetized Health Co-benefits ..................

$7.4 to $18……..

Total Monetized Health Co-benefits combined

$18 to $28

with Monetized Climate Benefits d.....................

Final Guidelines, Rate-based Approach, 2030

PM2.5 precursors: b

SO2 ..........................................................................

NOX .........................................................................

Ozone precursor: c

NOX (ozone season only) ........................................

$5.7 to $13

$0.50 to $1.1

$0.49 to $2.1

$6.7 to $16

$17 to $26

318

282

$12 to $28………

$1.0 to $2.3…….

$11 to $25

$0.93 to $2.1

118

$0.86 to $3.7…...

$0.86 to $3.7

1513

Pollutant

Total Monetized Health Co-benefits ..................

Total Monetized Health Co-benefits combined

with Monetized Climate Benefits d.....................

National

emission

reductions

(thousands of

short tons)

Monetized

health cobenefits

(3 percent

discount)

Monetized

health cobenefits

(7 percent

discount)

$14 to $34………

$13 to $31

$34 to $54………

$33 to $51

a All estimates are rounded to two significant figures, so estimates may not sum. It is important to note that

the monetized co-benefits do not include reduced health effects from direct exposure to SO2, direct exposure to

NO2, exposure to mercury, ecosystem effects or visibility impairment. Air pollution health co-benefits are

estimated using regional benefit-per-ton estimates for the contiguous U.S.

b The monetized PM2.5 co-benefits reflect the human health benefits associated with reducing exposure to

PM2.5 through reductions of PM2.5 precursors, such as SO2 and NOX. The co-benefits do not include the benefits

of reductions in directly emitted PM2.5. These additional benefits would increase overall benefits by a few

percent based on the analyses conducted for the proposed rule. PM co-benefits are shown as a range reflecting

the use of two concentration-response functions, with the lower end of the range based on a function from

Krewski et al. (2009) and the upper end based on a function from Lepeule et al. (2012). These models assume

that all fine particles, regardless of their chemical composition, are equally potent in causing premature

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by

particle type.

1514

c The monetized ozone co-benefits reflect the human health benefits associated with reducing exposure to

ozone through reductions of NOX during the ozone season. Ozone co-benefits are shown as a range reflecting

the use of several different concentration-response functions, with the lower end of the range based on a function

from Bell, et al. (2004) and the upper end based on a function from Levy, et al. (2005). Ozone co-benefits occur

in the analysis year, so they are the same for all discount rates.

d We estimate climate benefits associated with four different values of a one ton CO2 reduction (model average

at 2.5 percent discount rate, 3 percent, and 5 percent; 95th percentile at 3 percent). Referred to as the social

cost of carbon, each value increases over time. For the purposes of this table, we show the benefits associated

with the model average at 3 percent discount rate, however we emphasize the importance and value of

considering the full range of social cost of carbon values. We provide combined climate and health estimates

based on additional discount rates in the RIA.

1515

TABLE 20—SUMMARY OF THE MONETIZED HEALTH CO-BENEFITS IN THE U.S. FOR THE FINAL

GUIDELINES, MASS-BASED APPROACH

[Billions of 2011$] a

Pollutant

National

emission

reductions

(thousands of

short tons)

Monetized

health cobenefits

(3 percent

discount)

Final Guidelines, Mass-based Approach, 2020

PM2.5 precursors: b

SO2 ..........................................................................

54 $1.7 to $3.8

NOX .........................................................................

60 $0.17 to $0.39

Ozone precursor: c

NOX (ozone season only) ........................................

23 $0.14 to $0.61

Total Monetized Health Co-benefits .................. ……………….. $2.0 to $4.8

Total Monetized Health Co-benefits combined

with Monetized Climate Benefits d..................... ……………….. $5.3 to $8.1

Final Guidelines, Mass-based Approach, 2025

PM2.5 precursors: b

SO2 ..........................................................................

185 $6.0 to $13

NOX .........................................................................

203 $0.58 to $1.3

Monetized

Health cobenefits

(7 percent

discount)

$1.5 to $3.4

$0.16 to $0.36

$0.14 to $0.61

$1.8 to $4.4

$5.1 to $7.7

$5.4 to $12

$0.52 to $1.2

1516

Pollutant

National

emission

reductions

(thousands of

short tons)

Monetized

health cobenefits

(3 percent

discount)

Ozone precursor: c

NOX (ozone season only) ........................................

88 $0.56 to $2.4

Total Monetized Health Co-benefits .................. ……………….. $7.1 to $17

Total Monetized Health Co-benefits combined

with Monetized Climate Benefits d..................... ……………….. $19 to $29

Final Guidelines, Mass-based Approach, 2030

b

PM2.5 precursors:

SO2 ..........................................................................

280 $10 to $23

NOX .........................................................................

278 $0.87 to $2.0

Ozone precursor: c

NOX (ozone season only) ........................................

121 $0.82 to $3.5

Total Monetized Health Co-benefits .................. ……………….. $12 to $28

Total Monetized Health Co-benefits combined

with Monetized Climate Benefits d..................... ……………….. $32 to $48

a All estimates are rounded to two significant figures, so estimates may not sum.

Monetized

Health cobenefits

(7 percent

discount)

$0.56 to $2.4

$6.5 to $16

$18 to $27

$9.0 to $20

$0.79 to $1.8

$0.82 to $3.5

$11 to $26

$31 to $46

It is important to note that

the monetized co-benefits do not include reduced health effects from direct exposure to SO2, direct exposure to

1517

NO2, exposure to mercury, ecosystem effects or visibility impairment. Air pollution health co-benefits are

estimated using regional benefit-per-ton estimates for the contiguous U.S.

b The monetized PM2.5 co-benefits reflect the human health benefits associated with reducing exposure to

PM2.5 through reductions of PM2.5 precursors, such as SO2 and NOX. The co-benefits do not include the benefits

of reductions in directly emitted PM2.5. These additional benefits would increase overall benefits by a few

percent based on the analyses conducted for the proposed rule. PM co-benefits are shown as a range reflecting

the use of two concentration-response functions, with the lower end of the range based on a function from

Krewski et al. (2009) and the upper end based on a function from Lepeule, et al. (2012). These models assume

that all fine particles, regardless of their chemical composition, are equally potent in causing premature

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by

particle type.

c The monetized ozone co-benefits reflect the human health benefits associated with reducing exposure to

ozone through reductions of NOX during the ozone season. Ozone co-benefits are shown as a range reflecting

the use of several different concentration-response functions, with the lower end of the range based on a function

from Bell, et al. (2004) and the upper end based on a function from Levy, et al. (2005). Ozone co-benefits occur

in the analysis year, so they are the same for all discount rates.

d We estimate climate benefits associated with four different values of a one ton CO2 reduction (model average

at 2.5 percent discount rate, 3 percent, and 5 percent; 95th percentile at 3 percent). Referred to as the social

cost of carbon, each value increases over time. For the purposes of this table, we show the benefits associated

with the model average at 3 percent discount rate, however we emphasize the importance and value of

considering the full range of social cost of carbon values. We provide combined climate and health estimates

based on additional discount rates in the RIA.

1518

The EPA has used the social cost of carbon (SC-CO2)

estimates presented in the Technical Support

Document: Technical Update of the Social Cost of

Carbon for Regulatory Impact Analysis Under

Executive Order 12866 (May 2013, Revised June 2015)

(“current TSD”) to analyze CO2 climate impacts of this

rulemaking. 1051 We refer to these estimates, which

were developed by the U.S. Government, as “SC-CO2

estimates.” The SC-CO2 is a metric that estimates the

monetary value of impacts associated with marginal

changes in CO2 emissions in a given year. It includes

a wide range of anticipated climate impacts, such as

net changes in agricultural productivity and human

health, property damage from increased flood risk,

and changes in energy system costs, such as reduced

costs for heating and increased costs for air

conditioning. It is typically used to assess the avoided

damages as a result of regulatory actions (i.e., benefits

of rulemakings that lead to an incremental reduction

in cumulative global CO2 emissions).

The SC-CO2 estimates used in this analysis were

developed over many years, using the best science

1051 Docket

ID EPA-HQ-OAR-2013-0495, Technical Support

Document: Technical Update of the Social Cost of Carbon for

Regulatory Impact Analysis Under Executive Order 12866,

Interagency Working Group on Social Cost of Carbon, with

participation by Council of Economic Advisers, Council on

Environmental Quality, Department of Agriculture, Department

of Commerce, Department of Energy, Department of

Transportation, Domestic Policy Council, Environmental

Protection Agency, National Economic Council, Office of

Management and Budget, Office of Science and Technology Policy,

and Department of the Treasury (May 2013, Revised July 2015).

Available at: http://www.whitehouse.gov/sites/default/files/

omb/inforeg/scc-tsd-final-july-2015.pdf.

1519

available, and with input from the public. Specifically,

an interagency working group (IWG) that included the

EPA and other executive branch agencies and offices

used three integrated assessment models (IAMs) to

develop the SC-CO2 estimates and recommended four

global values for use in regulatory analyses. The SCCO2 estimates were first released in February 2010

and updated in 2013 using new versions of each IAM.

The 2010 SC-CO2 Technical Support Document (2010

TSD) 1052 provides a complete discussion of the

methods used to develop these estimates and the

current TSD presents and discusses the 2013 update

(including two recent minor corrections to the

estimates).1053

1052 Docket ID EPA-HQ-OAR-2009-0472-114577, Technical

Support Document: Social Cost of Carbon for Regulatory Impact

Analysis Under Executive Order 12866, Interagency Working

Group on Social Cost of Carbon, with participation by the Council

of Economic Advisers, Council on Environmental Quality,

Department of Agriculture, Department of Commerce,

Department of Energy, Department of Transportation,

Environmental Protection Agency, National Economic Council,

Office of Energy and Climate Change, Office of Management and

Budget, Office of Science and Technology Policy, and Department

of Treasury (February 2010).

Also available at:

http://www.whitehouse.gov/sites/default/files/omb/inforeg/fo

r-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

1053 The current version of the TSD is available at:

https://www.whitehouse.gov/sites/default/files/omb/inforeg/s

cc-response-to-comments-final-july-2015.pdf, Docket ID EPA-HQOAR-2013-0495, Technical Support Document: Technical Update

of the Social Cost of Carbon for Regulatory Impact Analysis Under

Executive Order 12866, Interagency Working Group on Social

Cost of Carbon, with participation by Council of Economic

Advisers, Council on Environmental Quality, Department of

Agriculture, Department of Commerce, Department of Energy,

Department of Transportation, Domestic Policy Council,

1520

The EPA received numerous comments on the SCCO2 estimates as part of this rulemaking. The

comments covered a wide range of topics including the

technical details of the modeling conducted to develop

the SC-CO2 estimates, the aggregation and

presentation of the SC-CO2 estimates, and the process

by which the SC-CO2 estimates were derived. Many

but not all commenters were supportive of the SC-CO2

and its application to this rulemaking. Commenters

also provided constructive recommendations for

potential opportunities to improve the SC-CO2

estimates in future updates. Many of these comments

were similar to those that OMB’s Office of Information

and Regulatory Affairs received in response to a

separate request for public comment on the approach

used to develop the estimates.

After careful

evaluation of the full range of comments submitted to

OMB, the IWG continues to recommend the use of the

SC-CO2 estimates in regulatory impact analysis. 1054

With the release of the response to comments, the IWG

announced plans to obtain expert independent advice

from the National Academies of Sciences, Engineering,

and Medicine (Academies) to ensure that the SC-CO2

estimates continue to reflect the best available

scientific and economic information on climate change.

The Academies review will be informed by the public

comments received and focus on the technical merits

Environmental Protection Agency, National Economic Council,

Office of Management and Budget, Office of Science and

Technology Policy, and Department of Treasury (May 2013,

Revised July 2015).

See https://www.whitehouse.gov/omb/oira/social-costof-carbon for additional details, including the OMB Response to

Comments and the SC-CO2 TSDs.

1054

1521

and challenges of potential approaches to improving

the SC-CO2 estimates in future updates. See the EPA

Response to Comments document for the complete

response to comments received on SC-CO2 as part of

this rulemaking.

Concurrent with OMB’s publication of the response

to comments on SC-CO2 and announcement of the

Academies process, OMB posted a revised TSD that

includes two minor technical corrections to the current

estimates. One technical correction addressed an

inadvertent omission of climate change damages in

the last year of analysis (2300) in one model and the

second addressed a minor indexing error in another

model. On average the revised SC-CO2 estimates are

one dollar less than the mean SC-CO2 estimates

reported in the November 2013 revision to the May

2013 TSD. The change in the estimates associated

with the 95th percentile estimates when using a 3

percent discount rate is slightly larger, as those

estimates are heavily influenced by the results from

the model that was affected by the indexing error.

The EPA, as a member of the IWG on the SC-CO2,

has carefully examined and evaluated the minor

technical corrections in the revised TSD and the public

comments submitted to OMB’s separate SC-CO2

comment process. Additionally, the EPA has carefully

examined and evaluated all comments received

regarding the SC-CO2 through this rulemaking

process. The EPA concurs with the IWG’s conclusion

that it is reasonable, and scientifically appropriate, to

use the current SC-CO2 estimates for purposes of

regulatory impact analysis, including for this

proceeding.

1522

The four SC-CO2 estimates are as follows: $12, $40,

$60, and $120 per short ton of CO2 emissions in the

year 2020 (2011$).1055 The first three values are based

on the average SC-CO2 from the three IAMs, at

discount rates of 5, 3, and 2.5 percent, respectively.

The SC-CO2 value at several discount rates are

included because the literature shows that the SC-CO2

is quite sensitive to assumptions about the discount

rate, and because no consensus exists on the

appropriate rate to use in an intergenerational context

(where costs and benefits are incurred by different

generations). The fourth value is the 95th percentile

of the SC-CO2 from all three models at a 3 percent

discount rate. It is included to represent higher-thanexpected impacts from temperature change further

out in the tails of the SC-CO2 distribution

(representing less likely, but potentially catastrophic,

outcomes).

There are limitations in the estimates of the

benefits from the final emission guidelines, including

the omission of climate and other CO2 related benefits

that could not be monetized. The 2010 TSD discusses

a number of limitations to the SC-CO2 analysis,

including the incomplete way in which the IAMs

capture catastrophic and non-catastrophic impacts,

their incomplete treatment of adaptation and

technological change, uncertainty in the extrapolation

1055 The current version of the TSD is available at:

https://www.whitehouse.gov/sites/default/files/omb/inforeg/s

cc-tsd-final-july-2015.pdf. The 2010 and 2013 TSDs present SCCO2 in 2007$ per metric ton. The estimates were adjusted to (1)

short tons for using conversion factor 0.90718474 and (2)

2011$ using GDP Implicit Price Deflator, http://www.gpo.gov/

fdsys/pkg/ECONI-2013-02/pdf/ECONI-2013-02-Pg3.pdf.

1523

of damages to high temperatures, and assumptions

regarding risk aversion. Currently, IAMs do not

assign value to all of the important impacts of CO2

recognized in the literature, such as ocean

acidification or potential tipping points, for various

reasons, including the inherent difficulties in valuing

non-market impacts and the fact that the science

incorporated into these models understandably lags

behind the most recent research. Nonetheless, these

estimates and the discussion of their limitations

represent the best available information about the

social benefits of CO2 emission reductions to inform

the benefit-cost analysis. As previously noted, the

IWG plans to seek independent expert advice on

technical opportunities to improve the SC-CO2

estimates from the Academies.

The Academies

process will help to ensure that the SC-CO2 estimates

used by the federal government continue to reflect the

best available science and methodologies. Additional

details are provided in the TSDs.

The health co-benefits estimates represent the total

monetized human health benefits for populations

exposed to reduced PM2.5 and ozone resulting from

emission reductions from the illustrative compliance

strategy for the final standards. Unlike the global SCCO2 estimates, the air pollution health co-benefits are

estimated for the contiguous U.S. only. We used a

“benefit-per-ton” approach to estimate the benefits of

this rulemaking. To create the PM2.5 benefit-per-ton

estimates, we conducted air quality modeling for an

illustrative scenario reflecting the proposed standards

to convert precursor emissions into changes in

ambient PM2.5 and ozone concentrations. We then

1524

used these air quality modeling results in BenMAP 1056

to calculate average regional benefit-per-ton estimates

using the health impact assumptions used in the PM

NAAQS RIA 1057 and Ozone NAAQS RIAs.1058 1059 The

three regions were the Eastern U.S., Western U.S.,

and California. To calculate the co-benefits for the

final standards, we multiplied the regional benefitper-ton estimates generated from modeling of the

proposed standards by the corresponding regional

emission reductions for the final standards. 1060 All

1056 http://www.epa.gov/airquality/benmap/index.html.

1057 U.S. Environmental Protection Agency (U.S. EPA). 2012.

Regulatory Impact Analysis for the Final Revisions to the

National Ambient Air Quality Standards for Particulate Matter.

Research Triangle Park, NC: Office of Air Quality Planning and

Standards, Health and Environmental Impacts Division. (EPA

document number EPA-452/R-12-003, December). Available at:

<http://www.epa.gov/pm/2012/finalria.pdf>.

1058 U.S. Environmental Protection Agency (U.S. EPA).

2008b.

Final Ozone NAAQS Regulatory Impact Analysis. Research

Triangle Park, NC: Office of Air Quality Planning and Standards,

Health and Environmental Impacts Division, Air Benefit and

Cost Group Research. (EPA document number EPA-452/R-08003, March). Available at: <http://cfpub.epa.gov/ncea/cfm/

recordisplay.cfm?deid=194645>.

1059 U.S. Environmental Protection Agency (U.S. EPA). 2010.

Section 3: Re-analysis of the Benefits of Attaining Alternative

Ozone Standards to Incorporate Current Methods. Available at:

<http://www.epa.gov/ttnecas1/regdata/RIAs/s3supplemental_analysis-updated_benefits11-5.09.pdf>.

Technical

support document: Estimating the benefit per ton of reducing

PM2.5 precursors from 17 sectors. Research Triangle Park, NC:

Office of Air and Radiation, Office of Air Quality Planning and

Standards, January. Available at: <http://www.epa.gov/

1060 U.S. Environmental Protection Agency. 2013.

1525

benefit-per-ton estimates reflect the geographic

distribution of the modeled emissions for the proposed

standards, which may not exactly match the emission

reductions in this final rulemaking, and thus they may

not reflect the local variability in population density,

meteorology, exposure, baseline health incidence rates,

or other local factors for any specific location. More

information regarding the derivation of the benefitper-ton estimates is available in the RIA.

PM benefit-per-ton values are generated using two

concentration-response functions, Krewski et al.

(2009) 1061 and Lepeule et al. (2012).1062 These models

assume that all fine particles, regardless of their

chemical composition, are equally potent in causing

premature mortality because the scientific evidence is

not yet sufficient to allow differentiation of effect

estimates by particle type. Even though we assume

that all fine particles have equivalent health effects,

the benefit-per-ton estimates vary between PM2.5

precursors depending on the location and magnitude

of their impact on PM2.5 concentrations, which drive

population exposure.

airquality/benmap/models/Source_Apportionment_BPT_TSD_

1_31_13.pdf>.

1061 Krewski D.; M. Jerrett; R.T. Burnett; R. Ma; E. Hughes; Y.

Shi, et al. 2009. Extended Follow-up and Spatial Analysis of the

American Cancer Society Study Linking Particulate Air Pollution

and Mortality. Health Effects Institute. (HEI Research Report

number 140). Boston, MA: Health Effects Institute. Available

at http://www.healtheffects.org/Pubs/RR140-Krewski.pdf.

1062 Lepeule,

J.; F. Laden; D. Dockery; J. Schwartz. 2012.

‘‘Chronic Exposure to Fine Particles and Mortality: An Extended

Follow-Up of the Harvard Six Cities Study from 1974 to 2009.’’

Environmental Health Perspective, 120(7), July, pp. 965–970.

1526

It is important to note that the magnitude of the

PM2.5 and ozone co-benefits is largely driven by the

concentration response functions for premature

mortality and the value of a statistical life used to

value reductions in premature mortality. For PM2.5,

we use two key empirical studies, one based on the

American Cancer Society cohort study (Krewski et al.,

2009) and one based on the extended Six Cities cohort

study (Lepuele et al., 2012). We present the PM2.5 cobenefits results as a range based on benefit-per-ton

estimates calculated using the concentration-response

functions from these two epidemiology studies, but

this range does not capture the full range of

uncertainty inherent in the co-benefits estimates. In

the RIA for this rule, which is available in the docket,

we also include PM2.5 co-benefits estimates using

benefit-per-ton estimates based on expert judgments

of the effect of PM2.5 on premature mortality (Roman

et al., 2008) 1063 as a characterization of uncertainty

regarding the PM2.5-mortality relationship.

For the ozone co-benefits, we present the results as

a range reflecting benefit-per-ton estimates which use

several different concentration-response functions for

mortality, with the lower end of the range based on a

benefit-per-ton estimate using the function from Bell

et al. (2004) 1064 and the upper end based on a benefitper-ton estimate using the function from Levy et al.

1063 Roman, H., et al. 2008. ‘‘Expert Judgment Assessment of

the Mortality Impact of Changes in Ambient Fine Particulate

Matter in the U.S.’’ Environmental Science & Technology, Vol. 42,

No. 7, February, pp. 2268–2274.

1064 Bell, M.L., et al. 2004.

‘‘Ozone and Short-Term Mortality

in 95 U.S. Urban Communities, 1987–2000.’’ Journal of the

American Medical Association, 292(19), pp. 2372–8.

1527

(2005). 1065 Similar to PM2.5, the range of ozone cobenefits does not capture the full range of inherent

uncertainty.

In this analysis, in estimating the benefits-per-ton

for PM2.5 precursors, the EPA assumes that the health

impact function for fine particles is without a

threshold. This is based on the conclusions of EPA’s

Integrated Science Assessment for Particulate

Matter, 1066 which evaluated the substantial body of

published scientific literature, reflecting thousands of

epidemiology, toxicology, and clinical studies that

documents the association between elevated PM2.5

concentrations and adverse health effects, including

increased premature mortality. This assessment,

which was twice reviewed by the EPA’s independent

Science Advisory Board, concluded that the scientific

literature consistently finds that a no-threshold model

most adequately portrays the PM-mortality

concentration-response relationship.

In general, we are more confident in the magnitude

of the risks we estimate from simulated PM2.5

concentrations that coincide with the bulk of the

observed PM concentrations in the epidemiological

studies that are used to estimate the benefits.

Likewise, we are less confident in the risk we estimate

1065 Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. 2005.

‘‘Ozone exposure and mortality:

An empiric Bayes

metaregression analysis.’’ Epidemiology. 16(4): p. 458–68.

Integrated

Science Assessment for Particulate Matter (Final Report).

Research Triangle Park, NC: National Center for Environmental

Assessment, RTP Division. (EPA document number EPA-600-R08-139F, December).

Available at:

http://cfpub.epa.gov/

ncea/cfm/recordisplay.cfm?deid=216546.

1066 U.S. Environmental Protection Agency. 2009.

1528

from simulated PM2.5 concentrations that fall below

the bulk of the observed data in these studies.

For this analysis, policy-specific air quality data are

not available,1067 and thus, we are unable to estimate

the percentage of premature mortality associated with

this specific rule that is above the lowest measured

PM2.5 levels (LML) for the two PM2.5 mortality

epidemiology studies that form the basis for our

analysis. As a surrogate measure of mortality impacts

above the LML, we provide the percentage of the

population exposed above the lowest measured PM2.5

level (LML) in each of the two studies, using the

estimates of baseline projected PM2.5 from the air

quality modeling for the proposed guidelines used to

calculate the benefit-per-ton estimates for the EGU

sector. Using the Krewski et al. (2009) study, 88

percent of the population is exposed to annual mean

PM2.5 levels at or above the LML of 5.8 micrograms per

cubic meter (μg/m3). Using the Lepeule et al. (2012)

study, 46 percent of the population is exposed above

the LML of 8 μg/m3. It is important to note that

baseline exposure is only one parameter in the health

impact function, along with baseline incidence rates,

population, and change in air quality.

Every benefit analysis examining the potential

effects of a change in environmental protection

requirements is limited, to some extent, by data gaps,

model capabilities (such as geographic coverage) and

uncertainties in the underlying scientific and

economic studies used to configure the benefit and cost

models. Despite these uncertainties, we believe the

1067 In addition, site-specific emission reductions will depend

upon how states implement the guidelines.

1529

air quality co-benefit analysis for this rule provides a

reasonable indication of the expected health benefits

of the air pollution emission reductions for the

illustrative analysis of the final standards under a set

of reasonable assumptions. This analysis does not

include the type of detailed uncertainty assessment

found in the 2012 PM2.5 National Ambient Air Quality

Standard (NAAQS) RIA (U.S. EPA, 2012) because we

lack the necessary air quality input and monitoring

data to conduct a complete benefits assessment. In

addition, using a benefit-per-ton approach adds

another important source of uncertainty to the

benefits estimates. The 2012 PM2.5 NAAQS benefits

analysis provides an indication of the sensitivity of our

results to various assumptions.

We note that the monetized co-benefits estimates

shown here do not include several important benefit

categories, including exposure to SO2, NOX, and

hazardous air pollutants (e.g., mercury and hydrogen

chloride), as well as ecosystem effects and visibility

impairment. Although we do not have sufficient

information or modeling available to provide

monetized estimates for this rule, we include a

qualitative assessment of these unquantified benefits

in the RIA for the final guidelines. In addition, in the

RIA for the final standards, we did not estimate

changes in emissions of directly emitted particles. As

a result, quantified PM2.5 related benefits are

underestimated by a relatively small amount. In the

RIA for the proposed guidelines, the benefits from

reductions in directly emitted PM2.5 were less than 10

percent of total monetized health co-benefits across all

scenarios and years.

1530

For more information on the benefits analysis,

please refer to the RIA for this rule, which is available

in the rulemaking docket.

XII. Statutory and Executive Order Reviews

Additional information about these Statutory and

Executive

Orders

can

be

found

at

http://www2.epa.gov/laws-regulations/laws-andexecutive-orders.

A. Executive Order 12866: Regulatory Planning and

Review, and Executive Order 13563: Improving

Regulation and Regulatory Review

This final action is an economically significant

regulatory action that was submitted to the OMB for

review. Any changes made in response to OMB

recommendations have been documented in the docket.

The EPA prepared an analysis of the potential costs

and benefits associated with this action. This analysis,

which is contained in the “Regulatory Impact Analysis

for Clean Power Plan Final Rule” (EPA-452/R-15-003,

July 2015), is available in the docket and is briefly

summarized in section XI of this preamble.

Consistent with Executive Order 12866 and

Executive Order 13563, the EPA estimated the costs

and benefits for illustrative compliance approaches of

implementing the guidelines.

The final rule

establishes:

(1) Carbon dioxide (CO2) emission

performance rates for two source categories of existing

fossil fuel-fired EGUs, fossil fuel-fired electric utility

steam generating units and stationary combustion

turbines, and (2) guidelines for the development,

submittal and implementation of state plans that

implement the CO2 emission performance rates.

Actions taken to comply with the guidelines will also

1531

reduce the emissions of directly-emitted PM2.5, SO2

and NOX. The benefits associated with these PM2.5,

SO2 and NOX reductions are referred to as co-benefits,

as these reductions are not the primary objective of

this rule.

The EPA has used the social cost of carbon

estimates presented in the Technical Support

Document: Technical Update of the Social Cost of

Carbon for Regulatory Impact Analysis Under

Executive Order 12866 (May 2013, Revised July 2015)

(“current TSD”) to analyze CO2 climate impacts of this

rulemaking. We refer to these estimates, which were

developed by the U.S. government, as “SC-CO2

estimates.”

The SC-CO2 is an estimate of the

monetary value of impacts associated with a marginal

change in CO2 emissions in a given year. The four SCCO2 estimates are associated with different discount

rates (model average at 2.5 percent discount rate, 3

percent, and 5 percent; 95th percentile at 3 percent),

and each increases over time. In this summary, the

EPA provides the estimate of climate benefits

associated with the SC-CO2 value deemed to be central

in the current TSD: The model average at 3 percent

discount rate.

In the final emission guidelines, the EPA has

translated the source category-specific CO2 emission

performance rates into equivalent state-level ratebased and mass-based CO2 goals in order to maximize

the range of choices that states will have in developing

their plans. Because of the range of choices available

to states and the lack of a priori knowledge about the

specific choices states will make in response to the

final goals, the Regulatory Impact Analysis (RIA) for

this rule analyzed two implementation scenarios

1532

designed to achieve these goals, which we term the

“rate-based” illustrative plan approach and the “massbased” illustrative plan approach.

It is very important to note that the differences

between the analytical results for the rate-based and

mass-based illustrative plan approaches presented in

the RIA may not be indicative of likely differences

between the approaches if implemented by states and

affected EGUs in response to the final guidelines.

Rather, the two sets of analyses are intended to

illustrate two different approaches to accomplish the

emission performance rates finalized in the Clean

Power Plan Final Rule. In other words, if one

approach performs differently than the other on a

given metric during a given time period, this does not

imply this will apply in all instances in all time periods

in all places.

The EPA estimates that, in 2020, the final

guidelines will yield monetized climate benefits (in

2011$) of approximately $2.8 billion for the rate-based

approach and $3.3 billion for the mass-based approach

(3 percent model average).

For the rate-based

approach, the air pollution health co-benefits in 2020

are estimated to be $0.7 billion to $1.8 billion (2011$)

for a 3 percent discount rate and $0.64 billion to $1.7

billion (2011$) for a 7 percent discount rate. For the

mass-based approach, the air pollution health cobenefits in 2020 are estimated to be $2.0 billion to $4.8

billion (2011$) for a 3 percent discount rate and $1.8

billion to $4.4 billion (2011$) for a 7 percent discount

rate.

The annual, illustrative compliance costs

estimated by IPM and inclusive of demand-side EE

program and participant costs and MRR costs in 2020,

are approximately $2.5 billion for the rate-based

1533

approach and $1.4 billion for the mass-based approach

(2011$). The quantified net benefits (the difference

between monetized benefits and compliance costs) in

2020 are estimated to range from $1.0 billion to $2.1

billion (2011$) for the rate-based approach and from

$3.9 billion to 6.7 billion (2011$) for the mass-based

approach, using a 3 percent discount rate (model

average).

The EPA estimates that, in 2025, the final

guidelines will yield monetized climate benefits (in

2011$) of approximately $10 billion for the rate-based

approach and $12 billion for the mass-based approach

(3 percent model average).

For the rate-based

approach, the air pollution health co-benefits in 2025

are estimated to be $7.4 billion to $18 billion (2011$)

for a 3 percent discount rate and $6.7 billion to $16

billion (2011$) for a 7 percent discount rate. For the

mass-based approach, the air pollution health cobenefits in 2025 are estimated to be $7.1 billion to $17

billion (2011$) for a 3 percent discount rate and $6.5

billion to $16 billion (2011$) for a 7 percent discount

rate.

The annual, illustrative compliance costs

estimated by IPM and inclusive of demand-side EE

program and participant costs and MRR costs in 2025,

are approximately $1.0 billion for the rate-based

approach and $3.0 billion for the mass-based approach

(2011$). The quantified net benefits (the difference

between monetized benefits and compliance costs) in

2025 are estimated to range from $17 billion to $27

billion (2011$) for the rate-based approach and $16

billion to $26 billion (2011$) for the mass-based

approach, using a 3 percent discount rate (model

average).

1534

The EPA estimates that, in 2030, the final

guidelines will yield monetized climate benefits (in

2011$) of approximately $20 billion for the rate-based

approach and $20 billion for the mass-based approach

(3 percent model average).

For the rate-based

approach, the air pollution health co-benefits in 2030

are estimated to be $14 billion to $34 billion (2011$)

for a 3 percent discount rate and $13 billion to $31

billion (2011$) for a 7 percent discount rate. For the

mass-based approach, the air pollution health cobenefits in 2030 are estimated to be $12 billion to $28

billion (2011$) for a 3 percent discount rate and $11

billion to $26 billion (2011$) for a 7 percent discount

rate.

The annual, illustrative compliance costs

estimated by IPM and inclusive of demand-side EE

program and participant costs and MRR costs in 2030,

are approximately $8.4 billion for the rate-based

approach and $5.1 billion for the mass-based approach

(2011$). The quantified net benefits (the difference

between monetized benefits and compliance costs) in

2030 are estimated to range from $26 billion to $45

billion (2011$) for the rate-based approach and from

$26 billion to $43 billion (2011$) for the mass-based

approach, using a 3 percent discount rate (model

average).

Tables 20 and 21 provide the estimates of the

climate benefits, health co-benefits, compliance costs

and net benefits of the final emission guidelines for

rate-based and mass-based illustrative plan

approaches, respectively.

1535

TABLE 21—SUMMARY OF THE MONETIZED BENEFITS, COMPLIANCE COSTS, AND

NET BENEFITS FOR THE FINAL GUIDELINES IN 2020, 2025 AND 2030 UNDER

THE RATE-BASED ILLUSTRATIVE PLAN APPROACH

[Billions of 2011$] a

Rate-based approach

2020

Climate Benefits b

5% discount rate.......................................................................

$0.80

3% discount rate.......................................................................

$2.8

2.5% discount rate....................................................................

$4.1

95th percentile at 3% discount rate ........................................

$8.2

Air Quality Co-benefits Discount Rate

3%

7%

3%

7%

Air Quality Health Co$0.70 to

$0.64 to

$7.4 to

$6.7 to

benefits c ............................... $1.8

$1.7

$18

$16

d

Compliance Costs .....................................................................

$2.5

$1.0 to

$1.0 to

$17 to

$16 to

Net Benefits e ....................... $2.1

$2.0

$27

$25

2025

2030

$3.1

$10

$15

$31

$6.4

$20

$29

$61

3%

$14 to

$34

$1.0

$26 to

$45

7%

$13 to

$31

$8.4

$25 to

$43

1536

Non-Monetized Benefits ......

Non-monetized climate benefits.

Reductions in exposure to ambient NO2 and SO2.

Reductions in mercury deposition.

Ecosystem benefits associated with reductions in emissions of NOX, SO2,

PM, and mercury.

Visibility impairment.

a All are rounded to two significant figures, so figures may not sum.

b The climate benefit estimate in this summary table reflects global impacts from CO2 emission changes and

does not account for changes in non-CO2 GHG emissions. Also, different discount rates are applied to SC-CO2

than to the other estimates because CO2 emissions are long-lived and subsequent damages occur over many

years. The benefit estimates in this table are based on the average SC-CO2 estimated for a 3 percent discount

rate. However, we emphasize the importance and value of considering the full range of SC-CO2 values. As

shown in the RIA, climate benefits are also estimated using the other three SC-CO2 estimates (model average

at 2.5 percent discount rate, 3 percent, and 5 percent; 95th percentile at 3 percent). The SC-CO2 estimates are

year-specific and increase over time.

c The air pollution health co-benefits reflect reduced exposure to PM2.5 and ozone associated with emission

reductions of SO2 and NOX . The range reflects the use of concentration-response functions from different

epidemiology studies. The co-benefits do not include the benefits of reductions in directly emitted PM2.5. These

additional benefits would increase overall benefits by a few percent based on the analyses conducted for the

proposed rule. The reduction in premature fatalities each year accounts for over 98 percent of total monetized

co-benefits from PM2.5 and ozone. These models assume that all fine particles, regardless of their chemical

1537

composition, are equally potent in causing premature mortality because the scientific evidence is not yet

sufficient to allow differentiation of effect estimates by particle type.

d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning

Model for the final guidelines and a discount rate of approximately 5 percent. This estimate includes monitoring,

recordkeeping, and reporting costs and demand-side EE program and participant costs.

e The estimates of net benefits in this summary table are calculated using the global SC-CO2 at a 3 percent

discount rate (model average). The RIA includes combined climate and health estimates based on additional

discount rates.

1538

TABLE 22—SUMMARY OF THE MONETIZED BENEFITS, COMPLIANCE COSTS, AND

NET BENEFITS FOR THE FINAL GUIDELINES IN 2020, 2025 AND 2030 UNDER

THE MASS-BASED ILLUSTRATIVE PLAN APPROACH

[Billions of 2011$] a

Mass-based approach

2020

Climate Benefits b

5% discount rate.......................................................................

$0.9

3% discount rate.......................................................................

$3.3

2.5% discount rate....................................................................

$4.9

95th percentile at 3% discount rate ........................................

$9.7

Air Quality Co-benefits Discount Rate

3%

7%

3%

$2.0 to

$1.8 to

$7.1 to

$4.8

$4.4

$17

Compliance Costs d .....................................................................

$3.9 to

$3.7 to

$16 to

e

Net Benefits ....................... $6.7

$6.3

$26

Air Quality Health Cobenefits c ...............................

7%

$6.5 to

$16

$1.4

$15 to

$24

2025

2030

$3.6

$12

$17

$35

$6.4

$20

$29

$60

3%

$12 to

$28

$3.0

$26 to

$43

7%

$11 to

$26

$5.1

$25 to

$40

1539

Non-Monetized Benefits ......

Non-monetized climate benefits.

Reductions in exposure to ambient NO2 and SO2.

Reductions in mercury deposition.

Ecosystem benefits associated with reductions in emissions of NOX, SO2,

PM, and mercury.

Visibility improvement.

a All are rounded to two significant figures, so figures may not sum.

b The climate benefit estimate in this summary table reflects global impacts from CO2 emission changes and

does not account for changes in non-CO2 GHG emissions. Also, different discount rates are applied to SC-CO2

than to the other estimates because CO2 emissions are long-lived and subsequent damages occur over many

years. The benefit estimates in this table are based on the average SC-CO2 estimated for a 3 percent discount

rate. However, we emphasize the importance and value of considering the full range of SC-CO2 values. As

shown in the RIA, climate benefits are also estimated using the other three SC-CO2 estimates (model average

at 2.5 percent discount rate, 3 percent, and 5 percent; 95th percentile at 3 percent). The SC-CO2 estimates are

year-specific and increase over time.

c The air pollution health co-benefits reflect reduced exposure to PM2.5 and ozone associated with emission

reductions of SO2 and NOX. The co-benefits do not include the benefits of reductions in directly emitted PM2.5.

These additional benefits would increase overall benefits by a few percent based on the analyses conducted for

the proposed rule. The range reflects the use of concentration-response functions from different epidemiology

studies. The reduction in premature fatalities each year accounts for over 98 percent of total monetized cobenefits from PM2.5 and ozone. These models assume that all fine particles, regardless of their chemical

1540

composition, are equally potent in causing premature mortality because the scientific evidence is not yet

sufficient to allow differentiation of effect estimates by particle type.

d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning

Model for the final guidelines and a discount rate of approximately 5 percent. This estimate includes monitoring,

recordkeeping, and reporting costs and demand-side EE program and participant costs.

e The estimates of net benefits in this summary table are calculated using the global SC-CO2 at a 3 percent

discount rate (model average). The RIA includes combined climate and health estimates based on additional

discount rates.

1541

There are additional important benefits that the

EPA could not monetize. Due to current data and

modeling limitations, our estimates of the benefits

from reducing CO2 emissions do not include important

impacts like ocean acidification or potential tipping

points in natural or managed ecosystems.

Unquantified benefits also include climate benefits

from reducing emissions of non-CO2 GHGs (e.g.,

nitrous oxide and methane) and co-benefits from

reducing direct exposure to SO2, NOX and hazardous

air pollutants (e.g., mercury), as well as from reducing

ecosystem effects and visibility impairment. Based

upon the foregoing discussion, it remains clear that

the benefits of this final action are substantial, and far

exceed the costs. Additional details on benefits, costs,

and net benefits estimates are provided in this RIA.

B. Paperwork Reduction Act (PRA)

The information collection requirements in this rule

have been submitted for approval to OMB under the

PRA. The Information Collection Request (ICR)

document prepared by the EPA has been assigned the

EPA ICR number 2503.02. You can find a copy of the

ICR in the docket for this rule, and it is briefly

summarized here.

The information collection

requirements are not enforceable until OMB approves

them.

This rule does not directly impose specific

requirements on EGUs located in states or areas of

Indian country. The rule also does not impose specific

requirements on tribal governments that have

affected EGUs located in their area of Indian country.

For areas of Indian country, the rule establishes CO2

emission performance goals that could be addressed

1542

through either tribal or federal plans. A tribe would

have the opportunity under the Tribal Authority Rule

(TAR), but not the obligation, to apply to the EPA for

Treatment as State (TAS) for purposes of a CAA

section 111(d) plan and, if approved by the EPA, to

establish a CAA section 111(d) plan for its area of

Indian country. To date, no tribe has requested or

obtained TAS eligibility for purposes of a CAA section

111(d) plan. For areas of Indian country with affected

EGUs where a tribe has not applied for TAS and

submitted any needed plan, if the EPA determines

that a CAA section 111(d) plan is necessary or

appropriate, the EPA would have the responsibility to

establish the plans. Because tribes are not required to

implement section 111(d) plans and because no tribe

has yet sought TAS eligibility for this purpose, this

action is not anticipated to impose any information

collection burden on tribal governments over the 3year period covered by this ICR.

This rule does impose specific requirements on state

governments with affected EGUs. The information

collection

requirements

are

based

on

the

recordkeeping and reporting burden

This text is long and has been trimmed here. Open the source document for the complete record.