Determination Regarding Good Neighbor Obligations for the 2008 Ozone National Ambient Air Quality Standard

Federal RegisterDec 21, 2018

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2018-0225; FRL-9987-86-OAR]

RIN 2060-AT92

Determination Regarding Good Neighbor Obligations for the 2008 Ozone National Ambient Air Quality Standard

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

This action finalizes the Environmental Protection Agency's (EPA) determination that the existing Cross-State Air Pollution Rule Update for the 2008 Ozone National Ambient Air Quality Standards (NAAQS) (CSAPR Update) fully addresses certain states' obligations under the good neighbor provision of the Clean Air Act (CAA) regarding interstate pollution transport for the 2008 ozone NAAQS. The CSAPR Update, published on October 26, 2016, promulgated Federal Implementation Plans (FIPs) for 22 states in the eastern U.S. In the final CSAPR Update, based on information available at that time, the EPA could not conclude that the rule fully addressed these CAA section obligations for 21 of the 22 CSAPR Update states. As a result, the EPA has an outstanding obligation to fully address the requirements of this Clean Air Act provision for these states. Based on information and analysis that became available after the CSAPR Update was finalized, this action finalizes a determination that the existing CSAPR Update fully addresses the CAA's good neighbor provision for the 2008 ozone NAAQS for all remaining CSAPR Update states. Specifically, EPA is finalizing a determination that 2023 is an appropriate future analytic year to evaluate remaining good neighbor obligations and that, for the purposes of addressing good neighbor obligations, there will be no remaining nonattainment or maintenance receptors with respect to the 2008 ozone NAAQS in the eastern U.S. in that year. Therefore, with the CSAPR Update fully implemented, these remaining CSAPR Update states are not expected to contribute significantly to nonattainment in, or interfere with maintenance of, any other state with regard to the 2008 ozone NAAQS. In accord with this finding, the EPA has no outstanding, unfulfilled obligation to establish additional requirements for emission sources in these states to further reduce transported ozone pollution under the good neighbor provision for the 2008 ozone NAAQS. As a result of this finding, this action finalizes minor revisions to the existing CSAPR Update regulations to reflect that the CSAPR Update FIPs fully address this CAA provision. This determination applies to states currently subject to CSAPR Update FIPs as well as any states for which EPA has approved replacement of CSAPR Update FIPs with CSAPR Update state implementation plans (SIPs).

DATES:

This final rule is effective on February 19, 2019.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2018-0225. All documents in the docket are listed on the

www.regulations.gov

website. Although listed in the index, some information may not be publicly available,

e.g.,

CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through

www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

David Risley, Clean Air Markets Division, Office of Atmospheric Programs, U.S. Environmental Protection Agency, MC 6204M, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: (202) 343-9177; email address:

Risley.David@epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated Entities.

Entities regulated under the CSAPR Update are fossil fuel-fired boilers and stationary combustion turbines that serve generators producing electricity for sale, including combined cycle units and units operating as part of systems that cogenerate electricity and other useful energy output. Regulated categories and entities include:

≥

Category

NAICS* code

Examples of

potentially regulated

industries

Industry

221112

Fossil fuel-fired electric power generation

* North American Industry Classification System.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated. To determine whether your facility is affected by this action, you should carefully examine the applicability provisions in 40 CFR 97.804. If you have questions regarding the applicability of the CSAPR Update to a particular entity, consult the person listed in the

FOR FURTHER INFORMATION CONTACT

section above.

Outline.

The following outline is provided to aid in locating information in this preamble.

I. General Information

A. Summary of Proposal in Relation to the Final Determination

B. States Covered by This Action

II. Background and Legal Authority

A. Ground-level Ozone Pollution and Public Health

B. The EPA's Statutory Authority for This Final Action

C. Good Neighbor Obligations for the 2008 Ozone NAAQS

D. Summary of the CSAPR Update

III. Final Determination Regarding Good Neighbor Obligations for the 2008 Ozone NAAQS

A. Analytic Approach

B. Selection of a Future Analytic Year

1. Attainment Dates for the 2008 Ozone NAAQS

2. Feasibility of Control Strategies to Further Reduce Ozone Season NO

Emissions

3. Focusing on 2023 for Analysis

C. Air Quality Analysis

1. Overview of Air Quality Modeling Platform

2. Emission Inventories

3. Definition of Nonattainment and Maintenance Receptors

4. Air Quality Modeling to Identify Nonattainment and Maintenance Receptors

5. Pollutant Transport from Upwind States

D. Final Determination

IV. Statutory Authority and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review, and Executive Order 13563: Improving Regulation and Regulatory Review

B. Executive Order 13771: Reducing Regulations and Controlling Regulatory Costs

C. Paperwork Reduction Act

D. Regulatory Flexibility Act

E. Unfunded Mandates Reform Act

F. Executive Order 13132: Federalism

G. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments

H. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks

I. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

J. National Technology Transfer Advancement Act

K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

L. Congressional Review Act

M. Determinations Under CAA Section 307(b)(1) and (d)

I. General Information

Within this document “we,” “us,” or “our” should be interpreted to mean the U.S. EPA.

Where can I get a copy of this document and other related information?

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2018-0225 (available at

http://www.regulations.gov

). Information related to this final action is available at the website:

https://www.epa.gov/airtransport.

A. Summary of Proposal in Relation to the Final Determination

On July 10, 2018, the EPA issued its proposed Determination Regarding Good Neighbor Obligations for the 2008 Ozone National Ambient Air Quality Standard. 83 FR 31915 (July 10, 2018). In that action, the agency proposed to determine that the existing CSAPR Update fully addressed certain states' obligations under CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. The proposed determination was based upon a finding that 2023 was a reasonable future analytic year in which to further evaluate air quality with respect to remaining good neighbor obligations, considering relevant attainment dates for the 2008 ozone NAAQS and the time necessary to further mitigate nitrogen oxide (NO

) emissions through regional assessment of state-of-the-art post-combustion controls within the CSAPR Update region. The agency's analysis of projected 2023 ozone concentrations indicated that there would be no remaining monitors expected to have difficulty attaining or maintaining the 2008 ozone NAAQS, and the EPA therefore proposed to determine that the existing regulation—the CSAPR Update—fully addressed states' obligations under this Clean Air Act provision for this NAAQS. The agency solicited comment on that proposal with the comment period ending on August 31, 2018. The agency also held a public hearing on August 1, 2018. This final action was developed considering comments received on the proposal. Generally, the agency's final action herein remains consistent with the proposal with respect to its determination regarding good neighbor obligations for the 2008 ozone NAAQS and its underlying rationale.

B. States Covered by This Action

In the CSAPR Update, 81 FR 74504 (Oct. 26, 2016), the EPA promulgated FIPs affecting 22 eastern states that at least partially addressed obligations under CAA section 110(a)(2)(D)(i)(I), also known as the “good neighbor provision,” with respect to the 2008 ozone NAAQS. The good neighbor provision requires upwind states to control their emissions that significantly contribute to air quality problems in downwind states. Based on information available when the CSAPR Update was finalized, the EPA was unable to determine at that time that the FIPs fully addressed good neighbor obligations under this NAAQS for 21 of the 22 states.

The EPA has subsequently finalized approval of a SIP that fully addresses the good neighbor obligation for one of these states—Kentucky. 83 FR 33730 (July 17, 2018). Consistent with the EPA's July 2018 proposed determination, in this action, the EPA finalizes a determination that with CSAPR Update implementation the 20 remaining states' good neighbor obligations for the 2008 ozone NAAQS are fully addressed. In accord with this determination, the EPA has no further obligation under CAA section 110(c) to establish requirements for power plants or any other emission sources in these states to further reduce transported ozone pollution under CAA section 110(a)(2)(D)(i)(I) with regard to this NAAQS. See Table I.A-1 for a list of states covered by this final action.

The EPA determined in the final CSAPR Update that implementation of the emissions budget for Tennessee would fully eliminate the state's significant contribution to downwind nonattainment and interference with maintenance of the 2008 ozone NAAQS because the downwind air quality problems to which the state was linked were projected to be resolved after implementation of the CSAPR Update. 81 FR 74540.

Table I.A-1—States Covered by This Final Determination Regarding Good Neighbor Obligations for the 2008 Ozone NAAQS

State

Alabama

Missouri

Arkansas

New Jersey

Illinois

New York

Indiana

Ohio

Iowa

Oklahoma

Kansas

Pennsylvania

Louisiana

Texas

Maryland

Virginia

Michigan

West Virginia

Mississippi

Wisconsin

II. Background and Legal Authority

A. Ground-level Ozone Pollution and Public Health

Ground-level ozone causes a variety of negative effects on human health, vegetation, and ecosystems. In humans, acute and chronic exposure to ozone is associated with premature mortality and a number of morbidity effects, such as asthma exacerbation. In ecosystems, ozone exposure causes visible foliar injury in some plants, decreases growth in some plants, and affects ecosystem community composition.

For more information on the human health and welfare and ecosystem effects associated with ambient ozone exposure, see the EPA's October 2015 Regulatory Impact Analysis of the Final Revisions to the National Ambient Air Quality Standards for Ground-Level Ozone (EPA-452/R-15-007) in the docket for this action and also found in the docket for the 2015 ozone NAAQS, Docket No. EPA-HQ-OAR-2013-0169-0057.

In this final action, consistent with EPA's proposal and with previous rulemakings described in section II.B, the EPA relies on analysis that reflects the regional nature of transported ground-level ozone pollution. Ground-level ozone is not emitted directly into the air, but is a secondary air pollutant created by chemical reactions between NO

, carbon monoxide (CO), methane (CH

), and non-methane volatile organic compounds (VOCs) in the presence of sunlight. Emissions from mobile sources, electric generating units (EGUs), industrial facilities, gasoline vapors, and chemical solvents are some of the major anthropogenic sources of ozone precursors. The potential for ground-level ozone formation increases during periods with warmer temperatures and stagnant air masses. Therefore, ozone levels are generally higher during the summer months.

3 4

Ground-level ozone concentrations and temperature are highly correlated in the eastern U.S., with observed ozone increases of 2-3 parts per billion (ppb) per degree Celsius reported.

Rasmussen, D.J. et al. (2011). Ground-level ozone-temperature relationships in the eastern US: A monthly climatology for evaluating chemistry-climate models. Atmospheric Environment 47: 142-153.

High ozone concentrations have also been observed in cold months, where a few areas in the western U.S. have experienced high levels of local VOC and NO

emissions that have formed ozone when snow is on the ground and temperatures are near or below freezing.

Bloomer, B.J., J.W. Stehr, C.A. Piety, R.J. Salawitch, and R.R. Dickerson (2009). Observed relationships of ozone air pollution with temperature and emissions, Geophys. Res. Lett., 36, L09803.

Precursor emissions can be transported downwind directly or, after transformation in the atmosphere, as ozone. Studies have established that ozone formation, atmospheric residence, and transport occur on a regional scale (

i.e.,

hundreds of miles) over much of the eastern U.S. As a result of ozone transport, in any given location, ozone pollution levels are affected by a combination of local emissions and

emissions from upwind sources. Numerous observational studies have demonstrated the transport of ozone and its precursors and the impact of upwind emissions on high concentrations of ozone pollution.

For example, Bergin, M.S. et al. (2007). Regional air quality: local and interstate impacts of NO

and SO

emissions on ozone and fine particulate matter in the eastern United States. Environmental Sci & Tech. 41: 4677-4689.

The EPA concluded in several previous rulemakings (summarized in section II.B) that interstate ozone transport can be an important component of peak ozone concentrations during the summer ozone season and that NO

control strategies are effective for reducing regional-scale ozone transport. Model assessments have looked at impacts on peak ozone concentrations after potential emission reduction scenarios for NO

and VOCs for NO

-limited and VOC-limited areas. For example, Jiang and Fast concluded that NO

emission reduction strategies are effective in lowering ozone mixing ratios in urban areas and Liao et al. showed that NO

reductions result in lower peak ozone concentrations in non-attainment areas in the Mid-Atlantic.

7 8

Assessments of ozone conducted for the October 2015 Regulatory Impact Analysis of the Final Revisions to the National Ambient Air Quality Standards for Ground-Level Ozone (EPA-452/R-15-007) also show the importance of NO

emissions on ozone formation. This analysis is in the docket for this action and also can be found in the docket for the 2015 ozone NAAQS regulatory impact analysis, Docket No. EPA-HQ-OAR-2013-0169 (document ID EPA-HQ-OAR-2013-0169-0057).

Jiang, G.; Fast, J.D. (2004). Modeling the effects of VOC and NO

emission sources on ozone formation in Houston during the TexAQS 2000 field campaign. Atmospheric Environment 38: 5071-5085.

Liao, K. et al. (2013) Impacts of interstate transport of pollutants on high ozone events over the Mid-Atlantic United States. Atmospheric Environment 84, 100-112.

Studies have found that NO

emission reductions can be effective in reducing ozone pollution as quantified by the form of the 2008 ozone standard, 8-hour peak concentrations. Specifically, studies have found that NO

emission reductions from EGUs, mobile sources, and other source categories can be effective in reducing the upper-end of the cumulative ozone distribution in the summer on a regional scale.

Analysis of air quality monitoring data trends shows reductions in summertime ozone concurrent with implementation of NO

reduction programs.

Gilliland et al. examined the NO

SIP Call, discussed in more detail later, and presented reductions in observed versus modeled ozone concentrations in the eastern U.S. downwind from major NO

sources.

The results showed significant reductions in ozone concentrations (10-25 percent) from observed measurements (CASTNET and AQS)

between 2002 and 2005, linking reductions in EGU NO

emissions from upwind states with ozone reductions downwind of the major source areas.

Additionally, Gégo et al. showed that ground-level ozone concentrations were significantly reduced after implementation of the NO

SIP Call.

Thus, these studies support the EPA's continued focus on regional and seasonal NOx control strategies to address regional interstate ozone pollution transport.

Hidy, G.M. and Blanchard C.L. (2015). Precursor reductions and ground-level ozone in the Continental United States. J. of Air & Waste Management Assn. 65, 10.

Simon, H. et al. (2015). Ozone trends across the United States over a period of decreasing NO

and VOC emissions. Environmental Science & Technology 49, 186-195.

Gilliland, A.B. et al. (2008). Dynamic evaluation of regional air quality models: Assessing changes in O

stemming from changes in emissions and meteorology. Atmospheric Environment 42: 5110-5123.

CASTNET is the EPA's Clean Air Status and Trends Network. AQS is the EPA's Air Quality System.

Hou, Strickland & Liao. “Contributions of regional air pollutant emissions to ozone and fine particulate matter-related mortalities in eastern U.S. urban areas”. Environmental Research, Feb. 2015. Available at

https://ac.els-cdn.com/S0013935114004113/1-s2.0-S0013935114004113-main.pdf?_tid=78c88101-fa6e-4e75-a65c-f56746905e7d&acdnat=1525175812_0e62553b83c9ffa1105aa306a478e8bb.

Gégo et al. (2007). Observation-based assessment of the impact of nitrogen oxides emission reductions on O

air quality over the eastern United States. J. of Applied Meteorology and Climatology 46: 994-1008.

B. The EPA's Statutory Authority for This Final Action

The statutory authority for this final action is provided by the CAA as amended (42 U.S.C. 7401

et seq.

). Specifically, sections 110 and 301 of the CAA provide the primary statutory underpinnings for this action. The most relevant portions of section 110 are subsections 110(a)(1), 110(a)(2) (including 110(a)(2)(D)(i)(I)), and 110(c)(1).

Section 110(a)(1) provides that states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and that these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS.

The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon the EPA taking any action other than promulgating a new or revised NAAQS.

42 U.S.C. 7410(a)(1).

See EPA

EME Homer City Generation, L.P.,

134 S. Ct. 1584, 1601 (2014).

The EPA has historically referred to SIP submissions made for the purpose of satisfying the applicable requirements of CAA sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Section 110(a)(1) addresses the timing and general requirements for infrastructure SIP submissions, and section 110(a)(2) provides more details concerning the required content of these submissions. It includes a list of specific elements that “[e]ach such plan” submission must address.

All states, regardless of whether the state includes areas designated as nonattainment for the relevant NAAQS, must have SIPs that meet the applicable requirements of section 110(a)(2), including provisions of section 110(a)(2)(D)(i)(I), described later, that are the focus of this action.

The EPA's general approach to infrastructure SIP submissions is explained in greater detail in individual notices acting or proposing to act on state infrastructure SIP submissions and in guidance.

See, e.g.,

Memorandum from Stephen D. Page on Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2) (Sept. 13, 2013).

Section 110(c)(1) requires the Administrator to promulgate a FIP at any time within two years after the Administrator: (1) Finds that a state has failed to make a required SIP submission; (2) finds a SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C); or (3) disapproves a SIP submission. This obligation applies unless the state corrects the deficiency through a SIP revision that the Administrator approves before the FIP is promulgated.

42 U.S.C. 7410(c)(1).

Section 110(a)(2)(D)(i)(I), also known as the “good neighbor provision,” provides the primary basis for this action. It requires that each state SIP include provisions sufficient to “prohibit[ ], consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any [NAAQS].”

The EPA

often refers to the emission reduction requirements under this provision as “good neighbor obligations” and submissions addressing these requirements as “good neighbor SIPs.”

42 U.S.C. 7410(a)(2)(D)(i)(I).

The EPA has previously issued four rules interpreting and clarifying the requirements of section 110(a)(2)(D)(i)(I) for states in the eastern United States. These rules, and the associated court decisions addressing these rules, summarized here, provide important direction regarding the requirements of section 110(a)(2)(D)(i)(I).

The NO

SIP Call, promulgated in 1998, addressed the good neighbor provision for the 1979 1-hour ozone NAAQS.

The rule required 22 states and the District of Columbia to amend their SIPs to reduce NO

emissions that contribute to ozone nonattainment in downwind states. The EPA set ozone season NO

budgets for each state, and the states were given the option to participate in a regional allowance trading program, known as the NO

Budget Trading Program (NBP), to achieve all or most of the required emission reductions.

The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) largely upheld the NO

SIP Call in

Michigan

EPA,

213 F.3d 663 (D.C. cir. 2000),

cert. denied,

532 U.S. 904 (2001).

63 FR 57356 (Oct. 27, 1998). As originally promulgated, the NO

SIP Call also addressed good neighbor obligations under the 1997 8-hour ozone NAAQS, but the EPA subsequently stayed the rule's provisions with respect to that standard. 40 CFR 51.121(q).

“Allowance Trading” sometimes referred to as “cap and trade” is an approach to reducing pollution that has been used successfully to protect human health and the environment. Allowance trading programs have two key components: Emissions budgets (the sum of which provide a cap on emissions), and tradable allowances equal to the budgets that authorize allowance holders to emit a specific quantity (

e.g.,

one ton) of the pollutant. This approach ensures that the environmental goal is met while the tradable allowances provide flexibility for individual participants to establish and follow their own compliance path. Because allowances can be bought and sold in an allowance market, these programs are often referred to as “market-based.”

The EPA's next rule addressing the good neighbor provision, the Clean Air Interstate Rule (CAIR), was promulgated in 2005 and addressed both the 1997 fine particulate matter (PM

2.5

) NAAQS and 1997 ozone NAAQS.

CAIR required SIP revisions in 28 states and the District of Columbia to reduce emissions of sulfur dioxide (SO

) and/or NO

—important precursors of regionally transported PM

2.5

(SO

and annual NO

) and ozone (summer-time NO

). As in the NO

SIP Call, states were given the option to participate in regional allowance trading programs to achieve the reductions. When the EPA promulgated the final CAIR in 2005, the EPA also issued findings that states nationwide had failed to submit SIPs to address the requirements of CAA section 110(a)(2)(D)(i) with respect to the 1997 PM

2.5

and 1997 ozone NAAQS.

The states were required by the CAA to have submitted good neighbor SIPs for those standards by July 2000 (

i.e.,

three years after the standards were finalized).

These findings of failure to submit triggered a two-year clock for the EPA to issue FIPs to address interstate transport,

and on March 15, 2006, the EPA promulgated FIPs to implement the emission reductions required by CAIR.

CAIR was remanded to the EPA by the D.C. Circuit in

North Carolina

EPA,

531 F.3d 896 (D.C. Cir. 2008),

modified on reh'g,

550 F.3d 1176. For more information on the legal issues underlying CAIR and the D.C. Circuit's holding in

North Carolina,

refer to the preamble of the original CSAPR.

70 FR 25162 (May 12, 2005).

70 FR 21147 (April 25, 2005).

See

n.14 and main text,

supra.

See

n.17 and main text,

supra.

71 FR 25328 (April 28, 2006).

76 FR 48208, 48217 (Aug. 8, 2011).

In 2011, the EPA promulgated the original CSAPR to address the issues raised by the remand of CAIR. CSAPR addressed the two NAAQS at issue in CAIR and additionally addressed the good neighbor provision for the 2006 PM

2.5

NAAQS.

CSAPR, as revised, required 28 states to reduce SO

emissions, annual NO

emissions, and/or ozone season NO

emissions that significantly contribute to other states' nonattainment or interfere with other states' abilities to maintain these air quality standards.

To align implementation with the applicable attainment deadlines, the EPA promulgated FIPs for each of the 28 states covered by CSAPR. The FIPs implement regional allowance trading programs to achieve the necessary emission reductions. Each state can submit a good neighbor SIP at any time that, if approved by the EPA, would replace the CSAPR FIP for that state.

CSAPR was the subject of an adverse decision by the D.C. Circuit in August 2012.

However, this decision was reversed in April 2014 by the Supreme Court,

which largely upheld the rule, including EPA's approach to addressing interstate transport in CSAPR. The rule was remanded to the D.C. Circuit to consider other claims not addressed by the Supreme Court.

EPA

EME Homer City Generation, L.P.,

134 S. Ct. 1584 (2014) (

EME Homer City

). In July 2015 the D.C. Circuit affirmed the EPA's interpretation of various statutory provisions and the EPA's technical decisions.

EME Homer City Generation, L.P.

EPA,

795 F.3d 118 (2015) (

EME Homer City II

). However, the court also remanded the rule without vacatur for reconsideration of the EPA's emissions budgets for certain states, which the court found may over-control those states' emissions with respect to the downwind air quality problems to which the states were linked.

Id.

at 129-30, 138. For more information on the legal considerations of CSAPR and the court's decisions in the

EME Homer City

litigation, refer to the preamble of the CSAPR Update.

76 FR 48208.

CSAPR was revised by several rulemakings after its initial promulgation in order to revise certain states' budgets and to promulgate FIPs for five additional states addressing the good neighbor obligation for the 1997 ozone NAAQS. 76 FR 80760 (Dec. 27, 2011); 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 12, 2012).

The EPA has already approved SIPs fully replacing the original CSAPR FIPs for Alabama, 81 FR 59869 (Aug. 31, 2016); Georgia, 82 FR 47930 (Oct. 13, 2017); South Carolina, 82 FR 47936 (Oct. 13, 2017); and Indiana (signed Nov. 27, 2018; publication in the

Federal Register

forthcoming).

On August 21, 2012, the D.C. Circuit issued a decision in

EME Homer City Generation, L.P.

EPA,

696 F.3d 7 (D.C. Cir. 2012) (

EME Homer City I

), vacating CSAPR. The EPA sought review with the D.C. Circuit

en banc

and the D.C. Circuit declined to consider the EPA's appeal

en banc. EME Homer City Generation, L.P.

EPA,

No. 11-1302 (D.C. Cir. January 24, 2013), ECF No. 1417012 (denying the EPA's motion for rehearing en banc).

On January 23, 2013, the Supreme Court granted the EPA's petition for certiorari.

EPA

EME Homer City Generation, L.P.,

133 S. Ct. 2857 (2013) (granting the EPA's and other parties' petitions for certiorari).

81 FR 74511.

In 2016, the EPA promulgated the CSAPR Update to address interstate transport of ozone pollution with respect to the 2008 ozone NAAQS.

The final rule generally updated the CSAPR ozone season NO

emissions budgets for 22 states to achieve cost-effective and immediately feasible NO

emission reductions from EGUs within those states.

To align implementation with relevant attainment dates, the CSAPR Update implemented these budgets through FIPs requiring sources to participate in a revised CSAPR ozone season NO

allowance trading program beginning with the 2017 ozone season. As discussed in more detail later in this preamble, the 2017 deadline was intended to ensure that the emission reductions from the rule would be made prior to the July 20, 2018 moderate attainment deadline. As under the

original CSAPR, each state can submit a good neighbor SIP at any time that, if approved by the EPA, would replace the CSAPR Update FIP for that state.

The final CSAPR Update also addressed the remand by the D.C. Circuit of certain states' original CSAPR phase 2 ozone season NO

emissions budgets in

EME Homer City II.

The CSAPR Update is subject to pending legal challenges in the D.C. Circuit.

Wisconsin

EPA,

No. 16-1406 (D.C. Cir. argued Oct. 3, 2018). Further information about the CSAPR Update can be found in section II.D of this notice.

81 FR 74504.

One state, Kansas, was made newly subject to a CSAPR ozone season NO

requirement by the CSAPR Update. All other CSAPR Update states were already subject to ozone season NO

requirements under the original CSAPR.

EPA has already approved SIPs fully replacing the CSAPR Update FIPs for Alabama, 82 FR 46674 (Oct. 6, 2017), and Indiana (signed Nov. 27, 2018; publication in the

Federal Register

forthcoming).

Section 301(a)(1) of the CAA also gives the Administrator the general authority to prescribe such regulations as are necessary to carry out functions under the Act.

Pursuant to this section, the EPA has authority to clarify the applicability of CAA requirements. In this action, among other things, the EPA is clarifying the applicability of section 110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. In particular, the EPA is using its authority under sections 110 and 301 to make a determination that no further enforceable reductions in emissions of NO

are required under this provision with respect to the 2008 ozone NAAQS for the states covered by this rule. The EPA is making minor revisions to the existing state-specific sections of the CSAPR Update regulations for all states covered by this action.

42 U.S.C. 7601(a)(1).

C. Good Neighbor Obligations for the 2008 Ozone NAAQS

On March 12, 2008, the EPA promulgated a revision to the NAAQS, lowering both the primary and secondary standards to 75 ppb.

See

National Ambient Air Quality Standards for Ozone, Final Rule, 73 FR 16436 (March 27, 2008). Specifically, the standards require that an area may not exceed 0.075 ppm (75 ppb) using the 3-year average of the fourth highest 24-hour maximum 8-hour rolling average ozone concentration. These revisions of the NAAQS, in turn, triggered a 3-year deadline for states to submit SIP revisions addressing infrastructure requirements under CAA sections 110(a)(1) and 110(a)(2), including the good neighbor provision. Several events affected the timely application of the good neighbor provision for the 2008 ozone NAAQS, including reconsideration of the 2008 ozone NAAQS and legal developments pertaining to the EPA's original CSAPR, which created uncertainty surrounding the EPA's statutory interpretation and implementation of the good neighbor provision.

Notwithstanding these events, the EPA ultimately affirmed that states' good neighbor SIPs were due on March 12, 2011.

These events are described in detail in section IV.A.2 of the CSAPR Update. 81 FR 74515.

The EPA subsequently took several actions that triggered the EPA's obligation under CAA section 110(c) to promulgate FIPs addressing the good neighbor provision for several states.

First, on July 13, 2015, the EPA published a rule finding that 24 states failed to make complete submissions that address the requirements of section 110(a)(2)(D)(i)(I) related to the interstate transport of pollution as to the 2008 ozone NAAQS.

See

80 FR 39961 (effective August 12, 2015). This finding triggered a two-year deadline for the EPA to issue FIPs to address the good neighbor provision for these states by August 12, 2017. The CSAPR Update finalized FIPs for 13 of these states (Alabama, Arkansas, Illinois, Iowa, Kansas, Michigan, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee, Virginia, and West Virginia), requiring their participation in a NO

emission trading program. The EPA also determined in the CSAPR Update that the agency had no further FIP obligation as to nine additional states identified in the finding of failure to submit because these states did not contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to the 2008 ozone NAAQS. 81 FR 74506.

40 41

On June 15, 2016, and July 20, 2016, the EPA published additional rules finding that New Jersey and Maryland, respectively, also failed to submit transport SIPs for the 2008 ozone NAAQS.

See

81 FR 38963 (June 15, 2016) (New Jersey, effective July 15, 2016); 81 FR 47040 (July 20, 2016) (Maryland, effective August 19, 2016). The finding actions triggered two-year deadlines for the EPA to issue FIPs to address the good neighbor provision for Maryland by August 19, 2018, and for New Jersey by July 15, 2018. The CSAPR Update also finalized FIPs for these two states.

This section of the preamble focuses on SIP and FIP actions for those states addressed in the CSAPR Update. The EPA has also acted on SIPs for other states not mentioned in this action. The memorandum, “Final Action, Status of 110(a)(2)(D)(i)(I) SIPs for the 2008 Ozone NAAQS,” more fully describes the good neighbor SIP status for the 2008 ozone NAAQS and is available in the docket for this action.

The nine states were Florida, Georgia, Maine, Massachusetts, Minnesota, New Hampshire, North Carolina, South Carolina, and Vermont.

The two remaining states addressed in the findings of failure to submit (California and New Mexico) were not part of the CSAPR Update analysis and are not addressed in this action.

In addition to these findings, the EPA finalized disapproval or partial disapproval actions for good neighbor SIPs submitted by Indiana, Kentucky, Louisiana, New York, Ohio, Texas, and Wisconsin.

These disapprovals triggered the EPA's obligation to promulgate FIPs to implement the requirements of the good neighbor provision for those states within two years of the effective date of each disapproval. The EPA promulgated CSAPR Update FIPs for each of these states.

See

the following actions: Indiana (81 FR 38957, June 15, 2016); Kentucky (78 FR 14681, March 7, 2013); Louisiana (81 FR 53308, August 12, 2016); New York (81 FR 58849, August 26, 2016); Ohio (81 FR 38957, June 15, 2016); Texas (81 FR 53284, August 12, 2016); and Wisconsin (81 FR 53309, August 12, 2016).

As discussed in more detail in the next section, in issuing the CSAPR Update, the EPA did not determine that it had entirely addressed the EPA's outstanding CAA obligations to implement the good neighbor provision with respect to the 2008 ozone NAAQS for 21 of 22 states covered by that rule. Accordingly, the CSAPR Update did not fully satisfy the EPA's obligation under section 110(c) to address the good neighbor provision requirements for those states by approving SIPs, issuing FIPs, or some combination of those two actions. The EPA found that the CSAPR Update FIP fully addressed the good neighbor provision for the 2008 ozone NAAQS only with respect to Tennessee.

The EPA notes that it has separately finalized an action to fully address Kentucky's good neighbor obligation for the 2008 ozone NAAQS. On May 23, 2017, the U.S. District Court for the Northern District of California issued an order requiring the EPA to take a final action fully addressing the good neighbor obligation for the 2008 ozone NAAQS for Kentucky by June 30, 2018.

See

Order,

Sierra Club

Pruitt,

No. 3:15-cv-04328 (N.D. Cal.), ECF No. 73. On May 10, 2018, Kentucky submitted a final SIP to EPA, which the agency finalized approval of consistent with the court-ordered deadline. 83 FR 33730 (July 17, 2018).

Subsequent to the promulgation of the CSAPR Update, the EPA approved SIPs fully replacing the CSAPR Update FIPs for Alabama, 82 FR 46674 (October 6, 2017), and Indiana (signed November 27, 2018; publication in the

Federal Register

forthcoming). In those SIP approvals and consistent with the conclusions of the CSAPR Update, the EPA found that the SIPs partially satisfy

Alabama's and Indiana's good neighbor obligations for the 2008 ozone NAAQS. Thus, the EPA continues to have an obligation to fully address the good neighbor provision requirements for the 2008 NAAQS with respect to Alabama, stemming from the July 13, 2015 findings notice, and Indiana, due to the June 15, 2016 disapproval of the state's good neighbor SIP. Other states have also submitted SIPs, some of which the EPA has approved and some of which still remain pending. However, these states are not the subject of this rulemaking and these actions are therefore not described in detail in this section.

Table II.C-1 summarizes the statutory deadline for the EPA to address its FIP obligation under CAA section 110(c) and the event that activated the EPA's obligation for each of the 20 CSAPR Update states that are the subject of this final action. For more information regarding the actions triggering the EPA's FIP obligation and the EPA's action on SIPs addressing the good neighbor provision for the 2008 ozone NAAQS, see the memorandum, “Final Action, Status of 110(a)(2)(D)(i)(I) SIPs for the 2008 Ozone NAAQS,” in the docket for this action.

Table II.C-1—Actions That Activated EPA's Statutory FIP Deadlines

State

Type of action

(

Federal Register

citation, publication date)

Statutory FIP deadline

Alabama

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Arkansas

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Illinois

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Indiana

SIP disapproval (81 FR 38957, 6/15/2016)

7/15/2018

Iowa

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Kansas

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Louisiana

SIP disapproval (81 FR 53308, 8/12/2016)

9/12/2018

Maryland

Finding of Failure to Submit (81 FR 47040, 7/20/2016)

8/19/2018

Michigan

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Mississippi

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Missouri

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

New Jersey

Finding of Failure to Submit (81 FR 38963, 6/15/2016)

7/15/2018

New York

SIP disapproval (81 FR 58849, 8/26/2016)

9/26/2018

Ohio

SIP disapproval (81 FR 38957, 6/15/2016)

7/15/2018

Oklahoma

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Pennsylvania

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Texas

SIP disapproval (81 FR 53284, 8/12/2016)

9/12/2018

Virginia

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

West Virginia

Finding of Failure to Submit (80 FR 39961, 7/13/2015)

8/12/2017

Wisconsin

Partial SIP disapproval as to prong 2 (81 FR 53309, 8/12/2016)

9/12/2018

August 12, 2017 statutory deadline has passed for the EPA to act with respect to good neighbor obligations under the 2008 ozone NAAQS for 12 CSAPR Update states. The EPA is subject to a court-ordered deadline to promulgate a final action fully addressing the good neighbor obligations under the 2008 ozone NAAQS for five of these states by no later than December 6, 2018.

The statutory deadlines for the EPA to act with respect to good neighbor obligations under the 2008 ozone NAAQS for eight other CSAPR Update states passed between July 15, 2018, and September 26, 2018.

The FIP deadline is two years from the effective date of the SIP disapproval or Finding of Failure to Submit, which generally trails the publication date by 30 days.

Order,

New York

Pruitt,

No. 1:18-cv-00406-JGK (S.D.N.Y. June 12, 2018), ECF No. 34. The five states are Illinois, Michigan, Pennsylvania, Virginia, and West Virginia.

D. Summary of the CSAPR Update

On October 16, 2016, the EPA finalized the CSAPR Update. The purpose of the CSAPR Update was to protect public health and welfare by reducing interstate pollution transport that will significantly contribute to nonattainment, or interfere with maintenance, of the 2008 ozone NAAQS in the eastern U.S. As discussed in section II.C, the EPA finalized a FIP for each of the 22 states subject to the rule,

either having previously found that those states failed to submit a complete good neighbor SIP (15 states) or having issued a final rule disapproving their good neighbor SIP submittals (seven states). For the 22 states covered by the CSAPR Update, the EPA promulgated EGU ozone season NO

emissions budgets, implemented through a regional allowance trading program, to reduce interstate ozone transport for the 2008 ozone NAAQS during the ozone season (May-September), beginning with the 2017 ozone season.

Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.

To establish and implement the CSAPR Update emissions budgets, the EPA followed a four-step analytic process that has been used in each of the agency's regional interstate transport rulemakings. The four-step interstate transport framework is described in more detail in section III.A. To summarize, in step 1, the agency identified downwind locations, referred to as receptors, that were expected to have problems attaining or maintaining the NAAQS. In step 2, the EPA examined, using a contribution threshold of one percent of the NAAQS, which upwind states contributed to the nonattainment or maintenance receptors identified in step 1. In step 3, the EPA quantified the upwind emissions that significantly contributed to nonattainment or interfered with maintenance and established emission budgets that reflected removal of those emissions. Finally, in step 4, the agency provided for implementation of the budgets through an allowance trading program.

The EPA aligned its analysis of air quality and upwind state contributions in steps 1 and 2, as well as implementation of the trading program in step 4 with relevant attainment dates for the 2008 ozone NAAQS. The EPA's final 2008 Ozone NAAQS SIP Requirements Rule established the attainment deadline of July 20, 2018, for ozone nonattainment areas classified as

Moderate.

Because the attainment date fell during the 2018 ozone season, the 2017 ozone season was the last full season from which data could be used to determine attainment of the NAAQS by that date. Therefore, consistent with the court's instruction in

North Carolina

to harmonize implementation of emission reductions under the good neighbor provision with downwind attainment dates, 531 F.3d at 912, the EPA established and implemented emissions budgets starting with the 2017 ozone season. 81 FR 74507. The establishment of 2017 as the CSAPR Update's analytic year and compliance timeframe was further supported by an assessment that certain control strategies to mitigate ozone pollution transport were feasible in that timeframe.

80 FR 12264, 12268 (Mar. 6, 2015); 40 CFR 51.1103. Ozone nonattainment areas are classified as either Marginal, Moderate, Serious, Severe, or Extreme, based on the severity of the air quality problem in the area. Areas with more acute air quality problems are required to implement more stringent control requirements and are provided additional time to attain the NAAQS. See CAA sections 181 and 182, 42 U.S.C. 7511, 7511a.

As to step 3, in particular, the EPA quantified emissions from upwind states that would significantly contribute to nonattainment or interfere with maintenance by first evaluating various levels of uniform NO

control stringency, each represented by an estimated marginal cost per ton of NO

reduced. The EPA then applied a multi-factor test to evaluate cost, available emission reductions, and downwind air quality impacts to determine the appropriate level of uniform NO

control stringency that addressed the impacts of interstate transport on downwind nonattainment or maintenance receptors. The EPA used this multi-factor assessment to gauge the extent to which emission reductions should be implemented in the future compliance year (

i.e.,

2017) and to evaluate the potential for over- and under-control of upwind state emissions.

Within the multi-factor test, the EPA identified a “knee in the curve,”

i.e.,

a point at which the cost-effectiveness of the emission reductions was maximized, so named for the discernable turning point observable in a multi-factor (

i.e.,

multi-variable) curve.

See

81 FR 74550. The EPA concluded that this was at the point where emissions budgets reflected a uniform NO

control stringency represented by an estimated marginal cost of $1,400 per ton of NO

reduced. In light of this multi-factor test, EPA determined this level of stringency in emissions budgets represented the level at which incremental EGU NO

reduction potential and corresponding downwind ozone air quality improvements were maximized—relative to other control stringencies evaluated—with respect to marginal cost. That is, the ratio of emission reductions to marginal cost and the ratio of ozone improvements to marginal cost were maximized relative to the other levels of control stringency evaluated. The EPA found that feasible and cost-effective EGU NO

reductions were available to make meaningful and timely improvements in downwind ozone air quality to address interstate ozone transport for the 2008 ozone NAAQS for the 2017 ozone season. 81 FR 74508. Further, the agency's evaluation showed that emissions budgets reflecting the $1,400 per ton cost threshold did not over-control upwind states' emissions relative to either the downwind air quality problems to which they were linked or the one percent contribution threshold in step 2 that triggered their further evaluation in step 3.

Id.

at 74551-52. As a result, the EPA finalized EGU ozone season NO

emissions budgets developed using uniform control stringency represented by $1,400 per ton. These budgets represented emissions remaining in each state after elimination of the amounts of emissions that the EPA identified would significantly contribute to nonattainment or interfere with maintenance of the 2008 ozone NAAQS in downwind states.

To implement the CSAPR Update's emission budgets, the EPA promulgated FIPs requiring power plants in covered states to participate in the CSAPR NO

Ozone Season Group 2 allowance trading program starting in 2017.

CSAPR's trading programs and the EPA's prior emissions trading programs (

e.g.,

CAIR and the NO

Budget Trading Program) have provided a proven implementation framework for achieving emission reductions. In addition to providing environmental certainty (

i.e.,

a cap on emissions), these programs also provide regulated sources with flexibility in choosing compliance strategies. By using the CSAPR allowance trading programs, the EPA applied an implementation framework that was shaped by notice and comment in previous rulemakings and reflected the evolution of these programs in response to court decisions and practical experience gained by states, industry, and the EPA.

The ozone season NO

allowance trading program created under the original CSAPR was renamed the CSAPR NO

Ozone Season Group 1 Trading Program and now applies only to sources in Georgia. In the CSAPR Update, the EPA found that Georgia did not contribute to interstate transport with respect to the 2008 ozone NAAQS, but the state has an ongoing ozone season NO

requirement under the original CSAPR with respect to the 1997 ozone NAAQS.

Based on information available at the time of its promulgation, the EPA was unable to conclude that the CSAPR Update fully addressed most of the covered states' good neighbor obligations for the 2008 ozone NAAQS. 81 FR 74521. Information available at the time indicated that, even with CSAPR Update implementation, several downwind receptors were expected to continue having problems attaining and maintaining this NAAQS and that emissions from upwind states were expected to continue to contribute greater than or equal to one percent of the NAAQS to these areas during the 2017 ozone season.

Id.

at 74551-52. Further, the EPA could not conclude at that time whether additional EGU and non-EGU reductions implemented on a longer timeframe than 2017 would be necessary, feasible, and cost-effective to address states' good neighbor obligations for this NAAQS.

As noted, the EPA premised its conclusion that the CSAPR Update may not fully address states' good neighbor obligations in part on the agency's assessment that air quality problems would persist at downwind receptors in 2017 even with CSAPR Update implementation. The EPA's assessment of CSAPR Update implementation using the Air Quality Assessment Tool (AQAT) indicated that certain eastern air quality monitors would continue to have problems attaining and maintaining the 2008 ozone NAAQS in 2017. 81 FR 74550-52. Specifically, projected nonattainment receptors remained in Connecticut, Texas, and Wisconsin, while projected maintenance-only receptors remained in Connecticut, Maryland, Michigan, New York, and Texas.

See

Table II.D-1 for a list of remaining nonattainment receptors and Table II.D-2 for a list of remaining maintenance-only receptors. (The EPA's approach to defining nonattainment and maintenance-only receptors is explained in section III.C.1 below.)

Projected AQAT design values for the $1400/ton policy case are available in Tables D-6 and D-7 of the CSAPR Update “Ozone Transport Policy Analysis Final Rule TSD” (August 2016), Docket ID No. EPA-HQ-OAR-2015-0500-0555.

Table II.D-1—Remaining 2017 Projected Nonattainment Receptors in the Eastern U.S.

Monitor ID

State

County

090019003

Connecticut

Fairfield.

090099002

Connecticut

New Haven.

480391004

Texas

Brazoria.

484392003

Texas

Tarrant.

484393009

Texas

Tarrant.

551170006

Wisconsin

Sheboygan.

Table II.D-2—Remaining 2017 Projected Maintenance-Only Receptors in the Eastern U.S.

Monitor ID

State

County

090010017

Connecticut

Fairfield.

090013007

Connecticut

Fairfield.

240251001

Maryland

Harford

260050003

Michigan

Allegan.

360850067

New York

Richmond.

361030002

New York

Suffolk.

481210034

Texas

Denton.

482010024

Texas

Harris.

482011034

Texas

Harris.

482011039

Texas

Harris.

The EPA's analysis also showed that 21 of the 22 CSAPR Update states would continue to contribute equal to or greater than one percent of the 2008 ozone NAAQS to at least one remaining nonattainment or maintenance receptor in 2017.

The EPA did not, at that time, evaluate whether the projected air quality problems would persist and whether upwind states would continue to contribute to these receptors in years beyond 2017. Thus, for those 21 states, the EPA could not, based on information available in the CSAPR Update rulemaking, make an air quality-based conclusion that the CSAPR Update would fully resolve states' good neighbor obligations with respect to the 2008 ozone NAAQS. (For one state, Tennessee, the EPA determined that the CSAPR Update fully resolved its good neighbor obligation.)

See

EPA's Air Quality Assessment Tool from the CSAPR Update in the docket for this action.

Further, it was not feasible for the EPA to complete an emissions control analysis that may otherwise have been necessary to evaluate full elimination of each state's significant contribution to nonattainment or interference with maintenance and also ensure that emission reductions already quantified in the rule would be achieved by 2017. 81 FR at 74522. Specifically, the EPA was unable to fully consider both non-EGU ozone season NO

reductions and further EGU reductions that may have been achievable after 2017.

Id.

at 74521. The EPA did not quantify non-EGU stationary source emission reductions to address interstate ozone transport for the 2008 ozone NAAQS in the CSAPR Update for two reasons. First, the EPA explained that there was greater uncertainty in the EPA's assessment of non-EGU NO

mitigation potential, and that more time would be required for states and the EPA to improve non-EGU point source data and pollution control assumptions before we could develop emission reduction obligations based on that data.

Id.

at 74542. Second, the EPA explained that we did not believe that significant, certain, and meaningful non-EGU NO

reductions were feasible for the 2017 ozone season.

Id.

Many commenters on the CSAPR Update generally agreed with the EPA that non-EGU emission reductions were not readily available for the 2017 ozone season, but some advocated that such reductions should be included as appropriate in future mitigation actions.

Id.

at 74521-22. With respect to EGUs, the EPA concluded that additional control strategies, such as the implementation of new post-combustion controls, would take several years to implement, which was beyond the 2017 ozone season targeted in the CSAPR Update.

Id.

at 74541. Thus, the EPA also could not make an emission reduction-based conclusion that the CSAPR Update would fully resolve states' good neighbor obligations with respect to the 2008 ozone NAAQS because the reductions evaluated and required by the CSAPR Update were limited in scope (both by technology and sector). Specifically, EPA focused the policy analysis for the CSAPR Update on reductions available by the beginning of the 2017 ozone season from EGUs.

Regardless of these limitations, in promulgating the CSAPR Update the EPA stated its belief that it was beneficial to implement, without further delay, EGU NO

reductions that were achievable in the near term, particularly before the Moderate area attainment date of July 20, 2018. Notwithstanding that additional reductions may be required to fully address the states' interstate transport obligations, the EPA concluded that the EGU NO

emission reductions implemented by the final rule were needed for upwind states to eliminate their significant contribution to nonattainment or interference with maintenance of the 2008 ozone NAAQS and to assist downwind states with ozone nonattainment areas that were required to attain the standard by July 20, 2018.

As a result of the remaining air quality problems and the limitations on the EPA's analysis, for all but one of the 22 affected states, the EPA did not determine in the CSAPR Update that the rule fully addressed those states' downwind air quality impacts under the good neighbor provision for the 2008 ozone NAAQS.

Id.

at 74521. For one state, Tennessee, the EPA determined in the final CSAPR Update that Tennessee's emissions budget fully eliminated the state's significant contribution to downwind nonattainment and interference with maintenance of the 2008 ozone NAAQS because the downwind air quality problems to which the state was linked were projected to be resolved with implementation of the CSAPR Update.

Id.

at 74552.

III. Final Determination Regarding Good Neighbor Obligations for the 2008 Ozone NAAQS

As described in section II.D, in the CSAPR Update the EPA promulgated FIPs intended to address the good neighbor provision for the 2008 ozone NAAQS, but could not at that time determine, based on information available when the rule was finalized, that those FIPs would fully address 2008 ozone NAAQS good neighbor obligations for 21 of the 22 CSAPR Update states. As a result, the EPA could not conclude that the CSAPR Update fully satisfied its obligation to issue FIPs, nor had the agency otherwise approved SIPs at that time, to address those states' good neighbor obligations for the 2008 ozone NAAQS. Since the CSAPR Update, the EPA has approved a SIP revision fully resolving the remaining 2008 ozone NAAQS good neighbor obligations for Kentucky.

In this notice, the EPA finalizes a determination that, based on additional information and analysis that has subsequently become available, the CSAPR Update fully addresses the remaining 20 affected states' good neighbor obligations for the 2008 ozone NAAQS.

83 FR 33730 (July 17, 2018).

In particular, the EPA is finalizing a determination that 2023 is an appropriate future analytic year considering relevant attainment dates and the time necessary to implement further NO

controls. This rationale is described within this section, starting with Section III.A, which provides the EPA's analytic approach. Section III.B discusses the agency's selection of 2023 as its future analytic year and Sections III.B.2 provides the EPA's assessment of feasibility (

e.g.,

timing) to implement further regional NO

control strategies for EGUs (Section III.B.2.a) and non-EGUs (Section III.B.2.b). Further, based on the EPA's analysis of projected air

quality in that year, the EPA has determined that, for the purposes of addressing good neighbor obligations for the 2008 ozone NAAQS, there will be no remaining nonattainment or maintenance receptors in the eastern U.S. in the future analytic year of 2023. The agency's analysis is described in Section III.C. As a result of these determinations, the EPA finds that, with CSAPR Update implementation, these states will no longer contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to the 2008 ozone NAAQS. This rationale is described in Section III.D. The agency includes a summary of comments and the EPA's response to those comments at the conclusion of certain sections and subsections therein. The comments summarized in these sections and the EPA's responses are further supplemented by the EPA's Response to Comment document in the docket for this action.

A. Analytic Approach

Through the development and implementation of several previous rulemakings, including most recently the CSAPR Update, the EPA, working in partnership with states, established the following four-step framework to address regional interstate transport of ozone pollution under the Clean Air Act's good neighbor provision.

The agency is evaluating its determination regarding CSAPR Update states' remaining good neighbor obligations for the 2008 ozone NAAQS by applying this same approach.

The steps are summarized in the following four paragraphs.

See

Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone (also known as the NO

SIP Call), 63 FR 57356 (October 27, 1998); Clean Air Interstate Rule (CAIR) Final Rule, 70 FR 25162 (May 12, 2005); CSAPR Final Rule, 76 FR 48208 (August 8, 2011); CSAPR Update for the 2008 Ozone NAAQS Final Rule, 81 FR 74504 (October 26, 2016).

With respect to the 2015 ozone NAAQS, which is not addressed in this action, the EPA recently provided information to states to inform their development of SIPs to address CAA section 110(a)(2)(D)(i)(I). In a memorandum dated March 27, 2018, the agency noted that, in developing their own plans, states have flexibility to follow the familiar four-step transport framework (using the EPA's analytical approach or somewhat different analytical approaches within these steps) or alternative frameworks, so long as their chosen approach has adequate technical justification and is consistent with the requirements of the CAA.

Step 1: Identify downwind air quality problems relative to the 2008 ozone NAAQS.

The EPA historically (including in the CSAPR Update) identified downwind areas with air quality problems, or receptors, using air quality modeling projections for a future analytic year and, where appropriate, considering monitored ozone data. In the CSAPR Update, the agency relied on modeled and monitored data to identify receptors expected to be in nonattainment with the ozone NAAQS in the future analytic year, and relied on modeled data to identify additional receptors that may have difficulty maintaining the NAAQS in the future analytic year, notwithstanding clean monitored data or projected attainment.

Step 2: Determine which upwind states contribute to these identified downwind air quality problems sufficiently to warrant further analysis to determine whether their emissions violate the good neighbor provision.

These states are referred to as “linked” states. In the CSAPR Update, the EPA identified such upwind states as those modeled to impact a downwind receptor in the future analytic year at or above an air quality threshold equivalent to one percent of the 2008 ozone NAAQS.

Step 3: For states linked to downwind air quality problems, identify upwind emissions on a statewide basis that will significantly contribute to nonattainment or interfere with maintenance of a standard at a receptor in another state.

In all of the EPA's prior rulemakings addressing interstate ozone pollution transport, the agency identified and apportioned emission reduction responsibility among multiple upwind states linked to downwind air quality problems considering multiple factors consistently across the region. Specifically, the agency considered feasible NO

control strategies and used cost-based and air quality-based criteria to evaluate regionally uniform NO

control strategies that were then used to quantify the amount of a linked upwind state's emissions, if any, that will significantly contribute to nonattainment or interfere with maintenance in another state in the future analytic year. The agency then established emission budgets reflecting remaining emission levels following the reduction of emissions that significantly contribute to nonattainment or interfere with maintenance of the NAAQS downwind.

Step 4: For upwind states that are found to have emissions that will significantly contribute to nonattainment or interfere with maintenance of the NAAQS downwind, implement the necessary emission reductions within the state.

In the CSAPR Update, the EPA implemented the emission budgets for upwind states found to have good neighbor obligations by requiring EGUs in those states to participate in the CSAPR NO

Ozone Season Group 2 Trading Program. In virtually all respects other than the budgets and the starting year, the program is identical to allowance trading programs used to implement the emission reductions quantified in the original CSAPR, and it builds on the experience of both the EPA and states using emission trading programs to implement other earlier rules.

Affected sources have participated in EPA-administered allowance trading programs under both SIPs and FIPs.

Because this framework provides a reasonable and logical structuring of the key elements that should be considered in addressing the requirements of the good neighbor provision and because this action is evaluating outstanding obligations that remain following the EPA's application of this framework with respect to the 2008 ozone NAAQS in the CSAPR Update, the agency believes it is reasonable to apply the same framework in this final action.

Within this four-step interstate transport framework, the EPA would only proceed to higher enumerated (

i.e.,

downstream) steps if states meet the criteria applied in lower enumerated (

i.e.,

upstream) steps. For example, the EPA would only proceed to step 4, in which sources in upwind states are subject to enforceable emissions limitations, if downwind air quality problems are identified at step 1, an upwind state is found to be linked to a downwind air quality problem at step 2, and sources in the linked upwind state are identified at step 3 as having emissions that significantly contribute to nonattainment or interfere with maintenance of the NAAQS considering multiple cost, emissions, and air-quality factors. For the reasons described in the following paragraphs, the EPA believes this approach is a reasonable interpretation of the good neighbor provision.

The good neighbor provision instructs the EPA and states to apply its requirements “consistent with the provisions of” title I of the CAA. The EPA is therefore interpreting the requirements of the good neighbor provision, and the elements of its four-step interstate transport framework, to apply in a manner consistent with the designation and planning requirements in title I that apply in downwind states.

See North Carolina,

531 F.3d at 912 (holding that the good neighbor provision's reference to title I requires consideration of both procedural and substantive provisions in title I). The EPA notes that this consistency

instruction follows the requirement that plans “contain adequate provisions prohibiting” certain emissions in the good neighbor provision. The following paragraphs will therefore explain how the EPA's interpretation of the circumstances under which the good neighbor provision requires that plans “prohibit” emissions through enforceable measures is consistent with the circumstances under which downwind states are required to implement emissions control measures in nonattainment areas.

For purposes of this analysis, the EPA notes specific aspects of the title I designations process and attainment planning requirements for the ozone NAAQS that provide relevant context for evaluating the consistency of the EPA's approach to implementing the good neighbor provision in upwind states. The EPA notes that this discussion is not intended to suggest that the specific requirements of designations and attainment planning for downwind states apply to upwind states pursuant to the good neighbor provision, but rather to explain why the EPA's approach to interpreting the good neighbor provision is reasonable in light of relevant, analogous provisions found elsewhere in title I.

Cf. EDF

EPA,

82 F.3d 451, 457 (D.C. Cir. 1996) (per curiam) (describing the phrase “consistent with” as “flexible statutory language” which does not require “exact correspondence . . . but only congruity or compatibility,” thus requiring a court to defer to reasonable agency determinations),

amended by

92 F.3d 1209 (D.C. Cir. 1996). In particular, these provisions demonstrate that the EPA's approach is consistent with other relevant provisions of title I with respect to what data is considered in the EPA's analysis and when states are required to implement enforceable measures.

First, areas are initially designated attainment or nonattainment for the ozone NAAQS based on actual measured ozone concentrations.

See

CAA section 107(d), 42 U.S.C. 7407(d) (noting that an area shall be designated attainment where it “meets” the NAAQS and nonattainment where it “does not meet” the NAAQS (including certain “nearby” areas, as explained below)). If an area measures a violation of the relevant ozone NAAQS, then the area is generally designated nonattainment, regardless of what specific factors have influenced the measured ozone concentrations or whether such levels are due to enforceable emissions limits.

In such cases where the an ozone nonattainment area is classified as Moderate or higher, the state is then required to develop an attainment plan, which generally includes the application of various enforceable control measures to sources of emissions located in the nonattainment area, consistent with the requirements in Part D of title I of the Act.

See generally

CAA section 182, 42 U.S.C. 7511a. If, however, an area measures compliance with the ozone NAAQS, the area is designated attainment (unless it is included in the boundaries of a nearby nonattainment area due to its contribution to that area's nonattainment, as discussed below), and sources in that area generally are not subject to any new enforceable control measures under Part D.

Policy tools are available to apply to areas experiencing exceedances of ozone NAAQS that are appreciably impacted by U.S. background ozone. The tools available for each affected location will depend on the specific nature of U.S. background ozone in each area. Some tools would provide relief from a nonattainment designation; others would only provide relief from some of the CAA-prescribed nonattainment area requirements.

Areas classified as Marginal nonattainment areas are required to submit emission inventories and implement a nonattainment new source review permitting program, but are not generally required to implement controls at existing sources.

See

CAA section 182(a), 42 U.S.C. 7511a(a).

Clean Air Act section 184 contains the exception to this general rule: States that are part of the Ozone Transport Region are required to provide SIPs that include specific enforceable control measures, similar to those for nonattainment areas, that apply to the whole state, even for areas designated attainment for the ozone NAAQS.

See generally

42 U.S.C. 7511c.

In determining the boundaries of an ozone nonattainment area, the CAA requires the EPA to consider whether “nearby” areas “contribute” to ambient air quality in the area that does not meet the NAAQS. 42 U.S.C. 7407(d). For each monitor or group of monitors indicating a violation of the ozone NAAQS, the EPA assesses information related to various factors, including current emissions and emissions-related data from the areas near the monitor(s), for the purpose of establishing the appropriate geographic boundaries for the designated ozone nonattainment areas. A nearby area may be included within the boundary of the ozone nonattainment area only after assessing area-specific information, including an assessment of whether current emissions from that area contribute to the air quality problem identified at the violating monitor.

If such a determination is made, sources in the nearby area are also subject to the applicable Part D control requirements. However, if the EPA determines that the nearby area does not contribute to the measured nonattainment problem, then the nearby area is not part of the designated nonattainment area and sources in that area are not subject to such control requirements.

See

Attachment 2 to

Area Designations for the 2008 Ozone National Ambient Air Quality Standards.

Memorandum from Robert J. Meyers, Principal Deputy Assistant Administrator, U.S. EPA to Regional Administrators. December 4, 2008. Available at

https://archive.epa.gov/ozonedesignations/web/pdf/area_designations_for_the_2008_revised_ozone_naaqs.pdf.

The EPA's historical approach to addressing the good neighbor provision via the four-step interstate transport framework, and the approach the EPA continues to apply here, is consistent with these title I requirements. That is, in steps 1 and 2 of the framework, the EPA evaluates whether there is a downwind air quality problem (either nonattainment or maintenance), and whether an upwind state impacts the downwind area such that it contributes to and is therefore “linked” to the downwind area. The EPA's determination at step 1 of the good neighbor analysis (that it has not identified any downwind air quality problems to which an upwind state could contribute) is analogous to the EPA's determination in the designation analysis that an area should be designated attainment. Similarly, EPA's determination at step 2 of the good neighbor analysis (that, while it has at step 1 identified downwind air quality problems, an upwind state does not sufficiently impact the downwind area such that the state contributes to that area's air quality problems and is therefore linked to that area) is analogous to the EPA's determination in the designation analysis that a nearby area does not contribute to a NAAQS violation in another area. Under the good neighbor provision, the EPA can determine at either step 1 or 2, as appropriate, that the upwind state will not contribute to air quality problems in downwind areas and, thus, that the upwind state does not significantly contribute to nonattainment or interfere with maintenance of the NAAQS in other states.

See, e.g.,

CSAPR Update, 81 FR 74506 (determining that emissions from 14 states do not significantly contribute to nonattainment or interfere with maintenance of the 2008 ozone NAAQS); CSAPR, 76 FR 48236 (finding that states whose impacts on downwind receptors are below the air quality threshold do not significantly contribute to nonattainment or interfere with maintenance of the relevant NAAQS). Under such circumstances, sources in the upwind state are not required to implement any control measures under the good neighbor provision, which is analogous to the fact that under the designation and attainment regime,

sources located in areas that are designated attainment (because the area is attaining the NAAQS and not contributing to any nearby nonattainment areas) generally are not required to implement the control measures found in Part D of the Act.

Cf. EME Homer City II,

795 F.3d at 130 (determining that CSAPR ozone-season NO

budgets for 10 states were invalid based on determination that modeling showed no future air quality problems); CSAPR Update, 81 FR 74523-24 (removing three states from CSAPR ozone season NO

program based on determination that states are not linked to any remaining air quality problems for the 1997 ozone NAAQS).

The EPA acknowledges one distinction between the good neighbor and designation analyses: The good neighbor analysis relies on

future-year

projections of emissions to calculate ozone concentrations and upwind state contributions, compared to the use of

current

measured data in the designation analysis. As described in more detail in section III.B, this approach is a reasonable interpretation of the term “will” in the good neighbor provision,

see North Carolina,

531 F.3d at 913-14, and interpreting language specific to that provision does not create an impermissible inconsistency with other provisions of title I. Moreover, the EPA's approach to conducting future-year modeling in the good neighbor analysis to identify downwind air quality problems and linked states is consistent with its use of current measured data in the designations process. The EPA's future-year air quality projections consider a variety of factors, including current emissions data, anticipated future control measures, economic market influences, and meteorology. These same factors,

e.g.,

current control measures, economic market influences, and meteorology, can affect the NO

emissions levels and consequent measured ozone concentrations that inform the designations process. Like the factors that affect measured ozone concentrations used in the designations process, not all of the factors influencing the EPA's modeling projections are or can be subject to enforceable limitations on emissions or ozone concentrations. However, the EPA believes that consideration of these factors contributes to a reasonable estimate of anticipated future ozone concentrations.

See EME Homer City II,

795 F.3d at 135 (declining to invalidate the EPA's modeling projections “solely because there might be discrepancies between those predictions and the real world”);

Chemical Manufacturers Association

EPA,

28 F.3d 1259, 1264 (D.C. Cir. 1994) (“a model is meant to simplify reality in order to make it tractable”). Thus, the EPA's consideration of these factors in its future-year modeling projections used at steps 1 and 2 of the good neighbor analysis is reasonable and consistent with the use of measured data in the designation analysis.

The EPA notes that the consideration of projected

actual

emissions in the future analytic year—as opposed to

allowable

levels—is also consistent with the statute's instruction that states in their SIPs (or the EPA when promulgating a FIP) prohibit emissions that “will” impermissibly impact downwind air quality. This term is reasonably interpreted to mean that the EPA should evaluate anticipated emissions (based on what sources

will

emit) rather than potential emissions (based on what sources

could

emit).

The EPA notes that there is a further distinction between the section 107(d) designations provision and the section 110(a)(2)(D)(i) good neighbor provision in that the latter provision uses different terms to describe the threshold for determining whether emissions in an upwind state should be regulated (“contribute significantly”) as compared to the standard for evaluating the impact of nearby areas in the designations process (“contribute”). Thus, at step 3 of the good neighbor analysis the EPA evaluates additional factors, including cost and air-quality considerations, to determine whether emissions from a linked upwind state would violate the good neighbor provision. Only if the EPA at step 3 determines that the upwind state's emissions would violate the good neighbor provision will it proceed to step 4 to require emissions in the upwind state to be controlled so as to address the identified violation. This approach to steps 3 and 4 is analogous to the trigger for the application of Part D requirements to sources upon designation of an area to nonattainment. Thus, the EPA reasonably interprets the good neighbor provision to not require it or the upwind state to proceed to step 4 and implement any enforceable measures to “prohibit” emissions unless it identifies a violation of the provision at step 3.

See, e.g.,

76 FR 48262 (finding at step 3 that the District of Columbia is not violating the good neighbor provision, and therefore will not at step 4 be subject to any control requirements in CSAPR, because no cost-effective emission reduction opportunities were identified in the District).

Comment:

Several comments received on the EPA's proposal addressed the EPA's approach to identifying downwind air quality problems at step 1 of the framework. These comments contend that the agency's analysis relies on projected future emission levels that are not based on enforceable mechanisms that ensure those emission levels will actually occur or remain in place in a future year and thus improve air quality as modeled. The commenters contend that the Act requires that these emission levels be enforceable in order for modeling relying on such assumptions to be used to support any determination under the good neighbor provision.

One commenter states that the EPA's approach is contrary to the fundamental principle behind the statutory obligation that SIPs must “include enforceable emission limitations” and “contain adequate provisions prohibiting” emissions that unlawfully impact other states, citing CAA sections 110(a)(2)(A) and (D). The commenter contends that the EPA subverts the text and meaning of section 110(a)(2) by declaring that future air quality will attain the NAAQS without ensuring that the emission levels that informed that prediction are enforceable. The commenter further contends that enforceability of control measures is a consistent requirement throughout the CAA, including for redesignation to attainment under section 107(d)(3)(E)(iii) and for attainment SIPs under section 172(c)(6).

In support of this argument, another commenter cites CAA section 110(a)(2)(A), which indicates that SIPs must “include enforceable emission limitations and other control measures, means, or techniques . . . as well as schedules and timetables for compliance.” The commenter further cites CAA section 110(a)(2)(C), which indicates that SIPs must “include a program to provide for the enforcement of the measures described in subparagraph (A), and regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that national ambient air quality standards are achieved, including a permit program. . . .”

Response:

As explained in this section, the EPA does not agree that all assumptions in a model that inform future-year projections must be subject to enforceable commitments before the EPA can rely on the modeling for purposes of identifying downwind air quality problems.

As discussed earlier, within the four-step framework, the EPA interprets the good neighbor provision to require sources in upwind states to implement enforceable emission limitations only if: (1) Downwind air quality problems are identified at step 1, (2) emissions from an upwind state are linked to a

downwind air quality problem at step 2, and (3) sources in the linked upwind state are identified at step 3 as having emissions that significantly contribute to nonattainment and interfere with maintenance of the NAAQS, considering cost- and air-quality-based factors. If all three of these steps are not satisfied, then the state is not required at step 4 to include provisions in its SIP prohibiting any level of reductions because the EPA has determined that emissions from the state will not significantly contribute to nonattainment or interfere with maintenance of the NAAQS downwind and accordingly there are no emissions the state is obligated to “prohibit” under the good neighbor provision. Thus, the EPA does not agree that modeling used to evaluate ozone concentrations at step 1 must only consider enforceable emission levels. Rather, as explained in detail earlier, the EPA's approach is consistent with other applicable provisions of title I regarding the designations and planning requirements applicable in nonattainment areas.

The fact that certain statutory provisions require imposition of enforceable measures does not contradict the EPA's interpretation regarding when the good neighbor provision requires such measures. In fact, the requirement at section 172(c)(6), which commenters cite, that attainment plans for designated nonattainment areas include enforceable measures to bring the area into attainment is consistent with the EPA's interpretation of the good neighbor provision, because that requirement only applies once an area has been designated nonattainment. Similarly, in the EPA's four-step framework, if the EPA identifies a downwind air quality problem and determines that an upwind state significantly contributes to nonattainment or interferes with maintenance of the NAAQS in that downwind area, the EPA would also require, at step 4, the imposition of enforceable measures to address the upwind state's impact on the downwind area. Thus, consistent with the terms of the good neighbor provision, the EPA requires states to “prohibit” emissions upon a determination that such emissions are having the requisite impact on downwind areas. However, the requirement of section 172(c)(6) is not a predicate for an attainment designation, as would be the case by analogy to commenters' suggestion that enforceable limits are a required predicate for a determination that sources do not violate the good neighbor provision.

The citation to the requirements for the redesignation of areas to attainment under section 107(d)(3) is inapposite. Such requirements only apply in areas that have at one point been designated nonattainment under section 107(d)(1). The commenter has not explained why the requirements for redesignation, which apply at the end of a process for nonattainment areas that is well after initial area designations, should be considered relevant to interpreting initial obligations under the good neighbor provision. For the reasons described earlier, the EPA believes it is more reasonable to liken the process for identifying downwind air quality problems under the good neighbor provision to initial designations, which do not turn on evaluations of whether or not the measured emission levels informing the designation are due to enforceable reductions.

The EPA also does not agree that either section 110(a)(2)(A) or section 110(a)(2)(C) require the state to include measures to make the projected emission limitations enforceable in order to address the good neighbor provision. Section 110(a)(2)(A) states that a SIP should “include enforceable emission limitations and other control measures, means, or techniques . . .

as may be necessary or appropriate

to meet the applicable requirements” of the CAA (emphasis added). As described earlier, a finding at step 1 that there is no downwind air quality problem supports a conclusion that a state simply will not contribute significantly or interfere with maintenance of the NAAQS in another state, and thus that the state need not prohibit any particular level of emissions under the good neighbor provision. Accordingly, under section 110(a)(2)(A), no emission limitations would be “necessary or appropriate” to meet the good neighbor provision. Section 110(a)(2)(C) similarly indicates that SIPs should provide for the enforcement of measures cited to support the requirements of section 110(a)(2)(A), but it does not independently require the imposition of additional control measures.

For these reasons, the EPA does not agree with the commenters' conclusion that the statute requires the imposition of enforceable emission limitations even where the agency has determined that an upwind state does not significantly contribute to nonattainment or interfere with maintenance of the NAAQS in a downwind state. See section III.C.2 of this notice for further discussion regarding the EPA's air quality analysis used to support this final determination.

B. Selection of a Future Analytic Year

In this action, consistent with its practice in previous rulemakings addressing ozone transport, the EPA focuses its analysis on a future analytic year in light of the forward-looking nature of the good neighbor obligation in section 110(a)(2)(D)(i)(I) and in consideration of prior court decisions. With respect to the statutory language of the good neighbor provision, the statute requires that states prohibit emissions that “will” significantly contribute to nonattainment or interfere with maintenance of the NAAQS in any other state. The EPA reasonably interprets this language as permitting states and the EPA in implementing the good neighbor provision to prospectively evaluate downwind air quality problems and the need for further upwind emission reductions. In the EPA's prior regional transport rulemakings, the agency generally evaluated whether upwind states “will” significantly contribute to nonattainment or interfere with maintenance based on projections of air quality in the future year in which any emission reductions would be expected to go into effect. For the 1998 NO

SIP Call, it used an analytic year of 2007, and for the 2005 CAIR, it used analytic years of 2009 and 2010 for ozone and PM

2.5

, respectively. 63 FR 57450; 70 FR 25241. The D.C. Circuit affirmed the EPA's interpretation of “will” in CAIR, finding the EPA's consideration of future projected air quality (in addition to current measured data) to be a reasonable interpretation of an ambiguous term.

North Carolina,

531 F.3d at 913-14. The EPA applied the same approach in finalizing CSAPR in 2011 and the CSAPR Update in 2016 by evaluating air quality in 2012 and 2017, respectively. 76 FR 48211; 81 FR 74537.

Consistent with this approach, a key decision that informs the application of the interstate transport framework is the selection of a future analytic year. Several court decisions guide the factors that the EPA considers in selecting an appropriate future analytic year for this action. First, in

North Carolina,

the D.C. Circuit held that the timeframe for implementation of emission reductions required by the good neighbor provision should be selected by considering the relevant attainment dates of downwind nonattainment areas affected by interstate transport of air pollution. 531 F.3d at 911-12. Moreover, the U.S. Supreme Court and the D.C. Circuit have both held that the EPA may not over-control upwind state emissions relative to the downwind air quality problems to which the upwind emissions contribute. Specifically, the

courts found that the agency may not require emission reductions (at steps 3 and 4 of the good neighbor framework) from a state that are greater than necessary to achieve attainment and maintenance of the NAAQS in all of the downwind areas to which that state is linked.

See EME Homer City,

134 S. Ct. at 1600-01;

EME Homer City II,

795 F.3d at 127. In particular, in

EME Homer City II,

the D.C. Circuit determined that the CSAPR phase 2 ozone-season NO

budgets for ten states were invalid because the EPA's modeling showed that the downwind air quality problems to which these states were linked would be resolved by 2014, when the phase 2 budgets were scheduled to be implemented. 795 F.3d at 129-30.

These court decisions therefore support the agency's choice to use a future analytic year in order to help ensure that the EPA does not over- or under-control upwind state emissions at the time that controls will be implemented. Generally, NO

emissions levels are expected to decline in the future through the combination of the implementation of existing local, state, and federal emission reduction programs (

e.g.,

fleet penetration of mobile source programs through fleet turnover) and changing market conditions for electricity generation technologies and fuels.

As a result of expected emission reductions and resulting lower ozone concentrations in the future, the agency is relatively more at risk of over-controlling emissions were it not to identify an appropriate future year in which controls could be feasibly implemented to further reduce emissions and ozone concentrations. Therefore, because further controls cannot be implemented feasibly for several years, as discussed further below, and emissions, upwind contributions, and downwind ozone concentrations will likely be lower at that later point in time due to continued phase-in of existing regulatory programs, changing market conditions, and fleet turnover, it is reasonable for the EPA to evaluate air quality (at steps 1 and 2 of the good neighbor framework) in a future analytic year. In other words, it is appropriate for the EPA's evaluation of air quality to focus on a future analytic year that is aligned with feasible timing for installation of controls in order to ensure that downwind air quality problems exist (at step 1) and that upwind states continue (at step 2) to be linked to downwind air quality problems at a time when any cost-effective emission reductions (identified at step 3) would be implemented (at step 4) and to ensure that such reductions do not over-control relative to the identified ozone problems.

Cf. EME Homer City,

134 S. Ct. at 1600-01;

EME Homer City II,

795 F.3d at 127.

The Supreme Court also held that the agency may not over-control upwind state emissions such that the impact from an upwind state to all downwind air quality problems is below the contribution threshold applied at step 2 that “linked” the upwind state in the first place,

EME Homer City,

134 S. Ct. at 1600-01, but CSAPR was not found in

EME Homer City II

to have violated the prohibition on this type of over-control.

Annual Energy Outlook 2018.

Electricity Supply, Disposition, Prices, and Emissions.

Reference Case. Department of Energy, Energy Information Administration. Available at

https://www.eia.gov/outlooks/aeo/data/browser/#/?id=8-AEO2018&cases=ref2018&sourcekey=0

Thus, in determining the appropriate future analytic year for purposes of assessing remaining interstate transport obligations for the 2008 ozone NAAQS, the EPA considered two primary factors: (1) The applicable attainment dates for this NAAQS; and (2) the timing to feasibly implement new NO

control strategies. These factors are discussed in the following two sections. The EPA is finalizing its proposed determination that these factors collectively support the identification of 2023 as the future analytic year for evaluating whether further unfulfilled good neighbor obligations for the 2008 ozone NAAQS will remain after implementation of the CSAPR Update.

Comment:

Several commenters challenge the EPA's interpretation of the term “will” in the good neighbor provision to permit the identification of downwind air quality problems based on evaluating air quality in a future year. The commenters contend that the EPA's interpretation is inconsistent with the Clean Air Act for various reasons.

One commenter contends that the word “will” merely reflects the temporal dimension of interstate transport of pollutants—

i.e.,

the fact that an upwind state “will” significantly contribute to nonattainment or interfere with maintenance as soon as its ozone pollutants are transported in significant amounts into a downwind area measuring nonattainment or struggling to maintain the NAAQS. The commenter concedes that the term “will” also contemplates impacts in relevant future compliance years but contends it is not limited to the distant future. The commenter asserts that section 110's prohibition against “emitting” pollutants that will significantly contribute to downwind nonattainment (or interfere with downwind maintenance) plainly indicates that the phrase “will contribute” must be read to include both current and future emissions, citing

North Carolina,

531 F.3d at 914. The commenter contends that the EPA's interpretation of “will” to encompass future air quality, as affirmed by the D.C. Circuit in the CAIR litigation, was reasonable only in light of the agency's complementary consideration of present measured data. The commenter states that the EPA's proposed interpretation would grant the agency unfettered discretion, permitting it to find that “will” refers to any future time that the EPA selects, even one only in the distant future. The commenter contends that the interpretation of “will” to refer to a future year when “any emission reductions would be expected to go into effect” is circular, meaningless, and irrational where the EPA finds that no further emission reductions are required.

Another commenter states that Congress specified that implementation plans must prohibit “any” pollution from “any” source that will contribute significantly to nonattainment and interfere with maintenance, and this includes pollution that will contibute between now and 2023. The commenter states that the fact that other pollution emitted at some other time allegedly will not contribute significantly to nonattainment and interfere with maintenance does not excuse the EPA's failure to prohibit the pollution that will do so between now and 2023.

A further commenter contends that the use of the word “emitting” in section 110(a)(2)(D)(i) includes protection against current emissions from upwind sources that are significantly contributing to downwind areas' inability to attain a NAAQS. The commenter cites CAA section 126(b), which provides that a state “may petition the Administrator for a finding that any major source or group of stationary sources

emits or would emit

any air pollutant in violation of the prohibition of” section 110(a)(2)(D)(i) (emphasis added). The commenter states that this clause confirms that current air pollution transport cannot be ignored. Similarly, one commenter asserts that, when interpreting the term “emit” in other provisions of the Act, the D.C. Circuit has held that it refers to actual, present emissions, as opposed to mere potential or future emissions, citing

New York

EPA,

413 F.3d 3, 39-40 (D.C. cir. 2005).

Response:

These commenters are incorrect, for five reasons.

First, the commenters misconstrue both the facts and the holding of the D.C. Circuit's decision in

North Carolina.

In that case, the court was reviewing a challenge to the EPA's approach to identifying downwind

receptors in CAIR wherein the agency considered only those areas projected to be in nonattainment in a future year to be downwind receptors, but not areas projected to be in attainment that were currently measuring nonattainment. 531 F.3d at 913. The court explained that the EPA had consistently interpreted “will” in both the NO

SIP Call and CAIR to “indicate sources that presently

and

at some point in the future `will' contribute to nonattainment,” and noted that both rules relied on projections of nonattainment in the future year in which the rule would go into effect.

Id.

at 914. Thus, contrary to the commenters' assertions, the EPA did not identify downwind air quality problems in CAIR based on

either

a current measured violation

a projected violation of the NAAQS. Rather, in CAIR the EPA determined that a downwind air quality problem was required to be addressed under the good neighbor provision only if

both

the current measured data and the projected future data demonstrated there would be an air quality problem in a downwind area.

The court affirmed the EPA's interpretation, explaining that “will” “can mean either certainty or indicate the future tense” and held that it is reasonable for the EPA to give effect to both potential meanings of the word.

Id.

Thus, although the court acknowledged that the term “will” could refer to the certainty of an upwind state's impact on a downwind state (

i.e.,

based on current measured nonattainment), as one commenter contends it should, the court also clearly acknowledged the ambiguity of this term and indicated this was not the only reasonable interpretation. In light of this ambiguity, the D.C. Circuit affirmed that the EPA's approach, which gives effect to both meanings, is permissible under the Act. Here, as explained in more detail later in section III.C.3, the EPA is identifying downwind nonattainment receptors based on both current measured data and projected future air quality, just as the EPA did in the CSAPR Update, as well as CAIR and the NO

SIP Call.

In compliance with a separate holding of the

North Carolina

decision, the EPA further evaluates receptors in areas currently attaining the standard based on projected future air quality in order to ensure that the “interfere with maintenance” clause of the good neighbor provision is given independent effect.

See

531 F.3d at 910-11.

Second, the EPA also does not agree that the term “emitting” precludes its interpretation of “will” in the good neighbor provision. The relevant clause of the CAA section 110(a)(2)(D)(i) requires state plans (or federal plans, where the agency is acting in the state's stead) to “contain adequate provisions . . .

prohibiting

. . . any source or other type of emissions activity within the State

from emitting

any air pollution in amounts which will” improperly impact downwind areas under the remaining terms of the provision (emphasis added). Thus, the term “emitting” should be read in concert with the prohibition required in this clause to refer to the limitation that should be imposed on sources otherwise found to be in violation of section 110(a)(2)(D)(i)(I); the term “emitting” in its statutory context does not clearly define the temporal requirements for determining whether such a violation exists in the first instance. Rather, the good neighbor provision indicates that sources should be “prohibit[ed] . . . from emitting,” which is a forward-looking phrase intended to address limitations on a source's future activity. The introduction of the phrase “which will” at the end of the clause further serves as a transition from the general obligation to impose a prohibition to the specific circumstances under which the prohibition will apply.

The commenter's reference to the court's interpretation of “emit” in

New York

is therefore an inapt citation for purposes of interpreting the good neighbor provision requirements. In that case, the court was evaluating whether the use of the term “emit” in certain nonattainment new source review provisions (a program imposing a permitting requirement on the construction of new major sources of air pollutants and major modifications of existing sources) was intended to refer to actual or allowable emissions when determining whether modifications to the source trigger a permitting requirement. 413 F.3d 3, 39-40 (D.C. Cir. 2005). The court noted that the statutory provisions governing new source review use different language to distinguish between actual emissions (“emit” or “emitted”) and potential emissions (“potential to emit” or “emission limitations”).

Id.

In the case of the good neighbor provision, the phrase “prohibiting . . . sources . . . from emitting” certain amounts of pollution is more consistent with the terminology used to indicate potential emissions, and therefore more reasonably refers to the emission limitation that would be imposed under the good neighbor provision

the requisite finding of significant contribution or interference with maintenance is made. Thus, the statute's use of the term “emit” does not clearly preclude the EPA's interpretation of “will” as permitting the analysis of downwind air quality in a future year to evaluate interstate transport. The new source review preconstruction permitting program expressly lays out the predicate trigger for the permitting requirement (and the D.C. Circuit in

New York

was considering whether EPA's interpretation and application of those statutory terms was permissible); the good neighbor provision does not expressly lay out the methodology (including the termporal frame of reference) for determining what constitutes a good neighbor violation (and the D.C. Circuit in

North Carolina

affirmed EPA's construction of the governing statutory provision).

Third, the commenters err in suggesting that the standard for granting a section 126(b) petition is incorporated into the good neighbor provision. While section 126(b) cross-references the prohibition in section 110(a)(2)(D)(i),

the cross-reference is unidirectional. There is no indication that Congress intended for the “emits or would emits” language from section 126(b) to be conversely incorporated into section 110, and section 110(a)(2)(D)(i) does not contain any reference to section 126(b). In any event, the commenters have not offered any explanation regarding how any relevant interpretation of section 126(b) should inform the EPA's interpretation of section 110 with respect to current emissions data or projections of future air quality.

The text of CAA section 126 as codified in the U.S. Code cross-references CAA section 110(a)(2)(D)(ii) instead of CAA section 110(a)(2)(D)(i). The courts have confirmed that this is a scrivener's error and the correct cross-reference is to CAA section 110(a)(2)(D)(i).

See Appalachian Power Co.

EPA,

249 F.3d 1032, 1040-44 (D.C. Cir. 2001).

Fourth, while the EPA agrees that the references to “any” in section 110(a)(2)(D)(i) means that any source of emissions of any air pollutant having the requisite impact may be subject to control under that provision, the commenter does not explain how this term imposes an obligation to select a specific analytic year when evaluating whether such emissions are improperly impacting downwind areas and therefore whether such control is necessary or authorized. Rather, as the commenters fail to acknowledge, the EPA is only authorized under the good neighbor provision to require the prohibition of such emissions in “amounts which will” improperly impact another state with respect to the NAAQS. The Supreme Court has held that this language means that any emission reductions imposed under the good neighbor provision be no greater than necessary to address downwind

nonattainment and maintenance of the NAAQS,

i.e.,

that the EPA avoid unnecessary “over-control” of emissions from upwind states.

See EME Homer City,

134 S. Ct. at 1608. In interpreting that decision, the D.C. Circuit declared EPA's emission reduction requirements for certain states to be invalid under the good neighbor provision where the EPA had information indicating that there will be no downwind air quality problems by the time the emission reductions would have been implemented.

See EME Homer City II,

795 F.3d at 130. Thus, the EPA does not agree that information indicating a current violation necessarily obligates the EPA to impose additional emission reductions, especially if additional information indicates there will be no downwind air quality issues to address by the time such reductions could be in place. On the contrary, the D.C. Circuit has already spoken to both the temporal flexibilities and the temporal obligations imposed by the good neighbor provision. The court has both affirmed the EPA's interpretation of “will” as permitting consideration of projected future air quality and instructed the EPA to consider relevant downwind attainment dates in establishing future compliance timeframes.

North Carolina,

531 F.3d at 910-11, 913. The EPA has reasonably aligned these two considerations to ensure that emission reductions required from “any source” within the anticipated compliance timeframes are in fact necessary to address downwind air quality problems at that time, in order to avoid potential over-control in contradiction of

EME Homer City.

Fifth and finally, the EPA does not agree that its interpretation of “will” to permit consideration of projected future air quality grants the agency unfettered discretion to choose any future analytic year, however distant, to justify its conclusions. While the EPA does contend that the statute permits the consideration of air quality in a future year aligned with anticipated compliance, the EPA concedes that it must both comply with the holding in

North Carolina

to appropriately consider relevant downwind attainment dates and provide a reasonable, non-arbitrary justification for selecting an appropriate future analytic year. The EPA provides such an explanation for the selection of the 2023 analytic year in the following sections of this notice.

1. Attainment Dates for the 2008 Ozone NAAQS

As previously noted, in determining the appropriate future analytic year for purposes of assessing remaining interstate transport obligations for the 2008 ozone NAAQS, the EPA first considers the downwind attainment dates for the 2008 ozone NAAQS. Many areas currently have attainment dates of July 20, 2018 for areas classified as Moderate. However, as noted earlier, the 2017 ozone season was the last full season from which data could be used to determine attainment of the NAAQS by that date.

Given that the 2017 ozone season has now passed, it is not possible to achieve additional emission reductions by the Moderate area attainment date. It is therefore necessary to consider what subsequent attainment dates should inform the EPA's analysis. The next attainment dates for the 2008 ozone NAAQS will be July 20, 2021, for nonattainment areas classified as Serious, and July 20, 2027, for nonattainment areas classified as Severe.

Because the various attainment deadlines are in July, which is in the middle of the ozone monitoring season for all states, data from the calendar year prior to the attainment date—

e.g.,

data from 2020 for the 2021 attainment date and from 2026 for the 2027 attainment date—are the last data that can be used to demonstrate attainment with the NAAQS by the relevant attainment date. Therefore, the EPA considers the control strategies that could be implemented by 2020 and 2026 in assessing the 2021 and 2027 attainment dates in its subsequent analysis. The EPA has also considered that, in all cases, the statute provides that areas should attain as expeditiously as practicable.

See

CAA section 181(a)(1).

As discussed in Section II.D, emission reductions that were feasible and cost-effective for the 2017 ozone season were the focus of the CSAPR Update.

While there are no areas (outside of California) that are currently designated as Serious or Severe for the 2008 ozone NAAQS, the CAA requires that the EPA reclassify to Serious any Moderate nonattainment areas that fail to attain by their attainment date of July 20, 2018.

See

CAA section 181(b)(2), 42 U.S.C. 7511(b)(2). Similarly, if any area fails to attain by the Serious area attainment date, the CAA requires that the EPA reclassify the area to Severe.

Comment:

One commenter notes that all of the states burdened by the interstate pollution addressed by the proposed action are currently subject to attainment deadlines in 2015, 2016, or 2018, and it is likely that some states will be determined to have failed to attain and become subject to more stringent requirements and a new deadline of July 20, 2021. The commenter notes that no relevant states are subject to a deadline of 2027, nor will any be subject to a 2027 deadline in the future unless they fail yet again to attain by 2021. The commenter therefore contends that the EPA's decision to consider the 2027 attainment deadline is illegal, unexplained, and arbitrary.

Response:

The EPA does not agree that it may not consider any later attainment dates simply because there are no states currently subject to that deadline. As the commenter concedes, there are also currently no areas in the east subject to the 2021 Serious area attainment date, yet the EPA nonetheless believes it is appropriate to consider both future attainment dates in selecting a future analytic year, especially in light of the limitations on additional control strategies available in the near term, as discussed in more detail later. Moreover, the EPA was required to select an analytic year before the Moderate area attainment date had passed in order to provide sufficient time to conduct air quality modeling before issuing a proposal for the state of Kentucky by the court-ordered deadline in June 2018.

See

Order,

Sierra Club

Pruitt,

No. 3:15-cv-04328 (N.D. Cal. May 23, 2017), ECF No. 73. Because the Kentucky action addressed the same problem of regional interstate ozone transport for the 2008 ozone NAAQS at issue in this action, it was necessary to complete the modeling in time for the EPA to issue a proposed action for Kentucky in advance of that deadline. At that time, as the commenter notes, all areas were subject to attainment dates in 2015, 2016, or 2018, and emission reductions intended to assist with attainment by those dates would need to be achieved by the prior year's ozone season. Since all of these dates were effectively in the past (including one date that fell less than two weeks after the date of the proposal of this action), the EPA reasonably looked forward to the next potential attainment dates for purposes of this analysis.

2. Feasibility of Control Strategies To Further Reduce Ozone Season NO

Emissions

The EPA's analysis of the feasibility of NO

control strategies reflects the time needed to plan for, install, test, and place into operation EGU and non-EGU NO

reduction strategies regionally—

i.e.,

across multiple states. This regional analytic approach is consistent with the regional nature of interstate ozone pollution transport as described in section II.A. As proposed, the agency adopted this approach for this final action based on previous interstate ozone transport analyses showing that where eastern downwind ozone problems are identified, multiple upwind states typically are linked to

these problems.

Specifically of relevance to this action, as discussed in section II.C, the EPA's prospective air quality assessment of CSAPR Update implementation found that 21 states each continued to contribute greater than or equal to one percent of the 2008 ozone NAAQS (

i.e.,

0.75 ppb) to identified downwind nonattainment or maintenance receptors in multiple downwind states in 2017. Thus, to reasonably address any remaining ozone transport problems, the EPA must identify and apportion emission reduction responsibility across multiple upwind states. In other words, given the breadth of the ozone transport problem identified in the CSAPR Update and the breadth of the remaining CAA obligations (

i.e.,

for 20 states), it is reasonable for the EPA's analysis to be regional. Where such an analysis is needed for multiple states, the inquiry into the availability and feasibility of control options is considerably more time-consuming than it would be for a single facility or state or sector.

81 FR 74538.

Further, the feasibility of new emissions controls should be considered with regard to multiple upwind source categories to ensure that the agency properly evaluates NO

reduction potential and cost-effectiveness from all reasonable control measures. NO

emissions come from multiple anthropogenic source categories, such as mobile sources, electric utilities, and stationary non-EGU sources (

e.g.,

resource extraction industries and industrial and commercial facilities). Among stationary sources, EGUs in the eastern U.S. have been the primary subject of regulation to address interstate ozone pollution transport and have made significant financial investments to achieve emission reductions. While the EPA continues to evaluate control feasibility for EGUs in its analysis, the EPA's recent analyses indicate that non-EGU source categories, which the EPA has not made subject to new regulations to address interstate ozone transport since the NO

SIP Call, may also warrant further assessment of their potential to cost-effectively reduce NO

relative to EGUs.

Accordingly, the EPA's assessment of control feasibility focuses on both EGU and non-EGU sources.

See Assessment of Non-EGU NO

Emission Controls, Cost of Controls, and Time for Compliance Final TSD from the CSAPR Update (U.S. EPA, August 2016) in the docket for this action.

Although mobile source emissions also influence ozone formation, transport, and ambient concentrations, the EPA has historically addressed mobile source emissions through national rulemakings. As a result, mobile source emissions are already decreasing because of sector‐specific standards related to fuels, vehicle fuel economy, pollution controls, and repair and replacement of the existing fleet. Programs such as the Tier 3 vehicle emissions standards are already being phased in between now and 2023. That rule was finalized in 2014 with a phase-in schedule of 2017-2025 reflecting fleet turnover. As discussed in more detail later, emission reductions from stationary sources could likely be implemented more quickly than would result from any attempt to effect additional reductions from mobile sources beyond those already being implemented. Thus, the EPA has focused its analysis of the feasibility of implementing additional emission controls on stationary sources.

a. EGUs

The EPA's analysis in the CSAPR Update is of particular relevance to the agency's assessment of feasible EGU NO

mitigation strategies in this action because that rule evaluated and implemented all EGU strategies that were cost-effective and feasible to implement quickly. Accordingly, as explained in the proposal for this action, the EPA reasonably focused its current assessment of the feasibility of implementing further EGU NO

mitigation strategies on control technologies that require more time to implement and that were thus not previously evaluated in the CSAPR Update with respect to the 2008 ozone NAAQS.

In establishing the CSAPR Update EGU ozone season NO

emissions budgets, the agency quantified the emission reductions achievable from all NO

control strategies that were feasible to implement in less than one year and cost-effective at a marginal cost of $1,400 per ton of NO

removed.

These EGU NO

control strategies were: Optimizing NO

removal by existing, operational selective catalytic reduction (SCR) controls; turning on and optimizing existing, idled SCR controls; installing state-of-the-art NO

combustion controls; and shifting generation to existing units with lower NO

emissions rates within the same state. 81 FR 74541. The agency observes that the resulting CSAPR Update emissions budgets are being appropriately implemented under the CSAPR NO

Ozone Season Group 2 allowance trading program. Data for the 2017 ozone season (the first CSAPR Update compliance period) indicate that power plant ozone season NO

emissions across the 22 state CSAPR Update region fell by 77,512 tons (or 21%) from 2016 to 2017.

As a result, total 2017 ozone season NO

emissions from covered EGUs across the 22 CSAPR Update states were approximately 294,394 tons,

well below the sum of states' 2017 emissions budgets established in the CSAPR Update of 316,464 tons.

Further, the EPA is not aware of any relevant, significant changes in the EGU fleet since promulgation of the CSAPR Update that would necessitate reevalution of the emission reduction potential from control strategies already implemented in the CSAPR Update. Accordingly, for the purposes of this final determination, the EPA considers optimizing NO

removal by existing, operational SCR controls, turning on and optimizing of existing SCR controls, and the installation of combustion controls to be NO

control strategies that have already been appropriately evaluated and implemented in the final CSAPR Update for purposes of addressing the good neighbor provision for the 2008 ozone NAAQS. The EPA does not believe it would be reasonable to base its selection of a future analytic year on the timeframe for implementation of control strategies that the EPA has already evaluated in the CSAPR Update and that are already being implemented appropriately, according to the best data available at this time (

i.e.,

recent ozone season NO

emissions data with CSAPR Update implementation).

The CSAPR Update was signed on September 7, 2016, approximately 8 months before the beginning of the 2017 ozone season on May 1.

https://ampd.epa.gov/ampd/

(Data current as of October 26, 2018).

Id.

Preliminary data for the 2018 ozone season (the second CSAPR Update compliance period), which became available after the proposal for this action and after the close of the comment period, continue to indicate that CSAPR Update emissions budgets are being appropriately implemented under the trading program. Power plant ozone season NO

emissions across the 22 state CSAPR Update region fell by 83,084 tons (or 22%) from 2016 to 2018. As a result, total 2018 ozone season NO

emissions from covered EGUs across the 22 CSAPR Update states were approximately 288,825 tons, well below the sum of states' 2018 emissions budgets established in the CSAPR Update of 313,626 tons.

In the CSAPR Update, the EPA also evaluated one EGU NO

control strategy that was considered feasible to implement within one year but was not cost-effective relative to other near-term control strategies at a marginal cost of $1,400 per ton of NO

removed: Turning on existing idled selective non-catalytic reduction (SNCR) controls. In the CSAPR Update, the EPA identified

a marginal cost of $3,400 per ton as the level of uniform control stringency that represents turning on and fully operating idled SNCR controls.

However, the CSAPR Update finalized emissions budgets using $1,400 per ton control stringency, finding that this level of stringency represented the control level at which incremental EGU NO

reductions and corresponding downwind ozone air quality improvements were maximized with respect to marginal cost in the context of the short-term control strategies being considered in that rulemaking. In finding that the $1,400 per ton control cost level was appropriate, the EPA determined that, based on the fleet characteristics of SNCR and their operation at the time of the CSAPR Update, the more stringent emissions budget level reflecting $3,400 per ton (representing turning on idled SNCR controls) yielded fewer additional emission reductions and fewer air quality improvements relative to the increase in control costs. In other words, based on the CSAPR Update analysis, establishing emissions budgets at $3,400 per ton, and therefore developing budgets based on operation of idled SNCR controls, was not determined to be cost-effective for addressing good neighbor provision obligations for the 2008 ozone NAAQS. 81 FR 74550. As explained in our proposed determination, the EPA continues to believe that the strategy of turning on and fully operating idled SNCR controls was appropriately evaluated in the CSAPR Update with respect to other short-term control strategies for addressing interstate ozone pollution transport for the 2008 ozone NAAQS. Further, the EPA is not aware of any significant changes in the fleet characteristics of existing SNCR and their operation since promulgation of the CSAPR Update and therefore does not find it necessary to reevaluate the cost-effectiveness of operating idled SNCR in the short term. Based on data available at this time, the EPA does not believe it would be reasonable to base its selection of a future analytic year on the timeframe for implementation of a control strategy that the EPA has already determined was not cost-effective relative to other short-term control strategies. Accordingly, in this final action the EPA is not further assessing this control strategy for purposes of identifying an appropriate future analytic year.

See

EGU NO

Mitigation Strategies Final Rule TSD (docket ID EPA-HQ-OAR-2015-0500-0554, available at

www.regulations.gov

and

https://www.epa.gov/sites/production/files/2017-05/documents/egu_nox_mitigation_strategies_final_rule_tsd.pdf

) (NO

Mitigation Strategies TSD).

The remaining control strategy that the EPA evaluated in the CSAPR Update was the shifting of generation from EGUs with higher NO

emissions rates to EGUs with lower NO

emissions rates within the same state as a means of reducing emissions at costs commensurate with and in support of emission control technologies to reduce NO

emissions. Shifting generation is a NO

control strategy that occurs on a time- and cost-continuum, in contrast to the relatively discrete price-points and installation timeframes that can be identified for emission control technologies—

i.e.,

combustion and post-combustion controls. Therefore, in the CSAPR Update, the EPA identified the discrete cost thresholds used to evaluate upwind states' good neighbor obligations based on its evaluation of combustion and post-combustion control technologies, and secondarily examined the amount of generation shifting that would result at the same time and cost threshold associated with and in support of the particular control technology. Quantifying NO

reductions from shifting generation anticipated at the same time and cost thresholds relative to the control technologies being considered (

e.g.,

restarting idled SCR controls) helped ensure that the emission reductions associated with the control strategies could be expected to occur in the CSAPR Update's market-based implementation system. In other words, had the agency excluded consideration of generation shifting in calculating emissions budgets in step 3 in the CSAPR Update, generation shifting would have nonetheless occurred as a compliance strategy in step 4. Although potential emission reductions resulting from generation shifting were factored into the final budgets, this compliance strategy did not drive the EPA's identification of the analytic year or cost thresholds analyzed in the CSAPR Update.

Consistent with our explanation at proposal, the EPA does not find it appropriate to solely evaluate the potential for generation shifting (

e.g.,

in isolation from viable combustion or post-combustion control assessments) for purposes of selecting a future analytic year. The EPA continues to believe that generation shifting is not particularly well suited to identifying discrete analytic inputs, given its ability to be phased in on a time- and cost-continuum. Further, given CSAPR Update implementation as well as current and projected natural gas prices that are low relative to historical levels, significant shifting from higher-emitting EGUs to lower-emitting EGUs (relative to historical generation levels) is already occurring and expected to continue to occur by 2023 due to market drivers.

Thus, there may only be a limited opportunity, if any, for the EGUs in CSAPR Update states to implement as an interstate transport control measure further emission reductions through generation shifting prior to 2023, beyond that which is already occurring and reasonably expected to occur as a result of other factors. Given EPA's historical consideration of this strategy as a secondary factor in quantifying emissions budgets, the EPA believes the most reasonable approach for selecting a future analytic year is to focus on the timeframe in which specific control strategies other than generation shifting can be implemented.

See

Electric Monthly Power.

Department of Energy, Energy Information Administration. Table 1.1 Net Generation by Energy Sources. September 2018. Also See

Total Electricity Supply, Disposition, Prices, and Emissions,

Annual Energy Outlook. Department of Energy, Energy Information Administration.

Because the EPA is not in this final action evaluating additional generation shifting possibilities, it does not at this time need to revisit the question whether it is within the EPA's authority or otherwise proper to consider generation shifting in implementing the good neighbor provision. The EPA is aware that this has been an issue of contention in the past, and stakeholders have raised serious concerns regarding this issue.

See, e.g.,

81 FR at 74545 (responding to comments); CSAPR Update—Response to Comment, at 534-50 (EPA-HQ-OAR-2015-0500-0572) (summarizing and responding to comments).

For these reasons, for purposes of identifying an appropriate future analytic year, the EPA is focusing its assessment of EGUs in this action on control technologies that were deemed to be infeasible to install for the 2017 ozone season rather than reassessing controls previously analyzed for cost-effective emission reductions in the CSAPR Update. In establishing the CSAPR Update emissions budgets, the EPA identified but did not analyze the following two EGU NO

control strategies in establishing emissions budgets because regional implementation by 2017 was not considered feasible: (1) Installing new SCR controls; and (2) installing new SNCR controls. The EPA observed that EGU SCR post-combustion controls can achieve up to 90 percent reduction in EGU NO

emissions. The EPA also observed that SNCR controls can be effective at reducing NO

emissions and can achieve up to a 25 percent emission reduction from EGUs (so long as sufficient reagent is employed). In 2017, SCR controls were in widespread use across the power sector in the east, whereas SNCR controls are considerably

less prevalent. In the 22-state CSAPR Update region, approximately 62 percent of coal-fired EGU capacity is equipped with SCR controls while 12 percent is equipped with SNCR controls.

National Electric Energy Data System v6 (NEEDS). EPA (September 2018). Available at

https://www.epa.gov/airmarkets/national-electric-energy-data-system-needs-v6.

The EPA notes that differences between these control technologies exist with respect to the potential viability of achieving cost-effective, regional NO

reductions from EGUs. As just described, SCR controls generally achieve greater EGU NO

reduction efficiency (up to 90 percent) than SNCR controls (up to 25 percent). Resulting in part from this disparity in NO

reduction efficiency, the EPA found new SCR controls to be more cost-effective at regionally removing NO

when considering both control costs and the NO

reduction potential in developing its cost-per-ton analysis for the CSAPR Update. Specifically, the EPA found that new SCR controls could generally reduce EGU emissions at a marginal cost of $5,000 per ton of NO

removed whereas new SNCR controls could generally reduce EGU emissions at a higher cost of $6,400 per ton of NO

removed.

In other words, the greater NO

reduction efficiency for SCR controls translates into greater cost-effectiveness of NO

removal relative to SNCR controls. Simply put, SCR can achieve significantly more regional NO

reduction at a lower cost per ton than SNCR. The general NO

mitigation and cost-effectiveness advantage of SCR is also consistent with observed installation patterns where SCR controls (62 percent of coal-fired capacity) are more prevalent across the CSAPR Update states relative to SNCR (12 percent of coal-fired capacity). Moreover, as discussed in response to a comment later in this section, installation of SNCR still takes significant time as compared to the 2008 ozone NAAQS attainment dates and SNCR installation at an individual source would likely make later installation of an SCR cost-prohibitive and therefore forgo the potential for greater emission reductions that could be achieved at that source from the latter technology in the future. Considering these factors, the EPA believes it is appropriate to give particular weight to the timeframe required for implementation of SCR across the region as compared to SNCR.

EGU NO

Mitigation Strategies Final Rule TSD.

For SCR, the total time associated with project development is estimated to be up to 39 months for an individual power plant installing controls on more than one boiler.

However, more time is needed when considering installation timing for new SCR controls regionally, for CSAPR Update states. As described in the subsequent paragraphs, the EPA has determined that a minimum of 48 months (4 years) is a reasonable time period to allow to complete all necessary steps of SCR projects at EGUs on a regional scale. This timeframe would allow for regional implementation of these controls (

i.e.,

at multiple power plants with multiple boilers) considering the necessary stages of post-combustion control project planning, shepherding of labor and material supply, installation, coordination of outages, testing, and operation. SNCR installations, while generally having shorter project timeframes (

i.e.,

up to 16 months for an individual power plant installing controls on more than one boiler), share similar implementation steps with and also need to account for the same regional factors as SCR installations.

Therefore, the EPA finds that more than 16 months would be needed to complete all necessary steps of SNCR development at EGUs on a regional scale. Despite EPA's prioritization of SCR as compared to SNCR in identifying the timeframe for installing new controls, the EPA notes that installing these post-combustion controls (SCR or SNCR) involve very similar steps and many of the same considerations. The timing of their feasible regional development is therefore described together in the following paragraphs.

Engineering and Economic Factors Affecting the Installation of Control Technologies for Multipollutant Strategies. EPA Final Report. Table 3-1. Available at

https://archive.epa.gov/clearskies/web/pdf/multi102902.pdf.

A month-by-month evaluation of SNCR installation is discussed in EPA's “Engineering and Economic Factors Affecting the Installation of Control Technologies for Mulitpollutant Strategies” at Exhibit A-6 and in EPA's NO

Mitigation Strategies TSD. As noted at proposal, the analysis in this exhibit estimates the installation period from contract award as within a 10-13 month timeframe. The exhibit also indicates a 16-month timeframe from start to finish, inclusive of pre-contract award steps of the engineering assessment of technologies and bid request development. The timeframe cited for installation of SNCR at an individual source in this final action is consistent with this more complete timeframe estimated by the analysis in the exhibit.

Installing new SCR or SNCR controls for EGUs generally involves the following steps: Conducting an engineering review of the facility to determine suitability and project scope; advertising and awarding a procurement contract; obtaining a construction permit; installing the control technology; testing the control technology; and obtaining or modifying an operating permit.

These timeframes are intended to accommodate a plant's need to conduct an engineering assessment of the possible NO

mitigation technologies necessary to then develop and send a bid request to potential suppliers. Control specifications are variable based on individual plant configuration and operating details (

e.g.,

operating temperatures, location restrictions, and ash loads). Before making potential large capital investments, plants need to complete these careful reviews of their system to inform and develop the control design they request. They then need to solicit bids, review bid submissions, and award a procurement contract—all before construction can begin.

Final Report: Engineering and Economic Factors Affecting the Installation of Control Technologies for Multipollutant Strategies, EPA-600/R-02/073 (Oct. 2002),

available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.

An appropriate regional control implementation timeframe should also accommodate the additional coordination of labor and material supply necessary for any regional NO

mitigation efforts. For example, the total construction labor for a SCR system associated with a 500-megawatt (MW) EGU is in the range of 330,000 to 350,000 person-hours, with boilermakers accounting for approximately half of this time.

In a 2017 industry survey, one of the largest shortages of union craft workers was for boilermakers. This shortage of skilled boilermakers is expected to rise due to an anticipated nine percent increase in boilermaker labor demand growth by 2026, coupled with expected professional retirements and comparatively low numbers of apprentices joining the workforce.

The shortage of and demand for skilled labor, including other craft workers critical to pollution control installation, is pronounced in the manufacturing industry. The Association of Union Constructors conducted a survey of identified labor shortages and found that boilermakers were the second-most frequently reported skilled labor market with a labor shortage.

Moreover, recovery efforts from the natural disasters of recent hurricanes (

e.g.,

Harvey, Irma, Florence, and Michael) and wildfires in 2017 are expected to further tighten the labor supply market in manufacturing in the near term.

The EPA determined that these tight labor market conditions within the relevant manufacturing sectors, combined with regional NO

mitigation initiatives, would likely lead to some sequencing and staging of labor pool usage in implementing control technologies, rather than simultaneous construction across all efforts. This sector-wide trend supports SCR and SNCR installation timeframes for a regional program that exceed the demonstrated single-facility installation timeframe.

Id.

Occupational Outlook Handbook. Bureau of Labor Statistics. Available at

https://www.bls.gov/ooh/construction-and-extraction/boilermakers.htm.

Union Craft Labor Supply Survey. The Association of Union Constructors. Exhibit 4-2 at page 29. Available at

https://www.tauc.org/files/2017_TAUC_UNION_CRAFT_LABOR_SUPPLY_REVISEDBC_FINAL.pdf.

Skilled Wage Growth Less Robust, Worker Shortage Still an Issue. Industry Week. October 23, 2017. Available at

http://www.industryweek.com/talent/skilled-wage-growth-less-robust-worker-shortage-still-issue.

In addition to labor supply, NO

post-combustion control projects also require materials and equipment such as steel and cranes. Sheet metal workers, necessary for steel production, are reported as having a well-above-average supply-side shortage of labor.

This, coupled with growth in steel demand estimated at three percent in 2018 suggests that there may be a constricted supply of steel needed for installation of new post-combustion controls.

Similarly, cranes are critical for installation of SCRs, components of which must be lifted hundreds of feet in the air during construction. Cranes are also facing higher demand during this period of economic growth, with companies reporting a shortage in both equipment and available labor.

The tightening markets in relevant skilled labor, materials, and equipment, combined with the large number of installations that could be required under a regional air pollution transport program, necessitates longer installation timetables relative to what has been historically demonstrated at the facility level.

Union Craft Labor Supply Survey. The Association of Union Constructors. Exhibit 4-2 at page 29. Available at

https://www.tauc.org/files/2017_TAUC_UNION_CRAFT_LABOR_SUPPLY_REVISEDBC_FINAL.pdf.

Worldsteel Short Range Outlook. October 16, 2017. Available at

https://www.worldsteel.org/media-centre/press-releases/2017/worldsteel-Short-Range-Outlook-2017-2018.html.

See, e.g.,

Seattle Has Most Cranes in the Country for 2nd Year in a Row—and Lead is Growing. Seattle Times. July 11, 2017. Available at

https://www.seattletimes.com/business/real-estate/seattle-has-most-cranes-in-the-country-for-2nd-year-in-a-row-and-lead-is-growing/.

See RLB Crane Index, January 2018 in the docket for this action.

Further, scheduled curtailment, or planned outage, for pollution control installation would be necessary to complete SCR or SNCR projects on a regional scale. Given that peak demand and rule compliance would both fall in the ozone season, sources would likely need to schedule installation projects for the “shoulder” seasons (

i.e.,

the spring and/or fall seasons), when electricity demand is lower than in the summer, reserves are higher, and ozone season compliance requirements are not in effect. If multiple units were under the same timeline to complete the retrofit projects as soon as feasible from an engineering perspective, this could lead to bottlenecks of scheduled outages as each unit attempts to start and finish its installation in roughly the same compressed time period. Thus, any compliance timeframe that would assume installation of new SCR or SNCR controls should be developed to reasonably encompass multiple shoulder seasons to accommodate scheduling of curtailment for control installation purposes and better accommodate the regional nature of the program.

Finally, the time lag observed between the planning phase and in-service date of SCR operations in certain cases also illustrates that site-specific conditions can lead to installation times of four years or longer—even for individual power plants. For instance, SCR projects for units at the Ottumwa power plant (Iowa), Columbia power plant (Wisconsin), and Oakley power plant (California) were all in the planning phase in 2014. By 2016, these projects were under construction with estimated in-service dates of 2018.

Similarly, individual SNCR projects can exceed their estimated 16-month construction timeframe. For example, the SNCR installation at the Jeffrey power plant (Kansas) was in the planning phase in 2013 but not in service until 2015.

Further, large-scale projects also illustrate that timelines can extend beyond the general estimate for a single power plant when the project is part of a larger, multifaceted air pollution reduction goal. For instance, the Big Bend power plant in Florida completed a multifaceted project that involved adding SCRs to all four units as well as converting furnaces, over-fire air changes, and making windbox modifications. A decade elapsed between the initial planning stages and completion.

2014 EIA Form 860. Schedule 6. Environmental Control Equipment.

2013 EIA Form 860, Schedule 6, Environmental Control Equipment.

Big Bend's Multi-Unit SCR Retrofit.

Power Magazine. March 1, 2010. Available at

http://www.powermag.com/big-bends-multi-unit-scr-retrofit/.

In summary, while facility-level SCR and SNCR projects can themselves take up to 39 and 16 months, respectively, a comprehensive and regional emission reduction effort requires more time to accommodate the labor, materials, and outage coordination for these two types of control strategies. Given the extra weight given to SCR controls due to their greater NO

reduction efficiency and cost-effectiveness as well as the time to regionally develop and implement SCRs as a control strategy for CSAPR Update states, the EPA concludes that 48 months would be a reasonable and expeditious timeframe to coordinate the planning and completion of further regional NO

mitigation efforts.

Comment:

Several commenters contend that the EPA's assessment of emission reductions available from existing EGU NO

controls in the CSAPR Update is insufficient. These comments suggested that additional reductions are available from existing SCR NO

controls before 2023 because the EPA's use of a 0.10 lb/mmBtu emission rate in its calculation of emission budgets was not reflective of the total reduction potential from SCR optimization. The commenters provide analysis using the unit-level ozone-season emission rates between 2005-2016 and suggest that the EPA should have relied on each unit's best performing ozone-season emission rate from a given year in that period to determine the emission rate at which each unit's SCR is fully optimized. The commenters suggest that because the optimization of SCRs at a lower rate can be achieved prior to 2023, the EPA should examine air quality in an earlier analytic year.

Response:

The EPA does not agree that it is necessary to consider any further emission reductions ostensibly available from the optimization of existing SCRs. As described in the following paragraphs, the agency's assessment of NO

reduction potential from existing SCR controls used in establishing CSAPR Update emission budgets remains appropriate. Moreover, as discussed later in this notice, the best data available at this time—2017 EGU emission data reflecting CSAPR Update implementation—indicate that in general these controls are optimally operating to mitigate NO

emissions across the CSAPR Update region. Thus, control optimization for existing SCRs has already been addressed in the CSAPR Update and emission reductions associated with the “additional” control technology proposed by commenters are being commensurately realized through implementation of the CSAPR Update's

allowance trading program. The EPA therefore does not agree that a control strategy that is already being appropriately implemented should guide its selection of a future analytic year.

In the CSAPR Update, the EPA determined that, based on an aggregation of unit-level emission rates, an average fleet-wide emission rate of 0.10 lb/mmBtu would represent the optimized operation of SCR controls that were not already being operated and optimized. 81 FR 74543. In concluding that this rate would be appropriate for calculating emission reduction potential from implementation of this control strategy, the EPA recognized that some units would have optimized rates above that level and some below that level. 81 FR 74543. The EPA explained that it used data from 2009 through 2015 and calculated an average NO

ozone-season emission rate across the fleet of coal-fired EGUs with SCR for each of those years. It then selected the third-best (

i.e.,

third-lowest) yearly rate for each unit, noting that it did not find it prudent to use the first- and second-best yearly rate because the best-performing data from those years is likely to reflect the utilization of new SCR systems, all of whose components were new in that year (

e.g.,

new layers of catalyst), and may not be representative of an ongoing, achievable NO

rate once one or more SCR components have begun to degrade with age.

Id.

The third-to-lowest year average was 0.10 lb/mmBtu. In the CSAPR Update, the EPA applied that fleet-wide average to units with SCR that were not already emitting at or below that NO

emission rate. For units operating at or below that level in 2015 (the starting year from EPA's budget-setting methodology), the EPA continued to utilize that lower rate. The EPA in the CSAPR Update already addressed comments regarding the reasonableness of its approach to calculating an appropriate emission rate and did not, in this action, request additional comment on the EPA's determination finalized in the CSAPR Update that 0.10 lb/mmBtu was a reasonable rate to represent optimized SCR controls.

81 FR 74544. The issue is also currently the subject of litigation before the D.C. Circuit in

Wisconsin

EPA,

No. 16-1406. Accordingly, the EPA does not believe this issue is properly within the scope of this action.

83 FR 31937 (indicating that EPA is not reconsidering or reopening any analyses conducted or determinations made in the CSAPR Update).

The EPA continues to believe its approach in the CSAPR update was prudent and reasonable for purposes of calculating emission reductions achievable from the optimization of existing SCR controls and is not changing its approach in this action. While commenters suggest alternative emission rates would have been more appropriate, they have not demonstrated that the EPA's approach is unreasonable. In particular, the EPA does not agree with commenters that suggest that the EPA should have used a value derived by relying on a 2005-2016 baseline (as opposed to the 2009-2015 baseline years used by EPA) and selecting the single best year (

i.e.,

the lowest average ozone-season rate for SCR-controlled units in any given year) rather than the third-best year. The EPA continues to find, as it did in the CSAPR Update, that using a baseline starting in 2009 is more appropriate because that year coincided with the onset of annual operation for most SCR controls under the CAIR annual NO

program. Prior to 2009, these controls operated seasonally, which allowed substantial time during the fall, winter, and spring for routine maintenance and repair of the SCR, as well as replacement of catalyst. This seasonal operation is not representative of current or reasonably anticipated future operation of these units that have been and continue to be subject to annual NO

requirements, first under CAIR and now under CSAPR. Further, the agency notes that the power sector has undergone significant changes in recent years due to economic factors and technological advances (

e.g.,

natural gas production from horizontal fracking technology advancements). As a result, the agency believes that it is more appropriate to focus its analysis on relatively more recent years of data, rather than to include a significant number of years that preceded the set of current economic and technological conditions affecting and driving outcomes in the sector. In other words, the agency is more confident that recent data are an appropriate basis to reasonably project future economic and technological conditions with respect to operation of EGUs and their NO

controls. The agency is not confident that older (

i.e.,

pre-2009 data) would be an appropriate basis to reasonably project future economic and technological conditions with respect to operation of EGUs and their NO

controls. The EPA therefore believes its approach in the CSAPR Update was reasonable and preferable for the 2008 ozone NAAQS compliance assumptions, and retains that approach in this action.

The EPA also believes that its decision to rely on the third-best seasonal emission rate was more appropriate than the commenter's suggestion that the EPA select the emission rate from the best performing year. By selecting the third-best seasonal rate, the EPA avoided selecting times when SCR controls were newly constructed for most units or may have been recently refreshed/replaced with all-new catalyst. Complete catalyst change may have occurred at the onset of major NO

reduction programs or at a time when the purpose of the catalyst use changed (such as simultaneously optimizing for mercury (Hg) removal under the Mercury and Air Toxic Standards (MATS) program). By selecting the third-best seasonal rate out of the 2009-2015 time period, the agency evaluated repeatable, low-NO

control operation consistent with ongoing operation and maintenance of SCR controls.

Comment:

A commenter asserts that the EPA should consider operation of existing SNCR controls for purposes of selecting a future analytic year, rather than considering cost-effectiveness to eliminate utilization of some potentially feasible controls. The commenter contends that the EPA's use of cost-effectiveness as a bright line for determining what measures are appropriate for fully meeting the good neighbor SIP obligations for upwind states is both erroneous and, as applied here, arbitrary and capricious. The commenter states that, even if the CSAPR Update could be read to conclude that operation of SNCR was not cost-effective at that time, this conclusion was limited to the purposes of the partial solution in that rule. The commenter claims that the CSAPR Update did not deem operation of SNCR to never be cost-effective, particularly in circumstances where the EPA has found no other less-expensive way to reduce emissions. The commenter concludes that, if EPA is using cost to eliminate potentially available solutions, it must reevaluate these costs, not merely rest on cost data from the CSAPR Update that are now several years old.

Response:

The EPA does not agree that the timeframe for operating existing SNCR should influence its selection of a future analytic year. As discussed earlier, the EPA's assessment in the CSAPR Update indicated that the $3,400 per ton NO

control stringency (representing turning on idled SNCR) was not cost-effective relative to other short-term control strategies considered in that rulemaking. This conclusion was based on the fact that EGUs with idled SNCR in the CSAPR Update analysis

were relatively few and relatively small, such that few NO

reductions were incrementally achievable from operation of idled SNCR compared to other near-term control strategies available, while the difference in cost per ton compared to the other strategies was relatively large. Accordingly, the EPA found that the level of NO

control stringency reflecting operation of idled SNCR did not maximize NO

reduction potential and air quality improvement relative to cost. Although the commenters suggest that the EPA should reevaluate the cost-effectiveness of operating idled SNCR, the commenters have not provided any data to the agency that would indicate the agency's analysis would significantly change. Rather, the EPA's conclusion in the CSAPR Update is further supported by reported 2017 data which show that there were 55 coal units operating in the CSAPR Update region with SNCR installed with a weighted average ozone-season emission rate of 0.14 lb/mmBtu, indicating that existing SNCR-controlled units are already widely operating and would likely provide little opportunity for additional reductions.

Preliminary data for the 2018 ozone season, which became available after the proposal for this action and after the close of the comment period, continue to support this conclusion by showing that there were 48 coal units operating in the CSAPR Update region with SNCR installed with a weighted average ozone-season emission rate of 0.148 lb/mmBtu.

The EPA notes that the agency's analysis in the CSAPR Update was specific to the conditions evaluated therein. Thus, the EPA's conclusion that the feasibility of implementing SNCR should not inform the potential compliance timeframe and the identification of the future analytic year would not have precluded the EPA from considering whether the operation of SNCR would be cost-effective relative to the installation of the post-combustion controls discussed earlier in this section. Had the EPA, at step 1 of the four-step framework, identified continued downwind air quality problems in the future analytic year, the EPA could have considered at step 3 whether it would be cost-effective to require upwind states linked at step 2 to make emission reductions consistent with operation of existing SNCR relative to other longer-term control strategies like the implementation of new post-combustion controls. However, because EPA has already concluded that operation of existing SNCR is not cost-effective in the near term, the EPA does not agree that it would be reasonable for EPA to select an earlier analytic year that would only be consistent with the timeframe for implementing that particular compliance strategy.

Comment:

Several commenters contend that the EPA's implementation of emission reductions via an allowance trading program is not sufficient to guarantee that existing SCRs will continue to run in the future (especially in light of low allowance prices). The commenters therefore contend that further reductions are available from existing EGU controls. The commenters suggest that EPA needs to ensure daily operation of SCR controls and that the seasonal nature of the trading program does not do so.

Response:

The EPA begins by pointing out that the commenter appears to be attempting to reopen a determination made in the CSAPR Update regarding how best to implement the emission reductions required by that rule. The question of whether an allowance trading program is sufficient to ensure emission reductions, relative to other forms of emission limitations, was raised by commenters and addressed in the CSAPR Update.

The EPA did not, in this action, request additional comment on the appropriateness of an allowance trading program to ensure the CSAPR Update emission reductions would be achieved,

and it is therefore not re-opening the issue in this action. Moreover, even if this issue were within the scope of this action, the commenters have not explained how this concern should influence the EPA's selection of the future analytic year used in this action. Accordingly, the relative effectiveness of the CSAPR Update allowance trading program to ensure emission reductions commensurate with optimizing SCR, as compared to daily limits, is outside the scope of this action.

CSAPR Update—Response to Comment (EPA-HQ-OAR-2015-0500-0572).

83 FR 31937 (indicating that EPA is not reconsidering or reopening any analyses conducted or determinations made in the CSAPR Update).

Nonetheless, the EPA notes that current data refute commenters' assertion that allowance trading has been insufficient to achieve the emission reductions associated with the operation and optimization of existing SCRs. The best currently available data indicate that sources in in CSAPR Update states are indeed operating SCRs in order to comply with the CSAPR Update allowance trading program. Data from 2017, the first year of ozone-season data that would be influenced by the CSAPR Update compliance requirements, are consistent with the EPA's assumption that the allowance trading program would incentivize SCR operation on a fleet-wide level. The avera

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