[Federal Register Volume 64, Number 100 (Tuesday, May 25, 1999)]
[Rules and Regulations]
[Pages 28250-28328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11559]
[[Page 28249]]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 52
Findings of Significant Contribution and Rulemaking on Section 126
Petitions for Purposes of Reducing Interstate Ozone Transport; Final
Rule
Federal Register / Vol. 64, No. 100 / Tuesday, May 25, 1999 / Rules
and Regulations
[[Page 28250]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[FRL-6336-9]
RIN 2060-AH88
Findings of Significant Contribution and Rulemaking on Section
126 Petitions for Purposes of Reducing Interstate Ozone Transport
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In accordance with section 126 of the Clean Air Act (CAA), EPA
is taking final action on petitions filed by eight Northeastern States
seeking to mitigate what they describe as significant transport of one
of the main precursors of ground-level ozone, nitrogen oxides
(NOX), across State boundaries. Each petition specifically
requests that EPA make a finding that NOX emissions from
certain stationary sources emit in violation of the CAA's prohibition
on emissions that significantly contribute to ozone nonattainment
problems in the petitioning State. If EPA makes such a finding, EPA is
authorized to establish Federal emissions limits for the sources. The
eight Northeastern States that filed petitions are Connecticut, Maine,
Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, and
Vermont.
Today, EPA is making final determinations that portions of six of
the petitions are technically meritorious. The technically approvable
portions of the petitions will be automatically deemed granted or
denied at certain later dates pending certain actions by the States and
EPA regarding State submittals in response to the final NOX
State implementation plan call (NOX SIP call). This rule
describes the schedule and conditions under which applicable final
findings on the petitions would be automatically triggered.
The EPA intends to implement the section 126 control remedy through
a Federal NOX Budget Trading Program. The trading program
would apply to sources in the source categories for which a final
finding is ultimately granted. In today's rule, EPA is finalizing the
general parameters of the trading program. The EPA is committing to
promulgate the details of the trading program by July 15, 1999. The EPA
is including interim final emissions limitations for affected sources
which would apply only if EPA fails to promulgate the trading program
prior to a section 126 finding.
Mitigation of the transport of ozone and its precursors is
important because ozone, which is a primary harmful component of urban
smog, has long been recognized, in both clinical and epidemiological
research, to adversely affect public health.
DATES: The final rule is effective July 26, 1999.
ADDRESSES: Documents relevant to this action are available for
inspection at the Air and Radiation Docket and Information Center
(6102), Attention: Docket No. A-97-43, U.S. Environmental Protection
Agency, 401 M Street SW., room M-1500, Washington, DC 20460, telephone
(202) 260-7548 between 8:00 a.m. and 5:30 p.m., Monday though Friday,
excluding legal holidays. A reasonable fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT: General questions concerning today's
action should be addressed to Carla Oldham, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
MD-15, Research Triangle Park, NC, 27711, telephone (919) 541-3347, e-
mail at oldham.carla@epa.gov. Please refer to SUPPLEMENTARY INFORMATION
below for a list of contacts for specific subjects discussed in today's
action.
SUPPLEMENTARY INFORMATION:
Availability of Related Information
The official record for this rulemaking, as well as the public
version, has been established under docket number A-97-43 (including
comments and data submitted electronically as described below). A
public version of this record, including printed, paper versions of
electronic comments, which does not include any information claimed as
confidential business information, is available for inspection from
8:00 a.m. to 5:30 p.m., Monday through Friday, excluding legal
holidays. The official rulemaking record is located at the address in
ADDRESSES at the beginning of this document. In addition, the Federal
Register rulemakings and associated documents are located at http://
www.epa.gov/ttn/rto/126.
The EPA has issued a separate rule on NOX transport
entitled, ``Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone'' (see related
rulemakings included in the docket for this rulemaking). The rulemaking
docket for that rule (Docket No. A-96-56), hereafter referred to as the
NOX SIP call, contains information and analyses that are
relied upon in the section 126 rulemaking. Documents related to the
NOX SIP call rulemaking are available for inspection in
docket number A-96-56 at the address and times given above. In
addition, the NOX SIP call and associated documents are
located at http://www.epa.gov/ttn/otag/sip/index.html. Modeling and air
quality assessment information can be obtained in electronic form at
http://www.epa.gov.scram001/regmodcenter/t28.htm. Information related
to the budget development can be found at http://www.epa.gov/capi.
Additional information relevant to this section 126 rulemaking
concerning the Ozone Transport Assessment Group (OTAG) is available on
the web at http://www.epa.gov/ttn/otag/otag/index.html. If assistance
is needed in accessing the system, call the help desk at (919) 541-5384
in Research Triangle Park, NC. The OTAG's technical data are located at
http://www.iceis.mcnc.org/OTAGDC.
For Additional Information
For additional information related to air quality analysis, please
contact Carey Jang, Office of Air Quality Planning and Standards;
Emissions, Monitoring, and Analysis Division, MD-14, Research Triangle
Park, NC 27711, telephone (919) 541-5638. For legal questions, please
contact Howard Hoffman, Office of General Counsel, 401 M Street SW.,
MC-2344, Washington, DC, 20460, telephone (202) 260-5892. For questions
regarding the NOX cap-and-trade program, please contact
Sarah Dunham, Office of Atmospheric Programs, Acid Rain Division, MC-
6204J, 401 M Street SW, Washington, DC 20460, telephone (202) 564-9087.
For questions regarding regulatory cost analyses for electricity
generating sources, please contact MaryJo Krolewski, Office of
Atmospheric Programs, Acid Rain Division, MC-6204J, 401 M Street SW,
Washington, DC 20460, telephone (202) 564-9847. For questions regarding
regulatory cost analyses for other stationary sources, please contact
Larry Sorrels, Office of Air Quality Planning and Standards, Air
Quality Strategies and Standards Division, MD-15, Research Triangle
Park, NC 27711, telephone (919) 541-5041.
Outline
I. Background and Summary of Rulemaking
A. Summary of Rulemaking and Affected Sources
B. Ozone Transport, Ozone Transport Commission NOX
Memorandum of Understanding (OTC NOX MOU), OTAG, the
NOX SIP Call, the Revised Ozone
[[Page 28251]]
National Ambient Air Quality Standard (NAAQS), and Ozone Effects
C. Section 126
D. Summary of Section 126 Petitions
E. Litigation on Rulemaking Schedule
F. Advance Notice of Proposed Rulemaking on Petitions
G. Comment Periods and Availability of Key Information
1. Emissions Inventory Corrections
2. Impacts of 1-Hour Standard Revocation
3. Timing of Petition for Review
H. Summary of Major Changes Between Proposals and Final Rule
II. EPA's Analytical Approach
A. EPA's Interpretation of Section 126: Authorization of the
Petitions
1. Relationship Among Sections 110(a)(2)(D), 126, and 176A/184
2. Scrivener's Error
3. Interpretation of Emits in Violation of the Prohibition of
Section 110 and Integration of Section 126 Controls With SIPs/FIPs
Under the NOX SIP Call
a. Interpretation of Emits in Violation of the Prohibition of
Section 110
b. Integration of Section 126 Controls With SIPs/FIPs Under the
NOX SIP Call
c. Petitions Deemed Granted Upon Certain Events
B. EPA's Interpretation of Section 126: Significant Contribution
1. Significant Contribution Standard
a. NPR
b. Final Action
i. General Meaning of the ``Contribute Significantly'' Provision
ii. Varied Circumstances of Air Pollutant Transport
iii. Definition of the Significant Contribution Test and
Legislative History
iv. Application of Significant Contribution Test to Ozone
Problems
c. Comments and EPA Responses
i. Vagueness
ii. Collective Contribution
iii. Bright Line
iv. Other Factors
2. Cost Factor
C. EPA's Interpretation of Section 126: 8-Hour NAAQS
D. EPA's Interpretation of Section 126: Remedy
1. Three-Year Period
2. Uniform Level of Controls
a. Comments
b. Response
E. Obligations of Downwind States
1. Comments
2. Response
F. Effect of 1-Hour Attainment
G-H. Weight of Evidence Determination of Named Upwind States
I. Identifying Sources
1. Proposed EGU Source Classification
2. Proposed Non-EGU Boiler and Turbine Source Classification
3. Issues Raised by Commenters on EGU/Non-EGU Classification
4. Final Rule EGU/Non-EGU Classification
J. Cost Effectiveness of Emissions Reductions
1. Identifying Highly Cost Effective NOX Control
Levels
2. Determining the Cost Effectiveness of NOX Controls
a. Large EGUs
b. Large Non-EGUs
c. Large Process Heaters
d. Small Sources
e. Summary of Control Measures
K. Feasibility of NOX Control Implementation Date
1. Cost Assumptions for SCR
2. Technology Deployment
3. Catalyst Supply
4. Outage Periods
L. Air Quality Assessment
III. EPA's Final Action on Granting or Denying the Petitions
A. Technical Determinations
B. Action on Whether to Grant or Deny Each Petition
1. Portions of Petitions for Which EPA Is Making an Affirmative
Technical Determination
2. Portions of Petitions for Which EPA Is Not Making an
Affirmative Technical Determination
C. Requirements for Sources for Which EPA Makes a Section 126(b)
Finding
IV. Section 126 Control Remedy
A. Appropriateness of Trading as a Section 126 Remedy
B. Relationship of the Section 126 Remedy to the NOX
SIP Call and the Proposed FIP
C. Federal NOX Budget Trading Program
1. Elements of the Section 126 Remedy Finalized With Today's
Rulemaking
a. Compliance Schedule and Emission Limitation
b. Trading Program Budget
c. Compliance Supplement Pool
2. Elements of the Section 126 Remedy not Finalized With Today's
Rulemaking
D. Default Emission Limitations in the Absence of a Promulgated
Federal NOX Budget Trading Program
1. Default Emission Limitations a. Default Emission Limitations
for Existing Units b. Default Emission Limitations for New Units
2. July 15, 1999 Allocation Decisions
V. Non-ozone Benefits to NOX Reductions
VI. Administrative Requirements
A. Executive Order 12866: Regulatory Impact Analysis
B. Impact on Small Entities
1. Regulatory Flexibility
2. Potentially Affected Small Entities
C. Unfunded Mandates Reform Act
D. Paperwork Reduction Act
E. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
1. Applicability of Executive Order 13045
2. Children's Health Protection
F. Executive Order 12898: Environmental Justice
G. Executive Order 12875: Enhancing the Intergovernmental
Partnership
H. Executive Order 13084: Consultation and Coordination With
Indian Tribal Governments
I. National Technology Transfer and Advancement Act
J. Judicial Review
K. Congressional Review Act
I. Background and Summary of Rulemaking
A. Summary of Rulemaking and Affected Sources
In August 1997, eight northeastern States (Connecticut, Maine,
Massachusetts, New Hampshire, New York, Rhode Island, Pennsylvania, and
Vermont) submitted petitions to EPA under section 126 of the Clean Air
Act (CAA) seeking to mitigate what they describe as significant
transport of NOX, one of the main precursors of ozone. Each
petition requests that EPA make a finding that certain major stationary
sources or groups of sources in upwind States emit NOX
emissions in violation of the CAA's prohibition on amounts of emissions
that contribute significantly to ozone nonattainment or maintenance
problems in the petitioning State. All the petitioning States directed
their petitions to the 1-hour ozone standard. Originally, only three of
the States (Massachusetts, Pennsylvania, and Vermont) also directed
their petitions at the 8-hour ozone standard.
In rulemakings dated September 30, 1998 and October 21, 1998, EPA
proposed action on the petitions. The October notice of proposed
rulemaking (NPR) is the longer, more detailed version of the proposal.
In aggregate across all the petitions and for both ozone standards (to
the extent a petition applied to both standards), EPA proposed to find
that sources in 19 States and the District of Columbia are
significantly contributing to nonattainment problems in one or more of
the petitioning States. The October NPR also proposed a Federal
NOX budget trading program as the control remedy for sources
that would be subject to any section 126 findings.
In the NPR, EPA proposed action under the 1-hour and 8-hour
standards as specifically requested in each State's petition. At that
time, the Maine and New Hampshire petitions were only directed at the
1-hour standard. On November 30, 1998, both Maine and New Hampshire
requested that EPA also evaluate their August 1997 petitions under the
8-hour standard. These requests, in effect, constitute new petitions.
In a supplemental notice of proposed rulemaking (SNPR) dated March 3,
1999 (64 FR 10342), EPA proposed action on the new Maine and New
Hampshire 8-hour petitions. The SNPR did not affect any sources beyond
those already affected by the NPR with respect to the Maine and New
Hampshire 1-hour petitions and/or other petitions. The SNPR did not
propose any additional control requirements beyond what were
[[Page 28252]]
proposed in the NPR. The EPA is taking final action on both the NPR and
the SNPR in this rule.
In today's action, EPA is making final affirmative technical
determinations that certain major stationary sources and source
categories identified in the section 126 petitions are significantly
contributing to nonattainment in, or interfering with maintenance by,
one or more petitioning States with respect to one or both of the
national ambient air quality standards for ozone (hereafter referred to
as affirmative technical determinations). On the basis of these
affirmative technical determinations, the petitions naming these
sources and source categories will be finally granted (i.e, the section
126 findings will be deemed made) or denied at certain later dates
pending certain actions by the States and EPA regarding State
submittals in response to the final NOX SIP call. The
schedule and conditions under which the applicable final findings on
the petitions would be triggered are discussed below in Section I.E.
The EPA's analysis of significant contribution is discussed in Section
II below.
Under the 1-hour ozone standard, EPA is making final affirmative
technical determinations as to a subset of sources or source categories
named in the petitions from Connecticut, Massachusetts, New York, and
Pennsylvania. The source categories for which EPA is making this
affirmative technical determination of significant contribution are
discussed in Section II. The States where these sources are located are
listed in Table II-1.
The EPA is also partially denying the 1-hour petitions from
Connecticut, Massachusetts, New York, and Pennsylvania, and fully
denying the 1-hour petitions from Maine, New Hampshire, and Rhode
Island for on one of three reasons described below. First, for some
sources or source categories in some States named in these petitions,
EPA has information demonstrating these sources and States are not
significantly contributing to nonattainment in the relevant petitioning
State with respect to the 1-hour ozone standard. Second, for sources in
some States EPA does not have adequate information to show that the
sources do or do not significantly contribute (see Section III.A).
Third, based on air quality monitoring data from 1996 through 1998, EPA
believes preliminarily that certain areas in Maine, Massachusetts, New
Hampshire, Pennsylvania, and Rhode Island have now achieved the 1-hour
standard. Therefore, EPA is not making affirmative technical
determinations of significant contribution for any upwind sources with
respect to these areas (see Section II.F). The EPA is fully denying the
1-hour petition from Vermont because the 1-hour standard no longer
applies in that State (See 63 FR 31014).
Five of the petitioning States, Maine, Massachusetts, New
Hampshire, Pennsylvania, and Vermont, also directed their petitions at
the new 8-hour ozone standard. Under the 8-hour ozone standard, EPA is
making final affirmative technical determinations as to a subset of
sources named in the petitions from Maine, Massachusetts, New
Hampshire, and Pennsylvania. The source categories for which EPA is
making the affirmative technical determinations of significant
contribution are the same as for the 1-hour standard and are discussed
in Section II. The EPA is also denying portions of the petitions either
because EPA has information demonstrating that some of the sources or
source categories named in these petitions are not significantly
contributing to nonattainment in the relevant petitioning State with
respect to the 8-hour ozone standard or because EPA does not have
adequate information to show that the sources are significantly
contributing (see Section III.A). The EPA is denying the Vermont
petition in full with respect to the 8-hour ozone standard because
Vermont has no current 8-hour ozone nonattainment problems and no
future projected nonattainment (i.e., maintenance) problems based on
available analyses.
In aggregate for all petitions and both ozone standards, the
sources and source categories for which EPA is making final affirmative
determinations of significant contribution to nonattainment or
interference with maintenance (hereafter simply significant
contribution) with respect to one or more of the petitioning States are
located in the following States: Alabama, Connecticut, Delaware,
District of Columbia, Illinois, Indiana, Kentucky, Maryland,
Massachusetts, Michigan, Missouri, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Virginia, and
West Virginia.
Some of the sources that EPA is determining do not significantly
contribute to the petitioning States are located in States that are
affected by a separate rule on NOX transport, the
NOX SIP call. Specifically, EPA is determining that sources
in Georgia, South Carolina, and Wisconsin are not significantly
contributing to any of the petitioning States that name those States.
However, EPA has determined in the NOX SIP call that sources
in these three States do significantly contribute to nonattainment
problems in other downwind States. In acting on these section 126
petitions, EPA can only consider the impacts on downwind nonattainment
problems in the petitioning States, which are all located in the
Northeast. In the NOX SIP call, EPA considered impacts on
nonattainment problems throughout the eastern half of the United
States. Therefore, a determination that sources in certain States are
not significantly contributing to any petitioning State for purposes of
this action on the section 126 petitions does not alter EPA's
conclusions on significant contribution with regard to other States
under the NOX SIP call.
The section 126 petitions varied with regard to the control
requirements they recommend for mitigating the interstate transport.
While EPA considered the recommendations, section 126 does not limit
EPA to the recommended controls in determining an appropriate remedy.
In Section II.J., EPA discusses the emissions limitations that would be
necessary to ensure that the affected sources do not or would not emit
in violation of the applicable statutory prohibition on significant
contribution by upwind States to downwind air quality problems. The
control remedy is based on the uniform application of highly cost-
effective controls (as determined based on cost per ton of
NOX reduced for each type of source). In selecting the
control measures, EPA considered the recommendations made by OTAG on
July 8, 1997 and the analyses for the NOX SIP call.
In today's action, EPA is establishing a section 126 control remedy
for sources that would be subject to a future section 126 finding. The
EPA intends to implement the control requirements through a Federal
NOX cap-and-trade program. The EPA believes a trading
program is the most cost-effective approach for achieving emissions
reductions from large stationary sources. The EPA envisions that there
would be an interstate trading program among section 126 sources,
NOX SIP call sources in States that choose to participate in
the interstate trading program administered by EPA, and sources subject
to a Federal implementation plan under the NOX SIP call.
As discussed in Section IV below, EPA is today promulgating the
general parameters of the remedy, including, among others, the decision
to implement a NOX cap-and-trade program as the control
remedy, the control levels the trading program would be based on, the
definition of the
[[Page 28253]]
types of sources that would be subject to the trading program, and the
compliance date. By July 15, 1999, EPA will finalize the details of the
Federal NOX Budget Trading Program for the section 126
sources (as new 40 CFR part 97). The combined list of existing sources
affected by an affirmative technical determination with respect to at
least one petition, along with the more specific emissions limitations
in the form of tradable allowance allocations, will be provided in the
July notice of final rulemaking (NFR). The EPA intends to include new
sources in the source categories that are significantly contributing
with respect to the petitions from Connecticut, Maine, New Hampshire,
New York, and Pennsylvania. The petition from Massachusetts does not
cover new sources.
In accordance with section 126, sources must comply with the
control requirements no later than 3 years from a final positive
finding on the petitions. The EPA believes the full 3 years is
necessary for compliance. As discussed below, the portions of the
petitions for which EPA is making an affirmative technical
determination could be deemed granted (the finding deemed made) on
November 30, 1999 or May 1, 2000, depending on certain actions by
States and EPA regarding implementation plans required in response to
the NOX SIP call. As discussed in Section III.C., both of
these trigger dates would result in an emission reduction deadline of
May 1, 2003.
B. Ozone Transport, Ozone Transport Commission NOX
Memorandum of Understanding (OTC NOX MOU), OTAG, the
NOX SIP Call, the Revised Ozone National Ambient Air Quality
Standard (NAAQS), and Ozone Effects
Today's action occurs against a background of a major national
effort, spanning more than 10 years, to analyze and take steps to
mitigate the problem of the transport of ozone and its precursors
across State boundaries. This effort has grown more intensive in the
past several years with the approval of the OTC NOX MOU by
11 of the Northeastern States and the District of Columbia included in
the Northeast Ozone Transport Region (OTR), the completion of the OTAG
process (described below), and the promulgation of EPA's NOX
SIP call. In addition, on July 18, 1997, EPA issued a revised NAAQS for
ozone, which is determined over an 8-hour period (the 8-hour standard)
(62 FR 38856). In establishing the 8-hour standard, EPA set the
standard at 0.08 parts per million and defined the new standard as a
``concentration-based'' form, specifically the 3-year average of the
annual 4th-highest daily maximum 8-hour ozone concentrations. This has
resulted in more areas and larger areas with monitoring data indicating
nonattainment. Thus, it is even more important to implement regional
control strategies to mitigate interstate pollution in order to assist
downwind areas in achieving attainment. This new 8-hour standard must
now be taken into account, along with the pre-existing 1-hour standard,
in resolving transport issues. These issues and events are detailed in
the proposed NOX SIP call (62 FR 60318). The 8-hour standard
is intended to ultimately replace the 1-hour standard. However, the 1-
hour standard will continue to apply to areas not yet in attainment to
ensure an effective transition to the new 8-hour standard. In many
areas of the country, the 1-hour standard has been revoked because the
areas are attaining that standard (63 FR 31013; June 5, 1998 and 63 FR
39432; July 22, 1998). A State may petition under section 126 for both
the 1-hour standard, to the extent that it still applies in the
petitioning State, and the 8-hour standard.
The 1990 CAA set forth many requirements to address nonattainment
of the 1-hour ozone NAAQS. Many States have found it difficult to
demonstrate attainment of the NAAQS due to the widespread transport of
ozone and its precursors. The Environmental Council of the States
(ECOS) recommended formation of a national work group to allow for a
thoughtful assessment and development of consensus solutions to the
problem. This work group, OTAG, was established 4 years ago to
undertake an assessment of the regional transport problem in the
eastern half of the United States. The OTAG was a collaborative process
conducted by representatives from the affected States, EPA, and
interested members of the public, including environmental groups and
industry, to evaluate the ozone transport problem and develop
solutions. The OTAG region included the 37 eastern-most States and the
District of Columbia. Through the OTAG process, the States concluded
that widespread NOX reductions are needed in order to enable
areas to attain and maintain the ozone NAAQS. Based on information
generated by OTAG and other available data, EPA determined that twenty-
two States and the District of Columbia in the OTAG region are
significantly contributing to nonattainment problems in downwind
States. Therefore, EPA issued the NOX SIP call (63 FR 57356,
October 27, 1998) requiring these jurisdictions to revise their SIPs to
include NOX control measures to mitigate the ozone
transport.
The EPA's response to the section 126 petitions differs from EPA's
action in the NOX SIP call rulemaking in several ways. In
the NOX SIP call, where EPA concluded that NOX
emissions from a State are significantly contributing to nonattainment
problems in downwind States, EPA is requiring the State to submit SIP
provisions to prohibit an amount of NOX emissions which
represents the significant contribution. The State has the discretion
to select the mix of control measures for their sources to meet the
required statewide NOX emissions reductions. If the State
does not make the required SIP submission, or submits an inadequate
SIP, EPA is required to promulgate a Federal implementation plan (FIP)
within 2 years of EPA's finding of the State failure. In the November
7, 1997 NOX SIP call proposal, EPA announced that it
intended to expedite the FIP promulgation in order to assure that the
downwind States receive the air quality benefits of regional
NOX reductions as soon as practicable. Therefore, the EPA
proposed FIPs for all the States affected by the NOX SIP
call in conjunction with EPA's issuance of the final NOX SIP
call (63 FR 56394).
By comparison, section 126 petitions are limited to addressing
emissions from upwind stationary sources named in the petitions and not
other sectors of the inventory. If EPA grants the petitions, it is EPA,
not the States, that promulgates control requirements for the sources.
The control remedy for sources named in the petitions that would be
subject to future findings under section 126 is consistent with the
control assumptions EPA used for these sources in determining the final
statewide NOX budgets for States subject to the
NOX SIP call. In addition, the Federal NOX Budget
Trading Program that EPA intends to promulgate in July for the section
126 sources is the same trading program that EPA proposed to use to
achieve reductions from large electric generating units (EGUs) and
large non-EGUs if it promulgates a FIP in any State. It is also the
same trading program in which States can choose to participate to
achieve the majority of the required emissions reductions under the
NOX SIP call.
Because the NOX SIP call process and the section 126
petition process both address NOX transport in the eastern
United States, EPA believes it is important to coordinate the two
actions
[[Page 28254]]
as much as possible. As discussed below in Section I.E., EPA and the
petitioning States agreed to a proposed consent decree on the
rulemaking schedule for the petitions that takes into consideration the
NOX SIP call rulemaking. The court entered a slightly
modified consent decree on October 26, 1998.
All of the States that submitted section 126 petitions are included
in the OTR and participated in the OTAG process. In addition, all of
the upwind sources identified in the petitions are located in the OTAG
region. All eight petitions rely, in part, on the OTAG analyses for
technical justification. The OTAG process concluded in June 1997 prior
to the promulgation of the new 8-hour ozone standard and, therefore,
the OTAG analyses focused on the 1-hour standard. All the petitions
request relief under the 1-hour standard. Five of the petitions also
request relief under the new 8-hour standard. In acting on the section
126 petitions, EPA believes that it can only consider 8-hour
nonattainment problems for the petitioning States that expressly
requested relief under that standard. Under the NOX SIP
call, EPA considered both 1-hour and 8-hour nonattainment problems
throughout the OTAG region.
Ground-level ozone, the main harmful ingredient in smog, is
produced in complex chemical reactions when its precursors, volatile
organic compounds (VOCs) and NOX, react in the presence of
sunlight. The chemical reactions that create ozone take place while the
pollutants are being blown through the air by the wind, which means
that ozone can be more severe many miles away from the source of
emissions than it is at the source.
At ground level, ozone can cause a variety of ill effects to human
health, crops and trees. Specifically, ground-level ozone induces the
following health effects:
Decreased lung function, primarily in children active
outdoors,
Increased respiratory symptoms, particularly in highly
sensitive individuals,
Hospital admissions and emergency room visits for
respiratory causes, among children and adults with pre-existing
respiratory disease such as asthma,
Inflammation of the lung, and
Possible long-term damage to the lungs.
The new 8-hour primary ambient air quality standard will provide
increased protection to the public from these health effects.
Each year, ground-level ozone above background is also responsible
for several hundred million dollars worth of agricultural crop yield
loss. It is estimated that full compliance of the 8-hour ozone NAAQS
will result in about $500 million of prevented crop yield loss. Ozone
also causes noticeable foliar damage in many crops, trees, and
ornamental plants (i.e., grass, flowers, shrubs, and trees) and causes
reduced growth in plants. Studies indicate that current ambient levels
of ozone are responsible for damage to forests and ecosystems
(including habitat for native animal species).
C. Section 126
As discussed below in Section II.A., section 126 of the CAA
authorizes a downwind State to petition EPA for a finding that major
stationary sources or groups of sources upwind of the State emit in
violation of the prohibition of section 110(a)(2)(D)(i) because, among
other reasons, their emissions contribute significantly to
nonattainment, or interfere with maintenance, of a NAAQS in the State.
If EPA grants the requested finding, the existing sources must shut
down in 3 months unless EPA directly regulates the sources by
establishing emissions limitations and a compliance period extending
beyond 3 months but no later than 3 years from the finding.
D. Summary of Section 126 Petitions
As discussed in detail in the NPR, the petitions vary as to the
type and geographic location of the source categories identified as
significant contributors. All the petitions identified source
categories; some petitions also provided lists of sources within the
specified categories. The source categories include electric generating
plants, fossil fuel-fired boilers and other indirect heat exchangers,
and certain other related stationary sources that emit NOX.
All the petitions target sources in the Midwest; some also target
sources in the South and Northeast. The geographic area covered by each
petition is shown in Figures F2-F9 of appendix F of part 52.
The petitions also vary as to the level of controls they recommend
be applied to the sources to mitigate the transport problem. Several
recommend EPA establish a 0.15 lb/mmBtu NOx emission limitation and
several recommend that controls be implemented through a cap-and-trade
program.
All of the petitions rely, in part, on OTAG analyses for technical
support. In addition, the States submitted a variety of other technical
analyses which include computerized urban airshed modeling, wind
trajectory analyses, results of a transport study by the Northeast
States for Coordinated Air Use Management, and culpability analyses.
Table I-1 shows, by petitioner, the named source categories, the
named geographic areas, and the requested remedy sought by the
petitioning States. The named source categories are worded as they
appear in the petitions. A map of the OTAG Subregions is provided in
part 52, Appendix F, Figure 1, promulgated as part of this rule.
TABLE I-1. EPA's Summary of Section 126 Petitions
------------------------------------------------------------------------
Named source
State categories Named States Requested remedy
------------------------------------------------------------------------
CT................ Fossil fuel- Sources in OTAG Establish, at a
fired boilers Subregions 2, minimum,
or other 6, and 7 and emission
indirect heat portion of OTR limitations and
exchangers with extending west a schedule of
a maximum gross and south of compliance
heat input rate CT. Includes consistent with
of 250 mmBtu/hr all or parts of the OTC NOX MOU
or greater and IN, KY, MI, NC, a, and a cap-
electric OH, TN, VA, WV. and-trade
utility And OTR States program. Does
generating DC, DE, MD, NJ, not request
facilities with NY, PA. remedy for OTR
a rated output States because
of 15 MW or of OTC NOX MOU.
greater.
ME................ Electric Sources within Establish
utilities and 600 miles of compliance
steam- Maine's ozone schedule and
generating nonattainment emissions
units with a areas. Includes limitation of
heat input all or parts of 0.15 lb/mmBtu
capacity of 250 NC, OH, VA, WV, for electric
mmBtu/hr or and OTR States utilities and
greater. CT, DE, DC, MD, the OTC NOX MOU
MA, NJ, NY, NH, level of
PA, RI, VT. control for
steam
generating
units, in a
multi-state cap-
and-trade NOX
market system.
MA................ Electricity Sources in Establish
generating region within 3 emissions
plants. counties on limitation of
either side of 0.15 lb/mmBtu
the Ohio River or 1.5 lb/MWh
in IN, KY, OH, and a
WV. compliance
schedule.
[[Page 28255]]
NH................ Fossil fuel- Sources in OTR Establish
fired indirect States and OTAG compliance
heat exchange Subregions 1 schedule and
combustion through 7. emission
units and Includes all or limitations no
fossil fuel- parts of IL, less stringent
fired electric IN, IA, KY, MI, than:
generating MO, NC, OH, TN, (a) Phase III
facilities VA, WV, WI. OTC NOX MOU
which emit ten Also OTR States reductions; and/
tons of NOX or CT, DE, DC, MD, or
more per day. MA, ME, NJ, NY, (b) 85%
PA, RI, VT. reductions from
projected 2007
baseline; and/
or
(c) An emission
rate of 0.15 lb/
mmBtu.
NY................ Fossil fuel- Sources in OTAG Establish, at a
fired boilers Subregions 2, minimum,
or indirect 6, and 7 and emission
heat exchangers portion of OTR limitations and
with a maximum extending west a schedule of
heat input rate and south of compliance
of 250 mmBtu/hr NY. Includes consistent with
or greater and all or parts of the OTC NOX
electric IN, KY, MI, NC, MOU, and a cap-
utility OH, TN, VA, WV. and-trade
generating And OTR States program. Does
facilities with DC, DE, MD, NJ, not request
a rated output PA. remedy for OTR
of 15 MW or States because
greater. of OTC NOX MOU.
PA................ Fossil fuel- AL, AR, GA, IL, Establish
fired indirect IN, IA, KY, LA, emission
heat exchange MI, MN, MS, MO, limitations and
combustion NC, OH, SC, TN, a compliance
units with a VA, WV, WI. schedule for a
maximum rated cap-and-trade
heat input program
capacity of 250 requiring:
mmBtu/hr or (a) Seasonal
greater, and reductions of
fossil fuel- the less
fired electric stringent of
generating 55% from 1990
facilities baseline
rated at 15 MW levels, or 0.20
or greater. lb/mmBtu,
beginning by
May 1999;
(b) If
necessary,
seasonal
reductions of
the less
stringent of
75% from 1990
baseline
levels, or 0.15
lb/mmBtu,
beginning by
May 2003;
(c) Such
additional
reductions as
necessary
beginning in
2005.
RI................ Electricity Sources in Establish
generating region within 3 emissions
plants. counties on limitation of
either side of 0.15 lb/mmBtu
Ohio River in or 1.5 lb/MWh
IN, KY, OH, WV. and a
compliance
schedule.
VT................ Fossil fuel- Sources located Establish
fired electric within a emissions
utility geographic area limitation of
generating extending 1000 0.15 lb/mmBtu
facilities with miles southwest or 1.5 lb/MWh
a maximum gross from and a
heat input rate Bennington, VT. compliance
of 250 mmBtu/hr Includes all or schedule. Does
or greater and parts of IL, not request
potentially IN, KY, MI, NC, remedy for OTR
other OH, TN, VA, WV. States because
unidentified Also AL, GA, of OTC NOX MOU.
major sources. IA, MO, SC, WI.
Also OTR States
CT, DE, DC, MD,
MA, NJ, NY, PA.
------------------------------------------------------------------------
a The OTC NOX MOU is an agreement among the States in the Ozone
Transport Region to reduce ozone season NOX emissions from large
utility and industrial combustion sources through implementation of a
phased-in regionwide cap-and-trade program. It is described in detail
in the NPR.
Section 126 allows States to petition EPA for a finding against
sources and groups of sources that ``emit'' or ``would emit'' pollution
in violation of the section 110(a)(2)(D) prohibition on emissions that
significantly contribute to nonattainment problems in the petitioning
State. Thus, a finding could potentially apply not only to existing
sources within a particular source category, but also to sources that
would be built in the future. In the NPR, EPA stated it believed the
section 126 petitions are ambiguous as to whether the requested
findings are intended to include new sources. For the reasons discussed
in the NPR, EPA proposed to interpret all eight section 126 petitions
to encompass both existing and new sources. Therefore, if any final
findings were triggered for source categories in a particular
geographic area, new sources in those source categories locating in
that area would also be subject to the section 126 control remedy. The
EPA requested that if any of the petitioning States disagreed with this
interpretation of its petition, the State submit clarifying comments on
this issue. New York and New Hampshire submitted comments that EPA had
correctly interpreted their petitions to cover both existing and new
sources. The State of Massachusetts commented that it was not seeking a
finding with respect to new sources. Therefore, in today's rule, the
EPA is concluding that all of the petitions, except the petition from
Massachusetts, cover both existing and new sources.
E. Litigation on Rulemaking Schedule
As discussed in the NPR, on February 25, 1998, the eight
petitioning States filed a complaint in the U.S. District Court for the
Southern District of New York to compel EPA to take action on the
States' section 126 petitions. State of Connecticut v. Browner, No. 98-
1376. The EPA and the eight States filed a proposed consent decree that
would establish a schedule for EPA to act on the petitions. Pursuant to
CAA section 113(g), the EPA solicited comments on the proposed consent
decree, by notice dated March 5, 1998 (63 FR 10874). The comment period
closed April 6, 1998. On August 21, 1998, after considering the
comments received in the section 113(g) process, EPA requested the
Court to enter a slightly modified version of the consent decree. The
Court entered the slightly modified consent decree on October 26, 1998.
The schedule in the consent decree requires EPA to take final
action on at least the technical merits of the petitions by April 30,
1999. The schedule requires the full disposition of the petitions by
that date or an alternative final action by that date that would defer
the granting or denial of the petitions to certain later dates
extending to as late as May 1, 2000.
In formulating the consent decree, EPA developed the alternative
approach to harmonize the section 126 and NOX SIP call
actions. Specifically, paragraphs 5.b. and c. state that:
b. Unless EPA takes the final action described in paragraph 6,
as to each
[[Page 28256]]
individual petition, EPA's final action will be to--
(i) Grant the requested finding, in whole or part; and/or
(ii) Deny the petition, in whole or part.
c. Unless EPA denies a petition in whole, its final action will
include promulgation of a remedy under CAA section 126(c) for
sources to the extent that a requested finding is granted with
respect to those sources.
Then paragraph 6 states:
6. EPA shall be deemed to have complied with the requirements of
paragraph 5(a) if it instead takes a final action by April 30, 1999,
that--
a. makes an affirmative determination concerning the technical
components of the ``contribute significantly to nonattainment'' or
``interfere with maintenance'' tests under CAA section
110(a)(2)(D)(i), 42 U.S.C. section 7410(a)(2)(D)(i);
b. further provides that:
(i) If EPA does not issue a proposed approval of the relevant
Upwind State's SIP revision (submitted in response to the
NOX SIP call) by November 30, 1999, then the finding will
be deemed to be granted as of November 30, 1999, without any further
action by EPA;
(ii) If EPA issues a proposed approval of said SIP revision by
November 30, 1999, but does not issue a final approval of said SIP
revision by May 1, 2000, then the finding will be deemed to be
granted as of May 1, 2000, without any further action by EPA;
(iii) If EPA issues a final approval of said SIP revision by May
1, 2000, EPA must take any and all further actions, if necessary to
complete its action under section 126, no later than May 1, 2000;
and
c. Promulgates a remedy under CAA section 126(c) for sources to
the extent that an affirmative determination is made with respect to
those sources.
As discussed in the NPR, EPA believes that sources in an upwind
State should not be considered to be emitting an air pollutant in
violation of the section 110 prohibition, and hence EPA should not
grant a petition naming such sources, if the State is adhering to the
NOX SIP call rule's schedule for submission of an approvable
SIP revision, and EPA is acting speedily to approve the SIP--or,
failing that, if EPA has promulgated a SIP for the State. After all, if
EPA's rule provides a particular path for the development of a plan
calling on sources to reduce interstate pollution by May 1, 2003, and
under that rule either the upwind State or EPA is moving forward to
develop, take action on or promulgate a satisfactory plan meeting that
rule and achieving attainment as expeditiously as practicable, it would
be difficult to conclude that an affected source in the upwind State
``emits or would emit in violation'' of the prohibition that the plan
is not yet required to contain.1
---------------------------------------------------------------------------
\1\ Moreover there does appear to be tension between section
110(a)(2)(D), which does not establish the timing as to when the SIP
prohibition needs to be effective against sources (i.e., when
sources need to implement controls to reduce emissions) and the
timing in section 126, which requires implementation no later than 3
years following a section 126(b) determination. The EPA does not
believe that Congress intended section 126 to be used to shorten
timeframes for action that EPA has previously determined are
approvable for purposes of eliminating significant contribution to
nonattainment areas in other States.
---------------------------------------------------------------------------
For these reasons, EPA is following the alternative described in
paragraph 6 of the consent decree. Thus, EPA is structuring its final
action to contain: (1) A series of ``technical determinations'' as to
which sources in which States named in the petitions would emit in
violation of the section 110 prohibition if the State or EPA were to
fall off track in putting a timely and satisfactory plan in place; (2)
determinations that the petitions will automatically be deemed granted
or denied on the basis of the events set forth in paragraph 6; and (3)
the remedial requirements that will apply to the sources receiving
affirmative technical determinations if a petition naming those sources
is ultimately deemed granted.
The EPA received comments on the NPR that the section 126 petitions
were inappropriately driving the timetable for submission of the SIPs
required under the NOX SIP call; that is, that upwind States
were not given adequate time to develop and submit their SIP revision,
but that if they failed to do so on the mandated schedule, a section
126 finding would be deemed to be made. For the reasons discussed
below, EPA does not believe that the link between the section 126
petitions and the NOX SIP call SIPs is inappropriate.
Further, as stated in the final NOX SIP call, while EPA
believes it is advantageous to coordinate the section 126 and
NOX SIP call actions, EPA disagrees that this constrained
EPA from being responsive to public comments and considering
alternative compliance dates.
F. Advance Notice of Proposed Rulemaking on Petitions
In accordance with the schedule in the then proposed consent
decree, on April 30, 1998, EPA published in the Federal Register (63 FR
24058) an advance notice of proposed rulemaking (ANPR) on the section
126 petitions. The ANPR provided EPA's preliminary identification of
source categories named in the petitions that emit NOX in
amounts that significantly contribute to nonattainment problems in the
petitioning States, provided EPA's preliminary assessment of the types
of recommended emissions limitations and compliance schedules, provided
EPA's preliminary assessment of the remedy the Agency would propose for
approvable petitions, discussed legal and policy issues raised under
section 126, and outlined the rulemaking schedule for the petitions.
The ANPR solicited comment on all of the issues and preliminary
assessments. The EPA received a number of comments on the ANPR from
industry, States, and environmental groups. These comments covered the
full spectrum of issues discussed in the ANPR and were carefully
considered in the development of the section 126 NPR. The EPA indicated
in the ANPR that it would respond to the ANPR comments, if any response
were appropriate, when EPA responded to comments on the section 126
NPR.
The EPA established the informal comment period for the ANPR to
solicit information that would be helpful in the deliberative process
for the rulemaking proposal. The EPA appreciates the early, thoughtful
input from the commenters. In the NPR, EPA noted that its proposed
positions superseded the preliminary positions taken in the ANPR. The
majority of commenters on the ANPR submitted new comments on the NPR to
specifically address EPA's detailed proposal. The EPA has responded to
all significant comments on the proposal either in this preamble or in
the Response to Comments document that accompanies this rulemaking.
G. Comment Periods and Availability of Key Information
The EPA provided a 60-day comment period on the NPR and a 40-day
comment period on the SNPR. As discussed below, in response to
commenter's requests, EPA reopened the NPR comment period on two
occasions, to take further comment on source-specific emissions
inventory data and on the impacts of the proposed revocations of the 1-
hour standard on the section 126 rulemaking. Some commenters requested
that the NPR comment period be extended on all issues. The very limited
amount of time allowed in the consent decree between the deadline for
the proposed rule and the deadline for the final rule constrained EPA
from providing longer comment periods for every issue. However, EPA
received a number of comments after the close of the comment periods
which EPA considered in developing the final rule.
Commenters representing the interests of upwind sources and States
stated that they had not been given a meaningful opportunity to comment
on various aspects of today's rulemaking, either because important
documents had not been made available to them, or
[[Page 28257]]
because, in the commenters' view, EPA has not been open-minded to the
perspective of the upwind sources and States. For the reasons described
in the Response to Comments document, EPA believes that the appropriate
information was timely made available to the public, and that EPA has
been open-minded to the views of, and has carefully reviewed the
comments of, all commenters concerning today's rulemaking.
The major issues raised in the comments are responded to throughout
the preamble of this final rule. A comprehensive summary of all other
significant comments, along with EPA's response, is provided in the
Response to Comments document, that has been placed in the docket for
this rulemaking (Docket No. A-97-43).
1. Emissions Inventory Corrections
By action dated January 13, 1999 (64 FR 2416), EPA reopened the
comment period on source-specific emission inventory data. This comment
period was established in conjunction with the extended period for the
public to submit emissions inventory revisions for the purpose of the
NOX SIP call. The EPA received numerous requests to allow
more time to submit revisions to the source-specific data used to
establish each State's base inventory and budget in the NOX
SIP call. By action dated December 24, 1998, (63 FR 71220), EPA
extended the opportunity for submitting emission inventory corrections
for the NOX SIP call until February 22, 1999. Because the
section 126 action and the NOX SIP call rely on the same
emissions inventory information, EPA extended the comment period for
the section 126 action as well. The EPA committed to revise the
emissions inventory to reflect the new data, as appropriate, by the end
of April 1999. The EPA will use the revised inventory in identifying
the individual sources subject to today's affirmative technical
determinations and in assigning their NOX allowance
allocations for purposes of the Federal NOX Budget Trading
Program. This information will be provided in the July notice of final
rulemaking.
2. Impacts of 1-Hour Standard Revocation
By action dated March 2, 1999 (64 FR 10118), EPA reopened the NPR
comment period to allow comment on how the proposed section 126 action
may be affected by a separate proposed action by EPA (63 FR 69598,
December 17, 1998) to revoke the 1-hour ozone standard for certain
areas in States that had submitted section 126 petitions. The affected
areas are Boston-Lawrence-Worcester, Massachusetts-New Hampshire;
Portland, Maine; Portsmouth-Dover-Rochester, New Hampshire; and
Providence, Rhode Island. The comment period was reopened in response
to two requests. In that notice, EPA indicated its position that if EPA
promulgates a final determination that the 1-hour standard no longer
applies for those designated nonattainment areas, the contributions
from sources in upwind States to those areas would no longer constitute
a basis for EPA to approve the petitioning States' requested findings
as to the 1-hour standard for those areas. The EPA is finalizing action
on the revocation notice in the same timeframe as today's final action.
In addition, EPA is in the process of proposing to revoke the 1-hour
standard in another area in one of the petitioning States, Pittsburgh,
Pennsylvania, because the area has achieved clean air based on 1996-
1998 monitoring data. In today's rulemaking, EPA confirms its position
that the areas in the petitioning States for which EPA is revoking the
1-hour standard no longer provide a basis for EPA to make positive
findings under section 126 for the 1-hour standard.
3. Timing of Petition for Review
Commenters stated that if EPA takes action to approve the technical
merits of a section 126 petition by April 30, 1999, but findings on the
petitions are not deemed made until some later date, then the April 30
action should be deemed ``final action'' reviewable by a court of law
regardless of the fact that EPA would not be making findings on the
petitions until some later date.
Section 307(b) of the CAA identifies which court has venue to hear
a petition for review of final agency action and the timing by which
any such petition must be filed. For the reasons described in section
VI of this preamble, EPA is determining that final action regarding the
section 126 petitions is nationally applicable and of nationwide scope
or effect for purposes of section 307(b)(1). Therefore, venue lies with
the U.S. Court of Appeals for the D.C. Circuit. With respect to timing,
section 307(b)(1) generally provides that any petition for review must
be filed within sixty days of publication of agency final action in the
Federal Register. Whether a petition to review the decisions in this
rule would be properly reviewable at this time by the Court of Appeals
is a question to be addressed and decided by the court, not EPA.
H. Summary of Major Changes Between Proposals and Final Rule
This summary describes the major changes that have occurred since
publication of the NPR and SNPR.
Section 126 Control Remedy
In the NPR, EPA proposed to implement as the section 126 remedy a
new Federal NOX Budget Trading Program. That program would
consist of a capped, market-based trading system applicable to all
sources for which a final affirmative finding is ultimately granted.
The Agency intended to finalize all aspects of the section 126 remedy
by April 30, 1999. In today's notice, EPA finalizes the general
parameters of the remedy--including the decision to implement a capped,
market-based trading program, identification of the sources subject to
the program, specification of the basis for the total tonnage cap, and
specification of the compliance date. The details of the trading
program, including unit-by-unit allocations, will be finalized in a
separate action no later than July 15, 1999. As part of today's action,
the EPA is also establishing interim final emissions limitations that
will be imposed in the event a finding under section 126 is made and
the Administrator does not promulgate the Federal NOX Budget
Trading Program regulations before such finding.
1-Hour Standard Attainment
In the section 126 NPR, EPA proposed which upwind States contain
sources of emissions named in the petitions that contribute
significantly to nonattainment problems in the petitioning States under
the 1-hour ozone standard, and where petitions were based on it, the 8-
hour ozone standard.
After publication of the section 126 NPR on October 21, 1998, EPA
preliminarily determined that proposed to determine that the 1-hour
ozone standard no longer applied to certain nonattainment areas,
including several areas in the petitioning States based on 1996-1998
air quality monitoring data. These areas, however, continue to monitor
violations of the 8-hour standard.
Because EPA believes, preliminarily, that these areas no longer
have 1-hour nonattainment problems based on the 1996-1998 data, they
can no longer provide a basis for EPA to make affirmative findings
under section 126 that upwind sources are significantly contributing to
nonattainment with respect to the 1-hour standard. Therefore, EPA is
denying portions of
[[Page 28258]]
the 1-hour petitions related to these areas. The determination to
delete these areas as 1-hour receptor areas has no impact on the
determinations of which sources are significantly contributing to
downwind nonattainment.
Maine's 8-Hour Petition and North Carolina Sources
In the section 126 NPR, the upwind States that were named by the
petitioners and which were proposed to contain sources that make a
significant contribution to 8-hour nonattainment problems in the
petitioning States were based on the upwind-downwind linkages found to
be significant in the NOX SIP call. The exception to this in
today's rule is Maine's petition for relief from emissions sources in
North Carolina. In its petition, Maine requested relief from large
stationary sources within a 600-mile radius of the southwestern-most
nonattainment area in Maine. This radius includes several counties in
the extreme northeastern portion of North Carolina that do not contain
sources of the type and size identified in Maine's petition. Thus, even
though EPA found in the NOX SIP call that emissions in North
Carolina contribute significantly to 8-hour nonattainment in Maine, EPA
is denying Maine's petition relative to North Carolina because there
are no section 126 sources located in the portion of North Carolina
covered by Maine's petition.
II. EPA's Analytical Approach
The EPA described its analytical approach in the NPR, (63 FR
56299). The EPA received numerous comments on various aspects of its
approach. After considering these comments, EPA has determined to
maintain the principal elements of its approach. The major comments are
summarized below.
A. EPA's Interpretation of Section 126: Authorization of the Petitions
This section lays out EPA's legal interpretation of sections 126
and 110(a)(2)(D), the key statutory provisions that authorize today's
action. First, EPA describes how these provisions authorize EPA to
address interstate transport problems and how they relate to sections
176A and 184, which are the other two main interstate transport
provisions under the Act. Second, EPA explains its interpretation that
the reference in section 126 to section 110(a)(2)(D)(ii) is a
scrivener's error and the correct reference is to section
110(a)(2)(D)(i). Third, EPA discusses its interpretation of the phrase
``emits in violation of the prohibition'' of section 110 and explains
how this interpretation provides direction for coordinating EPA's
actions on the section 126 petitions and the NOX SIP call.
1. Relationship Among Sections 110(a)(2)(D), 126, and 176A/184
Subsection (a) of section 126 requires, among other things, that
SIPs require major proposed new (or modified) stationary sources to
notify nearby States for which the air pollution levels may be affected
by the fact that such sources have been permitted to commence
construction. Subsection (b) provides:
Any State or political subdivision 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)(ii) * * * or
this section.
Subsection (c) of section 126 states that--
[I]t shall be a violation of this section and the applicable
implementation plan in such State [in which the source is located or
intends to locate]--
(1) For any major proposed new (or modified) source with respect
to which a finding has been made under subsection (b) of this
section to be constructed or to operate in violation of the
prohibition of section 110(a)(2)(D)(ii) * * * or this section, or
(2) for any major existing source to operate more than three
months after such finding has been made with respect to it.
However, subsection (c) further provides that EPA may permit the
continued operation of such major existing sources beyond the 3-month
period, if such sources comply with EPA-promulgated emissions limits
within 3 years of the date of the finding.
Section 110(a)(2)(D) provides the requirement that a SIP contain
adequate provisions--
(i) Prohibiting, consistent with the provisions of this title,
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] national
* * * ambient air quality standard, or
(II) Interfere with measures required to be included in the
applicable implementation plan for any other State under part C to
prevent significant deterioration of air quality or to protect
visibility.
(ii) Insuring compliance with the applicable requirements of
sections 126 and 115 (relating to interstate and international
pollution abatement) * * *
In the 1990 Clean Air Act Amendments, Congress added section 184,
which delineates a multistate ozone transport region (OTR) in the
Northeast, requires specific additional controls for all areas (not
only nonattainment areas) in that region, and establishes the Ozone
Transport Commission (OTC) for the purpose of recommending to EPA
regionwide controls affecting all areas in that region. At the same
time, Congress added section 176A, which authorizes the formation of
transport regions for other pollutants and in other parts of the
country.
In the NPR, EPA proposed the view that, with respect to existing
stationary sources, sections 126(b)-(c) and 110(a)(2)(D), read
together, authorize a downwind State to petition EPA for a finding that
major stationary sources or groups of sources upwind of the State emit
in violation of the prohibition of section 110(a)(2)(D)(i) because,
among other reasons, their emissions contribute significantly to
nonattainment, or interfere with maintenance, of a NAAQS in the State.
If EPA grants the requested finding, the existing sources must shut
down in 3 months unless EPA directly regulates the sources by
establishing emissions limitations and a compliance period extending
beyond 3 months but no later than 3 years from the finding. In
accordance with section 302(j) of the CAA, the term major stationary
source means ``any stationary facility or source which directly emits,
or has the potential to emit, one hundred tons per year or more of any
air pollutant. . . .'' For the purpose of this rulemaking the relevant
pollutant is NOX emissions.
The EPA received numerous comments arguing that section 126(b)
should not be read to authorize the petitions, which ask EPA to
implement controls on upwind sources on grounds that, under section
110(a)(2)(D), they contribute significantly to nonattainment problems
downwind. According to these commenters, Congress, in the 1990 Clean
Air Act Amendments, dealt with interstate ozone transport by
establishing sections 176A and 184 as the key provisions, and revising
section 110(a)(2)(D) to assure that it did not apply outside the
context of section 184.
For the reasons discussed below, EPA believes that following the
1990 Clean Air Act Amendments, section 126(b) and 110(a)(2)(D) retain
independent effect and authorize the petitions. Please note that the
discussion below assumes that the references in section 126 to section
110(a)(2)(D)(ii) are a scrivener's error and instead should be read to
refer to section 110(a)(2)(D)(i). See section II.A.2. below for further
explanation of the error.
Background: The CAA, as amended in 1990, has four key provisions
that relate to the issue of interstate transport of air pollution and
air pollution precursors:
[[Page 28259]]
sections 110(a)(2)(D), 126, 176A, and 184. In attempting to resolve
disputes over specific interpretations of these provisions, it makes
sense to consider these provisions together as the set of statutory
requirements that carry out Congress' desired approach to the problem
of interstate transport. The provisions should be read in a manner that
will best bring meaning to each provision and allow it to fit
rationally into the overall statutory context.
A stated purpose of the CAA is ``to protect and enhance the quality
of the Nation's air resources so as to promote the public health and
welfare and the productive capacity of its population.'' CAA, section
101(b)(1). To understand how the interstate transport provisions
interact with one another and fit into the CAA's overall scheme to
achieve its clean air purposes, it is useful to step back and consider
how these provisions came into being in their current forms. Relevant
information includes earlier draft and adopted versions of the
provisions themselves, statements by Congress regarding the provisions,
and judicial rulings on EPA interpretations of the provisions. It is
also useful to recognize the larger factual context in which Congress
was operating while developing these provisions, both in terms of the
current understandings of the environmental problems that Congress was
attempting to remedy and of the political context for Congressional
action. The relevant legislative history is largely that of the 1970,
1977 and 1990 CAA Amendments, although the pre-1970 provisions are
useful to indicate the approach that Congress rejected in adopting the
first version of the current section 110(a)(2)(D).
As with most environmental policy issues, our understanding of the
problem of interstate transport of pollutants and pollution precursors,
our ability to measure it, and the legal means employed to address it
have become increasingly sophisticated over time. Prior to the adoption
of the 1970 CAA, conflicts between states over air pollution most
frequently concerned the relatively local air quality effects inflicted
on inhabitants of one state by a facility located on the other side of
the state border. The 1970 CAA contained an interstate pollution
provision that could potentially have been applied to long distance
transport disputes, but those did not appear to be Congress' main
concern. See S. Comm. on Public Works, National Air Quality Standards
Act of 1970, S. Rep. No. 91-1196, 91st Cong., 2d Sess., 13 (1970)
reprinted in 1 Committee on Public Works, 93d Cong., 2d Sess., A
Legislative History of the Clean Air Act Amendments of 1970, 413 (1974)
(hereinafter 1970 Legislative History). By the time Congress passed the
1977 Amendments, however, both the federal and state governments and
the general public had become increasingly aware that a significant
portion of certain air pollution problems in some states likely derived
from activities in other states, including more distant states. In
fact, the provisions of the 1970 CAA, as implemented, had exacerbated
long-range interstate transport problems by implicitly encouraging
dispersion through tall smoke stacks as a remedy for local air quality
problems. By 1990, our increasing awareness of the long-range transport
problem was bolstered by more sophisticated measurement and modeling
techniques.
As understanding of the problem became more sophisticated over
time, so did Congress' approach to ameliorating the problem. From 1970
to 1990, Congress steadily increased the number and power of the tools
available to both EPA and the states to address interstate pollution
transport. This expansion of authority under the CAA was driven by an
ongoing situation in which increased recognition of the problem was
accompanied by no actual reduction in transport over a 20-year period.
In fact, the set of actions comprised by the NOx SIP call
and the proposed FIP is EPA's first significant attempt to require
reduction of interstate transport of pollutants. While certain downwind
states affected by the problem have made serious attempts to impel
reductions by upwind states, none of these attempts has been effective
to date. This factual context, both in terms of the extent of the
effects of interstate pollutant transport on downwind states' citizens'
health, environments, and economies, and in terms of the continued
failure of the federal or state governments to have any direct effect
on the problem, is critical to understanding Congress' intent in
adopting the 1990 CAA provisions on interstate transport.
In addressing interstate pollution transport, there are several
central issues with which Congress has had to grapple. In its simplest
form, interstate transport raises questions of how to provide recourse
for a state experiencing health or welfare impacts from sources beyond
the state's control. To the extent that we have decided that there are
certain minimum national standards for air pollutants that must be met
to protect health and welfare, this first issue is a matter of creating
a mechanism for the downwind state to impel emission reductions in the
upwind state. The issue becomes more complicated in the more common
situation where both the upwind and downwind states contribute
pollutants causing the exceedance of the national standards. This
situation adds the need to allocate responsibility (and therefore cost)
for making the reductions necessary to meet the standards, which
involves both economic and equity aspects. Where the air in the
downwind area is cleaner than the standards require, it also raises the
issue of the extent to which the downwind state can ``reserve'' its
cleaner air either for environmental purposes or to provide a margin
for future economic growth. All of these questions are further
complicated where there are multiple upwind and downwind states
contributing to and experiencing an air pollution problem. With each of
these situations, there is also the continuing question of the extent
to which these issues should be resolved by the states involved and the
extent to which solutions may or must be imposed by the federal
government.
Pre-1970 Provisions: The Clean Air Act of 1963 and the Air Quality
Act of 1967 both included provisions to address interstate air
pollution, but neither had much effect on the problem. See generally,
Clean Air Act, Public Law 88-206, 77 Stat. 392, (1963); Air Quality Act
of 1967, Public Law 90-148, 81 Stat. 485 (1967). These early statutes
generally provided for far less of a federal role in pollution control
than the 1970 CAA. On interstate pollution, they took the approach that
it was an issue between states, and hence that states needed to
cooperate to develop a solution. See Vickie L. Patton, The New Air
Quality Standards, Regional Haze, and Interstate Air Pollution
Transport, 28 Envtl. L. Rep. 10155, 10157-10160 (1998); Geoffrey L.
Wilcox, New England and the Challenge of Interstate Ozone Pollution
Under the Clean Air Act of 1990, 24 Boston College Envtl. Affairs L.
Rev. 1, 13-14 (1996). The federal government would facilitate such
cooperation, but would not force it and would rarely step in to impose
a solution in the absence of state resolution. Over time, as the
approach of state cooperation has consistently failed to produce
reductions from upwind states, Congress has given more authority to the
federal government to break the deadlock between upwind and downwind
states, although a strong political and policy interest in letting
states solve state problems has produced continued attempts at driving
consensus solutions.
The CAA of 1963 provided that either a downwind state or Department
of Health, Education, and Welfare (HEW) could convene an
intergovernmental
[[Page 28260]]
conference on a particular interstate pollution issue. Section
5(c)(1)(A), (c)(1)(C), 77 Stat. at 396. The conference would make
findings, and HEW could recommend on that basis that the upwind state
take certain actions to reduce emissions. Section 5(d), 77 Stat. at
397. If the upwind state failed to act, HEW could hold a public hearing
to decide whether to recommend abatement measures again. Section5(e),
77 Stat. at 397. Finally, if the upwind state failed again to implement
the recommended measures, HEW could refer the issue to the U.S.
Attorney General who could bring an enforcement action. Section 5(f),
77 Stat. at 397-398. While they produced progress on a few interstate
pollution problems, the provisions were generally criticized as
ineffectual, particularly due to the long burdensome process required
before the upwind state could be forced to act. Patton, supra at 10157.
The Air Quality Act of 1967 added a regional air quality planning
approach, which was appropriate for addressing interstate pollution
issues, but still lacked a mechanism to force action. See Air Quality
Act of 1967, Public Law 90-148, 81 Stat. 485 (1967).
1970 Clean Air Act: In the face of a widespread lack of progress
addressing the nation's air pollution problems, Congress significantly
changed its approach in adopting the 1970 CAA. Congress moved from a
decentralized approach dependent on state action to a cooperative
federalism approach, with uniform minimum standards and federal
authority to step in where the states failed to act. In the 1970 CAA,
in then section 110(a)(2)(E), Congress first adopted language embodying
the concept that sources located in one state should not be allowed to
interfere with attainment or maintenance of a NAAQS in another state.
See Clean Air Act Amendments of 1970, Public Law 91-604, 84 Stat. 1676.
EPA was to approve a state implementation plan if, among other
requirements, ``it contains adequate provisions for intergovernmental
cooperation, including measures necessary to insure that emissions of
air pollutants from sources located in any air quality control region
will not interfere with the attainment or maintenance of such primary
or secondary standard in any portion of such region outside of such
State or in any other air quality control region.'' Public Law 91-604
section 110(a)(2)(E). While the final statutory language and the Senate
Committee Report (discussing almost identical language) emphasized
intergovernmental cooperation as the mechanism, the intent was that
states develop air quality programs that ``at the minimum must prevent
facilities in one State from contributing to the violation of ambient
air quality standards in an adjacent State * * *.'' S. Rept. No. 91-
1196 at 13, reprinted in 1970 Legislative History at 413. Although the
statutory language was sufficiently broad to encompass the long-range
transport issues that have emerged as the more difficult problem, it
appears that Congress initially conceptualized the problem as more of a
short-range transport issue, with pollution from a facility on one side
of a state border affecting a community on the other side.2
---------------------------------------------------------------------------
\2\ See, e.g., H.R. 17255, which would have amended section
108(c) of the CAA to provide that state plans should contain
``adequate provisions for intergovernmental cooperation, including,
in the case of any area covering part or all of more than one State
and designated as an air quality control region . . . appropriate
provisions for dealing with interstate air pollution problems, . .
.'' (limiting the interstate pollution provisions to states that are
part of a single air quality control region). H.R. 17255, 91st
Cong., 2d Sess. Sec. 4(a)(1) (1970), reprinted in 2 1970 Legislative
History at 914. Note also that most of the abatement conferences
held at that time, which addressed the more contentious interstate
air pollution issues, concerned conflicts between adjacent states.
See Air Pollution--1970: Hearings Before the Subcomm. on Air and
Water Pollution of the Senate Comm. on Public Works, 91st Cong., 2d
Sess. (March 17, 1990), reprinted in 2 1970 Legislative History at
1098-1103.
---------------------------------------------------------------------------
The EPA implemented sections 110(a)(2)(E) of the 1970 CAA through
regulations focusing on information exchange rather than requirements
to control emissions. Patton, supra, at 10162; Wilcox, supra, at 15-16.
The regulations required only that the SIP assure that the state will
transmit information to other states regarding factors, such as
construction of new plants, that may significantly affect air quality
in the same or adjoining air quality regions. 40 CFR 51.21(c) (1977)
(superseded). In a challenge by NRDC, the Eighth Circuit upheld the
regulations as a ``legitimate means to attain ``intergovernmental
cooperation'' as contemplated by Congress in the statute.'' Wilcox,
supra, at 15, quoting NRDC v. EPA, 483 F.2d 690, 692 (8th Cir. 1973).
The result of EPA's approach was that the states made virtually no
progress on control of interstate pollution under the 1970 Act. See
Patton, supra, at 10161, 19; Wilcox, supra, at 18; S. Comm. on Envt.
and Public Works, Clean Air Act Amendments of 1977, S. Rept. 95-127,
95th Cong., 1st, Sess. 41 (1977), reprinted in S. Comm. on Envt. and
Public Works, 95th Cong. 2d. Sess., 3 A Legislative History of the
Clean Air Act Amendments of 1977, 1415 (1978) (hereinafter 1977
Legislative History) (noting that the 1970 Act failed to specify any
abatement procedure if a source in one state emitted air pollutants
that adversely affected another state, and ``[a]s a result, no
interstate enforcement actions have taken place, resulting in serious
inequities among several States, where one State may have more
stringent implementation plan requirements than another State.'').
1977 Clean Air Act: In developing the 1977 Amendments to the CAA,
both Houses of Congress focused on interstate pollution as a major area
of concern, and the 1977 Amendments made significant changes to the
statute intended to address the problem. See S. Rept. 95-127 at 41,
reprinted in 3 1977 Legislative History at 1415. The Report of the
House Committee on Interstate and Foreign Commerce provided an
extensive discussion of the interstate pollution problem, a portion of
which ran as follows:
In the committee's view, however, the existing law (as
interpreted by the Administrator) is an inadequate answer to the
problem of interstate air pollution. This is so for five basic
reasons. First, an information exchange without adequate procedures
to act on that information is simply insufficient. Second, an
effective interstate air pollution control program must include not
only prevention of interstate air pollution from new sources but
also abatement of pollution from existing sources. Third, an
effective program must also be designed to prevent significant
deterioration * * * of air quality and to protect visibility under
section 116 of the bill from interstate air pollution. Fourth, an
effective program must not rely on prevention or abatement action by
the State in which the source of the pollution is located, but
rather by the State * * * which receives the pollution and the harm,
and thus which has the incentive and need to act. Fifth, an
effective program must include a Federal mechanism for resolving
disputes which cannot be decided through cooperation and
consultation between the States or persons involved * * *. The
problem of interstate air pollution remains a serious one that
requires a better solution * * *.
H. Comm. on Interstate and Foreign Commerce, 95th Cong., 1st Sess.,
Clean Air Act Amendments of 1977, H. Rept. 95-294, 330 (1977) reprinted
in 4 1977 Legislative History at 2797.
The Senate Committee on the Environment and Public Works also
viewed the 1970 provisions as inadequate, particularly in their failure
to ``specify any abatement procedure'' if a source in one state emitted
air pollutants that ``adversely affected the air quality control
efforts of another State.'' S. Rept. 95-127 at 41 reprinted in 3 1977
Legislative History at 1415. The Committee noted that ``[a]s a result,
[[Page 28261]]
no interstate enforcement actions have taken place, resulting in
serious inequities among several States, where one State may have more
stringent implementation plan requirements than another State.'' Id.
This put plants in the states with more stringent control measures ``at
a distinct economic and competitive disadvantage.'' Id. at 42, 1416.
The revisions were ``intended to equalize the positions of the States
with respect to interstate pollution by making a source at least as
responsible for polluting another State as it would be for polluting
its own ``State.'' Id.
To address the interstate pollution problem, the 1977 Amendments
modified section 110(a)(2)(E) and added a new section 126. See Clean
Air Act Amendments of 1977, Public Law 95-95, 91 Stat. 685. The House
Committee Report discussed how these provisions together incorporated
``the five elements for an effective program for control of interstate
pollution.'' H. Rept. 95-294 at 330, reprinted in 4 1977 Legislative
History at 2797. The most critical strengthening elements were a direct
requirement that SIPs prohibit emissions in amounts that would prevent
attainment or maintenance by any other state of a NAAQS, and a
mechanism for downwind states to petition EPA to bar emissions from any
major source in violation of that prohibition. The revised section
110(a)(2)(E) required SIPs to contain:
Adequate provisions (i) prohibiting any stationary source within
the State from emitting any air pollutant in amounts which will (I)
prevent attainment or maintenance by any other State of any such
national primary or secondary ambient air quality standard, or (II)
interfere with measures required to be included in the applicable
implementation plan for any other State under part C to prevent
significant deterioration of air quality or to protect visibility,
and (ii) insuring compliance with the requirements of section 126,
relating to interstate pollution abatement.
Public Law 95-95. While overall this made the SIP requirements for
interstate pollution more stringent, the provision was limited to
emissions from stationary sources, and Congress later removed this
limitation in the 1990 Amendments.
The new section 126 included both notification requirements and a
petition process. First, each SIP had to require notice to all nearby
States in which the air pollution levels might be affected of each
major existing or proposed new source that ``may significantly
contribute to levels of air pollution in excess of the national ambient
air quality standards in any air quality control region outside the
State.'' Public Law 95-95. Second, section 126 provided that a state
could petition EPA for a finding that any new or existing ``major
source emits or would emit any air pollutant in violation of the
prohibition of section 110(a)(2)(E).'' Public Law 95-95. EPA had to act
on the petition within 60 days, and if EPA made the finding, it would
be a violation of the SIP for the source either to be constructed or
operate in violation of section 110(a)(2)(E) or for the source to
operate for more than three months after the finding. The EPA could
allow the source to continue to operate beyond that period if it
complied with ``such emission limitations and compliance schedules''
set by EPA ``to bring about compliance with * * * section 110(a)(2)(E)
as expeditiously as practicable,'' but the source would have to comply
by three years from the date of the finding, at the latest. Public Law
95-95.
Congress made clear that it intended section 126 to provide an
additional means of attacking interstate pollution that would
supplement, not replace, the SIP requirement under section
110(a)(2)(e).
This petition process is intended to expedite, not delay,
resolution of interstate pollution conflicts. Thus, it should not be
viewed as an administrative remedy which must be exhausted prior to
bringing suit under section 304 of the act. Rather, the committee
intends to create a second and entirely alternative method and basis
for preventing and abating interstate pollution. The existing
provision prohibiting any stationary source from causing or
contributing to air pollution which interferes with timely
attainment or maintenance or [sic] a national ambient air standard
(or a prevention of significant deteriorating [sic] or visibility
protection plan) in another State is retained. A new provision
prohibiting any source from emitting any pollutant after the
Administrator has made the requisite finding and granted the
petition is an independent basis for controlling interstate air
pollution.
H. Rep. 95-294 at 331, reprinted in 4 1977 Legislative History at
2798.
A commentator summarizes the significance of and inter-relationship
between these two provisions in the following manner:
New section 126 had several remarkable features. Importantly, it
enabled downwind states to initiate action against interstate
pollution. While section 126 required upwind states to identify
sources potentially contributing to interstate pollution thereby
informing potential petitions, the petitions themselves were not
dependent on the cooperation of the upwind state. States suffering
from interstate pollution could independently obtain information and
petition EPA for abatement action.
Section 126 also provided a powerful federal remedial tool. It
authorized direct, expeditious federal abatement of pollution.
Additionally, it allowed objection to and corresponding remediation
of transported pollution at any time, not just when EPA was
reviewing an upwind state plan for compliance with the transport
prohibition.
The petition process together with the SIP prohibition on transport
provided reinforcing checks on interstate transport. The section 110
provisions restricted the source state from adopting, and prohibited
EPA from approving, state plans allowing interstate air pollution.
Section 126 provided a backstop in the event prohibited pollution
nevertheless occurred. It created a formal process for downwind states
to enforce the section 110 prohibition by bringing interstate pollution
concerns to EPA's attention and thereby enabling injured states to
safeguard their interests.
Patton, supra, at 10165-10166.
Despite Congress' provision of significantly improved tools to
address interstate pollution, in implementing these 1977 CAA provisions
EPA did not require reduction of interstate pollution. While EPA has
received a number of petitions under section 126, it has granted none
of them prior to this action. Nor had the Agency found a SIP inadequate
on the basis of interstate transport, until the OTC LEV SIP call. See
60 FR 4712 (January 24, 1995). See Patton, supra, 10166-10172; Wilcox,
supra, at 21-27 for detailed discussion of EPA's rejection of downwind
states' efforts to obtain relief under these provisions.
Clean Air Act Amendments of 1990: Congress adopted the CAA
Amendments of 1990 in the context of our continued failure to make
significant progress on several air pollution fronts, including
tropospheric ozone and acid rain, both of which are caused at least in
part by interstate transport of pollutants. See Lieberman, S. Debate on
H. Conf. Rep. 101-952, 101st Cong., 2d Sess., 10/27/90, reprinted in S.
Comm. on Envt. and Public Works, I A Legislative History of the Clean
Air Act Amendments of 1990, 103d Cong., 1st Sess., 1055 (1993)
(hereinafter 1990 Legislative History) (``In the years since the Clean
Air Act was amended--back in 1977--the air has become dirtier and more
dangerous. Our uphill climb against the ravages of pollution has turned
into a downhill fall, and only now are we realizing the real impact of
our failure to act.''). By 1990, there was also a greater awareness
that problems such as ozone pollution of the eastern U.S. were unlikely
ever to be successfully addressed without controlling interstate
pollution transport. As stated in the Senate Committee Report,
``[a]reas in some States may be unable to attain the ozone
[[Page 28262]]
standard despite implementation of stringent emissions control because
of pollution transported into such areas from other States * * *. The
transport problem in the northeast, and perhaps other regions as well,
is serious enough that additional efforts must be made on an interstate
basis to control emissions, including emissions from attainment
areas.'' S. Comm. on Env't and Public Works, Clean Air Act Amendments
of 1989, S. Rep. 101-228, 101st Cong., 1st Sess., 48 (1989) reprinted
in V 1990 Legislative History at 8388. See also Lautenberg, S. Debate
on H. Conf. Rep. 101-952, 101st Cong., 2d Sess., 10/26/90, reprinted in
I 1990 Legislative History at 1106 (``In New Jersey, the Department of
Environmental Protection says that on some days even if we shut down
the entire State, we would be in violation of some health standards
because of pollution coming over from other states.''); S. Rep. 101-
228, 101st Cong., 1st Sess. at 49 (1989), reprinted in V 1990
Legislative History at 8389 (``The model suggests that even if all
emissions sources were eliminated within the tri-state area [New York,
New Jersey and Connecticut], violations of the ozone standard would
still occur. This means substantial reductions in emissions from areas
upwind from the New York metropolitan area must be achieved if this
area is to attain the air quality standards.'').
The CAA Amendments of 1990 are widely viewed as one of the most
detailed, complex, and prescriptive pieces of environmental legislation
yet adopted. See Wilcox, supra, at 27. In light of EPA's lack of
progress on several major air pollution problems under the 1977
provisions, including interstate pollution, Congress responded by
strengthening existing federal tools and adding new ones that could be
used to achieve emissions reductions, and by establishing numerous new
mandates and deadlines to force action by states and EPA. See, e.g.,
sections 169B, 172, 174, 175A, 176, 176A, 179, 181, 182, 183, 184, 185,
186, 187, 188, 191, 192, and 401-416. See also, Lieberman, Senate
Debate on S. 1630, 1/31/90, reprinted in IV 1990 Legislative History at
5077 (``Indeed, it is in part the lack of support of EPA which in the
past has prevented the effort to institute regional controls from being
successful.''). The provisions that were either new or strengthened
included several targeting interstate pollution--the acid rain
provisions, the regional haze provisions, the eastern ozone transport
commission provisions, and general provisions for interstate transport.
Congress strengthened the existing interstate pollution transport
provisions in sections 110(a)(2)(D) (the successor to section
110(a)(2)(E)) and 126, and added two new interstate pollution
provisions in sections 176A and 184. See H. Debate, 5/21/90, Clean Air
Facts, reprinted in II 1990 Legislative History at 2558 (``Stronger
interstate transport provisions.--The Swift/Eckart amendment includes
stronger provisions for emission controls in interstate ozone transport
regions, as sought by many Northeast and Mid-Atlantic states.''). All
of the descriptions of the amendments in the legislative history refer
to the changes made to strengthen and supplement the provisions. See
discussion below.
Congress made several changes to sections 110(a)(2)(E) and 126 to
overcome EPA's limiting interpretations under the 1977 language, making
them easier to apply and more effective in controlling interstate
pollution. The Chafee-Baucus Statement of Senate Managers states that
the bill ``amends section 126 and section 302(h) of the Clean Air Act
to strengthen to [sic] prohibitions on emissions that result in
interstate pollution.'' Chafee-Baucus Statement of Senate Managers
reprinted in I 1990 Legislative History at 886. In describing the
changes to section 110, the Senate Committee Report states that
``[p]rovisions in existing law requiring SIPs to take into account the
effect of emissions on other States are strengthened.'' S. Comm. on
Envt. and Public Works, Clean Air Act Amendments of 1989, S. Rept. 101-
228, 101st Cong., 1st Sess. 19 (1989), reprinted in V 1990 Legislative
History at 8359. The Senate Committee Report further states ``[s]ection
110(a)(2)(E) is replaced by new section 110(c)(4), which, together with
changes made to section 126 * * * , improve the effectiveness of the
Act as a means of dealing with interstate air pollution.'' 3
Id. at 21, 8361.
---------------------------------------------------------------------------
\3\ Section 110(c)(4) was largely identical to the final version
of section 110(a)(2)(D), except that it contained one additional
provision and did not contain the clause ``consistent with the
provisions of this title.'' See S. 1630, 101st Cong., 2d Sess.
Sec. 101(c) (1990), reprinted in III 1990 Legislative History at
4140-4141.
---------------------------------------------------------------------------
One significant change to section 110(a)(2)(E), which became
section 110(a)(2)(D), was that Congress extended the prohibition beyond
stationary sources to cover other emissions activities, thereby
allowing downwind states to obtain relief from an upwind state's
pollution emanating from any source. The 1977 version of section 110
required the SIP to contain adequate provisions ``prohibiting any
stationary source within the State * * *,'' (emphasis added) which was
replaced with ``prohibiting, consistent with the provisions of this
title, any source or other type of emissions activity within the State
* * *'' (emphasis added). Congress also changed the language of the
criteria for showing that the downwind state is harmed by pollution
transport. Rather than barring emissions of air pollutants ``in amounts
which will (I) prevent attainment or maintenance by any other State''
(emphasis added), Congress modified section 110(a)(2)(D) to bar
emissions of air pollutants ``in amounts which will-- (I) contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State'' (emphasis added). Finally, Congress expanded the
prohibition to require SIPs to insure compliance with international
pollution abatement requirements under section 115, as well as
interstate pollution abatement requirements under section 126. In
describing the amendments to section 110(a)(2)(E), the Senate Committee
Report stated:
Where prohibitions in existing section 110(a)(2)(E) apply only
to emissions from a single source, the amendment includes ``any
other type of emissions activity,'' which makes the provision
effective in prohibiting emissions from, for example, multiple
sources, mobile sources, and area sources. For interstate pollution
to violate current law, it must ``prevent attainment.'' Since it may
be impossible to say that any single source or group of sources is
the one which actually prevents attainment, the bill changes
``prevent attainment or maintenance'' to ``contribute significantly
to nonattainment or interfere with maintenance by,'' thus clarifying
when a violation occurs.
Id. at 21, 8361. The only other change discussed in the Report was an
additional strengthening provision that was not included in the adopted
amendments.
Congress also made it easier for downwind states to use section 126
by allowing downwind states to petition based on pollution derived from
``any major source or a group of stationary sources'' (emphasis added),
not just from a major source, as under the previous version. As there
are usually multiple sources in the upwind state contributing to
transported pollution, it is far more difficult to prove that any one
particular source, rather than the entire set of contributing upwind
sources, prevents attainment or maintenance (or contributes
significantly to nonattainment or interferes with maintenance) in the
downwind state. In describing the amendment to section 126 contained in
H.R. 3030, which was identical to the adopted language, the House
Committee
[[Page 28263]]
Report mentions only the strengthening effect of the changes. ``Section
126 of the Clean Air Act, concerning interstate air pollution, is
amended to provide that when evaluating the impact of one State's
emissions on another State under this section, it is not necessary to
focus only on the impacts of a single major source. The evaluation of
whether pollution from one State is having a greater than permissible
impact on another State is to extend as well to a group of stationary
sources.'' H. Comm. on Energy and Commerce, Clean Air Act Amendments of
1990, H. Rept. 101-490, 101st Cong., 2d Sess. 274 (1990), reprinted in
II 1990 Legislative History at 3298.4
---------------------------------------------------------------------------
\4\ Note that this is the sum total description of the section
126 amendment in the House Committee Report. This version of the
House bill also contained in the 176A and 184 provisions, which the
House Committee Report did not describe at all. See H. Rep. 101-490,
101st Cong., 2d Sess. at 274, reprinted in II 1990 Legislative
History at 3298.
---------------------------------------------------------------------------
Congress also strengthened section 126 by adding ``this section''
in several places in section 126(b) and (c). This addition explicitly
allowed a finding that a source would emit or is emitting in violation
of section 126, in addition to a finding that the source would emit or
is emitting in violation of the prohibition of section 110(a)(2)(D).
The amendments also made continued operation after a section 126
finding a violation of section 126 itself, in addition to being a
violation of the applicable SIP.
In addition, Congress adopted changes to the definitions of ``air
pollutant'' and ``welfare'' that made the interstate transport
provisions clearly applicable to emissions of precursors to air
pollution, not just emissions of the NAAQS pollutants. This overrode
EPA's previous limiting interpretation that when reviewing a SIP
revision, EPA could only consider the impacts on interstate pollution
of the particular pollutant controlled under the SIP, not any other
pollution impacts that result from transformation of the pollutant.
See, e.g., Connecticut v. U.S. EPA, 696 F.2d 147, 162 (2d Cir. 1982);
Connecticut Fund for the Env't v. U.S. EPA, 696 F.2d 169, 177 (2d Cir.
1982); Patton, supra, at 10166.
Congress also adopted provisions to establish interstate transport
commissions, giving states and EPA a new tool to use to tackle the
intractable interstate pollution problem. Section 176A provides general
provisions for the creation and functioning of interstate transport
regions and interstate transport commissions, while in section 184
Congress directly established the Northeast Ozone Transport Region. The
transport commission approach is based on a recognition that regional
problems require regional, rather than state-by-state, solutions, and a
good way to achieve regional solutions may be for the affected states
to develop them and the federal government to require their
implementation. This maximizes information for decision-making,
generates political support for the outcome, and increases the
likelihood that states will implement identified solutions.
Under section 176A(a), EPA may establish by rule a transport region
for a pollutant whenever the interstate transport of air pollutants
from one or more states contributes significantly to a violation of a
NAAQS in one or more other states. The transport region would include
both the contributing and affected states. EPA may establish the
transport region on its own, or may act upon a petition from a Governor
of any state. Section 176A(b) requires establishment of a transport
commission for each transport region. The commission is to be comprised
of a representative of the Governor and an air pollution control
official from each state in the transport region, an EPA Headquarters
representative, and a representative of each affected EPA Region. The
transport commission is to assess interstate pollution transport
throughout the region, assess strategies for mitigating the transport,
and recommend to EPA measures necessary for SIPs to meet the
requirements of section 110(a)(2)(D). Under section 176A(c), the
transport commission may request EPA to find under section 110(k)(5)
that the SIPs for one or more of the states in the region are
inadequate to meet the requirements of section 110(a)(2)(D). The EPA
must act to approve, disapprove or partially approve and partially
disapprove the recommendations within eighteen months of receipt.
Section 184 contains additional provisions applicable specifically
to ozone transport regions and establishes the northeastern ozone
transport region by operation of law. Section 184(b) requires each
state in an ozone transport region to adopt SIP revisions containing
specified control measures related to motor vehicle inspection and
maintenance programs, reasonably available control technology for
control of VOCs, and vehicle refueling controls. Section 184(c) lays
out a process for an ozone transport commission to develop and EPA to
act on recommendations for additional control measures necessary to
bring any area in the region into attainment. EPA must approve,
disapprove, or partially approve and partially disapprove the
recommendations within nine months of their receipt. Upon full or
partial approval of the recommendations, EPA must issue a SIP call
under section 110(k)(5) requiring the relevant states to revise their
SIPs to include the recommended measures to meet the requirements of
section 110(a)(2)(D). If EPA disapproves the recommendations, EPA must
explain why the disapproved measures are not necessary to bring any
area in the region into attainment and must recommend equal or more
effective actions that the commission could take to conform the
recommendations to the section 184 requirements. Section 184(d)
requires EPA to promulgate criteria requiring that the best available
air quality monitoring and modeling techniques be used to determine the
contribution of sources in one area to concentrations of ozone in a
nonattainment area.
Comments: A number of commenters argue that Congress modified
section 126 and section 110(a)(2)(D) in the 1990 Amendments to
eliminate EPA's authority to take action against upwind sources, except
upon a recommendation from a transport commission established under
section 176A or section 184. They argue that the adoption of sections
176A and 184, combined with the addition of the language ``consistent
with the provisions of this title'' in section 110(a)(2)(D) and the
amended cite to section 110(a)(2)(D)(ii) in section 126, eliminates
EPA's authority to act under section 126(b) and (c), except with
respect to failures to notify under section 126(a). One commenter also
cites section 110(k)(5) to support the argument that EPA may not act to
address interstate transport problems except upon the recommendation of
an interstate transport commission established under section 176A or
section 184.
Response: Congress viewed the creation of interstate transport
commissions as a valuable new approach to resolving interstate
pollution problems that would encourage the affected states to help
design a solution. As stated by Senator Lieberman, ``[t]he creation of
a regional air quality commission is an important and creative part of
the bill. It recognizes that it is impossible to put a cleanup bubble
over an individual State. It puts some responsibility on the States to
be good neighbors.'' S. Debate on H. Conf. Rep. 101-952, 10/27/90,
reprinted in I 1990 Legislative History at 1053. Commenters argue that
these new interstate transport commission provisions are the exclusive
means for
[[Page 28264]]
EPA to address interstate pollution transport. However, nothing in the
structure or language of the interstate pollution provisions
themselves, their discussion in the legislative history, or the
historical development of the statutory authorities to address
interstate pollution through successive versions of the CAA, supports
the assertion that the new provisions were intended to replace, rather
than supplement, EPA's existing authority to address interstate
pollution problems under section 110(a)(2)(D) and section 126.
First, a straightforward interpretation of the CAA language and
structure leads to the conclusion that there are four fully effective
provisions providing multiple tools for EPA and states to use to
address interstate pollution problems. It is a canon of statutory
construction that statutes should be interpreted, if possible, to give
full effect to all of the statutory language. See Alabama Power Co. v.
EPA, 40 F.3d 450, 455 (D.C. Cir. 1994) (a statute ``is to be
interpreted to give consistent and harmonious effect to each of its
provisions.'') (Emphasis added, citation omitted). The simplest
interpretation of the inter-relationship of these four provisions
addressing interstate transport is that each one plays a role in a
rational system for upwind states, downwind states and EPA to work
together to develop and implement solutions for interstate pollution
transport.
Section 110(a)(2)(D) establishes one of the basic requirements that
each state must address in its air pollution planning efforts--the SIP
must contain adequate provisions prohibiting emissions that contribute
significantly to nonattainment in, or interfere with maintenance by,
any other state. This provision places the primary responsibility to
prohibit such emissions on the upwind state, but requires EPA to
evaluate the adequacy of a state's SIP submission in this respect and
potentially to disapprove the SIP on these grounds. A SIP disapproval
will eventually trigger sanctions against the state if it does not
revise the submission to contain adequate provisions for control of
interstate transport. While the downwind states are the parties with
the greatest incentive to obtain emissions reductions upwind, section
110(a)(2)(D) only provides a limited role for downwind states. They may
object to EPA's proposed approval of a SIP submission on the grounds
that it fails to control interstate transport as required by section
110(a)(2)(D), but cannot initiate action on interstate pollution
transport under this provision. 5 See, e.g., State of New
York v. U.S. EPA, 710 F.2d 1200 (6th Cir. 1983) (upholding EPA's
approval of a SIP revision for Tennessee and rejecting New York's claim
that the revision violated the requirements of section 110(a)(2)(E)).
---------------------------------------------------------------------------
\5\ Under section 553(e) of the Administrative Procedure Act, a
downwind state could petition EPA to issue a SIP call under section
110(k)(5) on the grounds that an upwind state's SIP failed to meet
section 110(a)(2)(D). See 5 U.S.C. 553(e). However, EPA would have
discretion to decide when to act on the petition, subject only to a
lawsuit for unreasonable delay under section 304(a) of the CAA. In
contrast, section 126 establishes a nondiscretionary duty and
deadlines for EPA to act on a petition under that section, which a
state may enforce through a citizen suit under section 304.
---------------------------------------------------------------------------
Congress adopted section 126 to give downwind states a stronger
tool to impel action by EPA and upwind states. First, section 126(a)
gives downwind states access to emissions information that may be
necessary for them to identify the upwind sources of their
nonattainment or maintenance problems. Second, section 126(b) and (c)
allows downwind states to petition EPA directly to make a finding that
upwind sources are emitting air pollutants in violation of the section
110(a)(2)(D)(i) prohibition on emissions that contribute significantly
to nonattainment in, or interfere with maintenance by, any other state.
If EPA makes a finding under section 126, EPA must directly regulate
the sources of the upwind emissions. Relief does not depend upon any
action by the upwind states, as is necessary for a SIP revision. Thus,
where currently approved SIPs do not contain adequate provisions
protecting downwind states from pollution transport, section 126
provides powerful recourse to the entities most motivated to reduce
transport. It allows the downwind states to initiate action and gives
EPA authority to implement a solution directly, without requiring
additional state response.
The sections 176A and 184 provisions on interstate transport
commissions supplement this scheme in two key respects. These sections
provide a stronger action-forcing tool for a situation where a majority
of upwind and downwind states have developed a compromise solution to
pollution transport in a region, but EPA has not acted to support
implementation of that solution. See S. Rep. 101-228, 101st Cong., 1st
Sess. at 51 (1989), Leg. Hist V. at 8391 (``A regional ozone transport
commission is one important way to address these problems identified by
modeling and monitoring. State air quality directors in the northeast
have been cooperating for several years to develop a regional solution
to the ozone problem. Lack of support by EPA and lack of authority to
institute needed regional controls (both in attainment and
nonattainment areas) have prevented this effort from being more
successful.'') The transport commission approach contemplates that all
affected states in an interstate transport region will come together
with EPA and identify emission control measures supported by at least a
majority of the states. Under the more specific provisions of section
184, the transport commission will forward the recommended emission
control measures to EPA, which then must take action to approve or
disapprove the recommended measures pursuant to criteria contained in
section 184.
Establishment of an interstate transport commission also may help
improve the political viability of potential solutions to interstate
transport problems, and hence increase the likelihood that such
solutions will be implemented through state and EPA actions. Bringing
the states together as a body to develop solutions emphasizes the
shared responsibility for the problem and the need to address it
through compromise and mutual agreement. Access to a shared body of
information increases the likelihood of reaching similar conclusions,
although, of course, the same information will always be analyzed
somewhat differently in light of different state interests.
Participation in a formal analysis and decision-making process
increases the parties' investment in the outcomes, thereby enhancing
political support for the recommended actions. Finally, enhanced
political support for the recommendations makes it easier for EPA to
require implementation of those recommendations. See Section I.B. for
discussion of how the OTAG process has fulfilled some of these
functions in this proceeding.
While Congress clearly saw the opportunities provided by a state
process for developing regional solutions, the process is designed to
promote consensus solutions where those are possible, but has no
mechanism for forcing action where states remain strongly divided.
Recommendations may only be made by vote of the majority of the states
represented. Where the transport commission approach works and produces
recommendations to EPA, the solutions developed may well be optimal in
terms of effectiveness and acceptability. However, there is simply no
forcing function to ensure that the transport commission process will
ever identify any, let alone an adequate, solution to any particular
interstate
[[Page 28265]]
transport problem. In fact, the northeast ozone transport commission
established by operation of law under section 184 has produced only one
recommendation to EPA, which was approved by EPA but overturned in
litigation. Moreover, apart from the establishment of the northeast
ozone transport commission by operation of law, EPA has discretion as
to whether even to establish a transport region, and hence transport
commission, to address a given interstate transport problem. See CAA,
section 176A (``Whenever, on the Administrator's own motion or by
petition from the Governor of any State, the Administrator has reason
to believe that the interstate transport of air pollutants from one or
more States contributes significantly to a violation of a national
ambient air quality standard in one or more other States, the
Administrator may establish, by rule, a transport region * * *.'')
(emphasis added). Thus, the regional transport commissions provide a
potentially useful tool, but by no means a panacea, for the interstate
pollution problem.
Despite the inherent limitation in the transport commission
approach--a structure that builds in a significant possibility that it
may never actually act to reduce any interstate pollution--commenters
argue that Congress intended to rely solely upon this one potential
approach and strip from EPA and downwind states the existing
alternative tools to address the problem that Congress had so carefully
developed in the 1970 and 1977 Amendments. It is hardly logical to
presume from the adoption of these transport commission provisions (in
the absence of any statutory language to that effect) that Congress
intended them also to divest EPA of authority to act at all in the
absence of a formal recommendation from a majority of affected states.
Such a presumption is inconsistent with both Congress' expressions of
concern about the effect of interstate transport on downwind states and
Congress' support for unilateral federal action if states continued to
fail to address the problem. See, e.g., Lieberman, S. Debate on H.
Conf. Rep. 101-952, 101st Cong., 2d Sess., 10/27/90, reprinted in I
1990 Legislative History at 1053 (``Another provision of the bill which
is an important part of our effort to control air pollution transported
from other areas is the requirement that the Federal Government
intervene and promulgate a plan of emission controls in an area where
the State fails to act. This provision guarantees that if States
sending pollution to Connecticut are not doing their jobs in
controlling pollution, Connecticut will be assured that the Federal
Government will step in and do the job.'')
Commenters claim that allowing EPA to act on interstate transport
problems without a recommendation from a transport commission reads
section 176A and 184 out of the CAA. This is nonsense. The transport
commission provisions provide a structure, authority and incentive for
state-driven solutions to regional pollution problems. The EPA has
strong legal and policy-based reasons to encourage such consensus-based
solutions and implement them where they emerge. Providing EPA
independent authority to act in the absence of a transport commission
or where the commission has failed to produce any recommendations does
not undermine the transport commission's authority, much less render
those provisions meaningless. Rather, by increasing the likelihood of
some action even in the absence of a recommendation, EPA's authority
may well encourage states to develop their own consensus-based
solutions in preference over imposition of requirements developed by
EPA. The logical interpretation of the structure of the Act is that the
transport commission provisions complement, but do not replace, the
other interstate pollution provisions contained in section
110(a)(2)(D)(i) and section 126 specifying requirements for SIPs and
providing for direct reductions from sources, even in the absence of
any regional agreement.
Second, the language of the provisions simply does not support the
commenters' arguments. Section 126 states that ``[a]ny 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)(ii) or this
section.'' Sections 176A and 184 provide authority to establish, and
for the northeastern ozone transport region directly establish,
transport regions and transport commissions. There is no language in
either section 126, or the sections that supposedly largely negate
section 126(b) and (c), suggesting that section 126 is superseded by
sections 176A and 184 or that all three provisions do not remain in
effect.
Moreover, in the 1990 legislation, Congress amended section 126 to
strengthen its effectiveness by broadening its scope without any
indication that it intended to simultaneously dramatically curtail
EPA's authority under that provision. See Chafee-Baucus Statement of
Senate Managers, reprinted in I 1990 Legislative History at 886
(stating that the bill ``amends section 126 and section 302(h) of the
Clean Air Act to strengthen to [sic] prohibitions on emissions that
result in interstate pollution.''). The amendments made it a
prohibition of section 126 itself, as well as of the applicable SIP (as
the previous version provided), for a source to continue to operate for
more than three months after EPA makes a finding under section 126.
They also explicitly allowed a finding that a source would emit or is
emitting in violation of section 126, in addition to the pre-existing
language allowing a finding that the source would emit or is emitting
in violation of the prohibition of section 110(a)(2)(D).
Under the commenters' interpretation of the amended version of
section 126, Congress strengthened the petition process while limiting
its applicability to violations of notification requirements. This
interpretation necessarily presumes that Congress intended to enhance
EPA's power to enforce through source shut-downs a requirement with no
direct environmental impacts, while removing EPA's pre-existing
independent authority to reduce the actual emissions. The commenters
claim that the petition process under section 126(b) and (c) is now
limited to petitions claiming that an upwind state has violated section
126(a) by failing to provide information to a downwind state regarding
certain sources of emissions in the upwind state. Section 126(a)
requires a SIP to include a requirement to provide information to
downwind states for each major new or existing source regarding
emissions ``which may significantly contribute to levels of air
pollution in excess of the national ambient air quality standards' in
those downwind states. Commenters are arguing that EPA could shut down
a source under section 126 because it had failed to comply with the
notification requirements, but could not shut down such a source
because it was emitting prohibited quantities of air pollution.
Moreover, the notification requirement applies to each major proposed
new or modified source that (a) is subject to part C of title I
(relating to prevention of significant deterioration of air quality) or
(b) may significantly contribute to levels of air pollution in excess
of the NAAQS downwind. Thus, under the commenters' interpretation, the
notification requirement, and hence the shut down remedy for its
violation, potentially applies to sources that do not actually
significantly contribute to downwind air pollution, while no
[[Page 28266]]
longer applying to sources because they do so contribute. The language
of the statute does not indicate that Congress intended this result,
and its inherent irrationality strongly suggests the contrary.
Commenters also rely on the revised language of section
110(a)(2)(D) and the new section 110(k)(5) to argue that sections 176A
and 184 are now the sole authorities for addressing interstate
pollution transport. The commenters point to the new language in
section 110(a)(2)(D)(i), which requires SIPs to prohibit, ``consistent
with the provisions of this title'' (emphasis added), emissions that
contribute significantly to nonattainment or interfere with
maintenance. They also note that section 110(k)(5), which Congress
added in the 1990 Amendments, gives EPA authority to call for a SIP
revision when a plan fails ``to mitigate adequately the interstate
pollutant transport described in section 176A or section 184.'' The
commenters argue that together, these provisions bar EPA from acting
under section 110(k)(5) and section 110(a)(2)(D)(i) (whether or not in
conjunction with section 126) in the absence of recommendations from an
interstate transport commission established under section 176A or
section 184.
The revision to section 110(a)(2)(D)(i) adds a general clause
requiring adopted SIP provisions to be consistent with title I
requirements. Nowhere in the statute is there language indicating that
sections 176A and 184 provide the sole mechanisms to address interstate
pollution transport. In the absence of such language, it is unclear how
the requirement for consistency with other provisions can be
bootstrapped into establishing the supremacy of certain provisions over
others. Since nothing in sections 176A or 184 states that those
provisions override other statutory provisions which establish other
means of addressing interstate pollution transport, it is perfectly
consistent with the language sections 176A and 184 for EPA to exercise
the authority directly established under sections 126 and
110(a)(2)(D)(i).
Under EPA's interpretation, the language ``consistent with the
provisions of this title'' serves the purpose of ensuring that in
requiring a SIP to contain adequate provisions for interstate
transport, EPA may not require states to take, and states may not take
on their own initiative, actions that are barred by or in conflict with
other requirements under title I. Title I establishes a multitude of
detailed requirements for states to adopt and submit SIP revisions
adequate to achieve and maintain each of the NAAQS in different areas
on various timetables. The 1990 Amendments greatly increased the detail
and complexity of the state planning requirements in title I. Thus, it
is perfectly reasonable that, in strengthening the section
110(a)(2)(D)(i) interstate transport requirements, Congress wanted to
make certain that these new more stringent requirements would not
override or interfere with other title I provisions. This is what the
language on its face requires. Had Congress intended to allow EPA to
act under section 110(a)(2)(D)(i) only upon the recommendation of an
interstate transport commission, it presumably would have said that
instead.
The legislative history supports EPA's interpretation that the
language ``consistent with the provisions of this title'' was intended
to be a catch-all safety clause, rather than a significant substantive
change. The language was introduced in H.R. 3030 as approved by the
House Committee on Energy and Commerce, and was included in the version
approved by the House. The version approved by the full Senate did not
contain the language, but it was retained in the Conference Committee
version approved by both Houses. In all of the discussions of the
changes made to sections 110(a)(2)(D)(i) and 126 and the addition of
sections 176A and 184 by both Houses, there is no mention of this
language. It is implausible that Congress intended the language to
dramatically reduce the scope of section 110(a)(2)(D)(i) without
mention, while discussing all of the strengthenings of these
provisions.
The language of section 110(k)(5) also does not limit EPA's
authority to act under section 110(a)(2)(D)(i) only upon the
recommendations of a transport commission. Section 110(k)(5) allows EPA
to call for a SIP revision ``to otherwise comply with any requirement
of this Act.'' The fact that section 110(k)(5) also identifies two
specific instances where a SIP would be inadequate does not narrow the
scope of the last catch-all clause. In adopting the interstate
transport commission provisions in the 1990 Amendments, Congress
established an entirely new additional mechanism for addressing
interstate pollution, which did not depend solely on EPA action.
Concurrent with establishing a new mechanism under the statute, it
makes sense that Congress would specifically identify a SIP call under
section 110(k)(5) as a key element in implementing that mechanism. It
does not follow, however, that Congress intended to remove EPA's
authority to call for a SIP revision in other circumstances related to
interstate transport. See also 63 FR at 57368, NOX SIP Call
Response to Comments Document, 39-43.
Third, the legislative history supports EPA's interpretation that
all four provisions remain fully effective. The legislative history
contains numerous descriptions of the amendments as strengthening the
authority to address the problem of interstate pollution. See, e.g.,
Chafee-Baucus Statement of Senate Managers, reprinted in I 1990
Legislative History at 886 (stating that the bill ``amends section 126
and section 302(h) of the Clean Air Act to strengthen to [sic]
prohibitions on emissions that result in interstate pollution.''); S.
Rep. 101-228, 101st Cong., 1st Sess. at 19 (1989), reprinted in V 1990
Legislative History at 8359 (in describing the changes to section 110,
states that ``[p]rovisions in existing law requiring SIPs to take into
account the effect of emissions on other States are strengthened.'');
House Committee on Energy and Commerce, H. Rep. 101-490, 101st Cong.,
2d Sess. at 274 (1990), reprinted in II 1990 Legislative History at
3298 (full text of the description of the amendments to section 126
follows: ``Section 126 of the Clean Air Act, concerning interstate air
pollution, is amended to provide that when evaluating the impact of one
State's emissions on another State under this section, it is not
necessary to focus only on the impacts of a single major source. The
evaluation of whether pollution from one State is having a greater than
permissible impact on another State is to extend as well to a group of
stationary sources.'').
In addition to the specific discussions in the legislative history
identified above, the legislative history is informative through what
it does not mention. The substantive changes to section 110(a)(2)(D)
are discussed in the Senate Committee Report, and the House Committee
Report. The substantive changes to section 126 are discussed in both
Committee Reports and the Chafee-Baucus Statement of Senate Managers.
The addition of sections 176A and 184 are discussed in all of these
sources plus statements on the House and Senate floors. None of these
discussions states or implies that in addition to the strengthening
changes identified, Congress also intends to sharply restrict EPA's
pre-existing authority under sections 110(a)(2)(D)(i) and 126 and to
establish sections 176A and 184 as the sole sources of authority to
address interstate pollution transport. Rather, the references in the
legislative history to sections 176A and 184 suggest
[[Page 28267]]
that interstate transport commissions provide one, rather than the only
means by which to address the problem. See, S. Rep. 101-228, 101st
Cong., 1st Sess. at 51 (1989), reprinted in V 1990 Legislative History
at 8391 (``A regional ozone transport commission is one important way
to address these problems identified by modeling and monitoring.''
(emphasis added); Baucus, S. Debate on H. Conf. Rep. 101-952, 101st
Cong., 2d Sess., 10/27/90, reprinted in I 1990 Legislative History at
1003 (``We believe that the transport commissions can play a vital role
in abating interstate air pollution control problems.'')
Fourth, as discussed extensively above, Congress adopted the 1990
Amendments in the context of continued lack of progress on the
interstate pollution problem and the failure of many areas affected by
interstate pollution transport to meet the NAAQS, and with the goal of
strengthening the CAA to produce results in the form of cleaner air.
The commenters argue that Congress intended to remove a primary
mechanism for reducing interstate transport and leave downwind states
with no recourse should upwind states fail to agree to recommend a
solution. They claim that Congress recognized ``that the adversarial
approaches of the past--pitting one state against another and pitting
EPA against one of those states--had not worked and would not work.''
Therefore, they argue that Congress ``restricted EPA's authority to
create the kind of confrontation and controversy that had existed in
the past.'' This is revisionist history, uninformed by the historical
development of the CAA and the factual and political context in which
Congress acted. The legislative history contains numerous references to
the problem of interstate pollution, the failure to make progress in
reducing pollution transport, and the effects on downwind
states.6 The legislative history expresses concern about the
lack of EPA and state action, but nowhere evinces a concern about
conflict between the states or adversarial relationships. (Note that
commenters do not cite any support for their characterization of
Congress' motivations).
---------------------------------------------------------------------------
\6\ See, e.g., Lieberman, S. Debate on H. Conf. Rep. 101-952,
101st Cong., 2d Sess., 10/27/90, reprinted in I 1990 Legislative
History at 1055 (``In the years since the Clean Air Act was
amended--back in 1977-the air has become dirtier and more dangerous.
Our uphill climb against the ravages of pollution has turned into a
downhill fall, and only now are we realizing the real impact of our
failure to act.''); S. Rep. 101-228, 101st Cong., 1st Sess. at 48
(1989), reprinted in V 1990 Legislative History at 8388 (``[a]reas
in some States may be unable to attain the ozone standard despite
implementation of stringent emissions control because of pollution
transported into such areas from other States. . . . The transport
problem in the northeast, and perhaps other regions as well, is
serious enough that additional efforts must be made on an interstate
basis to control emissions, including emissions from attainment
areas.''); Lautenberg, S. Debate on H. Conf. Rep. 101-952, 101st
Cong., 2d Sess., 10/26/90, reprinted in I 1990 Legislative History
at 1106 (``In New Jersey, the Department of Envirionmental
Protection says that on some days even if we shut down the entire
State, we would be in violation of some health standards because of
pollution coming over from other states.''); Lieberman, S. Debate on
S. 1630, 1/31/90, reprinted in IV 1990 Legislative History at 5077
(``Indeed, it is in part the lack of support of EPA which in the
past has prevented the effort to institute regional controls from
being successful.''); H. Debate, 101st Cong., 2d Sess., 5/21/90,
Clean Air Facts, reprinted in II 1990 Legislative History at 2558
(``Stronger interstate transport provisions.--The Swift/Eckart
amendment includes stronger provisions for emission controls in
interstate ozone transport regions, as sought by many Northeast and
Mid-Atlantic states.''); Lieberman, S. Debate on H. Conf. Rep. 101-
952, 101st Cong., 2d Sess., 10/27/90, reprinted in I 1990 Legisltive
History at 1053; Baucus, S. Debate on H. Conf. Rep. 101-952, 101st
Cong., 2d Sess., 10/27/90, reprinted in I 1990 Legislative History
at 1004 (``[] EPA bears a heavy burden on demonstrating that the
additional control measure(s) is not necessary to bring any area of
the region into attainment by the dates provided and to recommend
equal or more effective actions that could be taken designed [sic]
to replace the recommendation. Any recommendations by EPA under this
section, designed to replace the recommendations of the Commission,
shall not place an unfair burden on any state which is the victim of
the transported air pollution.''); Lieberman, S. Debate, 101st
Cong., 2d Sess., 1/31/90, reprinted in IV 1990 Legislative History
at 5076 (``So there is a basic point here that Connecticut cannot
clean its air itself because so much of its problems comes from
outside of the State of Connecticut, and therefore if we are going
to have clean air in Connecticut [sic] in so many other States in
the country, but particularly in the Northeast, we need help from
the Federal Government.'').
---------------------------------------------------------------------------
The commenters' interpretation is that Congress made section 126(b)
and (c) no longer effective for petitions against sources of pollution.
For this interpretation to be correct, Congress must have revised the
CAA to drastically limit section 126(b) and (c): (1) Without repealing
the provisions; (2) without explicitly overriding them elsewhere in the
CAA; (3) while adding language to strengthen those provisions; (4)
without mentioning the change in the legislative history discussions of
any of these provisions; and (5) while pursuing a forcefully stated
intent to compel EPA and the states to make more progress on reducing
interstate pollution. The EPA finds this argument profoundly
unconvincing.
For further discussion of EPA's position on these issues please see
the section 126 proposed rule, the NOX SIP Call final rule
and the NOX SIP Call Response to Comments Document. 63 FR
56292; 63 FR 57356.
2. Scrivener's Error
Section 126(b) provides that a State may petition EPA for a finding
that specified sources or groups of sources in other States emit or
would emit air pollutants ``in violation of the prohibition of section
110(a)(2)(D)(ii) of this title or this section.'' In turn, section 110
(a)(2)(D) requires that a SIP:
Contain adequate provisions:
(i) prohibiting, consistent with the provisions of this title,
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] national
ambient air quality standard, or
(II) interfere with measures required to be included in the
applicable implementation plan for any other State under part C to
prevent significant deterioration of air quality or to protect
visibility,
(ii) ensuring compliance with the applicable requirements of
sections 126 and 115 (relating to interstate and international
pollution abatement).
The EPA has concluded that the cross-reference in section 126(b) to
section 110(a)(2)(D)(ii) is a scrivener's error and that Congress
intended to refer to section 110(a)(2)(D)(i). Simply stated, the Agency
believes that Congress in the 1990 CAA Amendments meant to make a
conforming change in section 126(b) by replacing the pre-existing
cross-reference to section 110(a)(2)(E)(i) with the renumbered section
110(a)(2)(D)(i), but inadvertently referenced section 110(a)(2)(D)(ii).
As explained in greater detail below, this interpretation is based on
the statute's logic and structure, as well as the legislative history.
First, the reference to ``the prohibition of section 110(a)(2)(D)(ii)''
is ambiguous at best, and arguably nonsensical, since section
110(a)(2)(D)(ii) contains no prohibition, yet section 110(a)(2)(D)(i)
does. Second, the statutory cross-reference contained in section
126(b), if taken on its face, would render section 126(b) largely
meaningless. Finally, the legislative history of the CAA Amendments
supports this interpretation. The EPA's interpretation is consistent
with the reading of the CAA prior to the 1990 Amendments and Congress
expressed no indication that it meant to substantively revise this
provision of the statute at the time it administratively renumbered the
provision.7
---------------------------------------------------------------------------
\7\ The 1990 CAA Amendments revised section 110(a)(2)(D) by
dropping certain provisions not relevant here, and incorporating
other provisions previously contained in section 110(a)(2)(E). See
CAA Amendments of 1990, Pub. L. 101-549, 101(b), 104 Stat. 2404
(1990); S. Rep. No. 101-228, 101st Cong., 2d Sess. 20 (1989),
reprinted in 1990 U.S.C.A.A.N. 3385, 3406.
---------------------------------------------------------------------------
[[Page 28268]]
Many commenters agreed with EPA's interpretation (presented in the
proposal at 63 FR at 56299) that the cross-reference is a scrivener's
error and should be read as section 110(a)(2)(D)(i). However, the
Agency also received numerous comments taking exception to this view.
Such commenters argued that section 126(b) should be read literally,
such that the provision does not authorize EPA to issue a finding that
new or existing sources contribute significantly to nonattainment
downwind or interfere with measures to prevent significant
deterioration of air quality or to protect visibility. For the reasons
described below, EPA continues to believe that the cross-reference in
section 126(b) should be interpreted as referring to section
110(a)(2)(D)(i).
The doctrine of scrivener's error recognizes that typographical and
other drafting errors occasionally occur in the legislative process.
The U.S. Supreme Court therefore has determined that such errors may be
corrected where the statute ``can't mean what it says,'' Green v. Bock
Laundry Machine Co., 490 U.S. 504, 511 (1989) (internal quotation marks
omitted), and that courts should ``repunctuate, if need be, to render
the true meaning'' of a statute. U.S. Nat'l Bank v. Independent Ins.
Agents, 508 U.S. 439, 462 (1993) (quoting from Hammock v. Loan & Trust
Co., 105 U.S. 77, 84-85 (1882)). Courts have applied this doctrine when
the literal text ``would lead to unintended and absurd results.'' In re
Chateaugay Corp., 89 F.3d 942, 954 (2nd Cir. 1996) (holding that courts
are empowered to correct an erroneous statutory cross-reference that
inadvertently results from legislative changes). The EPA's specific
authority to apply this doctrine was recently upheld in a case
involving other aspects of the Clean Air Act's SIP provisions.
Environmental Defense Fund v. EPA, 82 F.3d 451 (D.C. Cir. 1996)
(affirming EPA's authority to depart from the literal reading of
section 176(c) of the Clean Air Act where it would frustrate
congressional purposes).
Some commenters argued that the cross-reference in section 126(b)
is not ``one of those rare cases where the statute as written will
produce a result demonstrably at odds with the intentions of the
drafters.'' Demarest v. Manspeaker, 498 U.S. 184, 190 (1991) (internal
quotations and citations omitted). At best, however, the cross-
reference in section 126(b) is ambiguous. First, section 126(b)
authorizes EPA to find that any major source or group of stationary
sources emits or would emit any air pollutant ``in violation of the
prohibition of section (a)(2)(D)(ii) of this title or this section''
(emphasis added). However, section 110(a)(2)(D)(ii) contains no
prohibition. Rather, it provides that SIPs must ``contain adequate
provisions insuring compliance with'' statutory sections relating to
interstate and international pollution abatement.
By contrast, section 110(a)(2)(D)(i)--the provision that EPA
believes Congress intended to cross-reference in section 126(b)--does
contain a prohibition. It requires that SIPs contain adequate
provisions ``prohibiting'' any source or other type of emissions
activity within the State from emitting any air pollutant in amounts
that, among other things, will contribute significantly to
nonattainment in, or interfere with maintenance by, another State with
respect to the NAAQS. Thus, the textual interplay between sections
126(b) and 110(a)(2)(D) provides strong evidence that the CAA contains
a scrivener's error.8
---------------------------------------------------------------------------
\8\ One commenter argued that Congress, in referring to sections
126(b) and 110, used the words ``prohibition'' and ``requirements''
interchangeably. Based on the provisions' text, structure and
legislative history, EPA disagrees. Nevertheless, the fact that
reasonable people can disagree on this issue confirms that section
126(b) is, at the very least, ambiguous.
---------------------------------------------------------------------------
As further support, reading section 126(b) as cross-referencing
section 110(a)(2)(D)(ii) essentially renders that provision redundant
and meaningless. Section 126(b) allows a party to petition EPA with
respect to a ``violation of the prohibition in section 110(a)(2)(D)(ii)
or this section.'' Section 110(a)(2)(D)(ii) states that SIPs must
contain adequate provisions to insure compliance with sections 126 and
115. To the extent section 110(a)(2)(D)(ii) cross-references back to
section 126, the statute is redundant. Reading the two provisions
together, section 126(b) would provide an opportunity for parties to
file a petition claiming that a major source violates the prohibition
of section 110(a)(2)(D)(ii) (i.e., section 126) or this section (i.e.,
section 126).
Moreover, to the extent that section 110(a)(2)(D)(ii) references
section 115, the provision is meaningless. There is no relief that can
be provided under section 126(b) for violations of section 115. Rather,
sections 126 and 115 create separate processes for different parties to
petition the Agency for a finding that a SIP is inadequate. Under
section 115, the Administrator may issue a SIP call to a State based on
a request by an international agency or the Secretary of State that an
air pollutant or pollutants emitted in the United States ``cause or
contribute to air pollution which may reasonably be anticipated to
endanger public health or welfare in a foreign country.'' In contrast,
only ``States'' or ``political subdivisions''--entities under the
jurisdiction of the United States--may request relief under section
126(b). If Congress intended to provide States or political
subdivisions in the United States with the opportunity to seek relief
for pollution transported to foreign countries, Congress could have
provided so in a much clearer fashion in section 115. It is highly
doubtful that Congress would have used such a cryptic reference to
grant political entities within the United States the power to address
pollution being transported out of the country from other States.
Further textual evidence that section 126(b) contains a scrivener's
error is found by examining section 126(c). Amended at the same time as
section 126(b), Congress modified section 126(c) by replacing the two
references to the original State petition process, section
110(a)(2)(E)(i), with the renumbered section ``110(a)(2)(D)(ii) or this
section.'' 9 As amended, the new cross-references are
ambiguous because they conflict with the structure and text of section
126(c). Read literally, section 126(c) would provide for enforcement of
violations of section 110(a)(2)(D)(ii), which requires SIPs to insure
compliance with section 126 (the interstate pollution provisions) and
section 115 (the international pollution abatement provisions). As
discussed above, these cross-references are redundant with respect to
section 126 and meaningless with respect to section 115. In addition,
section 126(c) again refers to the non-existent ``prohibitions'' of
110(a)(2)(D)(ii). There is also no legislative history indicating that
Congress intended to make such substantive legal changes. In contrast,
the interpretation that Congress meant to renumber section
110(a)(2)(E)(i) as 110(a)(2)(D)(i) avoids these ambiguities and
restores the section 126 State petition process to the structure and
manner in which it was intended to function prior to the 1990 CAA
Amendments. As such, EPA believes that the text, structure and
legislative history of section 126(c) bolsters the
[[Page 28269]]
Agency's conclusion that section 126(b) contains a scrivener's
error.10
---------------------------------------------------------------------------
\9\ As amended, section 126(c) states that it shall be a
violation for any major proposed new or modified source ``to be
constructed or to operate in violation of the prohibition of section
110(a)(2)(D)(ii) of this section.'' 42 U.S.C. 7426(c) (1995). The
provision also provides discretion to the Administrator to allow
sources to operate beyond three months after a finding of violation
where needed ``to bring about compliance with the requirements
contained in section 110(a)(2)(D)(ii) or this section.'' Id.
\10\ EPA's interpretation that the cross-reference in section
126(b) is a scrivener's error is further supported by the existence
of two clear, non-controversial typographical errors in the same
provision. First, section 126(c) refers to ``enforcement orders
under section 113(d),'' which was amended by section 701 of the 1990
Clean Air Act Amendments (Pub. L. 101-549, 104 Stat. 2672) without
conforming this reference. Similarly, the Clean Air Act Amendments
(Pub. L. 101-549, section 109(a)(2)(A), 104 Stat. 2470) amended
section 126(c) in the first sentence by inserting ``this section
and'' after ``violation of'' without further specification. However,
the words ``violation of'' appear in two places in the sentence.
Thus, read literally, section 126(c)(1) prohibits construction or
operation ``in violation of this section and the prohibition of
110(a)(2)(D)(ii) or this section.'' These errors were noted by the
House Energy and Commerce Committee, 103d Congress, 1st Sess.,
Committee Print 103-B, Compilation of Selected Acts Within the
Jurisdiction of the Committee on Energy and Commerce (Feb. 1993), at
124.
---------------------------------------------------------------------------
The EPA received comments suggesting that there is no ambiguity in
section 126(b) because, on its face, it refers to section
110(a)(2)(D)(ii), not 110(a)(2)(D)(i). However, ``[t]he rule that
statutes are to be read to avoid absurd results allows an agency to
establish that seemingly clear statutory language does not reflect the
unambiguously expressed intent of Congress and thus overcome the first
step of the Chervon analysis.'' Mova Pharmaceutical Corp. v. Shalala,
140 F.3d 1060, 1068 (D.C. Cir. 1998) (internal citations omitted). See
also Chemical Manufacturers Association v. Natural Resources Defense
Council, 470 U.S. 116, 126-27 (1985) (finding that the word ``modify''
has no plain meaning as used in section 301 of the Clean Water Act and
is properly subject to construction by EPA).
The EPA's interpretation that there is a scrivener's error, and
that the reference should be to section 110(a)(2)(D)(i), fits with the
legislative history on this provision. See Public Citizen v. Department
of Justice, 491 U.S. 440, 454 (1989) (if apparently plain language
compels an ``odd result,'' evidence of legislative intent other than
the text itself, such as the legislative history, should be
considered). The Agency received comments contesting this conclusion
and arguing that the legislative history is, at best, inconclusive. The
EPA disagrees with this characterization. The Agency's review of the
legislative history indicates that Congress' broad aim was to
strengthen the section 126(b) State petition process and there is
nothing to suggest that Congress meant to substantively revise this
process when it administratively renumbered section 110.
Several aspects of the legislative history are worth highlighting.
First, prior to the 1990 Amendments, section 126(b) could be used by
States to petition EPA for a finding about ``violation[s] of the
prohibition of section 110(a)(2)(E)(i),'' which required SIPs to
address interstate pollution. 42 U.S.C. 7410(a)(2)(E)(i) (1990). The
1990 Clean Air Act Amendments simply revised the text of former section
110(a)(2)(E)(i) and then renumbered it as section 110(a)(2)(D)(i).
Compare 42 U.S.C. 7410(a)(2)(E)(i) (1990) with 42 U.S.C.
7410(a)(2)(D)(i) (1995). In other words, EPA's interpretation that
section 126(b) contains a scrivener's error and that Congress intended
to cross-reference section 110(a)(2)(D)(i) is consistent with both the
structure of sections 126(b) and 110 and the way in which the section
126(b) State petition process was intended to function prior to the
1990 CAA Amendments.
Second, the U.S. Supreme Court has noted that, ``[u]nder
established canons of statutory construction, it will not be inferred
that Congress, in revising and consolidating the laws, intended to
change their effect unless such intention is clearly expressed.''
Finley v. U.S., 490 U.S. 545, 554 (1989) (internal quotation marks
omitted). Yet there is nothing in the legislative history to even
suggest that Congress intended to dramatically limit the State petition
process when it renumbered section 110(a)(2)(E)(i).
Indeed, the evidence indicates the opposite. For starters, the
sponsors of the Senate legislation never considered restricting the
scope of the section 126(b) petition process. As introduced, the Senate
bill, S. 1630, maintained the original provision, section
110(a)(2)(E)(i), and section 126(b) without any modifications. S. 1630,
as introduced, reprinted in Comm. On Environment and Public Works, U.S.
Senate, 103d Congress, 1st Sess., Legislative History of the Clean Air
Act Amendments of 1990 (1993) [hereinafter ``Legislative History of
1990 CAAA''], at 9060-61, 9148. The version of S. 1630 that was adopted
by the full Senate merely modified and renumbered section
110(a)(2)(E)(i) and changed the section 126(b) cross-reference
accordingly. S. 1630, as passed by Senate (April 3, 1990), reprinted in
Legislative History of 1990 CAAA,'' at 4139-41, 4270. Likewise, H.R.
3030, as introduced, was intended by its sponsors to simply modify and
renumber section 110(a)(2)(E)(i) and make a conforming change in the
section 126(b) cross-reference. H.R. 3030, as introduced, reprinted in
Legislative History of 1990 CAAA, at 3751-53, 3867.11
---------------------------------------------------------------------------
\11\ The manner in which H.R. 3030, as introduced, changed
sections 110 and 126(b) helps clarify the intent of the bill's
sponsors. As introduced, H.R. 3030 renumbered section
110(a)(2)(E)(i) as 110(a)(2)(D)(4). H.R. 3030, as introduced,
reprinted in Legislative History of 1990 CAAA, at 3752-53. The
cross-reference in section 126(b) was modified to refer to section
111(a)(2)(D)(4), a provision (in the section addressing new source
performance standards) that was not in existing law nor proposed by
the bill. Id. at 3867. EPA believes that the most logical
interpretation of the bill's ambiguous cross-reference to section
111(a)(2)(D)(4) is that Congress meant to refer to 110(a)(2)(D)(4).
Based on this interpretation, EPA believes that the sponsors of H.R.
3030 did not intend to limit the section 126(b) State petition
process.
---------------------------------------------------------------------------
The cross-reference to section 110(a)(2)(D)(ii) arose relatively
late in the congressional debate, as part of the version of H.R. 3030
passed by the House Energy and Commerce Committee. The House Committee
bill renumbered section 110(a)(2)(E)(i) as 110(a)(2)D)(i). H. Rep. No.
101-490, Pt. 1, 101st Cong. 2d Sess. 48 (1990), reprinted in
Legislative History of 1990 CAAA, at 3030. However, the cross-reference
in section 126(b) was amended to read section 110(a)(2)(D)(ii). Id. at
3072. Significantly, the Committee Report's discussion of sections 110
and 126 does not mention the cross-reference or provide any indication
that the Committee intended to fundamentally restrict the pre-existing
section 126(b) State petition process. Id. at 218, 274, reprinted in
Legislative History of 1990 CAAA'' at 3242, 3298.
In contrast, Congress clearly indicated that the Amendments were
designed to increase EPA's ability to address interstate air pollution.
For example, S. 1630, as passed by the Senate, included various
amendments to section 110 that ``strengthened'' provisions in existing
law requiring SIPs to take into account the effect of emissions on
other States.12 S. Rep. No. 101-228, 101st Cong. 2d Sess. 19
(1989), reprinted in 1990 U.S.C.C.A.N. 3385, 3405. The House Conference
Report notes that the amendments sought to ``enhance the
[[Page 28270]]
enforcement authority of the Federal government under the Clean Air
Act,'' including ``EPA enforcement authority regarding violations of
State Implementation Plans.'' H. Rep. No. 101-952, 101st Cong. 2d Sess.
347 (1990), reprinted in 1990 U.S.C.C.A.N. 3385, 3879. Similarly, the
conference report from the Senate managers states that the bill amends
section 126 ``to strengthen to [sic] prohibitions on emissions that
result in interstate pollution.'' Chaffee-Baucus Statement of Senate
Managers, S. 1630, reprinted in Legislative History of 1990 CAAA, at
880, 886.
---------------------------------------------------------------------------
\12\ S. 1630, as enacted by the Senate, expanded section 126(b)
by allowing States to petition about ``groups of sources'' in
addition to ``any major source.'' Similarly, the bill expanded the
scope of section 110 beyond stationary sources to include ``any
source or other type of emissions activity.'' The bill also modified
the standard for showing that the downwind state is harmed by
pollution transport by changing the language from amounts which will
``prevent attainment or maintenance by any other State'' to amounts
which will ``contribute significantly to nonattainment in, or
interfere with maintenance by, any other State.'' Finally, Congress
expanded the prohibition to require SIPs to insure compliance with
international pollution abatement requirements under section 115, as
well as interstate pollution abatement requirements under section
126. See S. Rept. 101-228 (to accompany S. 1630), 22, reprinted in
Legislative History of 1990 CAAA, at 4140, 4270.
---------------------------------------------------------------------------
Where Congress considered changes to the section 126(b) State
petition process, it did so explicitly. For example, Congress
specifically amended section 126(b) to add the phrase ``or group of
stationary sources'' after the phrase ``major source,'' thereby
expanding the scope of the State petition process. Public Law 101-549,
section 109, 104 Stat. 2469 (1990) reprinted in Legislative History of
CAAA, at 483. In contrast, EPA cannot find--and the commenters do not
point to--any discussion of the effect of the cross-reference to
section 110(a)(2)(D)(ii). In light of Congress' silence, EPA believes
that it is more reasonable to interpret the cross-reference as a
scrivener's error than to believe that Congress intended to make such a
significant change in the section 126(b) State petition process by
surreptitiously altering the cross-reference. See In re Chateaugay
Corp., 89 F.3d at 953 (``where it appears plain that an error in
drafting has occurred, so that a literal construction would make a
dramatic change in long-standing law, it is both sensible and
permissible for judges to consider, in conjunction with other factors,
Congress' complete silence on the literal effect of the change'').
The EPA received several comments suggesting that other
interpretations of section 126(b)'s cross-reference to section
110(a)(2)(D)(ii) were plausible. As discussed below, EPA finds these
theories unpersuasive. Nevertheless, even if a possible explanation for
the cross-reference could be advanced, EPA retains the discretion to
determine what, in fact, Congress intended. See U.S. Nat'l Bank of
Oregon v. Independent Insurance Agents of America, 508 U.S. 439, 461
n.10 (1993) (holding that, although plausible reasons to explain
Congress' drafting choices can be developed, ``the best reading of the
[Federal Reserve] Act, despite the punctuation marks, is that Congress
did something else'').
Some commenters suggested that Congress intended to replace the
section 126(b) State petition process with the new interstate transport
provisions of sections 176A and 184, or, alternatively, that Congress
required EPA to have a recommendation from a transport commission
established under sections 176A or 184 before acting on a section
126(b) petition. Proponents of this theory speculate that the cross-
reference to section 110(a)(2)(D)(ii) may have been a deliberate step
to achieve this result. The EPA believes that the better reasoned view
is that Congress intended sections 176A and 184 to supplement the
existing authorities provided to address interstate transport in
sections 126(b) and 110. As discussed in greater detail above in
Section II.A.1, this interpretation gives full effect to all four
statutory provisions. See Alabama Power Co. v. EPA, 40 F.3d 450, 455
(D.C. Cir. 1994) (a statute ``is to be interpreted to give consistent
and harmonious effect to each of its provisions''). In addition, there
is no statutory language indicating that sections 126(b) and
110(a)(2)(D)(i) are superseded by sections 176A or 184 or that all four
provisions do not remain in effect. Rather, the legislative history
demonstrates that Congress intended to strengthen EPA's authority to
address the problem of interstate pollution and there is nothing to
indicate that Congress envisioned sections 176A or 184 as the exclusive
mechanism by which to address these issues. See S. Rpt. 101-228 (on S.
1630), Legislative History of 1990 CAAA, at 8391 (``A regional ozone
transport commission is one important way to address these problems
identified by modeling and monitoring''). As a result, EPA reads
section 176A and 184 as supplementing, rather than limiting, the
section 126(b) State petition process.
The EPA also received a comment that, if there was a drafting
error, it is at least as plausible that Congress intended to refer to
section 110(a)(2)(D)(i)(II), which requires SIP provisions to prevent
significant deterioration of air quality or to protect visibility.
Another commenter argued that the cross-reference was a deliberate
statutory change to limit the section 126(b) petition process to
implementation of the notification requirements of section 126(a). The
legislative history, however, fails to provide any evidence to support
either theory. Rather, it is more plausible that Congress was silent on
the issue because the change in cross-reference was an unintended
scrivener's error. Further, EPA's interpretation that Congress did not
intend to limit the pre-existing section 126(b) State petition process
is a more narrow statutory interpretation than the theory that Congress
intended to limit section 126(b) to either the prevention of
significant deterioration and visibility provisions of section
110(a)(2)(D)(i)(II) or the notification requirements of section 126(a).
See Mova Pharmaceutical Corp., 140 F.3d at 1068-69 (remanding an FDA
rule for a ``more narrow solution'' because, ``when [an] agency
concludes that a literal reading of a statute would thwart the purposes
of Congress, it may deviate no further from the statute than is needed
to protect congressional intent''). Finally, as noted previously, even
if either theory were as plausible as EPA's interpretation, the Agency
remains responsible for determining what Congress actually meant. See
U.S. Nat'l Bank of Oregon v. Independent Insurance, 508 U.S. at 461
n.10.
Other commenters observed that Congress has chosen to leave the
statute as enacted in 1990, rather than amend the cross-reference in
section 126(b). However, the post-enactment legislative history sheds
no light on whether the 101st Congress intended to restrict the section
126(b) State petition process. There could be a host of potential
explanations for congressional inaction, ranging from ignorance of the
mistaken cross-reference to concern about reopening the CAA and
unraveling the broad compromise reached in the 1990 Clean Air Act
Amendments. As a result, EPA finds this argument unpersuasive.
The EPA received comments claiming that the Agency must obtain a
judicial ruling before interpreting section 126(b) as a scrivener's
error. Other commenters suggested that the only lawful route would be
for EPA to request that Congress revise the Act. The EPA does not
believe that either approach is required. Rather, based on the doctrine
of scrivener's error, courts have repeatedly affirmed interpretations
by federal agencies that deviate from a statute's literal text when
necessary to effectuate Congress' purpose. See Chemical Manufacturers
Ass'n v. Natural Resources Defense Council, 470 U.S. 116, 125-26 (1985)
(upholding EPA's interpretation that statutory language forbidding EPA
to ``modify'' national standards for the discharge of toxic water
pollutants did not preclude the Agency from issuing individualized
variances because a literalistic reading of the statute would ``make
little sense''); Environmental Defense Fund v. EPA, 82 F.3d at 468
(affirming EPA's interpretation of section 176(c) of the Clean Air Act
to avoid ``absurd or futile results'').
The EPA also received comments arguing that the Agency unlawfully
prejudged this issue by adopting the
[[Page 28271]]
scrivener's error theory as the basis for the consent decree in State
of Connecticut v. Browner , No. 98-1376 (S.D.N.Y. 1998), which requires
EPA to take final action on at least the technical merits of the
section 126(b) petitions by April 30, 1999. However, paragraph 10 of
the consent decree expressly leaves open all ``issue[s] regarding the
substance and timing of any remedy that EPA may or should require in
response to the Section 126 petition,'' including EPA's final
interpretation of section 126(b). State of Connecticut v. Browner, No.
98-1376 (S.D.N.Y. Oct. 27, 1998) (stipulation and order approving
consent decree). Thus, under the consent decree, EPA retained the
discretion to deny the section 126(b) petitions on the ground that the
Agency lacked statutory authority to entertain them in the first place.
Accord Croning v. Browner, 898 F. Supp. 1052, 1062 (S.D.N.Y. 1995)
(language in consent decree requiring EPA to take final action on
regulations did not preclude EPA from determining that ``regulations
are not called for''). The Agency has undertaken a full notice and
comment rulemaking process and has appropriately considered the
comments submitted in reaching its final decisions. As a result, EPA is
entitled to the traditional ``presumption of regularity [that] supports
the official acts of public officers.'' United States v. Chemical
Foundation, Inc., 272 U.S. 1, 14 (1926).
Some commenters suggested that EPA's proposed interpretation is
contrary to an Agency policy on typographical errors in the 1990 Clean
Air Act Amendments. The commenters cite to statements made during a
1993 rulemaking on acid rain allowance allocations.13 These
statements addressed only a narrow issue involving the statutory
interpretation of section 404(e) and did not purport to establish an
Agency-wide policy. Furthermore, unlike the issue at hand, EPA
determined that section 404(e) was ``clear'' for purposes of the
rulemaking. Acid Rain Allowance Allocations and Reserves Final Rule, 58
FR 15,634 15,642 (March 23, 1993). In contrast, EPA believes that the
literal text of section 126(b) and 110 is ambiguous and would create
absurd results. As a result, EPA's determination that section 126(b)
contains a scrivener's error is consistent with all relevant Agency
policy.
---------------------------------------------------------------------------
\13\ EPA stated that the Agency ``acknowledged the redundancy in
section 404(e) [of the Clean Air Act] as enacted, but believes that
the section is clear as to the eligibility requirements. Therefore
the Agency must follow the statute as enacted.'' 58 FR 15,634 15,642
(March 23, 1993). In a background document, EPA further stated that
``EPA accepts the statutory text as written and believes that it
does not have the authority to make the change suggested by the
commenter.'' EPA Response to Public Comment on Proposed Acid Rain
Allowance Allocation Rule, EPA Docket No. A-92-06, Doc. No. V-C-1,
at 124 (March 1993).
---------------------------------------------------------------------------
In sum, the cross-reference to section 110(a)(2)(D)(ii) is
ambiguous at best. A literal reading of the cross-reference is
impossible since section 110(a)(2)(D)(ii) does not contain a
prohibition and such an interpretation would contradict the statute's
logic and structure. Further, there is no indication that Congress, in
renumbering sections 126(b) and 110, intended to change the section
126(b) State petition process. The evidence indicates, in contrast,
that Congress wanted to enhance EPA's ability to address interstate air
pollution. As a result, EPA believes that its interpretation is
permissible because it resolves the ambiguity in the interplay between
sections 126(b) and 110(a)(2)(D) in a manner that harmonizes and gives
meaning to all of their provisions and reasonably accommodates the
purposes of the provisions. See Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, 467 U.S. 837, 844 (1984).
3. Interpretation of Emits in Violation of the Prohibition of Section
110 and Integration of Section 126 Controls With SIPs/FIPs Under the
NOX SIP Call
a. Interpretation of Emits in Violation of the Prohibition of Section
110
In the section 126 proposed rule, EPA explained its position on how
section 126 should be interpreted in coordination with section
110(a)(2)(D), and specifically, how the Agency should act on the
section 126 petitions in light of the NOX SIP call. See 63
FR 56301-56303. As proposed, EPA is structuring its final action to
contain: (1) A series of ``technical determinations'' as to which
sources in which States named in the petitions would emit in violation
of the section 110 prohibition if the State or EPA were to fall off
track in putting a timely and satisfactory plan in place pursuant to
the NOX SIP call; (2) determinations that the petitions will
automatically be deemed granted or denied on the basis of certain
specified events and timing related to state submissions and EPA
approvals of SIP revisions submitted in response to the
NOX SIP call, as well as EPA promulgations of federal
implementation plan provisions; and (3) the remedial requirements that
will apply to the sources receiving affirmative technical
determinations if a petition naming those sources is ultimately deemed
granted.
Numerous parties have commented on the relationship of the section
126 petitions to the NOX SIP call. One set of commenters
generally argues that action under the NOX SIP call does not
necessarily satisfy the requirements of section 126 and asserts that
EPA should not dismiss the section 126 petitions until sources have
actually reduced emissions. Several commenters assert that
implementation of the NOX SIP call rule either by the states
in their SIPs or by EPA in FIPs precludes a positive finding under
Sec. 126. Another commenter argues that it would be inconsistent with
the NOX SIP call for EPA to make any determinations
regarding the prohibition of section 110(a)(2)(D)(i) other than a
determination that the prohibition is not being violated by any source
in any state that is subject to the SIP call. The EPA continues to
believe that its approach, and the underlying interpretation of
sections 110(a)(2)(D)(i) and 126, is the most appropriate way to
interpret and reconcile the two provisions, for the reasons explained
in the proposal and further detailed below.
Section 126 calls for relief where EPA finds that sources are
emitting ``in violation of the prohibition'' of section
110(a)(2)(D)(i). The language of section 126 on its face, however, is
ambiguous as to what it means for a source to emit in violation of the
prohibition of section 110(a)(2)(D)(i).
Some commenters argue that there can be no violation of the
prohibition of section 110(a)(2)(D)(i) unless the upwind state SIP
contains an emission limit that implements the requirement of section
110(a)(2)(D)(i) and the source is violating that limit. In support of
this interpretation, the commenters point to section 126(c), which
states that ``it shall be a violation of this section and the
applicable implementation plan in such State'' for a source to operate
in violation of the prohibition of section 110(a)(2)(D) or section 126.
The commenters also argue that this interpretation makes sense in light
of the short time frame for EPA action under section 126, consistency
with section 110 and other provisions, and consistency with the remedy
under section 126(c).
Other commenters appear to believe that the existence of an
emissions limit in a SIP implementing section 110 is irrelevant. They
(either explicitly or implicitly) take the position that EPA may find
that a source is emitting in violation of the prohibition of section
110(a)(2)(D)(i) for any source that is contributing significantly to
nonattainment or interfering with maintenance downwind if either: (a)
the
[[Page 28272]]
SIP fails to limit those emissions, or; (b) the SIP limits the
emissions, but the source is violating those limits.
The EPA does not agree with either of these interpretations.
Rather, EPA interprets section 126 to provide that a source is emitting
in violation of the prohibition of section 110(a)(2)(D)(i) where the
applicable SIP fails to prohibit (and EPA has not remedied this failure
through a FIP) a quantity of emissions from that source that EPA has
determined contributes significantly to nonattainment or interferes
with maintenance in a downwind state. Several commenters support EPA's
approach.
The ambiguity of the language of section 126 raises at least three
related questions. The meaning of ``emit in violation of the
prohibition'' is ambiguous. As a consequence, it is not clear how
Congress intended sections 110(a)(2)(D)(i) and 126 to work together
under the CAA, and specifically, it is unclear how an approved SIP
provision implementing section 110(a)(2)(D)(i) or compliance with a SIP
call to implement section 110(a)(2)(D)(i) affects section 126 petitions
alleging that sources are emitting in violation of the prohibition of
section 110(a)(2)(D)(i).
The EPA believes that there are several key factors to consider in
attempting to resolve these questions. First, of course, is the
language of the provisions, to the extent that it can be read to
support one interpretation over another. A second key consideration is
the purpose of section 126 in light of the problem it was designed to
solve as indicated by the legislative history. Third, it is appropriate
to take into account the existence of other provisions in the CAA and
to interpret sections 126 and 110(a)(2)(D)(i) in a manner that gives
those sections full force and effect, without creating redundancy with
any other provision. Finally, in analyzing the role of direct controls
on sources through section 126 findings vis-a-vis controls on sources
through SIPs, it is useful to consider how these two different
mechanisms fit into the federal-state system for air pollution control
established under Title I. Taking all of these considerations into
account, EPA believes that the best interpretation of section 126 is
that it authorizes a downwind state to petition EPA to control
emissions from upwind sources where the upwind SIP is inadequate to
comply with the requirements of section 110(a)(2)(D)(i), but that where
the SIP establishes adequate controls on interstate transport and a
source is violating those requirements, the appropriate remedies are
provided in sections 113 and 304 of the Act, not section 126.
Focusing first on the language of the provisions, EPA believes that
it is reasonable and appropriate to interpret the prohibition of
section 110(a)(2)(D)(i) as a prohibition on emission of a quantity of
pollutants that would contribute significantly to nonattainment in or
interfere with maintenance by another state. In essence, it is a
prohibition on excessive interstate transport of air pollutants. The
state is responsible for implementing the prohibition by barring such
excessive emissions in the SIP. Thus, EPA believes a reasonable
interpretation is that where the state has failed to implement the
prohibition, the SIP allows excessive transport of pollutants, the
prohibition is violated, and a source emitting such quantities of
pollutants is emitting in violation of the prohibition.
Where the state has adopted SIP provisions barring such emissions,
but the source is violating those limits, it is less clear whether the
prohibition on excessive interstate transport has been violated and
hence whether the source is in violation of the prohibition. The EPA
believes it is most reasonable to read section 126 not to encompass
this situation, for the reasons explained below.
The EPA also rejects the more restrictive interpretation that
section 126 only applies where a state has adopted SIP provisions to
control interstate transport of pollutants, EPA has approved those SIP
provisions, and sources are violating those provisions. Section
110(a)(2)(D)(i) itself does not directly establish any emissions
limitations applicable to a particular source. The emissions
limitations on which the commenters are focusing are the requirements
of the SIP, not of section 110(a)(2)(D)(i). Looking just at the
specific language of the two provisions, EPA believes that the better
interpretation of the language of section 126 is that it refers to the
actual functional prohibition of section 110(a)(2)(D)(i), which bars
impermissible interstate transport, rather than the specific provisions
through which states implement that prohibition, the emissions
limitations for individual sources contained in an approved SIP. As
explained above, a source would be in violation of the prohibition of
section 110 where the applicable SIP failed to bar excessive interstate
transport of air pollutants. EPA believes that its interpretation is a
reasonable reading of the reference in section 126 to emitting in
violation of the prohibition of section 110, and in light of the
ambiguity of the statutory language, EPA's interpretation is subject to
deference under Chevron.
The clear purpose of section 126 is to provide a tool for downwind
states to achieve reductions in interstate pollution transport. See
discussion above in section II.A.1. The history and current
manifestation of interstate pollution problems emphasize that such a
tool is needed to address the situation where upwind states have not
designed their SIPs to account for the effects of emissions from
sources in those states on downwind areas. See discussion in Sections
II.A.1. and I.B. In short, as Congress recognized in adopting all of
the interstate transport provisions in the CAA, the interstate
pollution problem stems from inadequate SIPs, not inadequate compliance
with adequate SIP requirements. This characterization of the problem is
supported by the numerous descriptions of the interstate pollution
problem in the 1977 and 1990 legislative histories, all of which
explicitly or implicitly refer to the lack of upwind limitations and
none of which mentions sources' violation of upwind SIP
limits.14 Furthermore, it is reasonable to assume that
Congress intended to create a tool that would attack the problem
Congress recognized. This supports the conclusion that Congress
intended section 126 to apply where upwind states' SIPs are inadequate,
not (and certainly not only) where sources are violating adequate SIP
provisions.
---------------------------------------------------------------------------
\14\ See, e.g., S. Comm. on Envt. and Public Works, Clean Air
Act Amendments of 1977, S. Rep. 95-127, 95th Cong., 1st Sess. 41
(1977), reprinted in 3 1977 Legislative History, 1415 (noting that
the 1970 Act failed to specify any abatement procedure if a source
in one state emitted air pollutants that adversely affected another
state, and ``[a]s a result, no interstate enforcement actions have
taken place, resulting in serious inequities among several States,
where one State may have more stringent implementation plan
requirements than another state;'' H. Rep. 95-294, 95th Cong., 1st
Sess. at 331 (1977), reprinted in 4 1977 Legislative History at 2798
(``This petition process is intended to expedite, not delay,
resolution of interstate pollution conflicts.''); S. Rep. 101-228 at
48, reprinted in V 1990 Legislative History at 8388 (``The transport
problem in the northeast, and perhaps other regions as well, is
serious enough that additional efforts must be made on an interstate
basis to control emissions, including emissions from attainment
areas.''); id. at 49, 8389 (``The model suggests that even if all
emissions sources were eliminated within the tri-state area [New
York, New Jersey and Connecticut], violations of the ozone standard
would still occur. This means substantial reductions in emissions
from areas upwind from the New York metropolitan area must be
achieved if this area is to attain the air quality standards.'').
---------------------------------------------------------------------------
The EPA's interpretation is also consistent with Congress'
explanation of section 126 in the legislative history. In the course of
adopting the 1990 Amendments, the Senate Committee described section
126 as allowing a
[[Page 28273]]
downwind state to complain about ``a defect in the offending State's
SIP.'' Senate Committee Report, 75-76, Leg. Hist. V. 8415-8416. A
source's violation of adequate SIP requirements is certainly not
synonymous with a defect in the SIP itself.
In addition, there is little or no purpose to establishing a
process for downwind states to petition EPA to find that upwind sources
are violating their SIP requirements because other sections of the
Clean Air Act provide ample authority for states, citizens and EPA to
directly enforce approved SIP provisions against sources violating
those provisions. This objection applies even more forcefully against
the most limited interpretation advocated by some commenters, in which
the sole purpose of the petition process under section 126(b) and (c)
is to allow states to petition EPA to find that a source is violating
its emissions limitations under an approved SIP. Upon making such a
finding, EPA could then allow the source up to three years to come into
compliance with its emissions limitations. Yet there is no need to have
a petition, public hearing, and EPA determination simply to enforce
existing SIP limits, as the CAA elsewhere provides a quite sufficient
and much simpler set of remedies for violation of an approved SIP
provision. Under section 113, upon finding that any person is in
violation of any requirement of an approved SIP, EPA has the authority
to enforce the requirement by issuing an order to comply, issuing an
administrative penalty order, or bringing a civil action. In addition,
any person (which includes states) may bring a citizen suit against any
person in violation of any requirement of an approved SIP. Section
304(a), (f); see also section 302. These provisions provide more direct
and likely quicker recourse against a source that is violating its SIP-
imposed emission limits. In bringing suit under the citizen suit
provisions, a state could act independent of EPA action. Moreover,
these tools for enforcement of SIP requirements were available under
the 1977 Clean Air Act, which contained both sections 113 and 304 in
substantively similar form to the present versions. In adopting section
126 in 1977 and strengthening it in 1990, Congress clearly intended the
petition process to play a significant role in addressing the
interstate pollution problem. See discussion above in section II.A.1.
To the extent that section 126 is used to enforce SIP violations, the
petition process would not be serving such a role. Furthermore, under
the commenters' most limited interpretation, the petition process would
instead provide no authority at all to address interstate pollution
beyond what is already provided elsewhere in the Act through arguably
more effective mechanisms. In contrast, using the section 126 petition
process where a state has failed to adopt adequate SIP provisions
serves the unique role of allowing a downwind state to force EPA
consideration of the problem and potentially achieve emissions
reductions directly from sources, without the need to depend on action
by the upwind state.
In determining how Congress intended section 126 to operate both in
the absence of an adequate SIP and when a state is complying with the
section 110 SIP requirements, it is also important to consider the role
under Title I of state planning and control efforts in the form of
SIPs, versus imposition of direct federal controls. In Title I of the
Act, Congress has established a cooperative federalism approach in
which air pollution planning and control occurs largely at the state
level. Under Title I, states are primarily responsible for determining
the mix of control measures necessary to achieve the NAAQS, while the
federal government sets the uniform national goals and ensures that
states act to meet them. Train v. NRDC, 421 U.S. 60 (1975). Section 126
is somewhat unusual in Title I in that it authorizes EPA to control
sources directly, rather than providing a means for EPA to encourage
states to control those sources. In that sense, it is similar to the
provisions for federal implementation plans in section 110(c). With
both of these provisions, Congress provided tools for direct federal
action to address serious failures of state action. Nevertheless,
Congress' clear preference throughout Title I is that states are to
decide and plan how they will control their sources of air pollution,
and the mechanism for imposing those controls at the state level is
SIPs. As noted above, states, EPA and citizens have the authority to
directly enforce violations of an approved SIP. Thus, where a SIP is
adequate but a source is violating its provisions, it would be counter
to the cooperative federalism structure of the Act and would serve no
purpose to essentially replace those adequate SIP limits with redundant
direct federal controls on a source. In contrast, where a state has
failed to adopt adequate SIP provisions in the first place, it makes
sense to provide an alternative mechanism to directly achieve the
necessary emissions reductions from the sources. A state would always
be free to regulate the sources itself in that instance by revising its
SIP to include the necessary emission limits. EPA believes that this
understanding of Congress' overall design for air pollution control
supports EPA's interpretation that section 126 is intended to be used
only to address the situation where the SIP fails to prohibit sources
from emitting impermissible amounts of transported air pollutants.
Thus, under this view, a source is emitting in ``violation of the
prohibition of'' section 110(a)(2)(D)(i) under section 126 when the
applicable SIP fails to limit the emissions prohibited under section
110(a)(2)(D)(i).
In support of the most limited interpretation that there is no
violation of the prohibition absent an approved SIP provision limiting
the source's emissions, commenters point to the language of section
126(c), which states that ``it shall be a violation of this section and
the applicable implementation plan in such State'' for a source to
operate in violation of the prohibition of section 110(a)(2)(D) or
section 126. They claim that the reference to a violation of a SIP
supports the interpretation that section 126 only applies where there
is an approved SIP provision in place. However, if a source is emitting
in violation of an emission limitation in a SIP, there is no question
that the source is in violation of the SIP. The language in section 126
stating that ``it shall be a violation of * * * the applicable
implementation plan'' for a source to emit in violation of the
prohibition of section 110(a)(2)(D) serves no legal purpose where the
source is already directly violating a SIP requirement. In contrast,
under EPA's interpretation, section 126 deems a source's emissions to
be a violation of the applicable SIP (as well as of section 126) where
the SIP itself does not bar the source's emissions but the emissions
significantly contribute to nonattainment downwind. This interpretation
gives legal effect to the language in section 126 and is consistent
with Congress' purpose of providing a tool for downwind states and EPA
to use to impel upwind sources to reduce transported emissions.
Nor does EPA agree with the commenter's argument that EPA's
interpretation is inconsistent with the remedy under section 126(c).
The commenter asserts that because a source must comply within three
months of a finding or cease operating, the remedy makes no sense in
the absence of an approved SIP provision. However, section 126(c) also
provides that the three month deadline only applies if
[[Page 28274]]
EPA does not establish an alternative schedule for the source to come
into compliance. EPA may give a source up to three years to comply with
the prohibition in section 110(a)(2)(D), as long as the source meets
emissions limitations and compliance schedules containing increments of
progress set by EPA. The commenter fails to explain why this scheme
``makes no sense.'' In EPA's view, up to three years for compliance is
generally a reasonable amount of time that should not unduly burden
sources and is consistent with the timeframes for implementation of
many federal and state air pollution requirements. This is a perfectly
rational, if potentially stringent, means of assuring continued
progress on something that Congress viewed as a serious pollution
problem.
Commenters also assert that their interpretation is the only
interpretation that is consistent with section 110(a)(2)(D)(i) and
other provisions of the Act. They argue that states have the primary
responsibility for regulating their sources under section 110, and if
the states fail to do so, EPA's recourse is provided in sections 110(k)
(allowing EPA to call for revision of an inadequate SIP), 110(m)
(allowing EPA to impose sanctions) and 110(c) (allowing EPA to
promulgate a Federal implementation plan). EPA emphatically agrees that
a SIP call under sections 110(a)(2)(D)(i) and 110(k)(5) is an
alternative means for EPA to address interstate pollution transport.
However, commenters overlook the unique role of section 126, which is
designed to provide recourse to downwind states where both upwind
states and EPA have failed to act. As discussed above, no progress had
been made on interstate transport problems at the time of enactment of
both the 1977 and 1990 Amendments. Section 126 provides a tool for
downwind states, the entities with most at stake, to force EPA to
confront the issue directly. It also sets up an abbreviated, and hence
potentially faster, process to achieve emission reductions. Under the
SIP process, EPA must direct a state to revise its SIP to comply with
110(a)(2)(D), and then perhaps find that the state has failed to
comply, impose sanctions, and finally promulgate a Federal
implementation plan, all of which could potentially stretch out for
many years. In contrast Congress required very expeditious EPA action
on a petition and from three months up to three years for sources to
comply. It is perfectly reasonable for Congress to have established
section 126 as an alternative mechanism under the Clean Air Act to
address the interstate pollution problem, just as it did again in
adopting sections 176A and 184. To provide alternatives, the various
interstate transport provisions are necessarily different from each
other and from other provisions of the Act, but that does not make them
inconsistent with other provisions of the Act.
Finally, commenters argue that their interpretation makes sense
because Congress only gave the Agency 60 days after receipt of the
petition to hold a public hearing on the petition and act to grant or
deny the petition. They assert that this short time frame indicates
that Congress anticipated the decision would be a fairly simple
administrative task of determining whether a source is violating a SIP
requirement. EPA views the significance of these requirements
differently. First, the requirement to hold a hearing bolsters EPA's
interpretation of section 126 because a hearing would serve no purpose
here under the commenter's interpretation. Whether a source is
violating an emission limitation is a straightforward compliance
determination. EPA makes such determinations on a daily basis without
going through a public hearing process, and such a process would
provide no benefit. Second, the short time frame for a determination is
an indication of Congress' intent to produce action on the interstate
pollution issue. In section 307(d)(10) of the Act, Congress expressly
provided a generic time extension for EPA action on certain rules
listed under section 307 to address the possibility that some of the
deadlines under the Act might be too short to allow EPA to complete the
rulemaking process. This indicates that Congress did not necessarily
link short deadlines for action under section 307(d) with less complex
or substantive proceedings, and where a short deadline may threaten the
integrity of the rulemaking process, Congress was willing to extend the
deadline. A short deadline for EPA action corresponds better with
Congress' assessment of the urgency of the problem than the time needed
by EPA to carry out the mandate, and thus such a deadline should not be
assumed to signal a simple task for the Agency.
A commenter also stated that ``[i]n the NPR, EPA acknowledges that
the section 126 language requires a violation of a SIP provision
implementing section 110(a)(2)(D)(i) before a section 126 finding can
be made. 63 Fed. Reg. at 56302.'' EPA is not certain to which
particular statement the commenter is referring. The commenter may be
referencing out of context the last clause of a sentence describing
EPA's rationale for not granting a petition if either the State is
adhering to the NOX SIP call schedule for submission of an
approvable SIP revision and EPA is acting speedily to approve the SIP,
or if EPA has promulgated a FIP for the State. EPA's statement
regarding whether a source ``emits or would emit in violation of the
prohibition'' alluded to how EPA should interpret section 126 in light
of the interplay with the NOX SIP call under section
110(a)(2)(D). EPA rejects the notion that any statement in the NPR
constitutes the ``acknowledgment'' claimed by the commenter.
Overall, commenters advocating the most limited interpretation
would reduce what is perhaps the most powerful tool in the Clean Air
Act to address interstate pollution to a redundant mechanism to enforce
limitations that states have already included in their SIPs. Under
their interpretation section 126 is a tool to fix a nonexistent
problem. No commenter on the NOX SIP call or this section
126 rulemaking has claimed that the northeastern ozone problem is due
in any part to sources' noncompliance with emission limitations
contained in upwind states' SIPs. The commenters' interpretation of
section 126 does not comport with Congress' aim of establishing and
strengthening a means for downwind states to enlist EPA's assistance to
require the upwind reductions needed for the downwind states to meet
air quality standards.
b. Integration of Section 126 Controls With SIPs/FIPs Under the
NOX SIP Call
EPA's interpretation of ``emitting in violation of the
prohibition'' provides direction for how EPA should act on the section
126 petitions in light of the NOX SIP call, as for both
actions EPA is operating on basically the same set of facts regarding
the same pollutants and largely the same amounts of upwind reductions
affecting the same downwind states. First, it follows that if a state
had already adopted a SIP revision in response to the
NOX SIP call providing for sources to reduce their emissions
at a future date and EPA had approved the revision as adequate to meet
the requirements of section 110(a)(2)(D)(i), EPA would not find that a
source in that state was emitting in violation of the prohibition of
section 110(a)(2)(D)(i).15 Similarly, if a state had
[[Page 28275]]
failed to adopt a SIP revision in response to the NOX SIP
call and EPA had responded with a FIP, the FIP would bar the excessive
emissions of transported pollutants and hence sources in the state
would not be emitting in violation of the section 110 prohibition. EPA
believes it also follows that if states are currently subject to a
schedule for compliance with a SIP call to correct an inadequacy under
section 110(a)(2)(D)(i), and states have not yet slipped off track in
terms of compliance with the schedule, it is appropriate for EPA to
defer making a finding as to whether sources in the state are emitting
in violation of the prohibition of section 110(a)(2)(D)(i).
---------------------------------------------------------------------------
\15\ Of course, compliance with a SIP call based on section
110(a)(2)(D)(i) only means that a state has adequately prohibited
excessive emissions of transported pollutants for the particular set
of facts analyzed under the SIP call. For example, if a downwind
state that had not been considered a recipient of an upwind state's
emissions subsequently brought a petition under section 126, or a
downwind state that had been considered a recipient under the SIP
call produced new data showing a different level of contribution or
other new facts, compliance with the earlier SIP call would not be
determinative regarding whether the upwind sources were emitting in
violation of the prohibition of section 110(a)(2)(D)(i).
---------------------------------------------------------------------------
The premise of the NOX SIP call is that a number of
state SIPs fail to limit emissions to prevent the excessive interstate
pollution transport prohibited by section 110(a)(2)(D)(i). The purpose
of the NOX SIP call is to require the states to revise their
SIPs to comply with section 110(a)(2)(D). Pursuant to the
NOX SIP call, there is an explicit and expeditious schedule
for states to meet their section 110(a)(2)(D)(i) obligations. EPA has
also proposed a FIP to bar the excessive emissions of transported
pollutants for each state that fails to meet the schedule established
in the NOX SIP call, and EPA could finalize the FIP by
November 30, 1999. As long as both states and EPA are on track in terms
of complying with the substance and timing of the NOX SIP
call, EPA believes it is appropriate to interpret section 126 to allow
EPA to defer making a finding with respect to sources in those states.
It further follows that once a state has missed a deadline under
the schedule and EPA has not corrected the SIP inadequacy with a FIP,
it is reasonable to find at that point that sources in the state are
emitting in violation of the prohibition because the applicable SIP
fails to limit interstate transport and the state has failed to correct
the inadequacy in the timeframe established under the SIP call. It also
follows that EPA could not find that sources in the state are not
emitting in violation of the prohibition of section 110(a)(2)(D)(i) and
deny the petitions now simply because EPA has issued a SIP call, as one
commenter suggests. The key criterion under EPA's interpretation of
sections 126 and 110(a)(2)(D)(i) is the existence of provisions in an
applicable implementation plan to control interstate transport.
Issuance of the SIP call with a schedule for correcting the deficiency
is sufficient to allow EPA to defer a final decision on granting or
denying the petitions as long as the states have not missed a deadline
under that schedule. It is not a sufficient basis, however, on which to
assume that the required provisions controlling interstate transport
will necessarily be adopted by the state or EPA within the required
timeframe, and hence to assume that sources are not emitting in
violation of the prohibition of section 110.
EPA believes that it is reasonable to make technical determinations
at this time that absent timely action under the NOX SIP
call, sources covered by the petitions, which are in states subject to
the SIP call, will emit in violation of the prohibition of section
110(a)(2)(D)(i). Hence, if states or EPA fail to act on the schedule
established, the petitions will automatically be deemed granted, and if
states and EPA meet the schedule established, the petitions will
automatically be deemed denied. Specifically, today's action provides
that for each source for which EPA has made an affirmative technical
determination, EPA will be deemed to have found that the source emits
or would emit NOX in violation of the prohibition of section
110(a)(2)(D)(i) under the following circumstances.16 First,
the finding is deemed to be made for such sources in a state if by
November 30, 1999, EPA has not either (a) proposed to approve a state's
SIP revision to comply with the NOX SIP call or (b)
promulgated a FIP for the state. Second, the finding is deemed to be
made for such sources in a state if by May 1, 2000, EPA has not either
(a) approved a state's SIP revision to comply with the
NOX SIP call or (b) promulgated implementation plan
provisions meeting the section 110(a)(2)(D)(i) requirements. Upon EPA's
approval of a state's SIP revision to comply with the
NOX SIP call or promulgation of a FIP, the corresponding
portions of the petitions will automatically be deemed denied. Also, if
a finding is deemed to be made, it will be deemed to be withdrawn, and
the corresponding portions of the petitions will also be deemed to be
denied, upon EPA's approval of a state's SIP revision to comply with
the NOX SIP call or promulgation of a FIP. See Section II.B
for further discussion of the basis for EPA's technical determinations.
---------------------------------------------------------------------------
\16\ While these findings would be made automatically without
further EPA action, EPA would promptly publish a notice in the
Federal Register notifying affected sources and other interested
parties that the findings had been made.
---------------------------------------------------------------------------
This coordinated approach to addressing the overlapping section 126
petitions and the NOX SIP call is also a practical way to
implement both of these provisions in the same time period, as the
timing of the SIP call and the consent decree have required EPA to do
here. Several commenters have suggested that EPA address coordination
with the NOX SIP call through either retaining the section
126 petitions as a backstop until the SIP provisions are implemented
(possibly by ``staying'' action on the petitions), or treating timely
implementation of the FIP or SIP as alternative ``increments of
progress'' under section 126. However, each of these approaches would
raise practical problems by subjecting sources to differing emission
control requirements--e.g., one set from an approved SIP and the other
from the section 126 remedy. This would be particularly problematic for
sources in states that choose different control options from those
selected by EPA under the section 126 petitions and could potentially
significantly increase the overall burden of reducing interstate
transport of pollutants under the NOX SIP call and the
section 126 petitions.
The practical problems with the commenters' suggested approaches
stem from the fact that the controls adopted by upwind states in their
SIPs may well not be identical to the controls identified by EPA under
section 126. The SIP may control different sources, and may impose
looser, or no, controls on at least some of the sources also covered by
section 126. Accordingly, it may not be feasible to treat the SIP
controls as increments of progress under section 126. In addition, if
the SIP controlled different sources or imposed looser controls on the
sources covered by section 126, the section 126 sources would still be
obliged to implement the section 126 controls in time for the May 1,
2003 deadline. The section 126 sources would need to take this action
because otherwise, if the sources covered under the SIP did not
implement their SIP controls, the section 126 sources would be
responsible for having their controls in place as soon as the SIP
sources were determined not to be in compliance. Under this scenario,
the overall burden of achieving the downwind reductions could be
significantly higher than necessary because to the extent that the
controls required under section 126 and the controls required under a
SIP were nonidentical, sources would need to
[[Page 28276]]
implement all of the nonidentical controls required by either section
126 or the SIP, even though implementation of either the set of section
126 controls or the set of SIP controls alone would be sufficient to
eliminate emissions that contribute significantly to nonattainment or
interfere with maintenance in downwind states. Furthermore, this
potential inefficiency might be viewed as effectively impermissibly
pressuring states to adopt in their SIPs controls identical to the
section 126 controls, as states might conclude that identical controls
are necessary to minimize the overall compliance burden. As described
elsewhere in today's notice, the courts have found that while EPA may
specify a quantity of emissions reductions that states must achieve
through SIP revisions, EPA may not specify the particular controls that
a state must adopt.
A number of commenters have stated that EPA should not dismiss the
section 126 petitions unless and until the quantity of transported air
pollutants has been reduced, either through implementation of the SIP
revisions adopted in response to the NOX SIP call or through
implementation of a FIP. The commenters express the concern that under
EPA's approach, if the upwind states, EPA, or sources go off track in
terms of compliance with the NOX SIP call schedule, the
downwind states will be unable to enforce the three year deadline for
emissions reductions established by section 126.
For the reasons discussed above, EPA believes that the better
interpretation of sections 110(a)(2)(D)(i) and 126 is that sources emit
in violation of the prohibition of section 110(a)(2)(D)(i) only where
the applicable SIP, SIP submission, or federal plan fails to bar the
excessive emission of transported pollutants prohibited by section
110(a)(2)(D)(i). Nor does EPA agree that its approach raises the
problems cited by the commenters. First, EPA believes that it has
carefully structured its actions on the petitions to avoid any problems
associated with either the upwind states or EPA going off track with
respect to the NOX SIP call schedule for adoption and
approval of SIP revisions. By making technical determinations now and
specifying the exact dates and circumstances under which the petitions
would be deemed granted, EPA has structured today's action to ensure
that if either the upwind states or EPA do not submit or promulgate the
necessary plan provisions expeditiously under the NOX SIP
call, the section 126 remedy will automatically be activated without
any further action by EPA. Moreover, May 1, 2000 is the deadline for
the upwind states and EPA to complete their necessary actions to avoid
an automatic granting of the section 126 petitions. This provides ample
time for sources subject to the section 126 controls to come into
compliance by the May 1, 2003 deadline. Once the SIP revisions are
adopted and approved, no further action is needed from the upwind
states and EPA--from that point on, the only way that emissions
reductions would go off track is if the upwind sources failed to comply
with their SIP limitations.
Moreover, the problem of potential bad actors exists regardless of
whether EPA grants, retains (and somehow stays action on), or denies
the section 126 petitions. Under any approach, it is possible that some
sources may not meet the May 1, 2003 deadline for compliance with the
SIP limitations, and thus, whether or not EPA has denied the section
126 petitions, there is a possibility that some portion of the upwind
emissions will not be reduced within the three year period specified in
section 126. If EPA has either retained or denied the petitions, the
remedy is the same--enforcement action against the source for failure
to comply with a regulatory requirement embodied in an approved SIP. As
discussed above, either downwind states or EPA could directly enforce
the SIP limits against the source under section 304 or 113,
respectively. If EPA grants the petitions, downwind states would
additionally be able to enforce against sources for violation of
section 126, as well as the SIP limits, but it is not clear that this
would make any practical difference. It is not necessary for EPA to use
the section 126 petitions as a backstop in case of potential bad
actors, and attempting to do so would raise the practical problems
discussed above. In addition to this analysis of the practical issues
associated with granting or retention versus denial of the petitions
upon approval of the SIP revisions, such an approach would be
inconsistent with what EPA believes to be the best reading of the
statute, as discussed above. Moreover, with respect to the argument
that EPA should retain the section 126 petitions as a backstop after
approval of a SIP revision or promulgation of a FIP, EPA is uncertain
as to what would constitute the statutory authority for such an
approach.
c. Petitions Deemed Granted Upon Certain Events
A number of commenters objected to EPA's proposal that the section
126 petitions for which it has made affirmative determinations would be
deemed granted under the circumstances specified above. Commenters
asserted that EPA should withhold decisions regarding the section 126
petitions until it has had sufficient time to determine the adequacy of
the SIPs submitted pursuant to the NOX SIP call, rather than
providing that the section 126 remedy would be automatically triggered
by certain dates. Commenters also argued that EPA must conduct a
rulemaking to evaluate the technical merits of the section 126
petitions rather than setting up a mechanism whereby failure to take a
final action by a deadline, and in particular, EPA's failure to act,
constitutes a default to some pre-arranged decision. Commenters opined
that EPA might delay its approval of SIP submissions in order to
trigger granting of the section 126 petitions without providing for
public comment on the section 126 finding in light of a state's SIP
submission. As discussed above, EPA is finalizing the proposed
approach, which EPA believes is based on the most reasonable
interpretation of the relationship between sections 110(a)(2)(D)(i) and
126, and best coordinates actions under the overlapping
NOX SIP call and section 126 petitions.
The EPA has provided ample public notice and opportunity to comment
on the Agency's technical and legal determinations underlying today's
affirmative determinations on the section 126 petitions. The EPA is
determining through rulemaking that the sources subject to the
affirmative determinations will emit in violation of the prohibition of
section 110, absent timely state compliance with the NOX SIP
call or promulgation of a FIP. Today's rule provides that the petitions
will be granted if the Agency does not act to propose approval of and
finally approve a SIP revision or promulgate federal implementation
plan provisions satisfying the NOX SIP call. There is no
legal requirement for EPA to conduct rulemaking to determine that the
Agency has not proposed, approved, or promulgated implementation plan
provisions by a given date, and such a rulemaking would serve no
purpose. There is no benefit to providing for public comment on whether
EPA has published a specified notice by a specified date. EPA has
established easily verified, purely objective criteria for triggering
the granting of the petitions. Because EPA has provided for notice and
comment on every aspect of the finding on the section 126 petitions,
including on establishment of an
[[Page 28277]]
objective criteria for when petitions are deemed to be granted, EPA has
fully complied with the Clean Air Act and the Administrative Procedure
Act requirements for notice-and-comment rulemaking.
EPA also rejects commenters' allegations that the Agency may
deliberately or inadvertently miss the deadlines for proposed or final
approval of SIP revisions submitted under the NOX SIP call.
In the proposal and in the Response to Comments Document for this rule,
EPA explains why it believes the schedule for action on the SIP
revisions is reasonable and achievable. See 63 FR 56302-56303. Given
achievable deadlines, there is no reason why EPA would deliberately
miss them to impose the section 126 remedy in preference over states'
plans. As discussed above, EPA believes that Congress generally
intended states, not EPA, to be primarily responsible for imposing the
controls required under Title I of the Act to meet the NAAQS. Moreover,
EPA has attempted to coordinate its proceedings on the section 126
petitions and the NOX SIP call to provide the maximum
opportunity, consistent with EPA's interpretation of the statutory
provisions, for states to address the interstate transport problem
through their SIPs, rather than having EPA impose controls directly
through a FIP or under section 126. Commenters argue that the section
126 petitions should not be granted if states have submitted a SIP
revision purporting to comply with the NOX SIP call and EPA
has either not acted on the revision, or has proposed approval but not
acted to finally approve the revision. Yet such an approach would
provide no assurance that there would be timely emission reductions
either through an approved SIP, a FIP, or direct controls on sources.
EPA's interpretation provides states and EPA a reasonable opportunity
to address the interstate transport problem through approved SIP
revisions, but ensures that the opportunity is not open-ended. Instead,
EPA interprets the interplay of the two provisions to ensure that under
one approach or the other, reductions will be achieved as expeditiously
as practicable. EPA believes that this interpretation is reasonable and
best achieves Congressional intent regarding the purpose and function
of sections 126 and 110(a)(2)(D)(i).
B. EPA's Interpretation of Section 126: Significant Contribution
1. Significant Contribution Standard
a. NPR
In the NPR, EPA relied on the same multi-factor, weight-of-evidence
test used in the NOX SIP call final rulemaking for
determining whether emissions from upwind sources contribute
significantly to nonattainment problems downwind.
As described in the NOX SIP call final rule, section
110(a)(2)(D)(i)(I)--provides that the SIP must ``prohibit[]'' sources
from ``emitting any air pollutant in amounts which will contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State * * * [This provision requires] the elimination of * *
* those amounts of [upwind] emissions that, based on a multi-factor
test, significantly contribute to downwind air quality problems.
63 FR 57376.17
---------------------------------------------------------------------------
\17\ As indicated in the NOX SIP Call final
rulemaking, EPA views the interfere-with-maintenance test to
incorporate the same standards as the contribute-significantly-to-
nonattainment test.
---------------------------------------------------------------------------
The EPA further stated, in the NOX SIP call final rule,
that the multi-factor test, in turn, weighs together seven factors. The
first four were the ``primary components in EPA's consideration,'' and
EPA specifically considered them with respect to each upwind State:
The overall nature of the ozone problem (i.e.,
``collective contribution'')
The extent of the downwind nonattainment problems to which
the upwind State's emissions are linked, including the ambient impact
of controls required under the CAA or otherwise implemented in the
downwind areas
The ambient impact of the emissions from the upwind
State's sources on the downwind nonattainment problems
The availability of highly cost effective control measures
for upwind emissions.
63 FR 57376.
In the NOX SIP call final rule, in the context of
applying the weight-of-evidence test to the New York City nonattainment
area as an example, EPA further indicated the manner in which these
primary factors were combined and considered:
The extent of New York City's nonattainment problem and the nature
of the contributions from upwind States were considered in determining
whether the values of the metrics indicate large and/or frequent
contributions for individual upwind States. Specifically, additional
controls beyond the local and upwind NOX reductions which
are part of the regional NOX strategy may be needed to solve
New York City's 1-hour nonattainment problem. Also, the total
contribution from all upwind States is large and there is no single
State or small number of States which comprise this total upwind
portion. In this regard, the contributions to New York City from some
States may not appear to be individually ``high'' amounts. However * *
* these contributions, when considered together with the contributions
from other States (i.e., the collective contribution) produce a large
total contribution to nonattainment in New York City.
63 FR 57392.
In addition, EPA stated, in the NOX SIP call final rule,
that the multi-factor test included three other factors, as follows:
In addition, EPA generally reviewed several other considerations
before concluding that upwind emissions contribute significantly to
downwind nonattainment. The EPA did not consider it necessary, or did
not have adequate information, to apply each these factors with
specificity with respect to each upwind State's emissions. In addition,
in some instances, EPA did not have quantitative information to assess
certain of these factors, and instead relied on qualitative
information. These considerations were secondary aspects of EPA's
analysis. They include:
The consistency of the regional reductions with the
attainment needs of the downwind areas with nonattainment problems.
The overall fairness of the control regimes required of
the downwind and upwind areas, including the extent of the controls
required or implemented by the downwind and upwind areas.
General cost considerations, including the relative cost-
effectiveness of additional downwind controls compared to upwind
controls.
63 FR 57376.
b. Final Action
i. General Meaning of the ``Contribute Significantly'' Provision
The significant contribution test of section 126(b)/110(a)(2)(D)
represents Congress's effort to determine how the various users of the
downwind air basin should share that valuable resource when the air
basin has, or may have, a nonattainment problem. The sharing occurs
through a determination by EPA that the appropriate upwind entities are
[[Page 28278]]
emitting pollutants in amounts that ``contribute significantly'' to a
downwind nonattainment problem, or interfere with maintenance.
Under EPA's favored interpretation of section 110(a)(2)(D)(i)
(although, as described below, not the only reasonable interpretation),
the amounts of emissions that contribute significantly must be
prohibited. The remaining amounts of emissions--those that do not
contribute significantly--need not be controlled under section
110(a)(2)(D)(i). Under section 126(c), if EPA grants a petition on
grounds that the indicated sources violate the prohibition of section
110(a)(2)(D), EPA may promulgate a remedy that has the effect of
requiring the elimination of the amount of emissions that contribute
significantly to nonattainment, or that interfere with maintenance,
downwind.
The CAA does not define the term ``contribute significantly,'' nor
specify any of the factors that should be considered in applying the
term. That is, Congress did not provide that a specified amount of
contribution from upwind sources to a downwind nonattainment problem
should be considered to be ``significant,'' nor did Congress
specifically direct EPA to determine that a particular amount of
contribution should be considered ``significant.'' Certainly, Congress
knew well how to draft the provision to include a specific standard or
a set of criteria, had Congress chosen to do so. Compare section 183(e)
(requiring EPA to establish controls on the set of consumer and
commercial products that EPA determines account for at least 80% of VOC
emissions in areas that violate the NAAQS) and section 107(d)(4)(A)(v)
(establishing criteria for EPA to consider in determining whether to
grant a State's request to exclude certain portions from ozone or
carbon monoxide nonattainment areas classified as serious or higher).
Nor does the statute require the downwind petitioner or EPA to
demonstrate that the upwind reductions, with or without other
reductions from local, national, or other regional measures, will
result in attainment and maintenance of the downwind problem. By
comparison, in other provisions, Congress did require the downwind
nonattainment area or EPA to specify an attainment plan and
demonstration. See sections 182(c)(2)(A), 182(d)(flush language at
beginning), and section 182(e) (flush language at beginning) (downwind
states designated nonattainment for ozone and classified as serious,
severe, or extreme, must submit attainment demonstrations on specified
schedules); and section 110(c)(1) (EPA must promulgate a Federal
Implementation Plan under certain circumstances).18
Similarly, in other sections, Congress required compliance with SIP
requirements before a State with a nonattainment area would be eligible
for certain benefits. See section 107(d)(3)(E)(ii) and (v)
(nonattainment area may be redesignated to attainment only if, among
other things, SIP has been approved and State has met applicable
requirements); section 181(a)(5)(A) (nonattainment area may receive an
extension of attainment date if, among other things, State has complied
with all SIP requirements). Congress did not establish such strictures
with respect to the downwind State under section 110(a)(2)(D)(i)(I).
---------------------------------------------------------------------------
\18\ It is true that section 110(a)(2)(I) requires SIPs for
nonattainment areas to meet the nonattainment requirements found in
part D, which include requirements to submit an attainment
demonstration. However, failure by a downwind State to submit an
attainment demonstration would not have any direct effect on EPA's
decision whether to grant the downwind State's section 126 petition.
---------------------------------------------------------------------------
Rather, Congress provided simply that upwind contributions must be
eliminated if they are ``significant''. According to the dictionary,
the term ``significant'' means, among other things, ``(1) ``Having or
expressing a meaning; meaningful * * * (3) Having or likely to have a
major effect; important; (4) Fairly large in amount or quantity * *
*.'' American Heritage Dictionary of the English Language (3d ed. 1992)
1679. Thus, the term appears to permit of various meanings, ranging
from the more general ``meaningful'' or ``important,'' which would
permit consideration of more factors or circumstances; to a
sufficiently large air quality contribution. Under these circumstances,
EPA has discretion under Chevron U.S.A., Inc. v. Natural Resources
Defense Council, 468 U.S. 1227 (1984) (Chevron), to an interpretation
of the statutory test of ``contribute significantly'' that reflects a
reasonable accommodation with the purposes of the statute.19
---------------------------------------------------------------------------
\19\ The term ``contribute significantly'' or variations of that
term is found in various other Clean Air Act provisions concerning
various pollutants, including, among others section 169B(c)(1)
(visibility impairment), section 187(c) (carbon monoxide), and
section 189(e) (particulate matter). The term has been defined
differently under those various sections. Indeed, in section 188(f),
relating to particular matter, the term ``contribute significantly''
is used twice, and EPA has concluded that it should be given a
different meaning for each of the two uses. ``Addendum to General
Preamble for Future Proposed Rulemakings: State Implementation Plans
for Serious PM-10 Nonattainment Areas, and Attainment Date Waivers
for PM-10 Nonattainment Areas Generally,'' 59 FR 419998, 42004
(August 16, 1994).
---------------------------------------------------------------------------
ii. Varied Circumstances of Air Pollutant Transport
It was wise for Congress to authorize discretion to EPA because
defining the significant contribution test amounts to determining how
the downwind air basin should be shared among upwind and downwind
claimants, a task that necessarily involves making judgments as to the
extent and manner in which that basin may be shared under the specific
circumstances presented. Because there are many different contexts in
which air pollution transport may occur, the basin may be shared
differently, and the significant contribution test may be applied
differently, in those contexts. For example, the types of pollutants
may vary, ranging from direct pollutants such as SO2, to secondary
pollutants, such as NOX. The numbers of areas (both upwind
and downwind) may vary. The numbers of sources and amounts of
pollutants may vary. The status of both upwind and downwind control
implementation efforts, and of air quality planning efforts, may also
vary.
To illustrate the practical importance of these variations:
At one extreme, a relatively simpler transport problem may arise
involving a direct pollutant, such as SO2, and one upwind State with
one or a few sources, and one downwind State with one or a few
sources. Under these circumstances, the sharing of the air basin
presents important and complex decisions, but it need occur only as
among several sources. Moreover, a clear path to attainment may be
determined (although choosing among several alternative control
schemes to reach attainment may be necessary). This scenario is
similar to some of the past EPA rulemakings. See Air Pollution
Control District of Jefferson County, Kentucky v. EPA, 739 F.2d 1071
(6th Cir. 1984).
The opposite extreme is similar to the circumstances of the
NOX SIP call and today's rulemaking. These actions involve
the greater technical complexity of a pollution problem caused by a
secondary pollutant, ozone. There are numerous downwind areas with
nonattainment problems, and numerous upwind sources in numerous upwind
States. Upwind sources have varying impacts on the different downwind
receptors. Downwind States are at varying stages in ozone planning
efforts; some do not yet have approved attainment demonstrations. In
addition, varying control levels may have already been implemented by
similar sources.
These variables may profoundly affect the type of control efforts
on upwind sources that may be considered to be reasonable. For example:
Assume that Downwind State exceeds its NAAQS by 10 percent. The amount
of pollution is
[[Page 28279]]
determined to be created in 90 percent part by sources in Downwind
State, and in 10 percent part by sources in Upwind State. In this
example, were the Upwind Sources to eliminate their contribution, the
Downwind State would experience attainment of the NAAQS.
If the air basin in Downwind State is viewed as the resource of
solely the citizens of Downwind State, then the Upwind Sources may be
obliged to eliminate 100 percent of their contribution. However, if the
air basin is viewed as a resource to be shared in some manner among the
citizens of Upwind and Downwind States, then a different pattern of
control obligations may emerge.
Further, different results may seem reasonable depending on
existing control levels. For example, in Scenario-1, assume that Upwind
State has always enjoyed attainment air quality, and Upwind Sources
have never implemented any controls, but that Downwind State has long
experienced nonattainment air quality, and Downwind Sources have
already implemented extensive controls. Under these circumstances, at
least some level of controls on Upwind Sources may seem reasonable.
On the other hand, under Scenario-2, assume, that Upwind State is
itself a nonattainment area, and that Upwind Sources have already
implemented extensive controls to improve air quality in Upwind State.
Assume further that Downwind State has long experienced attainment air
quality, Downwind Sources have never implemented any controls, and only
recently, growth in Downwind State has led to sufficiently more
emissions from Downwind Sources to tip air quality into nonattainment.
Under these circumstances, a control level on Upwind Sources that is
lesser than under Scenario-1, or even a zero control level on Upwind
Sources, may seem reasonable.
iii. Definition of the Significant Contribution Test and Legislative
History
The EPA believes that Congress provided in section 126/110(a)(2)(D)
the flexibility to determine the upwind control obligations under these
varying circumstances. As indicated above, the term ``significant[]''
may be construed broadly, to mean ``important'' or ``meaningful''. The
Senate Report accompanying the CAA Amendments of 1977, which added
section 126, offered the following description of the purpose of the
addition of section 126:
The [1970 version of the Clean Air Act] did not specify any
abatement procedure in the event that a stationary source on [sic:
in] one State did emit air pollutants which adversely affected the
air quality control efforts of another State. As a result, no
interstate enforcement actions have taken place, resulting in
serious inequities among several States, where one State may have
more stringent implementation plan requirements than another State.
For example, an implementation plan for the State of Ohio was not
even proposed until 1976. It has now been challenged and has not yet
been effectively implemented. As a result, there are no enforceable
control requirements applicable to most of the significant major
stationary sources of sulfur oxides in Ohio. The emissions from
plants in Ohio are transported across the Ohio River to West
Virginia, which must then cope with pollution not generated by a
source under its own control; and must require more stringent
control of West Virginia sources to attain the ambient air quality
standards.
In the absence of interstate abatement procedures, those plants in
States with more stringent control requirements are at a distinct
economic and competitive disadvantage. This new provision is intended
to equalize the positions of the States with respect to interstate
pollution by making a source at least as responsible for polluting
another State as it would be for polluting its own State. S. Rep. 95-
127 (95th Cong. 1st Sess.) at 41-42.
Clearly, the legislative history of section 126 indicates that this
provision, which of course relies on the significant contribution test,
is intended to take into account relative control requirements upwind
and downwind. Congress's focus on this specific factor--which concerns
costs and equity, and not air quality--coupled with the fact that the
term ``significant'' may be read broadly, has led EPA to conclude that
the term should be defined broadly to take account of all the important
aspects of the interstate pollution problem. In the context of ozone,
EPA applies this approach through a multi-factor formula discussed
below.
It should also be noted that the statutory provisions contain no
constraint that would indicate that the downwind States must have
developed attainment demonstrations before upwind controls may be
imposed. On the contrary, section 126(c) establishes a 3-year period
for implementation of controls that applies by its terms, without any
reference to the timing of attainment needs downwind. This provision
indicates that Congress intended section 126 controls to apply even in
the absence of downwind attainment demonstrations.
iv. Application of Significant Contribution Test to Ozone Problems
(1) Nature of the Ozone Problem
The ozone transport problem in the part of the United States
covered by the section 126 petitions that EPA is considering in today's
action may be characterized as follows: There are several downwind
areas that have nonattainment air quality under the 1-hour ozone NAAQS,
and numerous more that have nonattainment air quality under the 8-hour
ozone NAAQS. These ozone problems are caused by the collective
emissions from numerous downwind and upwind sources. As EPA stated in
the NOX SIP Rule final rulemaking:
Unhealthful levels of ozone result from emissions of NOX
and VOCs from thousands of stationary sources and millions of mobile
sources and consumer products and other sources across a broad
geographic area. Each source's contribution is a small percentage of
the overall problem; indeed, it is rare for emissions from even the
largest single sources to exceed one percent of the inventory of ozone
precursors even for a single metropolitan area. Under these
circumstances, even complete elimination of any given source's
emissions may well have no measurable impact in ameliorating the
nonattainment problem. Rather, attainment requires controls on numerous
sources across a broad area. Ozone is a regional scale problem that
requires regional scale reductions. 63 FR 57375-57376 (quoting
NOX SIP call NPR).
Further, UAM-V air quality models show that the major areas in the
northeast, with respect to which section 126 petitions have been
submitted, have 1- and 8-hour nonattainment air quality problems that
will continue even after all areas implement all controls specifically
required under the CAA. These model runs assume that the amount of
emissions will continue to grow at certain rates, and that meteorology
will recur that replicates the types of weather episodes that since
1988 have been conducive to ozone transport and to a high level of
exceedances of the ozone NAAQS.
Further, many States do not yet have SIPs approved as demonstrating
attainment for each of the downwind areas at issue that have
nonattainment problems.
In addition, the areas with one-hour ozone NAAQS problems have, by
and large, implemented more controls over a longer period than have
their upwind contributors. While some downwind
[[Page 28280]]
nonattainment areas have not yet fully implemented all of their
required measures, the UAM-V modeling shows that even when these
measures are fully implemented, certain areas with nonattainment
problems would continue to show nonattainment.
(2) Reasonable Step in Ameliorating Ozone Nonattainment
Under the circumstances presented concerning the ozone problem, EPA
believes it reasonable to interpret section 126(b)/110(a)(2)(D)(i) to
authorize a step in the direction of ameliorating the downwind
nonattainment problem by achieving cost-effective reductions to
eliminate an important component of the upwind contribution. Additional
reductions may be necessary from, for example, sources in the downwind
area itself or from national measures that EPA may promulgate. However,
again, these sections do not require an overall plan for attainment
prior to action to eliminate significant upwind contributions.
This interpretation treats section 126(b)/110(a)(2)(D)(i) as a
control mechanism that is similar to numerous other provisions in the
CAA in which Congress mandated cost-effective or technologically
achievable reductions in ozone precursors from a particular group of
sources for the purpose of ameliorating ozone nonattainment problems,
but without any requirement for some overall attainment plan.
For example, in promulgating various mobile source rules to control
ozone precursors, EPA generally examines the need for further
reductions of those precursors based on the expected attainment or
nonattainment status of areas nationwide. The EPA then examines whether
further regulation of the mobile sources is appropriate, based on the
amount of emissions from those sources as well as the feasibility and
cost-effectiveness of such regulation.\20\ The resulting rules are not
designed, by themselves, to lead to attainment in all areas; and in
promulgating these rules, EPA does not specify any particular strategy
for reductions from additional sources designed to reach attainment in
all areas. As additional examples, EPA recently promulgated standards
for nonroad diesel engines. EPA first noted the level of contribution
from such engines to total nationwide NOX and PM emissions
and stated that without further controls, the contribution from these
engines would increase. EPA then developed standards based on the
feasibility of controls, the amount of emission reductions (in tons of
NOX, VOC and PM reduced), and the cost of the controls or
control levels. Although EPA did compare the cost-effectiveness of
these standards against that of other standards, EPA did not attempt to
integrate these standards into any specific strategy for achieving
attainment based on reductions from all sources. 63 FR 56968 (Oct. 23,
1998). See 62 FR 54694 (Oct. 21, 1997) (promulgation of standards
requiring emission reductions from heavy duty motor vehicles based on
feasibility, taking into consideration cost-effectiveness, without
specifying any particular overall strategy for overall attainment).
---------------------------------------------------------------------------
\20\ Different types of mobile sources are regulated based on
different specific sections of the CAA, with some sections placing
more emphasis on one or more of the criteria mentioned above. E.g.,
section 202(i)(3)(c) (Tier 2 light-duty standards based on need for
further reductions, availability of technology, and cost-
effectiveness); section 202(a)(3)(A) (Heavy-duty on-highway
standards reflect greatest reduction achievable through available
technology, considering cost, energy, and safety factors).
---------------------------------------------------------------------------
Similarly, under section 183(e), Congress directed EPA to determine
the categories of consumer and commercial products that account for at
least 80 percent of the VOC emissions from such products in areas that
violate the ozone NAAQS. After doing so, EPA must proceed to regulate
those categories of sources by requiring ``best available controls.''
Again, the statute does not specify the need for any particular link to
demonstrations of attainment downwind.
For these reasons, EPA disagrees with the commenters who argued
that EPA should deny the section 126 petitions because a number of
nonattainment areas may be brought into attainment without transport
controls. Although this may be true, EPA's modeling shows areas with
nonattainment problems that are not expected to be brought into
attainment even with transport controls.
The EPA also disagrees with the commenters who stated that the
section 126 petitions should be denied because implementation of the
NOX SIP call (and, presumably, the section 126 control
program) will not by itself achieve attainment. These commenters
suggested that this failure to achieve attainment indicates that upwind
controls have no use for attainment purposes, and that only local
controls should be implemented.
The EPA agrees that regional controls may not by themselves result
in attainment in all downwind areas, but modeling shows that these
controls ameliorate nonattainment problems. In addition, EPA does not
believe that Congress mandated an overall demonstration of attainment
as a prerequisite to requiring even initial reductions from upwind
States whose emissions clearly are part of the nonattainment problem.
All that is necessary is an indication that these reductions ameliorate
the nonattainment problem.
(3) Factors in Weight of Evidence Test
Further, EPA believes that the weight-of-evidence test that
considers a series of factors is an appropriate means to define the
significant contribution standard.
(a) Collective Contribution
One of the principal factors that EPA examined was the collective
contribution aspect of ozone formation, described above. That ozone is
caused by the collective contribution of numerous sources across a
broad geographic area is universally true, and thus is true for each of
the downwind receptors. This factor pushes in the direction of
recognizing that even relatively small (in an absolute sense)
contributions must be recognized as a meaningful part of the problem
and thus potentially as part of the solution.
(b) Extent of Downwind Problem
A second principal factor that EPA recognized was the extent of the
downwind problems. As noted above, for each downwind area with
nonattainment air quality under either or both the 1- and 8-hour NAAQS,
EPA used computer modeling to determine that certain of these
nonattainment areas would continue to have nonattainment problems in
the future, even assuming the implementation by all areas of
specifically required CAA obligations. These circumstances indicate
that additional controls will be necessary for the downwind areas to
attain. This factor also pushes in the direction of recognizing that
even relatively small (in an absolute sense) upwind contributions must
be recognized as a meaningful part of the problem and thus potentially
as part of the solution.
(c) General Factors
EPA also examined some factors more generally, without applying
them to each downwind (or upwind) contributor. First, EPA recognized
that in general, as part of the Ozone Transport Commission (OTC), the
section 126 petitioners have agreed to implement NOX
controls pursuant to a Memorandum of Understanding,--the OTC
NOX MOU--which requires controls similar to those that EPA
would mandate were the section 126 petitions approved. Moreover,
virtually all of the downwind areas are themselves upwind
[[Page 28281]]
contributors, and thus would be subject to the controls placed on
upwinds. As a result, sources in the section 126 petitioning States may
be expected to be subjected to at least the same level of control as
upwind sources targeted by those petitions. Indeed, in general, the
SIPs in downwind areas with one-hour NAAQS ozone nonattainment problems
have already required ozone precursor controls over a longer period of
time than have the upwind areas. This factor, which is related to
equity, also generally argues in favor of controls on upwind sources.
As noted above, the legislative history of the 1977 CAA Amendments
notes that one of the purposes of section 126 was to ensure this type
of equity.
Moreover, because downwind areas under the one-hour NAAQS are
already fairly vigorously controlled, the cost-per-ton removed for
additional downwind controls is generally higher than the cost-per-ton
removed for upwind controls. As EPA stated in the NOX SIP
call final rule--
[I]n general, areas that currently have, or that in the past have
had, nonattainment problems under the 1-hour NAAQS, or that are in the
Northeast Ozone Transport Region (OTR), have already incurred ozone
control costs. The controls already implemented in these areas tend to
be among the less expensive of available controls * * *. EPA has
determined that, in general, the next set of controls identified as
available in the downwind nonattainment areas under the 1-hour NAAQS
would cost approximately $4,300 per ton removed. By comparison, EPA has
determined that the cost of the regional reductions required [in the
NOX SIP Call final rule] would approximate $1,500 per ton
removed. Thus, it appears that the upwind reductions required by [the
NOX SIP Call final rule] are more cost-effective per ton
removed than reductions in the downwind nonattainment areas.
63 FR 57379. This factor of relative cost-effectiveness points towards
controls on even relatively small (in absolute terms) upwind
contributions.
(d) Air Quality Metrics
The factors described above informed EPA's judgment about the size
of upwind contributions that should be considered to be a meaningful
part of downwind attainment problems. EPA employed two air quality
models--UAM-V and CAMx--which each generated a set of modeling runs to
measure the amount of contribution generated by the upwind State's
entire inventory of ozone precursors to the downwind area's
nonattainment problem. Commenters have questioned EPA's evaluation of
the impact of the full amount of the statewide inventory, as opposed to
evaluating the impact of only the amount of emissions required to be
reduced by the rulemaking. EPA believes it appropriate to evaluate the
impact of the entire inventory because this amount causes the upwind
State's contribution to ambient ozone levels downwind.
The EPA evaluated this impact on the basis of a set of metrics for
the UAM-V modeling runs, and a separate set of metrics for the CAMx
modeling runs. The EPA determined that, in light of the collective
contribution nature of the ozone problem and the extent of the downwind
ozone nonattainment problems, even relatively small (in absolute terms)
upwind contributions to those nonattainment problems should be
considered to be meaningful components of the problems and thus as
potentially subject to controls. Only if the statewide contribution was
extremely small did EPA conclude that none of the emissions from the
State's sources could be considered to contribute significantly to the
downwind nonattainment problems. The EPA's specific evaluation of these
metrics, including its response to comments received, is discussed
below.
(e) Cost-Effectiveness Factor
After determining which upwind State emissions should be considered
part of the downwind nonattainment problem, EPA considered whether the
portion of those emissions from section 126 sources could be reduced in
a highly cost-effective manner. EPA determined the amounts that could
be so reduced to be the amounts that significantly contribute to
downwind nonattainment, and that therefore must be prohibited.\21\ In
theory, if all of the upwind State's emissions came from section 126
sources and could be eliminated through highly cost-effective controls,
EPA would conclude that all of those emissions should be considered to
contribute significantly to nonattainment downwind, and EPA would
require their elimination. On the other hand, in theory, if EPA
determined that no highly cost-effective controls were available, EPA
would determine that none of the emissions contribute significantly,
and therefore than none need be eliminated.
---------------------------------------------------------------------------
\21\ Strictly speaking, only the amount of emissions that may be
eliminated through highly cost-effective controls should be
considered the amount that contributes significantly to downwind
nonattainment. For convenience, throughout the notices and
supporting documents for today's action, as well as the notices and
supporting documents for the NOX SIP call final
rulemaking, EPA occasionally refers to the entire amount of
emissions from the upwind State as contributing significantly to
nonattainment downwind.
---------------------------------------------------------------------------
The EPA received comments that it does not have authority to use
cost as a factor, or that if EPA could consider cost, EPA did not
formulate its consideration of cost in a rational manner. These
comments are discussed below. The EPA also received comment that it
should not apply a uniform level of control to all affected upwind
sources. These comments are also discussed below.
(f) Air Quality Modeling of Amount of Reductions
Finally, as a general consideration, EPA modeled the upwind
reductions and determined that they generally were consistent with the
attainment needs of the downwind areas with nonattainment problems.
That is, the reductions from affected sources in each upwind State,
combined with reductions from affected sources in the other upwind
States, resulted in meaningful ambient improvement downwind, and did
not result in any situation in which upwind sources were required to
reduce more than necessary to achieve attainment in each of the
downwind areas that they impact. This consideration further supports
EPA's determination as to significant contribution.
c. Comments and EPA Responses
i. Vagueness
Some commenters considered the significant-contribution test as EPA
defined it in the NPR to be vague or unclear.
Other commenters did not appear to consider the test to be vague,
and EPA believes that its discussion of the test in the NOX
SIP Call rulemaking (referenced in the section 126 NPR) adequately
explained the Agency's interpretation and methodology. In any event,
EPA believes that the description above of the multifactor test further
elaborates on the connection of each of the primary and secondary
factors to the conclusions drawn.
ii. Collective Contribution
In the NPR, EPA incorporated the determination in the
NOX SIP call that whether the upwind sources' contribution
to nonattainment downwind rises to the level of significance is
determined, in part, by reference to the ambient impact of all of the
ozone precursor emissions in the upwind sources' state, as indicated by
the state-by-state UAM-V and CAMx modeling runs. In addition, EPA
evaluated the impact of the reductions in emissions by modeling the
impact of
[[Page 28282]]
all upwind reductions on downwind receptors.
(1) Comments
Commenters argued that EPA erred in considering collective
contribution as a factor in the determination of significant
contribution. According to the commenters, EPA employs the collective
contribution approach to evaluate the downwind air quality impact of
emissions from sources in each upwind State by considering those
emissions to be part of the entire set of multi-upwind-state emissions.
According to the commenters, EPA then determines that because the
entire set of multi-upwind-state emissions collectively contributes
significantly to nonattainment downwind, each upwind State's emissions,
and emissions from all the targeted sources in each upwind State,
should be considered to contribute significantly to nonattainment
downwind. According to the commenters, sections 126(b) and
110(a)(2)(D)(i) should be read to require evaluation of the downwind
air quality impact of emissions from only the particular sources
targeted by the section 126 petitions, or at most from each upwind
State on a State-by-state basis, and not on any geographically larger
basis. Some commenters stated that the terms of section 126(b), which
limit EPA's possible finding to ``any major source or group of
sources,'' requires EPA to make the determination of significant
contribution on the basis of each source or group of sources targeted
by the section 126 petitions, and not on a state-wide basis.
Commenters further stated that reliance on broader modeling results
based on collective contribution failed to evidence the precise
contribution from the targeted upwind sources or their individual
states, and allowed EPA to claim that the small contributions from the
targeted sources were in fact larger because they were linked to
contributions from other sources. The commenters further expressed
concern that the collective contribution approach proves too much
because it could be used to combine any particular set of emissions
with a much larger set of emissions that have a large impact downwind,
and thereby support the claim that the initial set of emissions is
partly responsible for that large impact downwind. Similarly, EPA
received comments that it should evaluate the petitions on a petition-
by-petition basis.
(2) Responses
(a) Petition-by-Petition
The EPA agrees that with respect to each section 126 petition, EPA
must make a determination as to whether the sources identified in that
petition contribute significantly to nonattainment in the petitioning
state. EPA believes that it may rely on the collective contribution
factor to inform its judgment as to the level of contribution that it
may consider to be significant. That is, as explained above, even
relatively small amounts of contribution (in an absolute sense) may be
considered to be significant in light of the collective contribution of
many sources of the ozone problem.
(b) Statewide Groups of Sources
Further, section 126 authorizes EPA to grant a petition with
respect to either ``any major source'' or ``group of stationary
sources.'' The EPA believes it is reasonable to treat all section 126
sources in a single upwind State as a ``group[] of sources,'' \22\
rather than to treat sources individually or to treat smaller sets of
sources as a ``group''. As noted elsewhere, ozone results from
emissions of numerous sources over a broad geographic area; in many
cases, even the largest source comprises less than 1% of the inventory.
Accordingly, attempting to quantify the impact of individual sources,
or even small groups, may prove futile.
---------------------------------------------------------------------------
\22\ The term ``group of sources'' is not defined, and does not
exclude other reasonable methods of combining sources, such as
combining all targeted sources in a particular geographic region.
---------------------------------------------------------------------------
EPA believes it is reasonable to confine its analysis of the
section 126 sources to a state-by-state basis, so that the impact of
emissions from sources in one upwind State is analyzed separately from
the impact of emissions from sources in another upwind State (except,
as described below, for analyzing the impact of the reductions from the
section 126 controls). That is, EPA did not combine emissions from more
than one upwind State in its UAM-V zero-out or CAMx apportionment
modeling. EPA agrees that it is sensible to demarcate sets of upwind
emissions along some lines, and evaluate those sets separately.
The EPA believes that in the context of section 126 action,
demarcating sources by state lines is reasonable. Although emissions
and the ozone they generate of course do not respect state boundaries,
those boundaries are important for regulatory purposes.23 As
discussed elsewhere in today's rulemaking, under EPA's interpretation
of section 126, sources subject to that provision may not emit in
excess of the amounts that would be authorized under SIP provisions
that meet the requirements of section 110(a)(2)(D)(i)(I). In the case
of ozone precursors, the section 110(a)(2)(D)(i)(I) requirements are
applied on the basis of state-wide emissions. If State-wide emissions
contribute significantly to nonattainment downwind, then the State's
section 126 sources may be subject to SIP controls; if state-wide
emissions do not contribute significantly, then the State's section 126
sources would not be subject to SIP controls. For these reasons, it is
appropriate to evaluate the impact of State-wide emissions from all
source categories in order to determine whether the emissions from the
section 126 sources should be considered to contribute significantly.
---------------------------------------------------------------------------
\23\ In general, under the CAA, States are given the primary
responsibility for air pollution prevention and control. Section
101(a)(3).
---------------------------------------------------------------------------
By the same token, if EPA finds that emissions from a State's
section 126 sources contribute significantly to nonattainment downwind
because State-wide emissions contribute significantly, the State may
promulgate SIP controls that would achieve sufficient emissions
reductions so that EPA may conclude that the section 126 sources in
that State should no longer be considered to contribute significantly
to nonattainment. The State may place these SIP controls on any sources
it chooses, and is not limited to imposing controls on the section 126
sources. Under these circumstances, as discussed elsewhere in today's
rulemaking, EPA may rescind the section 126 finding. This
determination--that in light of the SIP controls, the section 126
sources no longer contribute significantly--is possible if the initial
finding that the section 126 sources do contribute significantly was
made in the context of examining the emissions from the upwind State
itself.
This analysis leads EPA to conclude that in determining whether the
sources targeted in each petition make a significant contribution to
the petitioning state, EPA may rely on the results of the State-by-
State UAM-V zero-out modeling and the state-by-state CAM-X modeling as
the primary basis for that determination. These models allow a
determination that state-wide emissions do or do not contribute
significantly to nonattainment downwind, and therefore--under EPA's
interpretation of section 126, as described immediately above--whether
the emissions from the section 126 sources contribute significantly to
nonattainment.
[[Page 28283]]
The EPA also believes that the collective contribution aspect of
ozone formation provides a separate basis for relying on the
determination of whether State-wide emissions contribute significantly
as the basis for the determination that emissions from section 126
sources contribute significantly. That is, because an ozone
nonattainment results from the emissions of numerous sources across a
broad geographic area, and because the State-wide emissions from a
particular upwind State contribute significantly to that problem, then
the various emitters within the upwind State should be considered to
contribute significantly to that problem.
Both of the above bases for relying on State-wide emissions impacts
to determine whether section 126 source emissions contribute
significantly--EPA's interpretation of the relationship of section
126(b) to section 110(a)(2)(D)(i), and the collective contribution
aspect of ozone formation--are consistent with certain facts concerning
the NOX emissions inventories for the upwind States
associated with ozone transport problems. Specifically, as discussed
below, for each upwind State subject to today's rulemaking, the section
126 sources are a substantial portion of the State-wide NOX
inventory. Thus, it is more readily apparently, that because the entire
upwind State emissions contribute significantly, the portion of those
emissions from the section 126 sources contribute significantly.
The EPA is well aware that the metrics for determining the air
quality component of the significant contribution test are based on the
entire set of emissions from the upwind State, not only the emissions
from the section 126 sources. It is conceivable that modeling only the
emissions from the section 126 sources would result in smaller ambient
impacts downwind, and that those smaller impacts, if analyzed on the
basis of the metrics and thresholds developed for State-wide emissions,
may not exceed those thresholds.
The EPA believes it sensible to link its determinations to the
state-by-state modeling of emissions of all ozone precursors in each
state. For certain upwind States, this modeling indicates that all
ozone precursors in the State contribute significantly to nonattainment
downwind. A group of sources that represents a substantial portion of
those emissions should be considered to contribute significantly to
nonattainment downwind as well. Otherwise, the determination that all
of a State's emissions contribute significantly could in effect be
defeated by the simple expedient of dividing those emissions among
various source categories, and determining that the emissions from each
source category are too few to constitute a significant
contribution.24
---------------------------------------------------------------------------
\24\ EPA acknowledges that it is theoretically possible for
there to be two adjoining upwind States, one of which has a
NOX inventory that contributes significantly downwind,
but that has only a few emissions from section 126 sources; and the
second of which has a NOX inventory that does not
contribute significantly downwind, but that has a large percentage
of emission from section 126 sources. These theoretical
circumstances could lead to the anomaly that the relatively few
emissions from section 126 sources in State-1 may be subject to
section 126 controls, but the greater emissions from section 126
sources in State-2 may not be subject to section 126 controls. These
factual circumstances are not present in this or related
rulemakings. All the States for which actions are being taken
contain both substantial amounts of emissions from utilities and
from other sources. No upwind States contain an exceptionally high
percentage of emissions from section 126 sources, but do not
contribute significantly.
---------------------------------------------------------------------------
Additional data sets support EPA's technical determination that
emissions from the section 126 sources contribute significantly
downwind. For the NOX SIP call rulemaking, EPA conducted air
quality modeling runs indicating the impact of emissions reductions,
comparable to those required today, in certain of the upwind States.
These model runs indicate that ambient ozone reductions occur in
northeastern nonattainment areas as a result of these reductions. It
should be noted that some of the section 126 petitioning States do not
target sources in all of the upwind States that EPA determined during
the NOX SIP call rulemaking to contribute significantly to
those States. Even so, EPA believes that the sources targeted by the
section 126 petitions overlap sufficiently with this NOX SIP
call modeling so that the conclusions of this modeling--that upwind
NOX reductions improve ambient ozone concentrations
downwind--apply as well in today's action. This modeling is described
in Air Quality Modeling Technical Support Document for the
NOX SIP Call, Docket A-96-56, No. VI-B-11, p. 70.
In addition, the U-runs performed by EPA, described below, confirm
that the amount of emissions reductions from each upwind State's
section 126 sources has a meaningful downwind impact. Although EPA did
not complete these U-runs on a state-by-state basis, the results
indicate an impact from each upwind State's sources. In some cases,
these impacts are small in an absolute sense, a result that is to be
expected when the amount of emissions reductions from sources in a
particular upwind State required through the highly cost effective
controls is relatively small, and when those sources are distant from
the downwind receptors.
However, the reduction in downwind ozone levels is meaningful, and
thus supports the affirmative technical determination made today
concerning the section 126 sources in that upwind State, because ozone
nonattainment problems are caused by emissions from numerous sources
over a broad geographic area, and those problems must be solved by
achieving emissions reductions from numerous sources over a broad
geographic area. Both the U-runs and the modeling described immediately
above that EPA conducted for the NOX SIP call indicate that
the ambient impact of the emissions reductions from sources in a
particular upwind State are more discernible when they are combined
with comparable reductions from sources in other upwind States.
iii. Bright Line
Commenters argued that EPA should have established a bright line
test based on air quality impact alone. Under this view, EPA would
determine that a specified frequency and/or magnitude of ambient ozone
impact would constitute a significant contribution, so that amounts of
NOX emissions that cause an impact higher than the specified
amount would have to be reduced to the point where the remaining
emissions caused an impact less than the specified amount. Proponents
of this approach have pointed out that EPA's approach results in a
situation in which Upwind State-1 that is near to a downwind
nonattainment area may continue to contribute a substantially higher
amount of ozone to the downwind area even after it implements the
highly cost effective controls than Upwind State-2 that is further away
from the nonattainment area contributes even before Upwind State-2
implements any controls.
The EPA rejected the bright-line approach because EPA considers it
reasonable, in the context of the ozone nonattainment problems under
both the 1- and 8-hour NAAQS, to interpret the significant contribution
standard as mandating the elimination of the portion of NOX
emissions from sources in states upwind of the nonattainment problems
that may be eliminated through highly cost-effective controls, when
those emissions cause even a relatively small (in an absolute sense)
ozone impact. Interpreted and applied in this manner, section 126(b)/
110(a)(2)(D) authorize a useful step towards ameliorating ozone
nonattainment problems. As discussed
[[Page 28284]]
above, in many other instances, Congress has directly mandated, or has
authorized EPA to require, a cost-or technology-based control scheme
designed to reduce ozone precursors for the purpose of ameliorating
nonattainment problems.
The EPA recognizes that this interpretation and application of the
significant contribution test diminishes the importance of the fact
that ozone precursors have a greater impact the closer they are emitted
to the nonattainment problem. However, all of the sources subject to
the affirmative technical findings contribute to the nonattainment
burdens in an amount that, considering the collective contribution
nature of the ozone problem, must be viewed as meaningful. Moreover,
nothing in sections 126/110(a)(2)(D) indicate that Congress intended
that sources in upwind States closer to a nonattainment problem bear a
proportionately larger burden of emissions reduction. Compare by
section 211(c)(4)(C) (EPA may approve state fuel controls, and thereby
waive Federal preemption of such rules, only after finding that ``no
other measures that would bring about timely attainment exist, or if
other measures exist and are technically possible to implement, but are
unreasonable or impracticable;'' this provision indicates Congress knew
how to require that control schemes be prioritized).
iv. Other Factors
In addition, some commenters stated that it was unlawful to include
certain factors in the significant contribution test, including the
secondary factors concerning (1) the overall fairness of the control
regimes required of the downwind and upwind areas (including the extent
of the controls required or implemented by the downwind and upwind
areas), and (2) general cost considerations, including the relative
cost-effectiveness of additional downwind controls compared to upwind
controls.
The commenters argued that these factors are invalid because
section 110 does not by its terms authorize consideration of cost and
economic fairness. They further argued that EPA has overlooked the fact
that some States in the South and Midwest have already incurred
significant control costs and have attained compliance with the 1-hour
NAAQS.
As discussed below, EPA believes that the significant contribution
test does permit consideration of cost factors. Indeed, the Senate
Report explaining passage of section 126 in the CAA Amendments of 1977
made clear that one purpose of the provision was to enable downwind
sources that were subject to controls because located in nonattainment
areas to assure that their upwind competitors that contributed to the
nonattainment problem would not reap the competitive advantages of
lighter control burdens. S. Rep. 95-127 (95th Cong. 1st Sess.) at 41-
42.
Further, evidence available to EPA indicates that in general,
sources in the one-hour nonattainment areas have incurred greater
control obligations than sources in the upwind areas.
2. Cost Factor
Summary: In the NPR, EPA proposed to follow the interpretation of
the significant contribution test set forth in the SIP Call Final Rule.
In particular, EPA proposed to use the cost of available controls in
upwind areas as a factor in the significant contribution test.
In today's action, EPA has concluded that the proposed
determination of significant contribution is appropriate. Thus, after
determining the degree to which NOX emissions from named
source categories contribute to downwind nonattainment or maintenance
problems in the petitioning States, the Agency determined whether any
amounts of the NOX emissions from those source categories
may be eliminated through controls that are highly cost effective on a
cost-per-ton basis. EPA has concluded that the amount of NOX
emissions from named source categories that can be eliminated through
application of highly cost-effective control measures contributes
significantly to nonattainment or maintenance problems downwind for
purposes of sections 110(a)(2)(D) and 126.
The EPA received many comments critical of the use of the
availability of cost-effective control measures in any way in the test
for determining significant contribution. These comments generally fell
into two categories. Commenters in the first category typically
asserted that the existence of a ``significant contribution'' to
nonattainment should be based merely on the quantitative amount of
ozone transported from sources in one State to another and that cost
should be irrelevant to the inquiry. These commenters argued that a
significant contribution should not be any less significant simply
because it is uneconomic to control, and that an insignificant
contribution should not become significant simply because it is
economical to control. Rather than an element of the significant
contribution analysis, the commenters suggested that the cost of
controls should only be relevant for purposes of selecting controls
once the Agency found that the amount of contribution in fact met some
bright line quantitative measurement for significance.
By comparison, commenters in the second category argued that EPA
should not utilize the cost of controls as an element of the
significant contribution determination because it would unduly limit
relief from ozone transport from upwind sources. These commenters
suggested that by linking the determination of significant contribution
to the availability of highly cost-effective controls, upwind sources
could continue to emit NOX that has an adverse transport
impact simply because of the cost of emissions control, whereas the
finding of significant contribution should be based simply on the
actual amount of ozone transport in the downwind State without regard
to the cost of controls upwind.
Response: EPA disagrees with the commenters' assertions that the
relative cost of controls has no place in the determination of
significant contribution. EPA believes that cost of controls in
general, and the consideration of the availability of highly cost-
effective controls in particular, is an appropriate factor for
consideration in making the determination of significant contribution.
The EPA notes that the term ``significant contribution'' is not defined
in the statute and that neither the statute nor the legislative history
provides meaningful guidance for interpreting the term. As explained
elsewhere in this document, EPA contends that Congress modified the Act
in the 1990 Amendments to incorporate the concept of significant
contribution as applied by the Agency and the courts to provide a de
minimis exception for pollutant transport across State boundaries. EPA
had formerly interpreted section 110(a)(2)(E) of the 1977 Act to
include this concept because otherwise the Agency arguably had to
reject SIPs that allowed for any amount of cross-boundary transport, no
matter how minute. See, e.g., Connecticut v. EPA, 696 F.2d at 164.
In prior determinations of significant contribution, whether in the
context of section 126 petitions or in partial SIP revisions, EPA has
generally utilized a multi-factor test to assess the presence or
absence of a significant contribution to nonattainment. See, e.g.,
Proposed Determination Under Section 126 of the Clean Air Act
(Interstate Pollution Abatement), 49 FR 34851, 34859 (September 4,
1984). The determinations included consideration
[[Page 28285]]
of a variety of factors addressing issues similar to the issues
addressed by the factors in the significant contribution test utilized
by EPA for today's Section 126 determinations. EPA has previously
included the relative cost of controls as one consideration in the
determination of the existence of a significant contribution. Id.,
(including as a factor ``the relative costs of pollution abatement
between source that contribute to a violation''). EPA has made these
determinations on a case by case basis and has stated that the
enumerated factors are not exclusive. See Final Determination Under
Section 126 of the Clean Air Act (Interstate Pollution Abatement), 49
FR 48152 , ________ (December 10, 1984) (``EPA enumerated a
nonexhaustive list of factors which the Administrator may take into
account in determining whether a contribution is significant'') . Given
the lack of a statutory definition of what emissions ``contribute
significantly to nonattainment,'' EPA believes that it has discretion
to decide what factors would best accomplish the statutory goal of
eliminating upwind emissions that comprise a significant contribution
to downwind nonattainment.
Through modeling, EPA has determined that the sources covered by
this section 126 action significantly contribute to downwind ambient
concentrations of ozone in one or more petitioning States. Because of
the pervasive problem of ozone transport across a large geographic
area, many upwind sources covered by today's action may be the source
of ozone for several downwind States. It does not necessarily follow,
however, that EPA should force the sources to halt all emissions
activities to eliminate the contribution to downwind States. EPA
believes that a definition of significant contribution that required
the elimination of all emissions that contribute to downwind
nonattainment is not a practical or appropriate method to address the
complex overlapping transport problems posed by ozone. Therefore, EPA
must utilize a workable method to determine when a contribution is
significant for purposes of section 110(a)(2)(D).
EPA has concluded that it is appropriate to utilize a multi-factor
approach to assess whether there is a significant contribution and to
take into account the availability of highly cost effective control
measures to the named sources as one factor in that analysis. EPA
believes that whether some amount of emissions is significant depends,
in part, upon the availability of highly cost-effective controls.
In 1990 Congress amended section 110(a)(2)(D) to make clear that
contribution must be ``significant'', i.e., not de minimis, while
remaining silent on the criteria EPA should use to make a determination
of significant contribution. Especially in light of EPA's past practice
of using a multi-factor approach--including cost--to assess
contribution, Congress' action affirms that EPA retains discretion
under the CAA to consider factors other than air quality when making a
determination of significant contribution.
The EPA's approach is consistent with case law concerning the CAA,
as well as other statutes. See Warren Corp. v. EPA, 159 F.3d 616, ____
(D.C. Cir. 1998), amended on other grounds, 164 F.3d 676 (1999)
(deferring to EPA's interpretation that CAA section 211(k)(8) allows
EPA to consider economic factors as well as air quality in promulgating
gasoline anti-dumping provisions), citing NRDC v. EPA, 824 F.2d 1146,
1157 (D.C. Cir. 1987) (en banc) (interpreting CAA section 112 and
rejecting the view that ``as a matter of statutory interpretation, cost
and technological feasibility may never be considered under the Clean
Air Act unless Congress expressly so provides''); International
Brotherhood of Teamsters v. United States, 735 F.2d 1525, 1529
(D.C.Cir. 1984) (``In the absence of clear congressional direction to
the contrary, we will not deprive the agency of the power to fine-tune
its regulations to accommodate worthy nonsafety interests'' under a
statute focused on safety); Grand Canyon Air Tour Coalition v. FAA, 154
F.3d 455, 475 (D.C.Cir. 1998) (FAA properly considered effects of rule
on air tourism industry where statute did not forbid such consideration
and required not total but only ``substantial restoration of the
natural quiet.''). When Congress intends to exclude consideration of
all issues other than air quality concerns, it has used decidedly
different statutory language than appears in sections 126 and
110(a)(2)(D). See Lead Indus. Ass'n v. EPA, 647 F.2d 1130, 1148-50
(D.C.Cir. 1980) (Congress' directive to promulgate primary national
ambient air quality standards which ``allow [] an adequate margin of
safety * * * to protect the public health'' precluded consideration of
cost and technology factors). Where, as here, the statute is silent
regarding the factors EPA may or may not consider, it is generally
permissible for the Agency to consider other relevant factors or policy
objectives in carrying out the statutory goal, absent some indication
to the contrary in the statutory text, structure or history. NRDC v.
EPA, 824 F.2d at 1157, 1158; see also International Brotherhood, 735
F.2d at 1528-29.
Some commenters point to a Supreme Court case, Union Electric v.
EPA, 427 U.S. 246 (1976) for the proposition that EPA may not include
costs considerations in the interpretation of ``significant
contribution.'' In Union Electric, the Supreme Court found that the
1970 version of section 110(a)(2) did not allow EPA to disapprove an
attainment sulfur dioxide (SO2) SIP on the ground that the SIP's
control measures for complying with the SO2 NAAQS would be so stringent
as to be technologically or economically infeasible. Id. at 265. The
Supreme Court made it clear that Congress left States free to choose
technology forcing measures to achieve attainment within what was then
a three-year deadline. Id. at 268-69. This holding is simply inapposite
to EPA's interpretation of ``significant contribution.'' With respect
to the separate question, whether EPA can take cost into account in
interpreting the minimum that State SIPs are required to include, the
Supreme Court expressly states that ``the Administrator may consider
whether it is economically or technologically possible for the state
plan to require more rapid progress than it does.'' Id. at 264, fn. 13.
This language from the case supports EPA's interpretation of
``significant contribution'' rather than the views of commenters.
Finally, EPA notes that the 1977 legislative history of the CAA
demonstrates that Congress was clearly concerned about the relative
cost of pollution control in upwind and downwind states when it added
section 126 to the CAA. The Senate Report accompanying the Clean Air
Act Amendments of 1977, which added section 126, offered the following
description of the purpose of the new section's addition:
In the absence of interstate abatement procedures those plants
in States with more stringent control requirements are at a distinct
economic and competitive disadvantage. This new provision is
intended to equalize the positions of the States with respect to
interstate pollution by making a source at least as responsible for
polluting another State as it would be for polluting its own State.
S. Rep. 95-127 (95th Cong. 1st Sess.) at 41-42. This legislative
history evinces Congressional concern about economic equity and
supports EPA's consideration of cost-effectiveness as a factor in
determining significant contribution.
[[Page 28286]]
C. EPA's Interpretation of Section 126: 8-Hour NAAQS Summary
In the NPR, EPA proposed to make a finding that certain sources and
categories of sources identified in the Sec. 126 petitions
significantly contribute to attainment in, or interfere with
maintenance by, one or more of the petitioning States. EPA proposed to
make this finding based upon evidence that upwind sources contribute
significantly to violations of the ozone NAAQS under both the pre-
existing 1-hour standard and the new 8-hour standard which EPA recently
promulgated. EPA's proposed approach was consistent with that of the
NOX SIP Call in which the Agency concluded that 22 States
and the District of Columbia must submit State Implementation Plan
(``SIP'') revisions to prohibit specified amounts of NOX
emissions in order to reduce NOX and ozone transport across
State boundaries in the eastern half of the United States. 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; Rule,'' 63 FR 57356 (Oct. 27, 1998). In
the latter action, EPA extensively discussed the Agency's authority and
rationale for finding that violations of the 8-hour ozone standard are
appropriate for consideration in the assessment of interstate transport
of ozone in violation of CAA section 110(a)(2)(D). Id., 63 FR at 57370-
57374. In the NPR for today's action, EPA also proposed to make the
finding of significant contribution for purposes of Sec. 126 based, in
part, upon violation of the 8-hour standard in full recognition that
the Agency has not yet formally designated any areas as nonattainment
under the 8-hour standard.
EPA received numerous comments on this issue, either directly or
through cross references to earlier comments on the NOX SIP
Call. Those commenters critical of EPA's use of the 8-hour standard
raised four specific arguments: (i) that EPA cannot base the finding of
significant contribution on violations under the 8-hour standard before
the Agency has designated any areas as nonattainment under such
standard; (ii) that EPA cannot use modeling to establish nonattainment
of the 8-hour standard as a basis for the finding of significant
contribution; (iii) that EPA cannot base the finding of significant
contribution on the 8-hour standard now and must wait until after
completion of SIPs to implement that standard under CAA section 172;
and (iv) that EPA's reliance upon violations of the 8-hour standard for
purposes of the NOX Sip Call or this finding under section
126 is inconsistent with President Clinton's stated implementation plan
for that standard.
Response: Although EPA has previously replied to these comments in
connection with the NOX SIP Call as noted above, it wishes
to reiterate and expand upon those responses here.
(a) Use of the 8-hour standard before designation of nonattainment
areas for that standard. The commenters noted that EPA will not
formally designate nonattainment areas for the 8-hour ozone standard
until the year 2000. The commenters argued that until such formal
designation, EPA cannot make any determination concerning significant
contribution of a pollutant from a State to any such future
nonattainment area in another State. According to the commenters, until
EPA designates areas for nonattainment under the 8-hour standard, the
Agency has no authority either to require SIP submissions under section
110(a)(1) or to make findings of significant contribution under
Sec. 126 with respect to the 8-hour standard. The heart of the
commenters' argument is that Sec. 110 may empower EPA to rectify
interstate pollutant transport, but that EPA must read the term
``area'' into section 110(a)(2)(D)(i)(I) so that EPA has no authority
to do so absent formally designated nonattainment areas. As further
evidence of their position, the commenters alleged that the new source
review requirements and other ozone nonattainment provisions of the
1990 CAA apply only to areas designated as nonattainment.
EPA disagrees that it must have designated 8-hour standard
nonattainment areas prior to taking today's action under section
126(b). First, section 110(a)(2)(D)(i)(I) provides, inter alia, that a
SIP must prohibit emissions that ``contribute significantly to
nonattainment in * * * any other State.'' The provision does not, by
its terms, indicate that this downwind ``nonattainment'' must already
be formally designated under section 107 as a nonattainment ``area.''
Because the provision does not include the term ``area'' in conjunction
with the term ``nonattainment,'' EPA believes that the express terms of
the statute do not support the claim of the commenters. Similarly,
section 126 as a whole also makes no reference to nonattainment
``areas'' and instead pointedly refers only to air pollution which can
contribute to violation of the relevant NAAQS. In section 126(a)(1)(B),
the provision states, inter alia, that States must provide notice of
new or modified sources ``which may significantly contribute to levels
of air pollution in excess of the [NAAQS] in any air quality control
region outside of the State'' (emphasis added). Likewise, section
126(c) contains no restrictions upon violations or remedies based upon
the existence of nonattainment areas. Most importantly for today's
action, section 126(b) provides that any State may petition EPA for a
finding that sources in another State are making a significant
contribution, but does not tie that finding to the existence of a
formally designated ``nonattainment area'' in the petitioning State.
EPA contends that it would be unreasonable to read into section 126
a requirement that States must wait until formal designation of
nonattainment areas before they may petition the Agency for relief or
before the EPA may take action to alleviate transport. Such an approach
would permit upwind States to inundate downwind States with emissions
for extended periods of time before downwind States could seek relief.
Given that section 126(a) clearly contemplates advance notice of
construction or modification of sources before they begin to contribute
to downwind levels of air pollution, regardless of whether the downwind
area is designated nonattainment or not, EPA believes that Congress did
not intend to preclude States from seeking recourse through section
126(b) prior to official designation of nonattainment status. As
explained elsewhere, EPA contends that the statutory reference in
section 126(b) should read ``Sec. 110(a)(2)(D)(i),'' thereby
establishing that Congress intended that States have the right to
petition for a finding that sources in a State contribute significantly
to nonattainment in, or interfere with maintenance by, another State.
By contrast, EPA notes that other provisions of the CAA do
explicitly employ the term ``area'' in conjunction with the term
``nonattainment,'' and that these provisions clearly refer to areas
designated as nonattainment. See, e.g., sections 107(d)(1)(A)(i),
181(b)(2)(A), 211(k)(10)(D). Similarly, the provisions to which the
commenters appeared to refer, section 172(b) and section 172(c)(5)(new
source review) and section 181(a)(1) and section 182 (classified ozone
nonattainment area requirements), by their terms apply to a designated
nonattainment ``area.'' EPA finds it unremarkable that provisions which
explicitly impose requirements on nonattainment areas apply to
nonattainment ``areas.'' Rather than supporting the commenters' claim,
EPA believes that the difference between the
[[Page 28287]]
explicit wording of the provisions illustrates the distinction Congress
intended in the statute. The sections at issue, section 110(a)(2)(D)
and section 126, do not make reference to nonattainment ``areas,'' but
rather to ``nonattainment'' or to levels of air pollution in excess of
the NAAQS.
As further evidence of the distinction in the provisions, EPA notes
that section 176A(a) authorizes EPA to establish a transport region
whenever ``the Administrator has reason to believe that the interstate
transport of air pollutants from one or more States contributes
significantly to a violation of a [NAAQS] in one or more other
States.'' This reference to ``a violation of a [NAAQS]'' makes clear
that EPA is authorized to form a transport region when an upwind State
contributes significantly to downwind area with nonattainment air
quality, regardless of whether the downwind area is designated
nonattainment. EPA also notes that the remedy under section 176A is a
SIP call under section 110(a)(2)(D), thereby shedding light on the
meaning of section 110(a)(2)(D) and confirming that the Agency may use
that provision as a tool to alleviate interstate transport. The EPA
believes that section 110(a)(2)(D) and section 126 should be read the
same way because of the parallels between those provisions and section
176A(a). All of the provisions address transport and all are triggered
when emissions from an upwind area ``contribute significantly'' to air
pollutants downwind. EPA believes that it is appropriate in light of
these related provisions to apply a consistent approach to interpreting
and implementing the provisions. Thus, EPA contends that the term
``nonattainment'' in section 110(a)(2)(D) is synonymous with ``a
violation of the [NAAQS]'' in section 176A. Section 126(b), in EPA's
opinion, refers to section 110(a)(2)(D)(i), thereby incorporating that
standard by reference. None of the three provisions at issue here make
reference to nonattainment ``areas,'' and EPA believes that this common
fact is significant.
EPA also notes that the CAA contains other provisions that refer to
the actual air quality status of a particular area rather than to the
area's formally designated status. These provisions include: (i)
sections 172(c) and 171(1), the reasonable further progress
requirements which require nonattainment SIPs to provide for ``such
annual incremental reductions in emissions * * * as * * * may * * * be
required * * * for the purpose of ensuring attainment of the [NAAQS];
and (ii) section 182(c)(2), the attainment demonstration requirement,
which mandates a ``demonstration that the [SIP] * * * will provide for
attainment of the [NAAQS].'' These provisions refer to air quality
status rather than to the designated status of the area in question. In
a series of notices in the Federal Register, EPA has relied on these
references to air quality status, rather than designated status, in
determining that areas seeking to redesignate from nonattainment to
attainment did not need to complete Rate Of Progress SIPs or attainment
demonstrations, even though those requirements generally apply to areas
designated as nonattainment. EPA took these actions because the air
quality for those areas seeking redesignation was, in fact, in
attainment notwithstanding their formal designation as nonattainment
areas. See ``State Implementation Plans: General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990;
Proposed Rule,'' 57 FR 13498, 13564 (April 16, 1992); ``Determination
of Attainment of Ozone Standard for Salt Lake and Davis Counties, Utah,
and Determination Regarding Applicability of Certain Reasonable Further
Progress and Attainment Demonstration Requirements; Direct Final Rule,:
60 FR 30189, 30190 (June 8, 1995); and ``Determination of Attainment of
Ozone Standard for Salt Lake and Davis Counties, Utah, and
Determination Regarding Applicability of Certain Reasonable Further
Progress and Attainment Demonstration Requirements; Final Rule,'' 60 FR
36723, 36724 (July 18, 1995). The EPA's interpretation was upheld by
the Court of Appeals for the 10th Circuit in Sierra Club v. EPA, 99
F.3d 1551, 1557 (10th Cir. 1996).
EPA has concluded that it may take today's action before formal
designation of nonattainment areas under the 8-hour standard. EPA
believes that it is clear that the reference in section
110(a)(2)(D)(i)(I) to ``nonattainment'' refers to actual air quality,
not the formal designation status of an area. EPA believes that it is
also clear that section 126(b) is tied to actual air quality rather
than to designation status. The explicit terms of section 110(a)(2) and
section 126 do not refer to nonattainment ``areas.'' Such a reading
would not be reasonable in light of the purpose of the provisions to
halt emissions of pollutants which significantly contribute to
nonattainment or maintenance of attainment in other States.
Accordingly, EPA believes that this issue is controlled by the clear
terms of the statute and is resolvable under the first step of Chevron.
If, however, the provisions were ambiguous on this point, then EPA
believes that, under the second step in the Chevron analysis, a court
should give EPA deference for its reasonable interpretation. EPA
contends that interpreting ``nonattainment'' to refer to air quality is
reasonable for the reasons described above. Additional arguments based
upon the structure of the Act are detailed in EPA's action on the
NOX SIP Call. See, 63 FR 57356, 57372.
(b) Use of modeling to support a finding of significant
contribution to nonattainment of the 8-hour standard. The commenters
also argued that EPA cannot use ``modeled nonattainment areas'' for
purposes of section 126 to determine whether the emissions of sources
in one State contribute significantly to nonattainment of the 8-hour
ozone standard in another State. By the commenters' reasoning, EPA must
first define such nonattainment areas in accordance with the applicable
regulations for determining violations of the ozone standard. Thus, the
commenters argued that EPA can only make the determination of
significant contribution to nonattainment of the 8-hour standard in
accordance with monitoring requirements of 40 CFR 50.10. In particular,
the commenters objected to EPA using modeled nonattainment areas in
advance of developing a procedure for States to perform attainment
demonstration modeling for the new 8-hour standard.
EPA disagrees with the commenters on the appropriateness of using
modeling to establish nonattainment. First, EPA disagrees that it may
not generally use modeling to assess the likelihood of a future
significant contribution to nonattainment or interference with
maintenance as contemplated by section 126. The provision does not
direct the Agency as to the particular method it must use to make the
finding. Historically, however, EPA has used modeling to determine the
presence or absence of such an impact. See, e.g., Air Pollution Control
District of Jefferson County, 739 F.2d at 1077-79 (Agency reliance on
modeling); New York v. EPA, 852 F.2d at 580 (Agency criticism of
insufficient modeling). Moreover, EPA notes that section 126 implicitly
contemplates that EPA may use modeling to assess significant
contribution. In particular, section 126(b) provides that any State may
petition for a finding that any source or group of sources ``emits or
would emit'' in violation of section 110. This construction indicates
that EPA may determine whether sources would
[[Page 28288]]
violate the provision now or in the future, thereby requiring that the
Agency would have to model to determine whether there would be a future
significant contribution to nonattainment or interference with
maintenance in the petitioning State. This anticipation of prospective
significant contribution is likewise implicit in section 126(a) which
provides for notice in advance of construction of major new sources or
the modification of existing sources that would have the same effect.
Thus, section 126 not only does not preclude EPA from modeling to make
a finding, it logically requires it in the case of petitions alleging
future significant contributions to nonattainment or interference with
maintenance. To interpret section 126 to forbid the use of modeling to
predict future air quality conditions would be inconsistent with the
statute and absurd.
Second, EPA notes that the commenters appear to misunderstand how
the Agency did use both monitoring data and modeling to project whether
areas will be in nonattainment of the 8-hour standard in the future for
purposes of this action. EPA did obtain monitoring data which
demonstrated that many areas in the petitioning States are currently
violating the 8-hour standard At the outset of the process, EPA thus
relied on actual monitored data of the type desired by the commenters.
As described in more detail in the NPR, EPA then utilized modeling to
determine which areas currently violating the 8-hour standard would be
likely to continue to violate the 8-hour standard in 2007, factoring in
expected ozone reductions and concomitant air quality improvements from
Federal and State control measures. Significantly, EPA used modeling
not to add areas to the list of nonattainment areas, but rather to
subtract from the list of areas already shown through monitoring data
to be in violation of the 8-hour standard at this time. EPA believes
that this conservative approach is a reasonable means to anticipate
which areas will continue to be in nonattainment of the 8-hour standard
unless sources in upwind States undertake additional control measures.
By contrast, the commenters imply that EPA cannot possibly determine
which areas will be in nonattainment in a future year unless EPA waits
until that year for actual monitored data showing that nonattainment.
Such an approach would be inconsistent with the provisions of section
126 as discussed above, and would be illogical because it would
preclude EPA from encouraging upwind States to obtain emission
reductions that the Agency can now reasonably identify through modeling
as necessary for downwind States to achieve attainment of the 8-hour
standard as expeditiously as practicable.
(c) Finding of significant contribution to nonattainment under the
8-hour standard before submissions of SIPs in accordance with section
172. The commenters also argued that EPA cannot make a finding under
section 126(b) using the 8-hour ozone standard because of timing
issues. In the NOX SIP Call, EPA concluded that States must
submit SIPs for the new 8-hour standard in accordance with the schedule
in section 110(a)(1), i.e., within three years after promulgation of a
new or revised NAAQS. The commenters claimed that such a timetable is
unauthorized under the CAA and that EPA must follow the schedule set
forth in section 172(b), which provides that SIPs required to satisfy
nonattainment areas are due three years after the designation of an
area as nonattainment pursuant to section 107(d). Because EPA has
stated that it intends to complete the designation process for
nonattainment areas under the 8-hour standard in 2000, the commenters
reason that SIPs to address that nonattainment would not be due until
2003. Following that reasoning, the commenters argued that because of
the schedule set forth in section 172(b), EPA cannot now use violations
of the 8-hour standard in connection with petitions under section 126.
For the reasons detailed in the NOX SIP Call, EPA
disagrees with the contentions of the commenters concerning the timing
of the NOX SIP Call and SIPs to implement the 8-hour
standard. See, 63 FR 57356, 57372-57374. With respect to today's action
under section 126(b), EPA reiterates that sections 110(a)(1) and (2)
authorize the Agency to require SIP revisions to address SIP
requirements in section 110(a)(2)(D) on the schedule set forth in the
NOX SIP Call.
EPA also notes that section 126 itself contains no reference to
section 172 as a timeline for requiring SIP revisions or implementation
of necessary emission reduction requirements as a result of a finding
under section 126(b). In fact, section 126(c) specifically stipulates
that existing sources may not continue to operate longer than three
months after a section 126(b) finding unless the source ``complies with
such emission limitations and compliance schedules * * * as may be
provided by the Administrator.'' If EPA extends the compliance period,
section 126(c) provides that the source must comply ``as expeditiously
as practicable, but in no event longer than three years after such
compliance.'' EPA believes that the explicit provisions of section 126
refute the commenters' implication that the Agency cannot take action
under section 126(b) until after the designation of nonattainment areas
and submission of SIPs for the 8-hour standard and the ultimate
potential compliance date, i.e., potentially as much as ten years after
designation. Having established that sources in upwind jurisdictions
will significantly contribute to ozone nonattainment or interfere with
maintenance in the petitioning States, EPA has authority to take action
and to require compliance in the time frame that the Agency believes
will allow attainment as expeditiously as practicable.
Although the commenters claimed that it is absurd to grant the
section 126 petitions now because this action will require upwind
emission reductions prior to forcing downwind areas to implement all
statutorily required or necessary controls, EPA disagrees. As explained
in connection with the NOX SIP Call, downwind nonattainment
areas have historically borne the brunt of controls designed to reduce
ozone and ozone precursors for many years. In spite of these efforts,
many areas have had difficulty meeting the 1-hour ozone standard
because of the influx of ozone and ozone precursors from upwind
jurisdictions. Under the new 8-hour standard, monitoring data indicate
that more and larger areas will potentially be in nonattainment. EPA
therefore believes that it is even more important to implement regional
control strategies to mitigate interstate pollution in order to assist
downwind areas in achieving attainment. As such, the granting of the
section 126 petitions is not an effort ``to enforce the 8-hour
standard'' prematurely as alleged by the commenters, but rather the
exercise of appropriate authority to begin to alleviate emissions that
are already contributing to ambient air conditions which exceed that
standard. This action will help meet the statutory objective of
achieving attainment as expeditiously as practicable.
(d) Finding of significant contribution under the 8-hour standard
in light of President Clinton's implementation plan for the standard.
Commenters also claimed that EPA's use of the 8-hour ozone standard for
purposes of the proposed section 126 finding was inconsistent with
President Clinton's Memorandum of July 16, 1997, entitled
``Implementation of Revised Air Quality Standards for Ozone and
Particulate
[[Page 28289]]
Matter'' (the ``Implementation Memo''). See, 62 FR 38421 (July 18,
1997). That document accompanied EPA's promulgation of the new 8-hour
NAAQS for ozone. The commenters noted that the Implementation Memo made
explicit reference to the statutory timeline for implementation of the
new 8-hour standard and indicated that there would be up to three years
to designate nonattainment areas under the new 8-hour standard, up to
three more years to develop SIPs for the new 8-hour standard, and up to
a total of ten years from designation to comply with the new 8-hour
standard. The commenters implied that the presence of the ``general
timeline'' in the Implementation Memo precludes EPA from making a
finding of significant contribution under section 126 using the 8-hour
standard at this time.
EPA disagrees that today's finding is inconsistent with the
Implementation Memo. EPA believes that the commenters have overlooked
key passages of the Implementation Memo which make clear that the
Agency is to take action to alleviate regional transport of ozone and
ozone precursors immediately, rather than to wait until formal
designation of nonattainment areas under the 8-hour standard.
Contrary to the commenters' implications, the Implementation Memo
does not state that EPA is to do nothing to implement the 8-hour ozone
standard until after designation of nonattainment areas and submission
of SIPs. The document explicitly discussed the need for a regional
strategy to address ozone nonattainment and the investigation of
strategy options by the Ozone Transport Assessment Group (OTAG) to
alleviate interstate transport of ozone. See, 62 FR at 38425. In
particular, the Implementation Memo stated ``that EPA will propose a
rule requiring States in the OTAG region that are significantly
contributing to nonattainment or interfering with maintenance of
attainment in downwind States to submit SIPs to reduce their interstate
pollution.'' Id. This was a clear reference to the NOX SIP
Call. The Implementation Memo promised issuance of the NOX
SIP Call final rule in September of 1998, well in advance of
designation of nonattainment areas for the 8-hour standard.
Significantly, the Implementation Memo did not indicate that EPA would
restrict the NOX SIP Call to nonattainment areas under the
old 1-hour standard. To the contrary, the document stated, inter alia,
that : ``Most important, based on the EPA's review of the latest
modeling, a regional approach, coupled with implementation of already
existing State and Federal Clean Air Act requirements, will allow the
vast majority of areas that currently meet the 1-hour standard but
would not otherwise meet the new 8-hour standard to achieve healthful
air without additional local controls.'' Id. In other words, the
Implementation Memo contemplated that control measures under the
NOX SIP Call would help alleviate nonattainment of the 8-
hour standard. Rather than suggesting that EPA is to defer any action
to ensure reductions in emissions that contribute to regional ozone
transport to achieve the 8-hour standard, the Implementation Memo
clearly contemplated that EPA should and would take appropriate action
in advance of designations.
Similarly, with regard to the ``transitional classification,'' the
Implementation Memo provided that: ``Because many areas will need
little or no additional new local emission reductions to reach
attainment, beyond those reductions that will be achieved through the
regional control strategy, and will come into attainment earlier than
otherwise required, the EPA will exercise its discretion under the law
to eliminate unnecessary local planning requirements for such areas.''
Id. The referenced ``regional control strategy'' is the NOX
SIP Call. Again, the Implementation Memo not only does not direct
inaction on the 8-hour standard, it specifically presumes that EPA will
take action on a regional basis to mitigate ozone transport without
regard to whether or not it has formally designated areas as
nonattainment for the 8-hour standard.
In short, EPA believes that the Implementation Memo reflected the
intention that EPA is to take appropriate advance action to ensure
future compliance with the 8-hour standard, and that such action should
specifically include a regional strategy to reduce ozone and ozone
precursors such as NOX. It is not reasonable to assume that
EPA must wait up to three years for formal designation of nonattainment
areas, much less the additional three years for development of
nonattainment SIPs or up to twelve years for full compliance, before it
may take appropriate action to address interstate transport under
section 110(a)(2)(D)(i), whether in the form of the NOX SIP
Call, as specifically contemplated in the Implementation Memo, or
otherwise under section 126. At the time of the Implementation Memo,
EPA had not yet proposed to take action on the section 126 petitions
and thus the absence of references to those petitions is not
significant. Like the NOX SIP Call, EPA's action under
section 126 is based upon a finding of significant contribution by
sources in upwind States. Like the NOX SIP Call, EPA's
action on the section 126 petitions is premised on the need to achieve
regional reductions in ozone and ozone precursors in order to enable
all States to achieve the 8-hour standard expeditiously. EPA's finding
under section 126 is consistent with the Implementation Memo.
D. EPA's Interpretation of Section 126: Remedy
In the NPR, EPA proposed a set of controls that would apply if any
of the petitions were granted. The EPA further proposed the maximum of
the 3 years allowed by the statute from the date of the final approval
of a section 126 petition to the date that the affected upwind sources
must implement controls that EPA may promulgate. The EPA further
proposed that if the petitions were granted during the fall of 1999,
EPA would grant a maximum of 3 years from the beginning of the next
ozone season. The EPA received numerous comments on this aspect of the
rulemaking.
1. Three-Year Period
Some commenters sought a longer-than-3-year period, but EPA
continues to believe that the section 126(c) provisions that establish
this period should be interpreted as establishing a ceiling of no more
than 3 years for implementation.
2. Uniform Level of Controls
a. Comments
Commenters argued that EPA has not justified uniform control levels
on upwind sources in light of the varying impacts among the different
upwind sources and the downwind receptors. These commenters stressed
that in general, the greatest part of a downwind area's nonattainment
problem results from emissions local to the downwind area; that the
next greatest part of the problem results from emissions in adjoining
States; and that emissions from further upwind States are a relatively
small part of the problem. According to these commenters, it would be
more cost-effective in terms of ambient impact to focus more controls
on sources in the local and adjoining areas.
The commenters further stated that the fact that the section 126
petitions present fewer downwind receptors (compared to the
NOX SIP call) that are concentrated in the northeast renders
the uniform remedy particularly suspect. Commenters added that EPA
concerns about the difficulty of establishing a remedy with state-by-
state
[[Page 28290]]
variations was not a valid reason if state-by-state variations were
otherwise justifiable.
b. Response
The EPA's response to these comments is similar to EPA's response
to comments that EPA should establish a bright-line approach for
determining significant contribution. That is, EPA believes its uniform
approach to the remedy is reasonable, regardless of whether other
approaches would also be considered reasonable.
Moreover, EPA's approach to the remedy stems directly from its
interpretation of the significant contribution test. EPA's
interpretation incorporates the application of cost-effective controls
to determine the amount of emissions considered to contribute
significantly. This application is, by its terms, uniform among all
upwind sources.
EPA believes that this approach to the significant contribution
determination, and thus to the remedy, is reasonable. As noted above,
sections 126(b)/110(a)(2)(D)(i)(I) do not include criteria for defining
and applying the significant contribution test. In addition, section
126(c) does not include criteria for determining the level of controls
that EPA is authorized to promulgate (except for the general
requirement that the controls must be designed to ``bring about
compliance with the requirements contained in'' section
110(a)(2)(D)[(i)] as expeditiously as practical, but in no case later
than three years after the date of such finding).
In particular, Congress did not provide any requirement that local
sources or adjoining sources are obligated to implement reductions
sooner, or to a greater degree, than sources further away. Congress has
included comparable provisions under other requirements. For example,
the Clean Air Act Amendments of 1990 included section 182, which
established a five-step set of graduated controls on ozone
nonattainment areas. The level of control requirements for
nonattainment areas increase with the severity of their nonattainment
problem. At the lower and upper boundaries of this scheme, areas with
``marginal'' problems are required to implement a lighter level of
controls, section 182(a); and areas with ``extreme'' problems are
required to implement a much higher level of controls, section 182(e).
By comparison, in sections 126/110(a)(2)(D), Congress did not indicate
more stringent sets of controls on upwind areas that immediately adjoin
downwind states with nonattainment problems, and a lower level of
controls on the further upwind areas.
As an additional example, section 211(c)(4)(C) provides the test
for granting a waiver of Federal preemption for State fuel controls.
Under this test, EPA may approve the state fuel controls only after
finding that ``no other measures that would bring about timely
attainment exist, or if other measures exist and are technically
possible to implement, but are unreasonable or impracticable.'' This
provision illustrates that Congress knew how to require that control
schemes be prioritized, and Congress chose not to include such a
requirement in sections 126/110(a)(2)(D)(i)(I).
As noted above, under these circumstances, EPA believes that it has
discretion under Chevron to develop a reasonable interpretation that
gives effect to the statutory purposes of ameliorating air pollution
transport.
For the reasons described above, EPA believes it has a valid basis
for establishing controls that are highly cost-effective on section 126
sources in States whose overall NOX emissions contribute
significantly to nonattainment downwind. As noted above, this approach
is fully consistent with the approach Congress and EPA have taken in
many other instances in which controls have been imposed on other
sources. The EPA's approach results in controls on sources whose
emissions have a meaningful impact on nonattainment downwind, in light
of the collective contribution nature of ozone nonattainment problems.
In addition, as noted above, imposing a lower--or even a zero--
level of controls on sources that are further away, yet still emit into
the same air basin as the more highly controlled sources, would give
the lesser controlled sources a competitive advantage. This competitive
advantage runs contrary to one of the purposes of section 126, as
expressed by the legislative history, described above, of eliminating
the competitive advantages enjoyed by upwind sources at the expense of
downwind sources.
Further, for the NOX SIP call rulemaking, EPA conducted
air quality modeling that assumed lower levels of controls on sources
in certain upwind States. The results of this modeling generally
indicated that lower levels of controls in the further-away upwind
States resulted in fewer ozone reductions in the northeast
nonattainment areas, compared to a uniform, higher level of control.
See Air Quality Modeling Technical Support Document for the
NOX SIP call, Docket A-96-56, No. VI-B-11, p. 69.
The EPA believes that the above-described reasons fully justify its
decision to adopt, as the remedy, a uniform set of highly cost-
effective controls. As additional reasons, EPA notes that a non-uniform
remedy would create substantial administrative complexities, as
described in the NOX SIP call rulemaking. In addition, in
the NOX SIP call NFR, EPA determined that emissions in each
upwind state--including the section 126 sources in those states--
generally contribute to several downwind nonattainment problems under
the 1-hour NAAQS, and numerous downwind nonattainment problems under
the 8-hour NAAQS. For some of these downwind nonattainment problems,
the downwind states have submitted a section 126 petition for which EPA
is today granting an affirmative technical determination; for others,
the downwind State has recently submitted a section 126 petition; and
for others, the downwind States have not submitted a section 126
petition. Regardless, EPA believes that in determining whether a
contribution is significant, including assessing the cost-effectiveness
of the upwind controls, it is reasonable to recognize that in general,
those controls will result in benefits throughout several downwind
areas under the one-hour NAAQS, and numerous downwind areas under the
eight-hour NAAQS. This issue is further discussed in the NOX
SIP Call final rule, 63 FR 57404-57405. As a result, EPA believes that
the controls for each upwind State should be considered as providing
benefits for at least several, and in some cases many, downwind areas.
As a qualitative matter, the fact that the controls provide benefits in
numerous downwind areas significantly improves the efficacy of the
controls.
E. Obligations of Downwind States
1. Comments
Numerous commenters representing the interests of upwind sources
and States stressed that in many cases, the petitioning States have not
completed all of the SIP requirements to which they are subject under
the CAA Amendments of 1990. These commenters argued that the section
126 petitions should be denied on this basis.
2. Response
The EPA disagrees that incomplete SIPs would preclude EPA from
issuing findings requested by the section 126 petitioners concerning
upwind sources.
The EPA responded at length to comparable comments in the
NOX SIP call final rule, 63 FR 57380, and EPA incorporates
those responses into
[[Page 28291]]
today's action. In addition, EPA has included in the rulemaking docket
for today's action a set of tables identifying the SIP submittal
requirements applicable to various downwind nonattainment areas under
the 1990 CAA Amendments, and summarizing the progress made by the
downwind states in completing their requirements. Although the downwind
States have not yet complied with some SIP submittal requirements, they
have complied with the vast majority of those requirements.
In addition, neither section 126(b)-(c) nor section 110(a)(2)(D)
contains any requirements that the section 126 petitioners or other
downwind states complete their SIP requirements before they become
entitled to the section 126/110(a)(2)(D) protections. By comparison, in
other CAA provisions, Congress required compliance with SIP
requirements before a State with a nonattainment area would be eligible
for certain benefits. See section 107(d)(3)(E)(ii) and (v)
(nonattainment area may be redesignated to attainment only if, among
other things, SIP has been approved and State has met applicable
requirements); section 181(a)(5)(A) (nonattainment area may receive an
extension of attainment date if, among other things, State has complied
with all SIP requirements). Congress did not establish such strictures
with respect to the downwind State under sections 126(b)-(c) or
110(a)(2)(D)(i)(I).
In addition, as EPA pointed out in the NOX SIP call
final rule, 63 FR 57380, air quality modeling shows that even if the
downwind states were to comply fully with all of the specifically
required CAA controls, they would continue to experience nonattainment
problems to which emissions from sources in the upwind States are
contributing.
F. Effect of 1-Hour Attainment
In the section 126 NPR, EPA proposed which upwind States contain
sources of emissions named in the petitions that contribute
significantly to nonattainment problems in the petitioning States under
the 1-hour ozone standard, and where petitions were based on it, the 8-
hour ozone standard that EPA promulgated to replace the 1-hour ozone
standard. These linked upwind States, which are identified in Tables
II-1 and II-2 in the section 126 NPR (63 FR 56303), were based on
determinations made in the NOX SIP call. After the
publication of the section 126 NPR, two additional states, Maine and
New Hampshire, submitted petitions under the 8-hour ozone standard. EPA
published a supplemental proposal regarding those petitions on March 3,
1999 (64 FR 10342).
After publication of the section 126 NPR on October 21, 1998, EPA
preliminarily determined that the air quality data for 1996-1998 for
certain areas in the petitioning states indicated that those areas--
which were still violating the 8-hour ozone standard--were no longer in
violation of the 1-hour ozone standard. These areas were: Boston-
Lawrence-Worcester, Massachusetts-New Hampshire; Portland, Maine;
Portsmouth-Dover-Rochester, New Hampshire; and Providence, Rhode Island
(63 FR 69598, December 17, 1998).25 In addition, EPA
believes that the 1996-98 air quality data for Pittsburgh,
Pennsylvania, indicates that Pittsburgh has attained the 1-hour ozone
standard. If EPA reaches a final determination that these areas have
attained the 1-hour standard, EPA will conclude that the 1-hour
standard will no longer apply anywhere in Maine, New Hampshire, and
Rhode Island. The 1-hour standard will still apply to certain areas in
Massachusetts and Pennsylvania. Moreover, all of these areas currently
violate the new 8-hour standard that EPA promulgated to replace the 1-
hour standard.
---------------------------------------------------------------------------
\25\ Based on these data, EPA published a notice of proposed
rulemaking on December 17, 1998 (63 FR 69598), in which the Agency
proposed to determine that the 1-hour standard had been achieved in
these areas and would no longer apply to those areas.
---------------------------------------------------------------------------
Because EPA has preliminarily determined that these areas no longer
have air quality in violation of the 1-hour standard, EPA believes it
would not be appropriate for EPA to consider them as downwind receptor
areas for purposes of determining whether upwind areas are
significantly contributing to 1-hour nonattainment in these areas.
While EPA has not yet made a final determination that these areas are
attaining the 1-hour standard, EPA believes that, in light of the air
quality monitoring data for 1996-98 for these areas, it is prudent to
delete them as receptor areas for purposes of this action under section
126.
It is important to note that the more protective 8-hour ozone
standard applies in all of these areas. Pennsylvania, Maine,
Massachusetts, and New Hampshire all petitioned EPA under both the 1-
hour and 8-hour ozone standards. A determination that any of the areas
in these States has air quality meeting the 1-hour standard does not
affect EPA's significant contribution determinations under the 8-hour
standard with regard to 8-hour nonattainment and maintenance problems
in these States. Indeed, the deletion of these areas as receptor areas
for the 1-hour standard has no impact whatsoever on which States EPA
has identified as contributing to ozone problems in the petitioning
States. In fact, more upwind States were identified as contributors
based on the 8-hour standard than on the 1-hour standard. As no upwind
States were identified as contributors based solely on Rhode Island's
1-hour petition, the deletion of Rhode Island as a 1-hour receptor does
not affect the conclusions as to the identification of which sources
are significant contributors.
The original comment period on the section 126 NPR closed on
November 30, 1998, prior to EPA's preliminary determination that these
areas had monitored attainment of the 1-hour standard based on 1996-98
monitoring data. As discussed in Section I.G.2, at the request of two
commenters, EPA reopened the section 126 NPR comment period to take
comment on the impacts of the 1996-98 air quality data on the section
126 rulemaking.
The majority of the commenters agreed that EPA should deny
petitions based on the 1-hour standard that seek findings against
upwind sources with regard to downwind areas where the 1-hour standard
is met.
Several of the petitioning States commented that a determination
that an area had attained the 1-hour standard should not alter EPA's
proposed findings of significant contribution related to those specific
areas. The States argued that such a determination does not guarantee
that the 1-hour standard will be maintained in the future. Two of the
States suggested that favorable meteorology may have been a large
factor in the current attainment conditions and that the upwind sources
are still significantly impacting the areas.
As discussed in Section I.B., the 8-hour ozone standard is intended
to fully replace the 1-hour standard. However, when EPA promulgated the
8-hour standard, it decided that the 1-hour standard would continue to
apply in an area for an interim period until the area achieved
attainment of that standard. Once EPA makes a final determination that
the 1-hour standard is attained, the standard will be revoked and
States are expected to focus their planning efforts on developing
strategies for attaining the 8-hour standard. As mentioned previously,
attainment of the 1-hour standard does not impact EPA's action on a
petition under the more stringent 8-hour standard. To the extent that a
State has 8-hour ozone problems, a State may seek a finding under that
standard. In this rulemaking, a finding under the 8-hour standard
yields the same
[[Page 28292]]
requirements for upwind emissions reductions as a finding under the 1-
hour standard.
Several commenters said that the 1996-98 air quality data
indicating attainment of the 1-hour standard in some areas in the
Northeast indicates that there is a trend in air quality improvement,
even without the section 126 control measures and, therefore, the
petitions should all be denied. The EPA agrees that there are general
downward trends in ozone concentrations in the Northeast. The EPA has
reported the air quality changes over the 10-year period 1988 to 1997
in the document, ``National Air Quality and Emissions Trends Report,
1997'' (Trends Report) (EPA 454/R-98-016). However, EPA cautions that
the air quality trends are historical records of what has occurred and
alone do not indicate future trends. Ambient ozone trends are
influenced by year-to-year changes in meteorological conditions,
population growth, VOC to NOX ratios, and changes in
emissions from ongoing control measures. The EPA does not agree that
current trends indicate that new NOX control programs are
not necessary. Rather, the data help show that NOX and VOC
controls can be very effective in reducing ozone. Since passage of the
CAA Amendments in 1990, States have implemented many new VOC and
NOX emissions control programs which have helped to reduce
ozone levels. However, for many areas, these reductions have not been
sufficient to provide for attainment of the 1-hour and/or 8-hour
standard. In addition, the majority of the areas in the Northeast do
not show significant downward trends in emissions (See Trends Report
maps, pages 58-59). For example, New York City and Philadelphia show no
significant downward (or upward) trends for the 1-hour and 8-hour
standards over the past few years (See Trends Report, pages 160 and
162). In order to see future air quality improvements, EPA believes
additional control measures are necessary to reduce emissions and
offset growth. The section 126 petitions are one way in which States
are seeking to ensure that their transported emissions are reduced.
Furthermore, there is no basis for denying all of the petitions on
the basis of any such trend. All of the petitioning States contain
areas that violate the 8-hour standard and there are many areas in the
Northeast that still violate the 1-hour standard.
The EPA received comments that the modeling is flawed because it
projects 1-hour nonattainment for 2007 in areas for which the 1-hour
NAAQS is proposed to be revoked based on current monitoring data. The
most recent three years had meteorological conditions in the Northeast
such that the emissions during this time period did not result in
nonattainment in the identified areas. The extent to which
meteorological conditions are conducive to ozone exceedences in a
particular area varies from year to year. As noted above, several
commenters suggested that the meteorology during 1996-1998 in the
Northeast was not particularly conducive to high ozone. Thus, if
meteorological conditions similar to those modeled by OTAG and used for
the SIP Call occur in the future, it is expected that ozone
concentrations >=125 ppb would recur in these areas, which is
consistent with what the modeling predicts. The fact that
meteorological conditions vary is one of the reasons EPA relied on both
current monitoring and projected future modeled predictions to
determine which areas should be considered to be downwind nonattainment
receptors to provide a more robust test for that determination.
G-H. Weight of Evidence Determination of Named Upwind States
1. General Approach
The EPA proposed to rely on the conclusions it drew in the final
NOX SIP call rulemaking to determine whether the emissions
in named upwind States contribute significantly to the 1-hour and 8-
hour nonattainment and maintenance problems in the petitioning States.
26 In the final NOX SIP call rulemaking, EPA used
a weight-of-evidence approach involving various factors, including air
quality impacts. To determine this latter factor, EPA relied on three
sets of modeling information: the OTAG subregional modeling together
with other information such as emission density and transport distance,
confirmed by the State-by-State UAM-V zero-out modeling and the State-
by-State CAMx source apportionment modeling. The upwind State-to-
downwind nonattainment linkages in the final NOX SIP call
rulemaking were used as the basis for the proposed section 126
findings.
---------------------------------------------------------------------------
\26\ The maintenence standard does not apply in the case of the
1-hour NAAQS because, under the regulation EPA promulgated in
connection with the 8-hour NAAQS, once an area attains the 1-hour
NAAQS, EPA determines that the area is no longer subject ot it. For
convenience, references to nonattainment problems under the 8-hour
NAAQS also include the maintenance standard.
---------------------------------------------------------------------------
The EPA is using this same information and reaffirming these
linkages as the basis for the related affirmative technical
determinations in today's rulemaking, as well as the denials of parts
or all of certain petitions. Specifically, EPA evaluated the petitions
in terms of which upwind States named in each petition were found in
the NOX SIP call to contribute significantly to
nonattainment in the petitioning State. Separate determinations were
made for the 1-hour and 8-hour NAAQS. The technical details of the
modeling information are described in the final NOX SIP call
rulemaking. Except as noted below, EPA is today making affirmative
technical determinations concerning emissions from identified sources
found in upwind States whose overall emissions were determined in the
NOX SIP call final rule to contribute significantly to the
petitioning State's nonattainment problems. In making these affirmative
technical determinations, and in denying part or all of certain
petitions, EPA is reaffirming the findings it made in the
NOX SIP call final rulemaking concerning the upwind-State
downwind-nonattainment area linkages related to those determinations,
on the basis of the same technical data relied on in that rulemaking.
For this, EPA is primarily relying on the UAM-V State-by-state zero-out
modeling runs and the CAMX modeling runs.
The EPA received a number of comments on the modeling and other
technical information relied on in the proposal. Those comments which
are most relevant to the technical aspects of this rulemaking are
addressed below or in the RTC document.
2. Collective Contribution
The EPA received comments that it is inappropriate to use modeling
that evaluates the downwind contribution from all manmade emissions in
an entire State for the purposes of evaluating the section 126
petitions since these petitions request relief from large stationary
sources which are only a portion of the States' total emissions and/or
from sources located in only a portion of the upwind State. This
comment, and EPA's response, is discussed above.
As noted above, part of EPA's response to this comment refers to
the collective contribution approach. Under this approach, if the total
NOX emissions from an upwind State contribute significantly
to a downwind petitioning State, then each large stationary source's
emissions in the upwind State or portion of the upwind State covered by
the petition, is considered to be a significant contributor to
nonattainment. The EPA noted above that even though large point
sources, like those covered by the
[[Page 28293]]
126 petitions, are only a portion of the total NOX emissions
in each State, they comprise a sizable portion of the NOX
inventory. For 17 of the 20 jurisdictions (Connecticut, Rhode Island
and the District of Columbia are the exceptions) NOX
emissions from electricity generating units and non-electricity
generating point sources comprise at least one third of Statewide
NOX emissions. Thus, EPA continues to believe that the full
State modeling is appropriate to establish whether the named sources in
specific upwind States contribute significantly to nonattainment in the
petitioning State.
3. U-Runs
The EPA received comments that it is necessary to specifically
evaluate the downwind contributions of large stationary sources.
Although, as noted above, EPA does not think this evaluation is
critical for today's rulemaking, EPA has performed a set of modeling
runs in which emissions from all utility point sources and large non-
utility point sources with boilers greater than 250 mmBTU were zeroed
out for select groups of States. All four OTAG episodes were modeled.
These model runs are referred to as the ``U runs.'' Further details
concerning these model runs are contained in the RTC document and in
the docket for this rulemaking (see Docket item number VI-D-23).
The EPA has reviewed the results of these runs which indicate that
sources covered by section 126 petitions provide meaningful ozone
reductions in downwind petitioning States. For example, in model run
``U-10,'' large stationary sources in Michigan, Indiana, Ohio,
Kentucky, West Virginia, and Virginia were zeroed-out. These States
closely approximate the non-OTR States petitioned by New York. The
results for run U-10 show contributions to nonattainment in New York of
>= 2 parts per billion (ppb) to 39 percent of the 1-hour exceedances,
>= 5 ppb to 14 percent of the 1-hour exceedances, and >= 10 ppb to 1
percent of the 1-hour exceedances.
4. UAM-V and CAMx Modeling and Metrics
A number of commenters said that zero-out modeling was flawed.
Several of these commenters submitted modeling based on CAMx. Other
commenters said that the CAMx source apportionment technique was flawed
and submitted modeling based on zero-out runs. The comments concerning
the technical adequacy of these modeling techniques are addressed in
the RTC document. The EPA relied on both UAM-V zero-out modeling and
CAMx source apportionment modeling in order to identify the significant
upwind-downwind linkages. In the evaluation by EPA of contributions for
individual linkages, both modeling techniques had to indicate a
significant contribution in order for the linkage to be found
significant. After reviewing the comments submitted by proponents and
opponents of each of these two modeling techniques, EPA has concluded
that the most technically credible approach is to continue to rely on
both techniques and not base its decisions of the significance of
individual linkages on one technique or the other. This is discussed in
further detail in the RTC document.
Several commenters submitted a technical report intended to
quantify the uncertainty in the UAM-V model predictions. These
commenters argued that the contributions which EPA found significant
are within the ``noise'' of the modeling. The EPA has reviewed that
study and determined that (1) the results do not indicate any bias in
the model predictions as being either too high or too low and (2) there
is no indication of any bias in the model's response to emissions
reductions or the ability of the model to predict the contribution of
emissions in upwind States to downwind nonattainment. This is discussed
in further detail in the RTC document.
Several commenters made general assertions that EPA was not clear
in its definition of significant contribution, and was inconsistent,
subjective, or arbitrary in its determination that certain States do
not make a significant contribution, but that other States do. EPA
believes that its definition of significant contribution is reasonably
clear and consistently applied. EPA's examination of the linkages
raised by the commenters does not reveal inconsistencies. This issue is
discussed further in the RTC.
In the proposal EPA requested comment on the individual upwind-
downwind linkages and, in particular, the linkages between some of the
more distant States, such as Alabama to Pennsylvania and Missouri to
Pennsylvania.
Several commenters were critical of EPA's finding that emissions
from Missouri contribute significantly to 8-hour nonattainment in
Pennsylvania. One of these commenters submitted an analysis of
contribution using many of the metrics EPA calculated from the State-
by-State zero-out and source apportionment modeling. In this analysis,
the commenter applied numerical criteria, used as a bright-line test,
to judge the significance of the contributions indicated by each
metric. The commenter then applied a numerical scoring system to
evaluate the overall significance of each individual linkage. The
commenter used the results of this analysis to argue that Missouri does
not contribute significantly to Pennsylvania. The EPA agrees that the
scoring system concept provides a way to quantify and numerically
compare the significance of individual linkages. However, the commenter
provided no technical justification for the criteria used in this
analysis or for selecting the cut-off value used to determine whether
or not the final score for each linkage indicates a significant
contribution. The EPA disagrees that using a single final cutoff value
is the appropriate way to distinguish between significant and
insignificant contributions. In this regard, EPA believes that
technical judgement, based on an evaluation of all of the metrics for
each linkage, as described elsewhere in today's rulemaking, is
necessary for decisions on which linkages are significant.
Regarding the linkage between Alabama and Pennsylvania under the 8-
hour NAAQS, several commenters submitted an independent study of EPA's
modeling of Alabama's contribution to 8-hour nonattainment in
Pennsylvania. These commenters concluded from this study that the
largest contributions from Alabama occur in Pennsylvania on a single
day in one episode. The study also includes a limited comparison of the
observed winds at 7 a.m. each day against the corresponding wind data
used in the modeling. For some wind observation stations between
Alabama and Pennsylvania, the data presented in the study indicate that
the observed winds are more westerly and/or northwesterly than those
used in the modeling. The commenter also notes uncertainties in the
modeled wet deposition calculations and modeled ozone overpredictions.
The commenter concludes from these data that in light of ``improper
model assumptions'', a determination of a significant impact on 8-hour
nonattainment in Pennsylvania is arbitrary.
The EPA has reviewed the data submitted by the commenters along
with the transport pattern of ozone from Alabama predicted by both the
UAM-V zero-out and the CAMx source apportionment modeling together with
the full set of data concerning observed and modeled winds aloft. Based
upon a comprehensive review of observed and modeled data, EPA concludes
that (1) the winds used in the model adequately represent the transport
pattern between
[[Page 28294]]
Alabama and Pennsylvania during this time period, (2) model performance
was acceptable for the full domain and the Southeast and Midwest OTAG
regions (3) EPA is not aware of errors in the modeling due to wet
deposition calculations and (4) the ozone ``plume'' from Alabama is
geographically extensive, covering a large portion of Pennsylvania, as
indicated by both the zero-out and source apportionment modeling. Thus,
there is no basis for EPA to change its conclusion relative to the
significance of Alabama's contribution to 8-hour nonattainment in
Pennsylvania. This is discussed further in the RTC document.
Several commenters stated that EPA's modeling indicates that much
of the downwinds' ozone problem is due to local emissions. The EPA
agrees that local emissions are a large part of the overall ozone
problem in most major cities in the OTAG region. However, the
collective contribution from upwind sources to ozone in these areas is
also quite large. For example, the average contribution from upwind
manmade emissions to 1-hour nonattainment in New York City is 45
percent (28 percent from States outside the Northeast), 83 percent in
Greater Connecticut (21 percent from States outside the Northeast), and
32 percent in the Philadelphia nonattainment area (all from States
outside the Northeast).
Some commenters questioned why the available modeling information
was not sufficient for EPA to make a final decision on whether certain
States in the OTAG domain (e.g., New Hampshire, Maine, and Vermont)
contribute significantly to nonattainment in downwind States. As stated
above, EPA primarily relied on two types of modeling for making a
determination of significant contribution. This included State-by-State
UAM-V zero-out and CAMx source-apportionment modeling. For an upwind-
downwind linkage to be significant, contributions from both of the
State-by-State techniques had to show significant contributions. For 15
States in the OTAG domain, including those identified by these
commenters, EPA does not have a complete set of modeling comparable to
that relied on for those States found to be significant. Thus, as part
of the NOX SIP call, EPA deferred taking final action on
these States. This is discussed further in the RTC document.
The upwind States that were named by the petitioners and which are
found to contain sources that make a significant contribution to
nonattainment in the petitioning States are based on the upwind-
downwind linkages found to be significant in the NOX SIP
call. The exception to this is Maine's petition for relief from
emissions in North Carolina. In its petition, Maine requested relief
from large stationary sources within a 600 mile radius of the
southwestern most nonattainment area in Maine. This radius includes
several counties in the extreme northeastern portion of North Carolina
that do not contain sources of the type and size identified in Maine's
petition. Thus, even though EPA found that emissions in North Carolina
contribute significantly to 8-hour nonattainment in Maine, EPA is
denying Maine's petition relative to North Carolina because there are
no section 126 sources located in the portion of North Carolina covered
by Maine's petition.
The significant upwind-downwind linkages applicable to the section
126 petitions are listed in Tables II-1 for the 1-hour NAAQS and Table
II-2 for the 8-hour NAAQS. The linkages in Table II-1 take into account
the recent revocations of the 1-hour NAAQS for certain 1-hour
nonattainment areas. All of the information contained in the docket of
the NOX SIP call rulemaking that is relevant to the
determination of significant contribution is incorporated by reference
into today's rulemaking.
Table II-1.--Named Upwind States Which Contain Sources That Contribute Significantly to 1-Hour Nonattainment in
Petitioning States
----------------------------------------------------------------------------------------------------------------
Petitioning state (nonattainment area) Named upwind states
----------------------------------------------------------------------------------------------------------------
New York (New York City)............... DC, DE, IN, KY, MD, MI, NC, NJ, OH, PA, VA, WV.
Connecticut (Greater Connecticut)...... DC, DE, IN*, KY*, MD, MI*, NC*, NJ, NY, OH, PA, VA, WV.
Pennsylvania (Philadelphia)............ NC, OH, VA, WV.
Massachusetts (Western Massachusetts).. WV.
Rhode Island........................... None.*
Maine.................................. None.**
New Hampshire.......................... None.**
Vermont................................ None.**
------------------------------------------------------------------------
Total.............................. DC, DE, IN, KY, MD, MI, NC, NJ, NY, OH, PA, VA, WV.
----------------------------------------------------------------------------------------------------------------
* Upwind States marked with an asterisk are considered to significantly contribute because they contribute to an
interstate nonattainment area that includes part of the petitioning State. Part of Connecticut is included in
the New York City nonattainment area.
** Based on 1996-1998 air quality monitoring data, EPA cannot now determine that areas in these States continue
to be in nonattainment for the 1-hour NAAQS.
Table II-2.--Named Upwind States Which Contain Sources That Contribute Significantly to 8-hour Nonattainment in
Petitioning States
----------------------------------------------------------------------------------------------------------------
Petitioning state Named upwind states
----------------------------------------------------------------------------------------------------------------
Pennsylvania........................... AL, IL, IN, KY, MI, MO, NC, OH, TN, VA, WV.
Maine.................................. CT, DC, DE, MA, MD, NJ, NY, PA, RI, VA.
Massachusetts.......................... OH, WV.
New Hampshire.......................... CT, DC, DE, MD, MA, NJ, NY, PA, RI.
[[Page 28295]]
Vermont................................ None.
------------------------------------------------------------------------
Total.............................. AL, CT, DC, DE, IL, IN, KY, MA, MD, MI, MO, NJ, NY, NC, OH, PA, RI, TN,
VA, WV.
----------------------------------------------------------------------------------------------------------------
The EPA concluded from all of the information considered that the
20 jurisdictions listed below contain sources that make a significant
contribution to nonattainment in, or interfere with maintenance by, one
or more petitioning States under the 1-hour and/or the 8-hour NAAQS:
Alabama,
Connecticut,
Delaware,
District of Columbia,
Illinois,
Indiana,
Kentucky,
Maryland,
Massachusetts,
Michigan,
Missouri,
New Jersey,
New York,
North Carolina,
Ohio,
Pennsylvania,
Rhode Island,
Tennessee,
Virginia, and West Virginia.
I. Identifying Sources
As discussed previously in Section I.D., all of the petitions named
specific upwind source categories as significantly contributing to
nonattainment in, or interfering with maintenance by, the petitioning
State. Four petitioning States (Massachusetts, New Hampshire, New York,
and Rhode Island) also attempted to identify the existing sources in
the targeted source categories. However, the petitioners cautioned EPA
that the lists might not be complete and that any omissions were
unintentional. In addition, the EPA has received several comments from
sources on the State lists saying that they do not meet the source
category definitions provided in the petitions.
In the final NOX SIP call (63 FR at 57427), EPA provided
the opportunity for comment on source-specific inventory data revisions
for the data used to establish each State's base inventory and budget.
Furthermore, EPA extended that comment period to February 22, 1999 (63
FR 71221). At the same time, EPA reopened the comment period for the
proposed section 126 and the proposed FIP for the same source-specific
inventory data revisions. Based on these comments, EPA will be
finalizing a list of existing sources in the source categories for
which EPA is making an affirmative technical determination. These
sources will be included in the Federal NOX Budget Trading
Rule which EPA intends to promulgate in July. The source categories
named in the petitions that EPA is making affirmative technical
determinations are large EGU boilers and turbines and large non-EGU
boilers and turbines. The EPA's methodology for determining if a boiler
or turbine fits in the EGU or the non-EGU category and whether it is
large or small are explained below. The EPA's rationale for determining
that large EGU boilers and turbines and large non-EGU boilers and
turbines contribute significantly is explained in Section II.J below.
1. Proposed EGU Source Classification
The section 126 NPR proposed the same two-step approach as used in
the final NOX SIP call for determining which of the
following categories a boiler or turbine fits into: large EGU, small
EGU, large non-EGU, or small non-EGU. In the final NOX SIP
call, EPA first determined if a boiler or turbine should be classified
into the category of EGU or non-EGU. The EPA then determined if the
boiler or turbine should be classified as large or small.
The EPA used three sources of data for determining if an existing
generator's purpose included generation of electricity for sale and
thus qualified the unit connected to the generator as an EGU. First,
EPA treated as EGUs all units that are currently reporting under title
IV of the CAA. Second, EPA included as EGUs any additional units that
were serving generators reporting to the Energy Information
Administration using Form 860 in 1995. Form 860 is submitted for
utility generators. Third, EPA included units serving generators that
reported to Energy Information Administration using Form 867 in 1995.
Since Form 867 is submitted by non-utility generators, including
generators ``which consume all of their generation at the facility,''
EPA excluded any units for which EPA had information indicating that
the unit was not connected to any generators that sold any electricity.
This was determined by excluding units that were not listed as sources
that sell power under contract to the electric grid using the electric
generation forecasts of the North American Electric Reliability
Council.
Once EPA determined that a boiler or turbine should be classified
as an EGU, EPA considered that unit to be a large EGU if it served a
generator greater than 25 MWe and considered it a small EGU if it
served a generator less than or equal to 25 MWe.
The EPA explained that there are two important reasons that the
methodology outlined above is not appropriate to use on an ongoing
basis for new boilers or turbines. First, EPA was concerned about the
completeness of data using this methodology. The EPA had this concern
because there are limited consequences to not reporting to Energy
Information Administration and because EPA has no assurance that
sources will continue to be required to report to Energy Information
Administration using the same forms. Second, because of changes in the
electric generation industry and because of regulatory developments
such as the NOX SIP call, owners and operators of units may
have an incentive to install, operate and sell electricity from small
(25 MWe or less) generators connected to larger boilers or turbines
that are primarily used for industrial processes and not electricity
generation. Such sources could have significant NOX
emissions.
To ensure that owners and operators of such units did not install a
small generator and sell small amounts of electricity merely to
circumvent the requirements of this rule, EPA established a slightly
different process for categorizing units that commenced operation on or
after January 1, 1996. First, EPA explained it would classify as an EGU
any boiler or turbine that is connected to a generator greater than 25
MWe from which any electricity is sold. This would be based on
information reported directly to the State under the SIP (or EPA in the
case of a FIP or
[[Page 28296]]
section 126 action). The EPA stated that this addresses the first
concern about completeness of data, as discussed in the previous
paragraph. Second, if a boiler or turbine is connected to a generator
equal to or less than 25 MWe from which any electricity is sold, it
would be considered a small EGU if it has the potential to use more
than 50.0 percent of the usable energy from the boiler or turbine to
generate electricity. For example, this means that a 260 mmBtu boiler
connected to a 20 MWe generator that is used to generate some
electricity for sale would be considered a small EGU. On the other
hand, a 600 mmBtu boiler connected to a 20 MWe generator that is used
to generate some electricity for sale would be considered a large non-
EGU. This addressed EPA's second concern (discussed in the previous
paragraph) about owners or operators of large boilers and turbines that
have small generators.
All other boilers and turbines (including boilers and turbines
connected to generators equal to or less than 25 MWe from which any
electricity is sold and which have the potential to use 50.0 percent or
less of the usable energy from the boiler or turbine to generate
electricity) were considered non-EGUs. The EPA stated that it will use
the process described below to classify those units as large or small.
The EPA stated that, once a unit had been classified in the base
inventory, EPA did not intend to reclassify that unit, but explained
that it might reconsider unit classification in 2007 along with the
2007 transport reassessment.
2. Proposed Non-EGU Boiler and Turbine Source Classification
In the section 126 NPR, the non-EGU point source categories that
EPA determined to be subject to the section 126 reduction requirements
are large boilers and turbines. The EPA proposed in the section 126 NPR
to use the same method to identify ``large'' and ``small'' non-EGU
boilers and turbines that was used in the final NOX SIP call
(for more detailed information refer to ``Development of Modeling
Inventory and Budgets for Regional SIP Call,'' September 24, 1998). The
methodology is as follows:
1. Where boiler heat input capacity data were available for a
unit, EPA used that data. Units with such data that are less than or
equal to 250 mmBtu are ``small'' and units greater than 250 mmBtu/hr
are ``large.''
2. Where boiler heat input capacity data were not available for
a unit, EPA estimated that data, as described in the NOX
SIP call NPR and SNPR. Units estimated to be greater than 250 mmBtu/
hr are ``large.''
3. Where boiler heat input capacity data were not available for
a unit and where the boiler capacity was estimated to be less than
250 mmBtu/hr, EPA checked 1995 point-level emissions for each unit.
If the 1995 average daily ozone season emissions were greater than
one ton, the unit was categorized as a ``large'' source; otherwise,
the unit was categorized as a ``small'' source.
3. Issues Raised by Commenters on EGU/Non-EGU Classification
One commenter, representing the pulp and paper industry, argued
that small cogeneration units should not be treated as EGUs and EPA
should continue to apply the exemption from treatment as utility units
established under new source performance standards (NSPS) and the Acid
Rain Program for cogeneration units that produce an annual amount of
electricity for sale less than one-third of their potential electrical
output capacity or equal to or less than 25 MWe. (Note that the
regulations implementing title IV converted the annual 25 MWe threshold
to 129,000 MWe hrs of electricity which is equivalent to 25 MWe per
hour times 8760 hours per year.) The commenter also noted that section
112 of the CAA defines ``electricity steam generating unit'' excluding
cogeneration units using the same thresholds. The commenter made
several assertions to support its argument. First, the commenter said
the classification of small cogeneration units would be contrary to 20
years of Agency precedent under the NSPS and Acid Rain programs. The
CAA encourages cogeneration by exempting small cogenerators below the
one-third/25 MWe trigger from the Acid Rain program and from section
112. Deviating from this historical precedent was not a logical
outgrowth of the proposed NOX SIP call since the proposed
NOX SIP call did not discuss that EPA would treat small
cogeneration units as EGUs or differently than under the NSPS and Acid
Rain programs. Second, the commenter argued the uniqueness of boiler
design, fuel type, and operations of individual industrial boilers
makes these units less amenable to achieving the utility standards.
Another commenter expressed concerns that defining ``electrical
generating units solely on the basis of electrical generating capacity
without regards to boiler size is patently unfair to a number of
industrial boilers.'' They explained that ``from a practical
standpoint, emissions from a 250 mmBTU/hr coal-fired industrial boiler
are the same whether it is used to generate electrical power or not.''
The commenter continued that EPA should treat all industrial boilers
alike whether or not they generate electrical power.
Several other commenters expressed concerns that the definition in
the trading rule was more inclusive than the definition used for
setting forth the control requirements. One commenter suggested
specific language to remedy this concern.
As EPA explained in a clarification notice published on December
24, 1998 (See 63 FR at 71223), EPA used two classification methods to
determine whether a unit should be classified as an EGU or a non-EGU.
One method (based on whether a unit served a generator from which
electricity was sold under a firm contract) applied to units that were
in existence in 1995 and were part of the base year emission inventory,
and the other method (based on whether a unit serves a generator from
which any electricity is sold) applies to units that came into
existence on or after January 1, 1996. Both of these methodologies are
explained above (in sections II.I.C1 and C.2 ). In addition, the
methodology used to classify units in the base-year inventory was
explained in the document, ``Development of Modeling Inventory and
Budgets for Regional NOX SIP call.'' A draft of this
document was issued on March 23, 1998 and a final document was issued
on September 24, 1998, and is available in the NOX SIP call
docket.
The methodology used to classify existing units as EGUs or non-EGUs
was based upon whether or not a unit was connected to a generator that
produced electricity for sale under firm contract to the grid. Since
most industrial units are not currently involved in sales under firm
contract to the grid, this leads to most industrial cogeneration units
being classified as non-EGUs. The EPA has several concerns about
changing from this methodology to a methodology based upon a one-third
potential capacity/25 MWe threshold, as suggested by the commenter. The
first is that EPA has not used that threshold in the rulemaking to
date, and does not have information on all existing units necessary to
apply that threshold to all the units. For example, EPA does not have
information to identify all the units that actually cogenerate and the
information on how much electricity is sold from these units. The
commenter did not even identify the units owned by its members, much
less provide that information for identified units.
Second, if EPA did have the information for each unit to determine
if the unit's classification should be changed, EPA is concerned that
the classification for a number of units would change, apparently none
of
[[Page 28297]]
which are owned or operated by the commenter's members. The commenter
noted that changing the definition to be based upon a one-third
potential capacity/25 MWe threshold ``would not alter the Agency's
baseline emissions inventory.'' Since the commenter never identified
any existing units where classification is different in the inventory
under the Agency's classification method than under the commenter's
classification method, EPA concludes that changing the methodology
would not change the inventory classification of any units owned or
operated by the commenter's members. The EPA believes that this is
because using the criteria of selling under firm contract to the grid
classifies most industrial units that generate small amounts of
electricity as non-EGUs rather than EGUs.
However, EPA maintains that there is the potential that a number of
other units could be reclassified if EPA applied the one-third
potential capacity/25 MWe threshold. This could change the
classification of a large EGU to a large non-EGU, the classification of
a large non-EGU to a large EGU or the classification of a small EGU to
a large non-EGU. For example, a unit that is currently classified as a
large EGU could become a large non-EGU if, even though the unit was
selling electricity under a firm contract, it sold less than one third
of its potential electrical output capacity. An independent power
producer unit that is connected to a generator greater than 25 MWe and
that cogenerates and provides both steam and electricity could fit into
this category. A unit that is currently classified as a large non-EGU
could become a large EGU if it did not sell power under a firm
contract, but did sell more than one third of its potential electrical
output capacity. An industrial boiler that cogenerates and is connected
to a generator greater than 25 MWe could fit into this category. A unit
that is currently classified as a small EGU and sells under firm
contract, but less than one-third of its potential electrical output
capacity, could become a large non-EGU if the unit was greater than 250
mmBtu and the generator to which it was connected was less than 25 MWe.
An independent power producer unit that cogenerates could fit into this
category. In short, the adoption of the commenter's classification
methodology could result in reclassification leading to more stringent,
rather than less stringent, regulation of some cogeneration facilities
The EPA also does not agree with the commenter's arguments: (1)
That deviating from the classification that EPA has used for
cogeneration units for 20 years was not a logical outgrowth of the
proposed NOX SIP call and that no discussion was included in
the proposal that small cogeneration units would be treated as EGUs or
differently than under the NSPS and Acid Rain programs; or (2) that the
uniqueness of boiler design, fuel type, and operations of individual
industrial boilers makes these units less amenable to achieving the
reduction requirements for large EGUs.
In prior regulatory programs, EPA has used the criteria of
producing an annual amount of electricity for sale less than one-third
of a unit's potential electrical output capacity or less than 25 MWe.
However, these criteria were not applied in the same way in each of
these prior programs and recent, ongoing changes in the electric power
industry undermine the basis for the criteria, and justify using
different criteria for the new units, in today's action. The Agency
began using the one-third potential capacity/25MWe cutpoint in 1978, in
40 CFR part 60, subpart Da, setting forth new source performance
standards for ``electric utility steam generating units.'' In that
case, the cutpoint was not used to exempt units entirely from NSPS.
Rather, it was used to classify them as either ``electric utility steam
generating units'' that would be subject to the new standards under
subpart Da or to classify them as non-utility steam generating units
that would continue to be subject to the requirements under subpart D
and would subsequently become subject to more stringent standards for
``Industrial-Commercial-Institutional Steam generating units'' under
subpart Db. As the commenter noted, this distinction between utility
and non-utility units continued under the Clean Air Act Amendments of
1990, in both title IV and section 112. This cutpoint applied to all
steam generating units, not just cogeneration facilities. The cutpoint
was used as a proxy for utility vs. non-utility ownership of the units,
the assumption being that a unit involved in electricity sales at or
below the cutpoint was owned by a company that was in a business other
than electric generation and so was a utility.
Since 1990 there have been dramatic changes in the electric power
industry associated with the emergence of competitive markets for
electricity generation where non-utility generators compete to an
increasingly significant extent with traditional utilities. As these
changes occur, it becomes less and less appropriate to differentiate
between utilities and non-utilities that produce electricity. The
Energy Policy Act of 1992 reflected these types of changes in the
electric power industry by recognizing a whole new category of non-
utility generators, wholesale generators that directly compete with
utility generators. The Federal Energy Regulatory Commission's 1996
order adopting open transmission access and the actions of many States
(currently at least 18 States) that are in the process of deregulating
electric power generation have further blurred the distinction between
utilities and non-utilities. Other federal agencies that deal with the
power industry have realized that historical categorizations of the
industry are no longer appropriate. For instance, the Energy
Information Agency is in the process of streamlining its reporting
requirements so that there will no longer be a distinction between
reporting by utility generators and by non-utility generators.
In the NOX SIP call rulemaking, that EPA expressed
concern that, under a deregulated electricity market, it is important
to consider all NOX emissions sources that generate
electricity. For instance, in the supplemental notice of proposed
rulemaking under the NOX SIP call, EPA explained that:
Additionally, with deregulation of electric utilities, it is not
clear how ownership of the electricity generating facilities will
evolve. Therefore, EPA proposes to include all large electricity
generating sources, regardless of ownership, in the trading program.
As there is no relevant physical or technological difference between
utilities and other power generators, the same monitoring provisions
and the size cut-off of greater than 25 MWe are applicable to all
units which serve generators. 63 FR at 25923.
With regard to the feasibility of meeting the ``utility''
standards, the above commenter made several technical arguments about
why non-utility units are fundamentally different from utility sources.
In particular, the commenter argued that because of the need to vary
loads significantly, many industrial boilers cannot operate at the
conditions required to obtain maximum NOX reduction using
combustion controls. In addition, the commenter argued that pulp and
paper mill boilers have technical limitations on the installation of
selective catalytic reduction (SCR) and selective non-catalytic
reduction (SNCR), due to wide and rapid load and lower operating
temperatures. Furthermore, the commenter does not believe there will be
a significant number of allowances available or that the assumption of
allowance availability should be used to justify higher costs for
industrial sources. Moreover, the commenter argues that some affected
States have expressed hesitancy to participate in
[[Page 28298]]
interstate or even intrastate NOX trading programs.
The EPA continues to believe that industrial cogeneration units can
achieve similar NOX emission reductions as utility units.
Post-combustion NOX control technologies, like SNCR and SCR,
are available to industrial units that cannot achieve NOX
reductions using combustion controls. Both SCR and SNCR are proven
technologies demonstrated on industrial and utility units, including
paper and pulp industry units. See White Paper--Selective Catalytic
Reduction (SCR) for Controlling NOX Emissions, ICAC, 1997
and White Paper--Selective Non-Catalytic Reduction (SNCR) for
Controlling NOX Emissions, ICAC, 1997. At the same time,
this rulemaking provides for multiple compliance options including
trading of allowances. The Agency believes that a significant number of
allowances will be available for trading. The Integrated Planning Model
(IPM) analysis shows a significant number of allowances will be
available in 2003 when trading begins (see the Regulatory Impact
Analysis for further discussion). The compliance supplement pool also
provides further allowances in the trading market (see compliance
supplement pool discussion in Section III below). In addition, EPA is
aware of several States in the process of developing a trading program
under the NOX SIP call. Furthermore, a trading program will
be promulgated for this section 126 rulemaking.
For all of these reasons, EPA believes that it is appropriate to
consider all units that generate electricity for sale as one source
category, regardless of whether the owners and operators of the units
are traditional utilities, independent power producers, or industrial
companies. (Indeed, it may be appropriate at some time in the future to
consider all units generating electricity, whether for sale or internal
use, as a single category). However, for purposes of this rulemaking,
EPA is continuing to apply to existing units the definition of EGU
based on firm-contract sales, essentially as clarified in the December
24, 1998 correction notice. This definition does not classify either
all existing or new units that generate electricity, or all existing or
new units that generate electricity for sale, as EGUs. For example,
industrial units that generate electricity only for internal use will
be considered non-EGUs. Furthermore, most existing industrial units
that sell small amounts of electricity will also not be considered
EGUs, because most of these units do not sell electricity under firm
contract. Even though EPA is not basing the EGU and non-EGU definitions
on the one-third potential capacity/25 MWe threshold supported by the
commenters, EPA believes that the definition for existing units
classifies the units of the commenter's members in a way that is
consistent with the way the commenters have suggested those units
should be classified, i.e., as non-EGUs.
The EGU and non-EGU definitions based on any sales of electricity
will apply to units that commence operation on or after January 1,
1999. These definitions will not apply to any of the units referenced
by the commenter (e.g., the units referenced, but not identified, in
the commenter's April 7, 1999 comments for which the commenter provided
information on actual, annual electricity sales). Thus, in general, any
new units that serve generators involved in electricity sales will be
EGUs. The EPA intends to make parallel clarifications to the definition
of EGU under the NOX SIP call rulemaking. The EPA believes
that the definition of EGU needs to be consistent across the
NOX SIP call, section 126, and FIP rulemakings because it is
possible that at one time a source might be subject to control
requirements under one of these mechanisms, while at another time a
source might be subject to control requirements under another one of
these mechanisms. Changing the category that a source has been placed
in because of this change in regulatory structure could be confusing
and burdensome for the source.
While EPA is not including all sources that generate electricity
for sale or internal use as EGUs at this time, EPA may for all of the
reasons explained above, consider whether this would be appropriate in
future rulemakings.
4. Final Rule EGU/Non-EGU Classification
In summary under today's final rule, EPA will take a three-step
approach to determining which of the following categories a boiler or
turbine fit into: large EGU, small EGU, large non-EGU, or small non-
EGU. First, EPA will determine the date upon which a unit commenced
operation. Second, EPA will determine if a boiler or turbine should be
classified into the category of EGU or non-EGU by applying the
appropriate criteria depending on the date on which the boiler or
turbine commenced operation. Finally, EPA will determine if the boiler
or turbine should be classified as large or small.
For units that commenced operation before January 1, 1999, EPA will
classify as an EGU any boiler or turbine that sells any electricity to
the grid under firm contract. For units that commenced operation on or
after January 1, 1999, EPA intends, in general, to classify as an EGU
any boiler or turbine that produces any amount of electricity for sale.
Once EPA determines that a boiler or turbine should be classified
as an EGU, EPA then will classify the unit as a small or large EGU. For
a unit that commenced operation before January 1, 1999, EPA will
consider the unit a small EGU if it serves a generator less than or
equal to 25 MWe and a large EGU if it serves a generator greater than
25 MWe. For a unit that commenced operation on or after January 1, 1999
and sells any electricity, EPA will consider the unit a small EGU if it
serves a generator that is less than or equal to 25 MWe and that has
the potential to use more than 50 percent of the potential electrical
output capacity of the unit. Units that serve generators greater than
25 MWe and that sell any electricity will be considered large EGUs.
All other boilers and turbines will be considered non-EGUs. This
includes boilers and turbines that commence operation on or after
January 1, 1999 connected to generators equal to or less than 25 MWe
from which any electricity is sold and that have the potential to use
50 percent or less of the potential electrical output capacity of the
boiler or turbine. This also includes any unit that commenced operation
before January 1, 1999 that did not produce electricity for sale under
firm contract.
Non-EGUs will be considered large if their maximum rated heat input
capacity is greater than 250 mmbtu/hour and will be considered small if
their maximum rated heat input capacity is equal to or less than 250
mmbtu/hour.
The EPA intends to address comments related to inconsistencies
between this definition and the applicability requirements of part 97,
when EPA promulgates part 97 in July.
J. Cost Effectiveness of Emissions Reductions
As described in Section II.A, above, one part of the significant-
contribution interpretation that EPA applied in the NOX SIP
call rule, and that EPA applies for purposes of today's final rule, is
the extent to which ``highly cost-effective'' NOX control
measures are available for the types of stationary sources named in the
petitions27. As in the NOX SIP call
[[Page 28299]]
rule (63 FR at 57399) and the proposed section 126 rule (63 FR at
56304), the EPA has selected these highly cost-effective measures by
examining the technological feasibility, administrative feasibility and
cost-per-ton-reduced of various multi-state ozone season NOX
control measures in light of other actions taken by EPA and States to
control NOX.
---------------------------------------------------------------------------
\27\ As discussed in this section, the highly cost-effective
NOX controls happen to apply only to large stationary
sources. Under section 126, EPA can make a finding for ``any major
source or group of stationary sources.'' In other words, even if not
all sources subject to this action were major, they would be part of
a group of stationary sources that contribute significantly to
nonattainment and hence could potentially be subject to a finding.
---------------------------------------------------------------------------
1. Identifying Highly Cost Effective NOX Controls Levels
The first step in the process of determining cost effectiveness was
to identify the types of sources named in the various petitions. The
petitioning States have identified the source categories that they
believe significantly impact their ability to achieve attainment of the
ozone standard. These categories are listed in Table I-1 earlier in
this preamble. The EPA has determined that the named source categories
can be combined into one general category--fossil fuel-fired indirect
heat exchangers. This term applies to boilers and turbines used for the
production of steam, electricity, and in some cases mechanical work,
and to process heaters. To assure equity among the various
subcategories of such sources and the industries they represent, EPA
considered the cost effectiveness of controls for each subcategory
separately throughout the affected 20-jurisdiction region described in
Section II.B above. The EPA further subdivided the category of boilers
and turbines into two categories, those used to generate electricity
for sale and those used for all other purposes. Therefore, the EPA
split the population of indirect heat exchangers into the following
four subcategories, consistent with the approach EPA took in the final
NOX SIP call and the section 126 proposal: (1) Boilers and
turbines serving generators greater than 25 MWe that produce
electricity for sale to the grid (``large EGUs''); (2) boilers and
turbines with a heat input greater than 250 mmBtu/hr that exclusively
generate steam, produce mechanical work (e.g., provide energy to an
industrial pump), or produce electricity for internal use (``large non-
EGUs''); (3) process heaters with a heat input greater than 250 mmBtu/
hr (``large process heaters''); and (4) smaller indirect heat
exchangers, i.e., all such sources not included in the first three
subcategories (``small sources'').
As mentioned above, in evaluating the cost effectiveness of
NOX control levels for indirect heat exchangers, the EPA has
taken the same approach as that taken in the final NOX SIP
call (see 63 FR at 57399). In short, for each subcategory, the amounts
of emissions that cause subcategories in the covered upwind States to
contribute significantly to a petitioning State's nonattainment were
determined based on the application of NOX controls that
achieve the greatest feasible emissions reduction while still falling
within a cost-per-ton-reduced range that EPA considers to be highly
cost effective. The NOX control levels for this rulemaking
were considered highly cost effective for the purposes of reducing
ozone transport to the extent they achieve the greatest feasible
emissions reduction but still cost no more than $2,000 per ton of ozone
season NOX emissions removed (in 1990 dollars), on average,
for each subcategory. The discussion below further describes the basis
for this cost amount and the techniques used for each subcategory. The
EPA believes that certain control levels that cost more than $2,000 per
ton of NOX reduced are reasonably cost effective in reducing
ozone transport or in achieving attainment with the ozone NAAQS in
specific nonattainment areas. However, EPA is basing the significant-
contribution determination only on highly cost-effective reductions. In
addition, as discussed further below, in determining whether to assume
reductions from the small source subcategory, EPA considered
administrative burden.
More specifically, to determine what level of control can be
considered highly cost effective, EPA considered other recently
undertaken or planned NOX control measures. Table II-3
provides a reference list of measures that EPA and States have
undertaken to reduce NOX and their average annual costs per
ton of NOX reduced. Most of these measures fall below $2,000
per ton. The average cost effectiveness of these measures is
representative of the average cost effectiveness of the types of
controls EPA and States have needed to adopt most recently, since their
previous planning efforts have already taken advantage of opportunities
for even cheaper controls. The EPA believes that the cost effectiveness
of measures that it or States have adopted, or have proposed to adopt,
forms a good reference point for determining which of the available
additional NOX control measures are among the most cost-
effective measures that can be implemented by the sources considered in
today's action.
Table II-3.--Average Cost Effectiveness of NOXControl Measures Recently
Undertaken
(1990 $)
------------------------------------------------------------------------
Cost per
Control measure ton of NOX
removed
------------------------------------------------------------------------
NOX RACT................................................... 150-1,300
Phase II Reformulated Gasoline............................. a 4,100
State Implementation of the Ozone Transport Commission 950-1,600
Memorandum of Understanding...............................
New Source Performance Standards for Fossil Steam Electric 1,290
Generation Units..........................................
New Source Performance Standards for Industrial Boilers.... 1,790
------------------------------------------------------------------------
a Average cost representing the midpoint of $2,180 to $6,000 per ton.
This cost represents the projected additional cost of complying with
the Phase II reformulated gasoline NOX standards, beyond the cost of
complying with other standards for Phase II RFG.
The EPA notes that there are also a number of less expensive
measures recently undertaken by the Agency to reduce NOX
emission levels that do not appear in Table II-3. These actions include
the title IV NOX reduction program. Though these actions are
very cost effective, the Agency is focusing on what other measures
exist, at a potentially higher (though still not the highest
reasonable) cost effectiveness, that can further reduce NOX
emissions. Table II-3 is thereby useful as a reference of the next
higher level of NOX reduction cost effectiveness that the
Agency considers among the most reasonable to undertake. As a result,
the Agency concludes that NOX controls that can feasibly be
achieved and have an average subcategory-specific cost effectiveness
less than $2,000 per ton of NOX removed are highly cost
effective. The subcategories that EPA intends to control are those
major stationary sources in the named categories for which EPA finds
that these highly cost-effective controls are available.
2. Determining the Cost Effectiveness of NOX Controls
In an effort to determine what, if any, highly cost-effective mix
of controls is available for each subcategory (i.e., large EGUs, large
non-EGUs, large process heaters, and small sources) the Agency
considered the average cost effectiveness of alternative levels of
controls for each subcategory as described in the final NOX
SIP call (see 63 FR at 57400). That analysis is summarized below.
[[Page 28300]]
For purposes of this final rule, EPA is using cost-effectiveness
numbers developed for the final NOX SIP call. When EPA
finalizes its source-specific inventory data (as discussed in section I
above), EPA will revise the cost estimates for this action in
conjunction with promulgation of the trading portion of this section
126 rulemaking. The EPA does not anticipate that the revised cost-
effectiveness numbers will be significantly different from those in
today's action. This is due to the fact that unit-specific changes on
the inventory should be minimal. For example, EGU units should not
change significantly because the information used for NOX
SIP call inventory was based on CEM data. For non-EGUs, EPA anticipates
a small decrease in the number of affected sources as units move from
the large to small category. In addition, EPA concludes that the cost
of controls and reductions achievable do not vary significantly across
the region and removing the three States that are in the NOX
SIP call, but not in today's section 126 action, should not impact the
regionwide average cost effectiveness. This is due to the fact that
cost-effectiveness numbers assume trading among sources. Therefore,
today's rule will use the cost-effectiveness numbers developed for the
NOX SIP call.
As part of today's action, the Agency is describing the interim
final emission limitations that will be imposed in the event that a
section 126 finding is made and the Agency does not promulgate the
Federal NOX Budget Trading Program before such finding (see
Section IV.D below for further discussion). The EPA notes that the
cost-effectiveness analysis summarized below applies to the Federal
NOX Budget Trading Program and not the interim final
emission limitations. EPA is committed to establishing final
allocations and trading program provisions by July 15, 1999, well
before the date that sources need to comply with this action (May
1 ,2003), and thus, the cost-effectiveness analysis presented is
appropriate for today's rulemaking.
The average cost effectiveness of the controls was calculated from
a baseline level that included all currently applicable Federal or
State NOX control measures for each subcategory. The
baseline did not include Phase II and Phase III of the OTC
NOX MOU since those measures are not Federally required and
they have not yet been adopted by all the involved States;28
if the OTC NOX MOU were included in the baseline, the
overall costs would be lower. In determining the cost of NOX
reductions from large EGUs, EPA assumed a multi-state cap-and-trade
program. As discussed in the final NOX SIP call (see 63 FR
at 57400), EPA evaluated and compared the likely air quality impacts
both with and without a multi-state NOX cap-and-trade
program for electricity generating sources. This analysis showed that a
multi-state trading program causes no significant adverse air quality
impacts. Because such a program would result in significant cost
savings, EPA's cost-effectiveness determination for large EGUs (i.e.,
the majority of the core group of sources in the trading program)
assumes sources will participate in a multi-state trading
program.29 For non-EGU sources, EPA used a least-cost method
which is equivalent to an assumption of an intrastate trading program.
Under this method, the least costly controls, in terms of total annual
cost per ozone season ton removed, across the entire set of possible
source-control measure combinations are selected in order until the
required NOX emission budget is achieved. Inclusion of non-
EGU sources in a multi-state trading program would provide further cost
savings.
---------------------------------------------------------------------------
\28\ In the Regulatory Impact Analysis of the final
NOX SIP call, EPA evaluates an additional option of the
economic impact of including the Phase II and III OTC NOX
MOU in the baseline for the electric power industry.
\29\ Large EGUs in States covered by (1) the NOX
Budget Trading program under the section 110 NOX SIP
call, (2) the section 110 FIP, or (3) section 126, will be able to
trade among each other.
---------------------------------------------------------------------------
Table II-4 summarizes the control options investigated for each
subcategory covered by the petitions and the resulting average, multi-
state cost effectiveness as presented in EPA's final NOX SIP
call (see 63 FR at 57401). Additionally, the cost effectiveness
analysis included a consideration of each subcategory's growth,
including new sources. Thus, the control levels arrived at are also
cost-effective for new sources.
Table II-4.--Average Cost Effectiveness of Options Analyzed a
[1990 dollars in 2007]
------------------------------------------------------------------------
Average cost
effectiveness ($/
Source category ozone season ton)
for each control
option
------------------------------------------------------------------------
Large EGUs:
0.20 lb/mmBtu...................................... $1,263
0.15 lb/mmBtu...................................... 1,468
0.12 lb/mmBtu...................................... 1,760
Large Non-EGUs:
50% reduction...................................... 1,235
60% reduction...................................... 1,467
70% reduction...................................... 2,140
Process Heaters b:
$3,000/ton maximum per source...................... 2,860
$4,000/ton maximum per source...................... 2,896
$5,000/ton maximum per source...................... 2,896
------------------------------------------------------------------------
a The cost-effectiveness values in Table II-4 are regionwide averages.
The cost-effectiveness values represent reductions beyond those
required by title IV or title I RACT, where applicable.
b For process heaters, the table indicates that the same control
technology (at the same cost) would be selected whether the cost
ceiling for each source is $3,000, $4,000, or $5,000 per ton; thus the
average cost-effectiveness number for this source category is the same
in each column.
The following discussion explains the control levels determined by
EPA to be highly cost effective for each subcategory.
a. Large EGUs
As proposed (63 FR at 56306), for large EGUs, the control level was
determined by applying a uniform NOX emissions rate across
the 23 jurisdictions of the NOX SIP call which includes the
jurisdictions potentially subject to section 126 findings. The cost
effectiveness for each control level was determined using the IPM.
Details regarding the methodologies used can be found in the Regulatory
Impact Analysis. Table II-4 summarizes the control levels and resulting
cost effectiveness of three levels analyzed.
A regionwide level of 0.20 lb/mmBtu was rejected because, though it
resulted in an average cost effectiveness of less than $2,000 per ton,
the air quality benefits were less than those for the 0.15 lb/mmBtu
level, which was also less than $2,000 per ton.
Some commenters supported a control level based on 0.12 lb/mmBtu.
The EPA estimates that a control level based on 0.12 lb/mmBtu has a
cost effectiveness of $1,760 per ozone season ton removed, which is
within the upper range of cost effectiveness. This estimate is based on
the Agency's best estimates of several key assumptions on the
performance of pollution control technologies and electricity
generation requirements in the future. While the record strongly
supports EPA's
[[Page 28301]]
determination that a 0.15 lb/mmBtu trading program beginning in 2003
will not lead to installation of SCR technology at a level and in a
manner that will be difficult to implement or that will result in
reliability problems for electric power generation, the record is not
as clear with regard to a trading program based on a 0.12 lb/mmBtu
level (see Section II.K below for discussion of reliability and section
III.C for discussion of compliance date). Although 0.12 lb/mmBtu is
technically achievable, the record had data from only one boiler
achieving that level, Birchwood Unit I in Virginia. (See Performance of
Selective Catalytic Reduction on Coal-Fired Steam Generating Units,
EPA, June 25, 1997.)
With a strong need to implement a program by 2003 that is
recognized by the States as practical, necessary, and highly cost
effective, the Agency has decided to base the emissions budgets for
EGUs on a 0.15 lb/mmBtu trading level of control. This control level
has an average cost effectiveness of $1,468 per ozone season ton
removed 30. This amount is consistent with the range for
cost effectiveness that EPA has derived from recently adopted (or
proposed to be adopted) control measures.
---------------------------------------------------------------------------
\30\ It should be noted that in the final NOX SIP
call, EPA also investigated the regionwide cost effectiveness of
NOX reductions if each State individually met the budget
component for large electricity generting boilers and turbines
(i.e., through intra-State trading). In the case of the 0.15 lb/
mmBtu strategy, intra-State trading resulted in a regionwide cost
effectiveness of $1,499/ton compared to $1,468/ton for regionwide
trading.
---------------------------------------------------------------------------
b. Large Non-EGUs
As proposed (63 FR at 56306), EPA determined a highly cost-
effective control level for large non-EGUs by applying a uniform
percent reduction in increments of 10 percent. Details regarding the
methodologies used are in the Regulatory Impact Analysis. Table II-4
summarizes the control levels and resulting cost effectiveness for non-
EGUs.
For large non-EGUs, the cost-effectiveness determination includes
estimates of the additional emissions monitoring costs that sources
would incur in order to participate in a trading program. Some non-EGUs
already monitor their emissions. These costs are defined in terms of
dollars per ton of NOX removed so that they can be combined
with the cost-effectiveness figures related to control costs.
Monitoring costs for large non-EGU boilers and turbines are about $160
per ton of NOX removed.
Based on this information, the EPA determines that for large non-
EGUs, a control level corresponding to 60 percent reduction from
baseline levels is highly cost effective (this percent reduction
corresponds to a regionwide average control level of about 0.17 lb/
mmBtu).
c. Large Process Heaters
For large process heaters, the control level was determined by
applying various cost-effectiveness thresholds, because trading was not
assumed to be readily available for this subcategory. Details regarding
the methodologies used are in the Regulatory Impact Analysis. Table II-
4 summarizes the control levels and resulting cost effectiveness for
each option under this subcategory.
At proposal (see 63 FR at 56306), EPA determined that controlling
process heaters, though reasonably cost effective, is not highly cost
effective because all the options analyzed for these source categories
cost more than $2,000 per ton of NOX removed. Thus, EPA
concluded that these sources do not emit in amounts that significantly
contribute to petitioning States' nonattainment or maintenance
problems.
One commenter objected to EPA's proposed denial of section 126
petition with respect to large process heaters. The commenter argued
that implementation of the regional NOX budget program
adopted by the OTC indicates that a trading program is readily
available for such sources within the OTC. If such a program is
available in the OTC, the commenter questions why such a program is not
being imposed on sources under section 126.
Although a trading program is available for process heaters under
the OTC, EPA has determined that controlling process heaters across the
entire region covered by section 126 is not highly cost effective. If
EPA were to include monitoring costs in its cost-effectiveness number
and assume that a trading program would achieve a 30 percent reduction
in the cost-effectiveness number, controlling process heaters would
still cost more than $2,000 per ton of NOX removed. Thus,
for today's final rule, EPA concludes that process heaters do not emit
in amounts that significantly contribute to petitioning States'
nonattainment or maintenance problems.
d. Small Sources
At proposal (see 63 FR at 56306), for the subcategory of small
sources, EPA has determined that additional control measures or levels
of control are not highly cost effective and appropriate to mandate.
For the purposes of this rulemaking, EPA generally considers the
following sizes of point sources to be small: (1) electricity
generating boilers and turbines serving generators 25 MWe or less, and
(2) other indirect heat exchangers with a heat input of 250 mmBtu/hr or
less (see section I above for further discussion).
One commenter objected to EPA's denial of section 126 petitions
with respect to EGUs between 15 and 25 MWe. The commenter advocated
capping such sources at 1990 levels consistent with the OTC
NOX MOU. The commenter argued that this action would not
require additional controls in a market driven NOX control
program.
In the NOX SIP call (see 63 FR at 57402), EPA found that
the collective emissions from small sources were relatively small (in
the context of that rulemaking) and the administrative burden, to the
permitting authority and to regulated entities, of controlling such
sources was likely to be considerable. Even if EPA were not to apply
additional controls beyond capping small sources at 1990 levels, there
would be administrative costs that would be considerable in comparison
to the emissions reductions gained. Thus, this level of control is not
highly cost effective and appropriate to mandate. Furthermore, EPA
notes that the 25 MWe is approximately equivalent to 250 mmBtu/hr used
for small non-EGUs.
In today's action, for the same reasons as described in the final
NOX SIP call, EPA concludes that small sources do not emit
in amounts that significantly contribute to petitioning States'
nonattainment or maintenance problems.
e. Summary of Control Measures
Table II-5 summarizes the controls that are assumed for each
subcategory.
Table II-5.--Summary of Feasible, Highly Cost-Effective NOX Control
Measures
------------------------------------------------------------------------
Subcategory Control measures
------------------------------------------------------------------------
Large EGUs................................ State-by-State ozone season
emissions level (in tons)
based on applying a NOX
emission rate of 0.15 lb/
mmBtu on all applicable
sources assuming historic
ozone season heat input and
adjusting for growth to
year 2007.
[[Page 28302]]
Large Non-EGUs............................ State-by-State ozone season
emissions level (in tons)
based on applying a 60
percent reduction from
uncontrolled emissions on
all applicable sources
assuming uncontrolled ozone
season emissions and
adjusting for growth to
year 2007.
Large Process Heaters..................... No additional controls
highly cost effective.
Small Sources............................. No additional controls
highly cost effective.
------------------------------------------------------------------------
K. Feasibility of NOX Control Implementation Date
Some commenters asserted that a compliance deadline of May 2003 is
infeasible for completing the installation of the assumed
NOX controls. Some commenters argued that there are not
enough materials and suppliers to install NOX controls by
the May 2003 deadline. Other commenters expressed concern that
utilities will not have sufficient time to install NOX
controls without causing electrical power outages; these commenters
stated that such power outages would have adverse impacts on the
reliability of the electricity supply. Commenters also expressed
concern about the technologies EPA assumed could be used to meet the
2003 deadline and the cost assumptions for NOX control
technology.
As part of the NOX SIP call, the Agency conducted a
detailed examination of the feasibility of installing the
NOX controls that EPA assumed in developing the emissions
budgets for the affected States. See Feasibility of Installing
NOX Control Technologies By May 2003, EPA, Office of
Atmospheric Programs, September 1998. The Agency's findings are
summarized in the NOX SIP call final rule (63 FR at 57447).
Based on these findings, EPA believes that the compliance date of May
1, 2003 for NOX controls to be installed to comply with this
section 126 rulemaking is a feasible and reasonable deadline.
Furthermore, several utility plants have already begun installation
of SCR retrofits, indicating the ability of electric utilities to meet
the compliance date for the NOX SIP call without system
reliability concerns. These projects are summarized in Table II-6
below. For instance, the Tennessee Valley Authority (TVA) has publicly
announced its schedule to have all its units comply with the
NOX SIP call by 2003. This is quite significant, since TVA
operates more than 7 percent of the coal-fired capacity in the
NOX SIP call Region.
Table II-6.--Planned SCR Retrofit Projects
----------------------------------------------------------------------------------------------------------------
Unit size
Utility Plant (MW) Fuel Outage date
----------------------------------------------------------------------------------------------------------------
TVA............................... Allen 1.............. 300 Coal.............. Spring 2001.
Allen 2.............. 300 Coal.............. Spring 2002.
Allen 3.............. 300 Coal.............. Fall 2001.
Bull Run............. 900 Coal.............. Spring 2003.
Cumberland 1......... 1300 Coal.............. Spring 2003.
Cumberland 2......... 1300 Coal.............. Fall 2002.
Paradise 1........... 700 Coal.............. Fall 2000.
Paradise 2........... 700 Coal.............. Spring/Fall 1999.
Widows Creek 2....... 141 Coal.............. Spring 2003.
Widows Creek 7....... 575 Coal.............. Spring 2002.
AES............................... Kintigh.............. 655 Coal.............. Before 2003.
Associated Electric Cooperative... New Madrid 1......... 600 Coal.............. Before 2003.
New Madrid 2......... 600 Coal.............. Fall 1999.
Edison Mission Energy............. Homer City 1......... 660 Coal.............. Before 2003.
Homer City 2......... 660 Coal.............. Before 2003.
Homer City 3......... 692 Coal.............. Before 2003.
----------------------------------------------------------------------------------------------------------------
In addition, one commenter agrees that the controls are feasible in
terms of their supply, the time available for the needed installation
and the availability of vendors to effectively install them. The
commenter has assessed the feasibility of NOX SIP call
compliance by the affected sources in the context of electric system
reliability, as explained in a report Electric System Reliability--A
Red Herring to Delay Clean Air Progress, Ozone Attainment Coalition,
September 1998. This report shows that, even with conservative
assumptions about outage periods for the installation of SCR controls,
compliance with the SIP call can be achieved in aggregate by the
affected sources. Furthermore, the commenter has completed additional
analysis that concludes that SIP call compliance is a manageable
situation that will be accomplished during the non-peak periods of
electricity demand. The analysis estimates that SCR can be installed on
255 electric utility units as compared to EPA's estimate of 142 units
(see Electric System Reliability and the NOX SIP Call, Ozone
Attainment Coalition, Draft Report, April 1999).
The Agency is also providing compliance flexibility to sources for
the 2003 and 2004 ozone seasons by establishing State compliance
supplement pools. (See section IV.C.1.c for further discussion of
compliance supplement pool.)
The EPA also concludes from the German experience that reliability
should not be a problem. In the mid-1980s, West Germany required every
plant to meet a NOX emission rate of about 0.16 lb/mmBtu,
every half-hour all year long. Within a 3-year period, West Germany
retrofitted more than 80 percent of its coal-fired power plants with
SCR. The retrofitted, coal-fired plants represented about 33 percent of
the overall generation capacity of Germany, compared to 27 percent of
the U.S. in the final NOX SIP call (under section 126 this
percentage will be less since the rule covers three less States).
During this time, no brownouts are known to have occurred as a result
of the SCR retrofits, even though West German plants tend to have more
space restrictions than U.S. plants and it was
[[Page 28303]]
much more difficult for West Germany to import power from other
countries.
1. Cost Assumptions for SCR
One commenter has argued that the costs for installation of SCR are
50 percent greater than EPA's estimate and that SCR does not achieve
NOX removal greater than 83 percent. The commenter did not
provide the basis for its estimates.
The EPA maintains that SCR systems are achieving 90 percent or
greater NOX removal in applications demonstrated worldwide.
The SCR is a proven technology used to significantly reduce
NOX emissions from more than 300 sources in the U.S., and
more than 500 sources worldwide. By proper catalyst selection and
system design, NOX removal efficiencies exceeding 90 percent
can be achieved. In practice, commercial SCR systems often meet control
targets of over 90 percent. For further discussion see White Paper--
Selective Catalytic Reduction (SCR) for Controlling NOX
Emissions, ICAC, 1997.
The SCR control assumptions used by EPA are supported by actual SCR
applications. The Northeast States for Coordinated Air Use Management
(NESCAUM) and the Mid-Atlantic Regional Air Management Association
(MARAMA) prepared a comprehensive report on the status of technologies
to reduce emissions of NOX from electric utility boilers.
The report relied on real-world cost and operating experience from
actual installations of advanced NOX control technologies
(including SCR) at fourteen U.S. facilities involving 52 coal and gas/
oil-fired boilers. The report results demonstrate that available
technologies can achieve significant NOX emissions
reductions both cost effectively and reliably. The report states that
NOX emission rates of 0.15 and as low as 0.08 lb/mmBtu were
achieved at a cost of $400 to about $1500/ton. (See Status Report on
NOX Control Technologies and Cost Effectiveness for Utility
Boilers, Staudt, James E., NESCAUM/MARAMA Report, June 1988.) Note that
capital costs reported are comparable to EPA capital costs which were
given at $50-70/kW (in 1997 dollars). (See Analyzing Electric Power
Generation Under the CAAA, EPA, March 1998.)
The EPA used the information available from the existing retrofit
at Merrimack Unit 2 to corroborate its costing methodology. For this
330 MW cyclone-fired installation, designed for a 65 percent
NOX removal efficiency, the total capital cost was reported
to be $55/kW and cost effectiveness was $400/ton of NOX
removed (see NESCAUM/MARAMA Report, June 1988). This cost included the
addition of a significant amount of additional ductwork and support
steel required for this retrofit because of unusual space limitations.
The baseline NOX emission rate for this unit was also
unusually high (2.66 lb/mmBtu), thus requiring a relatively large and
expensive ammonia handling system. The capital cost estimate for the
Merrimack Unit 2 retrofit using EPA's cost model was $68.53/kW, which
was over 20 percent higher than the $55/kW actual cost reported. Thus,
this comparison confirms the conservatism of the EPA's cost methodology
and contingencies built into it.
2. Technology Deployment
Commenters maintained that EPA has overestimated the amount of SCNR
that will be installed as a result of the section 126 action. First,
commenters argued that SNCR NOX removal is between 15 and 35
percent, as opposed to EPA's estimate of 40 percent. Second, commenters
disagreed with EPA's assertion that there are no limits to the unit
capacity for commercial application of SNCR. Commenters maintained that
SNCR is limited to units with capacities no higher than 325 MW.
The EPA maintains that SNCR NOX reduction of 40 percent
is attainable and represents the mid-range efficiency achieved in
current utility boiler applications. The SNCR has been commercially
used on electric utility boilers to achieve in excess of 60 percent
NOX reduction while maintaining ammonia slip below 10 ppm.
(See NESCAUM and MARAMA, June 1998, Attachment C, p. 42.) Although this
performance may not be possible for every boiler, careful assessment of
factors impacting boiler performance (such as initial NOX
level, furnace temperature, flue gas flow and NOX
distribution profiles at various operating load conditions, and access
for injection of reagent) can result in increased NOX
reduction efficiency and reduced ammonia slip from SNCR systems.
Reported literature indicates that SNCR control efficiency on the
installed utility boilers ranges predominantly from 30 to 60 percent.
(See White Paper--Selective Non-Catalytic Reduction (SNCR) for
Controlling NOX Emissions, ICAC, 1997, p. 18.) Based on the
demonstrated experience in the electric utility and other industry, EPA
has suggested use of SNCR as a cost-effective option to achieve desired
emissions reductions. The EPA does not require use of SNCR and
acknowledges that some of the affected facilities may choose to install
SCR instead of SNCR and reduce emissions over and above what is
required by the NOX SIP call, as part of their compliance
and economic strategies.
The EPA also maintains that there are no limits to the unit
capacity for commercial application of SNCR. The size of the boiler
does not limit the ability to inject SNCR reagent into the combustion
gas flow to achieve NOX reductions, as demonstrated by
applications worldwide. The SNCR is a fully commercial NOX
reduction technology, with application of ammonia and urea-based
processes at approximately 300 installations worldwide, ranging up to
822 MW in size and covering a wide array of stationary combustion units
firing a variety of fuels. (See White Paper--Selective Non-Catalytic
Reduction (SNCR) for Controlling NOX Emissions, ICAC, 1997,
pp. 17-26.) Industrial boilers, process units, and municipal combustors
make up the largest share of commercial SNCR installations in the U.S.
This distribution appears to be a result of NOX control
regulations in place rather than SNCR's technical limitations. In the
U.S., the largest urea-based SNCR has been commercially applied to a
320 MWe pulverized coal-fueled, wall-fired electric utility boiler.
However, there are various commercial urea-based SNCR contracts in
place for larger units (e.g., one unit is as large as 620 MWe). (See
NESCAUM/MARAMA Report, June 1998, Attachment C, p. 44.) Additionally,
literature shows that one technology vendor has conducted a computer
simulation of SNCR application on some large size boilers and is
extending commercial performance guarantees for the same. (See CFD
Modeling of Urea-Based SNCR and Hybrid Performance on Large Utility
Boilers, Comparato, J.; Boyle, J.; and Michaels, W., ICAC Forum 1998,
pp. 1-8.) Based on this information, it is reasonable to conclude that
commercially available SNCR technology can be applied to large boilers,
and therefore, costs for utility NOX reductions have not
been underestimated.
To further address concerns on the potential size limitations for
SNCR raised by the commenters, EPA conducted a sensitivity analysis
using the IPM as part of the final NOX SIP call. In this
analysis, SNCR was applied to boilers 200 MWe or smaller only. This is
a conservative assumption considering application of SNCR on a boiler
as large as 320 MW has already been demonstrated. Additionally, it was
assumed that SNCR NOX reduction efficiency would be 35
percent for sources which emit NOX (prior to the
[[Page 28304]]
application of SNCR) at levels of equal to or more than 0.5 lb/mmBtu.
The SNCR efficiency was assumed to be limited to 30 percent for sources
which emit NOX (prior to the application of SNCR) at levels
less than 0.5 lb/mmBtu (i.e., low-emitting sources).
Results of the IPM sensitivity simulation, showed less of SNCR and
more of SCR is needed to achieve the required NOX budget
contributions. Specifically, there is a decrease of 33.3 gigawatts (GW)
of SNCR on coal-fired units and an increase of 24.7 GW of SCR
installation on coal-fired units. Cost of compliance for EGUs under the
sensitivity scenario are estimated to be about $1746 (1990 dollars) per
ton of NOX removed in 2007. Thus, even with reduced use and
effectiveness of SNCR, it is highly cost effective for EGUs to comply
with the section 126 requirements.
In addition to the cost of compliance, EPA examined the feasibility
of implementing the retrofits by September 2002 for the sensitivity
scenario. The IPM projections revealed that, in general, one to three
SCR or SNCR installations per plant would be expected. However, at one
plant a maximum of six SCR systems may be required. Based on these
projections and EPA's analysis of control technology retrofitting
schedules, it is reasonable to conclude that all of the necessary
engineering and air permitting activities can be accomplished by
September 2002.
Based on the above discussion, limiting SNCR applicability and
NOX control efficiency would not affect the feasibility of
implementing the controls by May 2003. Moreover, compliance with the
section 126 requirements would still be cost effective.
3. Catalyst Supply
One commenter has argued that EPA's estimates on the availability
of SCR catalyst are flawed because the Agency is underestimating the
number of EGUs that will be employing SCR technology.
The EPA has determined that ample supply of catalyst exists. One
major catalyst vendor has recently announced its plans to build a new
catalyst manufacturing plant by mid-year 2000, thus increasing the
current supply of available catalyst. In addition, a study of catalyst
availability during the NOX SIP call had concluded that
adequate capacity of SCR catalyst supply is believed to be available to
satisfy the demand that may result from the projected SCR
installations. (See Feasibility of Installing NOX Control
Technologies by May 2003, EPA, September 1998.) In addition, as
discussed above, EPA conducted a sensitivity analysis limiting SNCR
applicability and assuming a lower SNCR NOX reduction
efficiency. Even with the increase in projected SCR capacity under the
sensitivity scenario, the excess capacity in catalyst supply would be
sufficient to meet the demand over an implementation period of less
than 3 years. Given the findings of the sensitivity analysis and the
plans for building an additional catalyst plant, EPA infers there will
be sufficient catalyst supply for increased SCR installations.
4. Outage Periods
One commenter has submitted information reflecting that SCR
retrofits expected to result from the final rule could be placed in
three categories: cases with modest retrofit difficulty, cases with
intermediate retrofit difficulty, and cases with challenging retrofit
difficulty. The commenter suggested that a modestly difficult retrofit
will require about 4-6 weeks of outage for completing SCR installation;
a retrofit with intermediate difficulty will need 8-12 weeks; and a
challenging retrofit will need more than 14 weeks of outage.
The EPA has examined the information submitted by the commenter and
determined that this information is unsupported and speculative. The
commenter asserts that the length of the outage periods to install SCR
will vary, depending upon the size of the affected units and the degree
of access. According to the commenter, small units with reasonable
access will be modestly difficult retrofits. The commenter fails to
show a logical connection between the size of a unit and the degree of
retrofit difficulty in the case of an SCR installation, where the
emission controls are in a separate structure adjacent to the unit
itself. In EPA's view, a large unit with relatively unconstrained plant
layout may be easier to retrofit compared to a small unit with a
relatively constrained layout.
The commenter provides an example of a hypothetical ``intermediate
retrofit difficulty case'' in which access to the unit is constrained.
In this example, the commenter lists the activities to be completed and
the volume of material needed but does not provide any data relating
these activities to the time needed to complete them. In the absence of
this data, the commenter's claimed outage period for the example is
unsupported. However, EPA notes that in any construction project (such
as SCR retrofit), multiple activities can be conducted concurrently
and, if needed, more personnel can be deployed to expedite the project.
Therefore, even assuming, for the sake of argument, the commenter's
categorization of retrofit difficulty has some merit, the relationship
of this categorization to outage requirement is unsupported. The
commenter's assertion that the vast majority of SCR retrofits will be
of intermediate retrofit difficulty also is unsupported.
The EPA also notes that a large utility in Germany, which also
supplies SCR systems, completed each of its SCR retrofits in about 4
weeks. This utility also has informed EPA that SCR retrofit-related
work can be spread over two or three outages. (See Feasibility of
Installing NOX Control Technologies By May 2003, September
1998.) By spreading retrofit work over a few outages, if necessary,
plants would be able to avoid causing any impacts on the reliability of
electricity supply.
The EPA used IPM to look into the sensitivity of a number of the
model's assumptions, as discussed in Feasibility of Installing
NOX Control Technologies by May 2003. One of the sensitivity
runs considered the installation of 63 GW in 1 year and an increase of
the planned outage period to 9 weeks. This run can also be considered a
representation of the installation of 189 GW of SCR at coal-fired units
over a 3-year period (more than the commenter assumes will occur) with
9 weeks of planned outages each year (10 percent less than what the
commenter assumes will occur on average). In this sensitivity scenario,
increasing the amount of planned outage did not threaten the stability
of the power supply (deduced from the fact that no new units were built
in IPM simulations). What does occur is some shifting of power between
regions in and around the SIP call region, decisions for later existing
unit retirement, and increased use of gas-fired units and an overall
result of some increased cost of electricity production, but no
conditions that would necessitate a blackout. The total costs over 3
years amount to a small increase of about 1.3 percent in overall costs.
The increase in costs were found to be related to the need to
substitute available, idle power plants for those units taken off line,
which are more expensive to run.
L. Air Quality Assessment
In the proposal, EPA relied on air quality modeling in the final
NOX SIP call to evaluate the ozone benefits in the
petitioning States of NOX controls proposed in today's
action. That modeling was performed for the 23 jurisdictions covered in
the NOX SIP call to confirm that those States
[[Page 28305]]
collectively contribute significantly to downwind nonattainment. The
collective contribution of all the upwind States is one factor that
went into EPA's decision that each individual upwind State contributes
significantly to downwind nonattainment. The results of this modeling
indicate that the NOX controls applied to the sources in the
upwind States which make a significant contribution to nonattainment in
one or more of the petitioning States will provide substantial ozone
benefits in each of the petitioning States. As discussed below, the EPA
continues to believe that the results of that modeling analysis are
valid for the purpose of today's rulemaking, as well.
The modeling cited at proposal was based on UAM-V model runs for a
2007 Base Case and a control scenario designed to evaluate the effects
of NOX controls very similar to those in today's rulemaking
on nonattainment in downwind States, including each of the petitioning
States. The details of this modeling are described in the final
NOX SIP call rulemaking. Several commenters stated that this
modeling does not isolate the effects on ozone in the petitioning
States of controls applied outside the Northeast. As part of the
NOX SIP call rulemaking, EPA performed model runs which
provide the type of assessment similar to that requested by the
commenters. This modeling included a comparison of two control
scenarios. One scenario is identified above as having NOX
controls applied across all 23 jurisdictions. The other scenario
included the application of these same NOX controls in the
Northeast only. The difference in ozone predictions between these two
scenarios shows the effects in the Northeast of NOX controls
applied outside this region. A full description of this modeling and
the metrics used to evaluate the results are described in the final
NOX SIP call rulemaking.
The results indicate that controls similar to those in today's
rulemaking will produce large reductions in ozone concentrations in the
petitioning States. For example, the number of modeled exceedences of
the 1-hour NAAQS that are reduced by upwind controls include a 16
percent reduction in New York City, a 38 percent reduction in
Philadelphia, and 43 percent reduction in western Massachusetts. Also,
for the 8-hour NAAQS, the number of exceedences reduced by upwind
controls is 7 percent in New York, 10 percent in Massachusetts, and 32
percent in Pennsylvania. Thus, the results of this modeling indicate
that the proposed NOX controls applied to the sources in the
upwind States proposed as making a significant contribution to
nonattainment in one or more of the petitioning States will provide
substantial ozone benefits downwind in the petitioning States.
The EPA recognizes that the amount of emissions reduction in the
modeled strategy is not identical to the amount of emissions reduction
in today's rulemaking. There are three additional upwind States (i.e.,
Georgia, South Carolina, and Wisconsin) which are controlled in the
modeled strategy that are not covered by today's rulemaking. The
difference in the total NOX emission reductions for the 20
jurisdictions covered by today's rule between what was assumed in the
23 jurisdiction modeling is 11 percent. These three States were covered
in the NOX SIP call because of their contributions to States
other than the petitioning States. Since EPA believes that emissions
from sources in these States do not contribute significantly to
nonattainment in any of the petitioning States, it is reasonable to
assume that emissions reductions in these States will not have any
appreciable impact on nonattainment in any of the petitioning States.
III. EPA's Final Action on Granting or Denying the Petitions
The EPA is taking final action on the section 126 petitions based
on the outcome of the multi-step process described in the preceding
section. The EPA's action consists of three components: (1) Technical
determinations of whether upwind sources or source categories named in
each of the petitions significantly contribute to nonattainment (of the
1-hour or 8-hour standard) or interfere with maintenance (of the 8-hour
standard) in the relevant petitioning State; (2) for those sources or
source categories for which EPA is making an affirmative technical
determination, action specifying when a finding that those sources emit
or would emit in violation of the section 110(a)(2)(D)(i)(I)
prohibition will be deemed made or not made (or made but subsequently
withdrawn) if certain events occur for purposes of section 126(b); and
(3) the specific emissions-reduction requirements that will apply when
such a finding is deemed made. Each of these actions is described
below. Under this final action, new and existing large EGUs and large
non-EGUs in 19 upwind States and the District of Columbia are
potentially subject to a future section 126(b) finding and therefore to
the requirements set forth in this final rule.
A. Technical Determinations
First, EPA is making final affirmative technical determinations as
to which of the new (or modified 31) or existing major
sources or groups of stationary sources named in each petition emit or
would emit NOX in amounts that contribute significantly to
nonattainment of the 1-hour or 8-hour standard in (or interfere with
maintenance of the 8-hour standard by) each petitioning State. The
regulatory text of today's rule sets forth each of the affirmative
technical determinations for sources named in each petition.
---------------------------------------------------------------------------
\31\ Whenever the word ``new'' is used in relation to sources
affected by this rule, it includes both new and modified sources.
---------------------------------------------------------------------------
In short, for each petition, with respect to each ozone standard
(as specifically requested in the petition), EPA is making affirmative
technical determinations of significant contribution (or interference)
for those large EGU and large non-EGU sources for which highly cost-
effective controls are available (as described in Section II.J.), to
the extent those sources are located in one of the ``Named Upwind
States'' corresponding to that petition in Tables II-1 and II-2. Thus,
to illustrate, for the petition from New York, EPA is making an
affirmative technical determination that large EGUs and large non-EGUs
that are located or would be located in the named portions of Delaware,
the District of Columbia, Indiana, Kentucky, Maryland, Michigan, New
Jersey, North Carolina, Ohio, Pennsylvania, Virginia, and West Virginia
emit, or would emit, NOX in amounts that contribute
significantly to nonattainment of the 1-hour standard in the State of
New York. (By contrast, EPA is determining that such sources located in
Tennessee, which New York also named in its petition, do not emit
NOX in amounts that significantly contribute to
nonattainment problems in the State of New York.) The result is that
EPA is determining that the large EGUs and large non-EGUs in at least
some upwind States named in every petition except Vermont's and Rhode
Island's contribute significantly to nonattainment of at least one of
the standards (or interfere with maintenance of the 8-hour standard) in
the petitioning State. The EPA refers the reader to the regulatory text
for a full description of the final affirmative technical
determinations for each petition.
The EPA notes that the Agency is not making final affirmative
technical determinations as to any sources located in Arkansas, Iowa,
Louisiana, Maine, Minnesota, Mississippi, New
[[Page 28306]]
Hampshire, and Vermont. For the States of Maine, New Hampshire, and
Vermont EPA has not completed sufficient modeling and other assessments
to enable the Agency to conclude that sources in any of those States
contribute significantly to nonattainment (or interfere with
maintenance) of an ozone standard in any downwind petitioning
State.32 In the final NOX SIP call, EPA stated
that it planned to conduct State-by-State modeling for these and
certain other States for which EPA does not currently have adequate
information. The EPA indicated it intended to begin the modeling in the
fall of 1998. However, in letters dated March 10, 1999, EPA notified
these States that, given the Agency's current resource contraints, it
would not be able to conduct the additional air quality modeling at
this time. Accordingly, for the present, EPA is denying, on the grounds
of inadequate information, the portions of the petitions from Maine,
New Hampshire, and Pennsylvania that request a finding of significant
contribution with regard to sources located in any of these three
States.
---------------------------------------------------------------------------
\32\ Maine's petition named sources in Vermont and New
Hamsphire; New Hampshire's petition named sources in Maine, Vermont,
and Iowa; and Pennsylvania's petition named sources in Arkansas,
Iowa, Louisiana, Minnesota, and Mississippi.
---------------------------------------------------------------------------
The EPA is also not making any affirmative technical determinations
regarding sources located in Georgia, South Carolina, Wisconsin,
Minnesota, Mississippi, Louisiana, Arkansas, and Iowa. For these
States, EPA has sufficient modeling results (and other technical
assessments) to enable it to conclude that these States do not
significantly contribute to downwind nonattainment or maintenance
problems in any of the petitioning States.33 Although, EPA
does not believe that sources in Georgia, South Carolina, and Wisconsin
are significantly contributing to nonattainment problems in any of the
petitioning States, EPA notes that it has determined in the NOx SIP
call rule that sources in these States are significantly contributing
to other States in the eastern half of the nation.
---------------------------------------------------------------------------
\33\ As part of EPA's evaluation of contributions, two screening
criteria were used to identify those linkages that were definitely
not significant (i.e., a 4-episode average contribution <1 percent="" or="" a="" maximum="" contribution=""><2ppb). a="" linkage="" is="" considered="" insignificant="" if="" at="" least="" one="" of="" the="" two="" screening="" criteria="" is="" not="" met.="" the="" results="" of="" the="">x modeling are described in
the Air Quality Modeling Technical Support Document for the
NOx SIP Call. The CAMx modeling indicates that
the 1-hour and 8-hour contributions from Iowa to both New Hampshire
and Pennsylvania are below the 1 percent screening criteria for the
4-episode average contribution metric. Also, the CAMx
modeling for Louisiana and Mississippi and the multi-state group
containing Arkansas and Minnesota indicates that contributions from
these States to 1-hour nonattainment in Pennsylvania are below the 1
percent screening criteria. Given that EPA's significant
contribution test requires that an upwind area be determined to
significantly contribute based on both the CAMx and UAM-V
models, the fact that these States do not significantly contribute
based on CAMx modeling means that they could not be found
to significantly contribute even if they are found to be significant
under the UAM-V modeling. Thus, even though EPA has not conducted
State-specific UAM-V zero-out modeling for each of these States, the
1-hour and 8-hour linkages from Iowa to New Hampshire and
Pennsylvania and the 1-hour linkages from Arkansas, Louisiana,
Minnesota, and Mississippi to Pennsylvania are not significant
because these linkages do not pass the screening criteria for the
CAMx 4-episode average contribution metric. Note that the
contributions from Louisiana, Mississippi, and the multi-state
grouping containing Arkansas and Minnesota to 8-hour nonattainment
in Pennsylvania exceed the screening criteria. Thus, we are not
making affirmative technical findings on these States under the 8-
hour standard because, without the State-by-State UAM-V zero-out
modeling, EPA does not have sufficient information to determine
whether they contribute significantly to Pennsylvania.
---------------------------------------------------------------------------
B. Action on Whether To Grant or Deny Each Petition
1. Portions of Petitions for Which EPA Is Making an Affirmative
Technical Determination
For the reasons described in Section II.E., EPA is issuing the
alternative type of final action provided for in the consent decree.
Under that alternative approach, for sources for which EPA is today
making an affirmative technical determination of significant
contribution, the section 126(b) finding that certain sources emit or
would emit in violation of the prohibition in section
110(a)(2)(D)(i)(I) will be deemed made as of certain specified dates if
certain events do not occur by those dates. More specifically, a
finding that new or existing sources, for which EPA has made an
affirmative technical determination, do emit in violation of section
110(a)(2)(D)(i)(I) will be deemed made:
As of November 30, 1999, if by such date EPA does not
issue either a proposed approval, under section 110(k) of the CAA,
of a SIP revision submitted by such State to comply with the
requirements of the NOX SIP call; or a final FIP meeting
such requirements for such State in which the affected sources are
or will be located,
As of May 1, 2000, if by November 30, 1999, EPA
proposes to approve the SIP revision described above for such State,
but, by May 1, 2000, EPA does not fully approve the SIP revision or
promulgate a FIP meeting the requirements of the NOx SIP
call for such State.
The EPA also is determining that any such finding as to any such major
source or group of stationary sources would be considered a finding
under section 126(b) and, therefore, would trigger the remedial
requirements of this final rule. At such time as a finding is deemed
made, EPA intends to publish a notice in the Federal Register
announcing the source categories and locations affected by the finding.
Furthermore, any portion of a petition for which EPA is making an
affirmative technical determination (as described above) shall be
deemed denied as of May 1, 2000, if a section 126(b) finding has not
been deemed to have been made by that date. In other words, if EPA has
taken final action putting into place a SIP or FIP meeting the
requirements of the NOX SIP call, any outstanding portions
of petitions will be deemed denied as of the date of approval of the
SIP or promulgation of the FIP. In addition, after a section 126(b)
finding has been deemed made as to sources or groups of stationary
sources in an upwind State, that finding will be deemed withdrawn, and
the corresponding part of the relevant petition(s) denied, if the
Administrator either approves a SIP or promulgates a FIP which complies
with the requirements of the NOX SIP call for such upwind
State. This would minimize any overlap between an effective section
126(b) finding, on one hand, and the application of satisfactory SIP or
FIP provisions, on the other.
2. Portions of Petitions for Which EPA Is Not Making an Affirmative
Technical Determination
Consistent with this overall approach, for the sources for which
EPA is not making an affirmative technical determination, EPA is
concluding that they do not or would not emit in violation of the
section 110(a)(2)(D)(i)(I) prohibition. As a result, EPA is denying
each aspect of each petition relating to such sources. Table I-1 shows
which States and sources were named in each petition. The EPA is not
making affirmative technical determinations for all sources named in
the petitions that are located in States not linked to the petitioning
State as shown in Tables II-I and II-2. In addition, EPA is not making
affirmative technical determinations for sources for which EPA has
determined highly cost effective control measures are not available
(see Section II.J.) For example, EPA is denying New York's petition as
to sources in any State (or portion of a State) named in New York's
petition that are outside the large EGU and large non-EGU categories
described in Section II.J., as well as any named sources of any type in
Tennessee. Another example is that EPA is today denying the petitions
from Rhode Island and Vermont in their entirety because
[[Page 28307]]
EPA has determined that none of the sources named in these petitions is
significantly contributing to nonattainment or maintenance problems
with respect to the ozone standard(s) for which relief is requested in
the petitions.
C. Requirements for Sources for Which EPA Makes a Section 126(b)
Finding
The control requirements that would apply to any new or existing
major source or group of stationary sources for which a section 126(b)
finding is ultimately made are discussed in Section IV below.
Section 126(c) states, in relevant part, that:
it shall be a violation of this section and the applicable
implementation plan in such State
(1) for any major proposed new (or modified) source with respect
to which a finding has been made under subsection (b) to be
constructed or to operate in violation of this section and the
prohibition of section 110(a)(2)(D)([i]) or this section or
(2) for any major existing source to operate more than three
months after such finding has been made with respect to it.
The Administrator may permit the continued operation of a source
referred to in paragraph (2) beyond the expiration of such 3-month
period if such source complies with such emission limitations and
compliance schedules (containing increments of progress) as may be
provided by the Administrator to bring about compliance with the
requirements contained in section 110(a)(2)(D)([i]) as expeditiously as
practicable, but in no case later than 3 years after the date of such
finding.
The remedial requirements that EPA is finalizing in today's action
for sources for which a section 126(b) finding is ultimately made would
satisfy the requirements just quoted. First, EPA is requiring that
sources for which a section 126(b) finding is ultimately made must
comply with the requirements described in Section IV to ensure that
they do not emit in violation of the section 110(a)(2)(D)(i)
prohibition. Second, the program EPA is finalizing serves as the
alternative set of requirements that the Administrator may apply for
the purpose of allowing existing sources subject to a section 126(b)
finding to operate for more than 3 months after the finding is made.
Consistent with section 126(c), the compliance period in EPA's program
extends no further than 3 years from the making of the finding. To the
extent a finding is deemed made as of November 30, 1999, compliance
will be required by November 30, 2002. But since the program EPA is
establishing would require actual emissions reductions only in the
ozone season (defined for purposes of this rule as May 1-September 30,
inclusive), actual reductions will not need to occur until May 1, 2003,
the start of the first ozone season after the November 30, 2002,
compliance date. Thus, compliance by November 30, 2002 would not
require actual reductions until May 1, 2003. A finding deemed made as
of May 1, 2000 would also yield a May 1, 2003 compliance date. As
described in Section V.A.1 of the final NOX SIP call and its
Response to Comment document and in Section II.K above, EPA believes
that compliance by the ozone season beginning May 1, 2003 is feasible.
IV. Section 126 Control Remedy
In the NPR (63 FR at 56309-56320), EPA proposed to implement a
market-based cap-and-trade system to bring sources covered by any final
section 126(b) finding into compliance. The Federal NOX
Budget Trading Program was proposed as a new part 97 in title 40 of the
Code of Federal Regulations. The EPA proposed that the Federal
NOX Budget Trading Program would be triggered automatically
if EPA makes a final finding of significant contribution as to any
sources under section 126(b). Participation in the program would be
mandatory for all sources affected by such a finding. As explained in
Section IV.C of this preamble, today's rule includes the general
parameters of the Federal NOX Budget Trading Program remedy
in paragraph (j) of Sec. 52.34. The EPA will issue the remaining
elements of the Federal NOX Budget Trading Program by July
15, 1999. Today's rule also includes paragraph (k) of Sec. 52.34, which
delineates the interim final emission limitations that will be imposed
in the event the Administrator fails to promulgate (i.e., sign and
release to the public) the Federal NOX Budget Trading
Program regulations before a finding under section 126 is made. Section
IV.D of this preamble describes these default emission limitations.
A. Appropriateness of Trading as a Section 126 Remedy
A market-based cap-and-trade program is a proven method for
achieving the highly cost-effective emissions reductions described in
section II.J., while providing sources compliance flexibility. As
explained in the NOX SIP call SNPR (63 FR at 25918-25919),
the Ozone Transport Assessment Group (OTAG) identified five advantages
of market-based systems: (1) Reduced cost of compliance, (2) creation
of incentives for early reductions, (3) creation of incentives for
emissions reductions beyond those required by regulations, (4)
promotion of innovation, and (5) increased flexibility without
resorting to waivers, exemptions, and other forms of administrative
relief (OTAG 1997 Executive Report, pg. 57).
The Agency received wide support for using the Federal
NOX Budget Trading Program as the section 126 remedy.
Several commenters cited lower compliance costs as a reason for
supporting a cap-and-trade program and generally stated that the
section 126 petitions would be satisfied if the sources named in the
petitions were included in the trading program. One commenter claimed
that pursuant to section 126, EPA has the clear authority to develop,
impose, and implement the emissions caps associated with the trading
program. Others claimed, however, that trading is not an appropriate
section 126 remedy. One commenter questioned EPA's authority to use
trading as the section 126 remedy because a section 126 finding
requires reductions from specific sources for which a finding of
significant contribution is made. That commenter pointed out that
trading allows reductions to occur where they are most cost effective
without regard to air quality benefits or impacts.
The EPA agrees with the majority of commenters that expressed
support for the Federal trading program. The EPA agrees with the
assertion that participation in the Federal NOX Budget
Trading Program is the most cost-effective method for achieving the
reductions required if EPA makes a finding with regard to the section
126 petitions. The EPA rejects the comment that EPA lacks the authority
under section 126 to implement a trading program. The EPA finds that it
has authority under section 126 to require sources or groups of sources
for which a section 126(b) finding is made to comply with a cap-and-
trade program. Section 126(c) provides that such sources or groups of
sources may continue to operate if they comply ``with such emission
limitations and compliance schedules (containing increments of
progress) as may be provided by the Administrator to bring about
compliance'' with section 110(a)(2)(D). Under section 302, an
``emission limitation'' is a ``requirement * * * which limits the
quantity, rate, or concentration of emission of air pollutants on a
continuous basis.'' This term is broad enough to include the limiting
of sources' emissions through a cap-and-trade program. In fact, title
IV of the Clean Air Act expressly refers to the
[[Page 28308]]
allowance requirements of the Acid Rain SO2 cap-and-trade
program as ``emission limitations.'' See e.g., 42 U.S.C. 7651c(a).
Under a cap-and-trade program, the Administrator sets an emission
limitation and compliance schedule for all units subject to the
program. The emission limitation for each unit is the requirement that
the quantity of the unit's emissions during a specified period (here,
the tonnage of NOX emissions during the ozone season) cannot
exceed the amount authorized by the allowances that the unit holds.
Allowances are allocated to units subject to the program, and the total
number of allowances allocated to all such units for each control
period is fixed or capped at a specified level. The compliance schedule
is set by establishing a deadline (here, May 1, 2003 as explained in
Section III.C of this preamble) by which units must begin to comply
with the requirement to hold allowances sufficient to cover emissions.
In summary, since EPA has the authority to establish emission limits
and compliance schedules under section 126, and allowance requirements
include both emission limits and a compliance schedule, EPA has the
authority to promulgate allowance requirements and allocate allowances
for purposes of section 126.
The Federal NOX Budget Trading Program required in
response to a section 126 finding will achieve the intended emissions
reductions while providing flexibility and cost savings to the covered
sources. The significant reductions incorporated into the cap, or
budget, under which the Federal trading program would operate help
ensure that the remedy would sufficiently mitigate the transport of
ozone as required by any remedy under section 126. This budget
represents the sum of NOX allowances allocated each year to
affected sources in States covered by any final section 126 findings,
calculated as explained in Section IV.C.1.b of this preamble. (For
purposes of the section 126 remedy, this budget is not aggregated to a
State level for any purpose other than for the calculation of
allowances available for allocation to affected sources. Since the
focus in the remedy is sources rather than States, there are no
programmatic requirements associated with this budget at the State
level.) For commenters concerned about the appropriateness of trading,
EPA emphasizes that the trading program has been designed to mitigate
the transport of ozone and its precursors to facilitate attainment and
maintenance of the ozone NAAQS. The program was proposed based on
recommendations from OTAG, experience from the OTC, and the
NOX SIP call rulemaking process. Additionally, four of the
petitioning States requested that a cap-and-trade program serve as the
section 126 remedy.
The analyses performed in conjunction with the NOX SIP
call demonstrate that no significant changes in the location of
emissions reductions will result from implementation of an unrestricted
trading program with a uniform control level, as compared to a
traditional command-and-control scenario (``Supplemental Ozone
Transport Rulemaking Regulatory Analysis'', April 1998, pp. 2-19). The
trading program will therefore allow named sources to retain some
flexibility in meeting the emission limitations, but also will ensure
that the necessary NOX reductions are achieved to mitigate
the transport of ozone.
B. Relationship of the Section 126 Remedy to the NOX SIP
Call and the Proposed FIP
In the section 126 NPR (63 FR at 56309), the EPA proposed to
establish a common trading program among sources subject to a trading
program under the NOX SIP call, a section 126 remedy or a
FIP. This common trading program could include all sources in States
found to be significantly contributing to nonattainment or interfering
with maintenance of the ozone standard in another State. Sources
subject to the Federal NOX Budget Trading Program under the
section 126 rulemaking or the FIP, and sources in States choosing to
participate in the State NOX Budget Trading Program under
the SIP call, could trade with one another across participating States
under a NOX cap equivalent to the sum of the NOX
emissions allocated to sources in participating States.
The commenters almost uniformly supported integrating the trading
programs under the NOX SIP call, section 126 rulemaking, and
the FIP. One commenter stated that aligning the program requirements
could lessen unnecessary compliance costs, promote greater certainty in
compliance planning, and reduce the potential administrative burdens on
both the regulatory and regulated communities. Most commenters cited
that all three programs address the same transport problem and
integrating them would achieve the environmental objective at least
cost and with more flexibility for the affected sources. One commenter
did not believe a trading program was an appropriate remedy for the
section 126 petitions (addressed in section IV.A.), and therefore, the
section 126 remedy should not be integrated with the NOX SIP
call and the FIP trading programs.
As stated in the section 126 NPR, all three rulemaking actions (the
NOX SIP call, the FIP, and the section 126 rulemaking) are
aimed at reducing transport of ozone by controlling emissions from
sources in a given State that are found to be contributing
significantly to nonattainment or interfering with maintenance in
another State. The EPA agrees with commenters that, because all three
programs were intended to achieve the same environmental objective, it
would be possible to integrate the programs and maintain the integrity
of this environmental objective.
In order to be eligible to participate in a cap-and-trade program,
the EPA believes that there are certain criteria that sources must meet
(e.g., they must accurately and consistently account for all of their
emissions). See Section 126 NPR, 63 FR at 56310. Because the sources in
States that choose to participate in the cap-and-trade program outlined
in the final NOX SIP call (40 CFR part 96) will meet these
criteria, the sources subject to this section 126 action will meet
these criteria, and the sources in States that would be subject to the
proposed FIP (with the exception of cement kilns and IC engines, which
are not included in the trading program) will meet these criteria, EPA
supports the establishment of a common trading program. Therefore, EPA
has determined that sources subject to the Federal NOX
Budget Trading Program under section 126 or the proposed FIP, and
sources in States choosing to participate in the State NOX
Budget Trading Program under the NOX SIP call, could trade
with one another under a NOX cap across participating States
equivalent to the sum of the NOX caps of the individual
States. In addition, in rejecting concerns about the appropriateness of
one common trading program as a remedy, EPA relies on the analyses
performed in conjunction with the NOX SIP call, which
demonstrated that implementation of a single trading program with a
uniform control level results in no significant changes in the location
of emissions reductions as compared to a non-trading scenario
(``Supplemental Ozone Transport Rulemaking Regulatory Analysis,'' April
1998, pp. 2-19).
C. Federal NOX Budget Trading Program
Under the terms of the consent decree with petitioning states, EPA
must take final action on a remedy under section 126 by April 30, 1999.
In accordance with that requirement, EPA is
[[Page 28309]]
promulgating the general parameters of the remedy in paragraph (j) of
Sec. 52.34. The general parameters of the remedy promulgated today
include the decision to employ a cap-and-trade program as the aggregate
remedy, identification of the categories of sources subject to the
trading program, specification of the basic emission limitation for the
covered source categories, specification of the total emissions
reductions to be achieved by the trading program, and the compliance
date. Since EPA is not promulgating in today's rule the unit-specific
allocations or 40 CFR part 97 rule provisions providing the details of
the trading program for the section 126 remedy (as explained in Section
IV.C.2), today's final rule specifies that EPA will issue these
elements of the Federal NOX Budget Trading Program by July
15, 1999. The EPA is committed to acting quickly in promulgating the
remaining elements of the Federal NOX Budget Trading
Program. The EPA has therefore specified the date in Sec. 52.34 by
which those elements will be promulgated, and has delineated in
paragraph (k) of Sec. 52.34 the interim final emission limitations that
will be imposed in the event the remaining elements of the Federal
NOX Budget Trading Program are not promulgated, as explained
in Section IV.D of this preamble.
1. Elements of the Section 126 Remedy Promulgated With Today's
Rulemaking
The intent of EPA's action today is to prescribe the general
parameters of the section 126 remedy and postpone the details of the
Federal NOX Budget Trading Program until July 1999. Today's
rule includes part 52, which establishes the general parameters of the
Federal NOX Budget Trading Program as well as the default
emission limitations should EPA fail to promulgate the details of the
trading program and allocation provisions. Specifically, the regulatory
language finalized today specifies the following elements, listed here
and explained in further detail in Sections IV.C.1.a and IV.D.1, below:
All large EGUs and large non-EGUs for which EPA makes a
final finding under section 126(b) will be covered by and subject to
the Federal NOX Budget Trading Program.
Beginning May 1, 2003, the owner or operator of each
source subject to the Federal NOX Budget Trading Program
must hold total NOX allowances available to that source in
the ozone season that are not less than the total NOX
emissions emitted by the source during that ozone season.
The total tons of NOX allowances allocated
under the trading program (other than any compliance supplement pool
credits) will be equivalent to the sum of two tonnage limits:
(A) The total tons of NOX that large EGUs in the program
would emit in an ozone season after achieving a 0.15 lb/mmBtu
NOX emissions rate, assuming historic ozone season heat
input adjusted for growth to the year 2007; plus
(B) The total tons of NOX that large non-EGUs in the
program would emit in an ozone season after achieving a 60 percent
reduction in ozone season NOX emissions compared to
uncontrolled levels adjusted for growth to the year 2007.
If EPA makes a final finding under section 126(b) for any
large EGUs and large non-EGUs and fails to promulgate the trading
program regulations, owners or operators shall control emissions from
such units so that each unit does not emit NOX emissions in
excess of the unit's allocated NOX allowances. Moreover,
NOX allowances will be allocated to large EGUs and large
non-EGUs according to the methodology originally set forth in the
proposed part 97.
Compliance supplement pool credits may be available for
distribution to affected sources, subject to specific State-by-State
tonnage limits as established in the SIP call.
a. Compliance Schedule and Emission Limitation
Section 52.34(j)(1) in today's final rule serves to establish a
compliance schedule, i.e., the May 1, 2003 start date for the control
program, as well as the general emission limitations for the large EGUs
and large non-EGUs covered by any final section 126 remedy (see section
II.I of this preamble for EGU and non-EGU definitions). Although
section 126 findings are made for sources or source categories (as
required by section 126), the section 126 remedy described in today's
final rule applies at the unit level rather than the source level. This
reflects the fact that many sources have multiple emission units and
already report emissions at the unit level.
Section 52.34(j)(1) requires the owners or operators of each such
unit to hold total ``NOX allowances available'' for the
ozone season not less than the unit's NOX emissions during
that ozone season. The NOX allowances--each allowance
representing a limited authorization to emit one ton of
NOX--would be the currency used in the Federal
NOX Budget Trading Program. The term ``available'' is
intended to be sufficiently broad to include not only NOX
allowances allocated to the unit, but additional NOX
allowances which may be available through trading or banking to the
extent such flexibility is incorporated into the final Federal
NOX Budget Trading Program, as well as allowances from the
compliance supplement pool in the 2003 and 2004 ozone seasons to the
extent they are distributed.
b. Trading Program Budget
In today's final rule, EPA describes the methodology used to
determine the NOX emissions budget, i.e., the total amount
of NOX allowances allocated to all units subject to the
Federal NOX Budget Trading Program in a State for purposes
of any section 126 finding. As noted in Section IV.A of this preamble,
for purposes of the section 126 remedy, this budget is not aggregated
to a State level for any purpose other than for the calculation of
allowances available for allocation. Section 52.34(j)(3) indicates that
the total available allowances will be calculated consistently with the
method used in developing the NOX SIP call budgets in 40 CFR
part 51, as described in the preamble to the final NOX SIP
call. The number of available allowances will be equal to the sum of
the tonnage limits explained in the following two paragraphs. The EPA
will calculate these emissions budgets following the issuance of the
final revised inventory for the SIP call and this section 126
rulemaking.
For large EGUs, the total tonnage limit will be determined by
applying a 0.15 lb/mmBtu emission rate to either the 1995 or 1996 heat
input level (whichever is higher for a particular State) projected to
the year 2007 in a manner consistent with the methodology EPA used in
developing the NOX SIP call budgets. The EPA used forecasts
of future electricity generation to apply State-specific growth factors
in calculating the emissions budgets for the electricity generating
sector. The Agency derived these State specific growth factors from
application of the Integrated Planning Model (IPM) using the 1998 Base
Case (the condition of the industry in the absence of the
NOX SIP call). A complete explanation of how EPA uses IPM to
determine growth factors is included in EPA's Analyzing Electric Power
Generation under the CAAA, March 1998.
Non-EGU point source inventory data for 1995 were grown to 2007
using Bureau of Economic Analysis (BEA) historical growth estimates of
industrial earnings at the State 2-digit Standard Industrial
Classification (SIC) level. Where source specific SIC data were not
available, associated Source Classification Code (SCC) growth rates
were used. In those cases where a State or industry may have had more
accurate
[[Page 28310]]
information than the BEA forecast (e.g., planned expansion or
population rates), data were verified and validated by the affected
States and by EPA, and revisions were made to the factors used for that
category.
A fixed number of NOX allowances will be allocated to
units for each ozone season equal to the total amount of the aggregate
emissions (as calculated above) allowed for the units in each State
included in the Federal NOX Budget Trading Program for
purposes of the section 126 remedy. The specific unit allocations as
well as the specific methodology will be provided with the provisions
of the Federal NOX Budget Trading Program when part 97 is
promulgated by July 15, 1999. The regulatory language finalized today
leaves the Agency free to adopt a method for determining individual
unit allocations in a manner different from the method used to
determine unit emissions in the NOX SIP call inventory.
c. Compliance Supplement Pool
In today's final rule, EPA includes a compliance supplement pool,
as delineated in Sec. 52.34(j)(4). In the Section 126 NPR, EPA proposed
that part 97 would include a compliance supplement pool consistent with
the compliance supplement pool finalized with the NOX SIP
call (63 FR at 56318). The Agency had received comments in response to
the proposals for the NOX SIP call expressing concern that
some sources may encounter unexpected problems installing controls by
the May 1, 2003 deadline. The commenters suggested that these
unexpected problems could cause unacceptable risk for a source and its
associated industry. In particular, commenters expressed concern
related to the electricity industry, stating that the deadline could
adversely impact the reliability of electricity supply.
The EPA addressed these concerns in the SIP call by providing
additional flexibility for sources to comply with requirements (see
also section II.K). One element of this flexibility is the compliance
supplement pool, which ensures that there are a limited number of
allowances available in addition to State budgets at the start of the
program. The EPA proposed to use the same compliance supplement pools
on a State-by-State basis for the section 126 remedy as were included
in the final NOX SIP call.
The majority of the commenters supported inclusion of the
compliance supplement pool in the Federal NOX Budget Trading
Program. These commenters asserted that the pool is necessary for
sources that are unable to meet the compliance deadline and to
alleviate concerns about electric supply reliability. However, three
petitioning States argued that the CAA does not authorize a compliance
supplement pool. These States commented that the pool effectively
extends the compliance period under section 126 from 3 to 5 years. One
State maintained that the compliance supplement pool compromises the
relief sought by its section 126 petition and requested that the States
against which its petition was directed not be permitted to rely on the
pool. An additional State commenter suggested that delay of the
compliance deadline was not warranted and supported this conclusion
with an example of an SCR installation that only took 6 months. That
State also commented that if EPA does adopt the compliance supplement
pool, the portion of the compliance supplement pool allotted to States
in the Ozone Transport Commission (OTC) should be apportioned to the
combined OTC States rather than individual States because that would
provide for less forfeiture of OTC banked allowances. Since each State
could bring banked allowances under the OTC into the Federal
NOX Budget Trading Program up to the level of their
compliance supplement pool, pooling allowances among OTC States would
allow these States to ensure maximum incorporation of banked
allowances. Another OTC State asserted that the States in the OTC are
given disproportionately small compliance supplement pools as a result
of the stricter controls already installed on their sources.
Consistent with the decision made for the NOX SIP call,
the Agency is including the compliance supplement pool as part of its
section 126 remedy, as delineated in Sec. 52.34(j)(4). Although the
Agency agrees with the commenters who asserted that States affected by
the NOX SIP call could reasonably achieve the reductions in
the time-frame specified (see section III.K of this preamble and
section III.F.6 of the final NOX SIP call preamble), EPA
created the additional pool of emissions to address concerns about the
compliance deadline. Those same concerns exist for sources subject to a
section 126 finding and we affirm and incorporate into this rulemaking
the rationales for the compliance supplement pool offered in the SIP
call final rule. Therefore, EPA is including the compliance supplement
pool in the Federal NOX Budget Trading Program.
The Agency disagrees with commenters that assert that EPA lacks
authority to include the compliance supplement pool and also disagrees
with commenters who stated that the compliance supplement pool
compromises the relief sought under section 126. The Agency disagrees
with the commenters' assertions that the compliance supplement pool
delays the compliance deadline beyond the 3 years required by section
126. The compliance deadline for the covered sources is 3 years from
the date the finding is made (which results in a May 1, 2003 deadline,
as explained in Section III.C) and the compliance supplement pool is an
inherent part of the remedy and concomitant emissions reductions
required to be achieved at that time, just as are the trading
provisions. Thus, this rule will require compliance with the Federal
NOX Budget Trading program as the remedy within the three
year timeframe contemplated by the CAA.
The section 126 remedy incorporates a reasonable degree of
flexibility with these compliance supplement pool provisions, while
still ensuring the necessary reductions to mitigate the transport of
ozone since the level of NOX emissions authorized through
the remedy is fixed. Capping the compliance supplement pool ensures
limited impact on emissions. Further, credits issued from the
compliance supplement pool will not be valid for compliance past the
2004 ozone season.
The Agency disagrees with commenters who suggest that the
compliance supplement pool should be distributed in a manner different
from the method described in the proposal. The compliance supplement
pool will be distributed, as proposed, proportionately to the level of
reductions required in each State by the NOX SIP call for
those States whose sources are covered by any section 126 remedy. The
final rule adopts the method in the NOX SIP call for
distributing the pool to each State because that method directly
addresses the reason for the creation of the pool: to address concerns
that the emission reductions required would create undue risk to the
industry affected by the controls. Therefore, the Agency rejects
comments asserting that the OTC States' share of the compliance
supplement pool is disproportionately small and that the compliance
supplement pool allowances should be aggregated across the OTC. Each
State's share of these additional allowances is based on the same
distribution criteria to ensure consistent treatment (in terms of the
original justification of the compliance supplement pool) of sources in
each State for which a section 126 finding is made. This approach will
maintain
[[Page 28311]]
compatibility with the NOX SIP call for the States covered
by the section 126 remedy.
The July rule will specify the criteria and procedures for
distributing allowances from the compliance supplement pool to sources
affected by the section 126 remedy. Comments relevant to distribution
of the compliance supplement pool to sources will be addressed at that
time.
2. Elements of the Section 126 Remedy Not Finalized With Today's
Rulemaking
After finalization of the NOX SIP call on October 27,
1998, EPA provided a 60-day public comment period for review of the
NOX SIP call inventory and budgets, which on December 24,
1998 was extended to February 22, 1999 (see Section I.I in this
preamble). Because the section 126 rulemaking relies on the same
emissions inventory as the NOX SIP call, EPA also reopened
the section 126 comment period for emissions inventory comments. The
EPA is completing its review of the inventory comments received and has
committed to revising the final SIP call inventory and budgets after
full evaluation of the comments submitted by States and sources.
Following the revision of the inventory, the Agency will finalize the
list of Section 126 affected sources, the Federal NOX Budget
Trading Program's allocation methodology, the unit-by-unit
NOX allowance allocations, and the compliance supplement
pool distribution methodology. The Agency did not have sufficient time
to properly evaluate comments related to the trading program which were
dependent on consideration of the inventory revisions, or to
incorporate those inventory revisions into the final trading program
prior to today's action.
The Agency has decided that taking until as late as July 15, 1999
to promulgate part 97 and the source specific allocations will not
affect the triggering of the remedy on November 30, 1999 or May 1, 2000
(these trigger dates are explained in Section III.B.1 and tied to the
SIP submission process under the NOX SIP call), or affect
the May 1, 2003 start date for compliance with the remedy. The Agency
has found that the May 1, 2003 implementation date is feasible to
achieve given the dates by which a section 126 remedy could be
triggered (see preamble section III.K.). Because the section 126 remedy
can not be triggered until November 30, 1999 at the earliest, issuing
final trading program regulations by July 15, 1999 will not affect the
trigger dates and therefore will not affect implementation of the
section 126 remedy.
Therefore, by July 15, 1999, the Administrator will promulgate
regulations setting forth the remaining elements of the section 126
remedy. The July rulemaking will describe in detail the entire Federal
NOX Budget Trading Program, summarize and respond to
comments on the proposed program provisions and unit allocations, and
present the specific unit allocations that would be imposed under a
section 126(b) finding. The July rulemaking will also specify the
methodology for distribution of allowances from the compliance
supplement pool. However, should the Administrator fail to promulgate
the trading program regulations before a section 126 finding is made,
the interim final emission limitations described in Section IV.D will
apply.
D. Default Emission Limitations in the Absence of a Promulgated Federal
NOX Budget Trading Program
The Agency has committed to promulgating regulations setting forth
the Federal NOX Budget Trading Program by July 15, 1999,
including the allocation of NOX allowances under the
program. By that date EPA will have considered the comments received on
the trading program and the individual unit allocations and will be
able to respond to these comments in making a final determination on
allocations and other trading program provisions.
As discussed in Section I.E. of this preamble, EPA entered into a
consent decree with the petitioning States that committed the Agency to
developing a final section 126 remedy by April 30, 1999. As part of
today's action, the Agency is promulgating on an interim basis emission
limitations that will be imposed in the event a finding under section
126 is made and the Administrator does not promulgate the Federal
NOX Budget Trading Program regulations before such finding.
EPA is finalizing the default emissions limitations remedy set forth in
Sec. 52.34(k) under the ``good cause'' exemption to the Administrative
Procedure Act's requirements for rulemaking. See 5 U.S.C. 553(b)(B). As
noted elsewhere, taking into account the comments received on the
appropriate remedy is impracticable given the court-ordered deadline
and the volume of comments received. The EPA does not expect the
default remedy set forth in Sec. 52.34(k) to ever be applied, for the
reasons explained in this section. When EPA promulgates the details of
the Federal NOX Budget Trading Program (40 CFR part 97),
Sec. 52.34(k) will be superseded as a matter of law and EPA will take
action to delete Sec. 52.34(k) accordingly.
The EPA believes that today's action, even without any default
emission limitations, meets the terms of the consent decree. However,
this rule limits a unit's emissions to the amount of its allocated
allowances to provide a remedy (in addition to the statutory remedy
under section 126) by ensuring that unit-specific emission limitations
are in place in the event that the Administrator fails to promulgate
the Federal NOX Budget Trading Program regulations and a
section 126 finding is made. In that event, the amount of allowances
allocated to each unit will be that unit's emission limitation in the
absence of trading provisions.
As discussed in Section III.B.1. of this preamble, any section 126
remedy would not be triggered before November 30, 1999 at the earliest.
Therefore, the interim remedy discussed in this section will not apply
unless the remedy is triggered and the Administrator has not
promulgated the Federal NOX Budget Trading Program
regulations. Further, as would be the case for the Federal
NOX Budget Trading Program, unit compliance with any section
126 remedy (whether it is the default emission limitations described in
this section or the Federal NOX Budget Trading Program
regulations to be promulgated in July) would not be required until May
1, 2003.
The methodology presented in this action for calculating the
allowance allocations mirrors the methodology for allocating allowances
described in the proposed part 97 (63 FR 56315), with changes to
account for incorporation of the rule language into part 52. Each of
these NOX allowance allocations will serve as a unit-
specific emission limitation only if a finding under Section 126 is
made and the Administrator fails to promulgate regulations setting
forth the Federal NOX Budget Trading Program before such
finding. If the Administrator promulgates such regulations prior to the
triggering of a section 126 remedy, the unit-specific emission
limitations described in Sec. 52.34(k) will not apply.
The EPA emphasizes that these allocations provide a default remedy
under the consent decree and that EPA is committed to establishing
final allocations, as well as trading program provisions, by July 15,
1999. The Agency has included these interim final limitations in order
to assure the petitioning States that emission limitations will be in
place should a final section 126 finding be made and the Administrator
has failed to promulgate the Federal NOX Budget
[[Page 28312]]
Trading Program regulations. As explained in Section IV.D.2, the Agency
is incorporating as a default remedy the proposed part 97 methodology,
but this does not represent the Agency's final determination on
allowance allocations under the NOX Budget Trading Program.
The Agency is continuing to review comments received on the proposed
allocation methodologies and will come to a final decision by July 15,
1999. The proposed part 97 rule language describing the allowance
allocation methodology is included in today's rule without significant
change in order not to pre-judge any decision the Agency will make on
allocations.
Further, EPA acknowledges that assigning these allowance
allocations as unit-specific emission limitations in the absence of a
trading program is not necessarily within the cost-effectiveness bounds
delineated in Section II.J. However, given that the statutory
alternative remedy to not promulgating emission limitations at this
time is requiring the shutdown of units within 3 months of a finding
under section 126(b) of the Act, today's action to meet the terms of
the consent decree represents a more cost-effective alternative.
Nonetheless, the Agency is concerned about meeting the cost-
effectiveness criteria. For this reason, as well as for the reason that
the allocation methodology included in today's rule does not
necessarily reflect the Agency's final decision on allocations, EPA
reiterates its commitment to promulgate the regulations and unit-
specific allocations to implement the Federal NOx Budget
Trading Program by July 15, 1999.
1. Default Emission Limitations
Section 52.34(k) sets forth the provisions for how the
Administrator will allocate NOx allowances to sources for
which EPA makes a finding under section 126(b), in the event that the
Administrator fails to promulgate the Federal NOX Budget
Trading regulations. The methodology for determining the individual
unit emission limitations included in this action incorporates rule
language that was proposed in Sec. 97.42 (63 FR 56315) for determining
allowance allocations. The EPA has incorporated Sec. 97.42 as proposed,
with changes only where necessary to account for the incorporation of
the proposed Sec. 97.42 into Sec. 52.34. Specifically, the Agency
removed any references to terminology or provisions of other sections
of proposed part 97, in order to refer instead to the relevant
terminology or provisions of part 52 or delete entirely references
relevant only to participation in a trading program. For example, in
order to maintain consistent terminology with Sec. 52.34, EPA replaced
the term ``NOX Budget unit'' with the term ``large EGUs and
large non-EGUs.''
a. Default Emission Limitations for Existing Units
As was described in the proposed Sec. 97.42, Sec. 52.34(k) bases
the allowance allocations on heat input data. For large EGUs, initial
unadjusted allocations would be based on actual heat input data (in
mmBtu) for the units multiplied by an emission rate of 0.15 lb/mmBtu.
For the ozone seasons in 2003, 2004, and 2005, the heat input used in
the allocation calculation for large EGUs equals the average of the
heat input for the two highest ozone seasons for the years 1995, 1996,
and 1997. The emission limitations for each unit would then be adjusted
upward or downward so that the total allocations for large EGUs in the
State match 95 percent (to provide for a 5 percent new source set-
aside) of the total ozone season NOX emissions calculated
for large EGUs in each State (see section IV.C.1.b. of this preamble).
For the ozone seasons starting in 2006, the heat input used in the
allocation calculation for large EGUs equals the heat input measured
during the ozone season of the year that is four years before the year
for which the allocations are being calculated. The emission
limitations would be determined by multiplying the heat input by 0.15
lb/mmBtu, and then adjusting the result so that the sum of the
allocations to each EGU in the State equals 98 percent (to provide for
a 2 percent new source set-aside) of the total ozone season
NOX emissions calculated for large EGUs in each State.
For large non-EGUs, initial unadjusted allocations would be based
on 1995 heat input data (in mmBtu) for the units multiplied by an
emission rate of 0.17 lb/mmBtu (the average emission rate for existing
non-EGUs after controls are in place). As discussed in the section 126
NPR, this differs from the method used to determine the aggregate
emission level for non-EGUs (a percentage reduction from historical
emissions) because at the time the aggregate level was determined
(during the NOX SIP call proposal process), heat input data
for individual units was not available. Distributing allocations on a
heat-input basis provides a fuel-neutral method of allocating
allowances to the units in the trading program similar to the
allocation approach proposed for the EGUs. This heat-input-based
allocation also allows for reallocating in the future (to accommodate
new units) whereas allocations based upon a specific percentage
reduction do not.
The emission limitations for each unit would then be adjusted
upward or downward so that the total allocations for large non-EGUs in
the State match 95 percent (to provide for a 5 percent new source set-
aside) of the total ozone season NOX emissions calculated
for large non-EGUs in each State.
As described for large EGUs, for the ozone seasons starting in
2006, the heat input used in the allocation calculation for large non-
EGUs equals the heat input measured during the ozone season of the year
that is four years before the year for which the allocations are being
calculated. The emission limitations would be determined by multiplying
the heat input by 0.17 lb/mmBtu, and then adjusting the result so that
the sum of the allocations to each non-EGUs in the State equals 98
percent (to provide for a 2 percent new source set-aside) of the total
ozone season NOX emissions calculated for large non-EGUs
each State.
b. Default Emission Limitations for New Units
The proposed Sec. 97.42 contained a new source set-aside of 5
percent for the ozone seasons of 2003, 2004 and 2005 and 2 percent for
each subsequent year. For purposes of this interim final remedy, the
set-aside would enable new units, which did not operate during the full
baseline periods used in assigning allocations to existing sources, to
still receive an allowance allocation.
As described in Sec. 52.34(k), the allowances would be issued to
new sources on a first-come, first-served basis at a rate of 0.15 lb/
mmBtu for large EGUs and 0.17 lb/mmBtu for large non-EGUs multiplied by
the unit's maximum design heat input. Following each ozone season, the
source would be subject to a reduced utilization calculation, in which
EPA would deduct NOX allowances based on the unit's actual
utilization. Because the allocation for a new unit from the set-aside
is based on maximum design heat input, this procedure adjusts the
allocation by actual heat input for the ozone season of the allocation.
This adjustment is a surrogate for the use of actual utilization in a
prior baseline period which is the approach used for allocating
NOX allowances to existing units.
At the end of the relevant ozone season, EPA would allocate any
allowances remaining in the account to the existing sources in the
State on a pro-rata basis. This would have the effect of increasing
each existing source's emission limitation for that ozone season.
[[Page 28313]]
2. July 15, 1999 Allocation Decisions
The methodology described above is included in Sec. 52.34 as a
default remedy under the consent decree with the section 126
petitioners. The EPA emphasizes that no decisions have yet been made as
to the allocation methodology that will be included in the Federal
NOX Budget Trading Program promulgated in July. Today's
default remedy reflects only what was initially proposed in Sec. 97.42
and does not reflect any comments or new information received since the
proposal. As explained in Sections I.I and IV.C.2 of this preamble, the
Agency has not yet had sufficient time to incorporate SIP call
inventory revisions into trading program policy decisions and analysis.
The Agency intends to use this revised data when it becomes available,
along with the comments received on the trading program generally and
allocations specifically, to make a decision on the allocation
methodology and other aspects of the trading program by July 15.
Specifically, the Agency has not yet made decisions regarding the
basis for allocations, the frequency with which the allocations might
be updated (including whether they will be updated), or who might be
eligible to receive allowances. In the NPR for the section 126
rulemaking, EPA proposed three possible allocation methodologies and
corresponding individual unit allocations for EGUs. The first
methodology proposed to allocate allowances based on the heat input
methodology that was included in Sec. 97.42 and is used for the interim
final emission limitations in Sec. 52.34(k) of this action. The second
methodology proposed would allocate to fossil fuel-fired electric
generators based on share of total electricity generation. The third
methodology would issue allowances to all electricity generators based
on their share of total electricity generation.
Selection of the first of these proposed methodologies for the
interim final emission limitations does not indicate that the Agency
prefers that option. The heat input option was included as a default
only because it had already been proposed in rule language in part 97.
The Agency is continuing to review comments, and the Administrator will
promulgate regulations by July 15, 1999 which establish the basis for
allowance allocations, as well as who will receive allowances.
Likewise, the methodology that describes an annually updating
system starting in 2006 was included as the interim remedy because that
was proposed in the Sec. 97.42 rule language. The Agency has not yet
made a decision regarding whether the allowance allocations in the
Federal NOX Budget Trading Program will be updated
periodically or how often they might be updated. The Agency will make a
final determination by July 15, 1999 after consideration of comments.
In addition, the Agency has received numerous comments on other
aspects of the proposed allocation methodologies and will continue to
review these. The Agency will provide final determinations and
responses to these comments by July 15, 1999.
V. Non-ozone Benefits to NOX Reductions
In addition to contributing to attainment of the ozone NAAQS,
decreases of NOX emissions will also likely help improve the
environment in several important ways. On a regional scale, decreases
in NOX emissions will also decrease acid deposition,
nitrates in drinking water, excessive nitrogen loadings to aquatic and
terrestrial ecosystems, and ambient concentrations of nitrogen dioxide,
particulate matter, and toxics. Thus, management of NOX
emissions is important to both air quality and watershed protection. In
its July 8, 1997 final recommendations, OTAG stated that it
``recognizes that NOX controls for ozone reductions purposes
have collateral public health and environmental benefits, including
reductions in acid deposition, eutrophication, nitrification, fine
particle pollution, and regional haze.'' These and other public health
and environmental benefits associated with decreases in NOX
emissions are summarized qualitatively below.34
---------------------------------------------------------------------------
\34\ U.S. Environmental Protection Agency, ``Nitrogen Oxides:
Impacts on Public Health and the Environment,'' EPA-452/R-97-002,
August 1997.
---------------------------------------------------------------------------
Justification for Rulemaking: While EPA believes the information
discussed in this section is important for the public to understand
and, thus, needs to be described as part of the rulemaking and RIA,
there should be no misunderstanding as to the legal basis for the
rulemaking, which is described in Section II of this notice and does
not depend on the non-ozone benefits. The non-ozone benefits did not
affect the method in which EPA determined significant contribution nor
the control requirements.
Acid Deposition: Sulfur dioxide and NOX are the two key
air pollutants that cause acid deposition (wet and dry particles and
gases) and result in the adverse effects on aquatic and terrestrial
ecosystems, materials, visibility, and public health. Nitric acid
deposition plays a dominant role in the acid pulses associated with the
fish kills observed during the springtime melt of the snowpack in
sensitive watersheds and recently has also been identified as a major
contributor to chronic acidification of certain sensitive surface
waters.
Drinking Water Nitrate: High levels of nitrate in drinking water is
a health hazard, especially for infants. Atmospheric nitrogen
deposition in sensitive watersheds can increase stream water nitrate
concentrations; the added nitrate can remain in the water and be
transported long distances downstream.
Eutrophication: NOX emissions contribute directly to the
widespread accelerated eutrophication of United States coastal waters
and estuaries. Atmospheric nitrogen deposition onto surface waters and
deposition to watershed and subsequent transport into the tidal waters
has been documented to contribute from 12 to 44 percent of the total
nitrogen loadings to United States coastal water bodies. Nitrogen is a
nutrient which enhances growth of algae in most coastal waters and
estuaries. Thus, addition of nitrogen results in accelerated algae and
aquatic plant growth causing adverse ecological effects and economic
impacts that range from nuisance algal blooms to oxygen depletion and
fish kills.
Nitrogen Dioxide (NO2): Exposure to NO2 is
associated with a variety of acute and chronic health effects. The
health effects of most concern at ambient or near-ambient
concentrations of NO2 include mild changes in airway
responsiveness and pulmonary function in individuals with pre-existing
respiratory illnesses and increases in respiratory illnesses in
children. Currently, all areas of the United States monitoring
NO2 are below EPA's threshold for health effects.
Nitrogen Saturation of Terrestrial Ecosystems: Nitrogen accumulates
in watersheds with high atmospheric nitrogen deposition. Because most
North American terrestrial ecosystems are nitrogen limited, nitrogen
deposition often has a fertilizing effect, accelerating plant growth.
Although this effect is often considered beneficial, nitrogen
deposition is causing important adverse changes in some terrestrial
ecosystems, including shifts in plant species composition and decreases
in species diversity or undesirable nitrate leaching to surface and
ground water and decreased plant growth.
Particulate Matter (PM): NOX compounds react with other
compounds in the atmosphere to form nitrate particles and acid
aerosols. Because of
[[Page 28314]]
their small size nitrate particles have a relatively long atmospheric
lifetime; these small particles can also penetrate deeply into the
lungs. The PM has a wide range of adverse health effects.
Toxic Products: Airborne particles derived from NOX
emissions react in the atmosphere to form various nitrogen containing
compounds, some of which may be mutagenic. Examples of transformation
products thought to contribute to increased mutagenicity include the
nitrate radical, peroxyacetyl nitrates, nitroarenes, and nitrosamines.
Visibility and Regional Haze: The NOX emissions lead to
the formation of compounds that can interfere with the transmission of
light, limiting visual range and color discrimination. Most visibility
and regional haze problems can be traced to airborne particles in the
atmosphere that include carbon compounds, nitrate and sulfate aerosols,
and soil dust. While the major cause of visibility impairment in the
eastern United States is sulfates, NOX emissions also
contribute to visibility impairment.
VI. Administrative Requirements
A. Executive Order 12866: Regulatory Impact Analysis
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether a regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
(1) Have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
The EPA believes that this action is a ``significant regulatory
action'' because it raises novel legal and policy issues arising from
the Agency's obligation to respond to the section 126 petitions, and
because the action could have an annual effect on the economy of more
than $100 million. As a result, the final rulemaking was submitted to
OMB for review. EPA is referencing the impacts in the final
NOX SIP call and proposed section 126 petitions RIA for the
final section 126 rule and has not prepared a new RIA for the final
rule at this time. Any written comments from OMB to EPA and any written
EPA response to those comments are included in the docket. The docket
is available for public inspection at the EPA's Air Docket Section,
which is listed in the ADDRESSES section of this preamble. The RIA is
available in hard copy by contacting the EPA Library at the address
under ``Availability of Related Information'' and in electronic form as
discussed above in that same section.
The RIA for the section 126 petitions addresses the costs and
benefits associated with reducing emissions at sources affected under
the petitions in the broader context of those sources potentially
affected by the final NOX SIP call and the proposed FIP.
Sources named in the section 126 petitions may also be controlled under
SIPs that will be revised to meet final NOX budgets. The EPA
has proposed that in the event that States fail to submit approvable
SIPs, FIPs will be enacted. Therefore, the sources named in section 126
petitions may be complying with either State or Federal regulations of
generally equivalent stringency.
The RIA for the final NOX SIP call and section 126
petitions concludes that the national annual cost of possible State
actions to comply with the NOX SIP call is approximately
$1.7 billion (1990 dollars). The sources named in the section 126
petitions will bear the majority of that total cost. The EPA will
revise this total cost estimate when it promulgates the NOX
trading program for this section 126 rulemaking. The EPA anticipates
the total cost for this section 126 rulemaking will not exceed the
NOX SIP call estimate. The associated benefits from the
NOX SIP call, in terms of improvements in health,
visibility, and ecosystem protection, that EPA has quantified and
monetized range from $1.1 billion to $4.2 billion. Due to practical
analytical limitations, the EPA is not able to quantify and/or monetize
all potential benefits of the NOX SIP call action. It is
anticipated that the majority of these quantified and monetized
benefits are associated with the section 126 action because the
majority of emission reductions, and the associated exposed populations
and ecosystems, are from sources potentially covered by SIP revisions,
and these sources may also be covered by this section 126 action.
Due to practical analytical and data limitations, such as a lack of
air quality modeling based on the final section 126 inventory data, the
EPA is not able to provide a quantified and monetized benefits analysis
for the promulgated trading program as part of this section 126
rulemaking in July. The EPA will provide a qualitative benefits
assessment for the final section 126 rule in July, and will provide a
quantitative benefits analysis for the final rule in October. The
qualitative benefits assessment will be included in an RIA. This RIA
will also contain estimates of the compliance costs and economic
impacts associated with selected regulatory options that will be
analyzed as part of the promulgation of the NOX trading
program in July.
B. Impact on Small Entities
1. Regulatory Flexibility
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act (SBREFA), provides that
whenever an agency is required to publish a general notice of final
rulemaking, it must prepare and make available a final Regulatory
Flexibility Analysis, unless it certifies that the proposed rule, if
promulgated, will not have ``a significant economic impact on a
substantial number of small entities.''
In accordance with section 603 of the RFA, EPA prepared an initial
regulatory flexibility analysis (IRFA) for this rule (see 63 FR at
56322), and convened a Small Business Advocacy Panel (henceforth called
a ``Panel'') to obtain advice and recommendations of representatives of
the affected small entities in accordance with requirements in the RFA.
As per section 604 of the RFA, we also prepared a final regulatory
flexibility analysis (FRFA) for today's final rule. The FRFA addresses
the issues raised by public comments on the IRFA which was part of the
proposal of this rule. The FRFA is available for review in the docket
and is summarized below.
In the process of developing this rulemaking, EPA worked with the
Small Business Administration (SBA) and OMB and obtained input from
small businesses, small governmental jurisdictions, and small
organizations. On June 23, 1998, EPA's Small Business Advocacy
Chairperson convened a Small Panel under section 609(b) of the RFA as
amended by SBREFA. In addition to its chairperson, the Panel consists
of EPA's Director of the Office of Air Quality Planning and Standards
within the Office of Air and Radiation, the Administrator of the Office
of Information and Regulatory Affairs within the OMB, and the Chief
Counsel for Advocacy of the SBA.
As described in the proposed rule (see 63 FR at 56322), this Panel
conducted
[[Page 28315]]
an outreach effort and completed a report on the section 126 proposal.
The report provides background information on the proposed rule being
developed and the types of small entities that would be subject to the
proposed rule, describes efforts to obtain the advice and
recommendations of representatives of those small entities, summarizes
the comments that have been received to date from those
representatives, and presents the findings and recommendations of the
Panel; the completed report, comments of the small entity
representatives, and other information are contained in the docket for
this rulemaking. The contents of today's action, including the RTC
document and the Final Regulatory Flexibility Analysis, address the six
recommendations in the Panel's report.
In addition, EPA will also prepare a small entity compliance guide
to assist small entities in complying with this rule as required by
Section 212 of the SBREFA.
2. Potentially Affected Small Entities
To define small entities, EPA used the SBA industry-specific
criteria published in 13 CFR section 121. The SBA size standards have
been established for each type of economic activity under the Standard
Industrial Classification (SIC) System. Due to their NOX-
emitting properties, the following industries have the potential to be
affected by the final section 126 rulemaking:
SIC Codes in Division D: Manufacturing
2611--Pulp mills
2819--Industrial Inorganic Materials
2821--Plastics Materials, Synthetic Resins, and Nonvulcanizable
Elastomers
2869--Industrial Organic Chemicals
3312--Steel Works, Blast Furnaces, and Rolling Mills
3511--Steam, Gas, and Hydraulic Turbines
3519--Stationary Internal Combustion Engines
3585--Air-Conditioning and Warm-Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment
SIC Codes in Division E: Transportation, Communications, Electric, Gas,
and Sanitary Services
SIC Major Group 49: Electric, Gas, and Sanitary Services, including:
4911--Electric Utilities
4922--Natural Gas Transmission
4931--Electric and other Gas Services
4961--Steam and Air Conditioning Supply
The section 126 rulemaking is potentially applicable to all
NOX-emitting entities named in one or more of the section
126 petitions. The EPA estimates that the total number of such entities
named in the section 126 petitions is approximately 5200, of which
about 1200 are small entities. The EPA's analysis, ``Final Regulatory
Flexibility Analysis For the Final Section 126 Petitions Under the
Clean Air Act Amendments Title I'' is contained in the docket for this
action, and results from this analysis are given below.
For purposes of today's final action, the section 126 rulemaking
will apply only to the following types of sources: large EGUs, and
large non-EGUs. At these size cutoffs, the estimated number of small
entities that would be affected is as follows:
Electric Generating Units--114 small entities
Industrial Boilers and/or Combustion Turbines--31 small entities.
The EPA has further estimated that, of these affected small
entities, the following would experience compliance costs equal or
greater to 1 percent of their estimated revenues:
Electric Generating Units--32 small entities
Industrial Boilers and Combustion Turbines--4 small entities
Of these, EPA estimates that about 18 small entities with electric
generating units and 4 small entities with industrial boilers or
turbines would experience costs greater than 3 percent of their
estimated revenues.
By limiting the small entities covered by the final rule to large
EGUs and large non-EGUs, EPA is reducing by over 85 percent the number
of small entities otherwise potentially affected by the cap-and-trade
program: out of 1200 potentially-affected small entities, over 1000
would be exempted, with only 145 small entities remaining. Commenters
have strongly endorsed these exemptions.
Furthermore, as described in the proposed rule (see 63 FR at
56323), the Panel explored additional options for reducing the impact
of the rule on small entities in the context of the NOX cap-
and-trade program. The EPA will consider these options and also produce
a small entity analysis based on the latest emissions inventory data
when it promulgates the NOX trading program for this section
126 rulemaking.
C. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, 2
U.S.C. 1532, EPA generally must prepare a written statement, including
a cost-benefit analysis, for any proposed or final rule that ``includes
any Federal mandate that may result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more . . . in any one year.'' A ``Federal mandate'' is
defined to include a ``Federal intergovernmental mandate'' and a
``Federal private sector mandate'' (2 U.S.C. 658(6)). A ``Federal
intergovernmental mandate,'' in turn, is defined to include a
regulation that ``would impose an enforceable duty upon State, local,
or tribal governments (2 U.S.C. 658(5)(A)(i)), except for, among other
things, a duty that is ``a condition of Federal assistance (2 U.S.C.
658(5)(A)(i)(I)). A ``Federal private sector mandate'' includes a
regulation that ``would impose an enforceable duty upon the private
sector,'' with certain exceptions (2 U.S.C. 658(7)(A)).
The EPA is taking the position that the requirements of UMRA apply
because this action could result in the establishment of enforceable
mandates directly applicable to sources (including sources owned by
State and local governments) that would result in costs greater than
$100 million in any one year. The UMRA generally requires EPA to
identify and consider a reasonable number of regulatory alternatives
and adopt the least-costly, most cost-effective or least-burdensome
alternative that achieves the objectives of the rule. The EPA's UMRA
analysis, ``Unfunded Mandates Reform Act Analysis For the Proposed
Section 126 Petitions Under the Clean Air Act Amendments Title I (Phase
I),'' is contained in the docket for this action and is summarized
below. The results of this analysis are referenced here since there
have been no changes in the input data or to the analysis methodology
offered by commenters.
This UMRA analysis examines the impacts of the final section 126
rulemaking on both EGUs and non-EGUs that are owned by State, local,
and tribal governments, as well as sources owned by private entities.
This final rule potentially affects 65 EGUs that are owned by one State
and 24 municipalities (Massachusetts owns 6 units, and the
municipalities own the remaining 59 units). In addition, seven non-EGUs
owned by two States and five municipalities are potentially affected.
The EPA has not identified any units on Tribal lands that would be
subject to the rule requirements. The overall costs are dominated by
the 65 EGUs and are about $30 million per year.
[[Page 28316]]
Under section 203 of UMRA, 2 U.S.C. 1533, before EPA establishes
any regulatory requirements ``that might significantly or uniquely
affect small governments,'' EPA must have developed a small government
agency plan. The plan must provide for notifying potentially affected
small governments; enabling officials of affected small governments to
have meaningful and timely input in the development of EPA regulatory
proposals with significant Federal intergovernmental mandates; and
informing, educating, and advising small governments on compliance with
the regulatory requirements. Today's final rule does not distinguish
EGUs based on ownership, either for those units that are included
within the scope of the proposed rule or for those units that are
exempted by the generating capacity cut-off. Consequently, the final
rule has no requirements that uniquely affect small governments that
own or operate EGUs within the affected region. With respect to the
significance of the rule's provisions, EPA's UMRA analysis (cited
above) demonstrates that the economic impact of the rule will not
significantly affect (as defined in Section 203 of UMRA) State or
municipal EGUs or non-EGUs, either in terms of total cost incurred and
the impact of the costs on revenue, or increased cost of electricity to
consumers. Therefore, development of a small government plan under
section 203 of UMRA is not required.
Under section 204 of UMRA, 2 U.S.C. 1534, if an agency proposes a
rule that contains a ``significant Federal intergovernmental mandate,''
the agency must develop a process to permit elected officials of State,
local, and tribal governments to provide input into the development of
the proposal.'' In order to fulfill UMRA requirements that publicly-
elected officials be given meaningful and timely input in the process
of regulatory development, EPA has sent letters to five national
associations whose members include elected officials. The letters
provided background information, requested the associations to notify
their membership of the proposed rulemaking, and encourage interested
parties to comment on the proposed actions by sending comments during
the public comment period and presenting testimony at the public
hearing on the proposal. The EPA considered these comments as part of
today's final action and EPA will also consider them when finalizing
the trading program.
In addition, during the NOX SIP call, EPA provided
direct notification to potentially affected State and municipally-owned
utilities as part of the public comment and hearing process attendant
to proposal of the NOX SIP call and supplemental notice of
proposed rulemaking. These procedures helped ensure that small
governments had an opportunity to give timely input and obtain
information on compliance. The EPA provided the 26 State- and
municipally-owned utilities and appropriate elected officials with a
brief summary of the proposal and the estimated impacts. The public
rulemaking also elicited numerous comments from State and municipal
utilities and groups representing utility interests. Commenters
generally endorsed the Agency's determinations on application of
controls to State- and municipally-owned utilities.
Furthermore, for the section 126 rulemaking, EPA published an ANPR
that served to provide notice of the Agency's intention to propose
emissions limits and to solicit early input on the proposal. This
process helped to ensure that small governments had an opportunity to
give timely input and obtain information on compliance.
The Agency will revise the UMRA analysis, based on the data in the
final section 126 inventory, when it promulgates the NOX
trading program for this section 126 rulemaking.
D. Paperwork Reduction Act
The information collection requirements in this final rule will be
submitted for approval to OMB under the Paperwork Reduction Act, 44
U.S.C. 3501 et seq., when the NOX trading portion of this
section 126 rulemaking is promulgated. An Information Collection
Request (ICR) document was prepared by EPA for the proposed section 126
rulemaking (see 63 FR at 56325, ICR No. 1889.01) and a copy may be
obtained from Sandy Farmer, OPPE Regulatory Information Division, US
Environmental Protection Agency (2137), 401 M St., SW, Washington, DC
20460 or by calling (202) 260-2740.
E. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
1. Applicability of Executive Order 13045
The Executive Order 13045 applies to any rule that EPA determines
is (1) ``economically significant'' as defined under Executive Order
12866, and (2) addressed an environmental health or safety risk that
has a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency. This final
rule is not subject to Executive Order 13045, entitled ``Protection of
Children from Environmental Health Risks and Safety Risks''(62 FR
19885, April 23, 1997), because it does not involve decisions on
environmental health risks or safety risks that may disproportionately
affect children.
2. Children's Health Protection
In accordance with section 5(501), the Agency has evaluated the
environmental health or safety effects of the rule on children, and
found that the rule does not separately address any age groups.
However, in conjunction with the final NOX SIP call
rulemaking, the Agency has conducted a general analysis of the
potential changes in ozone and PM levels experienced by children as a
result of the NOX SIP call; these findings are presented in
volume 2 of the RIA. The findings include population-weighted exposure
characterizations for projected 2007 ozone and PM concentrations. The
population data includes a census-derived subdivision for the under 18
group. These findings from the final NOX SIP call RIA are
also applicable to today's final action since the exposure
characterizations are based on emissions from sources potentially
covered by SIP revisions, and these sources may also be covered by this
section 126 action.
F. Executive Order 12898: Environmental Justice
Executive Order 12898 requires that each Federal agency make
achieving environmental justice part of its mission by identifying and
addressing, as appropriate, disproportionately high and adverse human
health or environmental effects of its programs, policies, and
activities on minorities and low-income populations. In conjunction
with the final NOX SIP call rulemaking, the Agency has
conducted a general analysis of the potential changes in ozone and PM
levels that may be experienced by minority and low-income populations
as a result of the NOX SIP call; these findings are
presented in volume 2 of the RIA. The findings include population-
weighted exposure characterizations for projected ozone concentrations
and PM concentrations. The population data includes census-derived
subdivisions for whites and non-whites, and for low-income groups.
[[Page 28317]]
G. Executive Order 12875: Enhancing the Intergovernmental Partnership
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments or EPA consults with those governments. If the mandate is
unfunded, EPA must provide to the OMB a description of the extent of
EPA's prior consultation with representatives of affected State, local
and tribal governments, the nature of their concerns, copies of any
written communications from the governments, and a statement supporting
the need to issue the regulation. In addition, Executive Order 12875
requires EPA to develop an effective process permitting elected
officials and other representatives of State, local and tribal
governments ``to provide meaningful and timely input in the development
of regulatory proposals containing significant unfunded mandates.''
The EPA has concluded that this rule may create a mandate on State
and local governments and that the Federal government will not provide
the funds necessary to pay the direct costs incurred by the State and
local governments in complying with the mandate. In order to provide
meaningful and timely input in the development of this regulatory
action, EPA sent letters to five national associations whose members
include elected officials. The letters provided background information,
requested the associations to notify their membership of the proposed
rulemaking, and encouraged interested parties to comment on the
proposed actions by sending comments during the public comment period
and presenting testimony at the public hearing on the proposal. The EPA
has addressed the concerns of these officials in the UMRA Analysis
mentioned in Section V.C. and in the Response to Comments document. A
statement supporting the need to issue the regulation is also contained
in the UMRA Analysis.
Furthermore, for the section 126 rulemaking, EPA published an ANPR
that served to provide notice of the Agency's intention to propose
emissions limits and to solicit early input on the proposal. This
process helped to ensure that small governments had an opportunity to
give timely input and obtain information on compliance.
H. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the government
provides the funds necessary to pay the direct compliance costs
incurred by the tribal governments. If the mandate is unfunded, EPA
must provide to the OMB, in a separately identified section of the
preamble to the rule, a description of the extent of EPA's prior
consultation with representatives of affected tribal governments, a
summary of the nature of their concerns, and a statement supporting the
need to issue the regulation. In addition, Executive Order 13084
requires EPA to develop an effective process permitting elected and
other representatives of Indian tribal governments ``to provide
meaningful and timely input in the development of regulatory policies
on matters that significantly or uniquely affect their communities.''
Today's rule does not significantly or uniquely affect the
communities of Indian tribal governments and, in any event, will not
impose substantial direct compliance costs on such communities. The EPA
is not aware of sources located on tribal lands that could be subject
to the requirements EPA is finalizing in this action. Accordingly, the
requirements of section 3(b) of Executive Order 13084 do not apply.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Pub. L. 104-113, Sec. 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. The NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
This final rulemaking would require all sources that participate in
the trading program under proposed part 97 to meet the applicable
monitoring requirements of part 75. Part 75 already incorporates a
number of voluntary consensus standards. In addition, the Agency
recently revised part 75 to incorporate procedures to monitor and
report NOX mass emissions (see 63 FR at 57464). During that
rulemaking, process EPA sought comments on additional voluntary
consensus standards.
This final rulemaking involves environmental monitoring or
measurements. Sources that participate in the trading program would be
required to meet the monitoring requirements under part 75. Consistent
with the Agency's Performance Based Measurement System (PBMS), part 75
sets forth performance criteria that allow the use of alternative
methods to the ones set forth in part 75. The PBMS approach is intended
to be more flexible and cost effective for the regulated community; it
is also intended to encourage innovation in analytical technology and
improved data quality. The EPA is not precluding the use of any method,
whether it constitutes a voluntary consensus standard or not, as long
as it meets the performance criteria specified, however, any
alternative methods must be approved in advance before they may be used
under part 75.
J. Judicial Review
Section 307(b)(1) of the CAA indicates which Federal Courts of
Appeal have venue for petitions of review of final actions by EPA. This
Section provides, in part, that petitions for review must be filed in
the Court of Appeals for the District of Columbia Circuit (i) when the
agency action consists of ``nationally applicable regulations
promulgated, or final actions taken, by the Administrator,'' or (ii)
when such action is locally or regionally applicable, if ``such action
is based on a determination of nationwide scope or effect and if in
taking such action the Administrator finds and publishes that such
action is based on such a determination.''
This rulemaking on several section 126 petitions is ``naturally
applicable'' within the meaning of section 307(b)(1). At the core of
this rulemaking is EPA's interpretation of sections 126 and
110(a)(2)(D)(i)(I). These interpretations were applied uniformly to
each section 126 petition.\35\ Further, the modeling which EPA employed
to assist in
[[Page 28318]]
making today's decisions involved uniform modeling techniques and a
uniform set of air quality metrics to assess upwind impacts on downwind
states. In addition, the cost effectiveness information was analyzed
and applied uniformly to each petition. Further, the remedy selected by
EPA is uniformly applicable to upwind sources in many different states
and involves interstate trading of NOX emission allowances.
In sum, the numerous legal and technical issues that EPA addressed in
this rulemaking apply uniformly to all the sources in 19 states and the
District of Columbia about which EPA is making an affirmative or
negative determination. Cf. West Virginia Chamber of Commerce v.
Browner, 1998 WL 827315, *7 (4th Cir., Dec. 1, 1998) (the proposed
NOX SIP Call Rule is nationally applicable because it
``seeks to tackle a problem affecting two-thirds of the country by
regulating somewhat less than one half of the states'').
---------------------------------------------------------------------------
\35\ EPA interpreted some of the same provisions in the SIP Call
final rule, and the U.S. Court of Appeals for the D.C. Circuit
agreed with the Administrator that the rule was nationally
significant and thus, that venue lies in that circuit. See State of
Michigan v. EPA, No. 98-1497 (D.C. Cir., Order, Mar. 19, 1999)
(citing Texas Municipal Power Agency v. EPA, 89 F. 3d 858, 867 (D.C.
Cir. 1996) (per curiam)).
---------------------------------------------------------------------------
For these reasons, the Administrator also is determining that the
final action regarding the section 126 petitions is of nationwide scope
and effect for purposes of section 307(b)(1). This is particularly
appropriate because in the report on the 1977 Amendments that revised
section 307(b)(1) of the CAA, Congress noted that the Administrator's
determination that an action is of ``nationwide scope or effect'' would
be appropriate for any action that has ``scope or effect beyond a
single judicial circuit.'' H.R. Rep. No. 95-294 at 323, 324, reprinted
in 1977 U.S.C.C.A.N. 1402-03. Here, the scope and effect of this
rulemaking extend to numerous judicial circuits since the downwind
petitioning states lie in the First, Second and Third Circuits of the
U.S. Courts of Appeals and the upwind regulated states lie in several
other circuits. In these circumstances, section 307(b)(1) and its
legislative history calls for the Administrator to find the rule to be
of ``nationwide scope or effect'' and for venue to be in the D.C.
Circuit.
Thus, any petitions for review of final actions regarding the
section 126 rulemaking must be filed in the Court of Appeals for the
District of Columbia Circuit within 60 days from the date final action
is published in the Federal Register.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. The EPA will submit a report containing this rule and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A ``major rule''
cannot take effect until 60 days after it is published in the Federal
Register. This action is a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective July 26, 1999.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Emissions trading,
Intergovernmental relations, Nitrogen oxides, Ozone transport,
Reporting and recordkeeping requirements.
Dated: April 30, 1999.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble, part 52 of chapter I of
title 40 of the Code of Federal Regulations is amended as follows:
PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart A--General Provisions
2. Subpart A is amended to add Sec. 52.34 to read as follows:
Sec. 52.34 Action on petitions submitted under section 126 relating to
emissions of nitrogen oxides.
(a) Definitions. For purposes of this section, the following
definitions apply:
(1) Administrator means the Administrator of the United States
Environmental Protection Agency or the Administrator's duly authorized
representative.
(2) Large Electric Generating Units (large EGUs) means:
(i) For units that commenced operation before January 1, 1997, a
unit serving during 1995 or 1996 a generator that had a nameplate
capacity greater than 25 MWe and produced electricity for sale under a
firm contract to the electric grid.
(ii) For units that commenced operation on or after January 1, 1997
and before January 1, 1999, a unit serving at any time during 1997 or
1998 a generator that had a nameplate capacity greater than 25 MWe and
produced electricity for sale under a firm contract to the electric
grid.
(iii) For units that commence operation on or after January 1,
1999, a unit serving at any time a generator that has a nameplate
capacity greater than 25 MWe and produces electricity for sale.
(3) Large Non-Electric Generating Units (large non-EGUs) means:
(i) For units that commenced operation before January 1, 1997, a
unit that has a maximum design heat input greater than 250 mmBtu/hr and
that did not serve during 1995 or 1996 a generator producing
electricity for sale under a firm contract to the electric grid.
(ii) For units that commenced operation on or after January 1, 1997
and before January 1, 1999, a unit that has a maximum design heat input
greater than 250 mmBtu/hr and that did not serve at any time during
1997 or 1998 a generator producing electricity for sale under a firm
contract to the electric grid.
(iii) For units that commence operation on or after January 1,
1999, a unit with a maximum design heat input greater than 250 mmBtu/hr
that:
(A) At no time serves a generator producing electricity for sale;
or
(B) At any time serves a generator producing electricity for sale,
if any such generator has a nameplate capacity of 25 MWe or less and
has the potential to use 50 percent or less of the potential electrical
output capacity of the unit.
(4) New sources means new and modified sources.
(5) NOX means oxides of nitrogen.
(6) NOX allowance means an authorization by the
permitting authority or the Administrator to emit up to one ton of
nitrogen oxides during the control period of the specified year or of
any year thereafter.
(7) OTAG means the Ozone Transport Assessment Group (active 1995-
1997), a national work group that addressed the problem of ground-level
ozone and the long-range transport of air pollution across the Eastern
United States. The OTAG was a partnership between EPA, the
Environmental Council of the States, and various industry and
environmental groups.
(8) Ozone season means the period of time beginning May 1 of a year
and ending on September 30 of the same year, inclusive.
(9) Potential electrical output capacity means, with regard to a
unit, 33 percent of the maximum design heat input of the unit.
(10) Unit means a fossil-fuel fired stationary boiler, combustion
turbine, or combined cycle system.
(b) Purpose and applicability. Paragraphs (c) through (h) of this
section set forth EPA's affirmative technical determinations, with
respect to the
[[Page 28319]]
national ambient air quality standards (NAAQS) for ozone, that certain
new and existing sources of emissions of nitrogen oxides
(``NOX'') in certain States emit or would emit
NOX in amounts that contribute significantly to
nonattainment in, or interfere with maintenance by, one or more States
that submitted petitions in 1997-1998 addressing such NOX
emissions under section 126 of the Clean Air Act. (As used in this
section, the term new source includes modified sources, as well.)
Paragraph (i) of this section sets forth EPA's decisions about whether
to grant or deny each of those petitions, and the remainder of this
section sets forth the emissions-reduction requirements that will apply
to the affected sources of NOX emissions to the extent any
of the petitions are granted.
(1) The States that submitted such petitions are Connecticut,
Maine, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode
Island, and Vermont (each of which, hereinafter in this section, may be
referred to also as a ``petitioning State'').
(2) The new and existing sources of NOX emissions
covered by the petitions that emit or would emit NOX
emissions in amounts that make such significant contributions are large
electric generating units (EGUs) and large non-EGUs.
(c) Affirmative technical determinations relating to impacts on
ozone levels in Connecticut. (1) Affirmative technical determinations
with respect to the 1-hour ozone standard in Connecticut. The
Administrator of EPA finds that any existing or new major source or
group of stationary sources emits or would emit NOX in
amounts that contribute significantly to nonattainment in the State of
Connecticut with respect to the 1-hour NAAQS for ozone if it is or will
be:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (c)(2) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 in appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of
Connecticut.
(2) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 1-
hour ozone standard in Connecticut. The States, or portions of States,
that contain sources of NOX emissions for which EPA is
making an affirmative technical determination are:
(i) Delaware.
(ii) District of Columbia.
(iii) Portion of Indiana located in OTAG Subregions 2 and 6, as
shown in appendix F, Figure F-2, of this part.
(iv) Portion of Kentucky located in OTAG Subregion 6, as shown in
appendix F, Figure F-2, of this part.
(v) Maryland.
(vi) Portion of Michigan located in OTAG Subregion 2, as shown in
appendix F, Figure F-2, of this part.
(vii) Portion of North Carolina located in OTAG Subregion 7, as
shown in appendix F, Figure F-2, of this part.
(viii) New Jersey.
(ix) Portion of New York extending west and south of Connecticut,
as shown in appendix F, Figure F-2, of this part.
(x) Ohio.
(xi) Pennsylvania.
(xii) Virginia.
(xiii) West Virginia.
(d) Affirmative technical determinations relating to impacts on
ozone levels in Maine. (1) Affirmative technical determinations with
respect to the 8-hour ozone standard in Maine. The Administrator of EPA
finds that any existing or new major source or group of stationary
sources emits or would emit NOX in amounts that contribute
significantly to nonattainment in the State of Maine, with respect to
the 8-hour NAAQS for ozone if it is or will be:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (d)(2) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 of appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of
Maine.
(2) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 8-
hour ozone standard in Maine. The States that contain sources for which
EPA is making an affirmative technical determination are:
(i) Connecticut.
(ii) Delaware.
(iii) District of Columbia.
(iv) Maryland.
(v) Massachusetts.
(vi) New Jersey.
(vii) New York.
(viii) Pennsylvania.
(ix) Rhode Island.
(x) Virginia.
(e) Affirmative technical determinations relating to impacts on
ozone levels in Massachusetts. (1) Affirmative technical determinations
with respect to the 1-hour ozone standard in Massachusetts. The
Administrator of EPA finds that any existing major source or group of
stationary sources emits NOX in amounts that contribute
significantly to nonattainment in the State of Massachusetts, with
respect to the 1-hour NAAQS for ozone if it is:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (e)(2) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 in appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of
Massachusetts.
(2) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 1-
hour ozone standard in Massachusetts. The portion of a State that
contains sources for which EPA is making an affirmative technical
determination are:
(i) All counties in West Virginia located within a 3-county-wide
band of the Ohio River, as shown in appendix F, Figure F-4, of this
part.
(3) Affirmative technical determinations with respect to the 8-hour
ozone standard in Massachusetts. The Administrator of EPA finds that
any existing major source or group of stationary sources emits
NOX in amounts that contribute significantly to
nonattainment in, or interfere with maintenance by, the State of
Massachusetts, with respect to the 8-hour NAAQS for ozone if it is:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (e)(4) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 in appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of
Massachusetts.
(4) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 8-
hour ozone standard in Massachusetts. The portions of States that
contain sources for which EPA is making an affirmative technical
determination are:
(i) All counties in Ohio located within a 3-county-wide band of the
Ohio River, as shown in appendix F, Figure F-4, of this part.
[[Page 28320]]
(ii) All counties in West Virginia located within a 3-county-wide
band of the Ohio River, as shown in appendix F, Figure F-4, of this
part.
(f) Affirmative technical determinations relating to impacts on
ozone levels in New Hampshire. (1) Affirmative technical determinations
with respect to the 8-hour ozone standard in New Hampshire. The
Administrator of EPA finds that any existing or new major source or
group of stationary sources emits or would emit NOX in
amounts that contribute significantly to nonattainment in, or interfere
with maintenance by, the State of New Hampshire, with respect to the 8-
hour NAAQS for ozone if it is or will be:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (f)(2) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 of appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of New
Hampshire.
(2) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 8-
hour ozone standard in New Hampshire. The States that contain sources
for which EPA is making an affirmative technical determination are:
(i) Connecticut.
(ii) Delaware.
(iii) District of Columbia.
(iv) Maryland.
(v) Massachusetts.
(vi) New Jersey.
(vii) New York.
(viii) Pennsylvania.
(ix) Rhode Island.
(g) Affirmative technical determinations relating to impacts on
ozone levels in the State of New York. (1) Affirmative technical
determinations with respect to the 1-hour ozone standard in the State
of New York. The Administrator of EPA finds that any existing or new
major source or group of stationary sources emits or would emit
NOX in amounts that contribute significantly to
nonattainment in the State of New York, with respect to the 1-hour
NAAQS for ozone:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (g)(2) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 in appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of New
York.
(2) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 1-
hour ozone standard in the State of New York. The States, or portions
of States, that contain sources for which EPA is making an affirmative
technical determination are:
(i) Delaware.
(ii) District of Columbia.
(iii) Portion of Indiana located in OTAG Subregions 2 and 6, as
shown in appendix F, Figure F-6, of this part.
(iv) Portion of Kentucky located in OTAG Subregion 6, as shown in
appendix F, Figure F-6, of this part.
(v) Maryland.
(vi) Portion of Michigan located in OTAG Subregion 2, as shown in
appendix F, Figure F-6, of this part.
(vii) Portion of North Carolina located in OTAG Subregions 6 and 7,
as shown in appendix F, Figure F-6, of this part.
(viii) New Jersey.
(ix) Ohio.
(x) Pennsylvania.
(xi) Virginia.
(xii) West Virginia.
(h) Affirmative technical determinations relating to impacts on
ozone levels in Pennsylvania. (1) Affirmative technical determinations
with respect to the 1-hour ozone standard in Pennsylvania. The
Administrator of EPA finds that any existing or new major source or
group of stationary sources emits or would emit NOX in
amounts that contribute significantly to nonattainment in the State of
Pennsylvania, with respect to the 1-hour NAAQS for ozone if it is or
will be:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (h)(2) of this section; and (iii) Within one of the ``Named
Source Categories'' listed in the portion of Table F-1 in appendix F of
this part describing the sources of NOX emissions covered by
the petition of the State of Pennsylvania.
(2) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 1-
hour ozone standard in Pennsylvania. The States that contain sources
for which EPA is making an affirmative technical determination are:
(i) North Carolina.
(ii) Ohio.
(iii) Virginia.
(iv) West Virginia.
(3) Affirmative technical determinations with respect to the 8-hour
ozone standard in Pennsylvania. The Administrator of EPA finds that any
existing or new major source or group of stationary sources emits or
would emit NOX in amounts that contribute significantly to
nonattainment in, or interfere with maintenance by, the State of
Pennsylvania, with respect to the 8-hour NAAQS for ozone:
(i) In a category of large EGUs or large non-EGUs;
(ii) Located in one of the States (or portions thereof) listed in
paragraph (h)(4) of this section; and
(iii) Within one of the ``Named Source Categories'' listed in the
portion of Table F-1 in appendix F of this part describing the sources
of NOX emissions covered by the petition of the State of
Pennsylvania.
(4) States or portions of States that contain sources for which EPA
is making an affirmative technical determination with respect to the 8-
hour ozone standard in Pennsylvania. The States that contain sources
for which EPA is making an affirmative technical determination are:
(i) Alabama.
(ii) Illinois.
(iii) Indiana.
(iv) Kentucky.
(v) Michigan.
(vi) Missouri.
(vii) North Carolina.
(viii) Ohio.
(ix) Tennessee.
(x) Virginia.
(xi) West Virginia.
(i) Action on petitions for section 126(b) findings. (1) For each
existing or new major source or group of stationary sources for which
the Administrator has made an affirmative technical determination as
described in paragraphs (c) through (h) of this section as to impacts
on nonattainment or maintenance of a particular NAAQS for ozone in a
particular petitioning State, a finding of the Administrator that each
such major source or group of stationary sources emits or would emit
NOX in violation of the prohibition of Clean Air Act section
110(a)(2)(D)(i)(I) with respect to nonattainment or maintenance of such
standard in such petitioning State will be deemed to be made:
(i) As of November 30, 1999, if by such date EPA does not issue
either:
(A) A proposed approval, under section 110(k) of the Clean Air Act,
of a State implementation plan revision submitted by such State to
comply with the requirements of 40 CFR 51.121 and 51.122; or
(B) A final Federal implementation plan meeting the requirements of
those sections for such State.
[[Page 28321]]
(ii) As of May 1, 2000, if by November 30, 1999, EPA issues the
proposed approval described in paragraph (i)(1)(i) of this section for
such State, but, by May 1, 2000, EPA does not fully approve or
promulgate implementation plan provisions meeting such requirements for
such State.
(2) The making of any such finding as to any such major source or
group of stationary sources shall be considered to be the making of a
finding under subsection (b) of section 126 of the Clean Air Act as to
such major source or group of stationary sources. Each aspect of a
petition covering sources in a State as to which the Administrator has
made an affirmative technical determination (as described in paragraphs
(c) through (h) of this section) shall be deemed denied as the date of
final approval, under section 110(k) of the Clean Air Act, of a State
implementation plan revision submitted by such State to comply with the
requirements of 40 CFR 51.121 and 51.122, or promulgation of a final
Federal implementation plan meeting the requirements of 40 CFR 51.121
and 51.122 for such State. Notwithstanding any other provision of this
paragraph (i), after such a finding has been deemed to be made under
this paragraph (i) as to a particular major source or group of
stationary sources in a particular State, such finding will be deemed
to be withdrawn, and the corresponding part of the relevant petition(s)
denied, if the Administrator issues a final action putting in place
implementation plan provisions that comply with the requirements of 40
CFR 51.121 and 51.122 for such State.
(j) Section 126 control remedy. The Federal NOX Budget
Trading Program applies to the owner or operator of any new or existing
large EGU or large non-EGU as to which the Administrator makes a
finding under section 126(b) of the Clean Air Act pursuant to the
provisions of paragraph (h) of this section.
(1) Starting May 1, 2003, the owner or operator of any large EGU or
large non-EGU in the program must hold total NOX allowances
available under the Federal NOX Budget Trading Program to
such unit for the ozone season that are not less than the total
NOX emissions emitted by the unit during that ozone season.
(2) No later than July 15, 1999, the Administrator will promulgate
regulations setting forth the Federal NOX Budget Trading
Program, including the allocation and distribution of NOX
allowances under the program in accordance with paragraphs (j)(3) and
(j)(4) of this section.
(3)(i) The total amount of NOX allowances allocated
under the Federal NOX Budget Trading Program will be
equivalent to the sum of the following two tonnage limits:
(A) The total ozone season NOX emissions from all large
EGUs in the program after achievement of a 0.15 lb/mmBtu NOX
emissions rate in the ozone season by every large EGU, assuming
adjusted historic ozone season heat input as defined in paragraph
(j)(3)(ii) of this section; and
(B) The total ozone season NOX emissions from all large
non-EGUs in the program after achievement of a 60 percent reduction in
ozone season NOX emissions from every large non-EGU,
assuming adjusted ozone season uncontrolled emissions as defined in
paragraph (j)(3)(iii) of this section.
(ii) The adjusted historic ozone season heat input for large EGUs
referenced in paragraph (j)(3)(i)(A) of this section will be calculated
by:
(A) Determining for each State for each year 1995 and 1996 the
total actual ozone season heat input for all EGUs that operated in the
State in 1995 or 1996;
(B) Determining for each State whether the total actual ozone
season heat input for all EGUs that operated in the State in 1995 or
1996 is greater for 1995 or 1996; and
(C) For all of the large EGUs that operated in a State in 1995 or
1996, taking the actual ozone season heat input for each large EGU for
the year determined in paragraph (j)(3)(ii)(B) of this section to have
the greater total actual ozone season heat input for the State and
adjusting for growth to the year 2007.
(iii) The adjusted ozone season uncontrolled emissions for large
non-EGUs referenced in paragraph (j)(3)(i)(B) of this section will be
calculated by taking each large non-EGU's 1995 actual ozone season
NOX emissions, increasing the NOX emissions by
removing the effect of any NOX controls at the large non-EGU
in 1995, and adjusting for growth to the year 2007.
(4)(i) Notwithstanding paragraph (j)(3) of this section, the
additional NOX allowances specified in 40 CFR
51.121(e)(3)(iii) will be available for distribution under the Federal
NOX Budget Trading Program to large EGUs and large non-EGUs
in the program that are located within applicable States.
(ii) After the 2004 ozone season, the owner or operator of any
large EGU or large non-EGU in the program may not use the additional
NOX allowances distributed under paragraph (j)(4)(i) of this
section to demonstrate compliance with the provisions of paragraph
(j)(1) of this section.
(k) Default section 126 remedy. (1) The provisions of this
paragraph (k) will apply only if:
(i) The Administrator makes a finding under section 126(b) of the
Clean Air Act pursuant to the provisions of paragraph (h) of this
section with regard to any new or existing large EGU or large non-EGU;
and
(ii) The Administrator fails to promulgate regulations setting
forth the Federal NOX Budget Trading Program (including the
allocation and distribution of NOX allowances under the
program in accordance with paragraphs (j)(3) and (j)(4) of this
section) before the Administrator makes the finding described in
paragraph (k)(1)(i) of this section.
(2) Starting May 1, 2003, the owner or operator of each large EGU
or each large non-EGU as to which the Administrator makes a finding
under section 126(b) of the Clean Air Act pursuant to the provisions of
paragraph (h) of this section shall control emissions from such unit so
that the unit does not emit total NOX emissions during the
ozone season in excess of the total NOX allowances allocated
to the unit for that ozone season under paragraph (k)(3) of this
section.
(3)(i) The Administrator will allocate to each large EGU and large
non-EGU in the program an amount of NOX allowances and, for
certain units, deduct an amount of NOX allowances,
calculated in accordance with paragraphs (k)(3)(ii) through (vii) of
this section.
(ii)(A) The heat input (in mmBtu) used for calculating
NOX allowance allocations for each large EGU and large non-
EGU in the program will be:
(1) For NOX allowance allocations for the 2003, 2004 and
2005 ozone seasons to any large EGU, the average of the two highest
amounts of the unit's actual heat input for the ozone seasons in 1995,
1996, and 1997 and to any large non-EGU, the ozone season in 1995; and
(2) For a NOX allowance allocation for ozone seasons in
2006 and thereafter to any large EGU or large non-EGU, the unit's
actual heat input for the ozone season in the year that is four years
before the year for which the NOX allocation is being
calculated.
(B) The unit's actual heat input for the ozone season in each year
specified under paragraph (k)(3)(ii)(A) of this section will be
determined in accordance with 40 CFR part 75 if the large EGU or large
non-EGU was otherwise subject to the requirements of 40 CFR part 75 for
the ozone season, or will be based on the best available data
[[Page 28322]]
reported to the Administrator for the unit if the unit was not
otherwise subject to the requirements of 40 CFR part 75 for the ozone
season.
(iii) For each ozone season, the Administrator will allocate to all
large EGUs in a State that commenced operation before May 1 of the
ozone season used to calculate heat input under paragraph (k)(3)(ii) of
this section, a total number of NOX allowances equal to 95
percent in 2003, 2004, and 2005, or 98 percent thereafter, of the total
ozone season NOX emissions from all large EGUs in the State
(as calculated under paragraph (j)(3)(i)(A) of this section) in
accordance with the following procedures:
(A) The Administrator will allocate NOX allowances to
each large EGU in an amount equaling 0.15 lb/mmBtu multiplied by the
heat input determined under paragraph (k)(3)(ii) of this section,
rounded to the nearest whole NOX allowance as appropriate.
(B) If the initial total number of NOX allowances
allocated to all large EGUs in the State for an ozone season under
paragraph (k)(3)(iii)(A) of this section does not equal 95 percent in
2003, 2004, and 2005, or 98 percent thereafter, of the total ozone
season NOX emissions from all large EGUs in the State (as
calculated under paragraph (j)(3)(i)(A) of this section), the
Administrator will adjust the total number of NOX allowances
allocated to all such large EGUs for the ozone season under paragraph
(k)(3)(iii)(A) of this section so that the total number of
NOX allowances allocated equals 95 percent in 2003, 2004,
and 2005, or 98 percent thereafter, of such total ozone season
NOX emissions. This adjustment will be made by: multiplying
each unit's allocation by 95 percent in 2003, 2004, and 2005, or 98
percent thereafter, of the total ozone season NOX emissions
from all large EGUs in the State (as calculated under paragraph
(j)(3)(i)(A) of this section) divided by the total number of
NOX allowances allocated under paragraph (k)(3)(iii)(A) of
this section, and rounding to the nearest whole NOX
allowance as appropriate.
(iv) For each ozone season, the Administrator will allocate to all
large non-EGUs in a State that commenced operation before May 1 of the
ozone season used to calculate heat input under paragraph (k)(3)(ii) of
this section, a total number of NOX allowances equal to 95
percent in 2003, 2004, and 2005, or 98 percent thereafter, of the total
ozone season NOX emissions from all large non-EGUs in the
State (as calculated under paragraph (j)(3)(i)(B) of this section) in
accordance with the following procedures:
(A) The Administrator will allocate NOX allowances to
each large non-EGU in an amount equaling 0.17 lb/mmBtu multiplied by
the heat input determined under paragraph (k)(3)(ii) of this section,
rounded to the nearest whole NOX allowance as appropriate.
(B) If the initial total number of NOx allowances allocated to all
large non-EGUs in the State for an ozone season under paragraph
(k)(3)(iv)(A) of this section does not equal 95 percent in 2003, 2004,
and 2005, or 98 percent thereafter, of the total ozone season
NOX emissions from all large non-EGUs in the State (as
calculated under paragraph (j)(3)(i)(B) of this section), the
Administrator will adjust the total number of NOX allowances
allocated to all such non-EGUs for the ozone season under paragraph
(k)(3)(iv)(A) of this section so that the total number of
NOX allowances allocated equals 95 percent in 2003, 2004,
and 2005, or 98 percent thereafter, of such total ozone season
NOX emissions. This adjustment will be made by: multiplying
each unit's allocation by 95 percent in 2003, 2004, and 2005, or 98
percent thereafter, of the total ozone season NOX emissions
from all large non-EGUs (as calculated under paragraph (j)(3)(i)(B) of
this section) divided by the total number of NOx allowances allocated
under paragraph (k)(3)(iv)(A) of this section, and rounding to the
nearest whole NOx allowance as appropriate.
(v) For each ozone season, the Administrator will allocate
NOX allowances to large EGUs and large non-EGUs that
commenced operation, or are projected to commence operation, in a State
on or after May 1 of the ozone season used to calculate heat input
under paragraph (k)(3)(ii) of this section, in accordance with the
following procedures:
(A) The Administrator will establish one allocation set-aside for
each ozone season for the State. Each allocation set-aside will be
allocated NOX allowances equal to 5 percent in 2003, 2004,
and 2005, or 2 percent thereafter, of the total ozone season
NOX emissions from all large EGUs and large non-EGUs in the
State (as calculated under paragraph (j)(3)(i) of this section).
(B) The owner or operator of any large EGU or large non-EGU under
paragraph (k)(3)(v) of this section may submit to the Administrator a
request, in writing or in a format specified by the Administrator, to
be allocated NOX allowances for no more than five
consecutive ozone seasons, starting with the ozone season during which
the unit commenced, or is projected to commence, operation and ending
with the ozone season preceding the ozone season for which it will
receive an allocation under paragraph (k)(3)(iii) or (iv) of this
section. The NOX allowance allocation request must be
submitted prior to May 1 of the first ozone season for which the
NOX allowance allocation is requested and after the date on
which the State permitting authority issues a permit to construct the
large EGU or large non-EGU.
(C) In a NOX allowance allocation request under
paragraph (k)(3)(v)(B) of this section, the owner or operator of a
large EGU may request for an ozone season NOX allowances in
an amount that does not exceed 0.15 lb/mmBtu multiplied by the unit's
maximum design heat input (in mmBtu/hr) multiplied by the number of
hours remaining in the ozone season starting with the first day in the
ozone season on which the unit operated or is projected to operate.
(D) In a NOX allowance allocation request under
paragraph (k)(3)(v)(B) of this section, the owner or operator of a
large non-EGU may request for an ozone season NOX allowances
in an amount that does not exceed 0.17 lb/mmBtu multiplied by the
unit's maximum design heat input (in mmBtu/hr) multiplied by the number
of hours remaining in the ozone season starting with the first day in
the ozone season on which the unit operated or is projected to operate.
(E) The Administrator will review, and allocate NOX
allowances pursuant to, each NOX allowance allocation
request under paragraph (k)(3)(v)(B) of this section in the order that
the request is received by the Administrator.
(1) Upon receipt of the NOX allowance allocation
request, the Administrator will determine whether, and will make any
necessary adjustments to the request to ensure that, for large EGUs,
the ozone season and the number of allowances specified are consistent
with the requirements of paragraphs (k)(3)(v)(B) and (C) of this
section and, for large non-EGUs, the ozone season and the number of
allowances specified are consistent with the requirements of paragraphs
(k)(3)(v)(B) and (D) of this section.
(2) If the allocation set-aside for the ozone season for which
NOX allowances are requested has an amount of NOX
allowances not less than the number requested (as adjusted under
paragraph (k)(3)(v)(E)(1) of this section), the Administrator will
allocate the amount of the NOX allowances requested (as
adjusted under paragraph (k)(3)(v)(E)(1) of this section) to the large
EGU or large non-EGU.
(3) If the allocation set-aside for the ozone season for which
NOX allowances
[[Page 28323]]
are requested has a smaller amount of NOX allowances than
the number requested (as adjusted under paragraph (k)(3)(v)(E)(1) of
this section), the Administrator will deny in part the request and
allocate only the remaining number of NOX allowances in the
allocation set-aside to the large EGU or large non-EGU.
(4) Once an allocation set-aside for an ozone season has been
depleted of all NOX allowances, the Administrator will deny,
and will not allocate any NOX allowances pursuant to, any
NOX allowance allocation request under which NOX
allowances have not already been allocated for the ozone season.
(F) Within 60 days of receipt of a NOX allowance
allocation request, the Administrator will take appropriate action
under paragraph (k)(3)(v)(E) of this section and notify the owner or
operator of the large EGU or large non-EGU that submitted the request
of the number of NOX allowances (if any) allocated for the
ozone season to the large EGU or large non-EGU.
(vi) For a large EGU or large non-EGU that is allocated
NOX allowances under paragraph (k)(3)(v) of this section for
a control period, the Administrator will deduct NOX
allowances to account for the actual utilization of the unit during the
ozone season. The Administrator will calculate the number of
NOX allowances to be deducted to account for the unit's
actual utilization using the following formulas and rounding to the
nearest whole NOX allowance as appropriate, provided that
the number of NOX allowances to be deducted shall be zero if
the number calculated is less than zero:
NOX allowances deducted for actual utilization for a
large EGU = (Unit's NOX allowances allocated for ozone
season)-(Unit's actual ozone season utilization x 0.15 lb/mmBtu);
and
NOX allowances deducted for actual utilization for a
large non-EGU = (Unit's NOX allowances allocated for
ozone season)-(Unit's actual ozone season utilization x 0.17 lb/
mmBtu),
Where:
Unit's NOX allowances allocated for ozone season = The
number of NOX allowances allocated to the unit for the
ozone season under paragraph (k)(3)(v) of this section; and
Unit's actual ozone season utilization = The utilization (in mmBtu)
of the unit during the ozone season.
(vii) After each ozone season, the Administrator will determine
whether any NOX allowances remain in the allocation set-
aside for a State for the ozone season. The Administrator will allocate
any such NOX allowances to the large EGUs and large non-EGUs
in the State using the following formula and rounding to the nearest
whole NOX allowance as appropriate:
Unit's share of NOX allowances remaining in allocation
set-aside = Total NOX allowances remaining in allocation
set-aside x (Unit's NOX allowance allocation
Total amount of NOX allowances allocated excluding
allocation set-aside)
Where:
Total NOX allowances remaining in allocation set-aside =
The total number of NOX allowances remaining in the
allocation set-aside for the State for the ozone season;
Unit's NOX allowance allocation = The number of
NOX allowances allocated under paragraph (k)(3)(iii) or
(iv) of this section to the unit for the ozone season to which the
allocation set-aside applies; and
Total amount of NOX allowances allocated excluding
allocation set-aside = The total ozone season NOX
emissions from all large EGUs and large non-EGUs in the State (as
calculated under paragraph (j)(3)(i) of this section) multiplied by
95 percent if the ozone season is in 2003, 2004, or 2005 or 98
percent if the ozone season is in any year thereafter, rounded to
the nearest whole allowance as appropriate.
3. Appendix F is added to part 52 to read as follows:
Appendix F to Part 52--Clean Air Act Section 126 Petitions From
Eight Northeastern States: Named Source Categories and Geographic
Coverage
The table and figures in this appendix are cross-referenced in
Sec. 52.34.
Table F-1.--Named Source Categories in Section 126 Petitions
------------------------------------------------------------------------
Petitioning state Named source categories
------------------------------------------------------------------------
Connecticut.................. Fossil fuel-fired boilers or other
indirect heat exchangers with a maximum
gross heat input rate of 250 mmBtu/hr or
greater and electric utility generating
facilities with a rated output of 15 MW
or greater.
Maine........................ Electric utilities and steam-generating
units with a heat input capacity of 250
mmBtu/hr or greater.
Massachusetts................ Electricity generating plants.
New Hampshire................ Fossil fuel-fired indirect heat exchange
combustion units and fossil fuel-fired
electric generating facilities which
emit ten tons of NOX or more per day.
New York..................... Fossil fuel-fired boilers or indirect
heat exchangers with a maximum heat
input rate of 250 mmBtu/hr or greater
and electric utility generating
facilities with a rated output of 15 MW
or greater.
Pennsylvania................. Fossil fuel-fired indirect heat exchange
combustion units with a maximum rated
heat input capacity of 250 mmBtu/hr or
greater, and fossil fuel-fired electric
generating facilities rated at 15 MW or
greater.
Rhode Island................. Electricity generating plants.
Vermont...................... Fossil fuel-fired electric utility
generating facilities with a maximum
gross heat input rate of 250 mmBtu/hr or
greater and potentially other
unidentified major sources.
------------------------------------------------------------------------
BILLING CODE 6560-50-P
[[Page 28324]]
[GRAPHIC] [TIFF OMITTED] TR25MY99.000
[[Page 28325]]
[GRAPHIC] [TIFF OMITTED] TR25MY99.001
[[Page 28326]]
[GRAPHIC] [TIFF OMITTED] TR25MY99.002
[[Page 28327]]
[GRAPHIC] [TIFF OMITTED] TR25MY99.003
[[Page 28328]]
[GRAPHIC] [TIFF OMITTED] TR25MY99.004
[FR Doc. 99-11559 Filed 5-24-99; 8:45 am]
BILLING CODE 6560-50-C
