2024-28739. Federal “Good Neighbor Plan” for the 2015 Ozone National Ambient Air Quality Standards; Notice on Remand of the Record of the Good Neighbor Plan To Respond to Certain Comments

Table I—Data Sources and Cost Estimates for RICE Controls

Control technology/engine type	Original reference	$/Ton value
SCR, 4 Stroke Natural Gas Engines, Lean Burn 17% (of engines in analysis population)	2003, cost information from CARB 2001 report	$2,900 (2001 dollars).
Non-Selective Catalytic Reduction or Layered Combustion, for SCCs where the firing technology is not specified as to Rich Burn or Lean Burn 36%	2009/2000 (from 2009 ERLE study and 2000 Pechan Phase II NO X SIP call report)	4,538 (2013 dollars).
Layered Combustion, 2 Stroke Natural Gas, Lean Burn 44%	2009 (ERLE study)	4,900 (2010 dollars).
Non-Selective Catalytic Reduction, 4 Cycle Natural Gas, Rich Burn 3%	2000 (Pechan, Phase II NO X SIP call report)	422 (1999 dollars).

Likewise, for MWCs in the Solid Waste Combustors and Incinerators industry, the EPA provided the cost assumptions used for the different control types in appendix B of the Non-EGU Memorandum.

For boilers, the EPA explained that its cost estimates were derived from the CMDB, and the EPA identified a number of assumptions used in developing representative cost figures, which the EPA was clear may not be reflective of all sources' circumstances. Non-EGU Memorandum at 7. Noting that boilers have the highest representative costs among the non-EGU source types, the EPA explained in the Good Neighbor Plan that for individual sources, costs on a per-ton basis could well be higher than the estimated $14,595/ton representative cost, but still be commensurate with the range of costs that informed the identification of the most stringent control strategy selected in the Good Neighbor Plan for EGUs (for which costs at the 90th percentile ran as high as $20,900/ton). 88 FR 36746.

The EPA also emphasized that cost-per-ton figures are only one factor in the Step 3 multi-factor analysis, can vary widely depending on the assumptions used, and the conclusions in the Good Neighbor Plan regarding appropriate stringency levels were informed by a broader review of how widely adopted and proven various control strategies had become. Id. at 36746-47. Because of this, the determinations in the Good Neighbor Plan regarding the appropriate level of emissions control that could be expected of a particular type of source considered not just cost-per-ton estimates, but analysis of which technologies were already in wide use or on which existing standards had been based. Good Neighbor Plan RTC at 62-63. Still, recognizing that individual sources may face circumstances of extreme economic hardship or infeasibility, the EPA also provided a mechanism for sources to obtain alternative emissions limits, among other mechanisms for flexibility in the Good Neighbor Plan, to address outlier cases. See40 CFR 52.40(e). These provisions are adequate to cover any potential gap in the Good Neighbor Plan's estimate of representative costs.

Accordingly, recalculating the weighted average representative cost for these particular non-EGU sources for any particular state or state grouping would not produce a representative cost falling outside the acceptable range. Thus, any change in the weighted average used to derive “representative” costs for these industries and emissions unit types resulting from looking at some subset of states would not materially affect the analysis.

3. Step 4

At Step 4, the EPA establishes regulatory requirements to achieve the “prohibition” of significant contribution identified at Step 3. CAA section 110(a)(2)(D)(i). Under the Good Neighbor Plan, implementation of these requirements occurs through compliance activities at the source level, for both EGUs and for non-EGUs. Contrary to commenters' allegations, and as explained in more detail here, in section III.B.3., the trading program for EGUs, which is a compliance flexibility, does not depend on an interstate trading region for viability. Because all of the obligations of the Good Neighbor Plan can be met by the sources in each state regardless of the application of the Good Neighbor Plan in any other state, the implementation framework at Step 4 is severable on a state-by-state basis.

This can be seen in the structure of the regulations themselves. The Good Neighbor Plan determines on a state-by-state basis which of the EGU and the non-EGU emissions-control programs (or both) should be applied through ( print page 99124) state-specific FIPs. See40 CFR 52.38(b)(2) (as amended by 88 FR 36862-63) (identifying states subject to the Good Neighbor Plan's “Group 3” EGU emissions trading program promulgated at 40 CFR part 97, subpart GGGGG); 40 CFR 52.40(c)(2) (as promulgated at 88 FR 36869) (identifying states subject to non-EGU emissions control requirements promulgated at id. 52.41-46). The regulations at 40 CFR part 97, subpart GGGGG and 40 CFR 52.41-46 are uniform in nature. But states are “enrolled” via FIPs into these requirements based on state-specific findings regarding the level of their contribution to other states' ozone problems and how long that contribution is projected to continue into the future.^[56]

It is through the application of those uniform programs, as appropriate, in each state, via FIPs, that the Good Neighbor Plan eliminates each covered state's significant contribution, as required by CAA section 110(a)(2)(D)(i)(I). The state-specific coverage of the Good Neighbor Plan (for the 23 states for which originally promulgated), by regulatory program, is as follows:

• EGUs in all covered states except California (22 States total) are required to participate in the Group 3 EGU emissions trading program at the level of stringency associated with near term emissions-control strategies that the EPA found can be implemented in 2023 and 2024.
• EGUs in Alabama, Minnesota, and Wisconsin are only subject to this “near-term” stringency level within the Group 3 Trading Program, and no more, because the EPA found these states are no longer linked to downwind ozone problems in the 2026 analytic year.
• EGUs in 19 States (excluding the three states listed in the preceding bullet) that are covered by the Group 3 trading program, are subject to the enhanced stringency in the budgets that takes effect over 2026 and 2027 because these states are linked through the 2026 analytic year.
• The EPA found California has no cost-effective fossil-fuel fired EGU emissions reductions available at the stringency levels determined in the Good Neighbor Plan and so is not subject to the Group 3 Trading Program at all.
• Non-EGUs in 20 states are subject to the uniform emissions control regulations. Because the EPA found these requirements may take up to three years to be implemented (i.e., until 2026), this number excludes Alabama, Minnesota, and Wisconsin, for the same reason as above: these states are not “linked” in 2026.

Table II—Coverage of the Good Neighbor Plan Regulatory Programs

State	EGU program— near term stringency	EGU program— long term stringency	Non-EGU
Alabama	X
Arkansas	X	X	X
California			X
Illinois	X	X	X
Indiana	X	X	X
Kentucky	X	X	X
Louisiana	X	X	X
Maryland	X	X	X
Michigan	X	X	X
Minnesota	X
Mississippi	X	X	X
Missouri	X	X	X
Nevada	X	X	X
New Jersey	X	X	X
New York	X	X	X
Ohio	X	X	X
Oklahoma	X	X	X
Pennsylvania	X	X	X
Texas	X	X	X
Utah	X	X	X
Virginia	X	X	X
West Virginia	X	X	X
Wisconsin	X