[Federal Register Volume 82, Number 62 (Monday, April 3, 2017)]
[Proposed Rules]
[Pages 16144-16146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06518]



40 CFR Part 60


Withdrawal of Proposed Rules: Federal Plan Requirements for 
Greenhouse Gas Emissions From Electric Utility Generating Units 
Constructed on or Before January 8, 2014; Model Trading Rules; 
Amendments to Framework Regulations; and Clean Energy Incentive Program 
Design Details

AGENCY: Environmental Protection Agency (EPA).

ACTION: Withdrawal of proposed rules.


SUMMARY: The U.S. Environmental Protection Agency (EPA) is withdrawing 
the October 23, 2015 proposals for a federal plan to implement the 
greenhouse gas (GHG) emission guidelines (EGs) for existing fossil 
fuel-fired electric generating units (EGUs), for model trading rules 
for implementation of the EGs, and for amendments to the Clean Air Act 
(CAA) 111(d) framework regulations, and the June 30, 2016 proposed rule 
concerning design details of the Clean Energy Incentive Program (CEIP).

DATES: The proposed rule published on October 23, 2015 entitled 
``Federal Plan Requirements for Greenhouse Gas Emissions From Electric 
Utility Generating Units Constructed on or Before January 8, 2014; 
Model Trading Rules; Amendments to Framework Regulations.'' 80 FR 
64966, and the proposed rule published on June 30, 2016 entitled 
``Clean Energy Incentive Program Design Details,'' 81 FR 42940, are 
withdrawn as of April 3, 2017.

FOR FURTHER INFORMATION CONTACT: Mr. Peter Tsirigotis, Sector Policies 
and Programs Division (D205-01), U.S. Environmental Protection Agency, 
Research Triangle Park, NC 27711; telephone number: (888) 627-7764; 
email address: [email protected].


1. Background

    On October 23, 2015, EPA published final carbon dioxide EGs under 
CAA 111(d) for existing EGUs, entitled ``Carbon Pollution Emission 
Guidelines for Existing Stationary Sources: Electric Utility Generating 
Units,'' 80 FR 64662 (October 23, 2015) (Clean Power Plan or CPP). On 
the same date, in connection with the CPP, EPA published a proposed 
rule for a federal plan to implement those guidelines, for model 
trading rules to aid implementation of the guidelines, and for 
amendments to

[[Page 16145]]

the existing framework regulations implementing CAA 111(d) ``Federal 
Plan Requirements for Greenhouse Gas Emissions From Electric Utility 
Generating Units Constructed on or Before January 8, 2014; Model 
Trading Rules; Amendments to Framework Regulations.'' 80 FR 64966 
(October 23, 2015) (the October 2015 Proposed Rule). Subsequently, on 
June 30, 2016, EPA published proposed design details of the Clean 
Energy Incentive Program (CEIP), an optional program that States could 
use to incentivize early emission reduction projects under the CPP. 
``Clean Energy Incentive Program Design Details,'' 81 FR 42940 (June 
30, 2016) (CEIP Proposed Rule). The EPA never finalized the October 
2015 Proposed Rule or the CEIP Proposed Rule, and is not doing so 
today. Instead, it is withdrawing them both.
    The CPP was promulgated under Section 111 of the CAA. 42 U.S.C. 
7411. Section 111 of the Clean Air Act authorizes the EPA to issue 
nationally applicable New Source Performance Standards (NSPS) limiting 
air pollution from ``new sources'' in source categories that cause or 
contribute to air pollution that may reasonably be anticipated to 
endanger public health or welfare. 42 U.S.C. Section 7411(b)(1). Under 
this authority, the EPA had long regulated new fossil fuel-fired power 
plants to limit air pollution other than carbon dioxide, including 
particulate matter (PM); nitrogen oxides (NOX) and sulfur 
dioxide (SO2). See 40 CFR part 60 subparts D, Da. In 2015, 
the EPA issued a rule that for the first time set carbon dioxide 
emissions limits for new fossil fuel-fired power plants. Standards of 
Performance for Greenhouse Gas Emissions From New, Modified, and 
Reconstructed Stationary Sources: Electric Utility Generating Units 
(New Source Rule), 80 FR 64510 (October 23, 2015). Under certain 
circumstances, when the EPA issues standards for new sources under 
Section 111(b), the EPA has the authority under Section 111(d), to 
prescribe regulations under which each State is to submit a plan to 
establish standards for existing sources in the same category. The EPA 
relied on that authority to issue the CPP, which for the first time 
required States to submit plans specifically designed to limit carbon 
dioxide emissions from existing fossil fuel-fired power plants.
    Due to concerns about EPA's legal authority and record, 24 States 
and a number of other parties sought judicial review of the New Source 
Rule in the U.S. Court of Appeals for the District of Columbia. State 
of North Dakota v. EPA, No. 15-1381 (and consolidated cases) (D.C. 
Cir.). Similarly, due to concerns about EPA's legal authority and 
record, 27 States and a number of other parties sought judicial review 
of the CPP in the D.C. Circuit. State of West Virginia v. EPA, No. 15-
1363 (and consolidated cases) (D.C. Cir.). On February 9, 2016, the 
Supreme Court stayed implementation of the CPP pending judicial review. 
Oral argument in the D.C. Circuit in North Dakota is currently 
scheduled for April 17, 2017. Following full merits briefing, oral 
argument in West Virginia was held before the D.C. Circuit, sitting en 
banc, on September 27, 2016. Both challenges to these rules are pending 
in the D.C. Circuit.

2. Energy Development Executive Order and Other Related Notices

    On March 28, 2017, President Trump issued an Executive Order 
establishing a national policy in favor of energy independence, 
economic growth, and the rule of law. The purpose of that Executive 
Order is to facilitate the development of U.S. energy resources and to 
reduce unnecessary regulatory burdens associated with the development 
of those resources. The President has directed agencies to review 
existing regulations that potentially burden the development of 
domestic energy resources, and appropriately suspend, revise, or 
rescind regulations that unduly burden the development of U.S. energy 
resources beyond what is necessary to protect the public interest or 
otherwise comply with the law. The Executive Order also directs 
agencies to take appropriate actions, to the extent permitted by law, 
to promote clean air and clean water while also respecting the proper 
roles of Congress and the States. This Executive Order specifically 
directs EPA to review and, if appropriate, initiate proceedings to 
suspend, revise or rescind the CPP.
    In EPA's notice announcing the initiation of its review of the CPP, 
EPA states that, if its review concludes that suspension, revision or 
rescission of the CPP may be appropriate, EPA's review will be followed 
by a rulemaking process that will be transparent, follow proper 
administrative procedures, include appropriate engagement with the 
public, employ sound science, and be firmly grounded in the law.

3. Why is the EPA withdrawing the October 2015 Proposed Rule and the 
CEIP Proposed Rule?

    The Executive Order directs the EPA to review the October 2015 
Proposed Rule and, if appropriate, as soon as practicable and 
consistent with law, consider revising or withdrawing the October 2015 
Proposed Rule. In anticipation of the Executive Order, the EPA had 
already begun a review of both the October 2015 Proposed Rule, and of 
the CEIP Proposed Rule, which proposes implementation details for a 
program that is directly connected to the CPP. In light of the policies 
set forth in the Executive Order and the Agency's concurrent notice 
initiating a review of the CPP, EPA has decided to withdraw the 
Proposed Rules, for the reasons discussed below.
    At this time, the EPA is not under an obligation to finalize these 
rulemakings, nor is there a time-sensitive need for them given the 
Supreme Court stay of the CPP. The October 2015 proposal and the CEIP 
proposal were issued at EPA's discretion to implement the 2015 CPP. 
First, the proposed model trading rules were designed to provide a 
sample for States wishing to adopt a trading program to implement the 
CPP. It was the CPP, however, that was designed to establish the 
binding requirements for state action, while the purpose of the 
proposed model rules was to give states examples of how to design an 
approvable program. While model rules may be helpful, they are not 
required under the CAA. Second, under the Clean Air Act's principles of 
cooperative federalism, hopefully a federal plan will never be needed 
to implement Section 111(d) emission guidelines, and a federal plan 
certainly is not statutorily required early in the implementation 
process, when the Agency's focus is to assist States in developing 
approvable state plans. Finally, the CEIP proposal provides details for 
a voluntary program that was designed to help States and tribes meet 
their CPP goals by removing barriers to investment in energy efficiency 
in low-income communities and encouraging early investments in zero-
emitting renewable energy generation. The CEIP is not required by the 
CAA. Furthermore, because the energy markets continue to change, the 
appropriateness of the details of the CEIP proposal are dependent on 
projected market conditions during the time period when it would apply. 
Changes in CPP compliance dates, including state plan submission dates, 
would likely necessitate a re-evaluation of the CEIP proposal details.
    When EPA initially made these proposals, it assumed that States 
needed immediate guidance to develop state plans because EPA had set 
state plan submission dates starting in September 2016. EPA also wanted 
to be prepared to institute a federal plan immediately if a State 
missed its submission date. Given the Supreme Court's stay of the CPP, 
however, the CPP compliance

[[Page 16146]]

dates must be reviewed. Indeed, the first state plan submission date 
has already passed, and other compliance dates are likely to pass while 
the Supreme Court stay is pending. Further, under the Supreme Court's 
stay of the CPP, States and other interested parties have not been 
required nor expected to work towards meeting the compliance dates set 
in the CPP. Thus, as the EPA conducts its review of the CPP and decides 
what further action to take on the EGU emission guidelines, EPA will 
ensure that any and all remaining compliance dates will be reasonable 
and appropriate in light of the Supreme Court stay of the CPP and other 
factors. Further state action will not be required unless and until 
there is resolution of the pending litigation or the EPA issues new EGU 
emission guidelines. This gives the EPA time to re-evaluate these CPP-
related proposals.
    The EPA believes it should use this time to re-evaluate these CPP-
related proposals and, if appropriate, put out re-proposals or new 
proposals to ensure that the public is commenting on EPA's most up-to-
date thinking on these issues. There are a number of reasons why these 
proposals may ultimately not reflect the Agency's reasoned policy 
decisions reflecting both the current state of the energy market and 
the agency's operative understanding of its statutory authority. First, 
the Agency has announced that it is reviewing and, as appropriate, may 
suspend, revise or rescind the CPP. Though our review of the CPP is 
ongoing and any final decision to suspend, revise or rescind it will be 
made only after EPA has provided notice and an opportunity for public 
comment, it is possible that the CPP as promulgated in 2015 will be 
rescinded and that new emission guidelines, if any, for existing EGUs 
will be different from the CPP. Because the CPP-related Proposed Rules 
are designed to provide implementation details related to the specific 
requirements of the CPP, any changes to the CPP or new emission 
guidelines would most likely require changes to these CPP-related 
proposals. Thus, this preliminary action to withdraw these CPP-related 
proposals will allow EPA to review them in light of its review of the 
CPP and, if they are still needed, to determine the appropriate next 
steps for these proposals, which may be to develop new proposals with 
revisions to ensure they are consistent with and appropriately 
implement revised emission guidelines, if any. Second, whether or not 
the EPA makes any changes as a result of its review of the CPP, it is 
appropriate for the EPA to re-evaluate the proposals in light of the 
policies set forth in the Executive Order and ensure that what the 
Agency proposes and seeks public comment on has been developed or 
reviewed in light of those policies.
    As a final point, we want to be clear that our withdrawal of these 
proposals is not based on any final substantive decision that we have 
made with respect to these proposals. We are withdrawing these 
proposals for the procedural reasons that we have discussed above to 
promote the EPA's review of the CPP and future rulemaking process, and 
ensure that interested parties have a full opportunity to comment on 
proposals that reflect the Agency's most up-to-date and relevant 
thinking. Thus, for the reasons stated above, EPA concludes that, at 
this time, it is appropriate to withdraw the October 2015 Proposed Rule 
and the CEIP Proposed Rule. The
    EPA intends to review these proposals in conjunction with its 
comprehensive review of the CPP. Based on that review, the Agency will 
determine how best to proceed, which may include the development of new 
proposals consistent with the requirements of CAA Section 307(d).

4. Statutory Authority

    Pursuant to CAA Section 307(d)(1)(V), the Administrator is 
determining that this withdrawal is subject to the provisions of CAA 
Section 307(d). The statutory authority for this notice is provided by 
Sections 111, 301 and 307(d) of the CAA as amended (42 U.S.C. 7411, 
7601 and 7607(d)).

5. Impact Analysis

    Because the EPA is not promulgating any regulatory requirements, 
there are no compliance costs or impacts associated with today's final 

6. Statutory and Executive Order Reviews

    Today's action does not establish new regulatory requirements. 
Hence, the requirements of other regulatory statutes and Executive 
Orders that generally apply to rulemakings (e.g., the Unfunded Mandate 
Reform Act) do not apply to this action.

    Dated: March 28, 2017.
E. Scott Pruitt,
[FR Doc. 2017-06518 Filed 3-31-17; 8:45 am]