[Federal Register Volume 83, Number 194 (Friday, October 5, 2018)]
[Notices]
[Pages 50444-50473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20854]
[[Page 50443]]
Vol. 83
Friday,
No. 194
October 5, 2018
Part II
Environmental Protection Agency
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Response to Clean Air Act Section 126(b) Petitions From Delaware and
Maryland; Notice
Federal Register / Vol. 83 , No. 194 / Friday, October 5, 2018 /
Notices
[[Page 50444]]
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ENVIRONMENTAL PROTECTION AGENCY
[EPA-HQ-OAR-2018-0295; FRL-9984-32-OAR]
RIN 2060-AT40, 2060-AT39, 2060-AT38, 2060-AT37, 2060-AT36
Response to Clean Air Act Section 126(b) Petitions From Delaware
and Maryland
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of final action on petition.
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SUMMARY: The Environmental Protection Agency (EPA) is denying four
petitions submitted by the state of Delaware and one petition submitted
by the state of Maryland under Clean Air Act (CAA or Act) section
126(b). The petitions were submitted between July and November 2016.
Each of Delaware's four petitions requested that the EPA make a finding
that emissions from individual sources in Pennsylvania or West Virginia
are significantly contributing to Delaware's nonattainment of the 2008
and 2015 8-hour ozone national ambient air quality standards (NAAQS).
Maryland's petition requested that the EPA make a finding that
emissions from 36 electric generating units in Indiana, Kentucky, Ohio,
Pennsylvania, and West Virginia are significantly contributing to ozone
levels that exceed the 2008 8-hour ozone NAAQS in Maryland, and,
therefore, are interfering with nonattainment and maintenance of the
2008 ozone NAAQS. The EPA is denying the petitions based on the best
information available to the agency at this time, and particularly in
light of an existing regulation already addressing emissions from these
facilities: The Cross-State Air Pollution Rule Update for the 2008
ozone NAAQS (CSAPR Update). The EPA's denial finds that Delaware has
not demonstrated that the named sources emit or would emit in violation
of the CAA's ``good neighbor'' provision. Further, the agency's
independent analysis indicates that the identified sources in
Delaware's and Maryland's petitions do not currently emit and are not
expected to emit pollution in violation of the good neighbor provision
for either the 2008 or 2015 ozone NAAQS.
DATES: This final action is effective on October 5, 2018.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2018-0295. All documents in the docket are
listed and publicly available at http://www.regulations.gov. Although
listed in the index, some information is not publicly available, i.e.,
Confidential Business Information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically in the docket or in hard copy at the
EPA Docket Center, William Jefferson Clinton (WJC) West Building, Room
3334, 1301 Constitution Avenue NW, Washington, DC. The Public Reading
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone number for the Public Reading
Room is (202) 566-1744, and the telephone number for the Office of Air
and Radiation Docket and Information Center is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Questions concerning this final action
should be directed to Mr. Lev Gabrilovich, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, Mail Code C539-01, Research Triangle Park, NC
27711, telephone (919) 541-1496; email at [email protected].
SUPPLEMENTARY INFORMATION: The information in this document is
organized as follows:
I. Executive Summary of the EPA's Decision on CAA Section 126(b)
Petitions From Delaware and Maryland
II. Background
A. Ozone and Public Health
B. The CAA Section 126(b) Petitions From Delaware
C. The CAA Section 126(b) Petition From Maryland
D. Summary of the EPA's May 31, 2018, Proposal
E. Historical Regional Analyses of Good Neighbor Obligations
Related to Ozone
III. CAA Sections 126 and 110 and Standard of Review for This Action
A. Statutory Authority Under CAA Sections 126 and
110(a)(2)(D)(i)(I)
B. Reasonableness of Applying the Four-Step Transport Framework
for This Action
IV. The EPA's Final Response to Delaware's and Maryland's CAA
Section 126(b) Petitions
A. The EPA's Evaluation of Whether the Petitions Are Sufficient
To Support a CAA Section 126(b) Finding
B. The EPA's Independent Analysis of the Petitions Consistent
With the CSAPR Update
V. Determinations Under CAA Section 307(b)(1)
VI. Statutory Authority
I. Executive Summary of the EPA's Decision on CAA Section 126(b)
Petitions From Delaware and Maryland
In 2016, the states of Delaware and Maryland submitted a total of
five petitions requesting that the EPA make findings pursuant to CAA
section 126(b) that emissions from numerous upwind sources
significantly contribute to nonattainment and/or interfere with
maintenance of the ozone NAAQS in violation of CAA section
110(a)(2)(D)(i)(I), otherwise known as the ``good neighbor'' provision.
Delaware submitted four petitions, each alleging good neighbor
violations by individual sources located in Pennsylvania or West
Virginia with respect to the 2008 and 2015 ozone NAAQS. Maryland
submitted a single petition alleging good neighbor violations by 36
electric generating units (EGUs) in five states with respect to the
2008 ozone NAAQS. On May 31, 2018, the EPA issued a proposal to deny
all five CAA section 126(b) petitions. 83 FR 26666 (June 8, 2018). The
agency solicited comments on the proposal and hosted a public hearing
on June 22, 2018, where nine speakers testified. The EPA also received
117 written comments submitted to the docket on the proposed denial.
This Federal Register notice addresses certain significant comments the
agency received. The remaining comments are addressed in the Response
to Comments (RTC) document available in the docket for this action.
As described in further detail in this notice, the EPA is
finalizing the denial of the CAA section 126(b) petitions submitted by
the states of Delaware and Maryland. Generally, the Delaware and
Maryland petitions (and commenters who were supportive of the EPA's
granting these petitions) suggest that Delaware and Maryland residents
are exposed to unhealthy levels of ground-level ozone pollution. They
identify certain EGUs in upwind states, most with post-combustion
nitrogen oxides (NOX) controls,\1\ that historically were
not optimally operating for pollution abatement. The petitions ask EPA
to impose federally enforceable short-term, rate-based emissions limits
on these EGUs to ensure that the NOX controls are optimally
operated. The EPA proposed to deny these petitions in May of 2018, and
has considered public
[[Page 50445]]
comments on that proposal in crafting this final action.
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\1\ In the case of one facility, Brunner Island Steam Generating
Station in Pennsylvania, Delaware cites, the facility's ability to
combust natural gas in electricity generation and thereby reduce
NOX relative to combusting coal at the facility.
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Consistent with the EPA's proposal and based on the best data
available to the agency at this time, the agency is finalizing its
denial of these petitions. The EPA's denial for Delaware is based on
its findings that air quality modeling of ozone levels in 2017 from the
Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS \2\
(CSAPR Update) and more recent air quality modeling of ozone levels in
2023 show no air quality problems in the state with regard to the 2008
and 2015 ozone NAAQS, respectively. For both the Delaware and Maryland
petitions, the EPA's denial is also based on the fact that the agency
has already evaluated the ozone transport issues and NOX
control strategies raised in the petitions and finalized the CSAPR
Update to implement the NOX control strategies achievable in
states upwind of Delaware and Maryland, including at the specific EGUs
named in both Delaware's and Maryland's petitions. 81 FR 74504.
Although the CSAPR Update only explicitly addressed the 2008 ozone
NAAQS, the EPA's conclusion in that action as to the control strategies
available at the named sources is relevant to its analysis of
Delaware's and Maryland's petitions with regard to both the 2008 ozone
NAAQS (addressed in all five petitions) and the 2015 ozone NAAQS
(addressed in the Delaware petitions) because the EPA's determination
that the cost-effective control strategy is already being implemented
at the named sources in the context of the CSAPR allowance trading
program applies regardless of which NAAQS is being addressed, as
explained below.
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\2\ 81 FR 74504 (October 26, 2016).
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Because the CSAPR Update is a final rule in which the EPA has
evaluated substantially the same environmental issues and concerns as
those that Delaware and Maryland raise in their CAA section 126(b)
petitions, the agency has reviewed those petitions in light of, among
other factors, the CSAPR Update record analysis and the findings made
therein. In doing so, the EPA found that the named EGUs do not have
further cost-effective \3\ NOX reduction potential beyond
the level of NOX control stringency already finalized in the
CSAPR Update emissions budgets. In other words, the agency determines
that the CSAPR Update appropriately quantified the cost-effective
NOX reduction potential from the EGUs named in the CAA
section 126(b) petitions and the EPA does not find any further
NOX reductions that may be available from these EGUs at more
stringent levels of NOX control to be cost effective
considering additional relevant factors such as NOX
reduction potential and air quality impacts.
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\3\ In the CSAPR Update, the EPA evaluated several levels of EGU
NOX control stringency and represented those levels using
an estimated marginal cost per ton of NOX reduced. The
final CSAPR Update action selected the level of control stringency
that included operating and optimizing existing SCR post-combustion
controls, installing state-of-the-art NOX combustion
controls, and shifting generation to existing units with lower
NOX emission rates within the same state. This level of
NOX control stringency was represented by a marginal cost
of $1,400 per ton. In other words, the agency considered these
NOX reduction strategies to be cost effective at marginal
cost of $1,400 per ton. The EPA selected this level of control
stringency by applying a multi-factor test, which indicated that
this level of control stringency maximized NOX reductions
and air quality improvement relative to cost, as compared to the
other control levels evaluated.
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Further, the EPA finds that the CSAPR Update is, in fact,
controlling emissions from the named EGUs specifically and from all
EGUs collectively in the named upwind states that impact ozone
concentrations in Delaware and Maryland. Based on the 2017 ozone season
emissions data, the CSAPR Update reduced regional ozone season
NOX emissions by approximately 77,000 tons (21 percent) from
2016 levels. Additionally, the average 2017 ozone season NOX
emissions rate across the EGUs named in the Delaware or Maryland
petitions was 0.116 pounds/one million British thermal units (lbs/
mmBtu) compared with average rates of 0.257 and 0.208 lbs/mmBtu in 2015
and 2016, respectively. Thus, the best data that the agency has
available at this time--2017 emissions data--indicate that the CSAPR
Update ozone season allowance trading program is reducing summer-time
NOX emissions and these data suggest that the units named in
the CAA section 126(b) petitions are collectively controlling their
NOX emissions consistent with the NOX control
strategies identified in the petitions.
The agency does not at this time find adequate technical or legal
grounds for granting the Delaware or Maryland CAA section 126(b)
petitions in light of the existing and effective CSAPR Update
regulation. The agency, therefore, denies these petitions due to the
lack of further cost-effective controls relative to the emissions
reductions already required by the CSAPR Update and based on the best
available information--2017 emissions data--indicating that the CSAPR
Update is being appropriately implemented to reduce NOX
emissions regionally and from the named EGUs. The EPA also notes
several technical deficiencies in the Delaware analyses. As further
described in this notice, the EPA is, therefore, denying Delaware's
petitions based on the petitioner's failure to meet its burden under
CAA section 126(b) to establish a basis for the finding requested. The
EPA additionally is denying both Delaware's and Maryland's petitions
based on the agency's own independent analysis of the interstate
transport of ozone pollution conducted for the CSAPR Update, which
rebuts several assertions in these petitions, as well as additional
technical analysis regarding current unit operations. Finally, the EPA
is also denying Delaware's petitions for the 2015 ozone NAAQS based on
its own recent analyses projecting emissions levels to a relevant
future year, which found no expected nonattainment or maintenance
problems in Delaware for that NAAQS. In making this final decision, the
EPA reviewed the incoming petitions, the public comments received, the
relevant statutory authorities, and other relevant materials.
Accordingly, the EPA denies the CAA section 126(b) petitions from
Delaware and Maryland.
The remainder of this notice is organized as follows: Section II of
this notice provides background information, a summary of the relevant
issues raised in Delaware's and Maryland's CAA section 126(b)
petitions, and a summary of the EPA's May 31, 2018, proposed action;
Section III of this notice provides information regarding the EPA's
approach to addressing the interstate transport of ozone and the
statutory authority under CAA sections 110(a)(2)(D)(i) and 126(b); and
Section IV of this notice details the basis for the EPA's final action
to deny these petitions, including responses to significant comments
received on the proposal.
II. Background
A. Ozone and Public Health
Ground-level ozone is not emitted directly into the air but is a
secondary air pollutant created by chemical reactions between
NOX and volatile organic compounds (VOCs) in the presence of
sunlight. These precursor emissions can be transported downwind
directly or, after transformation in the atmosphere, as ozone. As a
result, ozone formation, atmospheric residence, and transport can occur
on a regional scale (i.e., hundreds of miles). For further discussion
of ozone-formation chemistry, the regional nature of interstate
transport of ozone pollution, and health effects, see the CSAPR Update,
81 FR 74513-14.
[[Page 50446]]
On March 12, 2008, the EPA promulgated a revision to the ozone
NAAQS, lowering both the primary and secondary standards to 75 parts
per billion (ppb).\4\ On October 1, 2015, the EPA further revised the
ground-level ozone NAAQS to 70 ppb.\5\
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\4\ See National Ambient Air Quality Standards for Ozone, Final
Rule, 73 FR 16436 (March 27, 2008).
\5\ See National Ambient Air Quality Standards for Ozone, Final
Rule, 80 FR 65292 (October 26, 2015).
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B. The CAA Section 126(b) Petitions From Delaware
In 2016, the state of Delaware, through the Delaware Department of
Natural Resources and Environmental Control (Delaware), submitted four
petitions alleging that emissions from the Conemaugh Generating Station
(Conemaugh), the Homer City Generating Station (Homer City), and the
Brunner Island Steam Generating Station (Brunner Island) in
Pennsylvania, and the Harrison Power Station (Harrison) in West
Virginia, significantly contribute to exceedances of the 2008 and 2015
8-hour ozone NAAQS in the state of Delaware.\6\
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\6\ See Petitions from the state of Delaware under CAA section
126(b) requesting that the EPA find that Conemaugh, Homer City,
Brunner Island, and Harrison are emitting air pollutants in
violation of the provisions of CAA section 110(a)(2)(D)(i) of the
CAA with respect to the 2008 and the 2015 ozone NAAQS, available in
the docket for this action.
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The petitions identify a total of 59 exceedance days in Delaware
for the 2008 ozone NAAQS in the six ozone seasons between 2010 and
2015. Furthermore, Delaware contends that if the 2015 8-hour ozone
NAAQS had been in effect during this period, Delaware would have
experienced a total of 113 exceedance days in those ozone seasons. As
discussed in Section III.D of the proposal, each of the Delaware
petitions alleges that an individual source significantly contributes
to nonattainment of the 2008 and 2015 8-hour ozone NAAQS in Delaware
based on two common arguments. First, all four petitions allege that
the EPA's modeling conducted in support of the CSAPR Update shows that
the states in which these sources are located contribute one percent or
more of the 2008 8-hour ozone NAAQS to ozone concentrations in
Delaware. Second, all four petitions point to additional modeling to
support these same claims. The Brunner Island and Harrison petitions
cite an August 6, 2015 technical memorandum from Sonoma Technology,
Inc. (STI), which describes contribution modeling results. The
Conemaugh and Homer City petitions cite to October 24, 2016 modeling
documentation from the Comprehensive Air Quality Model with Extensions
(CAMx), but Delaware did not submit this documentation with its
petitions or otherwise provide it to the EPA. Based on the August 6,
2015 technical memorandum from STI and the October 24, 2016 CAMx
modeling documentation, the petitions claim that all four named sources
had modeled contributions above one percent of the 2008 8-hour ozone
NAAQS to locations in Delaware on select days during the 2011 ozone
season.\7\
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\7\ See 83 FR 26670.
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All four petitions contend that the absence of short-term
NOX emissions limits cause the named sources to
significantly contribute to Delaware's nonattainment of the 2008 and
2015 ozone NAAQS. The petitions ask the EPA to implement short-term
NOX emissions limits as a remedy under CAA section 126(c) to
ensure optimal operation at these units. The petitions identify
existing regulatory programs aimed at limiting NOX emissions
at the sources but argue that these programs are not effective at
preventing emissions from significantly contributing to downwind air
quality problems in Delaware. In the case of Brunner Island, Homer
City, and Conemaugh, Delaware argues that the Pennsylvania regulations
addressing the reasonable available control technology (RACT)
requirements for NOX \8\ include a 30-day averaging period
for determining compliance with emissions rates, which will allow the
facilities to emit above the rate limit on specific days while still
meeting the 30-day average limit. Furthermore, the state argues that,
although all four facilities named in their petitions have been subject
to several NOX emissions allowance trading programs that
effectively put a seasonal NOX emissions mass cap on the
fleet of subject units, the subject units are not required to limit
their NOX emissions over any particular portion of the ozone
season as long as they are able to obtain sufficient NOX
allowances to cover each unit's actual ozone season NOX mass
emissions. The state alleges that the sources have, therefore, been
able to comply with the allowance trading program requirements without
having to make any significant reductions in their ozone season average
NOX emissions rates.
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\8\ Additional RACT Requirements for Major Sources of NOX and
VOC; 25 Pa Code 129.96-100 (also known as the ``RACT II rule'').
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Notably, each of the facilities is equipped with combustion and/or
post-combustion controls. Harrison is equipped with low NOX
burners (LNBs), overfire air (OFA), and selective catalytic reduction
(SCR) for control of NOX emissions at all three coal-fired
units. Homer City is equipped with LNBs, OFA, and SCR for control of
NOX emissions at all three coal-fired units. Conemaugh is
equipped with LNBs, close-coupled and separated overfire air (CC/SOFA),
and SCR for control of NOX emissions at both coal-fired
units. Brunner Island is equipped with LNBs and combustion air controls
and has the ability to burn coal, gas, or both to provide steam to its
generators. Delaware acknowledges that Brunner Island can use natural
gas as fuel at all three units, lowering the units' NOX
emissions, but argues that Brunner Island's ability to also use coal
indicates that, without a short-term NOX emissions limit,
the units will continue to significantly contribute to nonattainment or
interfere with maintenance of the ozone NAAQS in Delaware. In the case
of Conemaugh, Harrison, and Homer City, Delaware similarly contends
that current NOX emissions regulations applicable to sources
in Pennsylvania and West Virginia do not prevent significant
contribution to Delaware's nonattainment of the ozone NAAQS. As
indicated in this notice, these EGUs all have SCR to control
NOX emissions. Delaware argues that a review of emissions
rates since the SCRs were installed indicates that the SCRs were at
times turned off or operated at reduced levels of effectiveness in the
ozone season. Thus, in Delaware's view, these sources also need a
short-term NOX emissions limit to implement effective and
consistent NOX control operation. For more information on
the sources identified in the petitions, see Sections III.D and III.E
of the proposal.
Subsequent to receiving the petitions, the EPA published notices
extending the statutory deadline for the agency to take final action on
all four of Delaware's CAA section 126(b) petitions. CAA section 126(b)
of the Act requires the EPA to either make a finding or deny a petition
within 60 days of receipt of the petition and after holding a public
hearing. However, any action taken by the EPA under CAA section 126(b)
is subject to the procedural requirements of CAA section 307(d). See
CAA section 307(d)(1)(N). CAA section 307(d) requires the EPA to
conduct notice-and-comment rulemaking, including issuance of a notice
of proposed action, a period for public comment, and a public hearing
before making a final determination whether to make the requested
finding. In light of the time required for notice-and-comment
rulemaking, CAA section 307(d)(10) provides for a time extension,
[[Page 50447]]
under certain circumstances, for rulemakings subject to the CAA section
307(d) procedural requirements. In accordance with CAA section
307(d)(10), the EPA determined that the 60-day period for action on
Delaware's petitions would be insufficient for the EPA to complete the
necessary technical review, develop an adequate proposal, and allow
time for notice and comment, including an opportunity for public
hearing. In 2016, the EPA published notices extending the deadlines to
act on all four of Delaware's petitions by 6 months. The notices
extending these deadlines can be found in the docket for this
rulemaking.
C. The CAA Section 126(b) Petition From Maryland
On November 16, 2016, the state of Maryland, through the Maryland
Department of the Environment, submitted a CAA section 126(b) petition
alleging that emissions from 36 EGUs significantly contribute to ozone
levels that exceed the 2008 ozone NAAQS in Maryland and, therefore,
significantly contribute to nonattainment and interfere with
maintenance of the NAAQS.\9\ These sources are coal-fired EGUs located
in Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia, which
Maryland notes are states that EPA has already determined are
significantly contributing to nonattainment in Maryland under the 2008
ozone NAAQS. Maryland indicates that all of these sources have SCR or
selective non-catalytic reduction (SNCR) to control NOX
emissions. In addition, Maryland's technical support document discusses
modeling conducted by the University of Maryland, which claims to show
that ozone concentrations would be reduced if these EGUs were to
optimize running their SCR and SNCR controls. Maryland argues that
these projected reductions in ozone concentrations at Maryland monitors
demonstrate that optimizing the post-combustion controls at the 36
units with SCR or SNCR would allow Maryland to attain, or come very
close to attaining, the 2008 8-hour ozone NAAQS. Maryland also provides
the results of control optimization modeling scenarios which project
the ozone impacts of optimizing emissions controls in 2018. Maryland
suggests, by way of using its own state regulation as an example, that
optimizing controls means operating controls consistent with
technological limitations, manufacturers' specifications, good
engineering and maintenance practices, and good air pollution control
practices for minimizing emissions.
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\9\ See Petition to the United States Environmental Protection
Agency Pursuant to Section 126 of the Clean Air Act for Abatement of
Emissions from 36 Coal-Fired Electric Generating Units at 19 Plants
in Five States that Significantly Contribute to Nonattainment of,
and Interfere with Maintenance of, the 2008 Ozone National Ambient
Air Quality Standard in the State of Maryland, available in the
docket for this action.
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The petition further alleges that Maryland's proposed remedy--
discussed further below--will influence how areas in Maryland and other
Mid-Atlantic states are designated under the new 2015 ozone NAAQS.
According to Maryland, the proposed remedy, if implemented in 2017,
would most likely allow the Baltimore area and the Washington, DC,
multi-state area, which includes portions of Maryland, to both be
designated attainment for the 2015 ozone NAAQS.
Maryland alleges that, although the 36 named EGUs have existing
post-combustion control mechanisms that should prevent significant
contribution, the facilities have either ceased to operate the controls
regularly during the ozone season or have chosen to operate them in a
sub-optimal manner. Maryland presents an analysis based on 2005-2015
ozone-season data to support this contention.\10\ Maryland argues that
whether controls are optimally run can be determined by comparing
current ozone season average emissions rates to the lowest ozone season
average emissions rate achieved either after 2005 or after the unit
installed SCR or SNCR, whichever is later. Maryland further alleges
that NOX emissions rates at the 36 EGUs have increased
significantly since the SCR and SNCR installation and initial testing,
indicating that these EGUs are not operating their post-combustion
controls efficiently on each day of the ozone season.
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\10\ Maryland Petition, Appendix A, Part 2, available in the
docket for this action.
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Maryland also submitted a number of technical memoranda to support
its argument. Maryland submitted analyses of control technology
optimization for coal-fired EGUs in eastern states, which they contend
demonstrate that NOX emissions rates at specific EGUs are
well above what is considered representative of an EGU running post-
combustion controls efficiently; that 2015 and 2016 EPA data show that
many EGUs have not been running their post combustion controls as
efficiently as they have in the past during the ozone season; and that
the EPA should, therefore, ensure these controls are operating during
the 2017 ozone season by including requirements that each named EGU to
minimize emissions by optimizing existing control technologies,
enforced through use of a 30-day rolling average rate.\11\
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\11\ See id.
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Maryland also submitted the following documents: A review of its
own NOX regulations for coal fired EGUs; \12\ a study
conducted by Maryland and the University of Maryland regarding regional
ozone transport research and analysis efforts in Maryland; \13\ an
August 6, 2015 STI report alleging that source apportionment modeling
indicates that emissions from Brunner Island (a source not specifically
addressed in Maryland's petition) contribute significantly to ozone
formation in Pennsylvania and neighboring states during the modeled
ozone season; \14\ a list of recommended language for the EPA to
include in federal orders related to the named EGUs to remedy
significant contribution; \15\ and an evaluation of cost savings
Maryland alleges the units have incurred in 2014 by not fully running
their controls compared with the cost of running their controls at full
efficiency.\16\
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\12\ Id. Appendix B.
\13\ Id. Appendix C.
\14\ Id. Appendix D.
\15\ Id. Appendix E.
\16\ Id. Appendix F.
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Maryland supplemented its petition with several further appendices
submitted in 2017. Maryland submitted an additional optimization
analysis comparing NOX emissions rates in 2006, 2015, and
2016 for EGUs listed in its petition; \17\ an analysis comparing 2016
ozone season average emissions rates to the lowest demonstrated ozone
season average emissions rates between 2005 and 2015 at 369 coal-fired
EGUs in 29 states identified as the Eastern Modeling Domain; \18\ an
analysis comparing of average emissions data at 21 units in
Pennsylvania in the first quarter of 2017 to the lowest demonstrated
ozone season average emissions rate between 2005-2016; \19\ and
additional photochemical modeling conducted by the University of
Maryland regarding the impact of the 36 named EGUs in the five upwind
states on ozone concentrations in Maryland, which concludes that
emissions from these units significantly contribute to ozone
concentrations in Maryland and, therefore, contribute to nonattainment
and interfere with the maintenance of the 8-hour ozone NAAQS.\20\
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\17\ Id. Supplemental Appendix A.
\18\ Id. Supplemental Appendix B.
\19\ Id. Supplemental Appendix C.
\20\ Id. Supplemental Appendix D.
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Maryland's petition requests a remedy that will compel the named
EGUs to
[[Page 50448]]
optimize their SCR and SNCR. Maryland indicates that its petition is
focused on ensuring controls are run at the units every day of the
ozone season. According to Maryland, the CSAPR Update, earlier federal
allowance trading programs, and many state regulations allow for longer
compliance periods, which means that controls do not necessarily need
to be run effectively every day to comply with these requirements.
Maryland claims that this has resulted in situations where sources in
the five upwind states have not run their controls efficiently on many
days with high ozone, and, therefore, these sources are impacting
Maryland in violation of CAA section 110(a)(2)(D)(i)(I). Maryland also
claims that, on some of those days, the 36 EGUs in these states emitted
in the aggregate over 300 more tons of NOX than they would
have if they had run their control technologies efficiently.
Additionally, Maryland states that these days are often the same days
where downwind ozone levels are likely to be highest because of hot,
ozone-conducive weather. Maryland supports its claim by alleging that
over the entire ozone season, the relief requested in its petition
could result in very large reductions. Maryland contends that in 2015,
approximately 39,000 tons of NOX reductions could have been
achieved in the ozone season if the 36 EGUs had simply run their
controls efficiently. Therefore, Maryland states that, based on the
EPA's past approaches to establishing significant contributions based
on cost-effective controls, the NOX emissions from these 36
EGUs must be abated on each day of the ozone season starting in May of
2017.
Maryland contends that emissions at the 36 named EGUs can be
reduced at reasonable cost, or with potentially no actual new costs to
the EGUs at all,\21\ because this requested remedy rests on the use of
existing control equipment. Maryland suggests two methods to ensure
optimized use of controls at these sources. First, Maryland requests
that the EPA include language in federal and state regulations or
operating permits requiring the owners or operators of the relevant
EGUs to use all installed pollution control technology consistent with
technological limitations, manufacturers' specifications, good
engineering and maintenance practices, and good air pollution control
practices. Second, Maryland requests that the EPA enforce this
requirement by comparing each unit's maximum 30-day rolling average
emissions rate to the unit's lowest reported ozone emissions rate.
Maryland also requests that this remedy be implemented by 2017 to help
areas in Maryland achieve attainment in time to inform area
designations in the state for the 2015 ozone NAAQS.
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\21\ Although Maryland suggests emissions could potentially be
reduced with no actual new costs to the EGUs, Maryland does not
provide further information supporting its suggestion that zero-cost
reductions may be available. To the contrary, Maryland states that
the cost per ton range would be from $670 to $1,000, depending on
whether the SCR systems are in partial operation or totally idled.
See Maryland Petition Appendix F, available in the docket for this
action.
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Consistent with CAA section 307(d), as discussed in Section III.D
of the proposal, the EPA determined that the 60-day period for
responding to Maryland's petition is insufficient for the EPA to
complete the necessary technical review, develop an adequate proposal,
and allow time for notice and comment, including an opportunity for
public hearing, on a proposed finding regarding whether the 36 EGUs
identified in the petition significantly contribute to nonattainment or
interfere with maintenance of the 2008 ozone NAAQS in Maryland. On
January 3, 2017, the EPA published a notice extending the deadline for
acting on Maryland's CAA section 126(b) petition to July 15, 2017.\22\
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\22\ 82 FR 22 (January 3, 2017).
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D. Summary of the EPA's May 31, 2018, Proposal
In Section IV of the proposal, the EPA explained its bases for
proposing to deny the CAA section 126(b) petitions from Delaware and
Maryland. Given that ozone is a regional pollutant and that the EPA had
recently evaluated regional ozone pollution in the CSAPR Update, the
EPA proposed to evaluate the petition consistent with the same four-
step regional analytic framework--described in more detail in the
following section--that the EPA has used in previous regulatory actions
to evaluate regional interstate ozone transport. Within this framework,
the EPA also proposed to evaluate whether the sources named in the
petitions emit or would emit in violation of the good neighbor
provision based on both current and future anticipated emissions
levels. The EPA identified multiple bases for the proposed denial.
The EPA noted that the agency's historical approach to evaluating
CAA section 126(b) petitions looks first to see whether a petition,
standing alone, identifies or establishes a technical basis for the
requested CAA section 126(b) finding. 83 FR 26674. In this regard, the
agency proposed to find that several aspects of Delaware's analyses are
insufficient to support Delaware's conclusion that the four sources
named in the petitions emit or would emit in violation of the good
neighbor provision. First, the EPA proposed to find that Delaware does
not provide sufficient information to indicate that there is a current
or expected future downwind air quality problem in the state with
respect to either the 2008 and 2015 ozone NAAQS. Id. at 26676. Second,
the EPA proposed to find that the emissions information Delaware relies
upon for its air quality modeling is not representative of current or
future projected emissions levels at the named EGUs. Id. Third, the EPA
proposed to find that Delaware's analyses regarding ozone contributions
to modeled and/or measured ozone levels are unclear and, therefore,
insufficient to support Delaware's position that the named sources are
significantly contributing to nonattainment or interfering with
maintenance of the NAAQS on specific days. Id. The EPA also proposed to
find that material elements of the analysis provided in Maryland's
petition are technically deficient. Id. at 26677.
The EPA further proposed to rely on its own independent analysis to
evaluate the requested CAA section 126(b) findings. Id. First, the EPA
proposed to find that its independent analysis provides no basis to
conclude that any of the sources named by Delaware are linked to a
downwind air quality problem with regard to the 2008 ozone NAAQS in
steps one and two of the four-step framework. The EPA explained that,
based on the modeling conducted in support of the CSAPR Update,
Delaware was not projected to have any nonattainment or maintenance
receptors in 2017 with respect to the 2008 ozone NAAQS, and, therefore,
the states named in Delaware's petitions are not linked to a downwind
air quality problem in the state under that standard. Id. at 26678.
Furthermore, both to confirm the projections in the CSAPR Update
modeling and in response to the petition's assertion that current air
quality data show that Delaware has a downwind problem for the 2008
ozone NAAQS, the EPA examined Delaware's 2014-2016 design values and
found that no monitors were violating the 2008 ozone NAAQS. Id. The EPA
also proposed to find that available future year modeling data do not
suggest that Delaware will have air quality problems by the relevant
attainment date for the 2015 ozone NAAQS.
Second, the EPA evaluated whether there are further cost-effective
NOX emissions reductions available at the specific sources
named in the petitions,
[[Page 50449]]
consistent with step three of the four-step framework. For units in the
Delaware and Maryland petitions already equipped with SCRs, the EPA
proposed to determine that the CSAPR Update emissions budgets already
reflect emissions reductions associated with the turning on and
optimizing of existing SCR controls at the EGUs that are the subject of
the petitions for the 2008 ozone NAAQS, which is the same control
strategy identified in the petitions as being both feasible and cost
effective. Id. at 26679. Therefore, the EPA proposed to determine that
all identified cost-effective emission reductions have already been
implemented with respect to these sources, and therefore that those
sources neither emit nor would emit in violation of the good neighbor
provision for the 2008 NAAQS. The EPA proposed to determine that this
conclusion is also appropriate with regard to the 2015 ozone NAAQS for
those sources addressed in the Delaware petitions because the EPA's
determination that the cost-effective control strategy is already being
implemented applies regardless of which NAAQS is being addressed. In
other words, because the strategy of optimizing existing controls
relative to the 2008 ozone NAAQS has already been implemented via the
CSAPR Update for the sources Delaware named for the 2015 NAAQS, the EPA
proposed there are no additional control strategies available to
further reduce NOX emissions at these sources to address
this standard. Id.
To the extent that the Delaware and Maryland petitions also
identify sources without SCR, the EPA also proposed to deny the
petitions. Maryland cited two sources operating selective non-catalytic
reduction post-combustion controls (SNCR). The EPA proposed to deny
Maryland's petition with respect to these sources based on its
conclusion in the CSAPR Update that fully operating with SNCR is not a
cost-effective NOX emission reduction strategy with respect
to addressing transport obligations for the 2008 ozone NAAQS. The EPA,
therefore, proposed to find that these sources do not emit and would
not emit in violation of the good neighbor provision with respect to
the 2008 ozone NAAQS. Additionally, one of Delaware's petitions alleges
significant contribution from the Brunner Island facility, which
currently has neither SCR nor SNCR installed. The EPA proposed to
determine that an independent step three analysis still provides a
basis for denying Delaware's Brunner Island petition. The EPA explained
that the facility primarily burned natural gas with a low
NOX emission rate in the 2017 ozone season and that the EPA
reasonably expects the facility to continue operating primarily by
burning natural gas in future ozone seasons. Id. at 26680. As such, the
EPA proposed to deny the Brunner Island petition because the agency
found that there are no additional feasible and cost-effective
NOX emission reductions available at Brunner Island.
E. Historical Regional Analyses of Good Neighbor Obligations Related to
Ozone
As explained in the proposal, given that formation, atmospheric
residence, and transport of ozone occur on a regional scale (i.e.,
hundreds of miles) over much of the eastern United States, the states
and the EPA have historically addressed interstate transport of ozone
pursuant to the good neighbor provision through a series of regional
rulemakings focused on the reduction of NOX emissions. These
rulemakings have included findings that downwind states' problems
attaining and maintaining the ozone NAAQS result, in part, from the
contribution of pollution from multiple upwind sources located in
different upwind states. Specifically, to support each historical
action, an evaluation of the extent of the ozone transport problem
(i.e., the breadth of downwind ozone problems and the contributions
from upwind states) was performed. Historically, these assessments have
found interstate ozone transport to be an interconnected system of
upwind and downwind ozone transport such that a regional trading
program would be effective at implementing the CAA's good neighbor
requirements.\23\
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\23\ The Supreme Court has also concurred with the EPA's
assessment regarding the complexity and interconnectivity
underpinning ozone transport. See EPA v. EME Homer City Generation,
L.P., 134 S. Ct. 1584, 1593-94 (2014).
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1. Description of the Four-Step Transport Framework
The EPA has promulgated several transport rulemakings that have
addressed the good neighbor provision, including four addressing
interstate transport with respect to various ozone NAAQS. Each of these
rulemakings essentially followed the same four-step transport framework
to quantify and implement emission reductions necessary to address the
interstate transport requirements of the good neighbor provision. These
steps are:
(1) Identifying downwind air quality problems relative to the
NAAQS. The EPA has identified downwind areas with air quality problems
(referred to as ``receptors'') considering monitored air quality data,
where appropriate, and air quality modeling projections to a future
compliance year. The EPA has focused its analysis on a future year in
light of the forward-looking nature of the good neighbor obligation in
CAA section 110(a)(2)(D)(i)(I). Specifically, the statute requires that
states prohibit emissions that ``will'' significantly contribute to
nonattainment or interfere with maintenance of the NAAQS in any other
state. The EPA has reasonably interpreted this language as permitting
states and the EPA in implementing the good neighbor provision to
prospectively evaluate downwind air quality problems and the need for
further upwind emissions reductions. See North Carolina v. EPA, 531
F.3d 896, 913-14 (D.C. Cir. 2008) (affirming as reasonable the EPA's
interpretation of ``will'' to refer to future, projected ozone
concentrations). The agency has thus identified areas expected to be in
nonattainment with the NAAQS and those areas that may struggle to
maintain the NAAQS;
(2) Determining which upwind states are linked to these identified
downwind air quality problems and warrant further analysis to determine
whether their emissions violate the good neighbor provision. In the
EPA's most recent transport rulemakings for the 2008 ozone NAAQS, the
agency identified such upwind states to be those modeled to contribute
at or above a threshold equivalent to one percent of the applicable
NAAQS;
(3) For upwind states linked to downwind air quality problems,
identifying on a statewide basis emissions (if any) that will
significantly contribute to nonattainment or interfere with maintenance
of a standard, based on cost and air quality factors evaluated in a
multi-factor test. In all four of the EPA's prior rulemakings for
ozone, the agency apportioned emission reduction responsibility among
multiple upwind states linked to downwind air quality problems using
several particular cost- and air quality-based factors to quantify the
reduction in a linked upwind state's emissions that the rulemaking
would require pursuant to the good neighbor provision; and
(4) For states that are found to have emissions that significantly
contribute to nonattainment or interfere with maintenance of the NAAQS
downwind, implementing the necessary emission reductions within the
state. When the EPA has promulgated federal implementation plans (FIPs)
addressing the good neighbor provision for the ozone NAAQS in prior
transport rulemakings, the EPA has typically required affected sources
in upwind states to participate in allowance trading
[[Page 50450]]
programs to achieve the necessary emission reductions.\24\ In addition,
the EPA has also offered states the opportunity to participate in
similar EPA-operated allowance trading programs to achieve the
necessary emission reductions through state implementation plans
(SIPs).
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\24\ While the EPA has chosen to implement emission reductions
through allowance trading programs for states found to have a
downwind impact, upwind states can choose to submit a SIP that
implements such reductions through other enforceable mechanisms that
meets the requirements of the good neighbor provision, such as the
enforceable mechanisms that petitioners apparently favor and argue
for in their petition.
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2. Prior Regional Rulemakings Under the Good Neighbor Provision
The EPA's first regional rulemaking regarding interstate transport,
the NOX SIP Call, addressed the 1979 ozone NAAQS. 63 FR
57356 (October 27, 1998). The NOX SIP Call was the result of
the analytic work and recommendations of the Ozone Transport Assessment
Group (OTAG), which was organized by and led by states in consultation
with the EPA and other stakeholders. The EPA used this collaboratively
developed analysis to conclude in the NOX SIP Call that
``[t]he fact that virtually every nonattainment problem is caused by
numerous sources over a wide geographic area is a factor suggesting
that the solution to the problem is the implementation over a wide area
of controls on many sources, each of which may have a small or
unmeasurable ambient impact by itself.'' 63 FR 57356, 57377 (October
27, 1998). The NOX SIP Call promulgated statewide emission
budgets and required upwind states to adopt SIPs that would decrease
their NOX emissions by a sufficient amount to meet these
budgets, thereby prohibiting the emissions that significantly
contribute to nonattainment or interfere with maintenance of the ozone
NAAQS in downwind states. The EPA also promulgated a model rule for a
regional allowance trading program called the NOX Budget
Trading Program that states could adopt in their SIPs as a mechanism to
achieve some or all of the required emission reductions. All of the
jurisdictions covered by the NOX SIP Call ultimately chose
to adopt the NOX Budget Trading Program into their SIPs. The
NOX SIP Call was upheld by the U.S. Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) in all pertinent respects.
See Michigan v. EPA, 213 F.3d 663 (2000).
In coordination with the NOX SIP Call rulemaking under
CAA section 110(a)(2)(D)(i)(I), the EPA also addressed several pending
CAA section 126(b) petitions submitted by eight northeastern states
regarding the same air quality issues addressed by the NOX
SIP Call (i.e., interstate ozone transport for the 1979 ozone NAAQS).
These CAA section 126(b) petitions asked the EPA to find that ozone
emissions from numerous sources located in 22 states and the District
of Columbia had adverse air quality impacts on the petitioning downwind
states. Half of the petitioning states requested that the
NOX reductions to address regional interstate ozone
pollution transport be implemented using an allowance trading
program.\25\ Based on analysis conducted for the NOX SIP
Call regarding upwind state impacts on downwind air quality, the EPA in
May 1999 made technical determinations regarding the claims in the
petitions, but did not at that time make the CAA section 126(b)
findings requested by the petitions. 64 FR 28250 (May 25, 1999). In
making these technical determinations, the EPA concluded that the
NOX SIP Call would fully address and remediate the claims
raised in these petitions, and that the EPA would, therefore, not need
to take separate action to remedy any potential violations of the CAA
section 110(a)(2)(D)(i) prohibition. 64 FR 28252. However, subsequent
litigation over the NOX SIP Call led the EPA to ``de-link''
the CAA section 126(b) petition response from the NOX SIP
Call, and the EPA made final CAA section 126(b) findings for 12 states
named in the petitions and the District of Columbia. The EPA found that
sources in these states emitted in violation of the prohibition in the
good neighbor provision with respect to the 1979 ozone NAAQS based on
the affirmative technical determinations made in the May 1999
rulemaking. In order to remedy the violation under CAA section 126(c),
the EPA required affected sources in the upwind states to participate
in a regional allowance trading program whose requirements were
designed to be interchangeable with the requirements of the optional
NOX Budget Trading Program model rule provided under the
NOX SIP Call. 65 FR 2674 (January 18, 2000). The EPA's
action on these CAA section 126(b) petitions was upheld by the D.C.
Circuit. See Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir.
2001).
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\25\ Connecticut, Maine, New York, and Pennsylvania requested an
allowance trading program to reduce NOX emissions and
remedy regional interstate ozone transport. 63 FR 56297.
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The EPA next promulgated the Clean Air Interstate Rule (CAIR), 70
FR 25162 (May 12, 2005) to address interstate transport under the good
neighbor provision with respect to the 1997 ozone NAAQS, as well as the
1997 fine particulate matter (PM2.5) NAAQS. 70 FR 25172. The
EPA adopted the same framework for quantifying the level of states'
significant contribution to downwind nonattainment in CAIR as it used
in the NOX SIP Call, based on the determination in the
NOX SIP Call that downwind ozone nonattainment is due to the
impact of emissions from numerous upwind sources and states. 70 FR
25162, 25172 (May 12, 2005). The EPA explained that ``[t]ypically, two
or more States contribute transported pollution to a single downwind
area, so that the `collective contribution' is much larger than the
contribution of any single State.'' 70 FR 25186. CAIR included two
distinct regulatory processes: (1) A rulemaking to define significant
contribution (i.e., the emission reduction obligation) under the good
neighbor provision and provide for submission of SIPs eliminating that
contribution, 70 FR 25162 (May 12, 2005); and (2) a rulemaking to
promulgate, where necessary, FIPs imposing emission limitations in the
event states did not submit SIPs. 71 FR 25328 (April 28, 2006). The
FIPs required EGUs in affected states to participate in regional
allowance trading programs, which replaced the previous NOX
Budget Trading Program.
In conjunction with the second CAIR rulemaking, which promulgated
backstop FIPs, the EPA acted on a CAA section 126(b) petition received
from the state of North Carolina on March 19, 2004, seeking a finding
that large EGUs located in 13 states were significantly contributing to
nonattainment and/or interfering with maintenance of the 1997 ozone
NAAQS and the 1997 PM2.5 NAAQS in North Carolina. Citing the
analyses conducted to support the promulgation of CAIR, the EPA denied
North Carolina's CAA section 126(b) petition in full based on
determinations either that the named states were not adversely
impacting downwind air quality in violation of the good neighbor
provision, or that such impacts were fully remedied by implementation
of the emission reductions required by the CAIR FIPs. 71 FR 25328,
25330 (April 28, 2006).
The D.C. Circuit found that EPA's approach to CAA section
110(a)(2)(D)(i)(I) in CAIR was ``fundamentally flawed'' in several
respects, and the rule was remanded in July 2008 with the instruction
that the EPA replace the rule ``from the ground up.'' North Carolina,
531 F.3d at 929.
[[Page 50451]]
The decision did not find fault with the EPA's general multi-step
framework for addressing interstate ozone transport, but rather
concluded the EPA's analysis and compliance mechanisms did not address
all elements required by the statute. The EPA's separate action denying
North Carolina's CAA section 126(b) petition was not challenged.
On August 8, 2011, the EPA promulgated CSAPR to replace CAIR. 76 FR
48208 (August 8, 2011). CSAPR addressed the same (1997) ozone and
PM2.5 NAAQS as CAIR and, in addition, addressed interstate
transport for the 2006 PM2.5 NAAQS by requiring 28 states to
reduce sulfur dioxide (SO2) emissions, annual NOX
emissions, and/or ozone season NOX emissions that would
significantly contribute to other states' nonattainment or interfere
with other states' ability to maintain these air quality standards.
Consistent with prior determinations made in the NOX SIP
Call and CAIR, the EPA again found that multiple upwind states
contributed to downwind ozone nonattainment in multiple downwind
states. Specifically, the EPA found ``that the total `collective
contribution' from upwind sources represents a large portion of
PM2.5 and ozone at downwind locations and that the total
amount of transport is composed of the individual contribution from
numerous upwind states.'' 76 FR 48237. Accordingly, the EPA conducted a
regional analysis, calculated emission budgets for affected states, and
required EGUs in these states to participate in new regional allowance
trading programs to reduce statewide emission levels.\26\ CSAPR was
subject to nearly 4 years of litigation. Ultimately, the Supreme Court
upheld the EPA's approach to calculating emission reduction obligations
and apportioning upwind state responsibility under the good neighbor
provision, but also held that the EPA was precluded from requiring more
emission reductions than necessary to address downwind air quality
problems, or ``over-controlling'' upwind state emissions. See EPA v.
EME Homer City Generation, L.P., 134 S. Ct. 1584, 1607-09 (2014) (EME
Homer City).\27\
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\26\ The CSAPR trading programs included assurance provisions to
ensure that emissions are reduced within each individual state, in
accordance with North Carolina, 531 F.3d at 907-08 (holding the EPA
must actually require elimination of emissions from sources that
contribute significantly to nonattainment and interfere with
maintenance in downwind areas). Those provisions were also included
in the CSAPR Update and went into effect with the 2017 CSAPR
compliance periods.
\27\ On remand from the Supreme Court, the D.C. Circuit further
affirmed various aspects of the CSAPR, while remanding the rule
without vacatur for reconsideration of certain states' emissions
budgets where it found those budgets may over-control emissions
beyond what was necessary to address the good neighbor requirements.
EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (2015) (EME
Homer City II). The EPA addressed the remand in several rulemaking
actions in 2016 and 2017.
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Most recently, the EPA promulgated the CSAPR Update to address the
good neighbor provision requirements for the 2008 ozone NAAQS. 81 FR
74504 (October 26, 2016). The CSAPR Update built upon previous
regulatory efforts in order to address the collective contributions of
ozone pollution from 22 states in the eastern United States to
widespread downwind air quality problems. As was also the case for the
previous rulemakings, the EPA evaluated the nature (i.e., breadth and
interconnectedness) of the ozone problem and NOX reduction
potential from EGUs, including those sources named in the Delaware and
Maryland CAA section 126(b) petitions. The CSAPR Update is described in
more detail in Section IV.B of this final action.
In finalizing the CSAPR Update, the EPA found that it was at that
time unable to determine whether the rule fully resolved good neighbor
obligations for most of the states subject to that action, including
those addressed in Delaware's and Maryland's petitions (Indiana,
Kentucky, Ohio, Pennsylvania and West Virginia), and noted that, based
on its analysis at that time, the emission reductions required by the
rule ``may not be all that is needed'' to address transported
emissions.\28\ 81 FR 74521 through 74522. The EPA noted that the
information available at that time suggested that downwind air quality
problems would remain in 2017 after implementation of the CSAPR Update
and that upwind states continued to be linked to those downwind
problems at or above the one-percent threshold. However, in the CSAPR
Update the EPA could not determine whether, in step three of the four-
step framework, the EPA had quantified all emission reductions that may
be considered cost effective because the rule did not evaluate non-EGU
ozone season NOX reductions and further EGU control
strategies (i.e., the implementation of new post-combustion controls)
that were achievable on timeframes extending beyond the 2017 analytic
year.
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\28\ The EPA determined that the emission reductions required by
the CSAPR Update satisfied the full scope of the good neighbor
obligation for Tennessee with respect to the 2008 ozone NAAQS. 81 FR
74551-22.
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On July 10, 2018, the EPA proposed to find that, based on the
latest available emissions inventory and air quality modeling data for
a 2023 analytic year, the CSAPR Update fully addresses the good
neighbor provision requirements for the 2008 ozone NAAQS for the 20
eastern states (among the 22) previously addressed in the CSAPR Update.
83 FR 31915. The EPA's proposed determination was premised on the
finding that there would be no remaining nonattainment or maintenance
receptors for the 2008 ozone NAAQS in the eastern U.S. in 2023. The
proposed determination applied the four-step CSAPR framework but did
not progress past step one since no air quality receptors were
identified. Therefore, with the CSAPR Update fully implemented, the EPA
has proposed to find that states are not expected to contribute
significantly to nonattainment in, or interfere with maintenance by,
any other state with regard to the 2008 ozone NAAQS. EPA is currently
reviewing comments on the proposed rule and anticipates taking final
action by December 2018. The remaining two states were determined to
have no remaining good neighbor obligation for the 2008 ozone NAAQS in
the CSAPR Update (Tennessee), 81 FR 74540 (October 26, 2016), and in a
separate SIP approval (Kentucky), 81 FR 33730 (July 17, 2018).
III. CAA Sections 126 and 110 and Standard of Review for This Action
The following subsections describe both the statutory authority and
the EPA's standard of review for the final action on Delaware's and
Maryland's CAA section 126(b) petitions. Section III.A of this notice
describes the EPA's authority and interpretation of key terms under
both CAA sections 126 and 110(a)(2)(D)(i)(I), including the
relationship between the good neighbor provision and CAA section
126(b). Section III.B of this notice describes the reasonableness of
applying the four-step framework and certain prior findings under the
CSAPR Update as the standard of review in evaluating Delaware's and
Maryland's CAA section 126(b) petitions.
A. Statutory Authority Under CAA Sections 126 and 110(a)(2)(D)(i)(I)
The statutory authority for this action is provided by CAA sections
126 and 110(a)(2)(D)(i). Section 126(b) of the CAA provides that any
state or political subdivision may petition the Administrator of the
EPA to find that any major source or group of stationary sources in an
upwind state emits or would emit any air pollutant in violation of the
prohibition of CAA
[[Page 50452]]
section 110(a)(2)(D)(i).\29\ Petitions submitted pursuant to this
section are commonly referred to as CAA section 126(b) petitions.
Similarly, findings by the Administrator, pursuant to this section,
that a source or group of sources emits air pollutants in violation of
the CAA section 110(a)(2)(D)(i) prohibition are commonly referred to as
CAA section 126(b) findings.
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\29\ The text of CAA section 126 as codified in the U.S. Code
cross-references CAA section 110(a)(2)(D)(ii) instead of CAA section
110(a)(2)(D)(i). The courts have confirmed that this is a
scrivener's error and the correct cross-reference is to CAA section
110(a)(2)(D)(i). See Appalachian Power Co. v. EPA, 249 F.3d 1032,
1040-44 (D.C. Cir. 2001).
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CAA section 126(c) explains the effect of a CAA section 126(b)
finding and establishes the conditions under which continued operation
of a source subject to such a finding may be permitted. Specifically,
CAA section 126(c) provides that it is a violation of section 126 of
the Act and of the applicable SIP: (1) For any major proposed new or
modified source subject to a CAA section 126(b) finding to be
constructed or operate in violation of the prohibition of CAA section
110(a)(2)(D)(i); or (2) for any major existing source for which such a
finding has been made to stay in operation more than 3 months after the
date of the finding. The statute, however, also gives the Administrator
discretion to permit the continued operation of a source beyond 3
months if the source complies with emission limitations and compliance
schedules provided by the EPA to bring about compliance with the
requirements contained in CAA sections 110(a)(2)(D)(i) and 126 as
expeditiously as practicable, but in any event no later than 3 years
from the date of the finding.
Section 110(a)(2)(D)(i) of the CAA, referred to as the good
neighbor provision of the Act, requires states to prohibit certain
emissions from in-state sources if such emissions impact the air
quality in downwind states. Specifically, CAA sections 110(a)(1) and
110(a)(2)(D)(i)(I) require all states, within 3 years of promulgation
of a new or revised NAAQS, to submit SIPs that contain adequate
provisions prohibiting any source or other type of emissions activity
within the state from emitting any air pollutant in amounts which will
contribute significantly to nonattainment in, or interfere with
maintenance by, any other state with respect to that NAAQS. As
described in the prior section, the EPA has developed a number of
regional rulemakings to address CAA section 110(a)(2)(D)(i)(I) for the
various ozone NAAQS. Notably, the EPA's most recent rulemaking, the
CSAPR Update, was promulgated to address interstate transport under
section 110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS and required
implementation of specific emission budgets starting in 2017. 81 FR
74504.
The EPA's historical approach to evaluating CAA section 126(b)
petitions evaluates whether a petition establishes a sufficient basis
for the requested CAA section 126(b) finding. See, e.g., 76 FR 19662,
19666 (April 7, 2011) (proposed response to petition from New Jersey
regarding SO2 emissions from the Portland Generating
Station); 83 FR 16064, 16070 (April 13, 2018) (final response to
petition from Connecticut regarding ozone emissions from Brunner
Island). The EPA first evaluates the technical analysis in the petition
to see if that analysis, standing alone, is sufficient to support a CAA
section 126(b) finding. The EPA focuses on the analysis in the petition
because the statute does not require the EPA to conduct an independent
technical analysis to evaluate claims made in CAA section 126(b)
petitions. The petitioner, thus, bears the burden of establishing, as
an initial matter, a technical basis for the specific finding
requested. The EPA has no obligation to prepare an analysis to
supplement a petition that fails, on its face, to include an initial
technical demonstration. Such a petition, or a petition that fails to
identify the specific finding requested, can be denied as insufficient.
Nonetheless, the EPA has the discretion to conduct independent analyses
when helpful in evaluating the basis for a potential CAA section 126(b)
finding or developing a remedy if a finding is made.
With respect to the statutory requirements of both section
110(a)(2)(D)(i) and section 126 of the CAA, the EPA has consistently
acknowledged that Congress created these provisions as two independent
statutory processes to address the problem of interstate pollution
transport. See, e.g., 76 FR 69052, 69054 (November 7, 2011). Congress
provided two separate statutory processes without indicating any
preference for one over the other, suggesting it viewed either approach
as a legitimate means to produce the desired result. While either
provision may be applied to address interstate transport, they are also
closely linked in that a violation of the prohibition in CAA section
110(a)(2)(D)(i) is a condition precedent for action under CAA section
126(b) and, critically, significant contribution to nonattainment and
interference with maintenance are construed identically for purposes of
both provisions (since the identical terms are naturally interpreted as
meaning the same thing in the two linked provisions). See Appalachian
Power, 249 F.3d at 1049-50.
While section 126(b) of the CAA provides a mechanism for states and
other political subdivisions to seek abatement of pollution in other
states that may affect their air quality, it does not identify specific
criteria or a specific methodology for the Administrator to apply when
deciding whether to make a CAA section 126(b) finding or deny a
petition. Therefore, the EPA has discretion to identify relevant
criteria and develop a reasonable methodology for determining whether a
CAA section 126(b) finding should be made. Thus, in addressing a CAA
section 126(b) petition that addresses ozone transport, the EPA
believes it is appropriate to interpret these ambiguous terms
consistent with the EPA's historical approach to evaluating interstate
ozone pollution transport under the good neighbor provision, and its
interpretation and application of that related provision of the
statute. This approach is particularly applicable to the Delaware and
Maryland petitions because the EPA recently finalized and began
implementation of the CSAPR Update, which evaluated and addresses
interstate ozone pollution transport, inclusive of the named states'
impacts on Delaware and Maryland. As described further in Section II of
this notice, ozone is a regional air pollutant and previous EPA
analyses and regulatory actions have evaluated the regional interstate
ozone transport problem using a four-step analytic framework. The EPA
most recently applied this four-step framework in promulgating the
CSAPR Update to address interstate transport with respect to the 2008
ozone NAAQS under CAA section 110(a)(2)(D)(i)(I) and believes it may be
generally useful in analyzing the 2015 ozone NAAQS. Given the specific
cross-reference in CAA section 126(b) to the substantive prohibition in
CAA section 110(a)(2)(D)(i), the EPA believes any prior findings made
under the good neighbor provision are informative--if not
determinative--for a CAA section 126(b) action. Therefore, in this
instance, the EPA's decision whether to grant or deny the CAA section
126(b) petitions regarding both the 2008 8-hour ozone and 2015 ozone
NAAQS depends on application of the four-step framework. The
application of the four-step framework to the EPA's analysis of
Maryland's and Delaware's CAA section 126(b) petitions regarding the
2008
[[Page 50453]]
ozone NAAQS is, therefore, legally appropriate given the EPA has
previously interpreted (and addressed) significant contribution and
interference with maintenance under CAA section 110(a)(2)(D)(i) under
this framework via the CSAPR Update.
Unlike the 2008 ozone NAAQS, the EPA has not to date engaged in a
rulemaking action regarding the good neighbor provision for the 2015
ozone NAAQS. However, the EPA has recently released technical
information intended to assist states' efforts in development of SIPs
to address this standard.\30\ As part of the memo releasing the
technical information, the EPA acknowledged that states have
flexibility to pursue approaches that may differ from the EPA's
historical approach to evaluating interstate transport in developing
their good neighbor SIPs. Nonetheless, the EPA's technical analysis and
the potential flexibilities identified in the memo generally followed
the basic elements of the EPA's historical four-step framework. Thus,
in light of the EPA's discretion to identify relevant criteria and
develop a reasonable methodology for determining whether a CAA section
126(b) finding should be made, the EPA continues to evaluate the claims
regarding the 2015 ozone NAAQS for the specific sources named in in
Delaware's CAA section 126(b) petitions consistent with the EPA's four-
step framework. To the extent that the EPA made determinations in
either the CSAPR Update or other analytic exercises that are pertinent
to the evaluation of the 2015 ozone NAAQS under the four-step framework
for the sources named in the petitions, it is appropriate to consider
that relevant information as well.\31\
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\30\ See ``Information on the Interstate Transport State
Implementation Plan Submissions for the 2015 Ozone National Ambient
Air Quality Standards under Clean Air Act Section
110(a)(2)(D)(i)(I)'' (March 27, 2018), available in the docket for
this proposed action. By operation of statute, states are required
to submit to the EPA their SIPs to address the good neighbor
provision for the 2015 ozone NAAQS in October 2018.
\31\ As discussed further in Section IV.B.1 of this notice, in
the CSAPR Update the EPA found that it was not at that time able to
determine whether the Update fully resolved good neighbor
obligations for the 2008 ozone NAAQS for most of the states subject
to that action, including those addressed in Delaware's and
Maryland's petitions (Indiana, Kentucky, Ohio, Pennsylvania, and
West Virginia), and noted that the emission reductions required by
the rule may not be all that is needed to address transported
emissions. 81 FR 74521. The EPA is not making a final determination
regarding any remaining good neighbor obligation for those states as
part of this action, other than with respect to emissions from the
sources named in the petition with respect to the particular NAAQS
at issue. (Any determination made in this final rule is only with
respect to the sources specifically named in Delaware's and
Maryland's petitions for the applicable NAAQS.) However, the EPA
notes that in a separate, pending action, the EPA has proposed to
determine that the CSAPR Update fully addresses certain states' good
neighbor obligations regarding the 2008 ozone NAAQS. See 83 FR 31915
(July 10, 2018).
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The EPA notes that Congress did not specify how the EPA should
determine that a major source or group of stationary sources ``emits or
would emit'' any air pollutant in violation of the prohibition of CAA
section 110(a)(2)(D)(i)(I) under the terms of CAA section 126(b). The
EPA also believes, given the more regional, rather than localized,
impact of NOX emissions on downwind ozone concentrations, it
is reasonable and appropriate at each step to consider whether the
facility ``emits or would emit'' in light of the facility's current or
reasonably anticipated future operating conditions. Therefore, the EPA
interprets the phrase ``emits or would emit'' in the context of acting
on Delaware's and Maryland's petitions to mean that a source may
``emit'' in violation of the good neighbor provision if, based on
current emission levels, the upwind state in which the source is
located contributes to downwind air quality problems and the individual
source may be further controlled as determined through a multi-factor
test that includes consideration of cost-effective controls, technical
feasibility, and air quality factors. Similarly, in evaluating the
sources named under these petitions, a source ``would emit'' in
violation of the good neighbor provision if, based on reasonably
anticipated future emission levels (accounting for existing
conditions), the upwind state in which the source is located
contributes to downwind air quality problems and the individual source
could be further controlled as determined through a multi-factor test
that includes consideration of cost-effective controls, technical
feasibility, and air quality factors. Consistent with this
interpretation, the EPA has, therefore, evaluated, in this notice,
whether the sources cited in the petitions emit or would emit in
violation of the good neighbor provision based on both current and
anticipated future emission levels.
In interpreting the phrase ``emits or would emit in violation of
the prohibition of section [110(a)(2)(D)(i)],'' if the EPA or a state
has already adopted adequate provisions that eliminate the significant
contribution to nonattainment or interference with maintenance of the
NAAQS in downwind states, then there simply is no violation of the CAA
section 110(a)(2)(D)(i)(I) prohibition, and, hence, no grounds to grant
a CAA section 126(b) petition. Put another way, requiring additional
reductions would result in eliminating emissions that do not contribute
significantly to nonattainment or interfere with maintenance of the
NAAQS, an action beyond the scope of the prohibition in CAA section
110(a)(2)(D)(i)(I) and, therefore, beyond the scope of the EPA's
authority to make the requested finding under CAA section 126(b). See
EME Homer City, 134 S. Ct. at 1604 n.18, 1608-09 (holding the EPA may
not over-control by requiring sources in upwind states to reduce
emissions by more than necessary to eliminate significant contribution
to nonattainment or interference with maintenance of the NAAQS in
downwind states under the good neighbor provision).
Thus, for example, if the EPA has already approved a state's SIP as
adequate to meet the requirements of CAA section 110(a)(2)(D)(i)(I),
the EPA has no basis to find that a source in that state emits or would
emit in violation of the prohibition of CAA section 110(a)(2)(D)(i)(I)
absent new information demonstrating that the SIP is now insufficient
to address the prohibition. Similarly, if the EPA has promulgated a FIP
that it has determined fully eliminates emissions that significantly
contribute to nonattainment or interfere with maintenance in a downwind
state, the EPA has no basis to find that sources in the upwind state
are emitting or would emit in violation of the CAA section
110(a)(2)(D)(i)(I) prohibition, absent new information to the contrary.
The EPA notes that the approval of a SIP or promulgation of a FIP
implementing CAA section 110(a)(2)(D)(i)(I) means that a state's
emissions are adequately prohibited for the particular set of facts
analyzed under approval of a SIP or promulgation of a FIP. If a
petitioner produces new data or information showing a different level
of contribution or other facts not considered when the SIP or FIP was
promulgated, compliance with a SIP or FIP may not be determinative
regarding whether the upwind sources would emit in violation of the
prohibition of CAA section 110(a)(2)(D)(i)(I). See 64 FR 28274 n.15; 71
FR 25336 n.6; Appalachian Power, 249 F.3d at 1067 (later developments
can provide the basis for another CAA section 126(b) petition). Thus,
in circumstances where a SIP or FIP addressing CAA section
110(a)(2)(D)(i)(I) is being implemented, the EPA will evaluate the CAA
section 126(b) petition to determine if it raises new information that
merits further consideration.
Several commenters disagreed with the EPA's interpretation of the
[[Page 50454]]
relationship between the good neighbor provision under CAA section
110(a)(2)(D)(i)(I) and section 126(b), contending that Congress
intended CAA section 126(b) petitions to be a legal tool to address
interstate problems separate and distinct from SIP and FIP actions
under CAA section 110. Commenters cite to legislative history and the
D.C. Circuit's opinion in Appalachian Power in support of their
assertions that CAA section 126 is intended to remedy interstate
transport problems notwithstanding the existence of CAA section 110.
Commenters accordingly assert the EPA is incorrect in determining that
its four-step approach under CAA section 110(a)(2)(D)(i)(I) is
appropriate for evaluating under CAA section 126(b) whether an upwind
source or group of sources will significantly contribute to
nonattainment or interfere with maintenance of the 2008 and the 2015
ozone NAAQS in a petitioning downwind state.
The EPA has consistently acknowledged in prior actions under CAA
section 126(b) that Congress created the good neighbor provision and
CAA section 126 as two independent statutory processes to address one
problem: Interstate pollution transport. See, e.g., 83 FR 26666, 26675
(June 8, 2018) (proposal for this final action); 76 FR 69052, 69054
(November 7, 2011) (proposed action for the EPA's final action on New
Jersey's CAA section 126(b) petition regarding SO2 emissions
from Portland Generating Station). As the commenters point out, courts
have upheld the EPA's position that CAA sections 110(a)(2)(D)(i) and
126 are two independent statutory processes to address the same problem
of interstate transport. See GenOn REMA, LLC v. EPA, 722 F.3d 513, 520-
23 (3d Cir. 2013); Appalachian Power, 249 F.3d at 1047. However, the
commenters misread the courts' holding regarding the EPA's
interpretation of the interplay between the two provisions. Both the
D.C. Circuit and Third Circuit spoke to the question of the timing of
these processes--specifically, whether the EPA could act on a CAA
section 126(b) petition in instances where the agency had not yet acted
on a CAA section 110 SIP addressing interstate transport for the same
NAAQS. Both courts upheld the EPA's position that it need not wait for
the CAA section 110 process to conclude in order to act on a CAA
section 126(b) petition, thus affirming that both statutory provisions
are independent from one another from a timing perspective. Here, the
agency has not deferred action on Delaware's petitions regarding the
2015 ozone NAAQS, for which good neighbor SIPs are not due until
October 2018, until its action on the good neighbor SIPs (for the named
upwind states) has concluded. Therefore, by taking action in this
instance on Delaware's section 126(b) petitions regarding the 2015
ozone NAAQS before action under section 110 has been concluded, the EPA
believes it has given CAA section 126(b) independent meaning as
intended by Congress and the courts.
The D.C. Circuit's opinion in Appalachian Power, which commenters
specifically point to, further supports the EPA's interpretation taken
in this action: That while the agency need not wait for the CAA section
110 process to conclude before taking action on a CAA section 126(b)
petition, the EPA reasonably interprets the substantive requirements of
the two provisions to be closely linked. The court in Appalachian Power
specifically considered whether it was appropriate for the EPA to rely
on findings made under the good neighbor provision in the
NOX SIP Call rulemaking in granting several CAA section
126(b) petitions raising similar interstate transport concerns with
regards to the same NAAQS. Petitioners in that case argued that the EPA
should instead make a finding that ``the specified stationary sources
within a given state independently met [the statute's] threshold test
for effect on downwind nonattainment.'' 249 F.3d at 1049. The court
found that by referring to stationary sources that emit pollutants ``in
violation of the prohibition of [CAA section 110(a)(2)(D)(i)],''
Congress ``clearly hinged the meaning of section 126 on that of section
110(a)(2)(D)(i).'' Id. at 1050. The court, therefore, concluded that
given CAA section 126's silence on what it means for a stationary
source to violate CAA section 110(a)(2)(D)(i), the EPA's approach of
relying on findings under CAA section 110(a)(2)(D)(i) was reasonable
and, therefore, entitled to deference under Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). Id.
The EPA's approach to addressing the CAA section 126(b) petitions
considered the Appalachian Power case is consistent with the EPA's
application of the four-step framework and consideration of findings
made in the CSAPR Update in acting on Maryland's and Delaware's CAA
section 126(b) petitions.
Commenters also contend that the EPA is erecting a ``new barrier''
to CAA section 126(b) petitions by requiring a petitioner to disprove
the validity of the SIP or FIP in place for a source. However, the
commenters mischaracterize the EPA's position. As described, where a
SIP or FIP is already in place to address the prohibition in CAA
section 110(a)(2)(D)(i)(I), the EPA has already made a determination
that sources subject to that SIP or FIP have been adequately addressed
for purposes of interstate transport. A petitioner need not demonstrate
that the EPA's original determination underlying the SIP or FIP is
flawed. Rather, the EPA has recognized that circumstances may change
after the EPA makes its determination under CAA section 110, in which
case it is incumbent upon the petitioner in the first instance to
provide information demonstrating that the named sources is unlawfully
impacting the petitioning state in spite of the SIP or FIP, in light of
newly available information. The EPA disagrees that this is a ``new''
position the agency is taking regarding the linkage between good
neighbor SIPs and FIPs and CAA section 126(b) petition. As described
earlier in this section, the EPA has interpreted CAA section 126(b) to
impose this burden on petitioners in each section 126(b) petition
addressed by the agency in the last two decades. See, e.g., 64 FR 28274
n.15 (action on eight states' petitions for the 1979 ozone NAAQS); 71
FR 25336 n.6 (action on North Carolina's petition for the 1997 ozone
NAAQS).
B. Reasonableness of Applying the Four-Step Transport Framework for
This Action
As discussed in Section II of this notice, the EPA has consistently
analyzed ozone transport with the understanding that nonattainment and
maintenance concerns result from the cumulative air quality impacts of
contributions from numerous anthropogenic sources across several upwind
states (as well as from within the downwind state). Consistent with
this understanding, the EPA has evaluated ozone transport based in part
on the relative contribution of all anthropogenic sources within a
state, as measured against to a screening threshold, and then
identified particular source sectors and units for regulatory
consideration.\32\ This approach to evaluating ozone transport is
reasonable because the statute's use of ``significantly'' as a modifier
to ``contribute'' implies a relationship, e.g.,
[[Page 50455]]
the impact a source or collection of sources has relative to other
relevant sources of that pollutant. Therefore, although CAA section
126(b) allows downwind states to petition the EPA regarding specific
sources or groups of sources that they believe are contributing to the
downwind air quality problems, the EPA believes it is reasonable and
appropriate to evaluate the emissions from sources named in a petition
in the context of all relevant anthropogenic sources of that pollutant
to determine whether or not emissions from the named sources are in
violation of the good neighbor provision.
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\32\ The EPA has used cost as a factor in its multi-factor
approach for quantifying significant contribution from multiple
contributing states. Cost is used in a relative (i.e., least-cost
abatement) approach that also requires examining individual source
impact and reduction potential in the context of the larger universe
of contributors.
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The EPA notes that the four-step framework provides a logical,
consistent, and systematic approach for addressing interstate transport
for a variety of criteria pollutants under a broad array of national,
regional, and local scenarios. Consequently, the EPA finds it
reasonable to apply the same four-step transport framework used to
evaluate regional ozone transport under the good neighbor provision in
considering a CAA section 126(b) petition addressing the impacts of
individual sources on downwind attainment and maintenance of the ozone
NAAQS. As the four-step framework is applied to evaluate a particular
interstate transport problem, the EPA can determine whether upwind
sources are actually contributing to a downwind air quality problem;
whether and which sources can be cost effectively controlled relative
to that downwind air quality problem; what level of emissions should be
eliminated to address the downwind air quality problem; and the means
of implementing corresponding emission limits (i.e., source-specific
rates, or statewide emission budgets in a limited regional allowance
trading program). The outcome of this assessment will vary based on the
scope of the air quality problem, the availably and cost of controls at
sources in upwind states, and the relative impact of upwind emission
reductions on downwind ozone concentrations. For a more localized
pollutant like SO2, the use of the four-step framework could
result in a finding that emissions from a unit were significantly
contributing to nonattainment, or interfering with maintenance, under
the first three steps, which may lead the agency in step four to
require unit-specific compliance requirements (such as an emission
rate).\33\
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\33\ For an example of such a case, the EPA's action on a prior
CAA section 126(b) petition regarding SO2 emissions from
the Portland Generating Station in Pennsylvania analyzed similar
factors as those outlined the four-step transport framework to
evaluate whether the identified source was emitting in violation of
the good neighbor provision. The EPA concluded that the petitioning
downwind state had an air quality problem (step one) for the 2010
SO2 NAAQS. The agency determined that emissions from the
named source in the upwind state alone were sufficient not just to
contribute to (step two), but to cause a violation of the NAAQS in
the petitioning state. As such, the agency determined that the
facility should be regulated because of the magnitude of its
contribution and the relative lack of other contributing sources
(step three). To address this impact, the EPA imposed federally
enforceable source-specific rate limits to eliminate the source's
significant contribution (step four). See Final Response to Petition
From New Jersey Regarding SO2 Emissions from the Portland
Generating Station, 76 FR 69052 (November 7, 2011).
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The complexity of atmospheric chemistry and the interconnected,
long-distance nature of ozone transport also demonstrates the
appropriateness of the four-step framework. As a result of this
complexity, including domestic and international as well as
anthropogenic and background contributions to ozone and its precursors,
it is less likely that a single source is entirely responsible for
impacts to a downwind area. For example, several commenters assert that
the emissions from all of the sources named in the Maryland petition
contribute 0.656 ppb to the Edgewood receptor in Maryland--an amount
that is insufficient to itself cause nonattainment. Thus, a
determination regarding whether this impact is sufficient to
significantly contribute to nonattainment or interfere with maintenance
of the NAAQS--in light of other anthropogenic emission sources
impacting a downwind area--is necessarily more complicated. However,
the EPA evaluates within step three of the framework whether upwind
sources have emissions that significantly contribute to nonattainment
or interfere with maintenance of the ozone NAAQS based on various
control, cost, and air quality factors, including the magnitude of
emissions from upwind states, the number of potential emission
reductions from upwind sources, the cost of those potential emission
reductions, and the potential air quality impacts of emission
reductions.\34\ The EPA believes it is reasonable to consider these
factors whether evaluating ozone transport in the context of a good
neighbor SIP under CAA section 110 or a section 126(b) petition.
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\34\ ``We believe it is important to consider both [cost and air
quality] factors because circumstances related to different downwind
receptors can vary and consideration of multiple factors can help
EPA appropriately identify each state's significant contribution
under different circumstances. [. . .] Using both air quality and
cost factors allows EPA to consider the full range of circumstances
and state-specific factors that affect the relationship between
upwind emissions and downwind nonattainment and maintenance
problems. For example, considering cost takes into account the
extent to which existing plants are already controlled as well as
the potential for, and relative difficulty of, additional emissions
reductions. Therefore, EPA believes that it is appropriate to
consider both cost and air quality metrics when quantifying each
state's significant contribution.'' Proposed Federal Implementation
Plans To Reduce Interstate Transport of Fine Particulate Matter and
Ozone, 75 FR 45210, 45271 (August 2, 2010) (CSAPR proposal)
(describing potential disparities between upwind and downwind state
contributions to identified air quality problems and between levels
of controls between states).
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The EPA has already conducted such an analysis for all sources
named in Delaware and Maryland's petitions via the CSAPR Update. The
EPA determined that the upwind states named by the petitioners emitted
in violation of the good neighbor provision with respect to downwind
states. The EPA, therefore, found that EGUs in these states, including
the named sources, collectively needed to make reductions at a cost
level commensurate with operating and optimizing existing SCR controls
(among other NOX reduction strategies included in the CSAPR
Update). Based on the nature of ozone formation, the many receptors
throughout the region, the many source sectors and numerous sources,
and because EGUs had readily available low-cost and impactful emission
reductions available, the EPA found that a limited allowance trading
program would achieve emission reductions commensurate with applying
these cost-effective controls. As discussed in more detail in Section
IV of this notice, petitioners and commenters have not demonstrated,
based on information available at this time, either that the particular
sources named by petitioners should be required to make further
emission reductions under the good neighbor provision in light of their
contributions relative to other sources that are not named in the
petitions, or that source-specific unit-level emission rates are
necessary to ensure reductions are being achieved under the CSAPR
Update. As further described in Section IV.B of this notice, the EPA's
independent analysis finds that, contrary to the petitioners' and
commenters' assertions, the CSAPR Update allowance trading program has
been sufficient and successful in reducing regional emissions of ozone
and emissions across the named EGUs.
For any analysis of a CAA section 126(b) petition regarding
interstate transport of ozone, a regional pollutant with contribution
from a variety of sources, the EPA reviews whether the particular
sources identified by the petitioner should be controlled in light of
the collective impact of emissions on
[[Page 50456]]
air quality in the area, including emissions from other anthropogenic
sources. Thus, review of the named sources in the Delaware and Maryland
petitions provides a starting point for the EPA's evaluation, but does
not--as the commenters suggest--complete the evaluation to determine
whether the named sources emit or would emit in violation of the good
neighbor provision.
IV. The EPA's Final Response to Delaware's and Maryland's CAA Section
126(b) Petitions
The EPA is finalizing denials of the Maryland petition and all four
of the Delaware petitions. Section IV.A of this notice describes the
EPA's determination that Delaware has not demonstrated that the sources
named in their petitions emit or would emit in violation of the good
neighbor provision such that they will significantly contribute to
nonattainment or interfere with maintenance of the 2008 or 2015 ozone
NAAQS in Delaware. Section IV.B of this notice describes the EPA's
independent analysis of the sources named in both states' petitions and
concludes based on such analysis that there is no basis to find that
the named sources emit or would emit pollution in violation of the good
neighbor provision with respect to the 2008 ozone NAAQS (Delaware and
Maryland) or the 2015 ozone NAAQS (Delaware only). In this section, and
in the RTC document included in the docket for this action, the agency
explains the rationale supporting its final action and provides its
response to significant public comments on the proposed action.
A. The EPA's Evaluation of Whether the Petitions Are Sufficient To
Support a CAA Section 126(b) Finding
1. Delaware's Petition Is Not Sufficient on Its Own Merit To Support a
CAA Section 126(b) Finding
The EPA finds that Delaware's conclusions are not supported by the
petitions' assessments based on several technical deficiencies. First,
with respect to the 2008 ozone NAAQS, the EPA is finalizing its
conclusion that Delaware does not provide sufficient information to
indicate that there is a current or expected future air quality problem
in the state. While the Delaware petitions identify individual
exceedances of the ozone standard in the state between the 2000 and
2016 ozone seasons, this does not demonstrate that there is a resulting
nonattainment or maintenance problem. Ozone NAAQS violations, as
opposed to exceedances, are determined based on the fourth-highest
daily maximum ozone concentration, averaged across 3 consecutive
years.\35\ In contrast, exceedances represent, in the case of the 2008
and 2015 ozone NAAQS, an 8-hour measurement above the level of the
NAAQS. Violations, rather than exceedances, are the relevant metric for
identifying nonattainment and maintenance problems. A design value is a
statistic that describes the air quality status of a given location
relative to the level of the NAAQS. Thus, individual exceedances at
monitors do not by themselves indicate that a state is not attaining or
maintaining the NAAQS. In prior transport rulemakings, the EPA
identified both nonattainment and maintenance receptors based on air
quality model projections of measured design values. In the CSAPR
Update, the EPA identified nonattainment receptors as those with an
average projected design value above the NAAQS and with current
measured nonattainment. The EPA identified maintenance receptors as
those monitors with a ``maximum'' future design value above the NAAQS
in order to take into account historic variability in air quality at
the monitor. See 81 FR 74531.
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\35\ See 80 FR 65296 (October 26, 2015) for a detailed
explanation of the calculation of the 3-year 8-hour average and the
methodology set forth in 40 CFR part 50, appendix U.
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Several commenters have argued that Delaware is not attaining or
maintaining the 2008 ozone NAAQS because there are areas in Delaware
that are designated nonattainment for that standard. However, a
nonattainment designation, which was first issued for the 2008 ozone
NAAQS in 2012, does not by itself indicate that a state is currently
failing to attain or struggling to maintain the NAAQS, or that it will
have problems attaining or maintaining the standard in the future. The
courts have confirmed that the EPA's authority to find that a source or
state is in violation of the good neighbor provision is constrained to
circumstances where an actual air quality problem has been identified.
See EME Homer City, 134 S. Ct. at 1608-09 (holding the EPA cannot
require more emission reductions than necessary to address downwind air
quality problems); EME Homer City II, 795 F.3d 118 at 129-30 (D.C. Cir.
2015) (holding state emission budgets invalid where air quality
modeling projected no downwind air quality problems). Delaware has not
demonstrated that there is a current or expected future air quality
problem in the state, nor did any commenters provide evidence of a
current or anticipated future violation of the 2008 ozone NAAQS. As
discussed in Section IV.B of this notice, the EPA's review of current
and projected future air quality in Delaware indicates that the state
is attaining and will maintain the 2008 ozone NAAQS. Accordingly,
Delaware's petition provides insufficient evidence of a requisite air
quality problem with respect to the 2008 ozone NAAQS within the state.
With respect to the 2015 ozone NAAQS, Delaware argues that if that
NAAQS had been in effect from 2011 through 2016, Delaware monitors
would have recorded more exceedances than they did under the 2008 ozone
NAAQS. However, again, the identification of individual exceedances
does not speak to whether there are current violations of the standard.
Additionally, as discussed further in Section II of this notice, the
EPA evaluates downwind ozone air quality problems for purposes of step
one of the four-step framework using modeled future air quality
concentrations for a year that considers the relevant attainment
deadlines for the NAAQS, based on its interpretation of the term
``will'' in the good neighbor provision.\36\ The petitions do not
provide any analysis indicating that Delaware may violate or have
difficulty maintaining 2015 ozone NAAQS in a year associated with the
relevant attainment dates for that standard.
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\36\ 81 FR 74517.
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Several commenters allege that the EPA incorrectly identified
technical deficiencies in Delaware's petition regarding whether there
is an air quality problem in Delaware. The commenters also submitted
additional data that they contend demonstrates current violations in
the state. However, comments related to the 2008 ozone NAAQS either
identified violating monitors outside of Delaware or identified further
individual exceedances in Delaware without demonstrating that they
contributed to a violating design value. The commenters have not
submitted information that conclusively shows current or future
violations of the 2008 ozone NAAQS within the state of Delaware. For
the 2015 ozone NAAQS, the commenters identified current violating
monitors in Delaware but did not identify any projected air quality
violations in a future year associated with the relevant attainment
dates. Commenters did not correct any of the technical deficiencies the
EPA identified in Delaware's petitions. Thus, the EPA is concluding, as
proposed, that the petition does not adequately identify a relevant air
quality problem related to the 2008 or 2015 ozone NAAQS.
Second, with respect to step two of the four-step framework,
material
[[Page 50457]]
elements of Delaware's analysis regarding the contributions from the
Brunner Island, Harrison, Homer City, and Conemaugh EGUs to air quality
in Delaware are deficient and, therefore, the conclusions that the
petitions draw are not supported by the technical assessment. As noted
earlier, all four petitions rely upon air quality modeling that uses
2011 emissions to quantify the contribution from each of the four named
sources to locations in Delaware on individual days in 2011. However,
2011 emissions are generally much higher than, and therefore not
representative of, current or future projected emissions levels at
these EGUs and in the rest of the region--levels that the EPA believes
are most relevant to determining whether a source ``emits or would
emit'' in violation of the good neighbor provision.\37\ Thus, the 2011
modeling does not provide representative data regarding contributions
that would result from either current or future emission levels from
these EGUs. When evaluating a CAA section 126(b) petition, it is
important and consistent with the language of the section to rely on
current and relevant data known at the time the agency takes action.
Were the EPA to act based on outdated or non-representative information
solely because it was provided in a petition, that action could be
arbitrary and unreasonable and could, for example, impose controls or
emission limitations that are not appropriately tailored to the nature
of the problem at the time of the EPA's final action or at the time
when such controls or limitations would actually be implemented. This
could result in unnecessary over-control (or under-control) of
emissions, beyond (or short of) what is required to address the good
neighbor provision, in violation of the Supreme Court's holding in EME
Homer City, 134 S. Ct. at 1608-09.
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\37\ As an example of how emissions have changed between 2011
and a recent historical year, the EPA notes that Pennsylvania's 2017
EGU NOX ozone season emissions were 79 percent below 2011
levels. One of the named sources, Brunner Island, is located in
Pennsylvania and reduced its individual ozone season NOX
emissions by 88 percent in 2017 relative to 2011 levels. (https://www.epa.gov/ampd). Additional emissions data from 2011 and a recent
historical year is included in the docket, which also shows that
2011 emissions are generally higher than emissions in recent years.
See 2011 to 2017 NOX Comparisons, Ozone Season, available
in the docket for this action.
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Further, the analyses provided by Delaware regarding the alleged
impacts of the four sources on downwind air quality include some
information on the frequency and magnitude of ozone impacts, but the
information provided does not account for the form of the 2008 or 2015
ozone standards--which indicates that a NAAQS violation occurs when the
fourth highest daily maximum value in a calendar year at a specific
monitor exceeds the standard--and, thus, is not informative of whether
there is a nonattainment issue in the state. Specifically, Delaware
does not identify the numeric modeled and/or measured ozone levels on
the same days identified in Delaware's petitions with modeled
impacts.\38\ For example, Delaware's Homer City petition identifies
modeled contributions from emissions at that source to three downwind
monitoring sites in Delaware on July 18, 2011. However, the petition
fails to identify whether there were measured and/or modeled
exceedances of the ozone NAAQS on that particular day at those sites.
Delaware's Harrison and Brunner Island petitions identify the days the
contributions were modeled to occur, but not the specific monitoring
sites where Delaware claims emissions from these sources impact air
quality. Moreover, these two petitions do not provide information on
whether the contributions were to design values that actually exceed
the ozone NAAQS. Delaware's Conemaugh petition identifies 2011
contributions on days when some Delaware monitors exceeded the 2008
NAAQS, but the petition does not specify which monitors were impacted
on those days. The petition therefore does not provide information to
show that the modeled contributions occurred at monitoring sites that
were exceeding either the 2008 or 2015 ozone NAAQS. Commenters did not
provide additional information clarifying these deficiencies.
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\38\ Existing EPA analyses of interstate ozone pollution
transport focus on contributions to high ozone days at the specific
downwind receptor in order to evaluate the impact on nonattainment
and maintenance at the receptor. For example, in the CSAPR Update
modeling, ozone contributions were calculated using data for the
days with the highest future year modeled ozone concentrations. For
the 2008 ozone NAAQS, only the highest measured ozone days from each
year are considered for the calculation of ozone design values (the
values that determine whether there is a measured NAAQS violation).
Measured ozone values that are far below the level of the NAAQS do
not cause an exceedance or violation of the NAAQS. For this reason,
only ozone contributions to days that are among the highest modeled
ozone days at the receptor are relevant to determining if a state or
source is linked to downwind nonattainment or maintenance issues.
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For the reasons described in this section, Delaware's analyses in
its four petitions do not allow the EPA to conclude that there is a
current or future nonattainment or maintenance problem in Delaware
based on violations of the NAAQS, nor that the named sources are
improperly impacting downwind air quality on days when such violations
would be expected. Therefore, the EPA does not have a basis to grant
Delaware's petition with respect to either the 2008 or 2015 ozone NAAQS
based on data and analyses provided in the petitions.
2. The EPA's Analysis of the Technical Sufficiency of Maryland's
Petition
The EPA is not finalizing its proposed finding that Maryland's
petitions are technically deficient, but is finalizing the denial based
on the EPA's independent assessment there are no additional cost-
effective reductions relative to the CSAPR Update for the sources named
in Maryland's petition. This topic is discussed in more detail in
Section IV.B of this notice.
B. The EPA's Independent Analysis of the Petitions Consistent With the
CSAPR Update
As discussed in Section III.A of this notice, the EPA may decide to
conduct independent analyses when evaluating the basis for a potential
CAA section 126(b) finding or when developing a remedy if a finding is
made. Because the CSAPR Update recently evaluated interstate ozone
pollution transport, including considering the air quality and EGU
emissions described in the Delaware and Maryland 126(b) petitions, the
EPA evaluated the petitions and comments received on the proposal in
light of the agency's existing regulatory program, and the underlying
analysis on which it is based. This constitutes the EPA's independent
analysis for certain aspects of the petitions. The agency also
evaluated additional technical information that became available after
the CSAPR Update was finalized to independently evaluate other aspects
of the petitions.
This section begins by explaining the relationship between the
CSAPR Update and the EPA's independent analysis of the petitions. The
subsequent subsections discuss the EPA's rationale for denying the
petitions with respect to the named sources.
1. CSAPR Update as Context
The EPA promulgated the CSAPR Update to address the good neighbor
provision requirements for the 2008 ozone NAAQS. 81 FR 74504. The final
CSAPR Update built upon previous regulatory efforts in order to address
the collective contributions of ozone pollution from 22 states in the
eastern United States to widespread downwind air quality problems. As
was also the case for the previous rulemakings, the EPA evaluated the
nature (i.e., breadth and interconnectedness) of the ozone problem and
NOX reduction potential
[[Page 50458]]
from EGUs, including those sources named in the Delaware and Maryland
CAA section 126(b) petitions.
Of particular relevance to this action, the EPA determined in the
CSAPR Update that emissions from the states identified in Maryland's
petition were linked in steps one and two of the four-step framework to
maintenance receptors for the 2008 ozone NAAQS in Maryland based on air
quality modeling projections to 2017. 81 FR 74538 through 74539. With
respect to Delaware, the CSAPR Update modeling revealed no monitors in
the state with a projected average or maximum design value above the
level of the 2008 ozone NAAQS in 2017.\39\ Thus, the EPA in step one of
the four-step framework did not identify any downwind air quality
problems in Delaware with respect to the 2008 ozone NAAQS and,
therefore, did not determine that emissions from any of the states
identified in the state's four petitions would be linked to Delaware.
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\39\ See Air Quality Modeling Technical Support Document for the
Final Cross-State Air Pollution Rule Update. Available at https://www.epa.gov/airmarkets/air-quality-modeling-technical-support-document-final-cross-state-air-pollution-rule.
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For states linked to downwind air quality problems in Maryland, the
agency identified certain emissions from large EGUs as significantly
contributing to nonattainment and/or interfering with maintenance of
the NAAQS based on cost and air-quality factors. Considering these
factors, the EPA found there were cost-effective emission reductions
that could be achieved within upwind states at a level of control
stringency available at a marginal cost of $1,400 per ton of
NOX reduced. This level of control stringency represented
ozone season NOX reductions that could be achieved in the
2017 analytic year and included the potential for operating and
optimizing existing SCR post-combustion controls; installing state-of-
the-art NOX combustion controls; and shifting generation to
existing units with lower NOX emission rates within the same
state. 81 FR 74551. The CSAPR Update quantified an emission budget for
each state based on that level of control potential. The EPA found that
these emission budgets were necessary to achieve the required emission
reductions and mitigate impacts on downwind states' air quality in time
for the July 2018 moderate area attainment date for the 2008 ozone
NAAQS.
The CSAPR Update finalized enforceable measures necessary to
achieve the emission reductions in each state by requiring power plants
in covered states, including the sources identified in Maryland and
Delaware's petitions, to participate in the CSAPR NOX Ozone
Season Group 2 allowance trading program, with more detailed assurance
provisions applying to each covered state to ensure that they will be
required to collectively limit their emissions, beginning with the 2017
ozone season. The CSAPR trading programs and the EPA's prior emission
trading programs (e.g., the NOX Budget Trading Program
associated with the NOX SIP Call) have provided a proven,
cost-effective implementation framework for achieving emission
reductions. This implementation approach was shaped by previous
rulemakings and reflects the evolution of these programs in response to
court decisions and practical experience gained by states, industry,
and the EPA.
As discussed in more detail later, the EPA has considered the CSAPR
Update and related technical information in evaluating the section
126(b) petitions. This includes a review of the air quality modeling
conducted for the CSAPR Update to evaluate projected nonattainment and
maintenance concerns in each petitioning states in steps one and two of
the four-step framework. The EPA has also considered the control
strategies evaluated and implemented in the CSAPR Update to conclude,
in step three, that the EPA has already implemented emission reductions
associated with operation of existing SCRs at the named sources and
that the EPA has already concluded that the operation of existing SNCR
at two other named sources is not a cost-effective control strategy
under the good neighbor provision.
2. The EPA's Step One and Two Analyses for Delaware and Maryland
As part of the EPA's independent analysis, the agency considered
Delaware's and Maryland's petitions in light of recent agency analysis
which applied steps one and two of the four-step framework. The EPA
found that the named sources are not contributing to nonattainment or
interfering with maintenance of Delaware's air quality for either the
2008 or 2015 ozone NAAQS, and that the sources named in Maryland's
petition warranted further analysis of significant contribution to
nonattainment and interference with maintenance for the 2008 ozone
NAAQS in step three.
a. The EPA's Step One Analyses for Delaware
While the EPA, as discussed in Section IV.A of this notice, finds
that Delaware's petitions do not on their own merits adequately
establish the presence of a current or future nonattainment or
maintenance problem in Delaware, the EPA also independently examined
whether there is an air quality problem under the 2008 and 2015 ozone
NAAQS (step one). As described in the following sections, the EPA finds
that the named sources in Delaware's petitions are not, and will not
be, emitting in violation of the good neighbor provision with respect
to Delaware for either the 2008 or 2015 ozone NAAQS. The EPA also
conducted a further independent assessment of the sources named in
Delaware's petitions with respect to step three of the framework,
discussed later in this notice, which further supports the EPA's denial
of the Delaware petitions.
(1) The EPA's Independent Analysis Regarding Delaware's Step One Claims
With Respect to the 2008 Ozone NAAQS
The EPA first looked to modeling conducted in 2016 that projects
ozone concentrations at air quality monitoring sites in 2017, which was
conducted for purposes of evaluating step one of the four-step
framework for the 2008 ozone NAAQS as part of the CSAPR Update.\40\
This modeling indicated that Delaware was not projected to have any
nonattainment or maintenance receptors in 2017 with respect to the 2008
ozone NAAQS. See 83 FR 26678. Furthermore, the EPA examined Delaware's
2014-2016 design values, and found that no areas in Delaware had a
design value that violated the 2008 ozone NAAQS. See id. An examination
of the recently released 2015-2017 design values showed the same
result.\41\ Accordingly, the EPA has no basis to conclude that any of
the sources named by Delaware in its petitions are linked to a downwind
air quality problem in the state with regard to the 2008 ozone NAAQS.
In the absence of a downwind air quality problem, the EPA has no
authority to regulate upwind sources to address air quality in Delaware
with respect to the 2008 ozone NAAQS.
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\40\ Air Quality Modeling Technical Support Document for the
Final Cross-State Air Pollution Rule Update (August 2016). Available
at https://www.epa.gov/sites/production/files/2017-05/documents/aq_modeling_tsd_final_csapr_update.pdf.
\41\ See 2017 Design Value Reports, available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
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[[Page 50459]]
(2) The EPA's Independent Analysis Regarding Delaware's Step One Claims
With Respect to the 2015 Ozone NAAQS
Additionally, the EPA independently examined whether there will be
a downwind air quality problem in Delaware with regard to the 2015
ozone NAAQS. The modeling conducted in support of the CSAPR Update
shows one monitor--monitor ID 100051003 in Sussex County--with a
maximum 2017 projected design value (which the EPA has typically used
to help identify maintenance receptors) above the 2015 ozone NAAQS.\42\
Measured data show that two monitors exceeded the 2015 ozone NAAQS
based on the 2014-2016 design values,\43\ and three monitors show
exceedances of the 2015 ozone NAAQS based on the 2015-2017 design
values.\44\ However, as described in Section II.B of this notice, the
EPA evaluates downwind ozone air quality problems for the purposes of
Step one of the four-step framework using modeled future air quality
concentrations for a year that EPA selects in consideration of the
relevant attainment deadlines for the NAAQS. Thus, the 2017 modeling
data and the recent measured data are not necessarily indicative of a
downwind air quality problem that would necessitate the control of
upwind sources to address air quality in Delaware with respect to the
2015 ozone NAAQS.
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\42\ In prior transport rulemakings, the EPA identified both
nonattainment and maintenance receptors based on air quality model
projections of measured design values. In the CSAPR Update, the EPA
identified nonattainment receptors as those with an average
projected design value above the NAAQS and with current measured
nonattainment. The EPA identified maintenance receptors as those
monitors with a ``maximum'' future design value above the NAAQS in
order to take into account historic variability in air quality at
the monitor. See 81 FR 74531.
\43\ See 2016 Design Value Reports, available at https://www.epa.gov/air-trends/air-quality-design-values#report. The
official designations for these areas and information relied upon
for those designations are contained in the EPA's designation
actions for the 2015 ozone NAAQS. See 82 FR 54232 (November 16,
2017) and the docket for Additional Air Quality Designations for the
2015 Ozone National Ambient Air Quality Standards, EPA-HQ-OAR-2017-
0548, and accompanying technical support documents.
\44\ See 2017 Design Value Reports, available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
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Recent analyses projecting emission levels to a future year
indicate that no air quality monitors in Delaware are projected to have
nonattainment or maintenance problems with respect to the 2015 ozone
NAAQS by 2023, which is the last year of ozone season data that will be
considered in order to determine whether downwind nonattainment areas
classified as moderate have attained the standard by the relevant 2024
attainment date.\45\ Therefore, consistent with the EPA's
interpretation of the term ``will'' in the good neighbor provision
discussed in Section III of this notice, available future year
information does not indicate Delaware will have air quality concerns
by the attainment date for the 2015 ozone NAAQS that EPA has determined
is relevant for purposes of this analysis. Accordingly, the EPA does
not have a basis to regulate upwind sources to address air quality in
Delaware with respect to the 2015 ozone NAAQS.
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\45\ See Information on the Interstate Transport State
Implementation Plan Submissions for the 2015 Ozone National Ambient
Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)
(March 27, 2017), available in the docket for this proposed action.
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(3) Responses to Comments Regarding the EPA's Independent Analysis for
Step One Under the 2008 and 2015 Ozone NAAQS
Commenters asserted that the EPA's conclusion that Delaware does
not have current or future nonattainment or maintenance problems for
the 2008 and 2015 ozone NAAQS is unreasonable in light of technical
information in the record they claim demonstrates otherwise. Commenters
further state that New Castle County, Delaware, was designated
nonattainment as part of the multistate Philadelphia nonattainment area
under both the 2008 and 2015 ozone NAAQS, and that the most recent
design values for three monitors in New Castle County exceeded the 70
ppb 2015 ozone standard.
As an initial matter, the EPA disagrees with the way the commenters
characterize an air quality problem in relation to CAA section 126(b).
The EPA's statutory authority extends to addressing emissions that
significantly contribute to nonattainment or interfere with maintenance
of the NAAQS. Commenters' focus on individual high ozone days does not
account for the form of the 2008 or 2015 ozone standards (under which a
violation occurs when the fourth-highest reading in a calendar year at
a specific monitor exceeds the NAAQS) and thus is not informative of
whether there is a nonattainment or maintenance issue. Thus, the
petitioners and commenters raise contentions are ultimately misaligned
with the EPA's logical approach of identifying downwind air quality
problems for purposes of CAA sections 110(a)(2)(D)(i)(I) and 126(b) in
a manner that is consistent with the form of the standard.
As described earlier, the EPA has evaluated air quality monitoring
and modeling data for the 2008 ozone NAAQS, and found no current or
anticipated future violations of the 2008 ozone NAAQS (in the form of
the standard) at receptors within the state of Delaware. While the EPA
evaluated modeling data for future projections of air quality for both
the 2008 and 2015 ozone NAAQS consistent with the forward-looking
nature of the good neighbor provision, monitoring data regarding
current violations is a relevant analytic tool for the 2008 ozone NAAQS
considering the attainment date for the standard has already passed.
However, because the relevant attainment date for the 2015 ozone NAAQS
has not yet passed, it is appropriate to evaluate future anticipated
air quality in step one of determining whether sources must be
controlled under the good neighbor provision. The EPA evaluated air
quality modeling data for receptors located within the state of
Delaware and found that, while there are monitors that are currently
violating the 2015 ozone NAAQS, the data indicate no future air quality
problem for this NAAQS by the relevant 2024 attainment date for that
standard. Thus, although commenters state that current ambient
monitoring data in Delaware for 2018 shows that three of Delaware's
monitors (all in New Castle County) are exceeding the 2015 ozone NAAQS,
the commenters have not provided any basis for the EPA to conclude that
Delaware will have an air quality problem relative to the 2015 ozone
NAAQS in the future year that it has selected as relevant for this
analysis.
Additionally, commenters challenge the EPA's conclusion that
Delaware does not have an air quality problem for the 2008 ozone NAAQS
by pointing out that the Bellefonte site in Delaware has recorded 8-
hour daily maximum values which exceed even the 1997 ozone NAAQS. These
exceedances at the Bellefonte site are not relevant to actual or
projected nonattainment or maintenance issues. Although there may be
some exceedances of the 2008 ozone NAAQS at the Bellefonte monitor, the
EPA does not have information to indicate that the fourth highest daily
ozone value averaged across 3 consecutive years will exceed the 2008
ozone NAAQS at this site. The commenter has not provided information
indicating that the monitor is currently violating the 2008 NAAQS.\46\
As noted in this section,
[[Page 50460]]
individual exceedances at monitors do not by themselves indicate that a
state is not attaining or maintaining the NAAQS. Thus, we have no basis
to conclude there are any air quality problems with respect to the 2008
NAAQS in Delaware in a manner relevant for step one of the four-step
transport framework. Thus, because all monitors were projected to
attain and maintain the standard in the CSAPR Update modeling and are
attaining the standard in the most recent monitoring period, the EPA
has no basis to conclude that the sources in the upwind states emit or
would emit in violation of the good neighbor provision in Delaware for
the 2008 NAAQS.
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\46\ The most current official design value at this monitor is
71 ppb. See 2017 Design Value Reports, available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
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Commenters point out that monitors in the Philadelphia
nonattainment area, located outside of the state of Delaware, are
violating both the 2008 and 2015 ozone NAAQS. The commenters assert
that because Delaware's New Castle County is included with other
counties which make up the Philadelphia nonattainment area for both the
2008 and 2015 ozone NAAQS, Delaware's attainment of the ozone NAAQS is
tied to the attainment of the other monitors in the nonattainment area.
The EPA disagrees with commenter's suggestion that non-attaining
monitoring data for nearby receptors outside the petitioning state
support a CAA section 126(b) finding for Delaware, even if such
monitors are located in a multistate nonattainment area that includes
the petitioning state. The specific language of CAA section 126(b) does
not say that a state may petition the EPA for a finding that emissions
from a source, or group of sources, is impacting downwind receptors in
a state other than the petitioning state. In addition, the legislative
history for this provision suggests the provision was meant to address
adverse air impacts only in the petitioning state.\47\ Given the
broader context of CAA section 126, the EPA reasonably interprets CAA
section 126(b)'s petition authority to be limited to states and
political subdivisions seeking to address interstate transport of
pollution impacting downwind receptors within their geographical
borders.
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\47\ When section 126 was added to the CAA, the Senate's
amendment implementing the basic prohibition on interstate pollution
stated that: ``Any State or political subdivision may petition the
Administrator for a finding that a major stationary source in
another state emits pollutants which would adversely affect the air
quality in the petitioning State.'' (emphasis added). Clean Air Act
Amendments of 1977, H.R. 95-564, 95th Cong. at 526 (1977). The House
concurred with the Senate's amendment to CAA section 126, with
changes to other portions of the amendment, but did not indicate
changes to this sentence. Id. The lack of stated changes to this
component of the Senate's original amendment suggest that Congress
did not intend for the scope of the petitioning authority to be
expanded to parties other than a state or political division in
which downwind air quality is adversely affected.
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Additionally, the context of CAA section 126 as a whole suggests
these provisions are meant to moderate interstate transport concerns
between affected states and upwind sources, not between any third party
(even if such party is another state) and upwind sources. CAA section
126(a), for example, requires upwind sources to provide notification of
certain potential air quality impacts to nearby states which may be
affected by the source, not to all states. Furthermore, CAA section
126(b) petitions may only be filed by states and political
subdivisions. By contrast, other provisions that contain petition
authority under the CAA expressly allow for any person to petition the
EPA (e.g., CAA section 505(b)(2)'s authority for any person to petition
the EPA to object to the issuance of a Title V petition). The more
restrictive text in CAA section 126(b) suggests that Congress intended
access to the petition process to be narrowly available to states and
political subdivisions directly affected by upwind pollution.
While the acknowledgement of multistate nonattainment areas in the
CAA reflects Congress's understanding that pollution crosses state
boundaries, that does not indicate that Congress clearly authorized all
states in a multistate nonattainment area to petition EPA under CAA
section 126(b) related to violating monitors outside their state.
Portions of Delaware were included in the Philadelphia nonattainment
area because the EPA determined that those portions were themselves
contributing to the air quality problems in Pennsylvania.\48\ Nothing
in the CAA suggests that section 126(b) was intended to relieve states
like Delaware of the specific planning obligations associated with its
inclusion in an area designated nonattainment. To the extent a state
has concerns about the impacts of upwind pollution on out-of-state
monitors in a shared multistate nonattainment area, these issues can be
addressed under other statutory processes. For example, every state has
an obligation to submit a transport SIP under CAA section
110(a)(2)(D)(i)(I) that contains provisions adequate to prohibit
emissions activity that contribute significantly to nonattainment or
interfere with maintenance of the NAAQS in another state, which may
also include a multistate nonattainment area if such area is being
impacted by upwind emissions activity.
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\48\ See Philadelphia-Wilmington-Atlantic City, PA-NJ-;MD-DE
Nonattainment Area Final Designations for the 2015 Ozone National
Ambient Air Quality Standards Technical Support Document. Available
at https://www.epa.gov/sites/production/files/2018-05/documents/phila_tsd_final.pdf.
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Furthermore, the commenters' assertion that monitors in the
Philadelphia nonattainment area are currently measuring exceedances of
the 2015 ozone NAAQS does not change the EPA's conclusion that Delaware
has no air quality problem under the 2015 ozone NAAQS when looking
toward a relevant future year. As described in Section IV.A of this
notice, the EPA evaluates downwind ozone air quality problems for the
purposes of step one of the four-step framework using modeled future
air quality concentrations for a year that considers the relevant
attainment deadlines for the NAAQS. Recent analyses projecting emission
levels to a future year indicate that no air quality monitors in
Delaware are projected to have nonattainment or maintenance problems
with respect to the 2015 ozone NAAQS by 2023.\49\ Therefore, consistent
with the EPA's interpretation of the term ``will'' in the good neighbor
provision, available future year information does not suggest Delaware
will have air quality concerns by the relevant attainment date for the
2015 ozone NAAQS. Under step one of the transport framework, since
there are no projected nonattainment or maintenance receptors in
Delaware, the EPA concludes that it does not have sufficient evidence
to determine that the upwind states and sources are significantly
contributing to nonattainment or interfering with maintenance of the
2015 ozone NAAQS in Delaware.\50\
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\49\ See Supplemental Information on the Interstate Transport
State Implementation Plan Submissions for the 2008 Ozone National
Ambient Air Quality Standards under Clean Air Act Section
110(a)(2)(D)(i)(I) (October 2017), available in the docket for this
proposed action.
\50\ The EPA notes that even if the Philadelphia area monitors
were relevant to the EPA's analysis of Delaware's petition, EPA's
analysis also shows that those monitors are not projected to have
nonattainment or maintenance problems with respect to the 2015 ozone
NAAQS by 2023.
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Several comments challenged the EPA's reliance on air quality
modeling projections for 2023 to indicate that Delaware will not have
an air quality problem under the 2015 ozone NAAQS. First, commenters
asserted that even if attainment of the 2015 ozone NAAQS was assured
for the Philadelphia nonattainment area by 2023, this
[[Page 50461]]
analytic year is unacceptable because the agency should consider the
August 2, 2021, marginal area attainment date as informative to the
selection of an analytic year. The EPA does not agree that it is
required to analyze air quality in a future year aligned with the
attainment date for nonattainment areas classified as Marginal for the
2015 ozone NAAQS. Although the North Carolina decision held that the
EPA must consider attainment dates in downwind states when establishing
compliance timeframes for emission reductions in upwind states, the
decision did not speak to which attainment date should influence the
EPA's evaluation when there are several potentially relevant attainment
dates. As the decision explains, the good neighbor provision instructs
the EPA and states to apply its requirements ``consistent with the
provisions of'' title I of the CAA. North Carolina, 531 F.3d. at 911-
12. The EPA notes that this consistency instruction follows the
requirement that plans ``contain adequate provisions prohibiting''
certain emissions in the good neighbor provision. The EPA, therefore,
interprets the requirements of the good neighbor provision to apply in
a manner consistent with the designation and planning requirements in
title I that apply in downwind states and, in particular, the timeframe
within which downwind states are required to implement specific
emissions control measures in nonattainment areas relative to the
applicable attainment dates. See id. at 912 (holding that the good
neighbor provision's reference to title I requires consideration of
both procedural and substantive provisions in title I).
Ozone nonattainment areas classified as Marginal are not generally
required to implement specific emission controls at existing sources.
See CAA section 182(a).\51\ Existing regulations--either local, state,
or federal--are typically a part of the reason why ``additional'' local
controls are not needed to bring the area into attainment. As described
in the EPA's record for its Classifications and Attainment Deadlines
rule for the 2015 ozone NAAQS, history has shown that the majority of
areas classified as Marginal for prior 8-hour ozone standards attained
the respective standards by the Marginal attainment date (i.e., without
being re-classified to a Moderate designation). 83 FR 10376. As part of
an historical lookback, the EPA calculated that by the relevant
attainment date for areas classified as Marginal, 85 percent of such
areas attained the 1979 1-hour ozone NAAQS, and 64 percent attained the
2008 ozone NAAQS. Id. at Response to Comments, section A.2.4.\52\ Based
on these historical data, the EPA expects that many areas classified
Marginal for the 2015 ozone NAAQS will attain by the relevant
attainment date as a result of emission reductions that are already
expected to occur through implementation of existing local, state, and
federal emission reduction programs. To the extent states have concerns
about meeting their attainment deadline for a Marginal area, the CAA
under section 181(b)(3) provides authority for them to voluntarily
request a higher classification for individual areas, if needed. Where
the ozone nonattainment area is classified as Moderate or higher, the
responsible state is required to develop an attainment plan, which
generally includes the application of various control measures to
existing sources of emissions located in the nonattainment area,
consistent with the requirements in Part D of title I of the Act. See
generally CAA section 182.
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\51\ New source review (NSR) and conformity are still required
for marginal areas, but their purpose is to ensure that new
emissions don't interfere with attainment as opposed to reducing
existing emissions.
\52\ Available at https://www.regulations.gov/document?D=EPA-HQ-OAR-2016-0202-0122.
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Thus, given that downwind states are generally not required to
impose additional controls on existing sources in a Marginal
nonattainment area, the EPA believes that it would be inconsistent to
interpret the good neighbor provision as requiring the EPA to evaluate
the necessity for upwind state emission reductions based on air quality
modeled in a future year aligned with the Marginal area attainment
date. Rather, the EPA believes it is more appropriate and consistent
with the nonattainment planning provisions in title I to evaluate
downwind air quality and upwind state contributions, and, therefore,
the necessity for upwind state emission reductions, in a year aligned
with an area classification in connection with which downwind states
are also required to implement controls on existing sources--i.e., with
the Moderate area attainment date, rather than the Marginal one. With
respect to the 2015 ozone NAAQS, the Moderate area attainment date will
be in the summer of 2024, and the last full year of monitored ozone-
season data that will inform attainment demonstrations is, therefore,
2023.
Even assuming that a year aligned with the Marginal area attainment
date could be an appropriate analytic year for the EPA to consider in
evaluating future air quality in Delaware, the commenters have not
submitted any information that indicates there will be an air quality
problem under the 2015 ozone NAAQS in Delaware in the Marginal
attainment-date year of 2021, nor did the petition provide any. As
discussed in Section III of this notice, the petitioner bears the
burden of establishing, as an initial matter, a technical basis for the
specific finding requested and has not done so here.
The projected ozone design values for 2023 represent the best
available data regarding expected air quality in Delaware in a future
attainment year. These data were developed over the course of multiple
years of analytic work, reflecting extensive stakeholder feedback and
the latest emission inventory updates. The EPA assembled emissions
inventory and performed air quality analytics in 2016 and released
corresponding data and findings in a Notice of Data Availability (NODA)
in January of 2017. Subsequent to stakeholder feedback on the NODA, the
EPA was able to further update its inventories and air quality modeling
and release results for 2023 future analytic year in October 2017.
There are no comparable data available for earlier analytic years
between 2017 and 2023 that have been through an equally rigorous
analytic and stakeholder review process, and, thus, the 2023 data are
the best data available currently for the EPA to evaluate Delaware's
claims at this time.
Commenters additionally contend that the 3-year deadline for
implementing a remedy under CAA section 126(c) suggests that the use of
2023, which is 5 years in the future, as an analytic year for purposes
of evaluating Delaware's CAA section 126(b) petitions is inappropriate.
The EPA disagrees. The EPA's evaluation of air quality in 2023 is a
necessary step to determine whether the sources named in Delaware's
petitions are in violation of the good neighbor provision, and the
choice of 2023 as an analytic year does not preclude the implementation
of a remedy in an earlier year if the necessary finding is made. While
CAA section 126 contemplates that a source or group of sources may be
found to have interstate transport impacts, it cannot be determined
whether such source or sources are in violation of the good neighbor
provision and whether controls are justified without analyzing
emissions from a range of sources influencing regional-scale ozone
transport, including sources not named in the petitions. In particular,
as discussed in Section III of this notice, the EPA evaluates air
quality in a year
[[Page 50462]]
when emission reductions would be expected to be implemented under the
good neighbor provision. Analysis of a future year aligned with
anticipated compliance also ensures that any emission reductions the
EPA may require under that provision are not in excess of what would be
necessary to address downwind nonattainment and maintenance problems.
The 2023 analytic year that the EPA has chosen for evaluating ozone
transport with respect to the 2015 ozone NAAQS was selected because it
aligns the downwind attainment dates and ensures that emission
reductions required by that date will not over-control upwind state
emissions because it accounts for changes in upwind state emissions and
downwind state ozone concentrations expected between now and 2023.
Additionally, even if the EPA were to determine based on 2023 as an
analytic year that the named sources are projected to be in violation
of the good neighbor provision, the EPA could still implement a remedy
that complies with the earlier timeline set out under CAA section
126(c). Therefore, the EPA's reasonable choice of 2023 as an analytic
year for evaluating Delaware's petition does not in and of itself
preclude implementation of a remedy at an earlier date.
Commenters further assert that since Delaware's and Maryland's
requested remedies are to require already existing controls to operate
mean the EPA's justification for selecting the 2023 analytic year is
incorrect. The EPA disagrees. First, the EPA believes it is appropriate
for the EPA to consider air quality in 2023 because it is aligned with
the attainment date for the 2015 ozone NAAQS. As discussed earlier, if
there is no future air quality problem relative to this NAAQS, it would
not be appropriate for EPA to require additional upwind emission
reductions under CAA sections 110 or 126. Moreover, as discussed later
in this notice, control optimization at the identified sources has
already been addressed in the CSAPR Update, and emission reductions
associated with the proposed control technology are already being
realized. Thus, the EPA does not agree that the timeframe for
implementation of a control strategy that is already in place should
guide its selection of a future analytic year for this NAAQS.
Rather than focusing on optimization, the selection of an
appropriate year for any additional mitigation measures necessary to
eliminate upwind contribution would have to accommodate the
corresponding technologies that could deliver incremental reductions.
Therefore, the EPA identified an appropriate future analytic year that
would allow for mitigation measures not yet considered in the CSAPR
Update for sources across the region. These are technologies that were
deemed to be infeasible to install for the 2017 ozone season. In
establishing the CSAPR Update emissions budgets, the EPA identified but
did not analyze the following two EGU NOX control strategies
in establishing the CSAPR Update emissions budgets because
implementation by 2017 was not considered feasible: (1) Installing new
SCR controls; and (2) installing new SNCR controls. For a variety of
labor, material, engineering, and grid-related considerations, the EPA
believes that 2023 would likely be an appropriate year to allow for
these mitigation measures. See 81 FR 33730 (July 17, 2018); 83 FR 31915
(July 10, 2018).
And fourth, commenters assert that the 2023 modeling is flawed
because it relies on optimistic assumptions that EGU controls would
operate when there is no enforceable requirement for sources to do so
under the existing allowance trading program. The commenter states that
in the 2023 air quality modeling, the EPA incorrectly assumed
individual units would make emission reductions. The EPA has made both
a conceptual case as to why those reductions will be achieved through
the CSAPR Update existing allowance trading program, and an evidence-
based case that reductions based on control optimization already
achieved in 2017. Not only were the anticipated reductions realized
generally from EGUs in the upwind states identified by the petitioners,
but reductions were also made by the fleet of individual sources (on a
seasonal and daily basis) identified by the commenter. The
reasonableness and feasibility of the EPA's 2023 EGU emission
projections regarding the control-optimization reductions under a
trading program are illustrated by the first year of CSAPR Update
compliance emission levels in 2017. EGU emissions in 2017 dropped by 21
percent from 2016 levels and were seven percent below the collective
CSAPR Update budgets for the 22 affected states. The EPA's 2023
projections for the 22 states were 10 percent below the collective
CSAPR Update budgets, meaning in just one year, states have already
achieved the majority of the EGU reductions anticipated by the EPA for
2023, suggesting that sources in these states are on pace to actually
be below that level by 2023. For the five states addressed in the
petitions, ozone-season NOX EGU emissions dropped from
136,188 tons in 2016 to 92,189 tons in 2017 for EGUs greater than 25
MW. This reflects a 32 percent reduction in just one year.\53\
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\53\ See Engineering Analysis--Unit File. Available at ftp://ftp.epa.gov/EmisInventory/2011v6/v3platform/reports/2011en_and_2023en/.
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Data from 2017, the first year of ozone-season data that would be
influenced by the CSAPR Update compliance requirements, are consistent
with the EPA's assumption that the allowance trading program would
drive SCR operation on a fleet-wide level. The EPA began its
engineering analysis to project 2023 EGU emissions with 2016 monitored
and reported data. For the units with existing SCRs that were operating
below 0.10 lb/mmBtu in 2016, the EPA assumed that their operation would
remain unchanged in 2023. For the units with existing SCRs that were
operating above 0.10 lb/mmBtu in 2016 (totaling 82,321 tons of
emissions in that year), the EPA assumed that SCRs would be optimized
under a CSAPR Update scenario to 0.10 lb/mmBtu on average for 2023.
This collective 2023 emissions estimates for these latter units were,
therefore, adjusted down to 40,590 tons. In 2017, the very first year
of CSAPR Update implementation, collective emissions from these units
were 41,706 tons. This 2017 value is already very close to EPA's 2023
estimated value, and supports the EPA's assumption that these units
would optimize SCR performance at 0.10 lb/mmBtu on average.
The EPA observes that this assumption is also reasonable for the
units identified in the petitions. When examining the group of sources
named in the petitions, the 2017 average ozone-season NOX
emission rate for SCR-controlled units was reduced by nearly half
during the first year of the program relative to 2016 and 2015 levels.
Moreover, preliminary data for the second quarter of 2018 suggest this
pattern of lower emission rates at SCR-controlled units under the CSAPR
Update is continuing.\54\ Many of the analyses provided by commenters
to suggest the group of named sources were not operating controls are
based in the 2015-2016 time-period, before the CSAPR Update was
implemented, when hourly, daily, and seasonal emissions were higher
because controls were not being consistently run at optimized levels.
Both CSAPR and the CSAPR
[[Page 50463]]
Update include assurance provisions that ensure that EGUs in each
covered state will be required to collectively limit their emissions.
These provisions include an assurance level for each state that serves
as a statewide emissions cap. This assurance level is the sum of the
state emission budget plus a variability limit equal to 21 percent of
the state's ozone-season budget. This means that collectively EGU
emissions in each state cannot exceed 121 percent of the state budget
level without incurring penalties. The assurance levels are designed to
help ensure each covered state in a region-wide trading program still
reduces emissions--as opposed to purely relying on allowance
purchases--from historical levels while allowing for the inherent
variability in generation and emissions from year-to-year given changes
in power sector market conditions. 76 FR 48212. These assurance levels
help ensure that the emission reductions associated with the
optimization of existing controls, on which the CSAPR Update budgets
were based, or commensurate emission reductions from elsewhere in the
state continue to be observed going forward. Therefore, even with fleet
turnover and a growing allowance bank, emissions will continue to be
limited within the state.
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\54\ Preliminary 2018 data reflects first two months of 2018
ozone season available at the time of finalizing this action. See
EPA's Clean Air Markets Division data, available at https://ampd.epa.gov/ampd/.
---------------------------------------------------------------------------
Finally, the EPA also disagrees to the extent the commenter claims
that EGU emissions will increase, rather than decrease, in future years
of the CSAPR Update implementation or that the market for allowance
prices would have to price credits much higher in order to ensure that
the emission reductions associated with control optimization will
continue. This claim is not consistent with observed historical
emission patterns over successive years of an allowance trading
program's implementation. It is also not consistent with forward
looking emissions projections in power sector models.\55\ There are a
variety of policy and market forces at work beyond CSAPR allowance
prices that are anticipated to continue to drive generation to shift
from higher emitting to lower emitting sources. These include changes
such as sustained lower natural gas prices that make lower emitting
natural gas combined cycle units more economic to build and dispatch,
state energy policy and technology advancements which have made
renewable energy (e.g., solar and wind) more competitive compared to
higher emitting fossil-fuel fired generation, and the aging of the coal
fleet which is leading many companies to conclude that a significant
number of higher emitting plants are reaching the end of their useful
economic life. The EPA's experience implementing prior allowance
trading programs shows that emissions from covered sources generally
trend downwards (regardless of allowance price) as time extends further
from the initial compliance year.\56\ Both the Acid Rain Program and
CSAPR SO2 allowance banks grew in 2017 from their 2016
levels, indicating that sources are collectively adding to the bank by
emitting below state budgets rather than drawing down the bank because
of the availability of low-cost allowances. This illustrates that the
EPA's assumptions underlying its projection of 2023 ozone-season
NOX levels for EGUs are reasonable and appropriate.
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\55\ See results from EPA's power sector modeling platform v6.
Available at https://www.epa.gov/airmarkets/results-using-epas-power-sector-modeling-platform-v6.
\56\ 2014 Program Progress, Clean Air Interstate Rule, Acid Rain
Program, and Former NOX Budget Trading Program. EPA.
Available at https://www.epa.gov/sites/production/files/2017-09/documents/2014_full_report.pdf.
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b. The EPA's Step One and Two Analysis for Maryland
With respect to steps one and two of the four-step framework for
the Maryland petition, as the state noted in its petition and as the
EPA acknowledged in the proposal, the EPA conducted an analysis in the
CSAPR Update regarding the air quality impact of anthropogenic
emissions from the five upwind states named in the state's petition on
downwind air quality in Maryland with respect to the 2008 ozone NAAQS.
In the CSAPR Update, the EPA found Maryland has a maintenance receptor
for the 2008 NAAQS (step one), and that the upwind states that Maryland
identifies in its petition are ``linked'' above the contribution
threshold of one percent of the NAAQS (step two).\57\ However, as
discussed in Section III of this notice, the conclusion that a state's
emissions met or exceeded this threshold only indicates that further
analysis is appropriate to determine whether any of the upwind state's
emissions meet the statutory criteria of significantly contributing to
nonattainment or interfering with maintenance (step three). The EPA's
independent step three analysis of the sources named in Maryland's
petition is discussed in the following sections.
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\57\ See CSAPR Update, 81 FR 74504 (October 26, 2016). The EPA
notes that based on 2015-2017 data, Maryland's highest ozone design
value is 75 ppb at monitor ID 240251001, which is currently not
violating the 2008 ozone NAAQS. See 2017 Design Value Reports,
available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
---------------------------------------------------------------------------
The state of Maryland submitted a comment challenging the EPA's
decision to assess Maryland's petition only for the 2008 ozone NAAQS,
asserting that the EPA failed to acknowledge that EPA's extended delay
in acting on the CAA section 126(b) petition has impacted Maryland's
designation under the 2015 ozone standard. Additionally, the comment
asserts that since Maryland has a maintenance problem for the 2008
ozone NAAQS, and the states where the petitioned units are located are
linked to that maintenance problem, applying the EPA's analysis under
the 2008 ozone NAAQS to the more stringent 2015 ozone NAAQS necessarily
demonstrates that the named sources are also linked to the same monitor
under the 2015 ozone standard.
Maryland's petition did not allege that a source or group of
sources emit or would emit in violation of CAA section
110(a)(2)(D)(i)(I) for the 2015 ozone NAAQS, but rather merely alleged
that emissions reductions resulting from Maryland's requested remedy
could influence the 2015 ozone designations. As noted in the EPA's
proposed action on Maryland's petition, the cover letter of the
petition specifically requests that the agency make a finding ``that
the 36 electric generating units (EGUs) . . . are emitting pollutants
in violation of the provisions of Section 110(a)(2)(D)(i)(I) of the CAA
with respect to the 2008 ozone National Ambient Air Quality
Standards,'' and the petition throughout refers only to the 2008 ozone
NAAQS when identifying alleged air quality problems in Maryland and the
impacts from upwind sources. Maryland acknowledges that it did not
submit a 126(b) petition requesting a finding with respect to the 2015
ozone NAAQS. Furthermore, because the EPA's proposal focused on the
claims related to the 2008 ozone NAAQS raised in the petition, the
EPA's proposed action on the petition did not provide notice to the
public of any proposed conclusions or analysis that the public would
need to appropriately comment on any determinations with respect to the
2015 ozone NAAQS, nor did it inform the public that any action might be
taken with regard to a finding of a good neighbor violation with regard
to the 2015 ozone NAAQS under Maryland's petition. Accordingly, taking
final action on the petition in the context of the 2015 ozone NAAQS in
response to Maryland's comments cannot be construed as a logical
outgrowth of the proposal.
[[Page 50464]]
Commenters further assert that it is improper for the agency to
rely on 2023 ozone modeling projections to claim that Maryland does not
have attainment problems with respect to the 2008 ozone NAAQS. This
comment misconstrues the EPA's basis for denying Maryland's petition.
Maryland's petition only requested a specific finding with respect to
the 2008 ozone NAAQS. As described earlier in this section, the EPA
determined that Maryland was projected to have a downwind air quality
concern with respect to the 2008 ozone NAAQS under step one of the
framework, and that the named upwind states are linked to Maryland in
step two based on the 2017 modeling conducted for the CSAPR Update. The
EPA did not evaluate whether Maryland has an air quality problem in
2023 in assessing its petition.
In conclusion, under steps one and two of the transport framework,
the EPA has modeled a maintenance problem in 2017 at the Harford County
receptor for the 2008 ozone NAAQS following the implementation of the
CSAPR Update and the upwind states named in the petition are linked to
that receptor in EPA's 2017 contribution modeling. See 81 FR 74533. The
EPA concludes that it is appropriate to assess the additional steps of
the transport framework for the sources named in Maryland's petition.
This analysis is further described in this section.
3. The EPA's Step Three Analysis With Respect to EGUs Equipped With
SCRs Named in Delaware and Maryland's Petitions
In the previous section, the EPA evaluated the petitions with
regard to steps one and two of the transport framework, and the agency
found that Delaware does not and is not expected to have a requisite
air quality problem under step one for either the 2008 or 2015 ozone
NAAQS, and, therefore, the EPA does not have a basis to impose
additional emission limitations on the named upwind sources. While the
EPA is finalizing a determination that Delaware's petitions should be
denied based on the EPA's conclusions in step one of the four-step
framework, the EPA is also evaluating the EGUs named in the Delaware
petitions in this step three analysis because we believe that
evaluation provides an additional independent basis for denial.
Regarding the Maryland petition, application of steps one and two for
the named upwind states indicated that it is appropriate to assess the
additional steps of the transport framework for the named sources.
Accordingly, this section discusses the step three analysis for the
sources named in both the Delaware petitions (as an additional basis
for denial) and the Maryland petition (as the sole basis for denial).
Generally, the EPA's analysis in step three considers cost,
technical feasibility, and air quality factors in a multi-factor test
to determine whether any emissions from states linked to downwind air
quality problems in steps one and two will significantly contribute to
nonattainment and/or interfere with maintenance of the NAAQS, and,
therefore, must be eliminated pursuant to the good neighbor provision.
Because the CSAPR Update was recently finalized to address regional
interstate ozone pollution transport, the EPA considered its step three
analysis of the sources named in the section 126(b) petitions in light
of the existing CSAPR Update analysis and in light of additional
analysis evaluating the impact of the CSAPR Update implementation.\58\
Thus, in this section, the EPA explains how it identified and evaluated
cost and air quality factors to evaluate the named sources in a
multifactor test consistent with step three of the framework as applied
in the CSAPR Update. The crucial factors the EPA considered include
whether there are further NOX emission reductions beyond
what was already finalized in the CSAPR Update available at the
specific sources named in the petitions, the cost of any such
reductions, and the potential air quality improvements that would
result from any such reductions. The EPA first analyzes this step with
respect to those units identified in the Delaware and Maryland
petitions that are equipped with SCR. The EPA then considers two named
units that are equipped with SNCR, and finally, the one named unit that
has neither SCR nor SCNR, but that has the ability to shift its fuel
combustion to lower-emitting options.
---------------------------------------------------------------------------
\58\ All of the EGUs named in the petitions are subject to FIPs
promulgated as part of the CSAPR Update that require EGUs in each
state, including the EGUs named in the petitions, to participate in
the CSAPR NOX Ozone Season Group 2 allowance trading
program, subject to statewide emission budgets with limited
interstate trading.
---------------------------------------------------------------------------
a. Analysis of SCR for NOX Mitigation
Three of Delaware's petitions identify EGUs (Conemaugh, Harrison,
and Homer City) that are already equipped with SCRs, and 34 of the 36
EGUs identified in Maryland's petition are also equipped with SCRs.\59\
In establishing each state's CSAPR Update EGU NOX ozone
season emission budgets, the agency quantified the emission reductions
achievable from all NOX control strategies that were
feasible to implement within one year \60\ and cost effective at a
marginal cost of $1,400 per ton of NOX removed. This level
of NOX control stringency was established explicitly to
reflect the ability of sources in regulated states to turn on existing,
idled SCR--i.e., the operational behavior that the section 126(b)
petitions generally ask EPA to mandate. In addition to turning on and
optimizing existing idled SCR controls, this level of NOX
control stringency encompassed optimizing NOX removal by
existing, operational SCR controls; installing state-of-the-art
NOX combustion controls; and shifting generation to existing
units with lower NOX emission rates within the same state.
81 FR 74541. Thus, the CSAPR Update emission budgets already reflect
emission reductions associated with turning on and optimizing existing
SCR controls across the 22 CSAPR Update states, including at the EGUs
that are the subject of the Maryland and Delaware petitions. This is
the same control strategy identified in the petitions as being both
feasible and cost effective. The EPA is determining that, as a result
of the CSAPR Update, all identified cost-effective emission reductions
have already been implemented for the 2008 ozone NAAQS with respect to
the sources named in the Delaware and Maryland petitions that are
already equipped with SCR.
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\59\ These facilities are located in Indiana (Alcoa Allowance
Management Inc., Clifty Creek, Gibson, IPL--Petersburg Generating
Station), Kentucky (East Bend Station, Elmer Smith Station,
Tennessee Valley Authority Paradise Fossil Plant), Ohio (Killen
Station, Kyger Creek, W. H. Zimmer Generating Station), Pennsylvania
(Bruce Mansfield, Cheswick, Homer City, Keystone, Montour), and West
Virginia (Harrison Power Station, Pleasants Power Station).
\60\ The CSAPR Update was signed on September 7, 2016--
approximately 8 months before the beginning of the 2017 ozone season
on May 1.
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Delaware and Maryland's petitions contend that, based on data
available at the time the petitions were filed, the named sources are
operating their NOX emissions controls at low efficiency
levels, or are not operating them at all at certain times. Delaware and
Maryland, therefore, ask the EPA to impose unit-specific 30-day
emission rate limits or other requirements to ensure the controls will
be continually operated. The EPA acknowledges that in years prior to
implementation of the CSAPR Update in 2017, the named sources may have
operated as petitioners describe. However, implementation of the
emission budgets promulgated in the CSAPR Update represents the most
recent data regarding these EGUs' operations. In the years before 2017,
the EPA observed
[[Page 50465]]
similar emissions behavior for a substantial number of EGUs across the
eastern United States (i.e., this was not limited to just the named
sources here) and suspected that the additional emissions resulting
from the inefficient operation of controls were detrimentally affecting
air quality for a substantial number of areas. Consequently, through a
notice-and-comment rulemaking and after evaluating and responding to
numerous stakeholder comments, the EPA finalized the CSAPR Update. That
rulemaking found EGUs in the named states had emissions that could be
cost effectively eliminated in order to address interstate ozone
transport under the good neighbor provision. Therefore, the EPA imposed
limits on statewide EGU emissions commensurate with running optimized
SCR controls (and certain other control strategies). These emission
reductions resulted in substantial modeled improvements in air quality
throughout the region and had substantial benefits for the specific
downwind areas identified in the petitions.
The EPA received several comments suggesting that emissions data
indicate that the EPA's determination that the CSAPR Update would
address interstate transport from these sources is flawed. Accordingly,
the EPA has evaluated emissions data across the CSAPR Update region,
including from the states and sources named in the petitions. As
further described later, the EPA's analysis of such data demonstrates
that, following implementation of the CSAPR Update, EGUs in the CSAPR
Update regional generally and the named EGUs specifically have in fact
achieved emission reductions commensurate with the operation of
existing SCRs. Consequently, the EPA finds that CSAPR Update
implementation is generally achieving the NOX reductions
identified in the section 126(b) petitions for mitigation at these
sources. The EPA, therefore, determines that these sources neither emit
nor would emit in violation of the good neighbor provision.
The EPA determines that this conclusion is appropriate with regard
to the claims raised under the 2008 ozone NAAQS in both states'
petitions. Moreover, because the cost-effective strategy of optimizing
existing controls relative to the 2008 ozone NAAQS has already been
implemented via the CSAPR Update for the sources Delaware named for its
claims regarding the 2015 NAAQS, the EPA also determines there are no
additional cost-effective control strategies available to further
reduce NOX emissions at these sources to address that most
recent standard.
(1) Current Emissions Data Show NOX Reductions Under the
CSAPR Update
Based on observed emissions levels and emission rates in 2017,
implementation of the CSAPR Update has resulted in actual emissions
reductions at the named sources and/or commensurate reductions at other
sources in the same state, both seasonally and on a daily basis. In
other words, because the strategy of optimizing existing controls has
already been implemented for these sources through the CSAPR Update,
there is no information suggesting there are additional control
strategies available to further reduce NOX emissions at
these sources to address for the 2008 ozone-NAAQS.
(a) Seasonal Reductions Under the CSAPR Update
The recent historical observed and reported data regarding
emissions from the sources named in the petitions, and the states they
are located in, illustrate the effectiveness of the EPA's allowance
trading approach to reducing NOX emissions. While much of
the data presented in the petitions focused on emissions and emission
rates prior to 2017, the 2017 ozone-season data illustrates that,
during the first year of the CSAPR Update Rule: (1) The average
emission rate improved nearly 50 percent on average at the 34 units
identified in the petitions as having SCR controls, (2) EGU emissions
declined by 46 percent at these 34 units, and (3) EGU emissions
declined by 32 percent collectively in the states where these
facilities are located.
Table 1--Ozone-Season NOX Emission Rates and Emissions Pre- and Post-CSAPR Update
----------------------------------------------------------------------------------------------------------------
2015 2016 2017
----------------------------------------------------------------------------------------------------------------
Average Ozone-Season Emission rate from 34 identified units (lb/ 0.254 0.200 0.115
mmBtu).........................................................
Total Emissions from 34 identified units (tons)................. 55,443 46,023 24,894
Total Emissions from states named in the petitions (tons)*...... 154,413 136,188 92,189
----------------------------------------------------------------------------------------------------------------
* IN, KY, OH, PA, and WV.
Table 1 shows the average emission rate across the 34 units, the
total seasonal emissions from these units, and the total seasonal
emissions from all units greater than 25 MW in the indicated states.
These data illustrate that, in 2017, the control optimization and the
emission reductions anticipated from the CSAPR Update are being
realized from the 34 units with SCR controls. Moreover, the EPA
examined control operation behavior at these units on a more granular
basis and determined that these operating patterns prevailed on a
smaller time scale as well. The EPA looked at the average daily
emission rate and emissions from this group of 34 sources with SCR
controls for 2015, 2016, and 2017 ozone seasons. The time-series
figures in the docket for this action show that 2017 daily ozone values
were significantly lower on both metrics relative to 2015 and 2016.\61\
This finding supports the EPA's contention that no further regulatory
actions are necessary to ensure emission reductions consistent with
operation of these controls at this time.
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\61\ The EPA has examined emission rate and tonnage reduction
from the petitioner-identified sources with SCR-optimization
potential prevails on a daily basis in addition to a seasonal basis
and added them to the docket for this action. See Daily
NOX Emissions Rates for Identified SCR-Controlled Sources
for Each Day of the Ozone-Season. Available in the docket for this
action.
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The fact that these particular sources are mitigating emissions
using the same technology and for the same standard identified in the
petitions is not the sole fact on which EPA bases its determination
that the measures adopted in the CSAPR Update have addressed reduction
potential from these sources. Because the EPA implemented those
reductions requirements though a limited trading program with state
emission caps, it is also possible that some of the emission reductions
corresponding to this identified mitigation measure are realized
elsewhere in the state and have a similar beneficial impact on downwind
air quality within the petitioning states. The EPA recognizes that a
regional trading program with embedded state emission caps provides the
flexibility to achieve emission reductions either at the sources
through the identified mitigation measures or at
[[Page 50466]]
sources elsewhere in the state but disagrees with the petitioners'
notion that this undermines the ability of the program to achieve
meaningful emissions reductions from particular sources. The latest and
best available data demonstrate that reductions are occurring at those
sources. Moreover, even in the event of any single-unit variation in
performance, the overall reductions are occurring within the same
airshed due to the fact that state budgets and assurance levels were
set to ensure those reduction levels statewide and regionwide. Thus,
the design of the CSAPR Update accommodates emissions reductions based
on unit-specific control optimization and observed data affirm its
success at realizing this end.
In evaluating these petitions, the EPA analyzed ozone-season
emission rates from all coal-fired units in the contiguous U.S.
equipped with SCR and found that, based on 2017 emissions data
reflecting implementation of the CSAPR Update, 261 of 274 units had
ozone-season emission rates below 0.20 lb/mmBtu, indicating they were
likely operating their post-combustion controls through most of the
ozone season, including every unit with SCR named in Delaware's and
Maryland's petitions.\62\ On average, the 274 units were operating at
an average emission rate of approximately 0.088 lb/mmBtu. Nine of the
13 units with 2017 emission rates above 0.20 lb/mmBtu are not located
in the states where petitioners identified sources.\63\ Of the
remaining four, one retired in 2018, and the other three have
preliminary 2018 ozone season data (for reported months of May and
June) below 0.20 lb/mmBtu. Consequently, the EPA finds that on average,
SCR-controlled units are operating their SCRs throughout the season
when operating conditions make it feasible, and that the petitioner's
assertion of the likelihood of not operating controls is not borne out
in the most recently available data.
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\62\ As described in the CSAPR Update, optimized operation of
combustion controls and SCR typically results in NOX
emission rates of 0.10 lb/mmBtu or below. Combustion controls alone
typically result in rates down to 0.20 lb/mmBtu but can at times
achieve results in the range of 0.14 lb/mmBtu. Therefore, units
equipped with SCR that have emission rates above 0.20 lb/mmBtu are
likely not significantly utilizing their SCR. The optimized rate for
any particular unit depends on the unit-specific characteristics,
such as boiler configuration, burner type and configuration, fuel
type, capacity factor, and control characteristics such as the age,
type, and number of layers of catalyst and reagent concentration and
type.
\63\ See Discussion of Short-term Emission Limits Final Rule,
available in the docket for this action.
---------------------------------------------------------------------------
The CSAPR Update regional trading program has resulted in an
approximately 50 percent improvement in emission rate performance at
SCR-controlled units at the sources named in these petitions. The
statewide EGU emissions limits help make those reductions permanent
within the state and region. Therefore, the EPA has addressed upwind
emission reductions commensurate with SCR optimization in the ozone
season from the named sources.
Commenters state that the EPA's use of a fleet-wide average to
demonstrate operation of SCRs at these units inappropriately ignores
the ability of the named sources to achieve better emission rates.
However, in the CSAPR Update, the EPA determined that, based on an
aggregation of unit-level emission rates, an average fleet-wide rate
emission rate of 0.10 lb/mmbtu would represent the optimized operation
of SCR controls that were not at that time being operated or optimized.
81 FR 74543. In concluding that this rate would be appropriate for
calculating emission reduction potential from implementation of this
control strategy, the EPA recognized that some units would have
optimized rates above that level and some below that level (consistent
with the petitioner's own comments and analysis). Therefore, in using a
fleet-wide average for setting regional and state emission limits, the
EPA considered and relied on unit-level data. Nevertheless, the 0.10
lb/mmBtu emission rate used to reflect control optimization for the
2008 ozone NAAQS for the identified sources in the CSAPR Update was not
reopened for comment in this action.
(b) Daily Reductions Under the CSAPR Update
Commenters disagree with the EPA's conclusion that data
demonstrating that SCRs are being operated in the upwind states and at
the named sources seasonally is representative of implementation of
cost-effective controls. It is the commenter's position that for
existing controls to be cost effective, they must be maintained and
operated in accordance with good pollution control practices whenever
feasible. Commenters assert that if shorter-term NOX
emission rate data are evaluated, the SCR controls do not appear to
have been operated in accordance with good pollution control practices
at all times the units were operating.
The petitions have alleged that short-term limits are necessary to
prevent units from turning controls off intermittently on days with
high ozone in order to harvest additional power that would otherwise be
used for control operation. As described at proposal, the EPA examined
the hourly NOX emissions data reported to the EPA and did
not observe many instances of units selectively turning down or turning
off their emission control equipment during hours with high
generation.\64\ SCR-controlled units generally operated with lower
emission rates during high generation hours, suggesting SCRs generally
were in better operating condition--not worse, let alone idling--during
those days/hours. In other words, the EPA compared NOX rates
for EGUs for hours with high energy demand and compared them with
seasonal average NOX rates and found very little difference.
Thus, the data do not support the notion that units are reducing SCR
operation on high demand days. Moreover, the auxiliary power used for
control operation is small--typically less than one percent of the
generation at the facility--and it is, therefore, unlikely that sources
would cease operation of controls for such a limited energy savings.
Instead, the data indicate that increases in total emissions on days
with high generation are generally the result of additional units that
do not normally operate coming online to satisfy increased energy
demand and units that do regularly operate increasing hourly
utilization, rather than reduced functioning of control equipment. The
EPA notes that if, in fact, the emission reductions expected from the
operation of control equipment at these facilities were no longer being
realized in the future, this final action denying Delaware's and
Maryland's petitions would not preclude either state from submitting
another CAA section 126(b) petition for these sources raising new
information not already considered herein. The EPA is not, however,
pre-determining what action may be appropriate on any such future
petition.
---------------------------------------------------------------------------
\64\ Id.
---------------------------------------------------------------------------
Commenters have observed that individual units equipped with SCR
have operated in 2017 ozone season with rates higher than 0.2 lb/mmBtu
on select days, suggesting that their SCR controls have been idled. The
commenters identified the number of days this occurred at individual
units (one unit at Homer City had the highest frequency of 15 days out
of the 153-day ozone season, one unit at Harrison had two days, and
Conemaugh had no days) and acknowledged that there may be engineering
reasons for units to decrease or cease operation of controls on
individual days (e.g., to avoid damaging or plugging of the SCR or
taking a forced outage where a breakdown leaves the
[[Page 50467]]
unit unavailable to produce power). The EPA also observes that there
appear to be engineering limitations to operating SCR at low hourly
utilization rates (e.g., at hourly capacity factors below about 25
percent, the EPA has observed limited operation of SCRs).\65\ While
Maryland acknowledges these engineering challenges to SCR performance
in low capacity factor conditions, it is not clear how the suggested
monthly unit-specific emission rate would accommodate those challenges.
In particular, ozone season capacity factors (which reflect the actual
output relative to potential output) have decreased over time, dropping
from a heat-input weighted capacity factor of 77 percent in 2006 to a
value of 67 percent in 2017, suggesting that units may spend fewer
hours operating at the high hourly utilization factors associated with
the most-efficient SCR operation and lowest emission rates.\66\ In
addition, units are now operating more frequently at hourly utilization
rates at or below 40 percent in 2017 compared to 2006.
---------------------------------------------------------------------------
\65\ Hourly utilization factor is defined here as the ratio of
the hourly heat input to the maximum rated hourly heat input rate.
See Discussion of Short-term Emissions Limits Final Rule, available
in the docket for this action.
\66\ The EPA selected 2006 because a commenter identified 2006
as the best year of operation for a number of units and 2005 did not
appear to have as comprehensive a data set.
---------------------------------------------------------------------------
An individual unit may have high emissions from idling an SCR or
SNCR or for burning coal (rather than natural gas) on a specific hour
or day in the 2017 ozone season, or that the absence of daily emission
limits leaves open the possibility that a unit at the facility may have
high emissions on days that Maryland or Delaware monitors record ozone
exceedances. However, in the context of regional ozone pollution, the
EPA has concludes that reducing NOX emissions regionally and
seasonally while allowing flexibility in compliance is effective at
reducing downwind peak ozone concentrations. Because of the regional
nature of interstate ozone transport, in which emissions are
transported hundreds of miles over the course of hours or days, the EPA
has focused on reducing aggregate NOX emissions, an approach
that has successfully led to reductions in ozone concentrations across
the east coast. As such, an emission event in one hour or on one day at
a particular unit is not sufficient to suggest that the source is not
adequately controlled over the course of the ozone season.
Petitioners and commenters asserted that that additional emission
reductions are achievable (comparing the methodology and rates put
forward by with what would be expected and/or realized under the CSAPR
Update) and that these emission reductions would be cost effective.
Commenters assert that the maximum 30-day emission rates requested
in Maryland's petition are (1) representative of well-run controls, (2)
flexible to allow for multiple operating conditions and even sub-
optimal operation of controls on some days, and (3) consistently
achievable based on the units' own reported emissions data that
indicates the units achieved this emission rate 123 times out of 123
attempts in their past-best ozone season. However, these assertions are
flawed because the commenters' assessment included historical data
that, through notice-and-comment rulemaking in the CSAPR Update, EPA
determined were not representative of current or future operating
conditions given SCR component degradation and maintenance schedules
and changes in unit operation (i.e., to lower capacity factors). For
example, EPA's analysis of historical SCR performance in the CSAPR
Update evolved through comments on the proposal, ultimately evaluating
data from 2009 through 2015 because in this time period SCR controls
were operated year-round starting in the first compliance period for
the CAIR NOX annual program (and subsequently CSAPR
NOX annual programs) rather than only seasonally as was done
in years before 2009.\67\ Further, the petitioners and commenters
assert that the agency can apply historical SCR operating data to the
future in a manner that is at odds with the EPA's conclusions reached
through notice-and-comment in the CSAPR Update. For example,
petitioners and commenters assert that the agency can consider data
from the year of each unit's lowest historical average NOX
rate. In the CSAPR Update, the agency took comment on the
representativeness of historical data in terms of future ongoing
achievable NOX rates. Stakeholder comment led the EPA to
ultimately to focus on the third lowest ozone season rate from 2009
through 2015 to ensure that its selected rates represented efficient
but routine SCR operation (i.e., when the performance of the SCR was
not simply the result of being new, or having a highly aggressive
catalyst replacement schedule, but was the result of being well-
maintained and well-run). These topics are as described further in the
CSAPR Update RTC. Thus, the petitioners and commenters rely on
inadequate arguments, based in part on analyzing unit behaviors over an
inappropriate time-period and by overstating the potential
NOX reductions achievable at the sources. Considering the
information received and EPA's assessment thereof, the EPA has not
received sufficient information that necessitates updating or otherwise
changing the agency's position with respect to the EPA's previous
findings regarding cost-effective reductions at SCRs.
---------------------------------------------------------------------------
\67\ The EPA's analysis of SCR NOX rates for the
final CSAPR Update differed from the proposal. The evaluation
focused on a more recent timeframe for analysis: 2009 through 2015,
compared to 2003 through 2014. The EPA believed this change was
reasonable because there were significant shifts in the power sector
since 2003, particularly with respect to power sector economics
(e.g., lower natural gas prices in response to shale gas
development) and environmental regulations (e.g., CAIR and CSAPR).
Because of these changes, the EPA considers it reasonable to
evaluate SCR performance focusing on more recent historical data
that better represent the current landscape of considerations
affecting the power sector. The EPA chose 2009 because that is the
first year of CAIR NOX annual compliance. For further
discussion, see page 522 of EPA's Response to Comments on the CSAPR
Update available in the docket for that rule at EPA-HQ-OAR-2015-
0500-0572 and EPA's EGU NOX Mitigation Strategies Final
Rule TSD available in the docket for that rule at EPA-HQ-OAR-2015-
0500-0554.
---------------------------------------------------------------------------
In addition, to the extent that commenters argue that the emission
levels assumed for these units in the CSAPR Update (or alternatively as
measured in 2017) are marginally higher than what commenters claim
would be readily achievable, the air quality impacts of these
differences on the design value are likely to be small. Specifically,
Maryland indicates that the state anticipates an air quality benefit of
0.656 ppb attributable to the named units going from idled controls to
Maryland's definition of ``optimized'' control operation. This is
comparable to the estimated improvement in the CSAPR Update from the
engineering base case to the control case of $1,400/ton, wherein the
EPA estimated a 0.6 ppb improvement in air quality at the for Harford,
Maryland receptor.\68\ Subtracting the improvement estimated by the
commenter from the value estimated by the EPA yields a marginal
difference of 0.056 ppb.\69\ Thus, the petitions do not provide system-
wide impacts analysis showing that their requested unit-specific rate
requirements, which would reduce sources' emissions only slightly below
already achieved levels, would result in
[[Page 50468]]
regional reductions and air quality improvements as related to the
EPA's analysis regarding the good neighbor provision.
---------------------------------------------------------------------------
\68\ See CSAPR Update Final Ozone AQAT ``Summary DVs'' tab,
comparing cell L12 and O12 (along with cell O28).
\69\ While there are differences in modeling platforms, emission
totals, and temporalization of the emissions within the modeling
platforms that would affect this comparison, this provides some
estimate of the difference.
---------------------------------------------------------------------------
(2) Reliance on Allowance Trading To Address Section 126(b) Petitions
One commenter asserts that evaluating Maryland's CAA section 126(b)
petition for control for a specific source by relying on an average
fleet-wide rate without any consideration of the emission rate that
specific source is capable of achieving undermines the intent of
section 126(b) of the CAA, which gives a state the authority to ask the
EPA to set emissions limits for specific sources of air pollution.
As described earlier, while CAA section 126(b) addresses the same
substantive prohibition as CAA section 110(a)(2)(D)(i), CAA section
126(b) provides an independent process for downwind states to address
interstate transport. Commenters state that whether a specific source
emits or would emit in violation of the good neighbor provision is
primarily a factual determination based on monitored data and modeling,
not a legal conclusion based on whether a source is meeting an
emissions budget under a SIP or FIP.
The EPA disagrees with those commenters that argue that the EPA can
only consider unit-level emission rates when evaluating CAA section
126(b) petitions and must ignore prior actions and reductions
addressing interstate transport that pertain to the same NAAQS, the
same mitigation measures, and the same units. If the EPA has already
identified, mandated, and received commensurate emission reductions
from those sources (or sources in a shared geographic region determined
to be equally relevant to the downwind monitor) based on control
optimization through a trading program, then ignoring that related
action could lead to miscounting emission reductions from a mitigation
technology for a given NAAQS. While the EPA does not disagree that
these types of considerations need to be revisited when evaluating
potential reductions to meet future updated NAAQS (just as they have
been revisited in previous updates to the NAAQS) for which SIPs and
FIPs have yet to be promulgated (e.g., the 2015 ozone NAAQS), the
agency disagrees that they are irrelevant considerations for other
actions related to upwind contribution for the 2008 NAAQS for which
actions have been promulgated.
According to commenters, evaluating Delaware's and Maryland's
section 126(b) petitions based on whether the named sources participate
in a trading program is a strained interpretation of section 126(b)
because it fails to account for CAA section 126(c)'s reference to
source-specific remedies, including emissions limitations. The EPA's
position on why it is appropriate to evaluate a CAA section 126(b)
under the four-step framework and CSAPR Update is described in Section
III of this notice. Additionally, the EPA disagrees with commenters
that taking account of compliance with an emissions budget as part of
an analysis of a CAA section 126(b) petition is inconsistent with the
nature of CAA section 126(c)'s specific alternative remedies. Under CAA
section 302(k), an ``emission limitation'' is ``a requirement that
limits the quantity, rate, or concentration of emission of air
pollutants on a continuous basis.'' Under an allowance trading program,
the Administrator sets an emission limitation for a defined region or
regions and a compliance schedule for each unit subject to the program
in that region. The emission limitation for each unit is the federally
enforceable requirement that the quantity of the unit's emissions
during a specified period cannot legally exceed the amount authorized
by the allowances that the unit holds. The compliance schedule is set
by establishing a deadline by which units must begin to comply with the
requirement to hold allowances sufficient to cover emissions. Because
an allowance trading program is a compliance mechanism that enables
sources to make cost-effective decisions to meet their allowance
requirements, which are, in essence, emission limits, the EPA believes
considering compliance with such a program as part of its analysis of a
CAA section 126(b) petition is in fact consistent with the forms of
remedy authorized under CAA section 126(c).
Additionally, the EPA has previously relied on regional allowance
trading programs intended to implement CAA section 110(a)(2)(D)(i)(I)
to also address section 126(b) petitions. The EPA first used a regional
trading program as a section 126(c) remedy for findings in response to
section 126(b) petitions from eight states requesting upwind sources be
regulated with respect to the 1979 ozone NAAQS. Based on findings made
through the NOX SIP call, the EPA established its Federal
NOX Budget Trading Program in response to these petitions.
65 FR 2674 (Jan. 18, 2000). The use of the regional analysis of ozone
transport in the NOX SIP call findings to respond to
contemporaneous section 126(b) petitions was challenged in the D.C.
Circuit in Appalachian Power, where Petitioners argued that findings
based on statewide emissions cannot determine whether specific
stationary source emissions are in violation of the good neighbor
provision. Petitioners argued that instead of relying on the
NOX SIP call findings, the EPA needed first to make the more
rigorous finding that the specified stationary sources within a given
state independently met its threshold test for impacts on downwind
areas. Given the linkage between section 126(b) and the good neighbor
provision, the court determined it was reasonable for the EPA to tie
its source-specific findings under section 126(b) to the significance
of a state's total NOX emissions as determined under section
110(a)(2)(D)(i). 249 F.3d at 1049-1050. While the court did not
explicitly speak to the issue of whether an allowance trading program
is an appropriate remedy under CAA section 126(c), the court's
conclusion that a regional analysis is appropriate to evaluate ozone
transport at individual sources also supports the conclusion that a
regional remedy can effectively address the any air quality problem
identified through such an analysis. The court ultimately upheld the
EPA's regulatory action on the section CAA 126(b) petitions, which
included reliance on the allowance trading program.
The EPA evaluated whether there is newly available information that
leads to a determination that these sources are inadequately controlled
by the CSAPR Update, as commenters assert. The petitioners and
commenters claim that this is so, based on data that preceded
implementation of the CSAPR Update that they assert illustrates that
relatively large sources with existing control equipment were not
operating at appropriate levels of NOX abatement. The
petitioners and commenters further assert that these sources are
inadequately controlled because they do not always operate control
equipment on high ozone days. They support their argument with an
analysis of an allegedly achievable NOX rate, which they
claim is appropriate for regulatory application.
The EPA does not agree that these assertions support a
determination that these sources are inadequately controlled by the
CSAPR Update, and that additional regulatory measures for these sources
are necessary under the good neighbor provision. Not only was that rule
specifically designed to achieve the reductions necessary under the
good neighbor provision, but recent data indicate that it is in fact
achieving such reductions and that petitioners' assertions are not
borne out by the
[[Page 50469]]
current or future operations of the named sources. As discussed
earlier, based on reported 2017 ozone-season emissions under the first
CSAPR Update compliance period, these sources as a group effectively
reduced emissions to a degree consistent with the CSAPR Update remedy.
Commenters provided no compelling additional recent emissions and air
quality data that suggest controls were broadly underperforming on high
ozone days.
The EPA notes that the power sector is a complex and interconnected
system in which factors affecting one facility can result in effects
across facilities within the state or dispatch region. Thus, granting
the petitioners' request for source-specific emission limitations at
certain EGUs could cause effects at other EGUs. For instance, rate
requirements could result in generation shifting to higher-emitting
units that were not named in the petition, potentially creating worse
downwind air quality impacts on a statewide or regionwide basis.
Petitioners fail to recognize or account for potential re-balancing
across the power sector in response to their requested remedy. By only
examining the impact of a subset of the units subject to the same cap,
the petitioner does not fully account for the potential air quality
impact from implementation of the proposed remedy.
The EPA received comments on the proposed action asserting that an
allowance trading program, such as that promulgated in the CSAPR
Update, cannot address significant contribution to nonattainment or
interference with maintenance from a source or group of sources under
CAA section 126. Commenters state that an allowance trading program is
insufficient to constrain NOX emissions where there are
excess allowances. Commenters state that since ozone is observed on a
daily basis and the form of the standard is based on daily
observations, daily NOX limits are necessary to prevent
units from emitting at high rates on exceedance days and the days
leading up to the exceedance. The EPA does not agree that an allowance
trading program is an inadequate means of implementing emission
reductions for interstate transport purposes and notes it has done so
in response to CAA section 126(b) petitions previously.\70\ Petitioners
have not provided compelling new or novel information regarding the
EPA's technical analysis of NOX control potential or
observation of CSAPR Update implementation. Implementation mechanisms
based on seasonal NOX requirements have demonstrated success
at reducing peak ozone concentrations. For example, over the past
decade, there has been significant improvement in ozone across the
eastern United States, in part due to season-long allowance trading
programs such as the NOX Budget Trading Program, CAIR, and
the CSAPR NOX ozone-season allowance trading program. As a
result, current measured air quality in all Eastern areas is below the
1997 ozone NAAQS. As such, based on the best information available to
the agency at this time, the EPA believes that its current approach of
implementing an allowance trading program at step four has proven
effective at constraining NOX emissions from covered
sources, including the sources named in the petitions.
---------------------------------------------------------------------------
\70\ See Rulemaking on Section 126 Petition From North Carolina
To Reduce Interstate Transport of Fine Particulate Matter and Ozone;
Federal Implementation Plans to Reduce Interstate Transport of Fine
Particulate Matter and Ozone; Revisions to the Clean Air Interstate
Rule; Revisions to the Acid Rain Program, 71 FR 25328 (April 28,
2006); Findings of Significant Contribution and Rulemaking on
Section 126 Petitions for Purposes of Reducing Interstate Ozone
Transport, 65 FR 2674 (January 18, 2000).
---------------------------------------------------------------------------
b. Analysis of SNCR for NOX Mitigation
In its petition, Maryland also alleges that two facilities
operating SNCR post-combustion controls--Cambria Cogen in Pennsylvania
and Grant Town Power Plant in West Virginia--emit or would emit in
violation of the good neighbor provision with respect to the 2008 ozone
NAAQS and asks that the agency impose emission limits or other
requirements to ensure that the facilities operate their SNCR during
the ozone season. The EPA is finalizing its proposal to deny Maryland's
petition with respect to sources operating SNCR based on its conclusion
that fully operating with SNCR is not a cost-effective NOX
emissions reduction strategy for these sources, considering other
relevant factors such as NOX reduction potential and
downwind air quality impact, with respect to addressing transport
obligations for the 2008 ozone NAAQS. The EPA determined in the CSAPR
Update that operating existing SNCR would be $3,400 per ton, which
exceeded the level that the EPA determined would be cost effective for
the good neighbor provision for the 2008 ozone NAAQS, and, therefore,
the EPA is determining in this action that these sources do not emit
and would not emit in violation of the good neighbor provision with
respect to that NAAQS.
As discussed in Section IV.C.2 of the proposal, the EPA evaluated
control strategies in the CSAPR Update that were considered feasible to
implement by the 2017 ozone season and determined that EGU control
strategies available at a marginal cost of $1,400 per ton of
NOX reduced were cost effective, using a multi-factor test
that considered cost, NOX reduction potential, and downwind
air quality improvements at various levels of potential NOX
control stringency. In its evaluation, the EPA examined control
strategies available at different cost thresholds, including turning on
existing idled SNCR, which is the remedy proposed by Maryland in its
petition for these two units. The EPA identified a marginal cost of
$3,400 per ton as the level of uniform control stringency that
represents turning on idled SNCR controls.\71\ The EPA identified this
higher marginal cost of operating SNCR at units in the CSAPR Update
region, relative to operation of SCR, predominately based on the cost
and quantity of reagent needed (i.e., SNCRs require substantially more
reagent compared with SCRs due to the absence of catalyst which greatly
facilitates the reactions converting the NOX).
---------------------------------------------------------------------------
\71\ See EGU NOX Mitigation Strategies Final Rule TSD
(docket ID EPA-HQ-OAR-2015-0500-0554), available at http://www.regulations.gov.
---------------------------------------------------------------------------
The CSAPR Update finalized emission budgets using $1,400 per ton
control stringency, finding within step three of the transport
framework that this level of stringency represented the control level
at which incremental EGU NOX reductions and corresponding
downwind ozone air quality improvements were maximized with respect to
marginal cost. In finding that use of the $1,400 per ton control cost
level was appropriate for the 2008 ozone NAAQS, the EPA determined that
the more stringent emission budget level reflecting $3,400 per ton
(representing turning on idled SNCR controls) yielded fewer additional
emission reductions and fewer air quality improvements per additional
dollar of control costs.
Based on the information, assumptions, and analysis in the CSAPR
Update, the EPA determined that establishing emission budgets at $3,400
per ton and developing associated emissions budgets based on operation
of idled SNCR controls was not cost effective for addressing good
neighbor provision obligations for the 2008 ozone NAAQS because this
level of control yielded fewer additional emission reductions and fewer
air quality improvements relative to other less-costly control
strategies. 81 FR 74550. A review of the emission levels at the
[[Page 50470]]
sources named in Maryland's petition before implementation of the CSAPR
Update, in particular, demonstrates that the two units are relatively
small in size and have low emission levels, indicating that the units
have a relatively limited ability to substantially reduce
NOX emissions and, thereby, improve air quality
downwind.\72\ Neither Maryland's petition nor public commenters provide
any contradictory information demonstrating that fully operating SNCR
is a cost-effective control for the two named sources, considering the
marginal cost of implementation, the anticipated emission reduction,
and the potential air quality benefits.\73\ The EPA, thus, denies
Maryland's petition with respect to these sources based on its
conclusion that fully operating with SNCR is not a cost-effective
NOX emission reduction strategy with respect to addressing
transport obligations for the 2008 ozone NAAQS for these sources, and,
therefore, that these sources do not emit and would not emit in
violation of the good neighbor provision with respect to the 2008 ozone
NAAQS.
---------------------------------------------------------------------------
\72\ Cambria Cogen units one and two emitted 237 tons and 219
tons of ozone season NOX in 2016, respectively, while
Grant Town units 1A and 1B emitted 282 tons and 285 tons of ozone
season NOX in 2016, respectively. Ozone season
NOX emissions rates from these EGUs under the CSAPR
Update in 2017 are described later.
\73\ Since the EPA does not agree, and Maryland has not
demonstrated in the first instance that the operation of SNCR at
these units is cost effective, the EPA need not address Maryland's
claim that short-term emission limits may be appropriate. In any
event, the EPA notes that the same concerns with relying on the
lowest historical emission rate for purposes of determining what is
achievable for SCRs, discussed in Section IV.B.2 in the proposal,
would also apply to Maryland's contentions with respect to SNCRs.
---------------------------------------------------------------------------
While the EPA determined that fully operating SNCR across the
region was not cost effective with respect to addressing transport
obligations for the 2008 ozone NAAQS, individual sources may
nonetheless choose how to comply with the CSAPR ozone season
NOX allowance trading program. The operation of existing
SNCR controls is one method to achieve emission reductions needed to
comply with the requirements of the trading program. 81 FR 74561. For
instance, during the 2017 ozone season, likely in part as the result of
economic incentives under the CSAPR Update, the two Cambria units with
SNCR appear to have operated their controls, resulting in average
NOX emissions rates of 0.15 and 0.16 lbs/mmBtu, respectively
(a drop from the 2016 rates of 0.23 and 0.24 lbs/mmBtu,
respectively).\74\
---------------------------------------------------------------------------
\74\ See 2015, 2016, and 2017 Ozone-Season NOX rates
(lbs/mmBtu) for 41 units named in the petitions, available in the
docket for this action.
---------------------------------------------------------------------------
One commenter asserts that the EPA incorrectly analyzed Maryland's
argument related to EGUs equipped with SNCR, as the availability of
NOX reductions under a 126(b) petition must be evaluated on
a source-specific basis in order to determine if the proposed
NOX control is cost effective. The commenter alleges that
when the EPA conducts cost-effectiveness determinations for RACT, SNCR
installation is considered cost effective, and, therefore that running
those installed controls is necessarily also cost effective in the
context of the good neighbor provision as well. Another commenter
asserts that the optimization of existing post-combustion controls is
an immediately available cost-effective NOX reduction
strategy available in the EGU sector.
While the operation of SNCR could be implemented relatively
quickly, as described earlier, the EPA does not have a basis to
determine that the controls are cost effective at these units when
considering cost, NOX reduction potential, and downwind air
quality improvements. Commenters have also not provided information
demonstrating that, even at the unit level proposed by the commenter,
operation of SNCR at the two units named in the Maryland petition are
cost effective relative to NOX reduction potential and
downwind air quality improvements.
The EPA also does not agree that any conclusions drawn regarding
cost effectiveness of controls in other contexts are directly
applicable here. RACT determinations are evaluating whether
implementation of certain controls within a nonattainment area will be
effective at addressing a local air quality problem relative to the
cost of implementing such controls. However, implementation of the same
controls at sources that are significantly farther from a particular
air quality problem may have very different air quality impacts a
downwind area. As described earlier in this notice, ozone transport is
the result of the collective contribution of many sources in several
upwind states. The relative cost effectiveness of emission reductions
from implementation of controls at a given upwind source, when
considering NOX reduction potential and downwind impacts,
will necessarily be different than evaluation of the same controls at a
more local source. The EPA's approach for assessing cost effectiveness
in the context of regional interstate ozone pollution transport can,
therefore, reasonably be considered as addressing a different air
quality concern and thereby independent from cost-effectiveness
determinations made under RACT.
Based on the EPA's conclusion that fully operating with SNCR is not
a cost-effective NOX emission reduction strategy with
respect to addressing transport obligations for the 2008 ozone NAAQS
for these sources, the EPA finds that the petition and the comments
provide no grounds for the EPA to determine that that the two sources
identified as operating SNCR emit or would emit in violation of the
good neighbor provision with respect to the 2008 ozone NAAQS.
c. The EPA's Step Three Analysis With Respect to Brunner Island
The remaining facility addressed in one of Delaware's petitions is
the Brunner Island facility, which currently has neither SCR nor SNCR
installed. As noted earlier, the EPA has already determined that
Delaware's petitions should be denied based on the EPA's conclusions
that there are no downwind air quality impacts in Delaware in steps one
and two of the four-step framework. Nonetheless, the EPA has evaluated
Brunner Island with respect to step three because it provides another
independent basis for EPA's denial of the petition.
With respect to the question of whether there are feasible and
cost-effective NOX emissions reductions available at Brunner
Island, the facility primarily burned natural gas with a low
NOX emissions rate in the 2017 ozone season, and the EPA
expects the facility to continue operating primarily by burning natural
gas in future ozone seasons. As such, and as described in more detail
in the following paragraphs, the EPA at this time finds that no
additional feasible and cost-effective NOX emissions
reductions available at Brunner Island have been identified. The EPA,
therefore, has no basis to determine, consistent with the standard of
review outlined in Section IV.A of this notice, that Brunner Island
emits or would emit in violation of the good neighbor provision with
respect to the 2008 or 2015 ozone NAAQS.
Delaware's CAA section 126(b) petition first proposes that the
operation of natural gas is an available cost-effective emissions
reduction measure that could be implemented at Brunner Island. Brunner
Island completed construction of a natural gas pipeline connection
prior to the beginning of the 2017 ozone season (i.e., by May 1, 2017)
and operated primarily using natural gas as fuel for the 2017 ozone
season. As a result, Brunner Island's actual ozone season
NOX emissions declined from 3,765 tons in 2016 to 877 tons
in 2017,
[[Page 50471]]
and the facility's ozone season NOX emissions rate declined
from 0.370 lbs/mmBtu in 2016 to 0.090 lbs/mmBtu in 2017. Thus, Brunner
Island has already implemented the emissions reductions consistent with
what Delaware asserted would qualify as a cost-effective strategy for
reducing NOX emissions. Accordingly, the EPA has determined
that Delaware's CAA section 126(b) petition does not demonstrate that,
at this current level of emissions, Brunner Island emits in violation
of the good neighbor provision.
Similarly, the EPA concludes that Delaware's petition does not
demonstrate that Brunner Island would emit in violation of the good
neighbor provision. The EPA believes Brunner Island will continue to
primarily use natural gas as fuel during future ozone seasons for
economic reasons. First, compliance with the CSAPR Update provides an
economic incentive to cost-effectively reduce NOX emissions.
Specifically, Brunner Island's participation in the CSAPR
NOX Ozone Season Group 2 allowance trading program provides
an economic incentive to produce electricity in ways that lower ozone
season NOX, such as by burning natural gas relative to
burning coal at this particular power plant. Under the CSAPR Update,
each ton of NOX emitted by a covered EGU has an economic
value--either a direct cost in the case that a power plant must
purchase an allowance to cover that ton of emissions for CSAPR Update
compliance or an opportunity cost in the case that a power plant must
use an allowance in its account for compliance and, thereby, foregoes
the opportunity to sell that allowance on the market. The EPA notes
that Brunner Island's 2017 emissions would have been approximately
2,714 tons more than its actual 2017 emissions if it had operated as a
coal-fired generator, as it did in 2016.\75\ This reduction in
NOX emissions that is attributable to primarily burning
natural gas has an economic value in the CSAPR allowance trading
market.
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\75\ This estimated emissions difference was calculated as the
difference between 2017 reported NOX emissions of 877
tons and a counterfactual 2017 NOX emissions estimate of
3,591 tons created using 2017 operations (i.e., heat input of
19,406,872 mmBtu) multiplied by the 2016 NOX emission
rate of 0.37 lb/mmBtu reflecting coal-fired generation. These data
are publicly available at https://www.epa.gov/ampd.
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Second, there are continuing fuel-market based economic incentives
suggesting that Brunner Island will continue to primarily burn natural
gas during the ozone season. Brunner Island elected to add the
capability to primarily utilize natural gas by way of a large capital
investment in a new natural gas pipeline capacity connection. Brunner
Island's operators would have planned for and constructed this project
during the recent period of relatively low natural gas prices. In the
years preceding the completion of this natural gas pipeline connection
project (i.e., between 2009 and 2016), average annual Henry Hub natural
gas spot prices ranged from $2.52/mmBtu to $4.37/mmBtu.\76\ The capital
expenditure to construct a natural gas pipeline connection suggests
that natural gas prices within this range make it economic (i.e.,
cheaper) for Brunner Island to burn natural gas to generate electricity
relative to burning coal. As such, future natural gas prices in this
same range suggest that Brunner Island will continue to primarily burn
natural gas during future ozone seasons. The EPA and other independent
analysts expect future natural gas prices to remain low and within this
price range exhibited from 2009 to 2016 due both to supply and
distribution pipeline buildout. For example, the Energy Information
Administration's (EIA) 2018 Annual Energy Outlook (AEO) natural gas
price projections for the Henry Hub spot price range from $3.06/mmBtu
in 2018 to $3.83/mmBtu in 2023.\77\ Moreover, the AEO short-term energy
outlook and New York Mercantile Exchange futures further support the
estimates of a continued low-cost natural gas supply.\78\ These
independent analyses of fuel price data and projections lead to the
EPA's expectation that fuel-market economics will continue to support
Brunner Island's primarily burning natural gas during future ozone
seasons through at least 2023.\79\
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\76\ Henry Hub is a significant distribution hub located on the
natural gas pipeline system located in Louisiana. Due to the
significant volume of trades at this location, it is seen as the
primary benchmark for the North American natural gas market. These
data are publicly available at https://www.eia.gov/dnav/ng/hist/rngwhhdA.htm.
\77\ In the 2018 reference case Annual Energy Outlook (AEO)
released February 6, 2018, created by the U.S. Energy Information
Administration (EIA), natural gas prices for the power sector for
2018 through 2023. Available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=13-AEO2018&cases=ref2018&sourcekey=0. Projected
delivered natural gas prices for the electric power sector in the
Middle Atlantic region, where Brunner Island is located, ranged
between $3.56 in 2018 and $4.08/mmBtu in 2023. The projected
delivered coal prices for the electric power sector in the Middle
Atlantic region remain relatively constant, ranging from $2.51 to
$2.56/mmBtu. These data are publicly available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2018®ion=1-2&cases=ref2018&start=2016&end=2023&f=A&linechart=ref2018-d121317a.3-3AEO2018.1-2&map=ref2018-d121317a.4-3-AEO2018.1-2&sourcekey=0.
\78\ AEO short-term energy outlook available at https://www.eia.gov/outlooks/steo/report/natgas.php.
\79\ The EPA also notes that a proposed consent decree between
Sierra Club and Talen Energy may further ensure that Brunner Island
will operate by burning gas in the ozone season in 2023 and future
years. Under the settlement, Brunner Island agrees to operate only
on natural gas during the ozone season (May 1-September 30) starting
on January 1, 2023, (subjected to limited exceptions) and cease coal
operations after December 31, 2028. Sierra Club, Talen Energy, and
Brunner Island jointly moved the Middle District of Pennsylvania to
enter the proposed the consent decree, and on August 31, 2018, the
court granted the motion and entered the agreement. See Order
Granting Joint Motion for Entry of Proposed Consent Decree and
Stipulation Extending Defendants' Time to Respond to Complaint,
Sierra Club. v Talen Energy Corp., Case No. 1:18-cv-01042-CCC.
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The context in which Brunner Island installed natural gas-firing
capability and burned natural gas is consistent with observed recent
trends in natural gas utilization within the power sector, suggesting
that Brunner Island's economic situation in which it primarily burns
gas as fuel during the ozone season is not unique or limited. Comparing
total heat input from 2014 with 2017 for all units that utilize natural
gas and report to the EPA's Clean Air Markets Division, historical data
showed an increased use of natural gas of 14 percent.\80\ This overall
increase results from both an increase in capacity from the
construction of additional units and an increased gas-fired capacity
factor at existing sources. The available capacity increased six
percent while average capacity factor increased from 23 percent to 25
percent, which reflects an eight percent increase in utilization.
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\80\ From 8.4 billion mmBtu to 9.6 billion mmBtu. See EPA's
Clean Air Markets Division data available at https://ampd.epa.gov/ampd/.
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Considering the projected continued broader downward trends in
NOX emissions resulting in improved air quality in Delaware,
the EPA anticipates that Brunner Island will likely continue to
primarily burn natural gas during the ozone season as air quality in
Delaware continues to improve. Accordingly, the EPA has no basis to
conclude that the facility would emit in violation of the good neighbor
provision with respect to either the 2008 or 2015 ozone NAAQS.
Commenters assert that the EPA's interpretation of ``emits'' or
``would emit'' inappropriately proposes to evaluate only a single
year's worth of emissions data or anticipated future rates, without
ensuring that the emission reductions (i.e. evaluated rates) are
permanent and federally enforceable. The EPA disagrees that it is
required to impose federally enforceable limitations at Brunner Island
based on the facts before the agency. The prohibition of CAA section
[[Page 50472]]
110(a)(2)(D)(i)(I) is linked directly to CAA section 126(b), in that a
violation of the prohibition in CAA section 110(a)(2)(D)(i) is a
condition precedent for action under CAA section 126(b) and,
critically, that significant contribution to nonattainment and
interference with maintenance should be construed identically for
purposes of both provisions where EPA has already given meaning to the
terms under one provision. 83 FR 7711 through 7722; see also
Appalachian Power, at 1048-50 (affirming as reasonable the EPA's
approach to interpreting a violation of CAA section 110(a)(2)(D)(i)(I)
under CAA section 126 consistent with its approach in the
NOX SIP Call).
Given the inextricable link between the substantive requirements of
the two provisions, the EPA applied the same four-step framework used
in previous ozone transport rulemakings, including the CSAPR Update,
for evaluating whether Brunner Island significantly contributes to
nonattainment, or interferes with maintenance, of the 2008 and 2015
ozone NAAQS in Delaware. Pursuant to this framework, the EPA first
determines in steps one and two whether emissions from an upwind state
impact downwind air quality problems at a level that exceeds an air
quality threshold, such that the state is linked and, therefore,
contributes to the air quality problem. In step three, the EPA then
determines whether the contribution is ``significant'' or interferes
with maintenance of the NAAQS based on several factors, including the
availability of cost-effective emission reductions at sources within
the state. Where the EPA determines that a source does not have cost-
effective emission reductions available, the EPA concludes that the
source does not significantly contribute to nonattainment or interfere
with maintenance of the NAAQS, and thus, that there are no emissions at
the source that must be ``prohibited'' under CAA section
110(a)(2)(D)(i)(I), and the petition can also be denied on this basis.
Importantly, the EPA only implements federally enforceable limits
under step four of the four-step framework for sources that the EPA
determines have emissions that significantly contribute to
nonattainment or interfere with maintenance of the ozone NAAQS downwind
under steps one, two, and three. See 81 FR 74553 (declining to impose
CSAPR Update FIP obligations for EGUs in District of Columbia and
Delaware despite linkages to downwind receptors where EPA determined no
cost-effective emission reductions were available). This is consistent
with the statutory language of CAA section 110(a)(2)(D)(i)(I), which
``prohibit[s]'' only those emissions that significantly contribute to
nonattainment or interfere with maintenance of the NAAQS in another
state. The EPA has reasonably interpreted this to mean that where there
is no such impact, the EPA and the states are not required to impose
emission limitations.\81\ The EPA does not dispute that, were it to
find that Brunner Island emits or would emit in violation of the
prohibition under CAA section 110(a)(2)(D)(i)(I), an appropriate remedy
to mitigate the emission impacts would necessarily have to be federally
enforceable, both under CAA section 126(c) (requiring compliance by a
source with EPA-imposed emission limitations and compliance schedules)
and CAA section 110(a)(2)(D)(ii) (requiring a state implementation plan
to contain provisions ensuring compliance with the requirements of CAA
section 126).
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\81\ This is also consistent with designation requirements
elsewhere in title I. Downwind areas are initially designated
attainment or nonattainment for the ozone NAAQS based on actual
measured ozone concentrations, regardless of whether the level of
ozone concentrations is due to enforceable emission limits.
Similarly, the EPA generally evaluates whether sources in nearby
areas contribute to measured nonattainment in such areas for
purposes of designations based on actual emission levels, and thus
sources in those nearby areas are generally subject to nonattainment
planning requirements only if actual emissions from that area are
considered to contribute to the air quality problem. Here, where
``significant contribution'' is necessarily a higher standard than
the contribution threshold used in designations, it is reasonable
and consistent to determine that states or EPA need only impose
emission limitations if it is determined that there is significant
contribution or interference with maintenance.
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However, for the reasons described in the proposal and in this
final action, the EPA has determined at this time that Brunner Island
does not emit, or would not emit, in violation of CAA section
110(a)(2)(D)(i)(I) under steps one, two, and three for either the 2008
or 2015 ozone NAAQS. Therefore, under the four-step framework, the EPA
does not reach step four's requirement of federally enforceable
emission reductions. However, the EPA notes that if, in fact, Brunner
Island's operations change such that the facility is operating
primarily on coal during future ozone seasons and future emission
levels increase so as to be in violation of the good neighbor
provision, then this final action denying Delaware's petition would not
preclude Delaware from submitting another petition regarding Brunner
Island's impacts. The EPA is not, however, pre-determining what action
may be appropriate on any such future petition, which would depend upon
a variety of factors, including the level of emissions at Brunner
Island and future ozone concentrations in Delaware.
V. Determinations Under Section 307(b)(1)
Section 307(b)(1) of the CAA indicates which Federal Courts of
Appeal have venue for petitions of review of final actions by the EPA.
This section provides, in part, that petitions for review must be filed
in the Court of Appeals for the District of Columbia Circuit if (i) the
agency action consists of ``nationally applicable regulations
promulgated, or final action taken, by the Administrator,'' or (ii)
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.''
The EPA finds that this final action regarding the pending CAA
section 126(b) petitions is ``nationally applicable.'' or, in the
alternative, is based on a determination of ``nationwide scope and
effect'' within the meaning of CAA section 307(b)(1). Through this
rulemaking action, the EPA interprets sections 110 and 126 of the CAA,
statutory provisions which apply to all states and territories in the
United States. In addition, the final action addresses emissions
impacts and sources located in seven States, which are located in
multiple EPA Regions and federal circuits.\82\ This action is also
based on a common core of factual findings and analyses concerning the
transport of pollutants between the different states. Furthermore, the
EPA intends this interpretation and approach to be consistently
implemented nationwide with respect to CAA section 126(b) petitions for
the 2008 and 2015 ozone NAAQS. Courts have found similar actions to be
nationally applicable.\83\ For these reasons, the Administrator finds
that any final action related to this proposal is nationally applicable
or, in the alternative, is based on a determination of nationwide scope
and effect for purposes of CAA section 307(b)(1).
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\82\ See H.R. Rep. No. 95-294 at 323, 324, reprinted in 1977
U.S.C.C.A.N. 1402-03.
\83\ See, e.g., Texas v. EPA, 2011 U.S. App. LEXIS 5654 (5th
Cir. 2011) (finding SIP call to 13 states to be nationally
applicable and thus transferring the case to the U.S. Court of
Appeals for the D.C. Circuit in accordance with CAA section
307(b)(1)).
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Thus, the EPA finds that pursuant to CAA section 307(b)(1) any
petitions for review of this final action would be filed in the Court
of Appeals for the District of Columbia Circuit within 60
[[Page 50473]]
days from the date any final action is published in the Federal
Register.
VI. Statutory Authority
42 U.S.C. 7410, 7426, 7601.
Dated: September 14, 2018.
Andrew R. Wheeler,
Acting Administrator.
[FR Doc. 2018-20854 Filed 10-4-18; 8:45 am]
BILLING CODE 6560-50-P