[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
[Rules and Regulations]
[Pages 65878-65924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27160]



[[Page 65877]]

Vol. 83

Friday,

No. 245

December 21, 2018

Part III





Environmental Protection Agency





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40 CFR Part 52





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

  Federal Register / Vol. 83 , No. 245 / Friday, December 21, 2018 / 
Rules and Regulations  

[[Page 65878]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2018-0225; FRL-9987-86-OAR]
RIN 2060-AT92


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

DATES: This final rule is effective on February 19, 2019.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2018-0225. All documents in the docket are 
listed on the www.regulations.gov website. Although listed in the 
index, some information may not be publicly available, e.g., CBI or 
other information whose disclosure is restricted by statute. Certain 
other material, such as copyrighted material, is not placed on the 
internet and will be publicly available only in hard copy form. 
Publicly available docket materials are available either electronically 
through www.regulations.gov.

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

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

------------------------------------------------------------------------
                                 NAICS*       Examples of potentially
           Category               code         regulated industries
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Industry.....................     221112  Fossil fuel-fired electric
                                           power generation
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* North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated. To 
determine whether your facility is affected by this action, you should 
carefully examine the applicability provisions in 40 CFR 97.804. If you 
have questions regarding the applicability of the CSAPR Update to a 
particular entity, consult the person listed in the FOR FURTHER 
INFORMATION CONTACT section above.
    Outline. The following outline is provided to aid in locating 
information in this preamble.

I. General Information
    A. Summary of Proposal in Relation to the Final Determination
    B. States Covered by This Action
II. Background and Legal Authority
    A. Ground-level Ozone Pollution and Public Health
    B. The EPA's Statutory Authority for This Final Action
    C. Good Neighbor Obligations for the 2008 Ozone NAAQS
    D. Summary of the CSAPR Update
III. Final Determination Regarding Good Neighbor Obligations for the 
2008 Ozone NAAQS
    A. Analytic Approach
    B. Selection of a Future Analytic Year
    1. Attainment Dates for the 2008 Ozone NAAQS
    2. Feasibility of Control Strategies to Further Reduce Ozone 
Season NOX Emissions
    3. Focusing on 2023 for Analysis
    C. Air Quality Analysis
    1. Overview of Air Quality Modeling Platform
    2. Emission Inventories
    3. Definition of Nonattainment and Maintenance Receptors
    4. Air Quality Modeling to Identify Nonattainment and 
Maintenance Receptors
    5. Pollutant Transport from Upwind States
    D. Final Determination
IV. Statutory Authority and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review, and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    J. National Technology Transfer Advancement Act
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    L. Congressional Review Act
    M. Determinations Under CAA Section 307(b)(1) and (d)

[[Page 65879]]

I. General Information

    Within this document ``we,'' ``us,'' or ``our'' should be 
interpreted to mean the U.S. EPA.
    Where can I get a copy of this document and other related 
information?
    The EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2018-0225 (available at http://www.regulations.gov). 
Information related to this final action is available at the website: 
https://www.epa.gov/airtransport.

A. Summary of Proposal in Relation to the Final Determination

    On July 10, 2018, the EPA issued its proposed Determination 
Regarding Good Neighbor Obligations for the 2008 Ozone National Ambient 
Air Quality Standard. 83 FR 31915 (July 10, 2018). In that action, the 
agency proposed to determine that the existing CSAPR Update fully 
addressed certain states' obligations under CAA section 
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. The proposed 
determination was based upon a finding that 2023 was a reasonable 
future analytic year in which to further evaluate air quality with 
respect to remaining good neighbor obligations, considering relevant 
attainment dates for the 2008 ozone NAAQS and the time necessary to 
further mitigate nitrogen oxide (NOX) emissions through 
regional assessment of state-of-the-art post-combustion controls within 
the CSAPR Update region. The agency's analysis of projected 2023 ozone 
concentrations indicated that there would be no remaining monitors 
expected to have difficulty attaining or maintaining the 2008 ozone 
NAAQS, and the EPA therefore proposed to determine that the existing 
regulation--the CSAPR Update--fully addressed states' obligations under 
this Clean Air Act provision for this NAAQS. The agency solicited 
comment on that proposal with the comment period ending on August 31, 
2018. The agency also held a public hearing on August 1, 2018. This 
final action was developed considering comments received on the 
proposal. Generally, the agency's final action herein remains 
consistent with the proposal with respect to its determination 
regarding good neighbor obligations for the 2008 ozone NAAQS and its 
underlying rationale.

B. States Covered by This Action

    In the CSAPR Update, 81 FR 74504 (Oct. 26, 2016), the EPA 
promulgated FIPs affecting 22 eastern states that at least partially 
addressed obligations under CAA section 110(a)(2)(D)(i)(I), also known 
as the ``good neighbor provision,'' with respect to the 2008 ozone 
NAAQS. The good neighbor provision requires upwind states to control 
their emissions that significantly contribute to air quality problems 
in downwind states. Based on information available when the CSAPR 
Update was finalized, the EPA was unable to determine at that time that 
the FIPs fully addressed good neighbor obligations under this NAAQS for 
21 of the 22 states.\1\ The EPA has subsequently finalized approval of 
a SIP that fully addresses the good neighbor obligation for one of 
these states--Kentucky. 83 FR 33730 (July 17, 2018). Consistent with 
the EPA's July 2018 proposed determination, in this action, the EPA 
finalizes a determination that with CSAPR Update implementation the 20 
remaining states' good neighbor obligations for the 2008 ozone NAAQS 
are fully addressed. In accord with this determination, the EPA has no 
further obligation under CAA section 110(c) to establish requirements 
for power plants or any other emission sources in these states to 
further reduce transported ozone pollution under CAA section 
110(a)(2)(D)(i)(I) with regard to this NAAQS. See Table I.A-1 for a 
list of states covered by this final action.
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    \1\ The EPA determined in the final CSAPR Update that 
implementation of the emissions budget for Tennessee would fully 
eliminate the state's significant contribution to downwind 
nonattainment and interference with maintenance of the 2008 ozone 
NAAQS because the downwind air quality problems to which the state 
was linked were projected to be resolved after implementation of the 
CSAPR Update. 81 FR 74540.

 Table I.A-1--States Covered by This Final Determination Regarding Good
              Neighbor Obligations for the 2008 Ozone NAAQS
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------------------------------------------------------------------------
                                  State
------------------------------------------------------------------------
Alabama                           Missouri
Arkansas                          New Jersey
Illinois                          New York
Indiana                           Ohio
Iowa                              Oklahoma
Kansas                            Pennsylvania
Louisiana                         Texas
Maryland                          Virginia
Michigan                          West Virginia
Mississippi                       Wisconsin
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II. Background and Legal Authority

A. Ground-level Ozone Pollution and Public Health

    Ground-level ozone causes a variety of negative effects on human 
health, vegetation, and ecosystems. In humans, acute and chronic 
exposure to ozone is associated with premature mortality and a number 
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone 
exposure causes visible foliar injury in some plants, decreases growth 
in some plants, and affects ecosystem community composition.\2\
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    \2\ For more information on the human health and welfare and 
ecosystem effects associated with ambient ozone exposure, see the 
EPA's October 2015 Regulatory Impact Analysis of the Final Revisions 
to the National Ambient Air Quality Standards for Ground-Level Ozone 
(EPA-452/R-15-007) in the docket for this action and also found in 
the docket for the 2015 ozone NAAQS, Docket No. EPA-HQ-OAR-2013-
0169-0057.
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    In this final action, consistent with EPA's proposal and with 
previous rulemakings described in section II.B, the EPA relies on 
analysis that reflects the regional nature of transported ground-level 
ozone pollution. Ground-level ozone is not emitted directly into the 
air, but is a secondary air pollutant created by chemical reactions 
between NOX, carbon monoxide (CO), methane (CH4), 
and non-methane volatile organic compounds (VOCs) in the presence of 
sunlight. Emissions from mobile sources, electric generating units 
(EGUs), industrial facilities, gasoline vapors, and chemical solvents 
are some of the major anthropogenic sources of ozone precursors. The 
potential for ground-level ozone formation increases during periods 
with warmer temperatures and stagnant air masses. Therefore, ozone 
levels are generally higher during the summer months.\3 4\ Ground-level 
ozone concentrations and temperature are highly correlated in the 
eastern U.S., with observed ozone increases of 2-3 parts per billion 
(ppb) per degree Celsius reported.\5\
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    \3\ Rasmussen, D.J. et al. (2011). Ground-level ozone-
temperature relationships in the eastern US: A monthly climatology 
for evaluating chemistry-climate models. Atmospheric Environment 47: 
142-153.
    \4\ High ozone concentrations have also been observed in cold 
months, where a few areas in the western U.S. have experienced high 
levels of local VOC and NOX emissions that have formed 
ozone when snow is on the ground and temperatures are near or below 
freezing.
    \5\ Bloomer, B.J., J.W. Stehr, C.A. Piety, R.J. Salawitch, and 
R.R. Dickerson (2009). Observed relationships of ozone air pollution 
with temperature and emissions, Geophys. Res. Lett., 36, L09803.
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    Precursor emissions can be transported downwind directly or, after 
transformation in the atmosphere, as ozone. Studies have established 
that ozone formation, atmospheric residence, and transport occur on a 
regional scale (i.e., hundreds of miles) over much of the eastern U.S. 
As a result of ozone transport, in any given location, ozone pollution 
levels are affected by a combination of local emissions and

[[Page 65880]]

emissions from upwind sources. Numerous observational studies have 
demonstrated the transport of ozone and its precursors and the impact 
of upwind emissions on high concentrations of ozone pollution. \6\
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    \6\ For example, Bergin, M.S. et al. (2007). Regional air 
quality: local and interstate impacts of NOX and 
SO2 emissions on ozone and fine particulate matter in the 
eastern United States. Environmental Sci & Tech. 41: 4677-4689.
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    The EPA concluded in several previous rulemakings (summarized in 
section II.B) that interstate ozone transport can be an important 
component of peak ozone concentrations during the summer ozone season 
and that NOX control strategies are effective for reducing 
regional-scale ozone transport. Model assessments have looked at 
impacts on peak ozone concentrations after potential emission reduction 
scenarios for NOX and VOCs for NOX-limited and 
VOC-limited areas. For example, Jiang and Fast concluded that 
NOX emission reduction strategies are effective in lowering 
ozone mixing ratios in urban areas and Liao et al. showed that 
NOX reductions result in lower peak ozone concentrations in 
non-attainment areas in the Mid-Atlantic.\7 8\ Assessments of ozone 
conducted for the October 2015 Regulatory Impact Analysis of the Final 
Revisions to the National Ambient Air Quality Standards for Ground-
Level Ozone (EPA-452/R-15-007) also show the importance of 
NOX emissions on ozone formation. This analysis is in the 
docket for this action and also can be found in the docket for the 2015 
ozone NAAQS regulatory impact analysis, Docket No. EPA-HQ-OAR-2013-0169 
(document ID EPA-HQ-OAR-2013-0169-0057).
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    \7\ Jiang, G.; Fast, J.D. (2004). Modeling the effects of VOC 
and NOX emission sources on ozone formation in Houston 
during the TexAQS 2000 field campaign. Atmospheric Environment 38: 
5071-5085.
    \8\ Liao, K. et al. (2013) Impacts of interstate transport of 
pollutants on high ozone events over the Mid-Atlantic United States. 
Atmospheric Environment 84, 100-112.
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    Studies have found that NOX emission reductions can be 
effective in reducing ozone pollution as quantified by the form of the 
2008 ozone standard, 8-hour peak concentrations. Specifically, studies 
have found that NOX emission reductions from EGUs, mobile 
sources, and other source categories can be effective in reducing the 
upper-end of the cumulative ozone distribution in the summer on a 
regional scale.\9\ Analysis of air quality monitoring data trends shows 
reductions in summertime ozone concurrent with implementation of 
NOX reduction programs.\10\ Gilliland et al. examined the 
NOX SIP Call, discussed in more detail later, and presented 
reductions in observed versus modeled ozone concentrations in the 
eastern U.S. downwind from major NOX sources.\11\ The 
results showed significant reductions in ozone concentrations (10-25 
percent) from observed measurements (CASTNET and AQS) \12\ between 2002 
and 2005, linking reductions in EGU NOX emissions from 
upwind states with ozone reductions downwind of the major source 
areas.\13\ Additionally, G[eacute]go et al. showed that ground-level 
ozone concentrations were significantly reduced after implementation of 
the NOX SIP Call.\14\ Thus, these studies support the EPA's 
continued focus on regional and seasonal NOx control strategies to 
address regional interstate ozone pollution transport.
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    \9\ Hidy, G.M. and Blanchard C.L. (2015). Precursor reductions 
and ground-level ozone in the Continental United States. J. of Air & 
Waste Management Assn. 65, 10.
    \10\ Simon, H. et al. (2015). Ozone trends across the United 
States over a period of decreasing NOX and VOC emissions. 
Environmental Science & Technology 49, 186-195.
    \11\ Gilliland, A.B. et al. (2008). Dynamic evaluation of 
regional air quality models: Assessing changes in O3 
stemming from changes in emissions and meteorology. Atmospheric 
Environment 42: 5110-5123.
    \12\ CASTNET is the EPA's Clean Air Status and Trends Network. 
AQS is the EPA's Air Quality System.
    \13\ Hou, Strickland & Liao. ``Contributions of regional air 
pollutant emissions to ozone and fine particulate matter-related 
mortalities in eastern U.S. urban areas''. Environmental Research, 
Feb. 2015. Available at https://ac.els-cdn.com/S0013935114004113/1-s2.0-S0013935114004113-main.pdf?_tid=78c88101-fa6e-4e75-a65c-f56746905e7d&acdnat=1525175812_0e62553b83c9ffa1105aa306a478e8bb.
    \14\ G[eacute]go et al. (2007). Observation-based assessment of 
the impact of nitrogen oxides emission reductions on O3 
air quality over the eastern United States. J. of Applied 
Meteorology and Climatology 46: 994-1008.
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B. The EPA's Statutory Authority for This Final Action

    The statutory authority for this final action is provided by the 
CAA as amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and 
301 of the CAA provide the primary statutory underpinnings for this 
action. The most relevant portions of section 110 are subsections 
110(a)(1), 110(a)(2) (including 110(a)(2)(D)(i)(I)), and 110(c)(1).
    Section 110(a)(1) provides that states must make SIP submissions 
``within 3 years (or such shorter period as the Administrator may 
prescribe) after the promulgation of a national primary ambient air 
quality standard (or any revision thereof),'' and that these SIP 
submissions are to provide for the ``implementation, maintenance, and 
enforcement'' of such NAAQS.\15\ The statute directly imposes on states 
the duty to make these SIP submissions, and the requirement to make the 
submissions is not conditioned upon the EPA taking any action other 
than promulgating a new or revised NAAQS.\16\
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    \15\ 42 U.S.C. 7410(a)(1).
    \16\ See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 
1584, 1601 (2014).
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    The EPA has historically referred to SIP submissions made for the 
purpose of satisfying the applicable requirements of CAA sections 
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' submissions. Section 
110(a)(1) addresses the timing and general requirements for 
infrastructure SIP submissions, and section 110(a)(2) provides more 
details concerning the required content of these submissions. It 
includes a list of specific elements that ``[e]ach such plan'' 
submission must address.\17\ All states, regardless of whether the 
state includes areas designated as nonattainment for the relevant 
NAAQS, must have SIPs that meet the applicable requirements of section 
110(a)(2), including provisions of section 110(a)(2)(D)(i)(I), 
described later, that are the focus of this action.
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    \17\ The EPA's general approach to infrastructure SIP 
submissions is explained in greater detail in individual notices 
acting or proposing to act on state infrastructure SIP submissions 
and in guidance. See, e.g., Memorandum from Stephen D. Page on 
Guidance on Infrastructure State Implementation Plan (SIP) Elements 
under Clean Air Act Sections 110(a)(1) and 110(a)(2) (Sept. 13, 
2013).
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    Section 110(c)(1) requires the Administrator to promulgate a FIP at 
any time within two years after the Administrator: (1) Finds that a 
state has failed to make a required SIP submission; (2) finds a SIP 
submission to be incomplete pursuant to CAA section 110(k)(1)(C); or 
(3) disapproves a SIP submission. This obligation applies unless the 
state corrects the deficiency through a SIP revision that the 
Administrator approves before the FIP is promulgated.\18\
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    \18\ 42 U.S.C. 7410(c)(1).
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    Section 110(a)(2)(D)(i)(I), also known as the ``good neighbor 
provision,'' provides the primary basis for this action. It requires 
that each state SIP include provisions sufficient to ``prohibit[ ], 
consistent with the provisions of this subchapter, any source or other 
type of emissions activity within the State from emitting any air 
pollutant in amounts which will--(I) contribute significantly to 
nonattainment in, or interfere with maintenance by, any other State 
with respect to any [NAAQS].'' \19\ The EPA

[[Page 65881]]

often refers to the emission reduction requirements under this 
provision as ``good neighbor obligations'' and submissions addressing 
these requirements as ``good neighbor SIPs.''
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    \19\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
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    The EPA has previously issued four rules interpreting and 
clarifying the requirements of section 110(a)(2)(D)(i)(I) for states in 
the eastern United States. These rules, and the associated court 
decisions addressing these rules, summarized here, provide important 
direction regarding the requirements of section 110(a)(2)(D)(i)(I).
    The NOX SIP Call, promulgated in 1998, addressed the 
good neighbor provision for the 1979 1-hour ozone NAAQS.\20\ The rule 
required 22 states and the District of Columbia to amend their SIPs to 
reduce NOX emissions that contribute to ozone nonattainment 
in downwind states. The EPA set ozone season NOX budgets for 
each state, and the states were given the option to participate in a 
regional allowance trading program, known as the NOX Budget 
Trading Program (NBP), to achieve all or most of the required emission 
reductions.\21\ The United States Court of Appeals for the District of 
Columbia Circuit (D.C. Circuit) largely upheld the NOX SIP 
Call in Michigan v. EPA, 213 F.3d 663 (D.C. cir. 2000), cert. denied, 
532 U.S. 904 (2001).
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    \20\ 63 FR 57356 (Oct. 27, 1998). As originally promulgated, the 
NOX SIP Call also addressed good neighbor obligations 
under the 1997 8-hour ozone NAAQS, but the EPA subsequently stayed 
the rule's provisions with respect to that standard. 40 CFR 
51.121(q).
    \21\ ``Allowance Trading'' sometimes referred to as ``cap and 
trade'' is an approach to reducing pollution that has been used 
successfully to protect human health and the environment. Allowance 
trading programs have two key components: Emissions budgets (the sum 
of which provide a cap on emissions), and tradable allowances equal 
to the budgets that authorize allowance holders to emit a specific 
quantity (e.g., one ton) of the pollutant. This approach ensures 
that the environmental goal is met while the tradable allowances 
provide flexibility for individual participants to establish and 
follow their own compliance path. Because allowances can be bought 
and sold in an allowance market, these programs are often referred 
to as ``market-based.''
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    The EPA's next rule addressing the good neighbor provision, the 
Clean Air Interstate Rule (CAIR), was promulgated in 2005 and addressed 
both the 1997 fine particulate matter (PM2.5) NAAQS and 1997 
ozone NAAQS.\22\ CAIR required SIP revisions in 28 states and the 
District of Columbia to reduce emissions of sulfur dioxide 
(SO2) and/or NOX--important precursors of 
regionally transported PM2.5 (SO2 and annual 
NOX) and ozone (summer-time NOX). As in the 
NOX SIP Call, states were given the option to participate in 
regional allowance trading programs to achieve the reductions. When the 
EPA promulgated the final CAIR in 2005, the EPA also issued findings 
that states nationwide had failed to submit SIPs to address the 
requirements of CAA section 110(a)(2)(D)(i) with respect to the 1997 
PM2.5 and 1997 ozone NAAQS.\23\ The states were required by 
the CAA to have submitted good neighbor SIPs for those standards by 
July 2000 (i.e., three years after the standards were finalized).\24\ 
These findings of failure to submit triggered a two-year clock for the 
EPA to issue FIPs to address interstate transport,\25\ and on March 15, 
2006, the EPA promulgated FIPs to implement the emission reductions 
required by CAIR.\26\ CAIR was remanded to the EPA by the D.C. Circuit 
in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), modified on 
reh'g, 550 F.3d 1176. For more information on the legal issues 
underlying CAIR and the D.C. Circuit's holding in North Carolina, refer 
to the preamble of the original CSAPR.\27\
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    \22\ 70 FR 25162 (May 12, 2005).
    \23\ 70 FR 21147 (April 25, 2005).
    \24\ See n.14 and main text, supra.
    \25\ See n.17 and main text, supra.
    \26\ 71 FR 25328 (April 28, 2006).
    \27\ 76 FR 48208, 48217 (Aug. 8, 2011).
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    In 2011, the EPA promulgated the original CSAPR to address the 
issues raised by the remand of CAIR. CSAPR addressed the two NAAQS at 
issue in CAIR and additionally addressed the good neighbor provision 
for the 2006 PM2.5 NAAQS.\28\ CSAPR, as revised, required 28 
states to reduce SO2 emissions, annual NOX 
emissions, and/or ozone season NOX emissions that 
significantly contribute to other states' nonattainment or interfere 
with other states' abilities to maintain these air quality 
standards.\29\ To align implementation with the applicable attainment 
deadlines, the EPA promulgated FIPs for each of the 28 states covered 
by CSAPR. The FIPs implement regional allowance trading programs to 
achieve the necessary emission reductions. Each state can submit a good 
neighbor SIP at any time that, if approved by the EPA, would replace 
the CSAPR FIP for that state.\30\ CSAPR was the subject of an adverse 
decision by the D.C. Circuit in August 2012.\31\ However, this decision 
was reversed in April 2014 by the Supreme Court,\32\ which largely 
upheld the rule, including EPA's approach to addressing interstate 
transport in CSAPR. The rule was remanded to the D.C. Circuit to 
consider other claims not addressed by the Supreme Court. EPA v. EME 
Homer City Generation, L.P., 134 S. Ct. 1584 (2014) (EME Homer City). 
In July 2015 the D.C. Circuit affirmed the EPA's interpretation of 
various statutory provisions and the EPA's technical decisions. EME 
Homer City Generation, L.P. v. EPA, 795 F.3d 118 (2015) (EME Homer City 
II). However, the court also remanded the rule without vacatur for 
reconsideration of the EPA's emissions budgets for certain states, 
which the court found may over-control those states' emissions with 
respect to the downwind air quality problems to which the states were 
linked. Id. at 129-30, 138. For more information on the legal 
considerations of CSAPR and the court's decisions in the EME Homer City 
litigation, refer to the preamble of the CSAPR Update.\33\
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    \28\ 76 FR 48208.
    \29\ CSAPR was revised by several rulemakings after its initial 
promulgation in order to revise certain states' budgets and to 
promulgate FIPs for five additional states addressing the good 
neighbor obligation for the 1997 ozone NAAQS. 76 FR 80760 (Dec. 27, 
2011); 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 12, 2012).
    \30\ The EPA has already approved SIPs fully replacing the 
original CSAPR FIPs for Alabama, 81 FR 59869 (Aug. 31, 2016); 
Georgia, 82 FR 47930 (Oct. 13, 2017); South Carolina, 82 FR 47936 
(Oct. 13, 2017); and Indiana (signed Nov. 27, 2018; publication in 
the Federal Register forthcoming).
    \31\ On August 21, 2012, the D.C. Circuit issued a decision in 
EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012) 
(EME Homer City I), vacating CSAPR. The EPA sought review with the 
D.C. Circuit en banc and the D.C. Circuit declined to consider the 
EPA's appeal en banc. EME Homer City Generation, L.P. v. EPA, No. 
11-1302 (D.C. Cir. January 24, 2013), ECF No. 1417012 (denying the 
EPA's motion for rehearing en banc).
    \32\ On January 23, 2013, the Supreme Court granted the EPA's 
petition for certiorari. EPA v. EME Homer City Generation, L.P., 133 
S. Ct. 2857 (2013) (granting the EPA's and other parties' petitions 
for certiorari).
    \33\ 81 FR 74511.
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    In 2016, the EPA promulgated the CSAPR Update to address interstate 
transport of ozone pollution with respect to the 2008 ozone NAAQS.\34\ 
The final rule generally updated the CSAPR ozone season NOX 
emissions budgets for 22 states to achieve cost-effective and 
immediately feasible NOX emission reductions from EGUs 
within those states.\35\ To align implementation with relevant 
attainment dates, the CSAPR Update implemented these budgets through 
FIPs requiring sources to participate in a revised CSAPR ozone season 
NOX allowance trading program beginning with the 2017 ozone 
season. As discussed in more detail later in this preamble, the 2017 
deadline was intended to ensure that the emission reductions from the 
rule would be made prior to the July 20, 2018 moderate attainment 
deadline. As under the

[[Page 65882]]

original CSAPR, each state can submit a good neighbor SIP at any time 
that, if approved by the EPA, would replace the CSAPR Update FIP for 
that state.\36\ The final CSAPR Update also addressed the remand by the 
D.C. Circuit of certain states' original CSAPR phase 2 ozone season 
NOX emissions budgets in EME Homer City II. The CSAPR Update 
is subject to pending legal challenges in the D.C. Circuit. Wisconsin 
v. EPA, No. 16-1406 (D.C. Cir. argued Oct. 3, 2018). Further 
information about the CSAPR Update can be found in section II.D of this 
notice.
---------------------------------------------------------------------------

    \34\ 81 FR 74504.
    \35\ One state, Kansas, was made newly subject to a CSAPR ozone 
season NOX requirement by the CSAPR Update. All other 
CSAPR Update states were already subject to ozone season 
NOX requirements under the original CSAPR.
    \36\ EPA has already approved SIPs fully replacing the CSAPR 
Update FIPs for Alabama, 82 FR 46674 (Oct. 6, 2017), and Indiana 
(signed Nov. 27, 2018; publication in the Federal Register 
forthcoming).
---------------------------------------------------------------------------

    Section 301(a)(1) of the CAA also gives the Administrator the 
general authority to prescribe such regulations as are necessary to 
carry out functions under the Act.\37\ Pursuant to this section, the 
EPA has authority to clarify the applicability of CAA requirements. In 
this action, among other things, the EPA is clarifying the 
applicability of section 110(a)(2)(D)(i)(I) with respect to the 2008 
ozone NAAQS. In particular, the EPA is using its authority under 
sections 110 and 301 to make a determination that no further 
enforceable reductions in emissions of NOX are required 
under this provision with respect to the 2008 ozone NAAQS for the 
states covered by this rule. The EPA is making minor revisions to the 
existing state-specific sections of the CSAPR Update regulations for 
all states covered by this action.
---------------------------------------------------------------------------

    \37\ 42 U.S.C. 7601(a)(1).
---------------------------------------------------------------------------

C. Good Neighbor Obligations for the 2008 Ozone NAAQS

    On March 12, 2008, the EPA promulgated a revision to the NAAQS, 
lowering both the primary and secondary standards to 75 ppb. See 
National Ambient Air Quality Standards for Ozone, Final Rule, 73 FR 
16436 (March 27, 2008). Specifically, the standards require that an 
area may not exceed 0.075 ppm (75 ppb) using the 3-year average of the 
fourth highest 24-hour maximum 8-hour rolling average ozone 
concentration. These revisions of the NAAQS, in turn, triggered a 3-
year deadline for states to submit SIP revisions addressing 
infrastructure requirements under CAA sections 110(a)(1) and 110(a)(2), 
including the good neighbor provision. Several events affected the 
timely application of the good neighbor provision for the 2008 ozone 
NAAQS, including reconsideration of the 2008 ozone NAAQS and legal 
developments pertaining to the EPA's original CSAPR, which created 
uncertainty surrounding the EPA's statutory interpretation and 
implementation of the good neighbor provision.\38\ Notwithstanding 
these events, the EPA ultimately affirmed that states' good neighbor 
SIPs were due on March 12, 2011.
---------------------------------------------------------------------------

    \38\ These events are described in detail in section IV.A.2 of 
the CSAPR Update. 81 FR 74515.
---------------------------------------------------------------------------

    The EPA subsequently took several actions that triggered the EPA's 
obligation under CAA section 110(c) to promulgate FIPs addressing the 
good neighbor provision for several states.\39\ First, on July 13, 
2015, the EPA published a rule finding that 24 states failed to make 
complete submissions that address the requirements of section 
110(a)(2)(D)(i)(I) related to the interstate transport of pollution as 
to the 2008 ozone NAAQS. See 80 FR 39961 (effective August 12, 2015). 
This finding triggered a two-year deadline for the EPA to issue FIPs to 
address the good neighbor provision for these states by August 12, 
2017. The CSAPR Update finalized FIPs for 13 of these states (Alabama, 
Arkansas, Illinois, Iowa, Kansas, Michigan, Mississippi, Missouri, 
Oklahoma, Pennsylvania, Tennessee, Virginia, and West Virginia), 
requiring their participation in a NOX emission trading 
program. The EPA also determined in the CSAPR Update that the agency 
had no further FIP obligation as to nine additional states identified 
in the finding of failure to submit because these states did not 
contribute significantly to nonattainment in, or interfere with 
maintenance by, any other state with respect to the 2008 ozone NAAQS. 
81 FR 74506.\40 41\ On June 15, 2016, and July 20, 2016, the EPA 
published additional rules finding that New Jersey and Maryland, 
respectively, also failed to submit transport SIPs for the 2008 ozone 
NAAQS. See 81 FR 38963 (June 15, 2016) (New Jersey, effective July 15, 
2016); 81 FR 47040 (July 20, 2016) (Maryland, effective August 19, 
2016). The finding actions triggered two-year deadlines for the EPA to 
issue FIPs to address the good neighbor provision for Maryland by 
August 19, 2018, and for New Jersey by July 15, 2018. The CSAPR Update 
also finalized FIPs for these two states.
---------------------------------------------------------------------------

    \39\ This section of the preamble focuses on SIP and FIP actions 
for those states addressed in the CSAPR Update. The EPA has also 
acted on SIPs for other states not mentioned in this action. The 
memorandum, ``Final Action, Status of 110(a)(2)(D)(i)(I) SIPs for 
the 2008 Ozone NAAQS,'' more fully describes the good neighbor SIP 
status for the 2008 ozone NAAQS and is available in the docket for 
this action.
    \40\ The nine states were Florida, Georgia, Maine, 
Massachusetts, Minnesota, New Hampshire, North Carolina, South 
Carolina, and Vermont.
    \41\ The two remaining states addressed in the findings of 
failure to submit (California and New Mexico) were not part of the 
CSAPR Update analysis and are not addressed in this action.
---------------------------------------------------------------------------

    In addition to these findings, the EPA finalized disapproval or 
partial disapproval actions for good neighbor SIPs submitted by 
Indiana, Kentucky, Louisiana, New York, Ohio, Texas, and Wisconsin.\42\ 
These disapprovals triggered the EPA's obligation to promulgate FIPs to 
implement the requirements of the good neighbor provision for those 
states within two years of the effective date of each disapproval. The 
EPA promulgated CSAPR Update FIPs for each of these states.
---------------------------------------------------------------------------

    \42\ See the following actions: Indiana (81 FR 38957, June 15, 
2016); Kentucky (78 FR 14681, March 7, 2013); Louisiana (81 FR 
53308, August 12, 2016); New York (81 FR 58849, August 26, 2016); 
Ohio (81 FR 38957, June 15, 2016); Texas (81 FR 53284, August 12, 
2016); and Wisconsin (81 FR 53309, August 12, 2016).
---------------------------------------------------------------------------

    As discussed in more detail in the next section, in issuing the 
CSAPR Update, the EPA did not determine that it had entirely addressed 
the EPA's outstanding CAA obligations to implement the good neighbor 
provision with respect to the 2008 ozone NAAQS for 21 of 22 states 
covered by that rule. Accordingly, the CSAPR Update did not fully 
satisfy the EPA's obligation under section 110(c) to address the good 
neighbor provision requirements for those states by approving SIPs, 
issuing FIPs, or some combination of those two actions. The EPA found 
that the CSAPR Update FIP fully addressed the good neighbor provision 
for the 2008 ozone NAAQS only with respect to Tennessee.
    The EPA notes that it has separately finalized an action to fully 
address Kentucky's good neighbor obligation for the 2008 ozone NAAQS. 
On May 23, 2017, the U.S. District Court for the Northern District of 
California issued an order requiring the EPA to take a final action 
fully addressing the good neighbor obligation for the 2008 ozone NAAQS 
for Kentucky by June 30, 2018. See Order, Sierra Club v. Pruitt, No. 
3:15-cv-04328 (N.D. Cal.), ECF No. 73. On May 10, 2018, Kentucky 
submitted a final SIP to EPA, which the agency finalized approval of 
consistent with the court-ordered deadline. 83 FR 33730 (July 17, 
2018).
    Subsequent to the promulgation of the CSAPR Update, the EPA 
approved SIPs fully replacing the CSAPR Update FIPs for Alabama, 82 FR 
46674 (October 6, 2017), and Indiana (signed November 27, 2018; 
publication in the Federal Register forthcoming). In those SIP 
approvals and consistent with the conclusions of the CSAPR Update, the 
EPA found that the SIPs partially satisfy

[[Page 65883]]

Alabama's and Indiana's good neighbor obligations for the 2008 ozone 
NAAQS. Thus, the EPA continues to have an obligation to fully address 
the good neighbor provision requirements for the 2008 NAAQS with 
respect to Alabama, stemming from the July 13, 2015 findings notice, 
and Indiana, due to the June 15, 2016 disapproval of the state's good 
neighbor SIP. Other states have also submitted SIPs, some of which the 
EPA has approved and some of which still remain pending. However, these 
states are not the subject of this rulemaking and these actions are 
therefore not described in detail in this section.
    Table II.C-1 summarizes the statutory deadline for the EPA to 
address its FIP obligation under CAA section 110(c) and the event that 
activated the EPA's obligation for each of the 20 CSAPR Update states 
that are the subject of this final action. For more information 
regarding the actions triggering the EPA's FIP obligation and the EPA's 
action on SIPs addressing the good neighbor provision for the 2008 
ozone NAAQS, see the memorandum, ``Final Action, Status of 
110(a)(2)(D)(i)(I) SIPs for the 2008 Ozone NAAQS,'' in the docket for 
this action.

                       Table II.C-1--Actions That Activated EPA's Statutory FIP Deadlines
----------------------------------------------------------------------------------------------------------------
                                                 Type of action (Federal Register citation,      Statutory FIP
                    State                                     publication date)                   deadline 43
----------------------------------------------------------------------------------------------------------------
Alabama......................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Arkansas.....................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Illinois.....................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Indiana......................................  SIP disapproval (81 FR 38957, 6/15/2016)......          7/15/2018
Iowa.........................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Kansas.......................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Louisiana....................................  SIP disapproval (81 FR 53308, 8/12/2016)......          9/12/2018
Maryland.....................................  Finding of Failure to Submit (81 FR 47040, 7/           8/19/2018
                                                20/2016).
Michigan.....................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Mississippi..................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Missouri.....................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
New Jersey...................................  Finding of Failure to Submit (81 FR 38963, 6/           7/15/2018
                                                15/2016).
New York.....................................  SIP disapproval (81 FR 58849, 8/26/2016)......          9/26/2018
Ohio.........................................  SIP disapproval (81 FR 38957, 6/15/2016)......          7/15/2018
Oklahoma.....................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Pennsylvania.................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Texas........................................  SIP disapproval (81 FR 53284, 8/12/2016)......          9/12/2018
Virginia.....................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
West Virginia................................  Finding of Failure to Submit (80 FR 39961, 7/           8/12/2017
                                                13/2015).
Wisconsin....................................  Partial SIP disapproval as to prong 2 (81 FR            9/12/2018
                                                53309, 8/12/2016).
----------------------------------------------------------------------------------------------------------------

    An August 12, 2017 statutory deadline has passed for the EPA to act 
with respect to good neighbor obligations under the 2008 ozone NAAQS 
for 12 CSAPR Update states. The EPA is subject to a court-ordered 
deadline to promulgate a final action fully addressing the good 
neighbor obligations under the 2008 ozone NAAQS for five of these 
states by no later than December 6, 2018.\44\ The statutory deadlines 
for the EPA to act with respect to good neighbor obligations under the 
2008 ozone NAAQS for eight other CSAPR Update states passed between 
July 15, 2018, and September 26, 2018.
---------------------------------------------------------------------------

    \43\ The FIP deadline is two years from the effective date of 
the SIP disapproval or Finding of Failure to Submit, which generally 
trails the publication date by 30 days.
    \44\ Order, New York v. Pruitt, No. 1:18-cv-00406-JGK (S.D.N.Y. 
June 12, 2018), ECF No. 34. The five states are Illinois, Michigan, 
Pennsylvania, Virginia, and West Virginia.
---------------------------------------------------------------------------

D. Summary of the CSAPR Update

    On October 16, 2016, the EPA finalized the CSAPR Update. The 
purpose of the CSAPR Update was to protect public health and welfare by 
reducing interstate pollution transport that will significantly 
contribute to nonattainment, or interfere with maintenance, of the 2008 
ozone NAAQS in the eastern U.S. As discussed in section II.C, the EPA 
finalized a FIP for each of the 22 states subject to the rule,\45\ 
either having previously found that those states failed to submit a 
complete good neighbor SIP (15 states) or having issued a final rule 
disapproving their good neighbor SIP submittals (seven states). For the 
22 states covered by the CSAPR Update, the EPA promulgated EGU ozone 
season NOX emissions budgets, implemented through a regional 
allowance trading program, to reduce interstate ozone transport for the 
2008 ozone NAAQS during the ozone season (May-September), beginning 
with the 2017 ozone season.
---------------------------------------------------------------------------

    \45\ Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas, 
Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, New 
Jersey, New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, 
Virginia, West Virginia, and Wisconsin.
---------------------------------------------------------------------------

    To establish and implement the CSAPR Update emissions budgets, the 
EPA followed a four-step analytic process that has been used in each of 
the agency's regional interstate transport rulemakings. The four-step 
interstate transport framework is described in more detail in section 
III.A. To summarize, in step 1, the agency identified downwind 
locations, referred to as receptors, that were expected to have 
problems attaining or maintaining the NAAQS. In step 2, the EPA 
examined, using a contribution threshold of one percent of the NAAQS, 
which upwind states contributed to the nonattainment or maintenance 
receptors identified in step 1. In step 3, the EPA quantified the 
upwind emissions that significantly contributed to nonattainment or 
interfered with maintenance and established emission budgets that 
reflected removal of those emissions. Finally, in step 4, the agency 
provided for implementation of the budgets through an allowance trading 
program.
    The EPA aligned its analysis of air quality and upwind state 
contributions in steps 1 and 2, as well as implementation of the 
trading program in step 4 with relevant attainment dates for the 2008 
ozone NAAQS. The EPA's final 2008 Ozone NAAQS SIP Requirements Rule 
established the attainment deadline of July 20, 2018, for ozone 
nonattainment areas classified as

[[Page 65884]]

Moderate.\46\ Because the attainment date fell during the 2018 ozone 
season, the 2017 ozone season was the last full season from which data 
could be used to determine attainment of the NAAQS by that date. 
Therefore, consistent with the court's instruction in North Carolina to 
harmonize implementation of emission reductions under the good neighbor 
provision with downwind attainment dates, 531 F.3d at 912, the EPA 
established and implemented emissions budgets starting with the 2017 
ozone season. 81 FR 74507. The establishment of 2017 as the CSAPR 
Update's analytic year and compliance timeframe was further supported 
by an assessment that certain control strategies to mitigate ozone 
pollution transport were feasible in that timeframe.
---------------------------------------------------------------------------

    \46\ 80 FR 12264, 12268 (Mar. 6, 2015); 40 CFR 51.1103. Ozone 
nonattainment areas are classified as either Marginal, Moderate, 
Serious, Severe, or Extreme, based on the severity of the air 
quality problem in the area. Areas with more acute air quality 
problems are required to implement more stringent control 
requirements and are provided additional time to attain the NAAQS. 
See CAA sections 181 and 182, 42 U.S.C. 7511, 7511a.
---------------------------------------------------------------------------

    As to step 3, in particular, the EPA quantified emissions from 
upwind states that would significantly contribute to nonattainment or 
interfere with maintenance by first evaluating various levels of 
uniform NOX control stringency, each represented by an 
estimated marginal cost per ton of NOX reduced. The EPA then 
applied a multi-factor test to evaluate cost, available emission 
reductions, and downwind air quality impacts to determine the 
appropriate level of uniform NOX control stringency that 
addressed the impacts of interstate transport on downwind nonattainment 
or maintenance receptors. The EPA used this multi-factor assessment to 
gauge the extent to which emission reductions should be implemented in 
the future compliance year (i.e., 2017) and to evaluate the potential 
for over- and under-control of upwind state emissions.
    Within the multi-factor test, the EPA identified a ``knee in the 
curve,'' i.e., a point at which the cost-effectiveness of the emission 
reductions was maximized, so named for the discernable turning point 
observable in a multi-factor (i.e., multi-variable) curve. See 81 FR 
74550. The EPA concluded that this was at the point where emissions 
budgets reflected a uniform NOX control stringency 
represented by an estimated marginal cost of $1,400 per ton of 
NOX reduced. In light of this multi-factor test, EPA 
determined this level of stringency in emissions budgets represented 
the level at which incremental EGU NOX reduction potential 
and corresponding downwind ozone air quality improvements were 
maximized--relative to other control stringencies evaluated--with 
respect to marginal cost. That is, the ratio of emission reductions to 
marginal cost and the ratio of ozone improvements to marginal cost were 
maximized relative to the other levels of control stringency evaluated. 
The EPA found that feasible and cost-effective EGU NOX 
reductions were available to make meaningful and timely improvements in 
downwind ozone air quality to address interstate ozone transport for 
the 2008 ozone NAAQS for the 2017 ozone season. 81 FR 74508. Further, 
the agency's evaluation showed that emissions budgets reflecting the 
$1,400 per ton cost threshold did not over-control upwind states' 
emissions relative to either the downwind air quality problems to which 
they were linked or the one percent contribution threshold in step 2 
that triggered their further evaluation in step 3. Id. at 74551-52. As 
a result, the EPA finalized EGU ozone season NOX emissions 
budgets developed using uniform control stringency represented by 
$1,400 per ton. These budgets represented emissions remaining in each 
state after elimination of the amounts of emissions that the EPA 
identified would significantly contribute to nonattainment or interfere 
with maintenance of the 2008 ozone NAAQS in downwind states.
    To implement the CSAPR Update's emission budgets, the EPA 
promulgated FIPs requiring power plants in covered states to 
participate in the CSAPR NOX Ozone Season Group 2 allowance 
trading program starting in 2017.\47\ CSAPR's trading programs and the 
EPA's prior emissions trading programs (e.g., CAIR and the 
NOX Budget Trading Program) have provided a proven 
implementation framework for achieving emission reductions. In addition 
to providing environmental certainty (i.e., a cap on emissions), these 
programs also provide regulated sources with flexibility in choosing 
compliance strategies. By using the CSAPR allowance trading programs, 
the EPA applied an implementation framework that was shaped by notice 
and comment in previous rulemakings and reflected the evolution of 
these programs in response to court decisions and practical experience 
gained by states, industry, and the EPA.
---------------------------------------------------------------------------

    \47\ The ozone season NOX allowance trading program 
created under the original CSAPR was renamed the CSAPR 
NOX Ozone Season Group 1 Trading Program and now applies 
only to sources in Georgia. In the CSAPR Update, the EPA found that 
Georgia did not contribute to interstate transport with respect to 
the 2008 ozone NAAQS, but the state has an ongoing ozone season 
NOX requirement under the original CSAPR with respect to 
the 1997 ozone NAAQS.
---------------------------------------------------------------------------

    Based on information available at the time of its promulgation, the 
EPA was unable to conclude that the CSAPR Update fully addressed most 
of the covered states' good neighbor obligations for the 2008 ozone 
NAAQS. 81 FR 74521. Information available at the time indicated that, 
even with CSAPR Update implementation, several downwind receptors were 
expected to continue having problems attaining and maintaining this 
NAAQS and that emissions from upwind states were expected to continue 
to contribute greater than or equal to one percent of the NAAQS to 
these areas during the 2017 ozone season. Id. at 74551-52. Further, the 
EPA could not conclude at that time whether additional EGU and non-EGU 
reductions implemented on a longer timeframe than 2017 would be 
necessary, feasible, and cost-effective to address states' good 
neighbor obligations for this NAAQS.
    As noted, the EPA premised its conclusion that the CSAPR Update may 
not fully address states' good neighbor obligations in part on the 
agency's assessment that air quality problems would persist at downwind 
receptors in 2017 even with CSAPR Update implementation. The EPA's 
assessment of CSAPR Update implementation using the Air Quality 
Assessment Tool (AQAT) indicated that certain eastern air quality 
monitors would continue to have problems attaining and maintaining the 
2008 ozone NAAQS in 2017. 81 FR 74550-52. Specifically, projected 
nonattainment receptors remained in Connecticut, Texas, and Wisconsin, 
while projected maintenance-only receptors remained in Connecticut, 
Maryland, Michigan, New York, and Texas.\48\ See Table II.D-1 for a 
list of remaining nonattainment receptors and Table II.D-2 for a list 
of remaining maintenance-only receptors. (The EPA's approach to 
defining nonattainment and maintenance-only receptors is explained in 
section III.C.1 below.)
---------------------------------------------------------------------------

    \48\ Projected AQAT design values for the $1400/ton policy case 
are available in Tables D-6 and D-7 of the CSAPR Update ``Ozone 
Transport Policy Analysis Final Rule TSD'' (August 2016), Docket ID 
No. EPA-HQ-OAR-2015-0500-0555.

[[Page 65885]]



  Table II.D-1--Remaining 2017 Projected Nonattainment Receptors in the
                              Eastern U.S.
------------------------------------------------------------------------
      Monitor ID                  State                   County
------------------------------------------------------------------------
090019003.............  Connecticut.............  Fairfield.
090099002.............  Connecticut.............  New Haven.
480391004.............  Texas...................  Brazoria.
484392003.............  Texas...................  Tarrant.
484393009.............  Texas...................  Tarrant.
551170006.............  Wisconsin...............  Sheboygan.
------------------------------------------------------------------------


Table II.D-2--Remaining 2017 Projected Maintenance-Only Receptors in the
                              Eastern U.S.
------------------------------------------------------------------------
      Monitor ID                  State                   County
------------------------------------------------------------------------
090010017.............  Connecticut.............  Fairfield.
090013007.............  Connecticut.............  Fairfield.
240251001.............  Maryland................  Harford
260050003.............  Michigan................  Allegan.
360850067.............  New York................  Richmond.
361030002.............  New York................  Suffolk.
481210034.............  Texas...................  Denton.
482010024.............  Texas...................  Harris.
482011034.............  Texas...................  Harris.
482011039.............  Texas...................  Harris.
------------------------------------------------------------------------

    The EPA's analysis also showed that 21 of the 22 CSAPR Update 
states would continue to contribute equal to or greater than one 
percent of the 2008 ozone NAAQS to at least one remaining nonattainment 
or maintenance receptor in 2017.\49\ The EPA did not, at that time, 
evaluate whether the projected air quality problems would persist and 
whether upwind states would continue to contribute to these receptors 
in years beyond 2017. Thus, for those 21 states, the EPA could not, 
based on information available in the CSAPR Update rulemaking, make an 
air quality-based conclusion that the CSAPR Update would fully resolve 
states' good neighbor obligations with respect to the 2008 ozone NAAQS. 
(For one state, Tennessee, the EPA determined that the CSAPR Update 
fully resolved its good neighbor obligation.)
---------------------------------------------------------------------------

    \49\ See EPA's Air Quality Assessment Tool from the CSAPR Update 
in the docket for this action.
---------------------------------------------------------------------------

    Further, it was not feasible for the EPA to complete an emissions 
control analysis that may otherwise have been necessary to evaluate 
full elimination of each state's significant contribution to 
nonattainment or interference with maintenance and also ensure that 
emission reductions already quantified in the rule would be achieved by 
2017. 81 FR at 74522. Specifically, the EPA was unable to fully 
consider both non-EGU ozone season NOX reductions and 
further EGU reductions that may have been achievable after 2017. Id. at 
74521. The EPA did not quantify non-EGU stationary source emission 
reductions to address interstate ozone transport for the 2008 ozone 
NAAQS in the CSAPR Update for two reasons. First, the EPA explained 
that there was greater uncertainty in the EPA's assessment of non-EGU 
NOX mitigation potential, and that more time would be 
required for states and the EPA to improve non-EGU point source data 
and pollution control assumptions before we could develop emission 
reduction obligations based on that data. Id. at 74542. Second, the EPA 
explained that we did not believe that significant, certain, and 
meaningful non-EGU NOX reductions were feasible for the 2017 
ozone season. Id. Many commenters on the CSAPR Update generally agreed 
with the EPA that non-EGU emission reductions were not readily 
available for the 2017 ozone season, but some advocated that such 
reductions should be included as appropriate in future mitigation 
actions. Id. at 74521-22. With respect to EGUs, the EPA concluded that 
additional control strategies, such as the implementation of new post-
combustion controls, would take several years to implement, which was 
beyond the 2017 ozone season targeted in the CSAPR Update. Id. at 
74541. Thus, the EPA also could not make an emission reduction-based 
conclusion that the CSAPR Update would fully resolve states' good 
neighbor obligations with respect to the 2008 ozone NAAQS because the 
reductions evaluated and required by the CSAPR Update were limited in 
scope (both by technology and sector). Specifically, EPA focused the 
policy analysis for the CSAPR Update on reductions available by the 
beginning of the 2017 ozone season from EGUs.
    Regardless of these limitations, in promulgating the CSAPR Update 
the EPA stated its belief that it was beneficial to implement, without 
further delay, EGU NOX reductions that were achievable in 
the near term, particularly before the Moderate area attainment date of 
July 20, 2018. Notwithstanding that additional reductions may be 
required to fully address the states' interstate transport obligations, 
the EPA concluded that the EGU NOX emission reductions 
implemented by the final rule were needed for upwind states to 
eliminate their significant contribution to nonattainment or 
interference with maintenance of the 2008 ozone NAAQS and to assist 
downwind states with ozone nonattainment areas that were required to 
attain the standard by July 20, 2018.
    As a result of the remaining air quality problems and the 
limitations on the EPA's analysis, for all but one of the 22 affected 
states, the EPA did not determine in the CSAPR Update that the rule 
fully addressed those states' downwind air quality impacts under the 
good neighbor provision for the 2008 ozone NAAQS. Id. at 74521. For one 
state, Tennessee, the EPA determined in the final CSAPR Update that 
Tennessee's emissions budget fully eliminated the state's significant 
contribution to downwind nonattainment and interference with 
maintenance of the 2008 ozone NAAQS because the downwind air quality 
problems to which the state was linked were projected to be resolved 
with implementation of the CSAPR Update. Id. at 74552.

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

    As described in section II.D, in the CSAPR Update the EPA 
promulgated FIPs intended to address the good neighbor provision for 
the 2008 ozone NAAQS, but could not at that time determine, based on 
information available when the rule was finalized, that those FIPs 
would fully address 2008 ozone NAAQS good neighbor obligations for 21 
of the 22 CSAPR Update states. As a result, the EPA could not conclude 
that the CSAPR Update fully satisfied its obligation to issue FIPs, nor 
had the agency otherwise approved SIPs at that time, to address those 
states' good neighbor obligations for the 2008 ozone NAAQS. Since the 
CSAPR Update, the EPA has approved a SIP revision fully resolving the 
remaining 2008 ozone NAAQS good neighbor obligations for Kentucky.\50\ 
In this notice, the EPA finalizes a determination that, based on 
additional information and analysis that has subsequently become 
available, the CSAPR Update fully addresses the remaining 20 affected 
states' good neighbor obligations for the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \50\ 83 FR 33730 (July 17, 2018).
---------------------------------------------------------------------------

    In particular, the EPA is finalizing a determination that 2023 is 
an appropriate future analytic year considering relevant attainment 
dates and the time necessary to implement further NOX 
controls. This rationale is described within this section, starting 
with Section III.A, which provides the EPA's analytic approach. Section 
III.B discusses the agency's selection of 2023 as its future analytic 
year and Sections III.B.2 provides the EPA's assessment of feasibility 
(e.g., timing) to implement further regional NOX control 
strategies for EGUs (Section III.B.2.a) and non-EGUs (Section 
III.B.2.b). Further, based on the EPA's analysis of projected air

[[Page 65886]]

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

A. Analytic Approach

    Through the development and implementation of several previous 
rulemakings, including most recently the CSAPR Update, the EPA, working 
in partnership with states, established the following four-step 
framework to address regional interstate transport of ozone pollution 
under the Clean Air Act's good neighbor provision.\51\ The agency is 
evaluating its determination regarding CSAPR Update states' remaining 
good neighbor obligations for the 2008 ozone NAAQS by applying this 
same approach.\52\ The steps are summarized in the following four 
paragraphs.
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    \51\ See Finding of Significant Contribution and Rulemaking for 
Certain States in the Ozone Transport Assessment Group Region for 
Purposes of Reducing Regional Transport of Ozone (also known as the 
NOX SIP Call), 63 FR 57356 (October 27, 1998); Clean Air 
Interstate Rule (CAIR) Final Rule, 70 FR 25162 (May 12, 2005); CSAPR 
Final Rule, 76 FR 48208 (August 8, 2011); CSAPR Update for the 2008 
Ozone NAAQS Final Rule, 81 FR 74504 (October 26, 2016).
    \52\ With respect to the 2015 ozone NAAQS, which is not 
addressed in this action, the EPA recently provided information to 
states to inform their development of SIPs to address CAA section 
110(a)(2)(D)(i)(I). In a memorandum dated March 27, 2018, the agency 
noted that, in developing their own plans, states have flexibility 
to follow the familiar four-step transport framework (using the 
EPA's analytical approach or somewhat different analytical 
approaches within these steps) or alternative frameworks, so long as 
their chosen approach has adequate technical justification and is 
consistent with the requirements of the CAA.
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    Step 1: Identify downwind air quality problems relative to the 2008 
ozone NAAQS. The EPA historically (including in the CSAPR Update) 
identified downwind areas with air quality problems, or receptors, 
using air quality modeling projections for a future analytic year and, 
where appropriate, considering monitored ozone data. In the CSAPR 
Update, the agency relied on modeled and monitored data to identify 
receptors expected to be in nonattainment with the ozone NAAQS in the 
future analytic year, and relied on modeled data to identify additional 
receptors that may have difficulty maintaining the NAAQS in the future 
analytic year, notwithstanding clean monitored data or projected 
attainment.
    Step 2: Determine which upwind states contribute to these 
identified downwind air quality problems sufficiently to warrant 
further analysis to determine whether their emissions violate the good 
neighbor provision. These states are referred to as ``linked'' states. 
In the CSAPR Update, the EPA identified such upwind states as those 
modeled to impact a downwind receptor in the future analytic year at or 
above an air quality threshold equivalent to one percent of the 2008 
ozone NAAQS.
    Step 3: For states linked to downwind air quality problems, 
identify upwind emissions on a statewide basis that will significantly 
contribute to nonattainment or interfere with maintenance of a standard 
at a receptor in another state. In all of the EPA's prior rulemakings 
addressing interstate ozone pollution transport, the agency identified 
and apportioned emission reduction responsibility among multiple upwind 
states linked to downwind air quality problems considering multiple 
factors consistently across the region. Specifically, the agency 
considered feasible NOX control strategies and used cost-
based and air quality-based criteria to evaluate regionally uniform 
NOX control strategies that were then used to quantify the 
amount of a linked upwind state's emissions, if any, that will 
significantly contribute to nonattainment or interfere with maintenance 
in another state in the future analytic year. The agency then 
established emission budgets reflecting remaining emission levels 
following the reduction of emissions that significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS downwind.
    Step 4: For upwind states that are found to have emissions that 
will significantly contribute to nonattainment or interfere with 
maintenance of the NAAQS downwind, implement the necessary emission 
reductions within the state. In the CSAPR Update, the EPA implemented 
the emission budgets for upwind states found to have good neighbor 
obligations by requiring EGUs in those states to participate in the 
CSAPR NOX Ozone Season Group 2 Trading Program. In virtually 
all respects other than the budgets and the starting year, the program 
is identical to allowance trading programs used to implement the 
emission reductions quantified in the original CSAPR, and it builds on 
the experience of both the EPA and states using emission trading 
programs to implement other earlier rules.\53\
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    \53\ Affected sources have participated in EPA-administered 
allowance trading programs under both SIPs and FIPs.
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    Because this framework provides a reasonable and logical 
structuring of the key elements that should be considered in addressing 
the requirements of the good neighbor provision and because this action 
is evaluating outstanding obligations that remain following the EPA's 
application of this framework with respect to the 2008 ozone NAAQS in 
the CSAPR Update, the agency believes it is reasonable to apply the 
same framework in this final action.
    Within this four-step interstate transport framework, the EPA would 
only proceed to higher enumerated (i.e., downstream) steps if states 
meet the criteria applied in lower enumerated (i.e., upstream) steps. 
For example, the EPA would only proceed to step 4, in which sources in 
upwind states are subject to enforceable emissions limitations, if 
downwind air quality problems are identified at step 1, an upwind state 
is found to be linked to a downwind air quality problem at step 2, and 
sources in the linked upwind state are identified at step 3 as having 
emissions that significantly contribute to nonattainment or interfere 
with maintenance of the NAAQS considering multiple cost, emissions, and 
air-quality factors. For the reasons described in the following 
paragraphs, the EPA believes this approach is a reasonable 
interpretation of the good neighbor provision.
    The good neighbor provision instructs the EPA and states to apply 
its requirements ``consistent with the provisions of'' title I of the 
CAA. The EPA is therefore interpreting the requirements of the good 
neighbor provision, and the elements of its four-step interstate 
transport framework, to apply in a manner consistent with the 
designation and planning requirements in title I that apply in downwind 
states. See North Carolina, 531 F.3d at 912 (holding that the good 
neighbor provision's reference to title I requires consideration of 
both procedural and substantive provisions in title I). The EPA notes 
that this consistency

[[Page 65887]]

instruction follows the requirement that plans ``contain adequate 
provisions prohibiting'' certain emissions in the good neighbor 
provision. The following paragraphs will therefore explain how the 
EPA's interpretation of the circumstances under which the good neighbor 
provision requires that plans ``prohibit'' emissions through 
enforceable measures is consistent with the circumstances under which 
downwind states are required to implement emissions control measures in 
nonattainment areas.
    For purposes of this analysis, the EPA notes specific aspects of 
the title I designations process and attainment planning requirements 
for the ozone NAAQS that provide relevant context for evaluating the 
consistency of the EPA's approach to implementing the good neighbor 
provision in upwind states. The EPA notes that this discussion is not 
intended to suggest that the specific requirements of designations and 
attainment planning for downwind states apply to upwind states pursuant 
to the good neighbor provision, but rather to explain why the EPA's 
approach to interpreting the good neighbor provision is reasonable in 
light of relevant, analogous provisions found elsewhere in title I. Cf. 
EDF v. EPA, 82 F.3d 451, 457 (D.C. Cir. 1996) (per curiam) (describing 
the phrase ``consistent with'' as ``flexible statutory language'' which 
does not require ``exact correspondence . . . but only congruity or 
compatibility,'' thus requiring a court to defer to reasonable agency 
determinations), amended by 92 F.3d 1209 (D.C. Cir. 1996). In 
particular, these provisions demonstrate that the EPA's approach is 
consistent with other relevant provisions of title I with respect to 
what data is considered in the EPA's analysis and when states are 
required to implement enforceable measures.
    First, areas are initially designated attainment or nonattainment 
for the ozone NAAQS based on actual measured ozone concentrations. See 
CAA section 107(d), 42 U.S.C. 7407(d) (noting that an area shall be 
designated attainment where it ``meets'' the NAAQS and nonattainment 
where it ``does not meet'' the NAAQS (including certain ``nearby'' 
areas, as explained below)). If an area measures a violation of the 
relevant ozone NAAQS, then the area is generally designated 
nonattainment, regardless of what specific factors have influenced the 
measured ozone concentrations or whether such levels are due to 
enforceable emissions limits.\54\ In such cases where the an ozone 
nonattainment area is classified as Moderate or higher, the state is 
then required to develop an attainment plan, which generally includes 
the application of various enforceable control measures to sources of 
emissions located in the nonattainment area, consistent with the 
requirements in Part D of title I of the Act.\55\ See generally CAA 
section 182, 42 U.S.C. 7511a. If, however, an area measures compliance 
with the ozone NAAQS, the area is designated attainment (unless it is 
included in the boundaries of a nearby nonattainment area due to its 
contribution to that area's nonattainment, as discussed below), and 
sources in that area generally are not subject to any new enforceable 
control measures under Part D.\56\
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    \54\ Policy tools are available to apply to areas experiencing 
exceedances of ozone NAAQS that are appreciably impacted by U.S. 
background ozone. The tools available for each affected location 
will depend on the specific nature of U.S. background ozone in each 
area. Some tools would provide relief from a nonattainment 
designation; others would only provide relief from some of the CAA-
prescribed nonattainment area requirements.
    \55\ Areas classified as Marginal nonattainment areas are 
required to submit emission inventories and implement a 
nonattainment new source review permitting program, but are not 
generally required to implement controls at existing sources. See 
CAA section 182(a), 42 U.S.C. 7511a(a).
    \56\ Clean Air Act section 184 contains the exception to this 
general rule: States that are part of the Ozone Transport Region are 
required to provide SIPs that include specific enforceable control 
measures, similar to those for nonattainment areas, that apply to 
the whole state, even for areas designated attainment for the ozone 
NAAQS. See generally 42 U.S.C. 7511c.
---------------------------------------------------------------------------

    In determining the boundaries of an ozone nonattainment area, the 
CAA requires the EPA to consider whether ``nearby'' areas 
``contribute'' to ambient air quality in the area that does not meet 
the NAAQS. 42 U.S.C. 7407(d). For each monitor or group of monitors 
indicating a violation of the ozone NAAQS, the EPA assesses information 
related to various factors, including current emissions and emissions-
related data from the areas near the monitor(s), for the purpose of 
establishing the appropriate geographic boundaries for the designated 
ozone nonattainment areas. A nearby area may be included within the 
boundary of the ozone nonattainment area only after assessing area-
specific information, including an assessment of whether current 
emissions from that area contribute to the air quality problem 
identified at the violating monitor.\57\ If such a determination is 
made, sources in the nearby area are also subject to the applicable 
Part D control requirements. However, if the EPA determines that the 
nearby area does not contribute to the measured nonattainment problem, 
then the nearby area is not part of the designated nonattainment area 
and sources in that area are not subject to such control requirements.
---------------------------------------------------------------------------

    \57\ See Attachment 2 to Area Designations for the 2008 Ozone 
National Ambient Air Quality Standards. Memorandum from Robert J. 
Meyers, Principal Deputy Assistant Administrator, U.S. EPA to 
Regional Administrators. December 4, 2008. Available at https://archive.epa.gov/ozonedesignations/web/pdf/area_designations_for_the_2008_revised_ozone_naaqs.pdf.
---------------------------------------------------------------------------

    The EPA's historical approach to addressing the good neighbor 
provision via the four-step interstate transport framework, and the 
approach the EPA continues to apply here, is consistent with these 
title I requirements. That is, in steps 1 and 2 of the framework, the 
EPA evaluates whether there is a downwind air quality problem (either 
nonattainment or maintenance), and whether an upwind state impacts the 
downwind area such that it contributes to and is therefore ``linked'' 
to the downwind area. The EPA's determination at step 1 of the good 
neighbor analysis (that it has not identified any downwind air quality 
problems to which an upwind state could contribute) is analogous to the 
EPA's determination in the designation analysis that an area should be 
designated attainment. Similarly, EPA's determination at step 2 of the 
good neighbor analysis (that, while it has at step 1 identified 
downwind air quality problems, an upwind state does not sufficiently 
impact the downwind area such that the state contributes to that area's 
air quality problems and is therefore linked to that area) is analogous 
to the EPA's determination in the designation analysis that a nearby 
area does not contribute to a NAAQS violation in another area. Under 
the good neighbor provision, the EPA can determine at either step 1 or 
2, as appropriate, that the upwind state will not contribute to air 
quality problems in downwind areas and, thus, that the upwind state 
does not significantly contribute to nonattainment or interfere with 
maintenance of the NAAQS in other states. See, e.g., CSAPR Update, 81 
FR 74506 (determining that emissions from 14 states do not 
significantly contribute to nonattainment or interfere with maintenance 
of the 2008 ozone NAAQS); CSAPR, 76 FR 48236 (finding that states whose 
impacts on downwind receptors are below the air quality threshold do 
not significantly contribute to nonattainment or interfere with 
maintenance of the relevant NAAQS). Under such circumstances, sources 
in the upwind state are not required to implement any control measures 
under the good neighbor provision, which is analogous to the fact that 
under the designation and attainment regime,

[[Page 65888]]

sources located in areas that are designated attainment (because the 
area is attaining the NAAQS and not contributing to any nearby 
nonattainment areas) generally are not required to implement the 
control measures found in Part D of the Act. Cf. EME Homer City II, 795 
F.3d at 130 (determining that CSAPR ozone-season NOX budgets 
for 10 states were invalid based on determination that modeling showed 
no future air quality problems); CSAPR Update, 81 FR 74523-24 (removing 
three states from CSAPR ozone season NOX program based on 
determination that states are not linked to any remaining air quality 
problems for the 1997 ozone NAAQS).
    The EPA acknowledges one distinction between the good neighbor and 
designation analyses: The good neighbor analysis relies on future-year 
projections of emissions to calculate ozone concentrations and upwind 
state contributions, compared to the use of current measured data in 
the designation analysis. As described in more detail in section III.B, 
this approach is a reasonable interpretation of the term ``will'' in 
the good neighbor provision, see North Carolina, 531 F.3d at 913-14, 
and interpreting language specific to that provision does not create an 
impermissible inconsistency with other provisions of title I. Moreover, 
the EPA's approach to conducting future-year modeling in the good 
neighbor analysis to identify downwind air quality problems and linked 
states is consistent with its use of current measured data in the 
designations process. The EPA's future-year air quality projections 
consider a variety of factors, including current emissions data, 
anticipated future control measures, economic market influences, and 
meteorology. These same factors, e.g., current control measures, 
economic market influences, and meteorology, can affect the 
NOX emissions levels and consequent measured ozone 
concentrations that inform the designations process. Like the factors 
that affect measured ozone concentrations used in the designations 
process, not all of the factors influencing the EPA's modeling 
projections are or can be subject to enforceable limitations on 
emissions or ozone concentrations. However, the EPA believes that 
consideration of these factors contributes to a reasonable estimate of 
anticipated future ozone concentrations. See EME Homer City II, 795 
F.3d at 135 (declining to invalidate the EPA's modeling projections 
``solely because there might be discrepancies between those predictions 
and the real world''); Chemical Manufacturers Association v. EPA, 28 
F.3d 1259, 1264 (D.C. Cir. 1994) (``a model is meant to simplify 
reality in order to make it tractable''). Thus, the EPA's consideration 
of these factors in its future-year modeling projections used at steps 
1 and 2 of the good neighbor analysis is reasonable and consistent with 
the use of measured data in the designation analysis.\58\
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    \58\ The EPA notes that the consideration of projected actual 
emissions in the future analytic year--as opposed to allowable 
levels--is also consistent with the statute's instruction that 
states in their SIPs (or the EPA when promulgating a FIP) prohibit 
emissions that ``will'' impermissibly impact downwind air quality. 
This term is reasonably interpreted to mean that the EPA should 
evaluate anticipated emissions (based on what sources will emit) 
rather than potential emissions (based on what sources could emit).
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    The EPA notes that there is a further distinction between the 
section 107(d) designations provision and the section 110(a)(2)(D)(i) 
good neighbor provision in that the latter provision uses different 
terms to describe the threshold for determining whether emissions in an 
upwind state should be regulated (``contribute significantly'') as 
compared to the standard for evaluating the impact of nearby areas in 
the designations process (``contribute''). Thus, at step 3 of the good 
neighbor analysis the EPA evaluates additional factors, including cost 
and air-quality considerations, to determine whether emissions from a 
linked upwind state would violate the good neighbor provision. Only if 
the EPA at step 3 determines that the upwind state's emissions would 
violate the good neighbor provision will it proceed to step 4 to 
require emissions in the upwind state to be controlled so as to address 
the identified violation. This approach to steps 3 and 4 is analogous 
to the trigger for the application of Part D requirements to sources 
upon designation of an area to nonattainment. Thus, the EPA reasonably 
interprets the good neighbor provision to not require it or the upwind 
state to proceed to step 4 and implement any enforceable measures to 
``prohibit'' emissions unless it identifies a violation of the 
provision at step 3. See, e.g., 76 FR 48262 (finding at step 3 that the 
District of Columbia is not violating the good neighbor provision, and 
therefore will not at step 4 be subject to any control requirements in 
CSAPR, because no cost-effective emission reduction opportunities were 
identified in the District).
    Comment: Several comments received on the EPA's proposal addressed 
the EPA's approach to identifying downwind air quality problems at step 
1 of the framework. These comments contend that the agency's analysis 
relies on projected future emission levels that are not based on 
enforceable mechanisms that ensure those emission levels will actually 
occur or remain in place in a future year and thus improve air quality 
as modeled. The commenters contend that the Act requires that these 
emission levels be enforceable in order for modeling relying on such 
assumptions to be used to support any determination under the good 
neighbor provision.
    One commenter states that the EPA's approach is contrary to the 
fundamental principle behind the statutory obligation that SIPs must 
``include enforceable emission limitations'' and ``contain adequate 
provisions prohibiting'' emissions that unlawfully impact other states, 
citing CAA sections 110(a)(2)(A) and (D). The commenter contends that 
the EPA subverts the text and meaning of section 110(a)(2) by declaring 
that future air quality will attain the NAAQS without ensuring that the 
emission levels that informed that prediction are enforceable. The 
commenter further contends that enforceability of control measures is a 
consistent requirement throughout the CAA, including for redesignation 
to attainment under section 107(d)(3)(E)(iii) and for attainment SIPs 
under section 172(c)(6).
    In support of this argument, another commenter cites CAA section 
110(a)(2)(A), which indicates that SIPs must ``include enforceable 
emission limitations and other control measures, means, or techniques . 
. . as well as schedules and timetables for compliance.'' The commenter 
further cites CAA section 110(a)(2)(C), which indicates that SIPs must 
``include a program to provide for the enforcement of the measures 
described in subparagraph (A), and regulation of the modification and 
construction of any stationary source within the areas covered by the 
plan as necessary to assure that national ambient air quality standards 
are achieved, including a permit program. . . .''
    Response: As explained in this section, the EPA does not agree that 
all assumptions in a model that inform future-year projections must be 
subject to enforceable commitments before the EPA can rely on the 
modeling for purposes of identifying downwind air quality problems.
    As discussed earlier, within the four-step framework, the EPA 
interprets the good neighbor provision to require sources in upwind 
states to implement enforceable emission limitations only if: (1) 
Downwind air quality problems are identified at step 1, (2) emissions 
from an upwind state are linked to a

[[Page 65889]]

downwind air quality problem at step 2, and (3) sources in the linked 
upwind state are identified at step 3 as having emissions that 
significantly contribute to nonattainment and interfere with 
maintenance of the NAAQS, considering cost- and air-quality-based 
factors. If all three of these steps are not satisfied, then the state 
is not required at step 4 to include provisions in its SIP prohibiting 
any level of reductions because the EPA has determined that emissions 
from the state will not significantly contribute to nonattainment or 
interfere with maintenance of the NAAQS downwind and accordingly there 
are no emissions the state is obligated to ``prohibit'' under the good 
neighbor provision. Thus, the EPA does not agree that modeling used to 
evaluate ozone concentrations at step 1 must only consider enforceable 
emission levels. Rather, as explained in detail earlier, the EPA's 
approach is consistent with other applicable provisions of title I 
regarding the designations and planning requirements applicable in 
nonattainment areas.
    The fact that certain statutory provisions require imposition of 
enforceable measures does not contradict the EPA's interpretation 
regarding when the good neighbor provision requires such measures. In 
fact, the requirement at section 172(c)(6), which commenters cite, that 
attainment plans for designated nonattainment areas include enforceable 
measures to bring the area into attainment is consistent with the EPA's 
interpretation of the good neighbor provision, because that requirement 
only applies once an area has been designated nonattainment. Similarly, 
in the EPA's four-step framework, if the EPA identifies a downwind air 
quality problem and determines that an upwind state significantly 
contributes to nonattainment or interferes with maintenance of the 
NAAQS in that downwind area, the EPA would also require, at step 4, the 
imposition of enforceable measures to address the upwind state's impact 
on the downwind area. Thus, consistent with the terms of the good 
neighbor provision, the EPA requires states to ``prohibit'' emissions 
upon a determination that such emissions are having the requisite 
impact on downwind areas. However, the requirement of section 172(c)(6) 
is not a predicate for an attainment designation, as would be the case 
by analogy to commenters' suggestion that enforceable limits are a 
required predicate for a determination that sources do not violate the 
good neighbor provision.
    The citation to the requirements for the redesignation of areas to 
attainment under section 107(d)(3) is inapposite. Such requirements 
only apply in areas that have at one point been designated 
nonattainment under section 107(d)(1). The commenter has not explained 
why the requirements for redesignation, which apply at the end of a 
process for nonattainment areas that is well after initial area 
designations, should be considered relevant to interpreting initial 
obligations under the good neighbor provision. For the reasons 
described earlier, the EPA believes it is more reasonable to liken the 
process for identifying downwind air quality problems under the good 
neighbor provision to initial designations, which do not turn on 
evaluations of whether or not the measured emission levels informing 
the designation are due to enforceable reductions.
    The EPA also does not agree that either section 110(a)(2)(A) or 
section 110(a)(2)(C) require the state to include measures to make the 
projected emission limitations enforceable in order to address the good 
neighbor provision. Section 110(a)(2)(A) states that a SIP should 
``include enforceable emission limitations and other control measures, 
means, or techniques . . . as may be necessary or appropriate to meet 
the applicable requirements'' of the CAA (emphasis added). As described 
earlier, a finding at step 1 that there is no downwind air quality 
problem supports a conclusion that a state simply will not contribute 
significantly or interfere with maintenance of the NAAQS in another 
state, and thus that the state need not prohibit any particular level 
of emissions under the good neighbor provision. Accordingly, under 
section 110(a)(2)(A), no emission limitations would be ``necessary or 
appropriate'' to meet the good neighbor provision. Section 110(a)(2)(C) 
similarly indicates that SIPs should provide for the enforcement of 
measures cited to support the requirements of section 110(a)(2)(A), but 
it does not independently require the imposition of additional control 
measures.
    For these reasons, the EPA does not agree with the commenters' 
conclusion that the statute requires the imposition of enforceable 
emission limitations even where the agency has determined that an 
upwind state does not significantly contribute to nonattainment or 
interfere with maintenance of the NAAQS in a downwind state. See 
section III.C.2 of this notice for further discussion regarding the 
EPA's air quality analysis used to support this final determination.

B. Selection of a Future Analytic Year

    In this action, consistent with its practice in previous 
rulemakings addressing ozone transport, the EPA focuses its analysis on 
a future analytic year in light of the forward-looking nature of the 
good neighbor obligation in section 110(a)(2)(D)(i)(I) and in 
consideration of prior court decisions. With respect to the statutory 
language of the good neighbor provision, the statute requires that 
states prohibit emissions that ``will'' significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in any other 
state. The EPA reasonably interprets this language as permitting states 
and the EPA in implementing the good neighbor provision to 
prospectively evaluate downwind air quality problems and the need for 
further upwind emission reductions. In the EPA's prior regional 
transport rulemakings, the agency generally evaluated whether upwind 
states ``will'' significantly contribute to nonattainment or interfere 
with maintenance based on projections of air quality in the future year 
in which any emission reductions would be expected to go into effect. 
For the 1998 NOX SIP Call, it used an analytic year of 2007, 
and for the 2005 CAIR, it used analytic years of 2009 and 2010 for 
ozone and PM2.5, respectively. 63 FR 57450; 70 FR 25241. The 
D.C. Circuit affirmed the EPA's interpretation of ``will'' in CAIR, 
finding the EPA's consideration of future projected air quality (in 
addition to current measured data) to be a reasonable interpretation of 
an ambiguous term. North Carolina, 531 F.3d at 913-14. The EPA applied 
the same approach in finalizing CSAPR in 2011 and the CSAPR Update in 
2016 by evaluating air quality in 2012 and 2017, respectively. 76 FR 
48211; 81 FR 74537.
    Consistent with this approach, a key decision that informs the 
application of the interstate transport framework is the selection of a 
future analytic year. Several court decisions guide the factors that 
the EPA considers in selecting an appropriate future analytic year for 
this action. First, in North Carolina, the D.C. Circuit held that the 
timeframe for implementation of emission reductions required by the 
good neighbor provision should be selected by considering the relevant 
attainment dates of downwind nonattainment areas affected by interstate 
transport of air pollution. 531 F.3d at 911-12. Moreover, the U.S. 
Supreme Court and the D.C. Circuit have both held that the EPA may not 
over-control upwind state emissions relative to the downwind air 
quality problems to which the upwind emissions contribute. 
Specifically, the

[[Page 65890]]

courts found that the agency may not require emission reductions (at 
steps 3 and 4 of the good neighbor framework) from a state that are 
greater than necessary to achieve attainment and maintenance of the 
NAAQS in all of the downwind areas to which that state is linked. See 
EME Homer City, 134 S. Ct. at 1600-01; EME Homer City II, 795 F.3d at 
127. In particular, in EME Homer City II, the D.C. Circuit determined 
that the CSAPR phase 2 ozone-season NOX budgets for ten 
states were invalid because the EPA's modeling showed that the downwind 
air quality problems to which these states were linked would be 
resolved by 2014, when the phase 2 budgets were scheduled to be 
implemented. 795 F.3d at 129-30.\59\ These court decisions therefore 
support the agency's choice to use a future analytic year in order to 
help ensure that the EPA does not over- or under-control upwind state 
emissions at the time that controls will be implemented. Generally, 
NOX emissions levels are expected to decline in the future 
through the combination of the implementation of existing local, state, 
and federal emission reduction programs (e.g., fleet penetration of 
mobile source programs through fleet turnover) and changing market 
conditions for electricity generation technologies and fuels.\60\ As a 
result of expected emission reductions and resulting lower ozone 
concentrations in the future, the agency is relatively more at risk of 
over-controlling emissions were it not to identify an appropriate 
future year in which controls could be feasibly implemented to further 
reduce emissions and ozone concentrations. Therefore, because further 
controls cannot be implemented feasibly for several years, as discussed 
further below, and emissions, upwind contributions, and downwind ozone 
concentrations will likely be lower at that later point in time due to 
continued phase-in of existing regulatory programs, changing market 
conditions, and fleet turnover, it is reasonable for the EPA to 
evaluate air quality (at steps 1 and 2 of the good neighbor framework) 
in a future analytic year. In other words, it is appropriate for the 
EPA's evaluation of air quality to focus on a future analytic year that 
is aligned with feasible timing for installation of controls in order 
to ensure that downwind air quality problems exist (at step 1) and that 
upwind states continue (at step 2) to be linked to downwind air quality 
problems at a time when any cost-effective emission reductions 
(identified at step 3) would be implemented (at step 4) and to ensure 
that such reductions do not over-control relative to the identified 
ozone problems. Cf. EME Homer City, 134 S. Ct. at 1600-01; EME Homer 
City II, 795 F.3d at 127.
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    \59\ The Supreme Court also held that the agency may not over-
control upwind state emissions such that the impact from an upwind 
state to all downwind air quality problems is below the contribution 
threshold applied at step 2 that ``linked'' the upwind state in the 
first place, EME Homer City, 134 S. Ct. at 1600-01, but CSAPR was 
not found in EME Homer City II to have violated the prohibition on 
this type of over-control.
    \60\ Annual Energy Outlook 2018. Electricity Supply, 
Disposition, Prices, and Emissions. Reference Case. Department of 
Energy, Energy Information Administration. Available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=8-AEO2018&cases=ref2018&sourcekey=0.
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    Thus, in determining the appropriate future analytic year for 
purposes of assessing remaining interstate transport obligations for 
the 2008 ozone NAAQS, the EPA considered two primary factors: (1) The 
applicable attainment dates for this NAAQS; and (2) the timing to 
feasibly implement new NOX control strategies. These factors 
are discussed in the following two sections. The EPA is finalizing its 
proposed determination that these factors collectively support the 
identification of 2023 as the future analytic year for evaluating 
whether further unfulfilled good neighbor obligations for the 2008 
ozone NAAQS will remain after implementation of the CSAPR Update.
    Comment: Several commenters challenge the EPA's interpretation of 
the term ``will'' in the good neighbor provision to permit the 
identification of downwind air quality problems based on evaluating air 
quality in a future year. The commenters contend that the EPA's 
interpretation is inconsistent with the Clean Air Act for various 
reasons.
    One commenter contends that the word ``will'' merely reflects the 
temporal dimension of interstate transport of pollutants--i.e., the 
fact that an upwind state ``will'' significantly contribute to 
nonattainment or interfere with maintenance as soon as its ozone 
pollutants are transported in significant amounts into a downwind area 
measuring nonattainment or struggling to maintain the NAAQS. The 
commenter concedes that the term ``will'' also contemplates impacts in 
relevant future compliance years but contends it is not limited to the 
distant future. The commenter asserts that section 110's prohibition 
against ``emitting'' pollutants that will significantly contribute to 
downwind nonattainment (or interfere with downwind maintenance) plainly 
indicates that the phrase ``will contribute'' must be read to include 
both current and future emissions, citing North Carolina, 531 F.3d at 
914. The commenter contends that the EPA's interpretation of ``will'' 
to encompass future air quality, as affirmed by the D.C. Circuit in the 
CAIR litigation, was reasonable only in light of the agency's 
complementary consideration of present measured data. The commenter 
states that the EPA's proposed interpretation would grant the agency 
unfettered discretion, permitting it to find that ``will'' refers to 
any future time that the EPA selects, even one only in the distant 
future. The commenter contends that the interpretation of ``will'' to 
refer to a future year when ``any emission reductions would be expected 
to go into effect'' is circular, meaningless, and irrational where the 
EPA finds that no further emission reductions are required.
    Another commenter states that Congress specified that 
implementation plans must prohibit ``any'' pollution from ``any'' 
source that will contribute significantly to nonattainment and 
interfere with maintenance, and this includes pollution that will 
contibute between now and 2023. The commenter states that the fact that 
other pollution emitted at some other time allegedly will not 
contribute significantly to nonattainment and interfere with 
maintenance does not excuse the EPA's failure to prohibit the pollution 
that will do so between now and 2023.
    A further commenter contends that the use of the word ``emitting'' 
in section 110(a)(2)(D)(i) includes protection against current 
emissions from upwind sources that are significantly contributing to 
downwind areas' inability to attain a NAAQS. The commenter cites CAA 
section 126(b), which provides that a state ``may petition the 
Administrator for a finding that any major source or group of 
stationary sources emits or would emit any air pollutant in violation 
of the prohibition of'' section 110(a)(2)(D)(i) (emphasis added). The 
commenter states that this clause confirms that current air pollution 
transport cannot be ignored. Similarly, one commenter asserts that, 
when interpreting the term ``emit'' in other provisions of the Act, the 
D.C. Circuit has held that it refers to actual, present emissions, as 
opposed to mere potential or future emissions, citing New York v. EPA, 
413 F.3d 3, 39-40 (D.C. cir. 2005).
    Response: These commenters are incorrect, for five reasons.
    First, the commenters misconstrue both the facts and the holding of 
the D.C. Circuit's decision in North Carolina. In that case, the court 
was reviewing a challenge to the EPA's approach to identifying downwind

[[Page 65891]]

receptors in CAIR wherein the agency considered only those areas 
projected to be in nonattainment in a future year to be downwind 
receptors, but not areas projected to be in attainment that were 
currently measuring nonattainment. 531 F.3d at 913. The court explained 
that the EPA had consistently interpreted ``will'' in both the 
NOX SIP Call and CAIR to ``indicate sources that presently 
and at some point in the future `will' contribute to nonattainment,'' 
and noted that both rules relied on projections of nonattainment in the 
future year in which the rule would go into effect. Id. at 914. Thus, 
contrary to the commenters' assertions, the EPA did not identify 
downwind air quality problems in CAIR based on either a current 
measured violation or a projected violation of the NAAQS. Rather, in 
CAIR the EPA determined that a downwind air quality problem was 
required to be addressed under the good neighbor provision only if both 
the current measured data and the projected future data demonstrated 
there would be an air quality problem in a downwind area.
    The court affirmed the EPA's interpretation, explaining that 
``will'' ``can mean either certainty or indicate the future tense'' and 
held that it is reasonable for the EPA to give effect to both potential 
meanings of the word. Id. Thus, although the court acknowledged that 
the term ``will'' could refer to the certainty of an upwind state's 
impact on a downwind state (i.e., based on current measured 
nonattainment), as one commenter contends it should, the court also 
clearly acknowledged the ambiguity of this term and indicated this was 
not the only reasonable interpretation. In light of this ambiguity, the 
D.C. Circuit affirmed that the EPA's approach, which gives effect to 
both meanings, is permissible under the Act. Here, as explained in more 
detail later in section III.C.3, the EPA is identifying downwind 
nonattainment receptors based on both current measured data and 
projected future air quality, just as the EPA did in the CSAPR Update, 
as well as CAIR and the NOX SIP Call.\61\
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    \61\ In compliance with a separate holding of the North Carolina 
decision, the EPA further evaluates receptors in areas currently 
attaining the standard based on projected future air quality in 
order to ensure that the ``interfere with maintenance'' clause of 
the good neighbor provision is given independent effect. See 531 
F.3d at 910-11.
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    Second, the EPA also does not agree that the term ``emitting'' 
precludes its interpretation of ``will'' in the good neighbor 
provision. The relevant clause of the CAA section 110(a)(2)(D)(i) 
requires state plans (or federal plans, where the agency is acting in 
the state's stead) to ``contain adequate provisions . . . prohibiting . 
. . any source or other type of emissions activity within the State 
from emitting any air pollution in amounts which will'' improperly 
impact downwind areas under the remaining terms of the provision 
(emphasis added). Thus, the term ``emitting'' should be read in concert 
with the prohibition required in this clause to refer to the limitation 
that should be imposed on sources otherwise found to be in violation of 
section 110(a)(2)(D)(i)(I); the term ``emitting'' in its statutory 
context does not clearly define the temporal requirements for 
determining whether such a violation exists in the first instance. 
Rather, the good neighbor provision indicates that sources should be 
``prohibit[ed] . . . from emitting,'' which is a forward-looking phrase 
intended to address limitations on a source's future activity. The 
introduction of the phrase ``which will'' at the end of the clause 
further serves as a transition from the general obligation to impose a 
prohibition to the specific circumstances under which the prohibition 
will apply.
    The commenter's reference to the court's interpretation of ``emit'' 
in New York is therefore an inapt citation for purposes of interpreting 
the good neighbor provision requirements. In that case, the court was 
evaluating whether the use of the term ``emit'' in certain 
nonattainment new source review provisions (a program imposing a 
permitting requirement on the construction of new major sources of air 
pollutants and major modifications of existing sources) was intended to 
refer to actual or allowable emissions when determining whether 
modifications to the source trigger a permitting requirement. 413 F.3d 
3, 39-40 (D.C. Cir. 2005). The court noted that the statutory 
provisions governing new source review use different language to 
distinguish between actual emissions (``emit'' or ``emitted'') and 
potential emissions (``potential to emit'' or ``emission 
limitations''). Id. In the case of the good neighbor provision, the 
phrase ``prohibiting . . . sources . . . from emitting'' certain 
amounts of pollution is more consistent with the terminology used to 
indicate potential emissions, and therefore more reasonably refers to 
the emission limitation that would be imposed under the good neighbor 
provision if the requisite finding of significant contribution or 
interference with maintenance is made. Thus, the statute's use of the 
term ``emit'' does not clearly preclude the EPA's interpretation of 
``will'' as permitting the analysis of downwind air quality in a future 
year to evaluate interstate transport. The new source review 
preconstruction permitting program expressly lays out the predicate 
trigger for the permitting requirement (and the D.C. Circuit in New 
York was considering whether EPA's interpretation and application of 
those statutory terms was permissible); the good neighbor provision 
does not expressly lay out the methodology (including the termporal 
frame of reference) for determining what constitutes a good neighbor 
violation (and the D.C. Circuit in North Carolina affirmed EPA's 
construction of the governing statutory provision).
    Third, the commenters err in suggesting that the standard for 
granting a section 126(b) petition is incorporated into the good 
neighbor provision. While section 126(b) cross-references the 
prohibition in section 110(a)(2)(D)(i),\62\ the cross-reference is 
unidirectional. There is no indication that Congress intended for the 
``emits or would emits'' language from section 126(b) to be conversely 
incorporated into section 110, and section 110(a)(2)(D)(i) does not 
contain any reference to section 126(b). In any event, the commenters 
have not offered any explanation regarding how any relevant 
interpretation of section 126(b) should inform the EPA's interpretation 
of section 110 with respect to current emissions data or projections of 
future air quality.
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    \62\ 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).
---------------------------------------------------------------------------

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

[[Page 65892]]

nonattainment and maintenance of the NAAQS, i.e., that the EPA avoid 
unnecessary ``over-control'' of emissions from upwind states. See EME 
Homer City, 134 S. Ct. at 1608. In interpreting that decision, the D.C. 
Circuit declared EPA's emission reduction requirements for certain 
states to be invalid under the good neighbor provision where the EPA 
had information indicating that there will be no downwind air quality 
problems by the time the emission reductions would have been 
implemented. See EME Homer City II, 795 F.3d at 130. Thus, the EPA does 
not agree that information indicating a current violation necessarily 
obligates the EPA to impose additional emission reductions, especially 
if additional information indicates there will be no downwind air 
quality issues to address by the time such reductions could be in 
place. On the contrary, the D.C. Circuit has already spoken to both the 
temporal flexibilities and the temporal obligations imposed by the good 
neighbor provision. The court has both affirmed the EPA's 
interpretation of ``will'' as permitting consideration of projected 
future air quality and instructed the EPA to consider relevant downwind 
attainment dates in establishing future compliance timeframes. North 
Carolina, 531 F.3d at 910-11, 913. The EPA has reasonably aligned these 
two considerations to ensure that emission reductions required from 
``any source'' within the anticipated compliance timeframes are in fact 
necessary to address downwind air quality problems at that time, in 
order to avoid potential over-control in contradiction of EME Homer 
City.
    Fifth and finally, the EPA does not agree that its interpretation 
of ``will'' to permit consideration of projected future air quality 
grants the agency unfettered discretion to choose any future analytic 
year, however distant, to justify its conclusions. While the EPA does 
contend that the statute permits the consideration of air quality in a 
future year aligned with anticipated compliance, the EPA concedes that 
it must both comply with the holding in North Carolina to appropriately 
consider relevant downwind attainment dates and provide a reasonable, 
non-arbitrary justification for selecting an appropriate future 
analytic year. The EPA provides such an explanation for the selection 
of the 2023 analytic year in the following sections of this notice.
1. Attainment Dates for the 2008 Ozone NAAQS
    As previously noted, in determining the appropriate future analytic 
year for purposes of assessing remaining interstate transport 
obligations for the 2008 ozone NAAQS, the EPA first considers the 
downwind attainment dates for the 2008 ozone NAAQS. Many areas 
currently have attainment dates of July 20, 2018 for areas classified 
as Moderate. However, as noted earlier, the 2017 ozone season was the 
last full season from which data could be used to determine attainment 
of the NAAQS by that date.\63\ Given that the 2017 ozone season has now 
passed, it is not possible to achieve additional emission reductions by 
the Moderate area attainment date. It is therefore necessary to 
consider what subsequent attainment dates should inform the EPA's 
analysis. The next attainment dates for the 2008 ozone NAAQS will be 
July 20, 2021, for nonattainment areas classified as Serious, and July 
20, 2027, for nonattainment areas classified as Severe.\64\ Because the 
various attainment deadlines are in July, which is in the middle of the 
ozone monitoring season for all states, data from the calendar year 
prior to the attainment date--e.g., data from 2020 for the 2021 
attainment date and from 2026 for the 2027 attainment date--are the 
last data that can be used to demonstrate attainment with the NAAQS by 
the relevant attainment date. Therefore, the EPA considers the control 
strategies that could be implemented by 2020 and 2026 in assessing the 
2021 and 2027 attainment dates in its subsequent analysis. The EPA has 
also considered that, in all cases, the statute provides that areas 
should attain as expeditiously as practicable. See CAA section 
181(a)(1).
---------------------------------------------------------------------------

    \63\ As discussed in Section II.D, emission reductions that were 
feasible and cost-effective for the 2017 ozone season were the focus 
of the CSAPR Update.
    \64\ While there are no areas (outside of California) that are 
currently designated as Serious or Severe for the 2008 ozone NAAQS, 
the CAA requires that the EPA reclassify to Serious any Moderate 
nonattainment areas that fail to attain by their attainment date of 
July 20, 2018. See CAA section 181(b)(2), 42 U.S.C. 7511(b)(2). 
Similarly, if any area fails to attain by the Serious area 
attainment date, the CAA requires that the EPA reclassify the area 
to Severe.
---------------------------------------------------------------------------

    Comment: One commenter notes that all of the states burdened by the 
interstate pollution addressed by the proposed action are currently 
subject to attainment deadlines in 2015, 2016, or 2018, and it is 
likely that some states will be determined to have failed to attain and 
become subject to more stringent requirements and a new deadline of 
July 20, 2021. The commenter notes that no relevant states are subject 
to a deadline of 2027, nor will any be subject to a 2027 deadline in 
the future unless they fail yet again to attain by 2021. The commenter 
therefore contends that the EPA's decision to consider the 2027 
attainment deadline is illegal, unexplained, and arbitrary.
    Response: The EPA does not agree that it may not consider any later 
attainment dates simply because there are no states currently subject 
to that deadline. As the commenter concedes, there are also currently 
no areas in the east subject to the 2021 Serious area attainment date, 
yet the EPA nonetheless believes it is appropriate to consider both 
future attainment dates in selecting a future analytic year, especially 
in light of the limitations on additional control strategies available 
in the near term, as discussed in more detail later. Moreover, the EPA 
was required to select an analytic year before the Moderate area 
attainment date had passed in order to provide sufficient time to 
conduct air quality modeling before issuing a proposal for the state of 
Kentucky by the court-ordered deadline in June 2018. See Order, Sierra 
Club v. Pruitt, No. 3:15-cv-04328 (N.D. Cal. May 23, 2017), ECF No. 73. 
Because the Kentucky action addressed the same problem of regional 
interstate ozone transport for the 2008 ozone NAAQS at issue in this 
action, it was necessary to complete the modeling in time for the EPA 
to issue a proposed action for Kentucky in advance of that deadline. At 
that time, as the commenter notes, all areas were subject to attainment 
dates in 2015, 2016, or 2018, and emission reductions intended to 
assist with attainment by those dates would need to be achieved by the 
prior year's ozone season. Since all of these dates were effectively in 
the past (including one date that fell less than two weeks after the 
date of the proposal of this action), the EPA reasonably looked forward 
to the next potential attainment dates for purposes of this analysis.
2. Feasibility of Control Strategies To Further Reduce Ozone Season 
NOX Emissions
    The EPA's analysis of the feasibility of NOX control 
strategies reflects the time needed to plan for, install, test, and 
place into operation EGU and non-EGU NOX reduction 
strategies regionally--i.e., across multiple states. This regional 
analytic approach is consistent with the regional nature of interstate 
ozone pollution transport as described in section II.A. As proposed, 
the agency adopted this approach for this final action based on 
previous interstate ozone transport analyses showing that where eastern 
downwind ozone problems are identified, multiple upwind states 
typically are linked to

[[Page 65893]]

these problems.\65\ Specifically of relevance to this action, as 
discussed in section II.C, the EPA's prospective air quality assessment 
of CSAPR Update implementation found that 21 states each continued to 
contribute greater than or equal to one percent of the 2008 ozone NAAQS 
(i.e., 0.75 ppb) to identified downwind nonattainment or maintenance 
receptors in multiple downwind states in 2017. Thus, to reasonably 
address any remaining ozone transport problems, the EPA must identify 
and apportion emission reduction responsibility across multiple upwind 
states. In other words, given the breadth of the ozone transport 
problem identified in the CSAPR Update and the breadth of the remaining 
CAA obligations (i.e., for 20 states), it is reasonable for the EPA's 
analysis to be regional. Where such an analysis is needed for multiple 
states, the inquiry into the availability and feasibility of control 
options is considerably more time-consuming than it would be for a 
single facility or state or sector.
---------------------------------------------------------------------------

    \65\ 81 FR 74538.
---------------------------------------------------------------------------

    Further, the feasibility of new emissions controls should be 
considered with regard to multiple upwind source categories to ensure 
that the agency properly evaluates NOX reduction potential 
and cost-effectiveness from all reasonable control measures. 
NOX emissions come from multiple anthropogenic source 
categories, such as mobile sources, electric utilities, and stationary 
non-EGU sources (e.g., resource extraction industries and industrial 
and commercial facilities). Among stationary sources, EGUs in the 
eastern U.S. have been the primary subject of regulation to address 
interstate ozone pollution transport and have made significant 
financial investments to achieve emission reductions. While the EPA 
continues to evaluate control feasibility for EGUs in its analysis, the 
EPA's recent analyses indicate that non-EGU source categories, which 
the EPA has not made subject to new regulations to address interstate 
ozone transport since the NOX SIP Call, may also warrant 
further assessment of their potential to cost-effectively reduce 
NOX relative to EGUs.\66\ Accordingly, the EPA's assessment 
of control feasibility focuses on both EGU and non-EGU sources.
---------------------------------------------------------------------------

    \66\ See Assessment of Non-EGU NOX Emission Controls, 
Cost of Controls, and Time for Compliance Final TSD from the CSAPR 
Update (U.S. EPA, August 2016) in the docket for this action.
---------------------------------------------------------------------------

    Although mobile source emissions also influence ozone formation, 
transport, and ambient concentrations, the EPA has historically 
addressed mobile source emissions through national rulemakings. As a 
result, mobile source emissions are already decreasing because of 
sector[hyphen]specific standards related to fuels, vehicle fuel 
economy, pollution controls, and repair and replacement of the existing 
fleet. Programs such as the Tier 3 vehicle emissions standards are 
already being phased in between now and 2023. That rule was finalized 
in 2014 with a phase-in schedule of 2017-2025 reflecting fleet 
turnover. As discussed in more detail later, emission reductions from 
stationary sources could likely be implemented more quickly than would 
result from any attempt to effect additional reductions from mobile 
sources beyond those already being implemented. Thus, the EPA has 
focused its analysis of the feasibility of implementing additional 
emission controls on stationary sources.
a. EGUs
    The EPA's analysis in the CSAPR Update is of particular relevance 
to the agency's assessment of feasible EGU NOX mitigation 
strategies in this action because that rule evaluated and implemented 
all EGU strategies that were cost-effective and feasible to implement 
quickly. Accordingly, as explained in the proposal for this action, the 
EPA reasonably focused its current assessment of the feasibility of 
implementing further EGU NOX mitigation strategies on 
control technologies that require more time to implement and that were 
thus not previously evaluated in the CSAPR Update with respect to the 
2008 ozone NAAQS.
    In establishing the CSAPR Update EGU ozone season NOX 
emissions budgets, the agency quantified the emission reductions 
achievable from all NOX control strategies that were 
feasible to implement in less than one year and cost-effective at a 
marginal cost of $1,400 per ton of NOX removed.\67\ These 
EGU NOX control strategies were: Optimizing NOX 
removal by existing, operational selective catalytic reduction (SCR) 
controls; turning on and optimizing existing, idled SCR controls; 
installing state-of-the-art NOX combustion controls; and 
shifting generation to existing units with lower NOX 
emissions rates within the same state. 81 FR 74541. The agency observes 
that the resulting CSAPR Update emissions budgets are being 
appropriately implemented under the CSAPR NOX Ozone Season 
Group 2 allowance trading program. Data for the 2017 ozone season (the 
first CSAPR Update compliance period) indicate that power plant ozone 
season NOX emissions across the 22 state CSAPR Update region 
fell by 77,512 tons (or 21%) from 2016 to 2017.\68\ As a result, total 
2017 ozone season NOX emissions from covered EGUs across the 
22 CSAPR Update states were approximately 294,394 tons,\69\ well below 
the sum of states' 2017 emissions budgets established in the CSAPR 
Update of 316,464 tons.\70\ Further, the EPA is not aware of any 
relevant, significant changes in the EGU fleet since promulgation of 
the CSAPR Update that would necessitate reevalution of the emission 
reduction potential from control strategies already implemented in the 
CSAPR Update. Accordingly, for the purposes of this final 
determination, the EPA considers optimizing NOX removal by 
existing, operational SCR controls, turning on and optimizing of 
existing SCR controls, and the installation of combustion controls to 
be NOX control strategies that have already been 
appropriately evaluated and implemented in the final CSAPR Update for 
purposes of addressing the good neighbor provision for the 2008 ozone 
NAAQS. The EPA does not believe it would be reasonable to base its 
selection of a future analytic year on the timeframe for implementation 
of control strategies that the EPA has already evaluated in the CSAPR 
Update and that are already being implemented appropriately, according 
to the best data available at this time (i.e., recent ozone season 
NOX emissions data with CSAPR Update implementation).
---------------------------------------------------------------------------

    \67\ The CSAPR Update was signed on September 7, 2016, 
approximately 8 months before the beginning of the 2017 ozone season 
on May 1.
    \68\ https://ampd.epa.gov/ampd/ (Data current as of October 26, 
2018).
    \69\ Id.
    \70\ Preliminary data for the 2018 ozone season (the second 
CSAPR Update compliance period), which became available after the 
proposal for this action and after the close of the comment period, 
continue to indicate that CSAPR Update emissions budgets are being 
appropriately implemented under the trading program. Power plant 
ozone season NOX emissions across the 22 state CSAPR 
Update region fell by 83,084 tons (or 22%) from 2016 to 2018. As a 
result, total 2018 ozone season NOX emissions from 
covered EGUs across the 22 CSAPR Update states were approximately 
288,825 tons, well below the sum of states' 2018 emissions budgets 
established in the CSAPR Update of 313,626 tons.
---------------------------------------------------------------------------

    In the CSAPR Update, the EPA also evaluated one EGU NOX 
control strategy that was considered feasible to implement within one 
year but was not cost-effective relative to other near-term control 
strategies at a marginal cost of $1,400 per ton of NOX 
removed: Turning on existing idled selective non-catalytic reduction 
(SNCR) controls. In the CSAPR Update, the EPA identified

[[Page 65894]]

a marginal cost of $3,400 per ton as the level of uniform control 
stringency that represents turning on and fully operating idled SNCR 
controls.\71\ However, the CSAPR Update finalized emissions budgets 
using $1,400 per ton control stringency, finding that this level of 
stringency represented the control level at which incremental EGU 
NOX reductions and corresponding downwind ozone air quality 
improvements were maximized with respect to marginal cost in the 
context of the short-term control strategies being considered in that 
rulemaking. In finding that the $1,400 per ton control cost level was 
appropriate, the EPA determined that, based on the fleet 
characteristics of SNCR and their operation at the time of the CSAPR 
Update, the more stringent emissions budget level reflecting $3,400 per 
ton (representing turning on idled SNCR controls) yielded fewer 
additional emission reductions and fewer air quality improvements 
relative to the increase in control costs. In other words, based on the 
CSAPR Update analysis, establishing emissions budgets at $3,400 per 
ton, and therefore developing budgets based on operation of idled SNCR 
controls, was not determined to be cost-effective for addressing good 
neighbor provision obligations for the 2008 ozone NAAQS. 81 FR 74550. 
As explained in our proposed determination, the EPA continues to 
believe that the strategy of turning on and fully operating idled SNCR 
controls was appropriately evaluated in the CSAPR Update with respect 
to other short-term control strategies for addressing interstate ozone 
pollution transport for the 2008 ozone NAAQS. Further, the EPA is not 
aware of any significant changes in the fleet characteristics of 
existing SNCR and their operation since promulgation of the CSAPR 
Update and therefore does not find it necessary to reevaluate the cost-
effectiveness of operating idled SNCR in the short term. Based on data 
available at this time, the EPA does not believe it would be reasonable 
to base its selection of a future analytic year on the timeframe for 
implementation of a control strategy that the EPA has already 
determined was not cost-effective relative to other short-term control 
strategies. Accordingly, in this final action the EPA is not further 
assessing this control strategy for purposes of identifying an 
appropriate future analytic year.
---------------------------------------------------------------------------

    \71\ See EGU NOX Mitigation Strategies Final Rule TSD 
(docket ID EPA-HQ-OAR-2015-0500-0554, available at 
www.regulations.gov and https://www.epa.gov/sites/production/files/2017-05/documents/egu_nox_mitigation_strategies_final_rule_tsd.pdf) 
(NOX Mitigation Strategies TSD).
---------------------------------------------------------------------------

    The remaining control strategy that the EPA evaluated in the CSAPR 
Update was the shifting of generation from EGUs with higher 
NOX emissions rates to EGUs with lower NOX 
emissions rates within the same state as a means of reducing emissions 
at costs commensurate with and in support of emission control 
technologies to reduce NOX emissions. Shifting generation is 
a NOX control strategy that occurs on a time- and cost-
continuum, in contrast to the relatively discrete price-points and 
installation timeframes that can be identified for emission control 
technologies--i.e., combustion and post-combustion controls. Therefore, 
in the CSAPR Update, the EPA identified the discrete cost thresholds 
used to evaluate upwind states' good neighbor obligations based on its 
evaluation of combustion and post-combustion control technologies, and 
secondarily examined the amount of generation shifting that would 
result at the same time and cost threshold associated with and in 
support of the particular control technology. Quantifying 
NOX reductions from shifting generation anticipated at the 
same time and cost thresholds relative to the control technologies 
being considered (e.g., restarting idled SCR controls) helped ensure 
that the emission reductions associated with the control strategies 
could be expected to occur in the CSAPR Update's market-based 
implementation system. In other words, had the agency excluded 
consideration of generation shifting in calculating emissions budgets 
in step 3 in the CSAPR Update, generation shifting would have 
nonetheless occurred as a compliance strategy in step 4. Although 
potential emission reductions resulting from generation shifting were 
factored into the final budgets, this compliance strategy did not drive 
the EPA's identification of the analytic year or cost thresholds 
analyzed in the CSAPR Update.
    Consistent with our explanation at proposal, the EPA does not find 
it appropriate to solely evaluate the potential for generation shifting 
(e.g., in isolation from viable combustion or post-combustion control 
assessments) for purposes of selecting a future analytic year. The EPA 
continues to believe that generation shifting is not particularly well 
suited to identifying discrete analytic inputs, given its ability to be 
phased in on a time- and cost-continuum. Further, given CSAPR Update 
implementation as well as current and projected natural gas prices that 
are low relative to historical levels, significant shifting from 
higher-emitting EGUs to lower-emitting EGUs (relative to historical 
generation levels) is already occurring and expected to continue to 
occur by 2023 due to market drivers.\72\ Thus, there may only be a 
limited opportunity, if any, for the EGUs in CSAPR Update states to 
implement as an interstate transport control measure further emission 
reductions through generation shifting prior to 2023, beyond that which 
is already occurring and reasonably expected to occur as a result of 
other factors. Given EPA's historical consideration of this strategy as 
a secondary factor in quantifying emissions budgets, the EPA believes 
the most reasonable approach for selecting a future analytic year is to 
focus on the timeframe in which specific control strategies other than 
generation shifting can be implemented.\73\
---------------------------------------------------------------------------

    \72\ See Electric Monthly Power. Department of Energy, Energy 
Information Administration. Table 1.1 Net Generation by Energy 
Sources. September 2018. Also See Total Electricity Supply, 
Disposition, Prices, and Emissions, Annual Energy Outlook. 
Department of Energy, Energy Information Administration.
    \73\ Because the EPA is not in this final action evaluating 
additional generation shifting possibilities, it does not at this 
time need to revisit the question whether it is within the EPA's 
authority or otherwise proper to consider generation shifting in 
implementing the good neighbor provision. The EPA is aware that this 
has been an issue of contention in the past, and stakeholders have 
raised serious concerns regarding this issue. See, e.g., 81 FR at 
74545 (responding to comments); CSAPR Update--Response to Comment, 
at 534-50 (EPA-HQ-OAR-2015-0500-0572) (summarizing and responding to 
comments).
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    For these reasons, for purposes of identifying an appropriate 
future analytic year, the EPA is focusing its assessment of EGUs in 
this action on control technologies that were deemed to be infeasible 
to install for the 2017 ozone season rather than reassessing controls 
previously analyzed for cost-effective emission reductions in the CSAPR 
Update. In establishing the CSAPR Update emissions budgets, the EPA 
identified but did not analyze the following two EGU NOX 
control strategies in establishing emissions budgets because regional 
implementation by 2017 was not considered feasible: (1) Installing new 
SCR controls; and (2) installing new SNCR controls. The EPA observed 
that EGU SCR post-combustion controls can achieve up to 90 percent 
reduction in EGU NOX emissions. The EPA also observed that 
SNCR controls can be effective at reducing NOX emissions and 
can achieve up to a 25 percent emission reduction from EGUs (so long as 
sufficient reagent is employed). In 2017, SCR controls were in 
widespread use across the power sector in the east, whereas SNCR 
controls are considerably

[[Page 65895]]

less prevalent. In the 22-state CSAPR Update region, approximately 62 
percent of coal-fired EGU capacity is equipped with SCR controls while 
12 percent is equipped with SNCR controls.\74\
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    \74\ National Electric Energy Data System v6 (NEEDS). EPA 
(September 2018). Available at https://www.epa.gov/airmarkets/national-electric-energy-data-system-needs-v6.
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    The EPA notes that differences between these control technologies 
exist with respect to the potential viability of achieving cost-
effective, regional NOX reductions from EGUs. As just 
described, SCR controls generally achieve greater EGU NOX 
reduction efficiency (up to 90 percent) than SNCR controls (up to 25 
percent). Resulting in part from this disparity in NOX 
reduction efficiency, the EPA found new SCR controls to be more cost-
effective at regionally removing NOX when considering both 
control costs and the NOX reduction potential in developing 
its cost-per-ton analysis for the CSAPR Update. Specifically, the EPA 
found that new SCR controls could generally reduce EGU emissions at a 
marginal cost of $5,000 per ton of NOX removed whereas new 
SNCR controls could generally reduce EGU emissions at a higher cost of 
$6,400 per ton of NOX removed.\75\ In other words, the 
greater NOX reduction efficiency for SCR controls translates 
into greater cost-effectiveness of NOX removal relative to 
SNCR controls. Simply put, SCR can achieve significantly more regional 
NOX reduction at a lower cost per ton than SNCR. The general 
NOX mitigation and cost-effectiveness advantage of SCR is 
also consistent with observed installation patterns where SCR controls 
(62 percent of coal-fired capacity) are more prevalent across the CSAPR 
Update states relative to SNCR (12 percent of coal-fired capacity). 
Moreover, as discussed in response to a comment later in this section, 
installation of SNCR still takes significant time as compared to the 
2008 ozone NAAQS attainment dates and SNCR installation at an 
individual source would likely make later installation of an SCR cost-
prohibitive and therefore forgo the potential for greater emission 
reductions that could be achieved at that source from the latter 
technology in the future. Considering these factors, the EPA believes 
it is appropriate to give particular weight to the timeframe required 
for implementation of SCR across the region as compared to SNCR.
---------------------------------------------------------------------------

    \75\ EGU NOX Mitigation Strategies Final Rule TSD.
---------------------------------------------------------------------------

    For SCR, the total time associated with project development is 
estimated to be up to 39 months for an individual power plant 
installing controls on more than one boiler.\76\ However, more time is 
needed when considering installation timing for new SCR controls 
regionally, for CSAPR Update states. As described in the subsequent 
paragraphs, the EPA has determined that a minimum of 48 months (4 
years) is a reasonable time period to allow to complete all necessary 
steps of SCR projects at EGUs on a regional scale. This timeframe would 
allow for regional implementation of these controls (i.e., at multiple 
power plants with multiple boilers) considering the necessary stages of 
post-combustion control project planning, shepherding of labor and 
material supply, installation, coordination of outages, testing, and 
operation. SNCR installations, while generally having shorter project 
timeframes (i.e., up to 16 months for an individual power plant 
installing controls on more than one boiler), share similar 
implementation steps with and also need to account for the same 
regional factors as SCR installations.\77\ Therefore, the EPA finds 
that more than 16 months would be needed to complete all necessary 
steps of SNCR development at EGUs on a regional scale. Despite EPA's 
prioritization of SCR as compared to SNCR in identifying the timeframe 
for installing new controls, the EPA notes that installing these post-
combustion controls (SCR or SNCR) involve very similar steps and many 
of the same considerations. The timing of their feasible regional 
development is therefore described together in the following 
paragraphs.
---------------------------------------------------------------------------

    \76\ Engineering and Economic Factors Affecting the Installation 
of Control Technologies for Multipollutant Strategies. EPA Final 
Report. Table 3-1. Available at https://archive.epa.gov/clearskies/web/pdf/multi102902.pdf.
    \77\ A month-by-month evaluation of SNCR installation is 
discussed in EPA's ``Engineering and Economic Factors Affecting the 
Installation of Control Technologies for Mulitpollutant Strategies'' 
at Exhibit A-6 and in EPA's NOX Mitigation Strategies 
TSD. As noted at proposal, the analysis in this exhibit estimates 
the installation period from contract award as within a 10-13 month 
timeframe. The exhibit also indicates a 16-month timeframe from 
start to finish, inclusive of pre-contract award steps of the 
engineering assessment of technologies and bid request development. 
The timeframe cited for installation of SNCR at an individual source 
in this final action is consistent with this more complete timeframe 
estimated by the analysis in the exhibit.
---------------------------------------------------------------------------

    Installing new SCR or SNCR controls for EGUs generally involves the 
following steps: Conducting an engineering review of the facility to 
determine suitability and project scope; advertising and awarding a 
procurement contract; obtaining a construction permit; installing the 
control technology; testing the control technology; and obtaining or 
modifying an operating permit.\78\ These timeframes are intended to 
accommodate a plant's need to conduct an engineering assessment of the 
possible NOX mitigation technologies necessary to then 
develop and send a bid request to potential suppliers. Control 
specifications are variable based on individual plant configuration and 
operating details (e.g., operating temperatures, location restrictions, 
and ash loads). Before making potential large capital investments, 
plants need to complete these careful reviews of their system to inform 
and develop the control design they request. They then need to solicit 
bids, review bid submissions, and award a procurement contract--all 
before construction can begin.
---------------------------------------------------------------------------

    \78\ Final Report: Engineering and Economic Factors Affecting 
the Installation of Control Technologies for Multipollutant 
Strategies, EPA-600/R-02/073 (Oct. 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.
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    An appropriate regional control implementation timeframe should 
also accommodate the additional coordination of labor and material 
supply necessary for any regional NOX mitigation efforts. 
For example, the total construction labor for a SCR system associated 
with a 500-megawatt (MW) EGU is in the range of 330,000 to 350,000 
person-hours, with boilermakers accounting for approximately half of 
this time.\79\ In a 2017 industry survey, one of the largest shortages 
of union craft workers was for boilermakers. This shortage of skilled 
boilermakers is expected to rise due to an anticipated nine percent 
increase in boilermaker labor demand growth by 2026, coupled with 
expected professional retirements and comparatively low numbers of 
apprentices joining the workforce.\80\ The shortage of and demand for 
skilled labor, including other craft workers critical to pollution 
control installation, is pronounced in the manufacturing industry. The 
Association of Union Constructors conducted a survey of identified 
labor shortages and found that boilermakers were the second-most 
frequently reported skilled labor market with a labor shortage.\81\ 
Moreover, recovery efforts from the natural disasters of recent 
hurricanes (e.g.,

[[Page 65896]]

Harvey, Irma, Florence, and Michael) and wildfires in 2017 are expected 
to further tighten the labor supply market in manufacturing in the near 
term.\82\ The EPA determined that these tight labor market conditions 
within the relevant manufacturing sectors, combined with regional 
NOX mitigation initiatives, would likely lead to some 
sequencing and staging of labor pool usage in implementing control 
technologies, rather than simultaneous construction across all efforts. 
This sector-wide trend supports SCR and SNCR installation timeframes 
for a regional program that exceed the demonstrated single-facility 
installation timeframe.
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    \79\ Id.
    \80\ Occupational Outlook Handbook. Bureau of Labor Statistics. 
Available at https://www.bls.gov/ooh/construction-and-extraction/boilermakers.htm.
    \81\ Union Craft Labor Supply Survey. The Association of Union 
Constructors. Exhibit 4-2 at page 29. Available at https://www.tauc.org/files/2017_TAUC_UNION_CRAFT_LABOR_SUPPLY_REVISEDBC_FINAL.pdf.
    \82\ Skilled Wage Growth Less Robust, Worker Shortage Still an 
Issue. Industry Week. October 23, 2017. Available at http://www.industryweek.com/talent/skilled-wage-growth-less-robust-worker-shortage-still-issue.
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    In addition to labor supply, NOX post-combustion control 
projects also require materials and equipment such as steel and cranes. 
Sheet metal workers, necessary for steel production, are reported as 
having a well-above-average supply-side shortage of labor.\83\ This, 
coupled with growth in steel demand estimated at three percent in 2018 
suggests that there may be a constricted supply of steel needed for 
installation of new post-combustion controls.\84\ Similarly, cranes are 
critical for installation of SCRs, components of which must be lifted 
hundreds of feet in the air during construction. Cranes are also facing 
higher demand during this period of economic growth, with companies 
reporting a shortage in both equipment and available labor.\85\ \86\ 
The tightening markets in relevant skilled labor, materials, and 
equipment, combined with the large number of installations that could 
be required under a regional air pollution transport program, 
necessitates longer installation timetables relative to what has been 
historically demonstrated at the facility level.
---------------------------------------------------------------------------

    \83\ Union Craft Labor Supply Survey. The Association of Union 
Constructors. Exhibit 4-2 at page 29. Available at https://www.tauc.org/files/2017_TAUC_UNION_CRAFT_LABOR_SUPPLY_REVISEDBC_FINAL.pdf.
    \84\ Worldsteel Short Range Outlook. October 16, 2017. Available 
at https://www.worldsteel.org/media-centre/press-releases/2017/worldsteel-Short-Range-Outlook-2017-2018.html.
    \85\ See, e.g., Seattle Has Most Cranes in the Country for 2nd 
Year in a Row--and Lead is Growing. Seattle Times. July 11, 2017. 
Available at https://www.seattletimes.com/business/real-estate/seattle-has-most-cranes-in-the-country-for-2nd-year-in-a-row-and-lead-is-growing/.
    \86\ See RLB Crane Index, January 2018 in the docket for this 
action.
---------------------------------------------------------------------------

    Further, scheduled curtailment, or planned outage, for pollution 
control installation would be necessary to complete SCR or SNCR 
projects on a regional scale. Given that peak demand and rule 
compliance would both fall in the ozone season, sources would likely 
need to schedule installation projects for the ``shoulder'' seasons 
(i.e., the spring and/or fall seasons), when electricity demand is 
lower than in the summer, reserves are higher, and ozone season 
compliance requirements are not in effect. If multiple units were under 
the same timeline to complete the retrofit projects as soon as feasible 
from an engineering perspective, this could lead to bottlenecks of 
scheduled outages as each unit attempts to start and finish its 
installation in roughly the same compressed time period. Thus, any 
compliance timeframe that would assume installation of new SCR or SNCR 
controls should be developed to reasonably encompass multiple shoulder 
seasons to accommodate scheduling of curtailment for control 
installation purposes and better accommodate the regional nature of the 
program.
    Finally, the time lag observed between the planning phase and in-
service date of SCR operations in certain cases also illustrates that 
site-specific conditions can lead to installation times of four years 
or longer--even for individual power plants. For instance, SCR projects 
for units at the Ottumwa power plant (Iowa), Columbia power plant 
(Wisconsin), and Oakley power plant (California) were all in the 
planning phase in 2014. By 2016, these projects were under construction 
with estimated in-service dates of 2018.\87\ Similarly, individual SNCR 
projects can exceed their estimated 16-month construction timeframe. 
For example, the SNCR installation at the Jeffrey power plant (Kansas) 
was in the planning phase in 2013 but not in service until 2015.\88\ 
Further, large-scale projects also illustrate that timelines can extend 
beyond the general estimate for a single power plant when the project 
is part of a larger, multifaceted air pollution reduction goal. For 
instance, the Big Bend power plant in Florida completed a multifaceted 
project that involved adding SCRs to all four units as well as 
converting furnaces, over-fire air changes, and making windbox 
modifications. A decade elapsed between the initial planning stages and 
completion.\89\
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    \87\ 2014 EIA Form 860. Schedule 6. Environmental Control 
Equipment.
    \88\ 2013 EIA Form 860, Schedule 6, Environmental Control 
Equipment.
    \89\ Big Bend's Multi-Unit SCR Retrofit. Power Magazine. March 
1, 2010. Available at http://www.powermag.com/big-bends-multi-unit-scr-retrofit/.
---------------------------------------------------------------------------

    In summary, while facility-level SCR and SNCR projects can 
themselves take up to 39 and 16 months, respectively, a comprehensive 
and regional emission reduction effort requires more time to 
accommodate the labor, materials, and outage coordination for these two 
types of control strategies. Given the extra weight given to SCR 
controls due to their greater NOX reduction efficiency and 
cost-effectiveness as well as the time to regionally develop and 
implement SCRs as a control strategy for CSAPR Update states, the EPA 
concludes that 48 months would be a reasonable and expeditious 
timeframe to coordinate the planning and completion of further regional 
NOX mitigation efforts.
    Comment: Several commenters contend that the EPA's assessment of 
emission reductions available from existing EGU NOX controls 
in the CSAPR Update is insufficient. These comments suggested that 
additional reductions are available from existing SCR NOX 
controls before 2023 because the EPA's use of a 0.10 lb/mmBtu emission 
rate in its calculation of emission budgets was not reflective of the 
total reduction potential from SCR optimization. The commenters provide 
analysis using the unit-level ozone-season emission rates between 2005-
2016 and suggest that the EPA should have relied on each unit's best 
performing ozone-season emission rate from a given year in that period 
to determine the emission rate at which each unit's SCR is fully 
optimized. The commenters suggest that because the optimization of SCRs 
at a lower rate can be achieved prior to 2023, the EPA should examine 
air quality in an earlier analytic year.
    Response: The EPA does not agree that it is necessary to consider 
any further emission reductions ostensibly available from the 
optimization of existing SCRs. As described in the following 
paragraphs, the agency's assessment of NOX reduction 
potential from existing SCR controls used in establishing CSAPR Update 
emission budgets remains appropriate. Moreover, as discussed later in 
this notice, the best data available at this time--2017 EGU emission 
data reflecting CSAPR Update implementation--indicate that in general 
these controls are optimally operating to mitigate NOX 
emissions across the CSAPR Update region. Thus, control optimization 
for existing SCRs has already been addressed in the CSAPR Update and 
emission reductions associated with the ``additional'' control 
technology proposed by commenters are being commensurately realized 
through implementation of the CSAPR Update's

[[Page 65897]]

allowance trading program. The EPA therefore does not agree that a 
control strategy that is already being appropriately implemented should 
guide its selection of a future analytic year.
    In the CSAPR Update, the EPA determined that, based on an 
aggregation of unit-level emission rates, an average fleet-wide 
emission rate of 0.10 lb/mmBtu would represent the optimized operation 
of SCR controls that were not already being operated and optimized. 81 
FR 74543. In concluding that this rate would be appropriate for 
calculating emission reduction potential from implementation of this 
control strategy, the EPA recognized that some units would have 
optimized rates above that level and some below that level. 81 FR 
74543. The EPA explained that it used data from 2009 through 2015 and 
calculated an average NOX ozone-season emission rate across 
the fleet of coal-fired EGUs with SCR for each of those years. It then 
selected the third-best (i.e., third-lowest) yearly rate for each unit, 
noting that it did not find it prudent to use the first- and second-
best yearly rate because the best-performing data from those years is 
likely to reflect the utilization of new SCR systems, all of whose 
components were new in that year (e.g., new layers of catalyst), and 
may not be representative of an ongoing, achievable NOX rate 
once one or more SCR components have begun to degrade with age. Id. The 
third-to-lowest year average was 0.10 lb/mmBtu. In the CSAPR Update, 
the EPA applied that fleet-wide average to units with SCR that were not 
already emitting at or below that NOX emission rate. For 
units operating at or below that level in 2015 (the starting year from 
EPA's budget-setting methodology), the EPA continued to utilize that 
lower rate. The EPA in the CSAPR Update already addressed comments 
regarding the reasonableness of its approach to calculating an 
appropriate emission rate and did not, in this action, request 
additional comment on the EPA's determination finalized in the CSAPR 
Update that 0.10 lb/mmBtu was a reasonable rate to represent optimized 
SCR controls.\90\ 81 FR 74544. The issue is also currently the subject 
of litigation before the D.C. Circuit in Wisconsin v. EPA, No. 16-1406. 
Accordingly, the EPA does not believe this issue is properly within the 
scope of this action.
---------------------------------------------------------------------------

    \90\ 83 FR 31937 (indicating that EPA is not reconsidering or 
reopening any analyses conducted or determinations made in the CSAPR 
Update).
---------------------------------------------------------------------------

    The EPA continues to believe its approach in the CSAPR update was 
prudent and reasonable for purposes of calculating emission reductions 
achievable from the optimization of existing SCR controls and is not 
changing its approach in this action. While commenters suggest 
alternative emission rates would have been more appropriate, they have 
not demonstrated that the EPA's approach is unreasonable. In 
particular, the EPA does not agree with commenters that suggest that 
the EPA should have used a value derived by relying on a 2005-2016 
baseline (as opposed to the 2009-2015 baseline years used by EPA) and 
selecting the single best year (i.e., the lowest average ozone-season 
rate for SCR-controlled units in any given year) rather than the third-
best year. The EPA continues to find, as it did in the CSAPR Update, 
that using a baseline starting in 2009 is more appropriate because that 
year coincided with the onset of annual operation for most SCR controls 
under the CAIR annual NOX program. Prior to 2009, these 
controls operated seasonally, which allowed substantial time during the 
fall, winter, and spring for routine maintenance and repair of the SCR, 
as well as replacement of catalyst. This seasonal operation is not 
representative of current or reasonably anticipated future operation of 
these units that have been and continue to be subject to annual 
NOX requirements, first under CAIR and now under CSAPR. 
Further, the agency notes that the power sector has undergone 
significant changes in recent years due to economic factors and 
technological advances (e.g., natural gas production from horizontal 
fracking technology advancements). As a result, the agency believes 
that it is more appropriate to focus its analysis on relatively more 
recent years of data, rather than to include a significant number of 
years that preceded the set of current economic and technological 
conditions affecting and driving outcomes in the sector. In other 
words, the agency is more confident that recent data are an appropriate 
basis to reasonably project future economic and technological 
conditions with respect to operation of EGUs and their NOX 
controls. The agency is not confident that older (i.e., pre-2009 data) 
would be an appropriate basis to reasonably project future economic and 
technological conditions with respect to operation of EGUs and their 
NOX controls. The EPA therefore believes its approach in the 
CSAPR Update was reasonable and preferable for the 2008 ozone NAAQS 
compliance assumptions, and retains that approach in this action.
    The EPA also believes that its decision to rely on the third-best 
seasonal emission rate was more appropriate than the commenter's 
suggestion that the EPA select the emission rate from the best 
performing year. By selecting the third-best seasonal rate, the EPA 
avoided selecting times when SCR controls were newly constructed for 
most units or may have been recently refreshed/replaced with all-new 
catalyst. Complete catalyst change may have occurred at the onset of 
major NOX reduction programs or at a time when the purpose 
of the catalyst use changed (such as simultaneously optimizing for 
mercury (Hg) removal under the Mercury and Air Toxic Standards (MATS) 
program). By selecting the third-best seasonal rate out of the 2009-
2015 time period, the agency evaluated repeatable, low-NOX 
control operation consistent with ongoing operation and maintenance of 
SCR controls.
    Comment: A commenter asserts that the EPA should consider operation 
of existing SNCR controls for purposes of selecting a future analytic 
year, rather than considering cost-effectiveness to eliminate 
utilization of some potentially feasible controls. The commenter 
contends that the EPA's use of cost-effectiveness as a bright line for 
determining what measures are appropriate for fully meeting the good 
neighbor SIP obligations for upwind states is both erroneous and, as 
applied here, arbitrary and capricious. The commenter states that, even 
if the CSAPR Update could be read to conclude that operation of SNCR 
was not cost-effective at that time, this conclusion was limited to the 
purposes of the partial solution in that rule. The commenter claims 
that the CSAPR Update did not deem operation of SNCR to never be cost-
effective, particularly in circumstances where the EPA has found no 
other less-expensive way to reduce emissions. The commenter concludes 
that, if EPA is using cost to eliminate potentially available 
solutions, it must reevaluate these costs, not merely rest on cost data 
from the CSAPR Update that are now several years old.
    Response: The EPA does not agree that the timeframe for operating 
existing SNCR should influence its selection of a future analytic year. 
As discussed earlier, the EPA's assessment in the CSAPR Update 
indicated that the $3,400 per ton NOX control stringency 
(representing turning on idled SNCR) was not cost-effective relative to 
other short-term control strategies considered in that rulemaking. This 
conclusion was based on the fact that EGUs with idled SNCR in the CSAPR 
Update analysis

[[Page 65898]]

were relatively few and relatively small, such that few NOX 
reductions were incrementally achievable from operation of idled SNCR 
compared to other near-term control strategies available, while the 
difference in cost per ton compared to the other strategies was 
relatively large. Accordingly, the EPA found that the level of 
NOX control stringency reflecting operation of idled SNCR 
did not maximize NOX reduction potential and air quality 
improvement relative to cost. Although the commenters suggest that the 
EPA should reevaluate the cost-effectiveness of operating idled SNCR, 
the commenters have not provided any data to the agency that would 
indicate the agency's analysis would significantly change. Rather, the 
EPA's conclusion in the CSAPR Update is further supported by reported 
2017 data which show that there were 55 coal units operating in the 
CSAPR Update region with SNCR installed with a weighted average ozone-
season emission rate of 0.14 lb/mmBtu, indicating that existing SNCR-
controlled units are already widely operating and would likely provide 
little opportunity for additional reductions.\91\
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    \91\ Preliminary data for the 2018 ozone season, which became 
available after the proposal for this action and after the close of 
the comment period, continue to support this conclusion by showing 
that there were 48 coal units operating in the CSAPR Update region 
with SNCR installed with a weighted average ozone-season emission 
rate of 0.148 lb/mmBtu.
---------------------------------------------------------------------------

    The EPA notes that the agency's analysis in the CSAPR Update was 
specific to the conditions evaluated therein. Thus, the EPA's 
conclusion that the feasibility of implementing SNCR should not inform 
the potential compliance timeframe and the identification of the future 
analytic year would not have precluded the EPA from considering whether 
the operation of SNCR would be cost-effective relative to the 
installation of the post-combustion controls discussed earlier in this 
section. Had the EPA, at step 1 of the four-step framework, identified 
continued downwind air quality problems in the future analytic year, 
the EPA could have considered at step 3 whether it would be cost-
effective to require upwind states linked at step 2 to make emission 
reductions consistent with operation of existing SNCR relative to other 
longer-term control strategies like the implementation of new post-
combustion controls. However, because EPA has already concluded that 
operation of existing SNCR is not cost-effective in the near term, the 
EPA does not agree that it would be reasonable for EPA to select an 
earlier analytic year that would only be consistent with the timeframe 
for implementing that particular compliance strategy.
    Comment: Several commenters contend that the EPA's implementation 
of emission reductions via an allowance trading program is not 
sufficient to guarantee that existing SCRs will continue to run in the 
future (especially in light of low allowance prices). The commenters 
therefore contend that further reductions are available from existing 
EGU controls. The commenters suggest that EPA needs to ensure daily 
operation of SCR controls and that the seasonal nature of the trading 
program does not do so.
    Response: The EPA begins by pointing out that the commenter appears 
to be attempting to reopen a determination made in the CSAPR Update 
regarding how best to implement the emission reductions required by 
that rule. The question of whether an allowance trading program is 
sufficient to ensure emission reductions, relative to other forms of 
emission limitations, was raised by commenters and addressed in the 
CSAPR Update.\92\ The EPA did not, in this action, request additional 
comment on the appropriateness of an allowance trading program to 
ensure the CSAPR Update emission reductions would be achieved,\93\ and 
it is therefore not re-opening the issue in this action. Moreover, even 
if this issue were within the scope of this action, the commenters have 
not explained how this concern should influence the EPA's selection of 
the future analytic year used in this action. Accordingly, the relative 
effectiveness of the CSAPR Update allowance trading program to ensure 
emission reductions commensurate with optimizing SCR, as compared to 
daily limits, is outside the scope of this action.
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    \92\ CSAPR Update--Response to Comment (EPA-HQ-OAR-2015-0500-
0572).
    \93\ 83 FR 31937 (indicating that EPA is not reconsidering or 
reopening any analyses conducted or determinations made in the CSAPR 
Update).
---------------------------------------------------------------------------

    Nonetheless, the EPA notes that current data refute commenters' 
assertion that allowance trading has been insufficient to achieve the 
emission reductions associated with the operation and optimization of 
existing SCRs. The best currently available data indicate that sources 
in in CSAPR Update states are indeed operating SCRs in order to comply 
with the CSAPR Update allowance trading program. Data from 2017, the 
first year of ozone-season data that would be influenced by the CSAPR 
Update compliance requirements, are consistent with the EPA's 
assumption that the allowance trading program would incentivize SCR 
operation on a fleet-wide level. The average emission rate for the 83 
SCR-controlled units in the CSAPR Update region that were not 
previously emitting with a NOX rate at or below 0.10 lb/
mmBtu in 2016 and are still operating in 2017 dropped by 45% from 0.22 
lb/mmBtu to 0.12 lb/mmBtu between 2016 and 2017--the first ozone season 
of CSAPR Update implementation.\94\ Not only is the program effective 
at encouraging these particular units to achieve a better performance 
rate, it also encourages the wider universe of SCR-controlled units to 
keep operating their controls. In 2017, 261 of 274 EGUs with SCR in the 
U.S. had ozone-season emission rates below 0.20 lb/mmBtu (194 of 202 in 
CSAPR Update states), indicating that they were likely operating their 
post-combustion controls throughout most of the ozone season. The 274 
units were operating at an average emission rate of approximately 0.088 
lb/mmBtu. Of the 13 units with 2017 emission rates above 0.20 lb/mmBtu, 
five are located in states outside of the CSAPR Update region, five 
have preliminary 2018 ozone season NOX emission rates below 
0.20 lb/mmBtu, and one has retired (Killen unit 2 in Ohio).\95\ 
Consequently, the EPA finds that on average, SCR-controlled units 
appear to be operating their SCRs throughout the season, and that the 
petitioner's assertion regarding the likelihood of not operating 
controls is therefore not supported by the most recently available 
data. The EPA has not identified a basis for reevaluating emission 
reductions available from optimizing SCRs and it therefore does not 
believe it would be reasonable in light of this data to select an 
earlier analytic year on the basis of this control strategy.
---------------------------------------------------------------------------

    \94\ Preliminary data for the 2018 ozone season, which became 
available after the proposal for this action and after the close of 
the comment period, continue to support this conclusion. The average 
emission rate for the 73 SCR-controlled units in the CSAPR Update 
region that were not previously emitting with a NOX rate 
at or below 0.10 lb/mmBtu in 2016 and are still operating in 2018 
dropped by 40% from 0.201 lb/mmBtu to 0.121 lb/mmBtu between 2016 
and 2018--the second ozone season of CSAPR Update implementation. 
Additionally, preliminary 2018 data indicate that the 192 coal units 
operating in the CSAPR Update region with SCR installed had a 
weighted average ozone-season NOX emission rate of 0.086 
lb/mmBtu.
    \95\ Source: AMPD (ampd.epa.gov), EPA, 2018.
---------------------------------------------------------------------------

    Notwithstanding the EPA's finding that SCRs are currently operating 
consistent with optimizing NOX reduction potential, the EPA 
notes that SCR operation is not the sole metric with which to gauge 
success of a cap-and-trade program. Rather, the success of the program 
is ultimately indicated

[[Page 65899]]

not by the employment of any particular control strategy, but rather by 
regionwide and state-level emission reductions. The CSAPR Update has 
contributed to a 21 percent reduction in regionwide NOX 
emissions in its first year, below the cumulative level of the budgets, 
and all states operated well below their assurance levels.\96\ If some 
SCRs are not performing at lower rates, but commensurate reductions are 
achieved elsewhere in the state, this demonstrates one of the benefits 
of a market-based trading program: It helps participants identify and 
make the least-cost reductions. The EPA does not agree that such a 
result, even accepting the commenter's analysis for the sake of 
argument, demonstrates that the allowance trading program is 
ineffective at achieving the intended emission reductions simply 
because the covered sources chose an alternative pathway to comply with 
the program's requirements.
---------------------------------------------------------------------------

    \96\ Source: AMPD (ampd.epa.gov), EPA, 2018.
---------------------------------------------------------------------------

    The EPA has also not identified a need to supplement the allowance 
trading program established in the CSAPR Update with additional 
emission limits in order to promote the daily operation of controls. 
The EPA examined the hourly NOX emissions data reported to 
the EPA and did not observe a significant number of instances of units 
selectively turning down or turning off their emission control 
equipment during hours with high generation. SCR-controlled units 
generally operated with lower emission rates during high generation 
hours, suggesting SCRs generally were in better operating condition--
not worse condition, let alone idling--during those days/hours. In 
other words, the EPA compared NOX rates for EGUs from hours 
with high energy demand, 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 and that consequently a narrower compliance timeframe is 
needed to incentivize them to run on a daily basis. An examination of 
average daily NOX emission rates for SCR-controlled units in 
the CSAPR Update region shows that 2017 emission rates were 
significantly lower than 2016 and 2015. The seasonal decline in 
emission rate was also observed on a daily basis in the CSAPR Update 
region: Out of 153 days in the ozone season in 2017, all 153 days had 
lower average emissions rates among SCR-controlled sources than the 
same day in 2016.\97\ 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. Thus, the EPA does not 
agree that there are additional limitations that should be implemented 
to achieve emission reductions from the optimization of existing SCRs.
---------------------------------------------------------------------------

    \97\ Source: AMPD (ampd.epa.gov), EPA, 2018.
---------------------------------------------------------------------------

    Comment: One commenter suggests that the EPA can achieve additional 
emission reductions in the short term by reducing budgets to account 
for the accumulation of banked allowances. The commenter contends that 
this would support higher allowance prices under the CSAPR 
NOX Ozone Season Group 2 program, thereby incentivizing 
continued SCR operation and further cost-effective reductions in 
NOX emissions.
    Response: The EPA first notes that, to the extent the commenter is 
challenging the EPA's decision in the CSAPR Update permit the continued 
use of certain banked allowances, the agency already addressed comments 
regarding this issue in that rulemaking, 81 FR 74557, and did not, in 
this action, request additional comment on its determination with 
regard to this issue as finalized in the CSAPR Update.\98\ The issue is 
also currently the subject of litigation before the D.C. Circuit in 
Wisconsin v. EPA. Accordingly, the EPA does not believe concerns 
regarding the bank of allowances that were carried over in the CSAPR 
Update are properly within the scope of this action. To the extent the 
commenter suggests that the EPA eliminate the current bank of 
allowances to achieve further NOX emission reductions in the 
future, the EPA does not believe that the mere presence of a bank of 
allowances indicates that such additional emission reductions are 
actually achievable in practice. Current program design elements, 
specifically the assurance provisions, are already in place to 
incentivize the control operation referred to by the commenter and 
ensure emission reductions. Moreover, the most recently observed 
historical data suggest these controls are widely operating in the 
compliance period and that their operation is not undermined by the 
existence of the bank as suggested by the commenter.
---------------------------------------------------------------------------

    \98\ 83 FR 31937 (indicating that EPA is not reconsidering or 
reopening any analyses conducted or determinations made in the CSAPR 
Update).
---------------------------------------------------------------------------

    First, the CSAPR Update includes assurance provisions that help 
ensure that EGUs in each covered state collectively limit their 
emissions. These provisions include an assurance level for each state 
that serves as a statewide emissions limit that cannot be exceeded 
without penalty. 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 collective 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 
that emissions are reduced in each covered state of a region-wide 
trading program while acknowledging and accommodating the inherent 
variability in electricity generation and NOX emissions due 
to year-to-year changes in power sector market conditions. These 
assurance levels help ensure that emission reductions, including those 
associated with the optimization of existing controls on which the 
CSAPR Update budgets were based, continue to be implemented. Therefore, 
even with fleet turnover and a growing allowance bank, EPA anticipates 
that the assurance limit will maintain downward pressure on state-level 
emissions.
    Second, the commenter misconstrues the emissions impact of an 
allowance bank and does not provide further evidence that would be 
needed to show that real-world emission reductions are available. A 
bank of allowances, first and foremost, represents emission reductions 
and not an emissions liability. Specifically, an allowance bank 
represents allowable emissions that have not been emitted into the 
atmosphere, converted into ozone, or transported downwind to impact the 
ability of downwind areas to attain or maintain the NAAQS. The 
commenter essentially asserts that an allowance bank will necessarily 
undermine the operation of NOX controls. However, as 
described previously, the best currently available data (i.e., recent 
EGU emissions data with CSAPR Update implementation) indicate that 
existing controls are being operated consistent with optimizing for 
NOX mitigation. As such, the agency finds that, at this 
time, the accumulation of the allowance bank primarily represents 
emission reductions, and is not creating the incentive for controls to 
be idled. Because the emission reductions sought

[[Page 65900]]

by the commenter (via operation of existing SCRs) are in fact already 
being implemented across the region, the EPA has no reason to believe 
that additional emission reductions could be achieved by either 
eliminating the banked allowances or adjusting the budgets in some 
manner commensurate with the current level of banked allowances. As 
such, the emission reduction potential asserted by commenters is 
hypothetical and the EPA has no reason to believe at this time that the 
adjustments to the bank would lead to significant real-world 
NOX reductions.
    Comment: The EPA received several comments on the proposed 
determination regarding its assessment of new EGU NOX 
control strategies, suggesting that new NOX emission 
mitigation technologies are available prior to 2023 and that the EPA's 
reliance on the feasibility of regional installation of SCRs for 
selection of a future analytic year is arbitrary and capricious. The 
commenter further questions the EPA's estimate for installation of SCRs 
and suggests they can be installed at a faster pace, noting that the 
EPA allowed for just 30 months under the initial CSAPR promulgated in 
2011. They assert that the EPA has not adequately demonstrated that the 
market for labor and materials, while observed to be strained, is more 
strained than previous environments. The EPA notes that other 
commenters agreed with the EPA's timeline for implementation of new 
mitigation technologies and asserted that that it would be infeasible 
for EGUs to install new SCRs or SNCRs in less than four years. The 
commenters observe that in many cases it may take longer due to 
planning and the outage window required for implementation of such 
controls. They suggest that the EPA should consider a later analytic 
year because not doing so puts the EPA at risk of over-controlling as 
some plants that could not install controls by 2023 would install them 
at a later date when those reductions are no longer needed.
    Response: For the reasons discussed earlier in this notice, the EPA 
believes that conducting a regional analysis ensures that the Agency 
can fully evaluate remaining obligations pursuant to the good neighbor 
provision with respect to the 2008 ozone NAAQS. As the EPA has 
routinely found throughout nearly 20 years of interstate transport 
rulemakings, the ozone transport problem is regional in nature, in that 
downwind states' problems attaining and maintaining the ozone NAAQS 
result from the contribution of pollution from multiple upwind states, 
with multiple upwind states routinely contributing to multiple downwind 
states' air quality problems in varying amounts. With respect to the 
2008 ozone NAAQS, the EPA determined in the CSAPR Update rulemaking 
that, collectively, 22 upwind states contributed at or above the 1 
percent threshold to downwind air quality problems at one or more of 19 
different receptor locations in the eastern United States. Individual 
upwind states contributed to between 1 and 8 downwind nonattainment or 
maintenance receptors and, in a number of cases, upwind states also 
contained at least one receptor indicating a downwind air quality 
problem to which other states contributed. Given the multi-faceted 
nature of ozone transport, the Supreme Court has acknowledged that the 
EPA is faced with the burden to determine ``how to differentiate among 
otherwise like contributions of multiple upwind states.'' EME Homer 
City, 134 S. Ct. at 1607. As the Supreme Court acknowledged, the 
statute is silent as to which metric the EPA should use to decide the 
apportionment of the shared obligation to address a downwind air 
quality problem among multiple upwind states--what the Court referred 
to as the ``thorny causation problem.'' Id. at 1603-04.
    Accordingly, because ozone air quality problems (and in particular 
interstate transport) are regional in nature, the EPA has developed--
and the Supreme Court has endorsed--a regional approach for quantifying 
individual states' emission reduction obligation. In particular, the 
EPA has developed a two-pronged metric (constituting steps 2 and 3 of 
the four-step transport framework) to identify the amounts of an upwind 
state's emissions that ``contribute significantly to nonattainment'' or 
``interfere with maintenance'' of the ozone NAAQS in a downwind state 
to which it is linked. The EPA identifies those emissions that both: 
(1) Contribute 1 percent or more of the NAAQS to an identified downwind 
air quality problem (i.e., the identification of linkage at CSAPR 
framework step 2); and (2) can be eliminated through implementation of 
cost-effective control strategies, applied uniformly to all states 
linked to an air quality problem (i.e., the quantification of emission 
reductions at CSAPR framework step 3). When evaluating at step 3 
whether a control strategy is cost-effective for this purpose, the EPA 
considers the incremental cost per ton of emissions reduced, the 
magnitude of emissions that can be reduced using a particular control 
strategy, and the downwind air quality benefits of implementing such 
emission reductions. 81 FR at 74519. The Supreme Court found this 
approach, as applied in the original CSAPR rulemaking, to be ``an 
efficient and equitable solution to the allocation problem the Good 
Neighbor Provision requires the Agency to address.'' Id. at 1607. The 
Court held that this approach is: ``[e]fficient because EPA can achieve 
the levels of attainment, i.e., of emission reductions, the 
proportional approach [urged by respondants in EME Homer City] aims to 
achieve, but at a much lower overall cost. Equitable because, by 
imposing uniform cost thresholds on regulated States, EPA's rule 
subjects to stricter regulation those States that have done relatively 
less in the past to control their pollution. Upwind States that have 
not yet implemented pollution controls of the same stringency as their 
neighbors will be stopped from free riding on their neighbors' efforts 
to reduce pollution. They will have to bring down their emissions by 
installing devices of the kind in which neighboring States have already 
invested.'' Id.
    Given the regional nature of the ozone pollution problem and the 
requirement that the EPA determine the remainder of its good neighbor 
FIP obligation with respect to the 2008 ozone NAAQS for 21 states in 
the CSAPR Update region, the EPA reasonably applied the regional 
framework endorsed by the Supreme Court as an ``efficient and 
equitable'' approach to resolving the remaining good neighbor 
obligations interstate transport problem. Id. at 1607. Accordingly, the 
EPA evaluated the contributions of all upwind states that are linked to 
a given downwind air quality problem, rather than quantifying the 
significant contributions of single states or sectors in a vacuum. 
Similarly, the EPA evaluated potential control strategies to address 
that contribution on a regional, rather than facility- or state-
specific, basis. Such an approach also ensures that each state's 
contributions to downwind air quality problems are quantified relative 
to the contribution of the other contributing states.
    The commenters are also incorrect to assert that the agency's 
conclusion that 48 months should be provided for the implementation of 
new SCR is in conflict with its position in the original CSAPR 
rulemaking. In the original CSAPR, the EPA established NOX 
emission budgets in CSAPR based on a cost threshold of $500 per ton, 
which was not anticipated to drive any new SCR installation in either 
compliance phase. See Table VII.C.2-1, 76 FR 48279 and discussion at 76 
FR 48302. As such,

[[Page 65901]]

this control strategy was not central to CSAPR Update implementation.
    Notwithstanding that SCR post-combustion controls were omitted from 
the EPA's CSAPR emissions budgets at the time, to the extent labor and 
supply markets were a consideration for installation timing 
requirements for scrubbers in CSAPR in 2011, those variables have 
changed over the last seven years. For instance, the EPA noted a sharp 
drop in boilermaker person-hours worked between 2008 and 2010, 
suggesting that the market at that time had substantial underutilized 
capacity whereas today's industry surveys identify labor shortages.\99\ 
The EPA also disagrees with the commenter's assertion that these 
observations regarding crane and steel markets are not reasonable and 
thus should not influence the EPA's analysis. While not the sole reason 
for the EPA's conclusion that a 48-month timeframe would be necessary 
for region-wide control installation, the EPA believes the market for 
labor and materials is a relevant weight-of-evidence consideration in 
light of reports from companies that supply the tower cranes that there 
is a shortage of both equipment and available labor. The crane index 
and quarterly construction costs reports are metrics regularly used to 
evaluate construction activity by construction consultants and provide 
a sense of equipment demand. Moreover, the commenter provides no 
evidence to refute the EPA's finding that these equipment markets are 
facing periods of higher demand.
---------------------------------------------------------------------------

    \99\ Labor Availability for the Installation of Air Pollution 
Control Systems at Coal-Fired Power Plants. Andover Technology 
Partners. October 18, 2011. Available at http://www.andovertechnology.com/images/boilermaker%20labor%20availability%20final_jes_%2010%2018%202011.pdf.

---------------------------------------------------------------------------

    Thus, while the EPA does not agree that it is reasonable to 
consider a timeframe longer than four years for the expeditious, 
region-wide implementation of SCR controls, neither does the EPA agree 
that it would be reasonable to assume any shorter timeframe under the 
circumstances.
    Comment: Some commenters assert that the EPA could identify an 
earlier analytic year based on the installation of new SNCRs because 
the controls can be implemented more quickly than SCRs.
    Response: As explained above, the EPA does not agree that that the 
regional installation of SNCRs should drive EPA's selection of an 
appropriate future analytic year, primarily because SCR controls are 
more effective at reducing NOX emissions and because SCR 
controls are more regionally cost-effective at mitigating 
NOX. Specifically, the EPA estimates the amount of 
reductions available by SCR installation at uncontrolled sources is 
nearly triple that available from SNCR installation.\100\ This 
difference is significant because the agency is tasked with issuing 
FIPs that fully resolve good neighbor obligations and therefore the 
agency finds it reasonable to focus its analysis on the timeframe for 
installing controls that would be best suited to achieve that goal in 
terms of NOX mitigation, downwind air quality improvement, 
and cost--i.e., SCR controls. Further, as described in the subsequent 
paragraphs, the EPA finds that the regionally implementing 
NOX reductions from SNCR would still take a significant 
amount of time and would significantly hamper the ability of these EGUs 
to obtain further emission reductions from installation of SCRs in the 
future.
---------------------------------------------------------------------------

    \100\ Based on 2017 ozone-season NOX data. Applying 
SCR reduction potential of 90 percent (up to a 0.07 lb/mmBtu floor) 
as opposed to 25 percent reduction for SNCR to 2017 emission levels 
for uncontrolled coal sources emitting at 0.15 lb/mmBtu or greater.
---------------------------------------------------------------------------

    First, the EPA noted above that the estimated timing to install 
SNCR for multiple boilers at one power plant is approximately 16 
months--and can take even longer in practice. Accounting for the 
regional factors that must be considered (described previously), it 
would take more than 16 months for this control strategy to be 
regionally implemented. Starting with promulgation of this action in 
December of 2018, the agency believes it would take well into 2020 for 
these controls to be feasibly implemented, regionally. As a result, it 
is very unlikely that these controls could affect ozone season 
NOX attainment demonstrations made in July 2021 for areas 
designated serious for the 2008 ozone NAAQS.
    Finally, the agency notes the potential for inefficiency in 
effectively controlling NOX emissions in the long term by 
prioritizing SNCR controls now to the detriment of future 
NOX mitigation potential from SCR controls. Installing an 
SNCR at a unit in the near term and then upgrading or retrofitting the 
unit to an SCR a few years down the road would effectively increase the 
cost per ton of that eventual SCR installation as compared to 
installing the SCR in the first place. The main difference between the 
two systems is the temperature window at which the reaction takes 
place. With an SNCR, that window is 900-1050 degrees Celsius, whereas 
it drops to a range of 160 to 350 degrees Celsius for an SCR. These 
differentials in optimal temperatures influence the location and 
modifications necessary for each retrofit technology and therefore 
complicate any transition from SNCR to SCR. SNCR can be described as 
including a silo or tank (for reagent), a conveyance system for the 
reagent, and a properly placed injection lance in the furnace. In terms 
of volume occupied, over 90 percent of the system exists outside the 
flue gas path. The SCR system, on the other hand, requires a catalytic 
reactor and is placed downstream of the economizer. An SCR occupies a 
significant space as the catalytic reactor resides in a dedicated 
multi-story structure elevated above ground elevation. Over 90 percent 
of an SCR's volume exists within the flue and duct work.
    The two systems are unique and distinct from one another in their 
approach to reducing NOX and the equipment cannot be shared 
or dual-purposed due to the size differences, conversion rates, and 
reagent material flows based on the application (namely, the location 
within the flue gas stream). Consequently, almost none of the capital 
cost incurred for an SNCR system can be credited towards installation 
of an SCR system. This would result--in most cases--in a higher overall 
cost to get to the same level of emission reductions if a source first 
installed an SNCR and then upgraded to an SCR as opposed to the initial 
installation of an SCR. Such a retrofit would also likely increase the 
amount of work, and therefore time, to complete the SCR installation.
    Thus, selecting an analytic year and imposing emission reductions 
focused on installation of SNCR alone at an earlier date (if this could 
even occur on an earlier timeframe regionwide) would potentially 
obviate a source's ability to cost-effectively install SCR, a more 
effective NOX control, at a later date. The EPA's obligation 
in this action was to fully address states' good neighbor obligation 
for the 2008 ozone NAAQS. Therefore, it was reasonable for the EPA to 
select a future analytic year that would allow for advanced control 
installation which would deliver significant reductions, if they were 
determined to be necessary. Choosing an earlier analytic year based on 
the installation of a SNCR alone would potentially be counterproductive 
to EPA's objective to address states' full obligations and severely 
limit sources' ability to obtain more significant emission reductions 
from SCR in the future to address other control obligations.
b. Non-EGU Control Technologies
    The EPA is also evaluating the feasibility of implementing 
NOX control

[[Page 65902]]

technologies for non-EGUs stationary sources as part of its 
identification of an appropriate future analytic year. While the EPA 
did not regulate non-EGUs in the CSAPR Update, the rule did evaluate 
the feasibility of NOX controls on non-EGUs in the eastern 
United States to assess whether any such controls could be implemented 
in time for the 2017 ozone season. In the CSAPR Update, the EPA noted 
that there was greater uncertainty in the assessment of non-EGU point-
source NOX mitigation potential as compared to EGUs, and 
therefore explained that more time was required for states and the EPA 
to improve non-EGU point source data, including data on existing 
control efficiencies, additional applicable pollution control 
technologies, and installation times for those control technologies. 81 
FR 74542. A significant factor influencing uncertainty was that the EPA 
lacked sufficient information on the capacity and experience of 
suppliers and major engineering firms' supply chains to determine if 
they would be able to install the pollution controls on non-EGU sources 
in time for the 2017 ozone season. Further, using the best information 
available to the EPA at that time, the EPA found that there were more 
non-EGU point sources than EGU sources and that these sources on 
average emit less NOX than EGUs. The implication was that 
there were more individual sources that could be controlled, but 
relatively fewer emission reductions available from each source when 
compared to the number of EGUs and emission reductions available from 
EGUs. Considering these factors, the EPA found that it was 
substantially uncertain whether significant aggregate NOX 
mitigation would be achievable from non-EGU point sources to address 
the 2008 ozone NAAQS by the 2017 ozone season. Id.
    Although the EPA determined that there were limited achievable 
emission reductions available from non-EGUs by the 2017 ozone season, 
the EPA acknowledged that it may be appropriate to evaluate potential 
non-EGU emission reductions achievable on a timeframe after the 2017 
ozone season to assess whether upwind states continued to have 
outstanding good neighbor obligations for the 2008 ozone NAAQS. 81 FR 
74522. In particular, the EPA's preliminary assessment in the CSAPR 
Update indicated that there may be emission reductions achievable from 
non-EGUs at marginal costs lower than the costs of remaining 
NOX control strategies available for EGUs. In evaluating 
potential non-EGU emission reductions in the CSAPR Update, the EPA 
included preliminary estimates of installation times for some non-EGU 
NOX control technologies in a technical support document 
entitled Assessment of Non-EGU NOX Emission Controls, Cost 
of Controls, and Time for Compliance Final Technical Support Document 
(henceforth, ``Final Non-EGU TSD''). These preliminary estimates were 
based on research from a variety of information sources, including:
     Typical Installation Timelines for NOX 
Emissions Control Technologies on Industrial Sources, Institute of 
Clean Air Companies, December 2006 (all sources except cement kilns and 
reciprocating internal combustion engines (RICE)); \101\
---------------------------------------------------------------------------

    \101\ Institute of Clean Air Companies. Typical Installation 
Timelines for NOX Emissions Control Technologies on 
Industrial Sources, December 2006. Available at https://c.ymcdn.com/sites/icac.site-ym.com/resource/resmgr/ICAC_NOx_Control_Installatio.pdf.
---------------------------------------------------------------------------

     Cement Kilns Technical Support Document for the NOX FIP, 
U.S. EPA, January 2001; \102\ and
---------------------------------------------------------------------------

    \102\ U.S. EPA. Cement Kilns Technical Support Document for the 
NOX FIP. January 2001. Available at https://www.regulations.gov/document?D=EPA-HQ-OAR-2015-0500-0094.
---------------------------------------------------------------------------

     Availability and Limitations of NOX Emission Control 
Resources for Natural Gas-Fired Reciprocating Engine Prime Movers Used 
in the Interstate Natural Gas Transmission Industry, Innovative 
Environmental Solutions Inc., July 2014--prepared for the Interstate 
Natural Gas Association of America (INGAA Foundation).\103\
---------------------------------------------------------------------------

    \103\ INGAA Foundation. Availability and Limitations of 
NOX Emission Control Resources for Natural Gas-Fired 
Reciprocating Engine Prime Movers Used in the Interstate Natural Gas 
Transmission Industry, Innovative Environmental Solutions Inc., July 
2014. Available at http://www.ingaa.org/Foundation/Foundation-Reports/NOx.aspx.
---------------------------------------------------------------------------

    In assessing an appropriate future analytic year for this action, 
the EPA has looked to the information compiled in the Final Non-EGU TSD 
for the CSAPR Update to evaluate what timeframe might be appropriate 
for installing sector- or region-wide controls on non-EGU sources.
    Among the control technologies that were evaluated in the Final 
Non-EGU TSD, the EPA identified six categories of common control 
technologies available for different non-EGU emission source 
categories. Final Non-EGU TSD at 19. For four of the technology 
categories (SNCR, SCR, low-NOX burners (LNB), and mid-kiln 
firing), the EPA preliminarily estimated that such controls for non-
EGUs could be installed in approximately one year or less in some unit-
specific cases. Installation time estimates presented in the Final Non-
EGU TSD considered a timeline that begins with control technology bid 
evaluation (bids from vendors) and ends with the startup of the control 
technology. See id. at 20. For the other two technology categories 
(biosolid injection technology (BSI) and OXY-firing), as well as one 
emission source category (RICE), the EPA had no installation time 
estimates or uncertain installation time estimates. For example, the 
EPA found that the use of BSI is not widespread, and therefore the EPA 
does not have reliable information regarding the time required to 
install the technology on cement kilns. The installation timing for 
OXY-firing is similarly uncertain because the control technology is 
installed only at the time of a furnace rebuild, and such rebuilds 
occur at infrequent intervals of a decade or more. For those categories 
for which preliminary estimates were available, as noted in the Final 
Non-EGU TSD, the single-unit installation time estimates provided do 
not account for additional important considerations in assessing the 
full amount of time needed for installation of NOX control 
measures at non-EGUs, including additional time likely necessary for 
permitting or installation of monitoring equipment. See id. at 19-21. 
These preliminary installation estimates also do not account for 
factors such as multi-boiler installations at a particular source and 
pre-vendor bid engineering studies.\104\
---------------------------------------------------------------------------

    \104\ In particular, this document presents different 
installation time estimates for SCRs for EGUs and non-EGUs. However, 
these installation times are not necessarily inconsistent, because 
the EGU time estimate of 39 months mentioned above is based on 
multi-boiler installation and factors in a pre-vendor bid 
engineering study consideration, whereas the non-EGU SCR 
installation time estimates are based on single-unit installation 
and do not factor in pre-vendor bid evaluation. Consideration of 
these additional factors might extend the time estimate for 
installation of SCRs for non-EGUs.
---------------------------------------------------------------------------

    In particular, the preliminary estimates of installation times of 
approximately a year or less shown in the Final Non-EGU TSD are for 
installation at a single source and do not account for the time 
required for installing controls to achieve sector-wide compliance. 
Thus, the preliminary estimates do not consider time, labor, and 
materials needed for programmatic adoption of measures and time 
required for installing controls on multiple sources in a few to 
several non-EGU sectors across the region. When considering 
installation of control measures on sources regionally and across non-
EGU sectors, the time for full sector-wide compliance is uncertain, but 
it is likely longer than the installation times shown for control 
measures for individual sources in the Final Non-EGU TSD. As discussed 
earlier with respect to EGUs, regional,

[[Page 65903]]

sector-wide compliance could be slowed down by limited vendor capacity, 
limited available skilled labor for manufacturers such as boilermakers 
(who produce steel fabrications, including those for pollution control 
equipment), availability of raw materials and equipment (e.g., cranes) 
for control technology construction, and bottlenecks in delivery and 
installation of control technologies. Some of the difficulties with 
control technology installation as part of regional, sector-wide 
compliance at non-EGUs, such as availability of skilled labor and 
materials, could also have an impact on monitor installation at such 
sources. The EPA currently has insufficient information on vendor 
capacity and limited experience with suppliers of control technologies 
and major engineering firms, which results in additional uncertainty in 
the overall installation time estimates for non-EGU sectors.
    The EPA notes that its analysis in the Final Non-EGU TSD focused on 
potential control technologies within the range of costs considered for 
EGUs in the final CSAPR Update, i.e., those controls available at a 
marginal cost of $3,400 per ton (2011 dollars) of NOX 
reduced or less. The EPA's analysis did not evaluate implementation 
timeframes or potential emission reductions available from controls at 
higher cost thresholds. See Final Non-EGU TSD at 18. This focus 
excluded some emission source groups with emission reduction potential 
at a marginal cost greater than $3,400 per ton, including: Industrial/
commercial/institutional boilers using SCR and LNB; and catalytic 
cracking units, process heaters, and coke ovens using LNB and flue gas 
recirculation. However, while emission reduction potential from these 
source groups is uncertain, the timeframe for these control 
technologies would be subject to considerations and limitations similar 
to those discussed in the preceding paragraphs.
    In summary, there is significant uncertainty regarding the 
implementation timeframes for various NOX control 
technologies for non-EGUs. While the EPA has developed preliminary 
estimates for some potential control technologies, these estimates only 
account for the time between bid evaluation and startup but do not 
account for additional considerations such as pre-bid evaluation 
studies, permitting, and installation of monitoring equipment. 
Moreover, these preliminary estimates do not account for the impacts of 
sector- and region-wide compliance, which may be complex considering 
the diversity of non-EGU sources as well as the greater number and 
smaller size of the individual sources. The EPA did not receive any 
comments on its proposal that would contradict the importance of these 
considerations. Accordingly, in light of these considerations, the EPA 
believes that it is reasonable to assume for purposes of this action 
that an expeditious timeframe for installing sector- or region-wide 
controls on non-EGU sources may be four years or more.
    Comment: One commenter suggests that the EPA's assessment of 
feasibility of control strategies for non-EGU sources rests on a need 
for further information gathering, when the agency has had ample time 
to do this work already, citing U.S. Sugar Corp. v. EPA, 830 F.3d 579, 
644 (D.C. cir. 2016) (``The Agency was obligated to collect the data it 
needed, and Congress gave it the authority to do so.''). The commenter 
asserts that the EPA cited this same basis for deferring a full remedy 
in the CSAPR Update and that the EPA has been invoking an alleged need 
to gather more information on these sources for more than a decade, 
citing the original CSAPR rulemaking and CAIR. The commenter states 
that it is unlawful and arbitrary for the EPA to rely on a need for 
information that it has failed to collect or analyze despite its own 
longstanding recognition that the information is needed, citing Sierra 
Club v. Johnson, 444 F. Supp. 2d 46, 53 (D.D.C. 2006) (explaining that 
statutory deadlines in the Clean Air Act indicate that Congress 
intended agencies to prioritize timeliness over perfection).
    Another commenter notes that the EPA indicated in separate 
litigation that it intended to take steps to improve its data on non-
EGU controls by November 2017, citing Opposition and Cross-Motion for 
Summary Judgment, Sierra Club v. Pruitt, No. 3:15-cv-04328 (N.D. Cal. 
Dec. 15, 2016) ECF No. 63., but that it has never completed these 
steps. The commenter asserts that the determination is therefore based 
on speculation. The commenter continues that the EPA does not explain 
why the information that was previously found to be insufficient is now 
sufficient for purposes of this action, nor does the EPA explain why it 
still has not quantified or analyzed the potential for cost-effective 
emission reductions from non-EGU sources. Thus, the commenter asserts 
that the EPA ignores its own framework for determining the availability 
and cost-effectiveness of non-EGU controls. The commenter claims that 
this is a change in position from the CSAPR Update where the EPA stated 
that a final determination of whether the emission reductions from that 
rule would be sufficient to address the good neighbor obligation would 
depend upon an evaluation of non-EGU sources.
    Response: The commenter is incorrect in asserting that the EPA's 
basis for its conclusion in this action regarding the implementation 
timeframe for control strategies for non-EGU sources rests on the 
assumption that more information gathering is necessary. While the EPA 
has discussed the uncertainties associated with determining appropriate 
implementation timeframes for a number of control measures and 
technologies that could be applied to a large number and variety of 
non-EGU sources, as discussed above the EPA has evaluated the 
information known to the agency regarding various control measures and 
technologies and the factors affecting the installation of various 
control technologies. Considering the information known to the agency, 
as outlined in the Final Non-EGU TSD, the EPA has reasonably concluded 
that expeditious implementation of additional controls for non-EGU 
sources may be four years or more. The commenter is thus incorrect to 
suggest that the EPA has further deferred its evaluation of non-EGU 
sources. This is the same information that the EPA relied upon to 
determine that significant and meaningful non-EGU emission reductions 
could not feasibly be implemented by the 2017 ozone season in the CSAPR 
Update. 81 FR 74542. The commenter has not provided information that 
would contradict the EPA's conclusion that it is appropriate to assume, 
based on the information known to the agency, that four years or more 
should be provided for the installation of controls for non-EGU 
sources.
    This approach is not a change in policy. In the CSAPR Update, the 
EPA only stated that it could not conclude, at that time, whether 
additional reductions from NOX sources (including non-EGUs) 
would be necessary to fully resolve these obligations. In the CSAPR 
Update, the EPA did indicate that it anticipated the need to evaluate 
non-EGUs to evaluate the full scope of upwind states' good neighbor 
obligations, and the agency has done so here in so far as evaluating 
control feasibility. Specifically, in selecting the appropriate future 
analytic year in which to evaluate air quality, contributions, and 
NOX reduction potential, as necessary, the EPA considered 
the implementation timeframes for controls at EGUs as well as non-EGUs. 
As discussed in more detail later, the EPA's analysis showed

[[Page 65904]]

that there would be no remaining air quality problems in 2023 in the 
eastern U.S., and thus the EPA has concluded that no such additional 
reductions beyond those on-the-books or on-the-way controls are 
necessary, whether from non-EGUs or otherwise, to bring downwind areas 
into attainment and maintenance of the 2008 ozone NAAQS. Because the 
air quality modeling results for 2023 show that air quality problems in 
the eastern U.S. would be resolved by 2023, the EPA has not further 
evaluated the cost-effectiveness of the control options considered for 
the feasibility analysis. This approach is consistent with the EPA's 
four-step framework and does not rely on the relative cost-
effectiveness of controls for non-EGU sources.
    The commenter's reliance on U.S. Sugar and Sierra Club is therefore 
inapposite. In U.S. Sugar, the court was reviewing the EPA's decision 
not to regulate certain sources under a different provision of the CAA 
based on a lack of information. 830 F.3d at 642-43. The court, however, 
found that the agency's duty to regulate these sources was 
nondiscretionary and that the statute provided the agency with explicit 
authority to gather information from the affected sources for this 
purpose. Id. at 644. Here, the EPA is not deferring a nondiscretionary 
duty to issue a regulation addressing controls at non-EGU sources, but 
has evaluated the potential NOX control measures and 
technologies at non-EGU sources using all information known to the 
agency, as described in the Final Non-EGU TSD, in order to inform its 
further analysis of upwind state obligations under the good neighbor 
provision. In Sierra Club, the court laid out the standard for 
determining the time needed to promulgate regulations under the CAA 
after the EPA fails to perform the mandatory duties within the 
statutorily prescribed timeframe. 444 F. Supp. 2d at 52. As the 
commenters note, the court stated, among other things, that courts will 
generally not provide additional time to promulgate a regulation 
``simply to improve the quality or soundness of the regulations to be 
enacted.'' Id. at 53. However, the court in that case addressed a 
mandatory deadline set by the statute to promulgate a plan; it was not 
evaluating the EPA's interpretation of a statutory provision like the 
good neighbor provision that does not set an express deadline for 
implementation of emission reductions.
    Notably, the court in Sierra Club did find that the statutory 
deadlines in the Clean Air Act indicate that Congress intended agencies 
to prioritize timeliness over perfection. 444 F. Supp. 2d at 53. Thus, 
to the extent another commenter chides the EPA for acting based on the 
information before the agency, even if it has not completed all steps 
to improve its data for non-EGU sources, the Sierra Club decision 
supports the agency's approach. Moreover, because the EPA did not need 
to evaluate either the cost-effectiveness or NOX reduction 
potential of either EGU or non-EGU sources, the commenter's concern 
with whether the EPA has completed steps to improve its data on these 
issues is irrelevant. Nonetheless, the EPA notes that the particular 
efforts outlined in the court filing referred to by the commenter were 
taken in support of the EPA's request in a mandatory duty suit that the 
court permit the agency several years to develop a rulemaking to 
address the good neighbor obligations with respect to the 2008 ozone 
NAAQS for Kentucky and 20 other states. In that filing, the EPA 
outlined steps that the agency believed would be necessary to 
promulgate a rulemaking if the EPA's analysis demonstrated that 
additional emission reductions would be required from sources in upwind 
states, including what the EPA viewed as necessary analysis regarding 
non-EGU sources. The EPA acknowledged in that same declaration that one 
possible result of the EPA's analysis could be a determination that 
downwind air quality problems would be resolved, in which case a cost-
effectiveness analysis would be unnecessary. See Opposition and Cross-
Motion for Summary Judgment, Exhibit 1 (Decl. of Janet G. McCabe) para. 
98, Sierra Club v. Pruitt, No. 3:15-cv-04328-JD (N.D. Cal. Dec. 15, 
2016), ECF No. 63. As the EPA could not know the results of any future 
air quality modeling before it was performed, the EPA's proposed 
timeline assumed that such an analysis might be required. Id. para. 
170. Ultimately, the court disagreed with the EPA's proposed timeline 
and provided only one year from its order--until June 30, 2018--for 
promulgation of a rulemaking addressing Kentucky's good neighbor 
obligation, which was insufficient time to complete all of the steps 
outlined in the EPA's declaration, thereby requiring the EPA to 
prioritize certain steps and eliminate others, including the additional 
efforts intended to improve data regarding the feasibility and cost-
effectiveness of controls. Nonetheless, because the first step of the 
EPA's analysis demonstrated that there would be no remaining air 
quality problems in 2023 in the eastern U.S., it turned out to be 
unnecessary for the EPA to finalize the efforts to improve its data 
regarding the cost-effectiveness of controls before finalizing this 
action. Thus, the representations that the EPA made to the court 
regarding the steps necessary to take this action no longer apply under 
the present circumstances.
3. Focusing on 2023 for Analysis
    As discussed in section III.B, the EPA weighed several factors to 
identify an appropriate future analytic year for evaluating interstate 
transport obligations for the 2008 ozone NAAQS. First, the EPA 
identified the relevant attainment dates to guide the EPA's 
consideration as 2021 and 2027, respectively the Serious and Severe 
area attainment dates for the 2008 ozone NAAQS.
    Second, the EPA identified and analyzed the feasibility and timing 
needed for installing additional NOX emissions controls. As 
discussed in section III.B.2, the EPA believes it is appropriate to 
assume that planning for, installing, and commencing operation of new 
controls, regionally, for EGUs and non-EGUs would take up to 48 months, 
and possibly more in some cases, following promulgation of a final rule 
requiring appropriate emission reductions. This period of time 
reflects, among other considerations, the time needed to regionally 
develop new post-combustion SCR projects--systems that continue to 
represent the engineering gold-standard in terms of reducing 
NOX from the U.S. power sector.
    To determine how this feasibility assessment should influence 
potential compliance timeframes, the EPA believes it is appropriate to 
consider the date of promulgation of the rule that would establish 
emission reduction requirements if necessary and thereby provide notice 
to potentially regulated entities that actions will be required for 
compliance. The EPA, therefore, considered the timeframe in which this 
rulemaking would be finalized. As discussed previously, the EPA is 
subject to several statutory and court-ordered deadlines to issue FIPs 
to address any outstanding requirements under the good neighbor 
provision for the 2008 ozone NAAQS for several states. The agency is 
issuing this final action in light of those obligations. This action 
will be signed no later than December 6, 2018, consistent with a court 
order to take action addressing the FIP obligation for five 
states.\105\ Considering the EPA's conclusion that 48 months is a 
reasonable, and potentially expeditious,

[[Page 65905]]

timeframe for implementation of substantial regional control strategies 
considered herein, emission reductions from these control strategies 
would not be feasible until the 2023 ozone season. In other words, 48 
months from a final rule promulgated in December 2018 would be December 
2022, after which the next ozone season begins in May 2023. Considering 
the time necessary to implement the controls calculated from a 
realistic timeframe in which EPA would expect to promulgate a final 
rule requiring such controls, the EPA believes that such reductions on 
a variety of sources across the region are unlikely to be feasibly 
implemented for a full ozone season until 2023.
---------------------------------------------------------------------------

    \105\ Order, New York v. Pruitt, No. 1:18-cv-00406-JGK (S.D.N.Y. 
June 12, 2018), ECF No. 34. The five states are Illinois, Michigan, 
Pennsylvania, Virginia, and West Virginia.
---------------------------------------------------------------------------

    Consistent with the court's holding in North Carolina, the agency 
considers this timing in light of upcoming attainment dates for the 
2008 ozone NAAQS. While 2023 is later than the next attainment date for 
nonattainment areas classified as Serious (i.e., July 20, 2021), for 
the reasons discussed above the EPA does not believe it is reasonable 
to expect that additional regional emissions control requirements could 
be developed and implemented by the Serious area attainment date. 
Rather, the most expeditious timeframe in which additional regional 
control strategies could be implemented at both EGUs and non-EGUs is 48 
months after promulgation of a final rule requiring appropriate 
emission reductions. At the same time, the EPA does not believe that it 
should generally take longer than 2023 to install emissions controls on 
a regional basis, based on the analysis above. Therefore, there is no 
basis to postpone any potentially needed emission reductions to the 
next attainment date after 2023, which is for nonattainment areas 
classified as Severe (i.e., July 20, 2027). Accordingly, the EPA 
believes implementation of additional emission reductions by 2023 is 
the earliest feasible timeframe that could be reasonably required of 
EGU and non-EGU sources that would be potentially subject to control 
requirements. Although this year does not precisely align with a 
particular attainment date, it reflects the year that is as expeditious 
as practicable for regionwide implementation, while also taking into 
account the relevant attainment dates.
    Given the current stage of the 2008 ozone implementation cycle, the 
EPA's feasibility analysis set forth above, the relevant attainment 
dates, and the courts' holdings in North Carolina and EME Homer City, 
the EPA believes that 2023 is the most appropriate year for it to 
assess downwind air quality and to evaluate any remaining requirements 
under the good neighbor provision for the 2008 ozone NAAQS with regard 
to all states covered in this action.
    Comment: Several commenters contend that the EPA's selection of a 
2023 analytic year is inappropriate because it does not address 
downwind states' obligations to attain the 2008 Ozone NAAQS by the July 
20, 2021 attainment date for nonattainment areas classified as Serious. 
The commenters generally cite North Carolina for the proposition that 
EPA must esatablish interstate transport compliance deadlines under the 
good neighbor provision that are identical to deadlines for downwind 
states to achieve attainment with the NAAQS. The commenters note that, 
in that decision, the D.C. Circuit rejected portions of CAIR on the 
grounds that it did not require upwind contributors to eliminate their 
significant contributions in time for downwind areas to meet their 
impending attainment deadlines. The commenters state that the 
attainment date for areas classified as Moderate nonattainment for the 
2008 ozone NAAQS passed on July 20, 2018, and the next attainment dates 
for the 2008 ozone NAAQS will be Serious area attainment date. Because 
July 20, 2021 falls during the 2021 ozone season, the 2020 ozone season 
will be the last full ozone season from which data can be used to 
demonstrate attainment of the NAAQS by the July 2021 attainment date. 
The commenters contend that North Carolina compels the EPA to identify 
upwind reductions and implementation programs to achieve these 
reductions, to the extent possible, during or before the 2020 ozone 
season.
    One commenter further notes that CAA sections 110(a)(2)(D) and 182 
require the EPA to implement the good neighbor provision ``consistent 
with'' applicable attainment deadlines, and notes that the D.C. Circuit 
held in North Carolina that this requirement is unambiguous. The 
commenter states that the attainment deadlines in section 182 are fixed 
dates with which the EPA must comply, citing Sierra Club v. Johnson, 
294 F.3d 155, 161 (D.C. cir. 2002) (``[Section] 181(a)(1)[ ] as written 
sets a deadline without an exception.''), and Train v. Natural 
Resources Defense Council, 421 U.S. 60, 64-65 (1975) (Congress 
``required'' attainment of air quality standards ``within a specified 
period of time''). The commenter further states that the EPA is bound 
by the requirement to eliminate significant contributions ``as 
expeditiously as practicable'' but further notes that the use of the 
words ``but not later than'' the dates listed in section 182 
established the attainment deadlines as an express limit on the EPA's 
discretion. The commenter therefore contends that the EPA's claim of 
authority to fully implement the good neighbor provision ``as 
expeditiously as practicable'' and later than the Serious attainment 
dates is an exercise in rewriting the statute.
    Commenters also contend that the EPA's consideration of feasibility 
cannot justify delaying action or analysis until 2023. One commenter 
contends that the D.C. Circuit's decision in North Carolina rejected 
compliance deadlines in CAIR that were based on ``feasibility 
restraints such as the difficulty of securing project financing and the 
limited amount of specialized boilermaker labor to install controls'' 
but were not ``consistent with . . . compliance deadlines for downwind 
states.'' 531 F.3d at 911-12. The commenter asserts that the Clean Air 
Act's attainment deadlines ``leave[ ] no room for claims of 
technological or economic infeasibility,'' citing Union Elec. Co. v. 
EPA, 427 U.S. 246, 258 (1976) (deadlines are ``intended to foreclose 
the claims of emission sources that it would be economically or 
technologically infeasible for them to achieve emission limitations 
sufficient to protect the public health within the specified time''); 
id. at 259 (Congress ``determined that existing sources of pollutants 
either should meet the standard of the law or be closed down'') 
(quoting S. Rep. No. 91-1196, pp. 2-3 (1970)).
    Response: The EPA does not agree that either the text of the 
statute or the court's holding in North Carolina dictates that there 
can only be one appropriate future analytic year and that this year 
must be identical to an attainment deadline or forecloses consideration 
of the feasibility of implementing emission reductions in determining 
the appropriate future analytic year.
    First, as to the statute, the good neighbor provision does not set 
forth any timeframe for the analysis of downwind air quality or the 
implementation of upwind emission reductions. On its face, the good 
neighbor provision is therefore ambiguous as to when the upwind 
emission reductions it calls for must be in place. The EPA acknowledges 
that the good neighbor provision does indicate that the prohibition of 
upwind state emissions must be ``consistent with the provisions of 
[title I],'' and that the D.C. Circuit held in its North Carolina 
decision that the other provisions with which the implementation of the 
good neighbor provision must be consistent include the attainment dates 
in part D of title I of the Act. However, the good neighbor

[[Page 65906]]

provision does not specify what it means to be ``consistent with'' the 
other provisions of the Act, and courts have routinely held that this 
phrase is ambiguous See, e.g., EDF, 82 F.3d at 457 (holding the 
requirement that implemention of transportation control measures be 
``consistent with'' the applicable implementation plan under section 
176 of the CAA is ``flexible statutory language'' which does not 
require ``exact correspondence . . . but only congruity or 
compatibility,'' thus requiring a court to defer to reasonable agency 
determinations); Natural Resources Defense Council v. Daley, 209 F.3d 
747, 754 (D.C. cir. 2000) (finding that statute requiring fishing 
quotas be ``consistent with'' a fishery management plan was ambiguous); 
NL Indus. v. Kaplan, 792 F.2d 896, 898-99 (9th Cir. 1986) (statutory 
phrase ``consistent with the national contingency plan'' in 42 U.S.C. 
9607(a)(2)(B) ``does not necessitate strict compliance with [national 
contingency plan's] provisions''). Moreover, while CAA section 181 
identifies timeframes for attaining ozone standards in downwind states, 
it does not specify deadlines for good neighbor emission 
reductions.\106\ Therefore, Congress has left a gap for EPA to fill. 
See Chevron v. NRDC, 467 U.S. 837, 843 (1984). In light of this 
ambiguity, the good neighbor provision cannot be read to require 
implementation of upwind emission reductions on a specific timeframe, 
and a compliance timeframe imposed pursuant to a good neighbor plan 
should be considered reasonable so long as the EPA has demonstrated 
that it is chosen in consideration of and is not inconsistent with 
downwind attainment dates and other relevant attainment planning 
requirements in title I.
---------------------------------------------------------------------------

    \106\ It is worth noting that the statutory text of CAA section 
181(a) does not itself establish the attainment dates for the 2008 
ozone NAAQS. Rather, the EPA undertakes rulemakings to establish the 
appropriate deadlines after a new or revised ozone NAAQS is 
promulgated. See, e.g., 2008 Ozone NAAQS SIP Requirements Rule, 80 
FR 12264, 12268 (Mar. 6, 2015); 40 CFR 51.1103.
---------------------------------------------------------------------------

    Moreover, the statute does not impose inflexible deadlines for 
attainment. The general planning requirements that apply to 
nonattainment areas under subpart 1 of part D provide that the 
Administrator may extend the default five-year attainment date by up to 
10 years ``considering the severity of nonattainment and the 
availability and feasibility of pollution control measures.'' CAA 
section 172(a)(2)(A). In the case of the ozone NAAQS, this provision is 
overridden by the more specific attainment date provisions of subpart 
2. The general timeframes provided for attainment in ozone 
nonattainment areas in the section 181(a)(1) table may be (and often 
are) modified pursuant to other provisions in section 182, considering 
factors such as measured ozone concentrations and the feasibility of 
implementing additional emission reductions. For example, the six-year 
timeframe for attainment of the 2008 ozone NAAQS in Moderate areas (the 
July 2018 attainment date) could be extended under certain 
circumstances to 2020, pursuant to section 181(a)(5). And pursuant to 
section 181(b)(2), when downwind areas are unable to implement 
sufficient reductions via feasible control technologies by one 
attainment date, those areas will be reclassified, or ``bumped up'' in 
classification, and given a new attainment date with additional time to 
attain. With ``bump-ups'' like this, the date for an area to attain the 
2008 ozone NAAQS could be extended to 2021, 2027, and 2032, and each of 
these deadlines could be subject to further extensions of up to two 
years pursuant to section 181(a)(5). Part D further defines what 
control strategies states must implement by sources in nonattainment 
areas by each of the applicable attainment dates, incorporating 
considerations of technological feasibility at each stage. See, e.g., 
CAA section 172(c)(1), (2) (requiring implementation of reasonably 
available control measures and reasonable further progress in 
designated nonattainment areas); section 182(b)(1)(A), (c)(2)(B) 
(setting explicit reasonable further progress targets for ozone 
precursors, and providing an exception when the SIP includes ``all 
measures that can feasibly be implemented in the area, in light of 
technological achievability'' (emphasis added)).
    Thus, while the statute indicates that downwind areas should attain 
as expeditiously as practicable, but no later than the attainment dates 
specified in sections 172(a)(2) and 181(a)(1), implementation 
provisions for nonattainment planning lay out myriad exceptions to 
those deadlines, including for circumstances when attainment is simply 
infeasible. See Whitman v. Am. Trucking Ass'ns, Inc., 531 U.S. 457, 
493-94 (2001) (Breyer, J., concurring) (considerations of costs and 
technological feasibility may affect deadlines established for 
attainment by the EPA). Thus, the EPA's approach to evaluating upwind 
emission reductions based on technological feasibility is consistent 
with the requirements imposed on downwind nonattainment areas required 
to implement certain ``reasonable'' controls within the targeted 
timeframe. By contrast, the commenters' premise that all upwind 
emission reductions must occur before the earliest downwind attainment 
date, without regard to feasibility, is inconsistent with the framework 
of section part D as it applies to downwind states.
    The ambiguity in the good neighbor provision regarding the 
relationship of upwind state emission reductions to attainment dates is 
further heightened with respect to downwind areas that the EPA 
anticipates are likely to be in attainment in a future year, some of 
which are already currently attaining the standard (or even designated 
attainment) \107\ but which may have problems maintaining the standard 
in the future (i.e., maintenance receptors). In the EPA's 2017 air 
quality modeling performed for the CSAPR Update, the EPA identified six 
nonattainment receptors and thirteen maintenance receptors. 81 FR 
74533. The maintenance receptors were areas that the EPA expected were 
likely to be in attainment based either on the modeling projections or 
current monitored data, but which EPA expected may have problems 
maintaining attainment of the standard under certain circumstances. 
While many of the maintenance receptors are in areas currently 
designated nonattainment, the EPA's analysis suggests that these areas 
will be able to demonstrate (and in many cases have in fact 
demonstrated) \108\ attainment of the NAAQS by the attainment date or 
otherwise receive a clean data determination that relieves the state of 
further planning obligations. While the good neighbor provision 
requires states to prohibit emissions that will ``interfere with 
maintenance'' of the NAAQS in these areas, there is no deadline for 
maintenance of the standard comparable to an attainment date for 
downwind areas that are in nonattainment of the standard. The 
commenters present no argument as to why upwind obligations for states 
linked to downwind maintenance areas

[[Page 65907]]

must be pegged to future analytic years identical to attainment dates 
which may not themselves be relevant to maintenance receptors.
---------------------------------------------------------------------------

    \107\ For example, in the CSAPR Update, two maintenance 
receptors (in Allegan County, Michigan, and Jefferson County, 
Kentucky) were located in areas designated attainment for the 2008 
ozone NAAQS. 40 CFR 81.318 (Kentucky), 81.323 (Michigan).
    \108\ See, e.g., 80 FR 30941 (June 1, 2015) (determination of 
attainment of Baltimore, MD (Harford receptor)); 81 FR 26697 (May 4, 
2016) (determination of attainment by the attainment date of 
Cincinnati-Hamilton OH-KY-IN (Hamilton receptor)); 82 FR 50814 
(November 2, 2017) (determination of attainment by attainment date 
of Philadelphia PA-NJ-MD-DE (Philadelphia receptor)).
---------------------------------------------------------------------------

    The EPA further disagrees that the D.C. Circuit's North Carolina 
decision requires the EPA to only use the next relevant attainment date 
in selecting its future analytic year. The North Carolina decision 
faulted the EPA for not giving any consideration to upcoming attainment 
dates in downwind states when setting compliance deadlines for upwind 
emission reductions in CAIR: There, the EPA had evaluated only the 
feasibility of implementing upwind controls. 531 F.3d at 911-12. But 
the court did not hold that the CAA requires that compliance deadlines 
for good neighbor emission reductions be identical to any attainment 
date, let alone the next upcoming one. Nor did the court opine that the 
EPA would never be justified in setting compliance dates that fall 
after the next upcoming downwind attainment date (but, as with the 
future analytic year selected in this action, well before the next date 
after that one) or that are based, in part, on the feasibility of 
implementing upwind emission reductions. Indeed, in remanding the rule, 
the D.C. Circuit acknowledged that upwind compliance dates may, in some 
circumstances, come after attainment dates. Id. at 930 (where the 
attainment date relevant to the discussion was 2010, instructing EPA to 
``decide what date, whether 2015 or earlier, is as expeditious as 
practicable for states to eliminate their significant contributions to 
downwind nonattainment''). Accordingly, the EPA's consideration of 
anticipated compliance timeframes for implementation of NOX 
control strategies in selecting a future analytic year is not 
inconsistent with North Carolina.
    The commenter's citations to Sierra Club and Train also do not 
contradict the EPA's interpretation. At issue in Sierra Club was 
whether the EPA could extend the deadline for attainment without 
reclassifying the area as a ``Severe'' nonattainment area and suspend 
other planning requirements based on the conclusion that continued 
nonattainment would be caused by emissions transported from other 
states. 294 F.3d at 159. Thus, although the court indicated that the 
attainment dates are ``without exception,'' it specifically stated that 
this was with respect to ``setbacks owing to ozone transport.'' Id. at 
161. The court did not contradict the conclusion that states are only 
required to implement measures that are ``reasonably available'' in 
downwind areas, deferring to the EPA's interpretation of section 172(c) 
as not requiring measures that ``would not advance the attainment date, 
would cause substantial widespread and long-term adverse impacts, or 
would be economically or technologically infeasible.'' Id. at 162-63, 
quoting 66 FR 608. Sierra Club therefore supports EPA's position that 
it is appropriate to consider the feasibility of implementing control 
strategies when evaluating appropriate compliance timeframes under the 
good neighbor provision. And although the Supreme Court in Train stated 
that the Act requires states to attain the air quality standards 
``within a specified period of time,'' the court pointed this out in a 
background discussion describing the evolution of the CAA from a prior 
period when the statute included no attainment dates. 421 U.S. at 65. 
Moreover, the decision was issued in 1975, before the 1990 amendments 
added the complicated set of provisions governing the timing concerns 
and control obligations imposed on states with ozone nonattainment 
areas. Thus, this decision cannot be relied upon to read out the 
flexibilities subsequently provided in the Act.\109\ (And, of course, 
in any event it does not address requirements such as the good neighbor 
provision, which contains no express deadlines or other timeframes.)
---------------------------------------------------------------------------

    \109\ Commenters also cite Union Electric for the proposition 
that economic and technological feasibility may not be considered, 
but the Court was also reviewing an earlier version of the Clean Air 
Act that has since been amended to add the specific provisions for 
ozone nonattainment areas discussed in this section which allow for 
consideration of economic and technological feasibility. 427 U.S. at 
249-50.
---------------------------------------------------------------------------

    CAA section 110(a)(2)(D)(i) (the good neighbor provision) and part 
D (governing nonattainment requirements), when read together, do not 
unambiguously require good neighbor emission reductions by a particular 
deadline. And in North Carolina the court simply found that EPA must 
make an effort to ``harmonize'' its upwind good neighbor reductions 
with downwind attainment dates. 531 F.3d at 911-12. The EPA has 
reasonably harmonized these provisions to require good neighbor 
emission reductions as expeditiously as practicable to benefit downwind 
areas, taking into account their attainment dates as well as how 
expeditiously upwind controls could feasibly be implemented. Thus, 
where the EPA was able to identify substantial upwind emission 
reductions available by the upcoming attainment date, as in the CSAPR 
Update, the EPA implemented those reductions. However, where additional 
controls could not be feasibly implemented by the next immediate 
attainment date, the EPA has instead reasonably determined it was 
appropriate to analyze air quality in the future year that represents 
the most expeditious timeframe for implementation of such controls 
after that date, but before the following attainment date. The EPA 
reasonably reads the good neighbor provision and the gaps left in the 
statutory scheme by Congress to allocate responsibility between the 
upwind and downwind states in a manner that aligns with the overall 
structure of CAA Title I. See, e.g., 81 FR at 74515-16, 74535-36. 
Notably, the consequence of reading the statute as the commenters 
suggest would be profound: Emission reductions would be required even 
if such reductions could be achieved only by the use of manifestly 
infeasible upwind control measures, an obligation not imposed on 
downwind nonattainment areas due to the availability of extensions and 
reclassifications, described earlier, which provide more time for such 
areas to implement reductions to attain the relevant NAAQS. Cf. S. Rep. 
No. 95-127, at 42 (1977) (the good neighbor provision is intended to 
``mak[e] a source at least as responsible for polluting another State 
as it would be for polluting its own State''--not more responsible) 
(emphasis added). Nothing in the CAA or judicial precedents requires 
this result.
    Comment: One commenter suggests that EPA cannot rely on the need to 
avoid over-control to justify the choice of the 2023 analytic year. The 
commenter states that, in EME Homer City, the Supreme Court made clear 
that, while EPA should strive to avoid over-control, ``the Agency also 
has a statutory obligation to avoid `under-control.''' 134 S. Ct. at 
1609. The commenter suggests that, should over-control become an issue 
at some future time, such as in 2023, the EPA can address that issue 
when it arises.
    Response: The EPA disagrees with the commenter's assertion that the 
EPA has inappropriately weighted concerns about over-control of upwind 
state emissions. The Supreme Court and the D.C. Circuit have both held 
that EPA may not require emission reductions that are greater than 
necessary to achieve attainment and maintenance of the NAAQS in 
downwind areas. See EME Homer City, 134 S. Ct. at 1608; EME Homer City 
II, 795 F.3d at 127. While the Supreme Court indicated that ``EPA must 
have leeway'' to balance the possibilities of under-control and over-
control and that ``some amount of over-

[[Page 65908]]

control . . . would not be surprising,'' the Court did not indicate 
that the EPA should ignore the risk of over-control. 134 S. Ct. at 
1609. Rather, the Court held, ``If EPA requires an upwind State to 
reduce emissions by more than the amount necessary to achieve 
attainment in every downwind State to which it is linked, the Agency 
will have overstepped its authority, under the Good Neighbor 
Provision.'' Id. at 1608. On remand in EME Homer City II, the D.C. 
Circuit gave that holding further meaning when it determined that the 
CSAPR phase 2 ozone season NOX budgets for 10 states were 
invalid because EPA's modeling showed that the downwind air quality 
problems to which these states were linked when EPA projected air 
quality to 2012 would be entirely resolved by 2014, when the phase 2 
budgets were scheduled to be implemented. 795 F.3d at 129-30. Thus, the 
Court did not hold that over-control was a secondary consideration or 
an issue that could be deferred to some indefinite future course 
correction, but rather that it was a primary constraint on the EPA's 
authority.
    Under the current circumstances, the EPA is determining that 
substantial additional emission reductions cannot be achieved until 
2023 because the implementation of additional control strategies not 
already considered and implemented in the CSAPR Update would take at 
least four years to accomplish. Thus, in order to ensure that the 
emission reductions that might be achieved from the implementation of 
such controls would not be more than necessary to address downwind air 
quality problems, the EPA reasonably evaluated air quality in the 
future year when implementation of such controls could reasonably and 
feasibly be expected to occur. Had the EPA instead evaluated air 
quality in an earlier year (e.g., the 2021 Serious area attainment 
date), even though emission reductions from these control strategies 
could not be implemented for several more years, the EPA could not have 
ensured that the emission reductions would still be necessary by the 
time of implementation. Here, where the EPA has information indicating 
that such emission reductions would likely not be necessary to address 
downwind air quality problems by the time they could feasibly and 
expeditiously be implemented, the D.C. Circuit's holding in EME Homer 
City II suggests that the EPA may not have the authority under the good 
neighbor provision to require such additional emission reductions. In 
any event, the court's holding suggests that it is prudent for the EPA 
to exercise its discretion taking into consideration, among other 
factors, the prohibition against over-control as one of multiple 
scientific, policy, and legal considerations informing the selection of 
a future analytic year for projection of air quality at step 1 of the 
four-step framework. Thus, it is reasonable for the EPA to harmonize 
this consideration with the EPA's reasonable anticipation of how long 
it would take to accomplish substantial additional emission reductions.
    Comment: One commenter contends that North Carolina required that 
the EPA model nonattainment and maintenance in the earliest compliance 
year that would align with the next attainment deadline, which is 
effectively the 2020 ozone season for the July 2021 Moderate area 
attainment date. Under the four-step framework, the commenter asserts 
that the EPA must first identify whether any downwind receptors are 
expected to have problems attaining or maintaining the 2008 ozone NAAQS 
in 2020 and then identify the upwind states that are contributing to 
those downwind problems. The commenter then contends that EPA should 
evaluate whether those unlawful contributions could be reduced through 
compliance with state budgets established using the next most cost-
effective NOX control technology that EPA has not yet relied 
upon to establish a good neighbor provision rule, in this case, 
starting up and operating idled SNCR controls.
    Another commenter states that the Ozone Transport Commission (OTC) 
has already conducted modeling for 2020, which shows that a number of 
receptor sites will exceed the 2008 ozone standard in 2020. In light of 
this modeling, the commenter asserts that it would be arbitrary for the 
EPA to dismiss the likelihood of continued attainment and maintenance 
difficulties through and in 2020 or to fail to conduct comprehensive 
modeling for the years before 2023.
    Response: As discussed earlier, the EPA does not agree that it is 
obligated to review air quality only in a year associated with the next 
attainment date, particularly under the present circumstances where its 
analysis of potential control strategies shows that new control 
strategies cannot be feasibly implemented within that timeframe. 
Further, the EPA does not believe it would be reasonable to implement 
the next most costly control technology simply to achieve any amount of 
additional reductions in the near term. As discussed in section III.B.2 
earlier, the EPA has already determined in the CSAPR Update that the 
operation of idled SNCR is not a cost-effective control strategy as 
compared to other available short term control strategies because the 
operation of such controls would result in small emission reductions 
and small downwind air quality improvements relative to the cost and 
relative to the much more significant emission reductions and ozone 
improvements the EPA determined were available from less-costly control 
strategies.\110\ Thus, it is incorrect to refer to the operation of 
SNCR as the ``next most cost-effective'' control strategy because the 
EPA concluded the control strategy was simply not cost-effective 
relative to other near-term control strategies.
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    \110\ For instance, based on 2017 heat input, SNCR coal-fired 
operation reflected a small portion (8 percent) of the total coal-
fired fleet operation. Not only is it a small inventory of units, 
but the additional reductions from these sources would be small as 
the SNCR fleet was already averaging a nationwide ozone-season 
emission rate of 0.16 lb/mmBtu and most SNCR-controlled units were 
emitting at levels consistent with control operation. Less than 1 
percent of the 2017 coal-fleet heat input had a SNCR and was 
operating at emission rates (greater than 0.3 lb/mmBtu) that would 
suggest additional reductions would be available from better SNCR 
operation.
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    The EPA notes that it would have been difficult under the 
circumstances to conduct air quality modeling for both the 2020 
attainment date suggested by the commenters and the 2023 compliance 
timeframe associated with the additional control strategies discussed 
earlier. Air quality modeling is a resource- and time-consuming 
process, as described in more detail in Section III.C and in the 
technical support documents in the record. Air quality modeling for a 
future year requires more than three months to develop detailed 
emission projection inventories for each emissions sector for the 
future year (with many of the inventories themselves derived from 
running other models) and to pre-process these emissions data for input 
to the air quality model. Once the inputs are prepared, a month or more 
is required to run the air quality model and post-process the outputs 
in order to produce results, followed by additional analysis to 
interpret the results. Producing contribution data, if necessary, also 
requires additional time to run a different, more complex modeling tool 
(i.e., modeling with source apportionment) and to interpret the 
results. All told, preparing for, completing, and interpreting air 
quality modeling data for a future year generally takes on the order of 
6 months. Thus, modeling more than one future year would have required 
significant additional time beyond that available to

[[Page 65909]]

the agency in light of the court-ordered deadline to propose an action 
fully addressing the good neighbor obligation for the 2008 ozone NAAQS 
for several states by June 30, 2018, and to take final action by 
December 6, 2018.\111\ In light of the resource and time constraints, 
the EPA determined that it was appropriate to select a single future 
analytic year that was most likely to permit the agency to fulfill its 
obligation to determine whether any good neighbor requirements remain 
unfulfilled for the 2008 ozone NAAQS. Accordingly, the EPA reasonably 
chose to only model air quality in 2023 in order to target the control 
strategies that were most likely to impact downwind air quality. Cf. 
Sierra Club v. Johnson, 444 F. Supp. 2d 46, 53 (D.D.C. 2006) 
(explaining that statutory deadlines in the Clean Air Act indicate that 
Congress intended agencies to prioritize timeliness over perfection).
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    \111\ Order, New York v. Pruitt, No. 1:18-cv-00406-JGK (S.D.N.Y. 
June 12, 2018), ECF No. 34 (setting deadline for EPA to address FIP 
obligation for Illinois, Michigan, Pennsylvania, Virginia, and West 
Virginia). The EPA's time to conduct the modeling was additionally 
constrained by the court-ordered deadline to take final action 
addressing the good neighbor obligation for Kentucky by June 30, 
2018. See Order, Sierra Club v. Pruitt, No. 3:15-cv-04328 (N.D. Cal. 
May 23, 2017), ECF No. 73. Because the Kentucky action addressed the 
same problem of regional interstate ozone transport for the 2008 
ozone NAAQS, it was necessary to complete the modeling in time for 
the EPA to issue a proposed action for Kentucky in advance of that 
deadline.
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    If the EPA had analyzed air quality in 2020 instead of 2023, in 
order to strictly adhere to the attainment dates under the Act, as the 
commenters suggest, and identified downwind air quality problems in 
that year, the agency would not have been able to identify any cost-
effective emission reductions that could be implemented in that year. 
As explained earlier, the EPA has already addressed control strategies 
that could be implemented in the short term and that were considered to 
be cost-effective. If the EPA issued a rule that focused instead only 
on the limited amount of emission reductions potentially achievable 
from additional control strategies feasible to implement by 2020--i.e., 
from the optimization of SNCR--the EPA is not aware of any information 
that would change its analysis of the cost-effectiveness of those 
controls, and accordingly believes that those controls would be 
unlikely to be implemented. Under these circumstances, any downwind air 
quality problems projected in 2020 would remain.
    The EPA believes that a more substantial amount of emission 
reductions is likely achievable from the implementation of new controls 
(SCR and SNCR) at EGUs or from the implementation of various control 
strategies at non-EGUs, but its analysis shows that such control 
strategies could not be feasibly implemented by the 2020 attainment 
date (or, indeed, for several years thereafter). Thus, if the EPA had 
relied on modeling for 2020 to identify downwind air quality issues, as 
the commenter urges, the EPA could not ensure that implementation of 
the emission reductions achievable with these control strategies 
several years later would be justified by continued downwind air 
quality problems (a concern justified by the results of the 2023 
modeling cited in this action). NOX emissions levels are 
expected to decline in the future through the combination of the 
implementation of existing local, state, and federal emission reduction 
programs and changing market conditions for generation technologies and 
fuels.\112\ Therefore, were the EPA to evaluate downwind ozone 
concentrations and upwind state linkages in a future year that precedes 
the date when actual compliance is anticipated (i.e., the timeframe 
within which additional control strategies can feasibly be 
implemented), the EPA could not ensure that the emission reductions 
will be ``necessary to achieve attainment'' in any downwind area by the 
time they were implemented. EME Homer City, 134 S. Ct. at 1608. While 
the Supreme Court indicated that the EPA was entitled to ``leeway,'' 
id. at 1609, the EPA does not believe it would have been consistent 
with the EME Homer City decisions to impose substantially greater 
emission reductions several years after the modeling year used to 
identify downwind air quality problems without ensuring that such 
reductions would be necessary by the time that they can reasonably be 
anticipated to be implemented, i.e., without ensuring that they would 
not over-control relative to downwind air quality. Such an approach 
would only replicate the circumstances the D.C. Circuit found 
impermissible in CSAPR in EME Homer City II.
---------------------------------------------------------------------------

    \112\ Annual Energy Outlook 2018. Electricity Supply, 
Disposition, Prices, and Emissions. Reference Case. Department of 
Energy, Energy Information Administration.
---------------------------------------------------------------------------

    Thus, if the EPA were to rely on only air quality modeling for 
2020, the EPA would be faced with a choice between the possibility of 
under-control if it promulgated a rule focusing only on the cost-
effective emission reductions achievable by the 2020 ozone season, and 
the potential for a significant amount of over-control if it 
promulgated a rule requiring substantial emission reductions to be 
implemented several years after any downwind ozone problems projected 
in 2020. Given the limited availability of potential emission 
reductions by the 2020 attainment date, the EPA instead has reasonably 
chosen to model downwind air quality in a year associated with a 
compliance timeframe consistent with the NOX control 
strategies anticipated to result in more meaningful improvements in 
downwind areas.
    While the EPA is aware of the modeling conducted by the OTC for 
2020, the EPA does not believe that this information demonstrates that 
the EPA's decision to model 2023 was unreasonable. As already noted, 
the EPA has already implemented all cost-effective control strategies 
that could be implemented in the near term under the CSAPR Update, and 
does not believe additional cost-effective control strategies can be 
implemented by the 2020 ozone season, even if the modeling did 
appropriately identify downwind air quality problems in that year. 
Moreover, despite asserting that the OTC used ``EPA-approved methods'' 
for the modeling, the commenter did not provide sufficient information 
regarding the inputs and methodology for the modeling such that the EPA 
could rely on the OTC modeling for purposes of this action. For the 
same reasons described more fully below in section III.C.4 with regard 
to the OTC's 2023 projections, the EPA also cannot conclude that the 
projections are reliable for all of the areas identified as having 
apparent projected air quality problems in 2020. Without reliable 
projected design values, the EPA cannot appropriately determine whether 
emission reductions implemented in that year (even assuming, contrary 
to EPA's conclusions in this action, that any additional control 
strategies that could be implemented in that year would be both 
feasible and cost-effective) would under- or over-control upwind state 
emissions.
    It is worth noting that the EPA was not aware at the time that it 
selected the 2023 modeling year that the results would show no 
remaining air quality problems in the East. The EPA certainly 
anticipated that ozone concentrations would improve over time relative 
to the 2017 modeling conducted for the CSAPR Update. However, the EPA 
had previously conducted modeling for 2023, released in Janaury 2017 
and discussed further in section III.C, that showed at least one 
potential maintenance receptor in Tarrant County, Texas. See Notice of 
Data

[[Page 65910]]

Availability, 82 FR 1733, 1737.\113\ The EPA accepted comments on this 
modeling and made adjustments to the emission inventories and other 
modeling inputs before running the model for 2023 again for purposes of 
this action after determining that 2023 would also be an appropriate 
year to evaluate for purposes of the remaining good neighbor 
obligations for the 2008 ozone NAAQS. It was only upon completing this 
additional modeling run that the EPA could conclude that, for the 
purposes of these good neighbor obligations, it projected no further 
air quality problems in 2023.
---------------------------------------------------------------------------

    \113\ Although the modeling was conducted to evaluate air 
quality relative to the more stringent 2015 ozone NAAQS, the data 
show that the maximum design value for the Tarrant County, Texas 
monitor was also expected to exceed the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    Comment: One commenter contends that the EPA's approach to 
determining that 2023 is the appropriate analytic year is a reversal of 
past agency interpretation regarding the four-step CSAPR framework. The 
commenter states that the CSAPR Update, though only a partial remedy 
under the good neighbor provision, acknowledged the 2018 attainment 
deadline for Moderate nonattainment areas. The commenter asserts that 
here, in contrast, the EPA has begun by assessing the feasibility of 
installing an arbitrarily narrow set of new controls without regard to 
the next attainment date. The commenter contends that this approach 
turns the CSAPR framework on its head, unreasonably changing agency 
interpretation without explanation and in violation of the Act.
    The commenter notes that control feasibility has played a role in 
the past regional ozone rules, but contends that it cannot override the 
obligation to prohibit pollution that prevents attainment and 
maintenance of the standards, nor can it displace the attainment 
deadlines. The commenter further asserts that when the EPA has 
considered feasibility in analyzing ozone-related good neighbor 
obligations since the North Carolina decision, it has not done so in 
the context of selecting an analytic year, but in apportioning the 
necessary emission reductions. The commenter explains that, in the 
original CSAPR, feasibility of installing SO2 controls did 
contribute to selecting two future analytic years, but contends that 
the rule linked both analytic years to attainment deadlines, including 
analysis of the next upcoming attainment year.
    Response: In the CSAPR Update, the EPA focused its analysis on the 
upcoming attainment date and the limited control strategies that could 
be implemented within that timeframe with the explicit understanding 
that such a limited analysis was unlikely to provide a sufficient basis 
to determine that the good neighbor obligation was fully addressed for 
all states for the 2008 ozone NAAQS. Here, the EPA is obligated to 
conduct an analysis that fully addresses the good neighbor provision 
and thus has selected a future analytic year to coincide with the 
timeframe in which emission reductions most likely to address that 
obligation could be implemented, rather than selecting a year in which 
few emission reductions could be implemented. Selection of an analytic 
year associated with anticipated future compliance is entirely 
consistent with the EPA's four-step framework as applied in prior 
rulemakings. See, e.g., NOX SIP Call, 63 FR 57450 (using the 
anticipated 2007 compliance year for its analysis); CAIR, 70 FR 25241 
(using the years 2009 and 2010, the anticipated compliance years for 
the ozone and PM2.5 NAAQS, respectively); CSAPR, 76 FR 48211 
(using the 2012 compliance year); CSAPR Update, 81 FR 74537 (using the 
2017 compliance year).
    The commenter is also incorrect to suggest that the EPA's approach 
is inconsistent with the original CSAPR rulemaking, which addressed 
good neighbor obligations for the 1997 ozone NAAQS. While it is true 
that the EPA considered attainment dates in its CSAPR analysis, the 
commenter fails to acknowledge that the EPA considered the entire suite 
of attainment dates for the relevant NAAQS, including the ``maximum'' 
future attainment dates that CSAPR's later compliance phase was 
intended to address. 76 FR 48277-78. Thus, in establishing two phases 
of compliance in 2012 and 2014, the EPA considered attainment dates for 
the ozone NAAQS between 2007 and 2024, and for the PM2.5 
NAAQS, the EPA considered attainment dates ranging from 2010 to 2019. 
Id. Moreover, as the commenter acknowledges, the EPA established two 
compliance phases in CSAPR based on the feasibility of implementing 
certain control strategies. Id. at 48278. In the earlier phase, the EPA 
anticipated that the covered EGUs would undertake more easily 
implemented control strategies that could be implemented in the short 
term, including optimization of existing controls, installation of 
relatively simple NOX controls, and generation shifting, see 
id. at 48279, the same control strategies already considered and 
implemented for the 2008 ozone NAAQS in the CSAPR Update. The EPA 
determined that a later compliance phase was justified based on the 
need for more time to feasibly implement other controls strategies. Id. 
at 48278 (``Given the time needed to design and construct scrubbers at 
a large number of facilities, EPA believes the 2014 compliance date is 
as expeditious as practicable for the full quantity of SO2 
reductions necessary to fully address the significant contribution to 
nonattainment and interference with maintenance.''). The EPA's approach 
to the 2008 ozone NAAQS has been consistent with ths earlier approach, 
except that the EPA has evaluated these two categories of control 
strategies in two separate actions (i.e., the CSAPR Update and this 
action) rather than in a single rulemaking specifically to ensure that 
the first phase of reductions could be implemented as soon as possible.
    To the extent that the commenters suggest that the EPA chose an 
earlier analytic year in prior rulemakings, the EPA notes that it has 
not done so in all rulemakings. In the NOX SIP Call, the EPA 
evaluated air quality in 2007, nine years after the rule was 
promulgated. 63 FR 57377 (October 27, 1998). In CAIR, which was 
promulgated in 2005, the EPA evaluated air quality in 2009 and 2010, 
for the ozone and PM2.5 NAAQS, respectively. 70 FR 25241 
(May 12, 2005). Thus, the EPA's approach in this action is not 
inconsistent with these prior actions. Although the EPA evaluated 
relatively more near-term air quality in CSAPR and CSAPR Update, the 
EPA expected that certain cost-effective control strategies could be 
implemented in the near term in those actions. Here, the EPA has 
already analyzed and implemented those cost-effective control 
strategies that could be implemented quickly to address the 2008 ozone 
NAAQS through the CSAPR Update. Accordingly, any further emission 
reductions that may be required to address the 2008 ozone NAAQS would 
necessarily be implemented through control strategies that cannot be 
implemented in the near term and require a longer period for 
implementation.

C. Air Quality Analysis

    In this section, the agency describes the air quality modeling 
performed, consistent with step 1 of the framework described in section 
III.A, to identify locations where it expects nonattainment or 
maintenance problems with respect to the 2008 ozone NAAQS in the 2023 
analytic year. This section includes information on the air quality 
modeling platform used in support of the final determination with a 
focus on the base year and future base case emission inventories. The 
June 2018 Air

[[Page 65911]]

Quality Modeling Technical Support Document (AQM TSD) in the docket for 
this action contains more detailed information on the air quality 
modeling for 2023 used to support the final determination.\114\
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    \114\ And available online at https://www.epa.gov/airmarkets/proposed-csapr-close-out.
---------------------------------------------------------------------------

    In addition to the proposal, 83 FR 31915 (July 10, 2018), the EPA 
provided an additional opportunity to comment on the air quality 
modeling platform and air quality modeling results that are used in 
this determination when it published a Notice of Data Availability (82 
FR 1733) on January 6, 2017, which provided the preliminary modeling 
results for the 2023 analytic year. Specifically, in the NODA the EPA 
requested comment on the data and methodologies related to the 2011 and 
2023 emission inventories and the air quality modeling to project 2023 
ozone concentrations and ozone contributions. While the EPA issued this 
NODA to provide information to assist state interstate transport 
planning for the 2015 ozone NAAQS (which is set at 70 ppb), the 
modeling approaches and future year projection methods were also 
applicable to the 2008 ozone NAAQS (set at 75 ppb). In fact, commenters 
explicitly commented on these methods with respect to the 2008 ozone 
NAAQS. The EPA considered comments received on the NODA in the 
development of the air quality modeling analysis used for proposal. As 
discussed below and in the Response to Comments (RTC) in the docket for 
this action, we have considered additional comments on emission 
inventories and air quality modeling submitted in response to the 
proposal for this action for this final determination. However, the EPA 
did not find that any of these comments raised concerns with the 
modeling discussed at proposal such that additional air quality 
modeling was merited. Accordingly, the emission inventories and 
modeling discussed in the following sections is the same information 
discussed in the EPA's proposed action.
1. Overview of Air Quality Modeling Platform
    The EPA performed nationwide photochemical modeling for 2023 to 
identify nonattainment and maintenance receptors relevant for the 2008 
ozone NAAQS. For this action, the EPA performed air quality modeling 
for two emissions scenarios: (1) A 2011 base year; and (2) the 2023 
analytic year (i.e., a business-as-usual scenario in 2023: One without 
any additional interstate ozone transport requirements beyond those 
imposed by the CSAPR Update). The modeling results for 2023 presented 
here were originally released to the public with an accompanying 
memorandum on October 27, 2017.\115\
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    \115\ Memorandum from Stephen D. Page, Director, Office of Air 
Quality Planning and Standards, to Regional Air Division Directors, 
Regions 1-10, 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) (Oct. 27, 2017), available at https://www.epa.gov/airmarkets/october-2017-memo-and-supplemental-information-interstate-transport-sips-2008-ozone-naaqs.
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    The 2011 base year has previously been used to support the CSAPR 
Update proposal and final rule. The EPA chose to continue using 2011 as 
the base year because when EPA's analyses commenced, 2011 was the most 
recent emissions modeling platform available that included future year 
projected inventories needed for transport analyses. Using 2011 as a 
base year also remains appropriate from the standpoint of good modeling 
practice. The meteorological conditions during the summer of 2011 were 
generally conducive for ozone formation across much of the U.S., 
particularly the eastern U.S. As described in the AQM TSD, the EPA's 
guidance for ozone attainment demonstration modeling, hereafter 
referred to as the modeling guidance, recommends modeling a time period 
with meteorology conducive to ozone formation for purposes of 
projecting future year design values.\116\ The EPA therefore believes 
that meteorological conditions and emissions during the summer of 2011 
provide an appropriate basis for projecting 2023 ozone concentrations.
---------------------------------------------------------------------------

    \116\ U.S. Environmental Protection Agency, 2014. Modeling 
Guidance for Demonstrating Attainment of Air Quality Goals for 
Ozone, PM2.5, and Regional Haze, Research Triangle Park, 
NC, available at http://www.epa.gov/ttn/scram/guidance/guide/Draft_O3-PM-RH_Modeling_Guidance-2014.pdf.
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    For this rule, the EPA used the Comprehensive Air Quality Model 
with Extensions (CAMx) version 6.40 \117\ to simulate pollutant 
concentrations for the 2011 base year and the 2023 future year 
scenarios. This version of CAMx was the most recent publicly available 
version of this model at the time that the EPA performed air quality 
modeling for this final rule. CAMx is a grid cell-based, multi-
pollutant photochemical model that simulates the formation and fate of 
ozone and fine particles in the atmosphere. The CAMx model applications 
were performed for a modeling region (i.e., modeling domain) that 
covers the contiguous 48 United States, the District of Columbia, and 
adjacent portions of Canada and Mexico using grid cells with a 
horizontal resolution of 12 km x 12 km. A map of the air quality 
modeling domain is provided in the AQM TSD.
---------------------------------------------------------------------------

    \117\ CAMx v6.40 was the most recent public release version of 
CAMx at the time the EPA updated its modeling in fall 2017. 
Comprehensive Air Quality Model with Extensions version 6.40 User's 
Guide. Ramboll Environ, December 2016, available at http://www.camx.com/.
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    The 2011-based air quality modeling platform includes 2011 base 
year emissions, 2023 future year projections of these emissions, and 
2011 meteorology for air quality modeling with CAMx. In the remainder 
of this section, the EPA provides an overview of the 2011 and 2023 
emission inventories and the methods for identifying nonattainment and 
maintenance receptors along with a list of the receptors in the U.S. 
that EPA projected would have nonattainment and maintenance air quality 
problems in 2023 (in the business-as-usual scenario).
    To ensure the reliability of its modeling results, the EPA 
conducted an operational model performance evaluation of the 2011 
modeling platform by comparing the 8-hour daily maximum ozone 
concentrations predicted during the May through September ozone season 
to the corresponding measured concentrations in 2011. This evaluation 
generally followed the approach described in the modeling guidance. 
Details of the model performance evaluation are described in the AQM 
TSD. The model performance results indicate that the 8-hour daily 
maximum ozone concentrations predicted by the 2011 CAMx modeling 
platform generally reflect the corresponding magnitude of observed 8-
hour ozone concentrations on high ozone days in the 12-km U.S. modeling 
domain. These results provide confidence in the ability of the modeling 
platform to provide a reasonable projection of expected future year 
ozone concentrations and contributions.\118\
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    \118\ As recommended in the modeling guidance, the acceptability 
of model performance was judged by considering the 2011 CAMx 
performance results in light of the range of performance found in 
recent regional ozone model applications. These other modeling 
studies represent a wide range of modeling analyses that cover 
various models, model configurations, domains, years and/or 
episodes, and chemical mechanisms. Overall, the ozone model 
performance results for the 2011 CAMx simulations are within the 
range found in other recent peer-reviewed and regulatory 
applications. The model performance results, as described in the AQM 
TSD, demonstrate that the predictions from the 2011 modeling 
platform correspond to measured data in terms of the magnitude, 
temporal fluctuations, and spatial differences for 8-hour daily 
maximum ozone.

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[[Page 65912]]

2. Emission Inventories
    The EPA developed emission inventories for this rule, including 
emissions estimates for EGUs, non-EGU point sources, stationary 
nonpoint sources, onroad mobile sources, nonroad mobile sources, 
wildfires, prescribed fires, and biogenic emissions. The EPA's air 
quality modeling relies on this comprehensive set of emission 
inventories because emissions from multiple source categories are 
needed to model ambient air quality and to facilitate comparison of 
model outputs with ambient measurements.
    To prepare the emission inventories for air quality modeling, the 
EPA processed the emission inventories using the Sparse Matrix Operator 
Kernel Emissions (SMOKE) Modeling System version 3.7 to produce the 
gridded, hourly, speciated, model-ready emissions for input to the CAMx 
air quality model. Additional information on the development of the 
emission inventories and on datasets used during the emissions modeling 
process for this final rule is provided in the October 2017 Technical 
Support Document ``Additional Updates to Emission Inventories for the 
Version 6.3, 2011 Emissions Modeling Platform for the Year 2023'' 
(Emissions Modeling TSD).\119\
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    \119\ This TSD is also available in the docket for this final 
action and at https://www.epa.gov/air-emissions-modeling/additional-updates-2011-and-2023-emissions-version-63-platform-technical.
---------------------------------------------------------------------------

    As noted earlier, the emission inventories, methodologies, and data 
used for the air quality modeling discussed in this final rule are the 
same as the inventories discussed at proposal as no new modeling was 
performed following the proposal. The inventories incorporate comments 
received on the January 2017 NODA along with improved data and methods 
that became available after the NODA modeling was completed. The 
inventories are documented in the Emissions Modeling TSD. The January 
2017 NODA itself was developed after taking into account the several 
iterations of comments on the data and methods used in the 2011 
emissions modeling platform.\120\
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    \120\ The initial modeling platform based on the 2011 National 
Emissions Inventory (NEI) was first released for public comment in 
November 2013 through a NODA (78 FR 70935). In developing the CSAPR 
Update, the EPA subsequently updated the base year 2011 emission 
inventory as well as future year inventories for that rulemaking and 
took comment on those updates. Notice of Data Availability, 79 FR 
2437 (January 2014); CSAPR Update proposal, 80 FR 46271 (August 
2015); CSAPR Update final, 81 FR 74527 (September 2016). Technical 
support documents are available for each iteration of the 
inventories on EPA's emissions modeling website: https://www.epa.gov/air-emissions-modeling/2011-version-6-air-emissions-modeling-platforms.
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    As noted above, the EPA uses emissions data from the year 2011 in 
its base year air quality modeling. The 2011 NOX and 
SO2 EGU emissions are based primarily on reported data from 
continuous emissions monitoring systems (CEMS). Other EGU pollutants in 
the 2011 emission inventories are estimated using emissions factors and 
annual heat input data reported to the EPA. For EGUs without CEMS, the 
EPA used data submitted to the National Emissions Inventory (NEI) by 
the states. The 2011 inventories also include some updates to 2011 EGU 
stack parameters and emissions made in response to comments on the 
January 2017 NODA. For more information on the details of how the 2011 
EGU emissions were developed and prepared for air quality modeling, see 
the Emissions Modeling TSD.
    In developing the 2023 emission inventory, the EPA did not 
incorporate any new interstate transport emission reductions beyond the 
CSAPR Update, but the 2023 projected emission inventory does reflect 
expected changes in activity and emission reductions from on-the-books 
actions, including planned emission control installations and 
promulgated federal measures that affect anthropogenic emissions. The 
emission inventories for air quality modeling include some emissions 
categories that are held constant between the base and future years, 
such as biogenic emissions and emissions from agricultural, wild, and 
prescribed fires.\121\ The emission inventories used for Canada were 
received from Environment and Climate Change Canada in April 2017 and 
were provided for the years 2013 and 2025. This was the first time that 
future year projected inventories for Canada were provided directly by 
Environment and Climate Change Canada and the new inventories are 
thought to be an improvement over inventories projected by EPA. The EPA 
used the Canadian emission inventories without adjusting the emissions 
to the represented year because the EPA lacks specific knowledge 
regarding Canadian emissions trends and because the interval of years 
(i.e., 12) was the same as that used for the U.S. modeling which relied 
on a 2011 to 2023 interval. For Mexico, onroad mobile source inventory 
data were based on 2011 and 2023 runs of MOVES-Mexico. For area, 
nonroad, and point source emissions in Mexico, EPA used the Inventario 
Nacional de Emisiones de Mexico using 2018 and 2025 data projections to 
interpolate 2023 estimates.
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    \121\ Biogenic emissions and emissions from wildfires and 
prescribed fires were held constant between 2011 and 2023 because: 
(1) These emissions are tied to 2011 meteorological conditions and 
(2) the focus of this action is on the contribution from 
anthropogenic emissions to projected ozone nonattainment and 
maintenance.
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    As noted in the October memo, the EPA projected EGU emissions for 
the 2023 emission inventory based on an approach that combines the 
latest reported operational data with known and anticipated fleet and 
pollution controls changes. The EPA begins with the most recent 
reported ozone season data available at the time of the EPA's 
analysis--in this case, 2016 SO2 and NOX data 
from units reporting under the Acid Rain and CSAPR programs under 40 
CFR part 75. The EPA then updated the 2016 reported emissions with 
unit-specific adjustments to account for upcoming announced 
retirements, post-combustion control retrofits, coal-to-gas 
conversions, combustion controls upgrades, new units, and on-the-books 
reductions such as CSAPR Update compliance, state rules, and Best 
Available Retrofit Technology (BART) requirements under the regional 
haze program of the CAA.\122\ The EPA implemented reductions associated 
with the CSAPR Update in its emission projection, because the 2016 
reported data did not reflect the implementation of this rule, by 
assuming each SCR-controlled unit in the CSAPR Update region not 
already emitting at or below 0.10 lb/mmBtu would do so beginning in 
2017. For emissions from EGUs not reporting under 40 CFR part 75, the 
EPA largely relied on unadjusted 2011 NEI data for its 2023 
assumptions.\123\ We note that the EPA's approach to projecting 2023 
EGU emissions is consistent with the approach the EPA used in the CSAPR 
Update to project the future EGU emissions baseline from which to 
estimate reduction potential. 81 FR 74543.\124\ Additional details 
about the EPA's future year EGU emissions projections are provided in 
the Emissions Modeling TSD.
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    \122\ The EPA uses the U.S. EIA Form 860 as a source for 
upcoming controls, retirements, and new units.
    \123\ Available at https://www.epa.gov/air-emissions-modeling/2011-version-63-platform.
    \124\ Also see the Ozone Transport Policy Analysis Final Rule 
Technical Support Document. EPA. August 2016. Available at https://www.epa.gov/sites/production/files/2017-05/documents/ozone_transport_policy_analysis_final_rule_tsd.pdf.
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    Non-EGU point source emissions in the 2011 inventory are generally 
based on the 2011 NEI version 2.\125\ However,

[[Page 65913]]

the NEI emission inventories must be processed into a format that is 
appropriate for the air quality model to use. Details on the 
development and processing of the emissions for 2011 are available in 
the Emissions Modeling TSD. The TSD also describes the EPA's 
methodology for developing the non-EGU emissions for the 2023 emission 
inventory. Projection factors and percent reductions used to estimate 
2023 emissions in this final rule reflect comments received through the 
January 2017 NODA, along with emission reductions due to national and 
local rules, control programs, plant closures, consent decrees, and 
settlements. The Emissions Modeling TSD contains details on the factors 
used and on their respective impacts on the emission inventories.
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    \125\ For more information on the 2011 National Emissions 
Inventory version 2, see https://www.epa.gov/air-emissions-inventories/2011-national-emissions-inventory-nei-technical-support-document.
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    As noted in the proposal, the EPA updated its methodology for 
estimating point and nonpoint 2023 emissions from the oil and gas 
sector after the release of the January 2017 NODA. The projection 
factors used in the updated 2023 oil and gas emission inventory 
incorporate state-level factors based on historical growth from 2011-
2015 and region-specific factors that represent projected growth from 
2015 to 2023. The 2011-2015 state-level factors were based on 
historical state oil and gas production data published by the U.S. 
Department of Energy's Energy Information Administration (EIA), while 
the 2015-2023 factors are based on projected oil and gas production in 
EIA's 2017 Annual Energy Outlook (AEO) Reference Case without the Clean 
Power Plan for the six EIA supply regions. The 2017 AEO was the latest 
available at the time the modeling was performed. Details on the 
revised methodology that the EPA used to project oil and gas emissions 
to 2023, as well as changes to the base year 2011 and future year 2023 
emission inventories for other sectors, can be found in the Emissions 
Modeling TSD.
    The EPA developed the onroad mobile source emissions for both the 
2011 and 2023 inventories using the EPA's Motor Vehicle Emissions 
Simulator, version 2014a (MOVES2014a). The agency computed these 
emissions within SMOKE by multiplying the MOVES-based emissions factors 
with activity data appropriate to each inventory year. MOVES2014a 
reflects projected changes to fuel usage and onroad mobile control 
programs finalized as of March 2014, which include emission reductions 
expected to occur into the future. Therefore, for the 2011 inventory, 
those rules that were in effect in 2011 are reflected at a level that 
corresponds to the extent to which each rule had penetrated the fleet 
and fuel supply by that year, and similarly for the 2023 inventory. 
Local control programs such as the California Low Emission Vehicle 
(LEV) III program, also implemented in states other than California 
that have adopted California's program pursuant to CAA section 177, are 
included in the onroad mobile source emissions. Activity data for 
onroad mobile sources, such as the expected vehicle miles traveled in 
2023, were projected for future year using trends identified in AEO 
2016.
    The commercial marine category 3 vessel (``C3 marine'') emissions 
in the 2011 emission inventory for this rule are equivalent to those in 
the 2011NEIv2 with the inclusion of updated emissions for California. 
These emissions reflect reductions associated with the Emissions 
Control Area proposal to the International Maritime Organization 
control strategy (EPA-420-F-10-041, August 2010); reductions of 
NOX, VOC, and CO emissions for new C3 engines that went into 
effect in 2011; and fuel sulfur limits that went into effect as early 
as 2010. The cumulative impacts of these rules, which will achieve 
additional reductions through 2023, are incorporated in the 2023 
projected emissions for C3 marine sources. For this modeling, the 
larger C3 marine sources are treated with plume rise, thereby putting 
the emissions into model layers higher than ground-level. This was done 
because the ships have stacks that release emissions higher than the 
20-meter threshold for the ground-level layer in the air quality model. 
The height at which the emissions are inserted into the model impacts 
how the emissions are transported within the model. The emissions from 
the smaller category 1 (C1) and category 2 (C2) vessels are still 
released into the ground-level layer of the model.
    To develop the nonroad mobile source emission inventories other 
than C3 marine for the modeling platform, the EPA used monthly, county, 
and process-level emissions output from the National Mobile Inventory 
Model (NMIM) (http://www.epa.gov/otaq/nmim.htm). The nonroad mobile 
emissions control programs include reductions in emissions from 
locomotives, diesel engines, and marine engines, along with standards 
for fuel sulfur content and evaporative emissions. A comprehensive list 
of control programs included for mobile sources is available in the 
Emissions Modeling TSD.
    The emissions for stationary nonpoint sources in the 2011 emission 
inventory are generally derived from the 2011 NEI version 2. For more 
information on nonpoint source emissions in the 2011 emission 
inventory, see the Emissions Modeling TSD and the 2011NEIv2 TSD. 2023 
emissions for stationary nonpoint sources were projected using a 
variety of factors, including AEO 2017 projections for 2023 and state 
projection factors using EIA data from 2011-2015. The 2023 emission 
inventory in the EPA's proposal and this final rule also incorporate 
information from states about projected control measures or changes in 
nonpoint source emissions provided in comments to the January 2017 
NODA. These changes were limited and are discussed in the Emissions 
Modeling TSD.
    Comment: While some commenters agreed with the reasonableness of 
the EPA's projections, others contend that the EPA's EGU emission 
projections are unreasonable for a variety of reasons. These commenters 
assert that actual 2023 emissions may be higher than modeled due to low 
CSAPR Update allowance prices or natural gas price uncertainty. They 
suggest that the 0.10 lb/mmBtu average used by EPA for SCR-controlled 
units covered by the CSAPR Update is not reasonable because some units 
may operate at higher levels in the future, and they also suggest that 
EPA should have incorporated impacts of the proposed repeal of the 
Clean Power Plan and the proposed Affordable Clean Energy (ACE) rule 
into its emissions projections.
    Response: The EPA disagrees with the suggestion that its 2023 EGU 
emission projections and the underlying methodology to generate those 
projections are unreasonable. As with all projections, there is 
inherent uncertainty, but with respect to EGU NOX emissions, 
the EPA's 2023 projections likely reflect a more conservative (i.e., 
higher) NOX emissions estimate than comparable alternative 
methods for projecting future EGU emissions. As explained above, the 
EPA's 2023 EGU emissions projections used reported 2016 data, adjusting 
that data based only on currently known changes in the power sector and 
a change in emission rate to reflect implementation of the CSAPR Update 
after 2017. As such, the EPA's approach does not account for changes 
that would be estimated to occur due to economic and other 
environmental policy factors. Trends in historic emissions data and 
emission projections using a variety of methods and models suggest that 
inclusion of these factors would likely further reduce future 
NOX emission projections. To illustrate the potential for 
additional NOX reductions when considering further factors, 
we note that

[[Page 65914]]

nationwide 2023 EGU NOX emission projections using various 
modeling approaches estimate lower NOX emission futures than 
the methodology EPA applied here. The EPA's EGU emissions projection 
methodology estimates that 2023 NOX emissions will be 20% 
below 2016 levels whereas EIA estimates that 2023 NOX 
emissions will be 21% to 32% below 2016 levels and EPA's Integrated 
Planning Model estimates that 2023 NOX emissions will be 28% 
below 2016 levels.126 127
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    \126\ EIA 2018 Annual Energy Outlook, Reference Case and High 
Oil and Gas Resource and Technology side case. Table 8 ``Electricity 
Supply, Disposition, Prices, and Emissions,'' available at https://www.eia.gov/outlooks/aeo/.
    \127\ IPM Version 6--Initial Run, available at https://www.epa.gov/airmarkets/clean-air-markets-power-sector-modeling.
---------------------------------------------------------------------------

    The EPA neither intends nor expects to be able to predict future 
emissions from each of thousands of EGUs.\128\ And it does not expect 
each of these SCR-controlled units to emit at the fleet-wide 
technology-specific average emission rate that it uses in its EGU 
emissions projections. Some of the units will over-perform and some of 
the units will under-perform in comparison to this average rate, but 
the average rate nevertheless reflects both a reasonable compliance 
pathway in response to the CSAPR Update and a reasonable fleet average 
for that compliance pathway. Predicting each unit's individual emission 
rate is an exercise in increased uncertainty, and the use of an average 
technology-specific fleet emission rate for each unit reduces that 
uncertainty. Moreover, in a trading program with state-specific caps, 
sources are permitted the flexibility to emit in a variety of ways 
provided the state and regional caps are met. The compliance success is 
not gauged on unit-level operation and emissions, but rather state and 
regional operation and emission levels. (The same holds true for 
gauging the reasonableness and accuracy of projections for such 
programs.) This compliance mechanism promotes more cost-effective 
attainment of the emissions and air quality goals. Therefore, it is 
plausible--and entirely consistent with EPA projections--that sources 
in each state would find an alternative compliance pathway that 
achieves commensurate emission reductions in equally relevant parts of 
the upwind airshed.
---------------------------------------------------------------------------

    \128\ EPA-HQ-OAR-2018-0225-0042 at 98; EPA-HQ-OAR-2009-0491-4512 
(RTC at 4).
---------------------------------------------------------------------------

    The EPA's EGU assumptions for 2023 reflected ozone-season emission 
levels that were approximately 10 percent lower than the CSAPR Update 
budgets. 2017 ozone-season data reflected emissions that were already 7 
percent below the CSAPR Update budgets, reflecting a 21 percent drop 
from the prior year, a pace of reduction that would, if continued, put 
actual emissions well below 2023 assumptions. Preliminary 2018 data 
suggest continuing reductions, and indicate that the CSAPR Update 
region is already in 2018 emitting at or near the EPA-assumed 2023 
emission level. In other words, the emission levels that commenters 
suggest are unreasonable for 2023 may well already have been achieved 
or nearly achieved in 2018--five years ahead of the analytic year. In 
order for emissions in 2023 to be at the levels commenters prefer that 
the EPA model (e.g., only emission levels that can be ensured via 
enforceable limits), a decade-long decline in ozone-season emissions 
would have to not only cease but reverse. Moreover, this would have to 
occur during a time period where significantly more high-emitting coal 
generation capacity has announced plans to retire and significantly 
more zero- or lower-emitting generation capacity is expected to come 
online. In particular, since the EPA in 2017 made EGU projections for 
2023 (in which the EPA only assumed retirements that had already been 
planned and announced at the time it made the projections), many 
additional high emitting coal units have announced their plans to 
retire by 2023. 5.9 gigawatts (GW) of coal capacity retirements were 
announced and planned for 2019-2022 based on the June 2017 EIA 860m 
Form, but that same form a year later (June 2018 EIA Form 860m) shows 
10.2 GW of coal retirements for that same period, reflecting a near 
doubling of coal retirement announcements occurring over a one-year 
period. For instance, Conesville Units 4, 5, and 6 in Ohio have 
announced their retirement prior to 2023. The EPA in its 2017 
projections had assumed these units would be operating and collectively 
emitting 1,502 tons of NOX in the 2023 ozone season. These 
additional retirements announced subsequent to the EPA's analysis 
further bolster the conclusion that the EPA's emission estimates are 
conservative (i.e., that they may overpredict 2023 emissions). The 
magnitude of coal retirements like this, announced after the EPA's 
analysis, but scheduled to occur prior to 2023, suggests the emissions 
trend will continue downward. Moreover, the commenters' assertion that 
an assumed increase would be a more reasonable projection is not 
supported by compelling analysis or economic modeling: It contradicts 
the recent historical data, the most recent announcements on 
retirements and newly built capacity, and the widely used power sector 
models' outlook for 2023. The EPA believes, supported by the most 
recent reported data, that its 2023 EGU projections are reasonable and 
conservative. To the extent that actual 2023 emissions may differ from 
these projections, they are more likely to be even lower than the 
assumptions used in the EPA's modeling.
    The utility and the reasonableness of the EPA's EGU projections 
hinge on state-level and regional-level EGU emission projections, not 
projections for individual units or groups of units within a state. 
Nonetheless, the EPA notes that the assumed average emission rate for 
units with SCR optimization potential was quite consistent with the 
observed compliance measures. That is, the most recent historical data 
reported by unit operation, discussed in more detail in section 
III.B.2, bears out EPA assumptions in the CSAPR Update that these units 
would lower their emission rates in response to that rule, as they did 
in fact lower their emission rate 45 percent in the first year of the 
program.
    The EPA also disagrees with the assertion that that low allowance 
prices necessarily mean that emissions will be higher than the EPA's 
EGU projections. In a scenario where all other elements of the power 
sector and allowance market are held constant, the commenters 
observation would likely be realized. However, it is the EPA's 
experience with trading programs that those other variables do not 
remain constant over time. In most cases, lower allowance prices 
reflect the market's expectation that future emissions will be lower 
than anticipated, rather than higher, as other market forces continue 
to drive down emissions, thus decreasing demand for allowances 
authorizing those emissions. The commenters' claim is therefore not 
consistent with observed historical emission patterns over successive 
years of an allowance trading program's implementation. For example, 
regional emissions under the Acid Rain Program and CSAPR have 
consistently been below the sum of emission budgets, despite relatively 
low allowance prices.\129\ The commenters' claim is also not consistent 
with forward-looking emissions projections in power sector models. 
There are a variety of policy and market forces at work beyond CSAPR 
Update allowance prices that are

[[Page 65915]]

anticipated to continue to drive generation shifting 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. 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 supports the EPA's belief 
that the assumptions underlying its projection of 2023 ozone-season 
NOX levels for EGUs are reasonable and appropriate.
---------------------------------------------------------------------------

    \129\ See 2016 Program Progress--Cross-State Air Pollution Rule 
and Acid Rain Program available at https://www3.epa.gov/airmarkets/progress/reports/index.html.
---------------------------------------------------------------------------

    To the extent that commenters assert that the EPA cannot in its 
projections perfectly predict future natural gas prices, the EPA 
agrees. Projections are inherently uncertain, and the EPA believes it 
has made reasonable and conservative estimates regarding the role of 
natural gas prices in generation shifting and lower future emission 
reductions. The EPA's EGU projection method for this action started 
with existing data and only assumed generation shifting in instances 
where retirements were scheduled to occur and newly built capacity was 
scheduled to come online. In other words, the generation shifting 
assumed for 2023 reflects concrete, planned actions. The agency's 
applied projection method would suggest that the EPA's 2023 projections 
are conservative and that more, not less, generation shifting is likely 
to occur as we remain in a low natural gas price environment that is 
complemented by debottlenecking of Marcellus region natural gas 
production through significant new pipeline and pipeline capacity 
expansion in the 2017-2023 timeframe.
    With regard to comments stating that the EPA should factor the 
proposed ACE rule into its 2023 outlook, the EPA notes it has not done 
so as the ACE rule is not final. Moreover, it has not factored the 
Clean Power Plan into its projections given the stay of that rule 
issued by the Supreme Court. Both of these assumptions are reasonable 
and consistent with EPA analytic precedents and OMB Circular A-4 
guidance (requiring that regulatory baselines should reflect the future 
effect of current government programs and policies).130 131
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    \130\ Regulatory Impact Analysis for the Proposed Emission 
Guidelines for Greenhouse Gas Emissions from Existing Electric 
Utility Generating Units; Revisions to Emission Guideline 
Implementing Regulations; Revisions to New Source Review Program. 
EPA. Table ES-8. August 2018. Available at https://www.epa.gov/sites/production/files/2018-08/documents/utilities_ria_proposed_ace_2018-08.pdf.
    \131\ Regulatory Impact Analysis for the Proposed Emission 
Guidelines for Greenhouse Gas Emissions from Existing Electric 
Utility Generating Units; Revisions to Emission. Table ES-8. 
Available at https://www.epa.gov/sites/production/files/2018-08/documents/utilities_ria_proposed_ace_2018-08.pdf.
---------------------------------------------------------------------------

    Comment: For mobile source and non-EGU emissions, commenters 
suggest that emissions projections for these sectors could be 
unreliable due to the EPA's planned rulemaking actions including the 
proposed repeal of regulations with respect to so-called ``glider'' 
vehicles, engines, and kits, 82 FR 53442 (Nov. 16, 2017) (proposing to 
repeal the Greenhouse Gas Emissions and Fuel Efficiency Standards for 
Medium- and Heavy-Duty Engines and Vehicles--Phase 2); the proposed 
Safer Affordable Fuel Efficient (SAFE) Vehicles Rule for Model Years 
2021-2026 Passenger Cars and Light Trucks, 83 FR 42986 (Aug. 24, 2018) 
(proposing to repeal the Corporate Average Fuel Economy (CAFE) 
standards); and the proposed withdrawal of Control Techniques 
Guidelines (CTG) for the Oil and Natural Gas Industry, 83 FR 10478 
(Mar. 9, 2018).
    Response: The EPA disagrees that its 2023 projections are 
unreliable because of potential changes to other regulations. The EPA 
first notes any potential regulatory changes to the ``glider'' 
regulations, the SAFE vehicle rules, and the oil and gas CTG have not 
been finalized. In general, the mobile source and non-EGU emission 
inventories do not reflect rulemakings finalized in calendar year 2016 
or later, nor do they reflect any rules proposed but not yet finalized 
since 2016, as only finalized rules are reflected in modeling 
inventories. The EPA's normal practice is to only include changes in 
emissions from final regulatory actions in its modeling because, until 
such rules are finalized, any potential changes in NOX or 
VOC emissions are speculative.
    In addition, even if emissions were to change as a result of any 
such final rules, commenters have not indicated how and whether these 
additional emissions would affect downwind ozone concentrations. The 
model year 2017-2025 GHG regulations for cars and light trucks were 
projected to yield small but measurable criteria and toxic emission 
reductions from vehicles.\132\ Because the vehicles affected by the 
2017-2025 GHG standards would still need to meet applicable criteria 
pollutant emissions standards (e.g., the Tier 3 emissions standards; 79 
FR 23414), the regulatory impact analysis that accompanied the proposed 
revision to the GHG standards estimated a very limited impact on 
criteria and toxic pollutant emissions (increases in upstream emissions 
and decreases in tailpipe emissions). Moreover, the proposed SAFE 
Vehicles Rule specifically notes that none of the regulatory 
alternatives considered ``would noticeably impact net emissions of 
smog-forming or other `criteria' or toxic air pollutants.'' 83 FR 
42996. As to glider kits in particular, we note that the ``no action 
assurance'' provided by then-Administrator Pruitt via memorandum of 
July 6, 2018, was subsequently rescinded via a memorandum signed by 
Acting Administrator Wheeler on July 26, 2018, and that the EPA has not 
taken any further final action that would change any requirements for 
glider vehicles, glider engines, or glider kits.
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    \132\ See Table 4.3-19 in EPA Regulatory Impact Analysis for 
EPA's Final Rulemaking for 2017-2025 Light-Duty Vehicle Greenhouse 
Gas Emission Standards and Corporate Average Fuel Economy Standards 
(EPA-420-R-12-016, August 2012).
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    Finally, with regard to the proposed withdrawal of the oil and gas 
CTG, we also note that impacts of the CTGs were not included in the 
modeled inventories, so their withdrawal would not change the results 
of the modeling.
3. Definition of Nonattainment and Maintenance Receptors
    In this action, the EPA is continuing to apply the CSAPR Update 
approach to identifying nonattainment and maintenance receptors for the 
2008 ozone NAAQS in the 2023 analytic year. The EPA here describes the 
analytical approach pursued in the CSAPR Update with regard to the good 
neighbor requirements for the 2008 ozone NAAQS. For consistency's sake, 
the analysis and discussion underlying and presented in this action 
adheres to that analytical approach.
    To give independent effect to both the ``contribute significantly 
to nonattainment'' and the ``interfere with maintenance'' prongs of 
section 110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS, consistent with 
the D.C. Circuit's opinion in North Carolina, 531

[[Page 65916]]

F.3d at 910-11, the EPA has separately identified downwind areas 
expected to be in nonattainment of the 2008 ozone NAAQS and downwind 
areas expected to have problems maintaining the 2008 ozone NAAQS.
    Specifically, the EPA has identified as nonattainment receptors 
those monitors that both currently measure nonattainment based on 
measured 2014-2016 design values and that the EPA projects will be in 
nonattainment for the 2008 ozone NAAQS in 2023 (i.e., are projected to 
have average design values that exceed the NAAQS).
    The EPA has identified maintenance receptors as those receptors 
that would have difficulty maintaining the relevant NAAQS in a scenario 
that accounts for historical variability in air quality at that 
receptor. The variability in air quality was determined by evaluating 
the ``maximum'' future design value at each receptor based on a 
projection of the maximum measured design value over the relevant base-
year period. The EPA defines the projected maximum future design value 
as a potential future air quality outcome consistent with the 
meteorology that yielded maximum measured concentrations in the ambient 
data set analyzed for that receptor. The EPA also recognizes that 
previously experienced meteorological conditions (e.g., dominant wind 
direction, temperatures, air mass patterns) promoting ozone formation 
that led to maximum concentrations in the measured data may reoccur in 
the future. Therefore, the maximum design value gives a reasonable 
projection of future air quality at the receptor under a scenario in 
which such conditions do, in fact, reoccur. The projected maximum 
design value is used to identify downwind areas where emissions from 
upwind states could therefore interfere with the area's ability to 
maintain the NAAQS. The EPA therefore assessed the magnitude of the 
maximum projected design value for 2023 at each receptor in relation to 
the 2008 ozone NAAQS. Where that value exceeded the NAAQS, the EPA 
determined that receptor to be a ``maintenance'' receptor for purposes 
of defining interference with maintenance, consistent with the method 
used in CSAPR and upheld by the D.C. Circuit in EME Homer City II.\133\ 
That is, monitoring sites with a maximum projected design value that 
exceeds the NAAQS in 2023 are considered to have a maintenance problem 
in 2023.
---------------------------------------------------------------------------

    \133\ See 795 F.3d at 136.
---------------------------------------------------------------------------

    All nonattainment receptors also, by definition, meet EPA's 
criteria for identifying maintenance receptors--i.e., in addition to 
currently measuring nonattainment and having projected average design 
values that exceed the NAAQS, the receptors also would have difficulty 
maintaining the NAAQS accounting for variability in air quality at the 
receptor. The EPA refers to maintenance receptors that are not also 
nonattainment receptors as ``maintenance-only'' receptors. Maintenance-
only receptors therefore include those sites where the projected 
maximum design value exceeds the NAAQS, but the projected average 
design value is at or below the NAAQS. In addition, those sites that 
are currently measuring clean data (i.e., are at or below the 2008 
ozone NAAQS), but are projected to be in nonattainment based on the 
average design value (and that, by definition, are projected to have a 
maximum design value above the standard) are also identified as 
maintenance-only receptors. Unlike nonattainment receptors, the EPA did 
not disqualify potential maintenance receptors based on current clean 
monitored data in order to account for the possibility that certain 
areas would fail to maintain the NAAQS in the future, even though they 
may be currently attaining the NAAQS. See North Carolina, 531 F.3d at 
910-11 (finding that failure to give independent significance to the 
maintenance prong ``provides no protection for downwind areas that, 
despite EPA's predictions, still find themselves struggling to meet 
NAAQS due to upwind interference'').
    For further details regarding the EPA's identification of receptors 
in the CSAPR Update, see 81 FR 74526.
4. Air Quality Modeling To Identify Nonattainment and Maintenance 
Receptors
    The following summarizes the procedures for projecting future-year 
8-hour ozone average and maximum design values to 2023 to determine 
nonattainment and maintenance receptors. Consistent with the EPA's 
modeling guidance, the agency uses the air quality modeling results in 
a ``relative'' sense to project future concentrations. That is, the 
ratios of future year model predictions to base year model predictions, 
i.e., the ``relative response factor'' or relative (percent) change in 
model predictions for each location, are used to adjust monitored 
ambient ozone design values to generate future year projected design 
values. The modeling guidance recommends using measured ozone 
concentrations for the 5-year period centered on the base year as the 
air quality data starting point for future year projections. This 
average design value is used to dampen the effects of inter-annual 
variability in meteorology on ozone concentrations and to provide a 
reasonable projection of future air quality at the receptor under 
``average'' conditions. In addition, the EPA uses the projection of the 
maximum base period design value to provide a projection of future year 
air quality during meteorological conditions more favorable for ozone 
formation than on average. Because the base year for this analysis is 
2011, the EPA is using the base period 2009-2013 ambient ozone design 
value data to project 2023 average and maximum design values in a 
manner consistent with the modeling guidance.
    The approach for projecting future ozone design values involved the 
projection of an average of up to three design value periods, which 
include the years 2009-2013 (design values for 2009-2011, 2010-2012, 
and 2011-2013). The 2009-2011, 2010-2012, and 2011-2013 design values 
are accessible at www.epa.gov/airtrends/values.html. The average of the 
three design values creates a ``5-year weighted average'' value. The 5-
year weighted average values were then projected to 2023. To project 8-
hour ozone design values, the agency used the 2011 base year and 2023 
future base-case model-predicted ozone concentrations to calculate 
relative response factors (RRFs) for the location of each monitoring 
site. The RRFs were then applied to actual monitored data, i.e., the 
2009-2013 average ozone design values (to generate the projected 
average design values) and the individual design values for 2009-2011, 
2010-2012, and 2011-2013 (to generate potential maximum design values). 
Details of this approach are provided in the AQM TSD.
    The EPA considers projected design values that are greater than or 
equal to 76.0 ppb to be violating the 2008 ozone NAAQS in 2023.\134\ As 
noted previously, nonattainment receptors are those sites that both 
have projected average design values greater than the 2008 ozone NAAQS 
and are also

[[Page 65917]]

violating the NAAQS based on the most recent measured air quality data. 
Therefore, as an additional step, for those sites that are projected to 
be violating the NAAQS based on the average design values in 2023, the 
EPA examined the most recent measured design value data to determine if 
the site was currently violating the NAAQS. For the proposal, the 
agency examined ambient data for the 2014-2016 period, which form the 
basis for the most recent available, certified measured design values 
at the time of proposal. Certified measured design value data for 2015-
2017 are now available and have been included in the analysis of 
projected receptor. The 2015-2017 design values can be found in a 
spreadsheet file in the docket for this rule. Considering the 2015-2017 
measured design values does not change the determination regarding 
nonattainment and maintenance receptors in 2023 for the 2008 NAAQS.
---------------------------------------------------------------------------

    \134\ From 40 CFR 50.15(b): ``The 8-hour primary and secondary 
ambient air quality standards are met at an ambient air quality 
monitoring site when the 3-year average of the annual fourth-highest 
daily maximum 8-hour average O3 concentration is less 
than or equal to 0.075 ppm, as determined in accordance with 
appendix P to this part.'' The agency's use of 76.0 ppb (or 0.076 
parts per million) to identify violations of the 2008 Ozone NAAQS in 
this action is consistent the 2008 ozone NAAQS regulation. From 
section 2.2 of appendix P to 40 CFR part 50: ``The computed 3-year 
average of the annual fourth-highest daily maximum 8-hour average 
O3 concentrations shall be reported to three decimal 
places (the digits to the right of the third decimal place are 
truncated, consistent with the data handling procedures for the 
reported data).''
---------------------------------------------------------------------------

    As discussed above, maintenance-only receptors include both: (1) 
Those sites with projected average and maximum design values above the 
NAAQS that are currently measuring clean data; and (2) those sites with 
projected average design values below the level of the NAAQS, but with 
projected maximum design values of 76.0 ppb or greater.
    In projecting these future year design values, the EPA applied its 
own modeling guidance,\135\ which recommends using model predictions 
from the ``3 x 3'' array of grid cells surrounding the location of the 
monitoring site to calculate the relative response factors and identify 
future areas of nonattainment. In addition, in light of comments on the 
January 2017 NODA and other analyses, the EPA also projected 2023 
design values based on a modified version of this approach for those 
monitoring sites located in coastal areas. In brief, in the alternative 
approach, the EPA eliminated from the design value calculations those 
modeling data in grid cells not containing a monitoring site that are 
dominated by water (i.e., more than 50 percent of the land use in the 
grid cell is water).\136\ For each individual monitoring site, the EPA 
is providing the base period 2009-2013 average and maximum design 
values, 2023 projected average and maximum design values based on both 
the 3 x 3 approach and the alternative approach affecting coastal 
sites, and 2014-2016 measured design values.
---------------------------------------------------------------------------

    \135\ U.S. Environmental Protection Agency, 2014. Modeling 
Guidance for Demonstrating Attainment of Air Quality Goals for 
Ozone, PM2.5, and Regional Haze. http://www.epa.gov/ttn/scram/guidance/guide/Draft_O3-PM-RH_Modeling_Guidance-2014.pdf.
    \136\ A model grid cell is identified as a ``water'' cell if 
more than 50 percent of the grid cell is water based on the 2006 
National Land Cover Database. Grid cells that meet this criterion 
are treated as entirely over water in the Weather Research Forecast 
(WRF) modeling used to develop the 2011 meteorology for EPA's air 
quality modeling.
---------------------------------------------------------------------------

    Tables III.C-1 and III.C-2 contain the ambient 2009-2013 base 
period average and maximum 8-hour ozone design values, the 2023 
projected baseline average and maximum design values, and the ambient 
2014-2016 design values for the air quality monitors that were 
identified in the CSAPR Update as having remaining problems attaining 
or maintaining the 2008 ozone NAAQS in 2017, even with CSAPR Update 
implementation. The tables present the projected design values under 
both the 3x3 approach and the alternative approach. Table III.C-1 
contains data for the monitors identified as remaining nonattainment 
receptors in 2017 in the CSAPR Update and Table III.C-2 contains data 
for the monitors identified as remaining maintenance-only receptors in 
2017 in the CSAPR Update.\137\ The design values for all monitoring 
sites in the contiguous U.S. are provided in the docket. According to 
the EPA's modeling, there are no remaining nonattainment or maintenance 
receptors in the eastern U.S. in 2023 regardless of which approach to 
projecting design values is used.
---------------------------------------------------------------------------

    \137\ The EPA recognizes that the modeling results indicate a 
substantial projected improvement in ozone air quality (compared to 
current measured ozone levels) at several locations, including three 
monitors in Connecticut located near the sea--i.e., on the order of 
10-12 ppb.

 Table III.C-1--Base Period, Current (2014-2016), and 2023 Projected Design Values (ppb) for Monitors Identified as Remaining Nonattainment Receptors in
                                                                2017 in the CSAPR Update
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                2009-2013    2009-2013                   2023en       2023en    2023en ``No  2023en ``No
     Monitor ID              State               County            Avg          Max       2014-2016   ``3x3'' Avg  ``3x3'' Max  Water'' Avg  Water'' Max
--------------------------------------------------------------------------------------------------------------------------------------------------------
090019003...........  Connecticut........  Fairfield.........         83.7           87           85         72.7         75.6         73.0         75.9
090099002...........  Connecticut........  New Haven.........         85.7           89           76         71.2         73.9         69.9         72.6
480391004...........  Texas..............  Brazoria..........         88.0           89           75         74.0         74.9         74.0         74.9
484392003...........  Texas..............  Tarrant...........         87.3           90           73         72.5         74.8         72.5         74.8
484393009...........  Texas..............  Tarrant...........         86.0           86           75         70.6         70.6         70.6         70.6
551170006...........  Wisconsin..........  Sheboygan.........         84.3           87           79         70.8         73.1         72.8         75.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table III.C-2--Base Period, Current (2014-2016), and 2023 Projected Design Values (ppb) for Monitors Identified as Remaining Maintenance-Only Receptors
                                                               in 2017 in the CSAPR Update
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                2009-2013    2009-2013                   2023en       2023en    2023en ``No  2023en ``No
     Monitor ID              State               County            Avg          Max       2014-2016   ``3x3'' Avg  ``3x3'' Max  Water'' Avg  Water'' Max
--------------------------------------------------------------------------------------------------------------------------------------------------------
090010017...........  Connecticut........  Fairfield.........         80.3           83           80         69.8         72.1         68.9         71.2
090013007...........  Connecticut........  Fairfield.........         84.3           89           81         71.2         75.2         71.0         75.0
240251001...........  Maryland...........  Harford...........         90.0           93           73         71.4         73.8         70.9         73.3
260050003...........  Michigan...........  Allegan...........         82.7           86           75         69.0         71.8         69.0         71.7
360850067...........  New York...........  Richmond..........         81.3           83           76         71.9         73.4         67.1         68.5
361030002...........  New York...........  Suffolk...........         83.3           85           72         72.5         74.0         74.0         75.5
481210034...........  Texas..............  Denton............         84.3           87           80         69.7         72.0         69.7         72.0
482010024...........  Texas..............  Harris............         80.3           83           79         70.4         72.8         70.4         72.8
482011034...........  Texas..............  Harris............         81.0           82           73         70.8         71.6         70.8         71.6
482011039...........  Texas..............  Harris............         82.0           84           67         71.8         73.6         71.8         73.5
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 65918]]

    Comment: The EPA received several comments regarding its projection 
of 2023 ozone design values. The commenters suggest that certain 
monitoring sites in the New York City area will continue to have 
nonattainment and/or maintenance problems for the 2008 NAAQS in 2023, a 
claim which is contrary to the results of the EPA's modeling which 
shows that nonattainment and maintenance problems will be resolved in 
all areas outside of California by 2023. The assertion by the 
commenters is based on their examination of measured design values for 
2017 and modeling-based projected design values for 2017 and 2023. 
First, some commenters compared the projected design values for 2017 
based on modeling by the OTC using the Community Multi-scale Air 
Quality Model (CMAQ) to the 2017 design values projected by the EPA 
using the CAMx model. Those commenters point out that the 2017 CMAQ-
based design values are higher than the EPA CAMx design values by up to 
9.2 ppb at certain sites in the Northeast. Commenters also point to 
data showing that the greatest difference between the OTC CMAQ and EPA 
CAMx 2017 design values is at coastal monitoring sites, such as the 
Susan Wagner site in New York and the Westport site in Connecticut. 
Second, commenters compared the 2017 OTC CMAQ and EPA CAMx design 
values to the corresponding 2017 measured design values and contend 
that the CMAQ-based 2017 design values compare favorably to the 
measured data and that the CAMx-based design values under-predict the 
measured data. One commenter identified eight sites in Connecticut that 
are currently measuring nonattainment based on 2015-2017 design values 
which the EPA's CAMx modeling predicts will be in attainment in 2017. 
Third, commenters point to OTC CMAQ-based design values for 2023 which 
indicate that there will be two monitoring sites in Connecticut with 
design values that exceed the 2008 NAAQS in that year. Fourth, the 
commenters note that the design values based on OTC CAMx modeling for 
2023 are comparable in magnitude to the corresponding 2023 design 
values based on EPA's 2023 CAMx modeling. Commenters use this 
information to contend that the CAMx model provides a forecast that is 
too optimistic and that the EPA should rely upon the higher projected 
design values for 2023 from the OTC CMAQ modeling.
    Some of the commenters point out that the EPA's 2023 modeling 
projects a maximum design value of 75.9 ppb at Westport site and 
contend that, before the EPA can conclude that areas will attain by 
2023 with only the narrowest of margins (i.e., 0.1 ppb), the EPA must 
conduct its own analysis of the emission response differences between 
CMAQ and CAMx. Similarly, some commenters said that the EPA must 
address the demonstrated tendency of its methodology to under-predict 
real-world ozone levels in many downwind locations and that the EPA's 
modeling is not sufficiently conservative to give confidence that 
attainment is assured even as late as 2023.
    Response: The EPA does not agree that the modeling provided by 
commenters should affect the EPA's reliance on its own 2023 modeling. 
First, the commenters focused on projected average design values and 
completely ignore the EPA's projected maximum design values when 
comparing modeled to measured design values for 2017.\138\ The 
projected maximum design values are intended to represent future ozone 
concentrations when meteorological conditions are more conducive to 
ozone formation than on average. Analysis of meteorological conditions 
for the summers of 2015, 2016, and 2017 indicate that meteorology was 
more conducive than average for ozone formation during these summers in 
the Northeast.\139\ Comparing both the 2017 modeled average design 
values and maximum projected design values from the EPA's modeling to 
the 2017 measured design values indicates that the projected maximum 
design values are, in most cases, closer in magnitude to the 2017 
measured design values than the 2017 model-projected average design 
values, particularly for the Susan Wagner and Westport sites cited by 
commenters. Specifically, the 2017 measured design value and the EPA's 
modeled maximum design value at the Susan Wagner site are 76 ppb and 
77.8 ppb, respectively. At the Westport site the 2017 measured design 
value and the EPA's modeled maximum design value are 83 ppb and 79.5 
ppb, respectively. At the site in Philadelphia County, Pennsylvania the 
modeled 2017 maximum design value was 1.1 ppb lower than the 
corresponding measured value (78 ppb), and at the site in Harford 
County, Maryland, the modeled value was higher, not lower, than the 
measured 2017 design value (75 ppb). As part of our response to the 
commenters' concerns about the EPA's modeling we also compared the 2017 
measured design values to the EPA's projected 2017 maximum design 
values for 81 sites in the Northeast that had both a 2009 to 2013 base 
period measured maximum design value exceeding the 2008 NAAQS and valid 
2017 measured design values. As a result of this analysis we found that 
the 2017 projected maximum design values are only 0.5 ppb higher than 
the corresponding 2017 measured design values, on average across these 
81 sites, and the median difference is -0.9 ppb. Thus, while the EPA 
recognizes that there are uncertainties in the modeling, the results 
for sites in the Northeast do not, on balance, show a notable bias in 
the EPA's design value projections. It is not unreasonable that there 
may be some differences in terms of over- and under-estimates between 
the modeling-based projections for a future year and the measured data 
in part because the meteorology of the future year cannot be known in 
advance. For instance, the degree of ozone conducive meteorology in a 
particular region can vary from year to year such that some years are 
more conducive then others. Since it is not possible to forecast 
meteorology for analytic years in the future, the EPA chose to model 
meteorological conditions from a historical time-period when 
meteorology was generally conducive for ozone formation, as recommended 
in the EPA's modeling guidance.
---------------------------------------------------------------------------

    \138\ Note that the analysis of modeled ozone design values 
described in this response are based on the ``3x3'' method to be 
consistent with the modeling data submitted by the commenter.
    \139\ See the Appendix in to the Considerations for Identifying 
Maintenance Receptors Memo (signed on October 19, 2018).
---------------------------------------------------------------------------

    For 2023, the modeling results show that the EPA and OTC CAMx-based 
2023 average design value projections are consistent on an individual 
site basis for all sites in the Northeast.\140\ Both the EPA and OTC 
CAMx modeling indicate that there will be no sites with design values 
that exceed the 2008 NAAQS by 2023.
---------------------------------------------------------------------------

    \140\ The OTC did not provide data on projected future year 
maximum design values based on their modeling.
---------------------------------------------------------------------------

    Moreover, the OTC CMAQ 2023 design values are, in fact, fairly 
consistent with both the OTC and EPA CAMx-based 2023 projections at 
nearly all sites. As an example, the average and median differences 
between the OTC CMAQ and EPA CAMx 2023 design values for sites in the 
Northeast are 0.15 ppb and 0.70 ppb, respectively. However, while the 
EPA and OTC CAMx modeling both indicate that all sites in the Northeast 
will be clean for the 2008 NAAQS by 2023, the OTC CMAQ modeling 
projects that two sites will have average design values above the 2008 
NAAQS by 2023. The two sites projected to exceed the 2008 NAAQS in

[[Page 65919]]

2023 with OTC CMAQ modeling are the Westport and the Susan Wagner site. 
The CMAQ projected design values for these two sites are not only 
inconsistent with the CAMx modeling, but they are also inconsistent 
with the CMAQ modeling for other nearby sites in Connecticut, New York, 
and New Jersey. For example, based on the OTC CMAQ modeling, ozone at 
the Susan Wagner site is projected to decline by only 5 percent between 
2011 and 2023, whereas at a site in nearby Bayonne, New Jersey, ozone 
is projected to decline by 13 percent over this same time period. 
Similarly, ozone at the Westport site is projected to decline by only 3 
percent between 2011 and 2023 with CMAQ, but at other sites along the 
Connecticut coastline (i.e., sites in Greenwich, Stratford, and 
Madison), ozone is projected to decline by 10 to 19 percent. In 
addition, the OTC CMAQ results for these two sites (i.e., Westport and 
Susan Wagner) are inconsistent with ozone reductions predicted by CMAQ 
at other sites in the New York City area which range from 11 to 18 
percent. In contrast, the EPA's 2023 modeling shows that ozone is 
projected to decline by 13 percent at the Westport site which is an 
amount far greater than the 3 percent predicted by OTC's CMAQ modeling. 
The EPA's predicted ozone reductions at Westport, however, are 
consistent with the predicted reductions at other coastal sites in 
Greenwich, Madison, and Stratford, all of which are in the range of 13 
to 18 percent. Similarly, ozone at the Susan Wagner site is projected 
to decline by 12 percent between 2011 and 2023 based on the EPA's CAMx 
modeling which is consistent with the 15 percent reduction predicted at 
the nearby site in Bayonne, New Jersey. Thus, the change in ozone from 
2011 to 2023 predicted by the EPA's CAMx modeling is much more 
spatially consistent within the New York City area than OTC's CMAQ 
modeling which predicts spatially anomalous results at two sites (i.e., 
Westport and Susan Wagner).
    While it is possible ozone levels in 2023 at the Westport and/or 
Susan Wagner sites may be higher than at other sites in the New York 
City area, the commenter fails to provide any explanation regarding the 
large difference in the CMAQ-based model response to emission 
reductions compared to the response at nearby sites and to other sites 
in the New York City area. Based on the complicated photochemistry in 
this area, it is possible that ozone monitoring sites closest to the 
large NOX emissions in New York City may be less responsive 
to NOX controls compared to sites further downwind. Due to 
non-linear chemistry, sites very close to the city may experience 
increases in ozone or less reduction than other nearby sites on some 
days in response to local emission reductions in NOX. Thus, 
we might expect that monitoring sites in Connecticut that are closer to 
New York City would show less reduction in ozone than sites in 
Connecticut that are further downwind. However, as noted above, in the 
OTC CMAQ modeling, the closest downwind Connecticut site (Greenwich) 
has a 10-percent modeled ozone reduction, while the Westport site, 
which is slightly farther downwind, has only a 3-percent modeled ozone 
reduction. The commenter did not provide any information to explain why 
the OTC CMAQ modeling results for the Westport and Susan Wagner 
monitoring sites are dissimilar to other nearby sites or why the 
commenters believe that the OTC CMAQ modeling provides a more 
representative ozone projection for these two sites compared to the EPA 
and OTC CAMx-based modeling.
    Information in the OTC air quality modeling technical support 
document (OTC TSD) provides some insight into why their CMAQ and CAMx 
modeling shows a dramatic difference in model response in New York City 
and coastal Connecticut.\141\ First, the OTC's comparison of CMAQ and 
CAMx 2011 base year model predictions to the corresponding measured 
data indicate that the CAMx 2011 predictions have lower error and 
higher correlation with measured data (i.e., better model performance) 
than the CMAQ 2011 predictions for the 8 monitoring sites in 
Connecticut and New York that are included in Table 6-6 of the OTC TSD. 
Second, examining the 2011 modeled data for the top-10 days used to 
calculate the site-specific RRF indicates that the CMAQ 2011 
predictions are not representative of ozone concentrations at the 
location of high ozone coastal sites in New York City and coastal 
Connecticut for which data are provided in the OTC TSD. For example, 
Figures 6-81 through 6-90 in the OTC TSD provide time series plots of 
measured and CMAQ and CAMx-modeled ozone data for the days used to 
calculate the RRF at each of 5 monitoring sites in the Northeast (2 
sites in coastal Connecticut, 2 sites in New York City, and 1 site in 
Maryland). These figures show several types of data including (1) the 
2011 measured and corresponding model-predicted hourly ozone 
concentrations at the monitoring site and (2) the highest 2011 and 2017 
modeled 8-hour daily maximum ozone concentrations in the 3 x 3 array of 
grid cells including and surrounding the monitoring site.\142\ The 
latter set of data are used in the calculation of the RRF which, in 
turn, is used to project the future year design value at each site. It 
is expected that the highest modeled ozone values based on the 3 x 3 
approach for calculating RRFs will be equal to or greater than the 
modeled value in the grid cell containing the monitor. However, as 
evident from the figures in the OTC TSD, the 2011 and 2017 ozone 
concentrations used for projecting design values based on OTC's CMAQ 
modeling overstate the modeled values at the coastal monitoring sites 
by a notably larger amount than the corresponding 2011 predictions from 
OTC's CAMx modeling. The clearest example of this is at the Queens 
College site in New York City where the CMAQ-based 2011 and 2017 data 
for the ten days used for the RRF calculation appear to be 50 to 60 ppb 
above the highest hourly measured concentrations at the location of the 
monitoring site. In contrast, the CAMx data used for the RRF 
calculation appear to be within 20 ppb of the highest hourly measured 
data on all ten days at this site. Overall, the OTC CAMx 2011 ozone 
concentrations used to calculate the RRF align closely with the model 
predictions and measured data at the monitoring sites for which data 
are provided in the OTC TSD. Thus, the CAMx-based projections are more 
likely to be representative than OTC's CMAQ modeling of the expected 
ozone response to emissions reductions at the location of the 
monitoring site.
---------------------------------------------------------------------------

    \141\ Ozone Transport Commission/Mid-Atlantic Northeastern 
Visibility Union 2011 Based Modeling Platform Support Document, 
October 18, 2018. This document can be found in the docket for this 
action.
    \142\ In Figures 6-81 through 6-90 of the OTC TSD the highest 
modeled ozone concentration in the 3 x 3 array of grid cells is 
referred to as the ``9-Grid 8HMX'' value.
---------------------------------------------------------------------------

    Typically, the highest modeled concentrations near coastal 
monitoring sites are found in adjacent over-water grid cells. Ozone can 
be higher over water than over land because mixing of the air is more 
limited over water and titration (i.e., removal) by chemical reaction 
of ozone with fresh NO emissions is less prevalent. Thus, it is 
possible that the apparent anomalous 2017 design values at the Westport 
and Susan Wagner sites derived from OTC's CMAQ modeling may be the 
result of using predicted ozone values in the RRF calculations that are 
not representative of concentrations at the monitoring site. This 
hypothesis is supported by the

[[Page 65920]]

OTC's own analysis in which the OTC applied an approach that limits the 
use of over-water ozone predictions in the calculation of projected 
design values (i.e., Land Water Mask or LWMASK). When the OTC applied 
the LWMASK approach, the projected 2017 design values at the Westport 
and Susan Wagner sites were lowered significantly. Specifically, the 
2017 OTC CMAQ design value at Westport drops from 83 ppb to 76 ppb and 
from 78 ppb to 72 ppb at Susan Wagner by limiting the amount of over 
water grid cells used in the projections. Thus, the concerns with the 
OTC's application of CMAQ for 2017, as described above, call into 
question the validity of their CMAQ modeling for other future years.
    Regarding the comment that the EPA's modeling predicts attainment 
in 2017 at eight monitors in Connecticut that are currently measuring 
nonattainment, it is entirely reasonable to project that these sites 
will be in attainment by 2023 as a result of the roughly 19 percent 
reduction in aggregate ozone season NOX emissions that is 
expected to occur between 2017 and 2023 for the states covered by the 
CSAPR Update. Despite large regional and local NOX emission 
reductions, ozone has remained stubbornly high at sites in Connecticut. 
Larger ozone reductions are expected at these sites in the future as 
NOX emissions continue to go down, and the local ozone 
chemistry becomes more responsive to NOX reductions. That 
is, because of the high NOX emissions in the New York City 
area and the non-linear chemistry associated with ozone formation, the 
benefits of NOX emission reductions may not have been fully 
realized to date at downwind sites in Connecticut. More notable 
reductions in ozone at these sites are expected as NOX 
emissions decline further, in response to existing control programs and 
other factors influencing emissions. Large, short-term reduction in 
ozone is not unprecedented at historically high-ozone sites in other 
parts of the Northeast Corridor. Specifically, the measured design 
values at the Edgewood monitoring site in Harford County, Maryland, 
which is downwind of the Baltimore/Washington, DC urban area, declined 
by nearly 20 percent between 2012 and 2014 and have been below the 
level of the 2008 NAAQS since 2014, as shown by the data in Table 
III.C-3, below. Thus, the EPA disagrees that the monitored and OTC CMAQ 
modeling data cited by the commenter indicate that the EPA modeling 
projections for 2023 are not reliable.

                                                  Table III.C-3--Design Values (ppb) at Edgewood Site in Harford County, MD, 2007 Through 2017
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Year                                 2007        2008        2009        2010        2011        2012        2013        2014        2015        2016        2017
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Design Value................................................         94          91          87          89          92          93          85          75          71          73          75
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    As the commenters have suggested, the EPA did perform an analysis 
comparing model response of ozone to emissions between CMAQ and CAMx 
and found that both models give very similar responses when both models 
are run with similar inputs (e.g., emissions, meteorology, and boundary 
concentrations) and similar technical constructs (e.g., vertical layer 
structure and vertical mixing method).\143\ The results of that study 
are further supported by a more recent comparison by the EPA of 
projected CAMx and CMAQ ozone design values using the EPA's version 6.2 
of the 2011 emissions platform \144\ with 2025 as the future 
year.145 146 For the two sites in the New York City area 
that are the focus of the comments (i.e., Westport and Susan Wagner), 
the EPA's analysis shows that both models predict a comparable 
reduction at each of these sites. Specifically, at the Westport site 
the 2009 to 2013 base period ozone design values were projected to 
decline by 9 percent with CMAQ and by 11 percent with CAMx. This 
difference in model response equates to only a 1.8 ppb difference in 
projected 2025 design values at this site, which is far less than the 
9.2 ppb difference between CMAQ and CAMx seen in the OTC's analysis of 
2023 modeling results. Similarly, at the Susan Wagner site the base 
period ozone design value was projected to decline by 11.2 percent with 
CMAQ and 11.7 percent with CAMx in EPA's modeling. The difference in 
model response at the Susan Wagner site equates to only a 0.4 ppb 
difference in the projected 2025 design, which is far less than the 5.8 
ppb difference between CMAQ and CAMx in OTC's 2023 analysis.\147\ 
Furthermore, a study sponsored by the Texas Commission on Environmental 
Quality also found that CAMx and CMAQ provide a comparable response to 
the same amount of NOX and VOC emission reductions.\148\ In 
summary, based on the EPA's analysis of its own data and the data 
available from commenters, we disagree with the commenter's contention 
that the EPA's CAMx-based modeling does not provide a credible 
projection of 2023 ozone design values.
---------------------------------------------------------------------------

    \143\ Baker, K., S. Phillips, and B. Timin. ``Operational 
Evaluation and Model Response Comparison of CAMx and CMAQ for Ozone 
and PM2.5'', 7th Annual Community Modeling & Analysis 
System Conference, October 2008.
    \144\ See the Technical Support Document (TSD): Preparation of 
Emissions Inventories for the Version 6.2, 2011 Emissions Modeling 
Platform, EPA, August 2015.
    \145\ A description of the CAMx modeling can be found in the 
Regulatory Impact Analysis of the Final Revisions to the National 
Ambient Air Quality Standards for Ground-Level Ozone, EPA-452/R-15-
007, September 2015.
    \146\ A description of the EPA CMAQ modeling can be found in the 
docket.
    \147\ An Excel file containing the differences in projected 
design values between EPA's CMAQ and CAMx modeling for sates along 
the Northeast Corridor from Washington, DC to Connecticut can be 
found in the docket for this final action.
    \148\ Final Report: Three-Dimensional Performance Comparison of 
CAMx and CMAQ Using the 2013 DISCOVER-AQ Field Study Data Base. 
Prepared by Ramboll under contract to the Texas Commission on 
Environmental Quality, August 2015.
---------------------------------------------------------------------------

5. Pollutant Transport From Upwind States
    Although the EPA has conducted nationwide contribution modeling for 
2023, the EPA does not believe this information is necessary for 
evaluating remaining good neighbor obligations for the 2008 ozone NAAQS 
because there are no ozone monitoring sites in the eastern U.S. that 
are expected to have problems attaining or maintaining the 2008 ozone 
NAAQS in 2023. Nonetheless, the results of the EPA's state-by-state 
ozone contribution modeling were released in a memorandum on March 27, 
2018, and are also available in the docket for this action.\149\ The 
EPA notes that, while the air quality modeling did identify potential 
remaining problem receptors in California in 2023, none of the EPA's 
prior analysis nor its current contribution modeling have linked any of 
the CSAPR Update states in the eastern U.S., whose good neighbor 
obligations for the 2008 ozone NAAQS

[[Page 65921]]

are the subject of this action, to any of those potential remaining 
problem receptors. Therefore, the EPA does not believe there is a need 
to further evaluate the contributions of the 20 CSAPR Update states to 
any downwind receptors identified in the EPA's 2017 modeling conducted 
for the CSAPR Update.
---------------------------------------------------------------------------

    \149\ 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). EPA Memorandum to Regional Air Division 
Directors. March 27, 2018. Available at https://www.epa.gov/sites/production/files/2018-03/documents/transport_memo_03_27_18_1.pdf.
---------------------------------------------------------------------------

D. Final Determination

    Consistent with the proposed action, the EPA has determined that, 
with CSAPR Update implementation, 20 eastern states' good neighbor 
obligations for the 2008 ozone NAAQS are fully addressed.\150\ The 
states covered by this action are listed in table III.D-1. The EPA's 
determination is based on findings that: (1) 2023 is a reasonable 
future analytic year for evaluating ozone transport problems with 
respect to the 2008 ozone NAAQS; and (2) for the purposes of interstate 
ozone transport, air quality modeling projections for 2023 indicate 
that no further air quality problems will remain in the east in 2023.
---------------------------------------------------------------------------

    \150\ The EPA has also already separately finalized an approval 
of Kentucky's SIP submittal demonstrating that the CSAPR Update is a 
full remedy for Kentucky's good neighbor obligation for the 2008 
ozone NAAQS. 83 FR 33730 (July 17, 2018).
---------------------------------------------------------------------------

    As explained in more detail in section III.B, the EPA's selection 
of 2023 as a reasonable future analytic year is supported by an 
assessment of attainment dates for the 2008 ozone NAAQS and feasibility 
of implementing control strategies to reduce NOX in CSAPR 
Update states. The EPA's NOX control strategy feasibility 
assessment prioritizes NOX control strategies in CSAPR 
Update states that would be additional to those strategies that were 
already quantified into CSAPR Update emissions budgets. The EPA finds: 
(1) That 2023 is an appropriate future analytic year, taking into 
consideration relevant attainment dates, because it is the first ozone 
season for which significant new controls to reduce NOX 
could be feasibly installed across the CSAPR Update region and thus 
represents the timeframe that is as expeditious as practicable for 
upwind states to implement additional emission reductions.
    Furthermore, as described in section III.C, the EPA finds: (2) That 
its analysis of ozone concentrations in step 1 for the 2023 analytic 
year indicates that there are no monitoring sites in the east that are 
projected to have nonattainment or maintenance problems with respect to 
the 2008 ozone NAAQS in 2023. Together, these two findings lead to 
EPA's final determination that--with CSAPR Update implementation--CSAPR 
Update states are not expected to significantly contribute to 
nonattainment or interfere with maintenance of the 2008 ozone NAAQS in 
downwind states in 2023.
    As a result of this final determination, the EPA finds that the 
promulgation of the CSAPR Update fully satisfies the requirements of 
the good neighbor provision for the 2008 ozone NAAQS for these states, 
and therefore also satisfies the agency's obligation pursuant to CAA 
section 110(c) for these states. Accordingly, the EPA has no remaining 
obligation to issue FIPs, nor are the states required to submit SIPs, 
that would further reduce transported ozone pollution beyond the 
existing CSAPR Update requirements with regard to the 2008 ozone NAAQS.

 Table III.D-1--States Covered by the Final Determination Regarding Good
              Neighbor Obligations for the 2008 Ozone NAAQS
------------------------------------------------------------------------
                               State name
-------------------------------------------------------------------------
Alabama
Arkansas
Illinois
Indiana
Iowa
Kansas
Louisiana
Maryland
Michigan
Mississippi
Missouri
New Jersey
New York
Ohio
Oklahoma
Pennsylvania
Texas
Virginia
West Virginia
Wisconsin
------------------------------------------------------------------------

    Consistent with this final determination, this action also 
finalizes minor revisions to the existing state-specific sections of 
the CSAPR Update regulations for states other than Kentucky and 
Tennessee. The revisions will remove the current statements indicating 
that the CSAPR Update FIP for each such state only partially addresses 
the state's good neighbor obligation under CAA section 
110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS. Because states can replace 
the CSAPR Update FIPs with SIPs, these revisions will also mean that a 
SIP that is approved through notice-and-comment rulemaking to fully 
replace the CSAPR Update FIP for one of these states would also fully 
address the state's good neighbor obligation for this NAAQS. In 
particular, the EPA finalizes findings that the agency's previous 
approvals of CSAPR Update SIPs for Alabama (82 FR 46674) and Indiana 
(signed November 27, 2018; publication in the Federal Register 
forthcoming) \151\ fully satisfy those states' good neighbor 
obligations for the 2008 ozone NAAQS. Thus, Alabama and Indiana have no 
obligation to submit any additional SIP revisions addressing these good 
neighbor obligations.
---------------------------------------------------------------------------

    \151\ In this action, the EPA proposed to find that Alabama's 
previously approved CSAPR Update SIP would now fully satisfy its 
good neighbor obligation for the 2008 ozone NAAQS. Subsequent to the 
proposal, the EPA finalized its approval of Indiana's CSAPR Update 
SIP. As discussed earlier, the EPA found that Indiana's SIP approval 
only partially satisfied its good neighbor obligation for the 2008 
ozone NAAQS for the same reasons that the EPA found that Alabama's 
SIP approval only partially satisfied that state's good neighbor 
obligation. Although the EPA did not propose in this action to find 
that Indiana's SIP would now fully satisfy its good neighbor 
obligation, the EPA did propose to find that the state's CSAPR 
Update FIP would fully satisfy its obligation. Because Indiana's 
approved SIP is commensurate with its prior CSAPR Update FIP such 
that Indiana is therefore now situated identically to Alabama, the 
EPA believes it is a logical outgrowth of the proposal to finalize a 
finding that Indiana's approved CSAPR Update SIP also now fully 
satisfies its good neighbor obligation for the 2008 ozone NAAQS.
---------------------------------------------------------------------------

IV. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

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

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review. Any changes 
made in response to OMB recommendations have been documented in the 
docket.

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

    This action is not subject to Executive Order 13771 because this 
final rule is expected to result in no more than de minimis costs.

C. Paperwork Reduction Act

    This action does not impose any new information collection burden 
under the Paperwork Reduction Act. The OMB has previously approved the 
information collection activities contained in the existing regulations 
and has assigned OMB control number 2060-0667. The minor revisions to 
the FIP provisions finalized in this action have no impact on 
monitoring, recordkeeping, and reporting requirements for affected

[[Page 65922]]

EGUs in the CSAPR NOX Ozone Season Group 2 Trading Program.

D. Regulatory Flexibility Act

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act. In making this determination, the impact of concern is 
any significant adverse economic impact on small entities. An agency 
may certify that a rule will not have a significant economic impact on 
a substantial number of small entities if the rule relieves regulatory 
burden, has no net burden, or otherwise has a positive economic effect 
on the small entities subject to the rule. This action makes a minor 
modification to existing CSAPR Update FIPs and does not impose new 
requirements on any entity. The EPA has therefore concluded that this 
action will have no net regulatory burden for all directly regulated 
small entities.

E. Unfunded Mandates Reform Act

    This action does not contain any unfunded mandate as described in 
the Unfunded Mandates Reform Act, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. The action imposes 
no enforceable duty on any state, local, or tribal governments or the 
private sector. This action simply updates the existing CSAPR Update 
FIPs to establish that no further federal regulatory requirements are 
necessary.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government. This 
action simply updates the existing CSAPR Update FIPs to establish that 
no further federal regulatory requirements are necessary.

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

    This action does not have tribal implications as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments, on the relationship between the federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the federal government and Indian tribes. This action simply 
updates the existing CSAPR Update FIPs to establish that no further 
federal regulatory requirements are necessary. Thus, Executive Order 
13175 does not apply to this action. Consistent with the EPA Policy on 
Consultation and Coordination with Indian Tribes, the EPA consulted 
with tribal officials while developing the CSAPR Update. A summary of 
that consultation is provided in the preamble for the CSAPR Update, 81 
FR 74584 (October 26, 2016). Additionally, the EPA provided an overview 
of its proposed determination during a National Tribal Air 
Association--EPA Air Policy Update meeting on Thursday July 26, 2018.

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

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it simply updates the existing CSAPR 
Update FIPs to establish that no further federal regulatory 
requirements are necessary.
    Comment: One commenter contends that the EPA has inappropriately 
failed to identify and assess the health risks to children from its 
decision to authorize continued interstate ozone pollution that 
contributes to violations of the 2008 and 2015 ozone air quality 
standards in downwind states. The commenter states that the EPA has 
consistently recognized that children are disproportionately vulnerable 
to the environmental health risks of ozone and asserts that by 
authorizing continued pollution that will harm children, the EPA has 
failed to ensure that its policies, programs, activities, and standards 
address these risks. The commenter claims that this rule is subject to 
section 2-202 of the Executive Order, which provides that ``covered 
regulatory action'' means ``any substantive action in a rulemaking'' 
that is ``likely to result in a rule that may'' (1) ``adversely affect 
in a material way . . . the environment, public health or safety, or 
State, local, or tribal governments or communities'' and (2) ``concern 
an environmental health risk or safety risk that an agency has reason 
to believe may disproportionately affect children.'' The commenter 
asserts that ozone pollution above the air quality standards the EPA 
has adopted indisputably is a health risk that disproportionately 
affects children.
    Response: According to section 2-202, a rulemaking is a ``covered 
regulatory action'' and thus subject to the Executive Order if the 
action is economically significant under Executive Order 12866 and 
involves an environmental health risk or safety risk that the agency 
has reason to believe may disproportionately affect children. This 
rulemaking does not qualify under either criterion. First, although 
this action is considered a significant regulatory action under 
Executive Order 12866, the EPA has not determined that the rule is 
economically significant under that Order, and the commenter has not 
explained whether or why it should be considered economically 
significant. To the extent that the commenter cites the standard for 
economic significance wherein an action ``would adversely affect in a 
material way . . . the environment, public health or safety, or State, 
local, or tribal governments or communities,'' the commenter has not 
explained how this action, which concludes that air quality problems 
will be resolved and therefore does not either impose or repeal any 
regulatory requirements, would have an adverse effect.
    Second, the health-based standard at issue in this action has 
already been set in a prior rulemaking to promulgate the 2008 ozone 
NAAQS, wherein the EPA did consider the effects of the standard under 
the Executive Order. 73 FR 16436, 16506-07. Therefore, this action does 
not concern an environmental health or safety risk because the EPA is 
simply evaluating how to implement an existing health standard. 
Moreover, under the good neighbor provision, the EPA's authority to 
prohibit emissions from sources in upwind states is constrained by the 
obligation to demonstrate that such reductions are necessary to address 
a downwind nonattainment or maintenance problem relative to a NAAQS. 
See EME Homer City, 134 S. Ct. at 1608. If the EPA's analysis 
determines that there are no such downwind air quality problems in the 
future, then the EPA cannot demonstrate that further emission 
reductions are necessary from an upwind state and the EPA lacks the 
authority to prohibit any further emissions. See id.; EME Homer City 
II, 795 F.3d at 130. Under such circumstances, there is no health or 
safety risk which may disproportionality affect children.

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

    This action is not a ``significant energy action'' because it is 
not likely to

[[Page 65923]]

have a significant adverse effect on the supply, distribution, or use 
of energy. This action simply updates the existing CSAPR Update FIPs to 
establish that no further federal regulatory requirements are 
necessary.

J. National Technology Transfer Advancement Act

    This rulemaking does not involve technical standards.

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

    Consistent with Executive Order 12898 and the EPA's environmental 
justice policies, the EPA considered effects on low-income populations, 
minority populations, and indigenous peoples while developing the CSAPR 
Update. The process and results of that consideration are described in 
the preamble for the CSAPR Update, 81 FR 74585 (October 26, 2016). 
Because this action simply updates the existing CSAPR Update FIPs to 
establish that no further federal regulatory requirements are necessary 
and does not establish a new environmental health or safety standard, 
the EPA believes that no further review of this action under Executive 
Order 12898 is necessary.
    Comment: One commenter asserts that the EPA has failed either to 
identify or to address the disproportionately high and adverse impact 
on minority communities of continued interstate ozone pollution that 
contributes to violations of both the 2008 and 2015 health-based 
standards for ozone and harms human health, in violation of the 
Executive Order. The commenter notes that the EPA's modeling conducted 
for the CSAPR Update showed that interstate ozone pollution contributes 
significantly to downwind states' failure to attain and maintain the 
2008 ozone standard and identified the downwind nonattainment and 
maintenance areas that receive this pollution. However, the commenter 
contends that the EPA conceded the CSAPR Update would achieve only very 
small reductions in the pollution and that the EPA expected air quality 
problems in downwind areas to persist. Data for the 2017 ozone season 
confirms the EPA's projection that these areas would continue to suffer 
poor air quality in violation of the 2008 standard. The commenter 
asserts that the agency's claim that all Eastern states will be in 
compliance with the 2008 ozone standard in 2023 does not negate the 
serious harms that will result from unhealthy ozone levels this year, 
next year, and in future years. The commenter states that the 
populations in downwind areas that continue to experience violations 
are disproportionately members of minority racial and ethnic groups, 
and that the EPA's decision will expose communities who live near 
polluting sources, who are also disproportionally members of racial and 
ethnic minorities, to continued high levels of pollution. The commenter 
further asserts that people most exposed to power plant pollution are 
the least likely to be able to afford the health care costs imposed by 
exposure to pollution and are otherwise socially disadvantaged.
    The commenter concludes that the agency's attempt to justify its 
failure to identify and address disproportionately high and adverse 
impacts on minority populations is contrary to the Executive Order and 
arbitrary. The commenter explains that Executive Order 12898 applies to 
all ``effects of [EPA's] programs, policies, and activities,'' which 
includes effects of the EPA's administration of the Clean Air Act's 
good neighbor provision and the decision not to address ongoing air 
pollution that contributes to violations of health-based air quality 
standards. The commenter contends that there is no basis to conclude 
that the Executive Order creates any exception for EPA programs, 
policies, or activities that effectively authorize, rather than curtail 
pollution, concluding that decisions that result in greater pollution 
are most likely to have disproportionately high and adverse impacts on 
minority populations.
    Response: The health-based standard at issue in this action was set 
in a prior rulemaking to promulgate the 2008 ozone NAAQS, wherein the 
EPA did consider the effects of ozone on different populations, 
including those identified by the commenter. 73 FR 16436, 16507. As 
discussed earlier, the EPA also considered these effects in 
promulgating the emission reduction obligations intended to address 
downwind nonattainment and maintenance concerns with respect to this 
standard in the CSAPR Update. However, under the good neighbor 
provision, the EPA's authority to prohibit emission reductions from 
sources in upwind states is constrained by the obligation to 
demonstrate that such reductions are necessary to address a downwind 
nonattainment or maintenance problem relative to a NAAQS. See EME Homer 
City, 134 S. Ct. at 1608. If the EPA's analysis demonstrates that there 
are no such downwind air quality problems in the future, then the EPA 
cannot demonstrate that further emission reductions are necessary from 
an upwind state and the EPA therefore lacks the authority to prohibit 
any further emissions. See id.; EME Homer City II, 795 F.3d at 130. 
Under such circumstances, further review under Executive Order 12898 is 
not warranted.

L. Congressional Review Act

    This action is subject to the Congressional Review Act, and the EPA 
will submit a rule report to each House of the Congress and to the 
Comptroller General of the United States. This action is not a ``major 
rule'' as defined by 5 U.S.C. 804(2).

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

    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, but ``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 action is ``nationally applicable'' or, in 
the alternative, is based on a determination of ``nationwide scope and 
effect'' within the meaning of section 307(b)(1). This action addresses 
emissions impacts and sources located in 20 States, which are located 
in multiple EPA Regions and federal circuits. The final 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 section 110(a)(2)(D)(i)(I) for 
the 2008 ozone NAAQS.
    For these reasons, the Administrator determines that this final 
action is nationally applicable or, in the alternative, is based on a 
determination of nationwide scope and effect for purposes of section 
307(b)(1). Thus, pursuant to section 307(b), any petitions for review 
of this final action must be filed in the Court of Appeals for the 
District of Columbia Circuit within 60 days from the date this final 
action is published in the Federal Register.
    In addition, pursuant to sections 307(d)(1)(C) and 307(d)(1)(V) of 
the CAA, the Administrator has determined

[[Page 65924]]

that this action is subject to the provisions of section 307(d). CAA 
section 307(d)(1)(B) provides that section 307(d) applies to, among 
other things, ``the promulgation or revision of an implementation plan 
by the Administrator under CAA section 110(c).'' 42 U.S.C. 
7407(d)(1)(B). Under section 307(d)(1)(V), the provisions of section 
307(d) also apply to ``such other actions as the Administrator may 
determine.'' 42 U.S.C. 7407(d)(1)(V). The agency has complied with 
procedural requirements of CAA section 307(d) during the course of this 
rulemaking.

List of Subjects in 40 CFR Part 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Incorporation by reference, Intergovernmental 
relations, Nitrogen oxides, Ozone, Particulate matter, Regional haze, 
Reporting and recordkeeping requirements, Sulfur dioxide.

    Dated: December 6, 2018.
Andrew R. Wheeler,
Acting Administrator.
    For the reasons stated in the preamble, part 52 of chapter I of 
title 40 of the Code of Federal Regulations is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.


Sec. Sec.  52.54, 52.184, 52.731, 52.789, 52.840, 52.882, 52.984, 
52.1084, 52.1186, 52.1284, 52.1326, 52.1584, 52.1684, 52.1882, 52.1930, 
52.2040, 52.2283, 52.2440, 52.2540, and 52.2587   [Amended]

0
2. Part 52 is amended by removing the text ``, provided that because 
the CSAPR FIP was promulgated as a partial rather than full remedy for 
an obligation of the State to address interstate air pollution, the SIP 
revision likewise will constitute a partial rather than full remedy for 
the State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision'' from the second sentence in each of the 
following paragraphs:
0
a. Section 52.54(b)(2);
0
b. Section 52.184(b);
0
c. Section 52.731(b)(2);
0
d. Section 52.789(b)(2);
0
e. Section 52.840(b)(2);
0
f. Section 52.882(b)(1);
0
g. Section 52.984(d)(2);
0
h. Section 52.1084(b)(2);
0
i. Section 52.1186(e)(2);
0
j. Section 52.1284(b);
0
k. Section 52.1326(b)(2);
0
l. Section 52.1584(e)(2);
0
m. Section 52.1684(b)(2);
0
n. Section 52.1882(b)(2);
0
o. Section 52.1930(b);
0
p. Section 52.2040(b)(2);
0
q. Section 52.2283(d)(2);
0
r. Section 52.2440(b)(2);
0
s. Section 52.2540(b)(2); and
0
t. Section 52.2587(e)(2).

[FR Doc. 2018-27160 Filed 12-20-18; 8:45 am]
 BILLING CODE 6560-50-P