The Department sought public comments on the petition for rulemaking submitted on October 18, 2018, by the American Public Gas Association (APGA), Spire, Inc., the Natural Gas Supply Association (NGSA), the American Gas Association (AGA), and the National Propane Gas Association (NPGA), collectively referred to as the “Gas Industry Petitioners,” asking DOE to: (1) Issue an interpretive rule stating that DOE's proposed energy conservation standards for residential furnaces and commercial water heaters would result in the unavailability of “performance characteristics” within the meaning of the Energy Policy and Conservation Act of 1975  1 (EPCA; 42 U.S.C. 6291 et seq. ), as amended ( i.e., by setting standards which can only be met by condensing combustion technology products/equipment and thereby precluding the distribution in commerce of non-condensing combustion technology products/equipment) and (2) withdraw the proposed energy conservation standards for residential furnaces  2 and commercial water heaters  3 based upon such findings. DOE published the petition in the Federal Register on November 1, 2018 (83 FR 54883), which had a comment period scheduled to close on January 30, 2019. DOE received two requests from interested parties seeking an extension of the comment period in order to develop additional data relevant to the petition. DOE granted those requests through publication in the Federal Register of a document extending the comment period on the notice of petition for rulemaking until March 1, 2019. 84 FR 449 (Jan. 29, 2019).

The 90-day public comment period, including the 30-day extension to submit comments, invited public input in order to better understand stakeholder perspectives and increase transparency around a complex issue involving DOE's legal authority. DOE received comments from a variety of stakeholders, including representatives from gas industry associations, the manufactured housing industry, efficiency advocates, consumer advocates, State organizations and Attorneys General, and individuals (mostly form letter comments). In general, the gas industry associations and the manufactured housing industry supported the petition, and the advocates and State officials opposed it. Specifically, DOE received comment on the notice of petition from:

• Air-Conditioning, Heating & Refrigeration Institute (AHRI);

• A.O. Smith Corporation (A.O. Smith);

• Appliance Standards Awareness Project (ASAP)/American Council for an Energy-Efficient Economy (ACEEE)/Alliance to Save Energy (ASE)/Consumer Federation of America (CFA)/National Consumer Law Center (NCLC) (ASAP et al. Joint Comment);

• California Energy Commission (CEC);

• Center for Efficient Living (CEL);

• EarthJustice/National Resources Defense Council (EarthJustice/NRCD Joint Comment);

• Emissol LLC;

• Indiana Manufactured Housing Association/Recreation Vehicle Indiana Council (IMHA/RVIC Joint Comment);

• Manufactured Housing Industry of Arizona (MHIA);

• Manufactured Housing Institute (MHI);

• Manufactured & Modular Home Association of Minnesota (MMHAM);

• Mississippi Manufactured Housing Association (MMHA);

• Mitsubishi Electric US (Mitsubishi);

• Mortex Products, Inc. (Mortex);

• National Consumer Law Center/Consumer Federation of America (NCLC/CFA Joint Comment);

• National Electrical Manufacturers Association (NEMA);

• National Multifamily Housing Council/National Apartment Association/National Leased Housing Association (NMHC/NAA/NLHA Joint Comment);

• Natural Resources Defense Council (NRDC);

• New Mexico Manufactured Housing Association (NMMHA);

• Nortek Global HVAC (Nortek);

• Northeast Energy Efficiency Partnerships (NEEP);

• Northwest Energy Efficiency Alliance (NEEA);

• Northwest Energy Efficiency Alliance/Northeast Energy Efficiency Partnership/Pacific Gas and Electric/National Grid (NEEA/NEEP/PG&E/National Grid Joint Comment);

• Oliver Technologies, Inc.;

• Pacific Gas and Electric Company (PG&E)/San Diego Gas and Electric (SDG&E)/Southern California Edison (SCE) (CA IOUs Joint Comment);

• Plumbing-Heating-Cooling Contractors Association (PHCC);

• Rheem Manufacturing Company (Rheem);

• Southern Company;

• Spire Inc./American Public Gas Association (APGA)/American Gas Association (AGA)/National Propane Gas Association (NPGA)/Natural Gas Supply Association (NGSA) (Gas Industry Petitioners Joint Comment);

• State Attorneys General (of NY, DC, IL, ME, MA, MN, NJ, OR, VT, and WA) and Corporation Counsel of New York City (Multi-State AGs Joint Comment);

• Suburban Propane;

• Triple-T;

• VEIC;

• Weil-McLain;

• Wisconsin Housing Alliance (WHA), and

• 22 individuals.

The comments were carefully and fully considered by DOE. DOE is issuing this notice of proposed interpretive rule to provide the public additional information about DOE's interpretation of EPCA's “features” provision  4 in the context of condensing vs. non-condensing furnaces and water heaters, as informed by public comments. The following sections of this document set forth the relevant legal authority, describe the Department's historical interpretation of EPCA's “features” provision as applied to condensing vs. non-condensing products/equipment, provide summary responses to significant and recurring comments received through the public comment process, and propose an interpretation of the relevant statutory provision.

This proposed interpretive rule does not change or revise any current policies or legal requirements with respect to residential furnaces and commercial water heaters. Decisions about whether and how this interpretation will apply to existing products/equipment utilizing condensing/non-condensing technology will be the subject of subsequent actions.

In this document, DOE explains its historical interpretation regarding the evaluation of what constitutes a product “feature” which cannot be eliminated under EPCA, specifically in the context of residential furnaces and commercial water heaters. For covered consumer products, the key statutory provision at issue can be found at 42 U.S.C. 6295(o)(4), which provides that the Secretary may not prescribe an amended or new standard under this section if the Secretary finds (and publishes such finding) that interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States at the time of the Secretary's finding.

Where the Secretary finds such “performance characteristics (including reliability), features, sizes, capacities, and volumes” (collectively referred to hereafter as “features”) to exist, the statute provides a potential remedy at 42 U.S.C. 6295(q)(1), which provides that a rule prescribing an energy conservation standard for a type (or class) of covered products shall specify a level of energy use or efficiency higher or lower than that which applies (or would apply) for such type (or class) for any group of covered products which have the same function or intended use, if the Secretary determines that covered products within such group—(A) consume a different kind of energy from that consumed by other covered products within such group (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard from that which applies (or will apply) to other products within such type (or class). In making a determination under 42 U.S.C. 6295(q)(1) concerning whether a performance-related feature justifies the establishment of a higher or lower standard, the Secretary shall consider such factors as the utility to the consumer of such a feature, and such other factors as the Secretary deems appropriate.

These provisions also apply to covered non-ASHRAE commercial and industrial equipment through the provision at 42 U.S.C. 6316(a). (Under the statute, “ASHRAE equipment” refers to small commercial package air conditioning and heating equipment, large commercial package air conditioning and heating equipment, very large commercial package air conditioning and heating equipment, packaged terminal air conditioners, packaged terminal heat pumps, warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, or unfired hot water storage tanks, which are addressed by the ASHRAE in Standard 90.1, Energy Standard for Buildings Except Low-Rise Residential Buildings. )

ASHRAE equipment has its own separate statutory scheme under EPCA, with the default situation being that DOE must adopt the level set forth in ASHRAE Standard 90.1 unless the Department has clear and convincing evidence to adopt a more-stringent standard ( see 42 U.S.C. 6313(a)(6)). Under 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa), there is a similar “features” provision which provides that the Secretary may not prescribe an amended standard under the subparagraph if the Secretary finds (and publishes the finding) that interested persons have established by a preponderance of the evidence that a standard is likely to result in the unavailability in the United States in any product type (or class) of performance characteristics (including reliability, features, sizes, capacities, and volumes) that are substantially the same as those generally available in the United States at the time of the finding of the Secretary. However, it is noted that this provision contains the specific limitation that it applies to an amended standard prescribed under this subparagraph ( i.e., when DOE is acting under its authority to set a more-stringent standard). There is no companion “features” provision under 42 U.S.C. 6313(a)(6)(A), which is the provision that would apply when DOE is adopting the levels set by ASHRAE. Congress was clearly aware of the features issue, and it chose to act in the context of DOE standard setting, but not ASHRAE standard setting. There is likewise no companion provision to 42 U.S.C. 6295(q)(1) for ASHRAE equipment.

With this statutory background in mind, in the March 12, 2015, notice of proposed rulemaking (NOPR) for energy conservation standards for residential furnaces, DOE set forth in detail its rationale for why it did not considering the venting of non-condensing furnaces to constitute a product “feature” under 42 U.S.C. 6295(o)(4). 80 FR 13120, 13137-13138.

As discussed previously, when evaluating and establishing energy conservation standards, the statute requires DOE to divide covered products into product classes by the type of energy used, by capacity, or by other performance-related features that justify a different standard. In making a determination whether a performance-related feature justifies a different standard, DOE must consider factors such as the utility to the consumer of the feature and other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) Historically, DOE has viewed utility as an aspect of the product that is accessible to the layperson and is based on user operation, rather than performing a theoretical function. This interpretation has been implemented consistently in DOE's previous rulemakings by determining utility through the value the item brings to the consumer, rather than through analyzing more complicated design features, or costs that anyone, including the consumer, manufacturer, installer, or utility companies may bear. DOE reasoned that this approach is consistent with EPCA requiring a separate and extensive analysis of economic justification for the adoption of any new or amended energy conservation standard (see 42 U.S.C. 6295(o)(2)(A)-(B) and (3)).

Under EPCA, DOE has typically addressed consumer utility by establishing separate product classes or otherwise taken action when a consumer may value a product feature based on the consumer's everyday needs. For instance, DOE has determined that it would be impermissible under 42 U.S.C. 6295(o)(4) to include elimination of oven door windows as a technology option to improve the energy efficiency of cooking products. 5 DOE reached this conclusion based upon how consumers typically use the product: Peering through the oven window to judge if an item is finished cooking, as opposed to checking the timer and/or indicator light or simply opening the oven door to see if the item is finished cooking. DOE has also determined that consumers may value other qualities such as ability to self-clean, 6 size, 7 and configuration. 8 This determination, however, can change depending on the technology and the consumer, and it is conceivable that certain products may disappear from the market entirely due to shifting consumer demand. DOE stated that it has determined such value on a case-by-case basis through its own research, as well as public comments received.

DOE offered a cautionary note that disparate products may have very different consumer utilities, thereby making direct comparisons difficult and potentially misleading. For instance, in a 2011 rulemaking, DOE created separate product classes for vented and ventless residential clothes dryers based on DOE's recognition of the “unique utility” that ventless clothes dryers offer to consumers. 76 FR 22454, 22485 (April 21, 2011). This utility could be characterized as the ability to have a clothes dryer in a living area where vents are impossible to install ( i.e., an apartment in a high-rise building). As explained in that April 2011 direct final rule technical support document, ventless dryers can be installed in locations where venting dryers would be precluded due to venting restrictions.

But in another rulemaking, DOE found that water heaters that utilize heat pump technology did not need to be put in a separate product class from conventional types of hot water heaters that utilize electric resistance technology, even though water heaters utilizing heat pumps require the additional installation of a condensate drain that a hot water heater utilizing electric resistance technology does not require. 74 FR 65852, 65871 (Dec. 11, 2009). DOE found that regardless of these installation factors, the heat pump water heater and the conventional water heater still had the same utility to the consumer: Providing hot water. Id. In both cases, DOE made its finding based on consumer type and utility type, rather than product design criteria that impact product efficiency. These distinctions in both the consumer type and the utility type are important because, taken to the extreme, each design differential could be designated a different “product class” and, therefore, require different energy conservation standards.

DOE expressed concern that tying the concept of “feature” to a specific technology would effectively lock-in the currently existing technology as the ceiling for product efficiency and eliminate DOE's ability to address technological advances that could yield significant consumer benefits in the form of lower energy costs while providing the same functionality for the consumer. DOE stated that it was very concerned that determining features solely on product technology could undermine the Department's Appliance Standards Program. DOE reasoned that if it is required to maintain separate product classes to preserve less-efficient technologies, future advancements in the energy efficiency of covered products would become largely voluntary, an outcome which seems inimical to Congress's purposes and goals in enacting EPCA.

Turning to the product at issue in that rulemaking, DOE noted that residential furnaces are currently divided into several product classes. For example, furnaces are separated into product classes based on their fuel source (gas, oil, or electricity), which is required by statute. For that rulemaking, DOE analyzed only two product classes for residential furnaces: (1) Non-weatherized gas-fired furnaces (NWGFs) and (2) mobile home gas-fired furnaces (MHGFs). DOE did not additionally separate NWGFs and MHGFs into condensing and noncondensing product classes.

In that rulemaking, DOE tentatively concluded that the methods by which a furnace is vented did not provide any separate performance-related impacts, and, therefore, DOE had no statutory basis for defining a separate class based on venting and drainage characteristics. DOE reasoned that NWGF and MHGF venting methods did not provide unique utility to consumers beyond the basic function of providing heat, which all furnaces perform. The possibility that installing a non-condensing furnace may be less costly than a condensing furnace due to the difference in venting methods did not justify separating the two types of NWGFs into different product classes. Unlike the consumers of ventless dryers, which DOE had determined to be a performance-related feature based on the impossibility of venting in certain circumstances ( e.g., high-rise apartments), DOE reasoned that consumers of condensing NWGFs are homeowners that may either use their existing venting or have a feasible alternative to obtain heat. In other words, homeowners would still be able to obtain heat regardless of the venting. In contrast, DOE reasoned that a resident of a high-rise apartment or condominium building that is not architecturally designed to accommodate vented clothes dryers would have no option in terms of installing and enjoying the utility of a dryer in their home unless he or she used a ventless dryer.

As explained above, DOE's conclusion in the March 12, 2015 NOPR was that the utility of a furnace involves providing heat to a consumer. DOE reasoned that such utility is provided by any type of furnace, but to the extent that a consumer has a preference for a particular fuel type ( e.g., gas), improvements in venting technology may eventually allow a consumer to obtain the efficiency of a condensing furnace using the existing venting in a residence by sharing venting space with water heaters. DOE postulated that this update in technology significantly would reduce the cost burden associated with installing condensing furnaces and reduce potential instances of “orphaned” water heaters, where the furnace and water heater can no longer share the same venting (due to one unit being condensing and the other noncondensing). In other words, when mature, this technology could allow consumers to switch from a non-condensing furnace to a condensing furnace in a greater variety of applications, such as urban row houses. For more information, interested parties were asked to consult appendix 8L of the NOPR TSD.

As noted above, on October 18, 2018, DOE received a petition from the Gas Industry Petitioners asking DOE to: (1) Issue an interpretive rule stating that DOE's proposed energy conservation standards for residential furnaces and commercial water heaters would result in the unavailability of “performance characteristics” within the meaning of the Energy Policy and Conservation Act of 1975, as amended ( i.e., by setting standards which can only be met by condensing combustion technology products/equipment) and (2) withdraw the proposed energy conservation standards for residential furnaces and commercial water heaters based upon such findings. In their petition, the Gas Industry Petitioners argue that DOE misinterpreted its mandate under section 325(o)(4) of EPCA by failing to consider as a “feature” of the subject residential furnaces and commercial water heating equipment the compatibility of a product/equipment with conventional atmospheric venting systems and the ability to operate without generating liquid condensate requiring disposal via a plumbing connection. Consequently, the Gas Industry Petitioners assert that DOE's proposals would make unavailable non-condensing products/equipment with such features, which currently exist in the marketplace, in contravention of the statute. The petition makes a number of technical, legal, and economic arguments in favor of its suggested interpretation, and it points to DOE's past precedent related to space constraints and differences in available electrical power supply (and associated installation costs) as supporting its call to find that non-condensing technology amounts to a performance-related “feature.” Based upon these arguments, the Gas Industry Petitioners conclude that DOE should issue an interpretive rule treating non-condensing technology as a “feature” under EPCA, withdraw its rulemaking proposals for both residential furnaces and commercial water heaters, and proceed on the basis of this revised interpretation.

DOE received a number of comments on the Gas Industry Petition with commenters both supporting the petition for rulemaking and opposing the petition. Comments from gas industry associations, certain manufacturer associations, and certain individual manufacturers generally expressed support for the petition. Comments from efficiency advocacy organizations, consumer advocacy organizations, other manufacturers, and certain States and Attorneys General generally oppose it. The following sections of this proposed interpretive rule summarize the comments received on the Gas Industry Petition and provide DOE's responses to those comments. DOE then proposes an interpretation consistent with its statutory authority and that considers the comments received along with all other available information. To aid in organizing the comments, this section categorizes public comments on the Gas Industry Petition in terms of legal authority, technical matters, implementation, and other related issues.

As DOE explained in section II.B of this document, for the purpose of EPCA, DOE has in prior instances considered product/equipment “features” in the context of the consumer's interaction with the appliance in question. With the submission of the Gas Industry Petition, DOE is re-evaluating its prior interpretations in the context of the petition and providing stakeholders and the interested public an opportunity to submit comments and information to further inform DOE's consideration, particularly in regards to its technical implications, as well as the needs of consumers (including those with low incomes).

DOE is issuing the interpretation as an interpretative rule within the meaning of the Administrative Procedure Act (APA). 5 U.S.C. 551(4), 553(b). DOE is publishing a proposed interpretation to solicit comment and to provide the public with a clear and transparent explanation of DOE's view of a specific legal question: Whether non-condensing technology and associated venting constitutes a performance-related “feature” under 42 U.S.C. 6295(o)(4), 9 as would support a separate product/equipment class under 42 U.S.C. 6295(q)(1), 10 including the authority that Congress conferred on DOE through those provisions.

The Gas Industry petition raises the issue of whether non-condensing technology, including the associated venting, constitutes a “performance characteristic” or “feature” under 42 U.S.C. 6295(o)(4), and if it is so, whether it justifies a separate product/equipment class under 42 U.S.C. 6295(q)(1). Commenters had divergent views regarding DOE's legal authority to determine non-condensing technology used in furnaces and water heaters, including the associated venting, is a “performance characteristic” or “feature” within the meaning of the statute, and whether as a “performance characteristic” or “feature” it would justify a separate product/equipment class and standard. Such views are summarized in the immediately following paragraphs.

Comments from the gas industry, certain manufacturers, housing associations, and a number of individuals generally supported the interpretation of “performance characteristic” and “feature” put forth in the Gas Industry Petition ( i.e., non-condensing technology and the associated venting is a “performance characteristic” for the purpose of EPCA), arguing that DOE is statutorily prohibited from adopting standards that would effectively eliminate this performance characteristic. (Gas Industry Petitioners Joint Comment, No. 44 at pp. 1 and 3; Mortex, No. 58 at p. 1; Weil-McLain, No. 29 at p. 1; PHCC, No. 53 at p. 1; Southern Company, No. 33 at p. 1; Suburban Propane, No. 13 at p. 1; Nortek, No. 35 at pp. 1 and 2; NMHC/NAA/NLHA Joint Comment, No. 41 at p. 1; Baker, No. 4 at p. 1; Matchneer, No. 21 at p. 1) These commenters emphasized the point presented in the Gas Industry Petition that the ability to use category I venting  11 and to operate without formation of condensate are performance characteristics and/or features that DOE cannot eliminate under EPCA.

Southern Company asserted that non-condensing furnaces and water heaters provide “unique utility” in terms of their ability to commonly vent with other gas appliances, vent into masonry chimneys, operate in unconditioned space without freeze protection, easily install in retrofit applications, and operate without the need to dispose of condensate. (Southern Company, No. 33 at p. 2) Nortek stated that an energy conservation standard that requires the use of condensing technology would eliminate the ability to combine the venting of other non-condensing appliances with the furnace or commercial water heater. (Nortek, No. 35 at p. 2) NMHC, NAAA, and NLHA stated that in the context of existing multifamily properties, installation of a condensing unit may require construction of an entirely new ventilation system within the apartment to meet the horizontal venting requirements of the condensing furnace unit, and in many properties, there is not sufficient clearance on the exterior wall of the property to locate a ventilation pipe due to existing windows and doors. (NMHC/NAA/NLHA Joint Comment, No. 41 at p. 2) Regarding commercial hot water heaters, Rheem stated that according to the Energy Information Agency (EIA) 2012 Commercial Buildings Energy Consumption Survey (CBECS) data, more than half of all commercial buildings were constructed before condensing commercial water heaters were introduced to the market and that in older buildings having greater than 3-stories with the water heater(s) located in the interior of the building structure, it is generally difficult, if not impossible, to replace non-condensing water heaters with condensing water heaters due primarily to the need to replace or reline existing vents/chimneys. (Rheem, No. 34 at p. 2) Southern Company further commented that non-condensing units can be installed in unconditioned space without the use of potentially dangerous heat tapes or other devices that prevent condensate from freezing. (Southern Company, No. 33 at p. 4)

Several of the commenters in support of the Gas Industry Petition asserted that there is precedent for establishing separate product classes for non-condensing furnaces and water heaters. (Gas Industry Petitioners Joint Comment, No. 44 at pp. 5-6; Mortex, No. 58 at p. 2; Southern Company, No. 33 at pp. 2-4; Nortek, No. 35 at p. 2; MHI, No. 54 at p. 2) The Gas Industry Petitioners stated that the issues facing the replacement of a non-condensing unit with a condensing unit are similar, but greater in magnitude, to installation issues for products that DOE has established separate “space-constrained” product classes. (Gas Industry Petitioners Joint Comment, No. 44 at pp. 4-5) Southern Company specifically referenced as applicable precedent the separate product classes established for gas-fired natural draft commercial packaged boilers, the standard-size equipment class for package terminal air conditioners and heat pumps, space-constrained central air conditioners and heat pumps, tabletop water heaters, and compact products such as clothes dryers. (Southern Company, No. 33 at pp. 3-4) Mortex and Southern Company pointed to the establishment of separate classes of furnace fans based on use in a condensing versus non-condensing furnace as support for establishing separate classes as requested in the Gas Industry Petition. (Mortex, No. 58 at p. 2; Southern Company, No. 33 at p. 3)

Various other commenters opposed the Gas Industry Petition and asserted that the method of venting, type of type of vent, and condensate disposal system associated with a furnace or water heater does not qualify as a performance-related characteristic or feature under EPCA. (CA IOUs Joint Comment, No. 45 at pp. 1-2; EarthJustice/NRDC Joint Comment, No. 55 at p. 1; Mitsubishi, No. 10 at p. 1; Multi-State AGs Joint Comment, No. 49 at pp. 1-2, 6; NEMA, No. 46 at p. 4; NEEA, No. 59 at pp. 1-2; CEC, No. 56 at pp. 1-2 ; NCLC/CFA Joint Comment, No. 50 at pp. 1-2; ASAP et al. Joint Comment, No. 61 at p. 4) Referencing DOE's prior, tentative analysis of the issue under EPCA, commenters stated that condensing and non-condensing furnaces and water heaters provide identical performance characteristics in the form of warm air or hot water, respectively; that installation cost is not a performance characteristic for the purpose of 42 U.S.C. 6295(o)(4); and that non-condensing technology does not justify a separate product class. (CA IOUs Joint Comment, No. 45 at pp. 2-3; EarthJustice/NRDC Joint Comment, No. 55 at pp. 5 and 13; Multi-State AGs Joint Comment, No. 49 at p. 7; NEEA, No. 59 at p. 5; CEC, No. 56 at p. 2; CEL, No. 3 at p. 1; NCLC/CFA Joint Comment, No. 50 at p. 5; ASAP et al. Joint Comment, No. 61 at p. 4) NEMA stated that increased cost of installation is not a performance characteristic or feature under paragraphs 42 U.S.C. 6295(o)(4) and (q)(1). (NEMA, No. 46 at pp. 4, 11) NEMA further stated that while the type of venting may be a “characteristic” or “feature,” it is not one that has utility to the consumer; the consumer suffers no loss of utility by no longer being able to use a “type B” metal vent with a condensing furnace. (NEMA, No, 46 at pp. 15-16) While NEMA agreed with the result of DOE's tentative determination, NEMA cautioned that DOE should not exclusively conflate an appliance's “basic function” with a useful feature, capacity, characteristic, size, or volume. (NEMA, No. 46 at p. 17)

EarthJustice and NRDC argued that Congress intended the provision at 42 U.S.C. 6295(o)(4) only to address the possibility that efficiency standards could completely destroy the market for a covered product. (EarthJustice/NRDC Joint Comment, No. 55 at p. 3) Additionally, EarthJustice and NRDC asserted that the difference in language between 42 U.S.C. 6295(o)(4) and 42 U.S.C. 6313(a)(6)(iii)(II)(aa) indicates that “performance characteristic” means something different for residential products and commercial equipment. Specifically, this comment imparts significant meaning to Congress's placement of a single parentheses within these two statutory provisions; on the residential side, 42 U.S.C. 6295(o)(4) describes “performance characteristics” as “(including reliability)” and then following with “features, sizes, capacities, and volumes,” but on the commercial side, 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) describes “performance characteristics” as “(including reliability, features, sizes, capacities, and volumes).” (EarthJustice/NRDC Joint Comment, No. 55 at p. 4) EarthJustice and NRDC continued that the method of venting and condensate disposal are not performance features under either provision, but “installation features.” (EarthJustice/NRDC Joint Comment, No. 55 at p. 4)

A number of commenters stated that not every technology design option should be captured as a separate “performance characteristic” or “feature,” because such approach would preclude DOE from ever setting incrementally more stringent energy conservation standards. (CA IOUs Joint Comment, No. 45 at p. 3; NRDC, No. 60 at p. 4, 6-7; Multi-State AGs Joint Comment, No. 49 at p. 7; A.O. Smith, No. 51 at p. 3; CEC, No. 56 at p. 1) Commenters asserted that the appropriate precedent is DOE's prior determination in the residential water heater rulemaking in which DOE determined that heat pump heaters provide hot water to a residence just as a traditional electric storage water heater does, and, therefore, a standard level that effectively bans electric resistance heating does not violate 42 U.S.C. 6295(o)(4). (CA IOUs Joint Comment, No. 45 at p. 3; NEMA, No. 46 pp. 7-8)

In opposition to the petition, commenters further stated that to the extent that there are installation cost differences between the venting technologies, those costs should be addressed in DOE's economic analysis and are not relevant to the determination of product/equipment classes. (CA IOUs Joint Comment, No. 45 at pp. 3-4; EarthJustice/NRDC Joint Comment, No. 55 at p. 7; NRDC, No. 60 at p. 8; ASAP et al. Joint Comment, No. 61 at pp. 3-4) EarthJustice and NRDC did state that DOE appropriately established separate product classes for through-the-wall central air conditioners and heat pumps to avoid requiring changes in the physical size of the through-the-wall systems and modifications to the buildings in which they are installed. (EarthJustice/NRDC Joint Comment, No. 55 at p. 10-11)

A number of commenters stated that with rare exceptions, condensing furnaces and water heaters are no more difficult to install than non-condensing units, and they added that in the small number of situations where there are difficulties, there are work-arounds. (Mitsubishi, No. 10 at pp. 1-2, 6; Multi-State AGs Joint Comment, No. 49 at p. 8; NEEP, No. 48 at p. 1; NEEA, No. 59 at pp. 1-2; CEC, No. 56 at p. 3; A.O. Smith, No. 51 at p. 4; Triple-T, No. 63 at p. 1) NEEA and the State Attorneys General provided the summary of a survey of residential furnace installers, based on which they stated that the percentage of homes with the conditions necessary to present significant issues is likely to be less than 5 percent of the retrofit installations. (NEEA, No. 59 at p. 2; Multi-State AGs Joint Comment, No. 49 at p. 8) The State Attorneys General added that those interviewed for the survey stated that even in “difficult” cases, technical solutions are possible. (Multi-State AGs Joint Comment, No. 49 at p. 8) Mitsubishi stated that cases where installation of condensing equipment is more difficult than replacing with non-condensing equipment are rare, and it estimated that such conditions exist in less than 1 percent of the total housing stock. (Mitsubishi, No. 10 at p. 4) The CEC identified a commercially-available product ( i.e., FasNSeal 80/90 by DuraVent) that allows for combined venting of an atmospheric appliance and a condensing appliance, thereby mitigating the issue of “orphaned” water heaters. (CEC, No. 56 at p. 3)

In response, DOE recognizes the importance of its interpretation of “performance characteristic” and “feature” in the context of condensing vs. non-condensing furnaces, water heaters, and similarly situated products/equipment. The submission of comments and other information pursuant to the Gas Industry Petition has heightened DOE's awareness of the real world impacts facing consumers of such products/equipment. In the past, DOE viewed venting of condensing vs. non-condensing as a technological and economic issue incidental to the appliance's purpose of providing heat or hot water to a dwelling or business. DOE has now come to see that it may have been too narrow in its focus. Commenters have made persuasive arguments that a consumer's interaction with and perception of a furnace or water heater may go beyond its primary function.

For example, adoption of an energy conservation standard requiring the use of condensing technology could potentially impact a home's aesthetics, if a new installation or retrofit were to entail additional venting in the conditioned space. Consumers would likely notice the new venting, and it might deprive them of some enjoyment related to the appearance of their home. In other cases, the condensing furnace may be of a different size or shape, and it may require modifications to existing utility closets or similarly constrained spaces, again potentially impacting the aesthetics of a room's layout. To that extent, non-condensing appliances may be similar to the space-constrained appliances which EarthJustice and NRDC point to in their comments as an appropriate use of EPCA's features provision. (DOE requests comments regarding any size-related impacts of the use of condensing technology, such as that related to the need for more heat exchanger surface area.)

Although DOE continues to believe that the distinction between condensing and non-condensing appliances is largely a matter of economics for most consumers, for some subset of the population, it is something much more than that. As commenters representing the manufactured housing industry and individual owners of such units made clear, energy conservation standards at condensing levels could price some low-income consumers out of the housing market entirely. Below that level, other low-income consumers could face a financial hardship once they are forced to purchase a condensing furnace, which on average for mobile home gas furnaces costs between $152 and $331 (total installed cost; 2015$) more than a non-condensing furnace. 12 (Consistently, DOE's data support the finding in the fuel switching analysis of the September 23, 2016 supplemental notice of proposed rulemaking (September 2016 SNOPR) that accounted for instances where installation of a condensing furnace was either too difficult or costly, with the result being substitution of another type of heating product. 81 FR 65720, 65791-65793 (Sept. 23, 2016) ( see also Chapter 8J of the SNOPR technical support document (TSD)). For such consumers, there could be difficult choices to be made between heat and other necessities such as food or medical care. The potential for overall energy savings after a long payback period does little to ameliorate such short-term impacts. In light of these reasons, DOE has tentatively concluded that the totality of such concerns may raise non-condensing appliances (and their associated venting) sufficiently in the consciousness of the consumer as to be deemed a “feature” under EPCA. DOE does not believe that its proposed interpretation would have a cascading effect that would prevent it from ever setting a standard that would eliminate a less-efficient technology; instead, DOE would continue to determine “features” based upon consumer utility on a case-by-case basis.

Manufactured housing associations, certain manufacturers to the manufactured housing industry, and a number of individuals faulted DOE's 2016 furnaces SNOPR (81 FR 65720 (Sept. 23, 2016)) for its failure to consider a “small” mobile home furnaces product class. Due to the cost impacts to manufactured housing consumers and these consumers' sensitivity to price increases, these commenters argued that DOE should have considered a “small” product class for mobile home furnaces. According to these commenters, manufactured housing is disproportionately impacted due to the comparatively high number of manufactured homes that rely on non-condensing gas furnaces as compared to site-built homes, as well as the disproportionate number of homes in the south where the payback of a high-efficiency furnace is less. (MHI, No. 54 at pp. 1, 3-4; MMHAM, No. 43 at p. 2; MMHA, No. 42 at p. 2; IMHA-RVIC, No. 32 at p. 2; NMMHA, No. 28 at pp. 1-2; WHA, No. 24 at pp. 1-2; MHIA, No. 23 at p. 2; Oliver Technologies, No. 16 at p. 1; Mortex, No. 58 at p. 2; Individuals, Nos. 17-22, 25-27, 30-31, 36-40, 47, 57 at pp. 1-2)

In the September 2016 furnaces SNOPR, DOE explained its rationale for proposing that energy conservation standards for mobile home gas furnaces should be set at 92 percent annual fuel utilization efficiency (AFUE). 81 FR 65720, 65743-65744 (Sept. 23, 2016). First, DOE stated that under the proposed standard, 63 percent of mobile home gas furnaces (MHGFs) would see a net benefit from such standards, whereas only 8 percent would experience a net cost. DOE anticipated minimal fuel switching, because for new mobile homes, the type of heating equipment tends to be determined by the intended location of the home, the expected heating load, and the availability of a gas supply. For replacement applications, DOE found that switching away from gas is not likely because the cost increase for installing a condensing furnace relative to a non-condensing furnace is not a significant factor due to a much simpler venting system compared to installation of a non-weatherized gas furnace (NWGF). Id. at 81 FR 65743. As to the costs, DOE's analyses determined that the expected average cost of a condensing furnace in a new mobile home is comparable to a non-condensing furnace, because the increase in the price of the product is offset by a lower installation cost for a condensing furnace for most installations. 13 The SNOPR noted that new furnaces installed in mobile homes must be approved by the U.S. Department of Housing and Urban Development, which requires special sealed combustion (direct vent) for all non-condensing and condensing installations of manufactured home furnaces. (24 CFR 3280.709(d)(1)) For condensing installations, the polyvinyl chloride (PVC) piping is usually less expensive than the metal vent system used for non-condensing furnaces. Thus, DOE reasoned that there is not likely to be any effect on the affordability of single-section mobile homes due to the SNOPR's proposed MHGF standard. Id. at 81 FR 65744.

Nevertheless, to the extent DOE moves to consider non-condensing furnaces and water heaters (and associated ductwork) to be a “feature” under EPCA, these commenters' concerns should be resolved, because mobile home purchasers would retain the choice of purchasing a furnace using non-condensing or condensing technology.

A number of commenters expressed concern that a national condensing furnaces standard would drive fuel switching and/or extend the use of less efficient appliances, because consumers who cannot afford more-expensive condensing technology will choose to switch to a non-gas heating option, repair their existing gas furnace, or use other less-efficient means of heating such as space heaters. (Gas Industry Petitioners Joint Comment, No. 44 at p. 3; MHI, No. 54 at p. 5; PHCC, No. 53 at p. 2; NMHC/NAA/NLHA Joint Comment, No. 41 at p. 2)

In contrast, the CEC argued that fuel switching is a cost impact, not a utility impact, as it does not disrupt service to the consumer of warm air or hot water. (CEC, No. 56 at p. 3) The CEC also stated that the costs related to fuel switching were included in DOE's life-cycle cost analysis in the September 2016 SNOPR for residential furnaces. (CEC, No. 56 at p. 3)

EarthJustice and NRDC stated that fuel switching is not an obstacle to amended standards under EPCA. These commenters noted that for small gas furnaces, EPCA required that DOE prescribe energy conservation standards at a level “which the Secretary determines is not likely to result in a significant shift from gas heating to electric resistance heating with respect to either residential construction or furnace replacement,” and asserted that Congress could have easily extended this requirement to other gas products but did not. EarthJustice and NRDC stated that, therefore, Congress did not intend to prevent the adoption of standards that may lead consumers to change their space or water heating energy sources. These commenters further argued that Congress's instruction to avoid fuel-switching in the initial small furnaces rulemaking would be superfluous if other parts of the statute were already intended to prohibit fuel switching. (EarthJustice/NRDC Joint Comment, No. 55 at pp. 8-9)

As the commenters noted, DOE addressed the potential for fuel switching in the September 2016 SNOPR. 81 FR 65720, 65723, and Chapter 8 of the September 2016 SNOPR Technical Support Document (TSD). 14 DOE agrees with the CEC, EarthJustice, and NRDC that concerns about fuel switching alone or in isolation would probably not justify a determination that non-condensing appliances (and associated venting) constitute a “feature” deserving a separate product/equipment class under EPCA. However, for the reasons previously stated, DOE has tentatively concluded that the choice of purchasing a non-condensing appliance is something that matters to some significant portion of consumers (especially persons with low-incomes), with concerns ranging from impacts on the aesthetics of the home to overall choice of housing options. To the extent DOE determines non-condensing technology (and associated venting) to be a feature, any fuel switching among such appliances going forward will be voluntary on the part of the consumer and not driven by government regulation.

Some commenters raised concerns with the analytical methodology underlying DOE's rulemakings for residential furnaces and commercial water heaters. (Gas Industry Petitioners Joint Comment, No. 44 at pp. 12-13; Rheem, No. 34 at pp. 2-3; NMHC/NAA/NLHA Joint Comment, No. 41 at p. 2; Weil McLain, No. 29 at p. 1) Among the issues raised by these commenters were that the national average approach to economic justification fails to consider the excessive localized costs that are certain to be incurred if non-condensing performance characteristics are eliminated. (Weil McLain, No. 29 at pp. 1-2)

DOE has attempted in prior residential furnaces and commercial water heaters rulemakings to capture localized effects ( e.g., regional climate, local utility rates, building type, local contractor labor rates, high-cost installations) in the life-cycle cost (LCC) analyses. DOE presented the average LCC results in summary form in the September 23, 2016 SNOPR. 81 FR 65720, 65814-65816. In chapter 8 of the September 23, 2016 furnaces SNOPR TSD, DOE presented the results in charts showing the mean and median LCC savings, along with the 5th, 25th, 75th, and 95th percentiles, to demonstrate the impacts of more extreme cases (both positive and negative). The same type of analysis was conducted for commercial water heaters in the May 31, 2016 NOPR. 81 FR 34440, 34482-34488.

Commenters also asserted that there is a fundamental flaw in DOE's modeling approach in that the base-case distribution of efficiencies is assigned randomly, rather than accounting for some consumers making economically rational decisions. (Gas Industry Petitioners Joint Comment, No. 44 at pp. 11-12) In response, DOE would point out that the base-case efficiency distributions for residential furnaces and commercial water heaters are not entirely random. For furnaces, assignment of efficiency in the base-case was based on both the region and specific building in which it is installed, with the market shares of furnace efficiencies first assigned by region based on historical shipments data and then allocated to specific buildings within each region based on the existing furnace being replaced. For commercial water heaters, the no-new-standards case and the selections in the LCC model were also not completely random, and rather were based on distributions of models in DOE's database, which included all commercially-available equipment on the market at the time and which (due to the absence of shipments data) represented the best data available to DOE at the time.

Furthermore, Rheem suggested that the EIA 2003 CBECS data used in DOE's commercial water heaters proposal is outdated, and DOE should recalculate results using more up-to-date data and re-evaluate its proposed standards accordingly. (Rheem, No. 34 at p. 2) In response, DOE notes that CBECS 2003 was the most recent version available at the time the analysis was conducted for the notice of proposed rulemaking for commercial water heating equipment. In any potential future rulemaking documents for commercial water heating equipment, DOE would update its analysis to utilize the most recent version of CBECS (currently the 2012 version).

The National Multifamily Housing Council (NMHC), the National Apartment Association (NAA), and the National Leased Housing Association (NLHA) commented that DOE did not include an adequate analysis of the venting and condensate disposal system installation costs for multi-story, multi-family properties in its proposals. (NMHC/NAA/NLHA Joint Comment, No. 41 at p. 2) In response, DOE notes that requirements specific to multi-story, multi-family properties were considered in the LCC analyses for residential furnaces and commercial water heating equipment. DOE acknowledged that multi-family buildings may require additional measures to replace non-condensing furnaces with condensing furnaces, noted that it did not find data that would allow a reliable estimation of the associated costs, and, therefore, requested comment on the issue. 81 FR 65720, 65778. DOE estimated in the September 23, 2016 SNOPR that more than 60 percent of replacement multi-family NWGF installations would not be impacted by the proposed standard. 81 FR 65720, 65780. For commercial water heaters, in the May 2016 NOPR, DOE included RECS data for multi-family buildings in the building sample used for its analysis, in order to account for the unique venting requirements of multi-family buildings, such as the vent length. 81 FR 34440, 34482 (May 31, 2016). 15

Rheem stated that efficiency standards for commercial water heaters that require condensing technology could lead to fuel switching or multiple residential water heaters as alternatives, and suggested that DOE should consider such costs as part of the life-cycle cost analysis for commercial water heaters. (Rheem, No. 34 at p. 3) As discussed in the May 2016 NOPR, DOE considered whether to model fuel switching in the analysis for commercial water heating equipment and tentatively determined that fuel switching would be unlikely to occur. 81 FR 34440, 34494 (May 31, 2016).

Finally, Southern Company argued that DOE's analysis for residential furnaces grossly overestimates the capabilities of DuraVent FNS 80/90 as a technological solution, because it does not allow a condensing appliance to operate with the same utility as a non-condensing model due to restrictions on the circumstances in which it can be used. (Southern Company, No. 33 at pp. 6-8)

DOE clarifies that it considered use of the DuraVent FasNSeal (FNS) 80/90 only as a sensitivity analysis; DOE's main analysis does not assume that the DuraVent FNS 80/90 would be used in any installations. Because of the uncertainty regarding applicability of FNS 80/90 and other new venting technologies, and lack of available field data on such venting installations, DOE has consistently maintained its approach of only using this option in a sensitivity analysis rather than its main analysis. In this sensitivity analysis, DOE only applied the FNS80/90 option to installations that could meet the FNS 80/90 installation requirements. While the previously noted comment from the CEC identified the FNS 80/90 (CEC, No. 56 at p. 3) as a means to address orphaned water heaters, the technology is only commercially available for applications with metal vents, and as pointed out by Southern, can only be used in certain situations where the vent can be installed at the appropriate angle to drain condensate. To address stakeholders' concerns regarding overestimating the number of installations that could use new venting technologies, DOE plans to include an additional sensitivity analysis in any potential future rulemaking documents for furnaces, where the FNS 80/90 option is applied to installations that can currently meet the FNS 80/90 installation requirements.

Finally, DOE notes that in its February 2019 NOPR regarding proposed changes to its Process Rule, the Department has announced its plans to conduct a peer review of its suite of rulemaking analyses as a second phase to the revisions of its Process Rule. 84 FR 3910, 3936-3938 (Feb. 13, 2019). Thus, DOE anticipates an ongoing discussion about potential refinements to its analytical methodologies and modeling, including those issues raised by commenters on the Gas Industry Petition.

A number of efficiency and consumer advocacy organizations and the State Attorneys General argued that granting the requests in the Gas Industry Petition would negatively impact consumers due to lost energy and cost savings. (NEEP, No. 48 at p. 1; NEEA, No. 59 at p. 3; NCLC/CFA, No. 50 at pp. 2-3; Multi-State AGs Joint Comment, No. 49 at pp. 9-10; ASAP et al. Joint Comment, No. 61 at pp. 1-3) The State Attorneys General also asserted that such action would disrupt State and local energy and climate goals. (Multi-State AGs Joint Comment, No. 49 at pp. 9-10) The Center for Efficient Living argued that the Gas Industry Petitioners do not represent the parties most directly impacted by the regulations at issue, as compared to consumers and manufacturers, but instead, DOE must recognize the significant advances in heating, ventilation, and air-conditioning technology in the past 10 years and not take actions which counteract the associated public health, indoor air quality (IAQ), and environmental benefits. (CEL, No. 3 at p. 1)

In contrast, individual commenters who support manufactured housing stated that Federal regulation should encourage manufactured housing as an affordable ownership option, but DOE's proposal inhibits that by increasing new home or retrofit costs, thereby potentially pricing consumers out of the manufactured housing market. These commenters stated that the median household income of manufactured homeowners is $30,000, which makes them very sensitive to any change in first cost of a new home or retrofit costs ( e.g., reworking existing utility closets due to larger units). It was also noted that there is no exemption or other accommodation for “small” furnaces, which are often used in manufactured homes. (Matchneer et al. (Form Comments), Nos. 17-22, 25-27, 30-31, 36-40, 47, 57 at p. 1)

As discussed, in establishing and amending energy conservation standards, EPCA prescribes a number of factors that DOE must consider. These factors include the savings in operating costs throughout the estimated average life of the covered product compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered products which are likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE historically has accounted for and considered the potential energy savings to consumers through the LCC and PBP analyses in all of its rulemakings. In contrast, however, EPCA's “features” provision demonstrates that Congress intended certain aspects of products with consumer utility to be preserved despite the energy savings or other benefits that might result from their elimination. (42 U.S.C. 6295(o)(4); 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa); 42 U.S.C. 6316(a)) DOE recognizes the important policy concerns raised by these commenters, but the Department is constrained to act within its statutory authority. Thus, to the extent DOE interprets EPCA's “features” provision as supporting separate products/equipment classes for condensing and non-condensing appliances, the concerns of commenters regarding the affordability of manufactured housing are largely resolved. For other consumers, DOE will account for them as part of the standard-setting process and develop energy conservation standards that meet the seven criteria for economic justification, are technologically feasible, and produce significant energy savings, as required by EPCA. DOE would note that for consumers who rent (including low-income consumers), energy savings from mandatory energy conservation standards set at condensing levels are likely to be offset, at least in part, by higher rents to cover the landlord/owner's first cost of the more expensive appliance.

Comments from the State Attorneys General and certain efficiency advocacy organizations commented that other nations such as Canada and the United Kingdom have successfully adopted and implemented regulations requiring condensing technology. (CEC, No. 56 at p. 3; Multi-State AGs Joint Comment, No. 49 at p. 8; ASAP et al. Joint Comment, No. 61 at p. 4) In response, DOE acknowledges both the energy savings potential of condensing appliances and the adoption of related regulatory requirements by other nations such as Canada and the U.K. However, DOE must act in accordance with domestic law ( i.e., EPCA) in formulating energy conservation standards, complying with all relevant requirements, including the features provision.

Additionally, the State Attorneys General argued that granting the Gas Industry Petition would impermissibly further delay DOE's publication of final rule for the products/equipment in question, rules which EPCA requires DOE to publish within two years after a proposal. The commenters pointed out that DOE's statutory deadlines for promulgating final furnace and water heater standards expired in March 2017 and May 2018, respectively. (Multi-State AGs Joint Comment, No. 49 at pp. 4-6) In response, DOE remains cognizant of its legal deadlines and plans to act expeditiously to comply with its mandates pursuant to EPCA. At the same time, the Gas Industry Petitioners have the right to petition for rulemaking under the Administrative Procedure Act, which provides that “[e]ach agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.” 5 U.S.C. 553(e). DOE is not at liberty to pick and choose among its legal obligations, but instead it must comply with all applicable legal requirements. In this case, DOE must evaluate and respond to the Gas Industry Petition and then implement any revised interpretation in the context of its ongoing rulemaking obligations.

In consideration of public comments and other information received on the Gas Industry Petition, DOE proposes to revise its interpretation of EPCA's “features” provision in the context of condensing and non-condensing technology used in furnaces, water heating equipment, and similarly-situated appliances (where permitted by EPCA). Based on those comments, DOE prospectively interprets the statute to provide that adoption of energy conservation standards that would limit the market to natural gas and/or propane gas furnaces, water heaters, or similarly situated products/equipment (where permitted by EPCA) that use condensing combustion technology would result in the unavailability of a performance related feature within the meaning of 42 U.S.C. 6295(o)(4) and 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) and 42 U.S.C. 6316(a).

The statute accords the Secretary of Energy considerable discretion in terms of determining whether a performance characteristic of a covered product/equipment amounts to a performance-related feature which cannot be eliminated through adoption of an energy conservation standard. DOE has taken the opportunity presented by the Gas Industry Petition to reconsider its historical interpretation of EPCA's “features” provision in the context of condensing and non-condensing technologies used by certain gas appliances. Contrary to the petitioners' assessment, DOE found this to be a close case, with persuasive arguments on both sides of the issue. However, a number of factors have convinced DOE to revise its interpretation.

First, DOE acknowledges that it has, in the past, taken space constraints and similar limitations into account when setting product classes ( e.g., PTACs, ventless clothes dryers). For example, DOE was sensitive to the costs associated with requiring expensive building modifications when it decided to set separate equipment classes for standard size PTACs and non-standard size PTACs. 73 FR 58772 (Oct. 7, 2008). DOE expects that similar expenses would occur here, if DOE were to hold to its historical interpretation, at least for some subset of installations. Although limited data were provided to address the actual costs that consumers and commercial customers would face to modify their existing category I venting, there is little doubt that some number of such installations would be quite costly. These more complicated/costly installations are documented as part of DOE's analysis of the venting costs for residential furnaces, which considered potential venting modifications that could be required when replacing an existing category I furnace with a condensing (category IV) furnace ( see appendix 8D of the 2016 SNOPR TSD for further details).

Second, DOE has in the past focused on the consumer's interaction with the product/equipment in deciding whether a performance feature is at issue. In the context of residential furnaces and commercial water heaters, DOE has focused on the primary function of the appliance ( e.g., providing heat to a home or potable hot water) in establishing the nexus to the consumer. In the past, DOE opined that consumers were only interested in obtaining heat or hot water from the appliance, so they would not care about the mechanism for generating that end product. However, commenters have made clear that in at least some cases, the physical changes associated with a condensing appliance may change a home's aesthetics ( e.g., by adding new venting into the living space or decreasing closet or other storage space), thereby impacting consumer utility even under DOE's prior approach.

Third, DOE notes that it has been its policy to remain neutral regarding competing energy sources in the marketplace. As certain commenters have pointed out and as DOE's own analyses have shown, some enhanced level of fuel switching is likely to accompany standard setting using DOE's prior interpretation. Many consumers who are currently gas customers may show a proclivity for that fuel type and would be negatively impacted by a standard that requires the purchase of a condensing unit to the extent they feel compelled to change to a different fuel type. DOE seeks neither to determine winners and losers in the marketplace nor to limit consumer choice.

Finally, DOE is very concerned about ensuring energy affordability, particularly for persons with low incomes. Although energy efficiency improvements may pay for themselves over time, there is a significant increase in first-cost associated with furnaces and water heaters using condensing technology. For consumers with difficult installation situations ( e.g., inner-city row houses), there would be the added cost of potentially extensive venting modifications. In certain cases, commenters have argued that accommodating condensing products may not even be possible. Although DOE continues to believe that costs are properly addressed in the economic analysis portion of its rulemakings, it remains cognizant of such issues. DOE has tentatively concluded that the other reasons discussed immediately above are sufficient in and of themselves to justify the Department's proposed change in interpretation, but it acknowledges these cost impacts in order to be fully transparent in terms of the agency's thinking.

Creating separate product classes for condensing and non-condensing furnaces, water heaters, and similarly situated products/equipment (where permitted by EPCA) would prevent many of these potential problems. Although DOE's proposed revised approach may have some impact on overall energy saving potential as a result of establishing separate product/equipment classes, that is not the touchstone of EPCA's “features” provision; through that provision, Congress expressed its will that certain product utilities will take priority over additional energy savings measures. (For example, DOE did not eliminate the oven window which consumers found useful, despite the potential for further energy savings.) With that said, DOE believes that any potentially negative programmatic impacts of its revised interpretation are likely to be limited. This interpretation is likely to impact only a limited set of appliances, and DOE notes that market trends have favored the growing reach of condensing furnaces, even as non-condensing alternatives have remained available. DOE has every reason to believe that such trends will continue.

DOE would clarify the limitations of its proposed revised interpretation, based upon the existing statutory provisions. As discussed previously, DOE can effect this change for all relevant consumer products, all non-ASHRAE commercial and industrial equipment, and ASHRAE equipment in those instances where DOE has clear and convincing evidence to adopt levels higher than the levels in ASHRAE Standard 90.1.

As noted, additional, subsequent DOE action is required before the interpretation in this proposed interpretive rule can be implemented. This proposed interpretive rule, therefore, does not alter the Department's current regulations. This interpretation does not and will not be used to abrogate DOE's responsibilities under existing laws or regulations, nor does it change DOE's existing statutory authorities or those of its regulators at the Federal, State, or local level. DOE anticipates continued engagement and productive involvement of members of the public and the regulated community in subsequent activities that may follow this interpretation.

As discussed immediately above, DOE is granting the Gas Industry Petition to the extent that it prospectively interprets the statute to provide that adoption of energy conservation standards that would limit the market of natural gas and/or propane gas furnaces, water heaters, or similarly situated products/equipment (where permitted by EPCA) that use condensing combustion technology would result in the unavailability of a performance related feature within the meaning of 42 U.S.C. 6295(o)(4) and 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) and 42 U.S.C. 6316(a). Such interpretation would apply to all applicable residential products, non-ASHRAE commercial equipment, and ASHRAE equipment where DOE adopts a level more stringent than the ASHRAE level.

DOE is denying the Gas Industry Petition as it pertains to those rulemakings where ASHRAE sets standard levels that trigger DOE to consider and adopt those level (unless DOE finds clear and convincing evidence to adopt more-stringent levels), due to lack of authority. DOE is also denying the Gas Industry Petition's request for DOE to withdraw the proposed rules for residential furnaces and commercial water heaters as unnecessary. If this interpretive rule is finalized, DOE anticipates developing supplemental notices of proposed rulemaking (SNOPRs) that would implement the new legal interpretation for those two rulemakings.

Through this interpretive rule, DOE states its understanding of the best interpretation of the statutory text in light of the language and purposes of EPCA, so as to be consistent with Congress's direction. In light of further consideration and the information presented with and in response to the Gas Industry Petition, DOE's position has evolved, and it has tentatively concluded that this revised interpretation is the best reading of EPCA's “features” provision. This interpretation does not, by itself, change existing applicable DOE regulations or policies regarding individual appliance standards rulemakings. Implementation of this interpretation in the context of energy conservation standards for particular products or equipment, and any changes to existing policies that may be appropriate in light of this interpretation will be the subject of subsequent actions.

DOE wishes to make clear that an interpretative rule is a type of rule or regulation within the meaning of those terms in the Administrative Procedure Act (APA), 5 U.S.C. 551(4). It is well established under the APA that agencies have the authority to issue interpretative rules, and that these rules are a valuable tool for an agency to use to advise the public prospectively and in a clear and transparent manner of the agency's construction of a statute it administers. As such, an interpretative rule does not have force and effect on its own. It is not until the agency takes an action in which the interpretation is applied that the interpretation can have an effect and, even then, only through that subsequent action.

When DOE considers this statutory interpretation in the context of taking any action in the future with regard to energy conservation standards rulemakings, it will evaluate its policies to determine if any require revision to accommodate this interpretation, and if so, DOE will follow applicable procedures to make any necessary changes. However, DOE's legal interpretations do not themselves constitute agency action.

DOE's interpretation does not have legal effect on its own. As appropriate, the public will be notified and have an opportunity to comment on any such proposals implementing the interpretation. Furthermore, the many substantive comments received, including comments that led to revisions of DOE's interpretation of the “features” provision,” as reflected in this proposed interpretive rule, indicate that the public had a meaningful opportunity to comment on DOE's general interpretation. As DOE has indicated, there will be additional processes after the interpretation has been issued but before any rulemaking decisions are implemented.

DOE invites all interested parties to submit in writing by the date listed in the DATES section of this document, comments and information regarding this proposed interpretive rule.

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Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.

Confidential Business Information. Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery two well-marked copies: One copy of the document marked “Confidential” including all the information believed to be confidential, and one copy of the document marked “Non-confidential” with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination.

Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time, and (7) why disclosure of the information would be contrary to the public interest.

It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).

DOE considers public participation to be a very important part of its process for considering regulatory actions. DOE actively encourages the participation and interaction of the public during the comment period. Interactions with and between members of the public provide a balanced discussion of the issues and assist DOE in determining how to proceed with a regulatory action. Anyone who wishes to be added to DOE mailing list to receive future document and information about this matter should contact Appliance and Equipment Standards Program staff at (202) 287-1445 or via email at ApplianceStandardsQuestions@ee.doe.gov.

The Secretary of Energy has approved publication of this document granting in part and denying in part the relevant petition for rulemaking and issuing a proposed interpretive rule.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend the Class E airspace extending upward from 700 feet above the surface at Posey Field Airport, Haleyville, AL, and Marion County-Rankin Fite Airport, Hamilton, AL, to support IFR operations at these airports.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2019-0502/Airspace Docket No. 19-ASO-13.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http:// www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Federal Aviation Administration, Air Traffic Organization, Central Service Center, Operations Support Group, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by:

Amending the Class E airspace extending upward from 700 feet above the surface to within a 6.5-mile radius (increased from a 6.4-mile radius) at Posey Field Airport, Haleyville, AL; removing the city associated with the airport in the airspace legal description to comply with a change in FAA Order 7400.2M, Procedures for Handling Airspace Matters; removing the Hamilton VORTAC and associated extension from the airspace legal description; and adding an extension 2 miles each side of the 002° bearing from the airport extending from the 6.5-mile radius to 11 miles north of the airport;

And amending the Class E airspace extending upward from 700 feet above the surface to within a 6.5-mile radius (reduced from a 6.6-mile radius) of Marion County-Rankin Fite Airport, Hamilton, AL; removing the city associated with the airport in the airspace legal description to comply with a change in FAA Order 7400.2M; removing the Hamilton VORTAC and associated extension from the airspace legal description; adding an extension 4 miles each side of the 002° bearing from the airport extending from the 6.5-mile radius to 11.8 miles north of the airport; adding an extension 4 miles each side of the 182° bearing from the airport extending from the 6.5-mile radius to 11.4 miles south of the airport; and would update the name and geographic coordinates of the Marion County-Rankin Fite Airport (formerly Marion County Airport) to coincide with the FAA's aeronautical database.

This action is the result of an airspace review caused by the decommissioning of the Hamilton VOR, which provided navigation information for the instrument procedures at these airports, as part of the VOR MON Program.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11C, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

The Regulatory Flexibility Act (“RFA”), codified at 5 U.S.C. 601-612, requires an agency to review its rules that have a significant economic impact upon a substantial number of small entities within ten years of the publication of such rules as final rules. 5 U.S.C. 610(a). The purpose of the review is “to determine whether such rules should be continued without change, or should be amended or rescinded . . . to minimize any significant economic impact of the rules upon a substantial number of such small entities.” 5 U.S.C. 610(a). The RFA sets forth specific considerations that must be addressed in the review of each rule:

• The continued need for the rule;

• The nature of complaints or comments received concerning the rule from the public;

• The complexity of the rule;

• The extent to which the rule overlaps, duplicates or conflicts with other federal rules, and, to the extent feasible, with state and local governmental rules; and

• The length of time since the rule has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule. 5 U.S.C. 610(c).

The Securities and Exchange Commission, as a matter of policy, reviews all final rules that it published for notice and comment to assess not only their continued compliance with the RFA, but also to assess generally their continued utility. When the Commission implemented the RFA in 1981, it stated that it “intend[ed] to conduct a broader review [than that required by the RFA], with a view to identifying those rules in need of modification or even rescission.” Securities Act Release No. 6302 (Mar. 20, 1981), 46 FR 19251 (Mar. 30, 1981). The list below is therefore broader than that required by the RFA, and may include rules that do not have a significant economic impact on a substantial number of small entities (but excludes such rules that are minor amendments to previously adopted rules or rules that are ministerial, procedural, or technical in nature). Where the Commission has previously made a determination of a rule's impact on small businesses, the determination is noted on the list.

The Commission particularly solicits public comment on whether the rules listed below affect small businesses in new or different ways than when they were first adopted. The rules and forms listed below are scheduled for review by staff of the Commission.

Title: Risk Management Controls for Brokers or Dealers with Market Access.

Citation: 17 CFR 240.15c3-5.

Authority: 15 U.S.C. 78b, 78c(b), 78k-1, 78o, 78q(a) and (b), and 78w(a).

Description: The Commission adopted a new rule under the Securities Exchange Act of 1934 (“Exchange Act”) to require broker-dealers with market access to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to manage financial, regulatory, and other risks of this business activity. These risk management controls and supervisory procedures are required to be under the direct and exclusive control of the broker-dealer subject to the obligations (subject to certain limited exceptions). In addition, these risk management controls and supervisory procedures must be reviewed for effectiveness on at least an annual basis, and the broker-dealer's Chief Executive Officer (or equivalent officer) must certify, on an annual basis, that the broker-dealer's controls and procedures comply with the requirements of the rule.

Prior RFA Analysis: A Final Regulatory Flexibility Analysis was prepared in accordance with 5 U.S.C. 604 in conjunction with the Commission's adoption of Release No. 34-63241 (November 3, 2010). In the adopting release, the Commission considered comments received on the Initial Regulatory Flexibility Analysis included in the proposing release, Release No. 34-61379 (January 19, 2010).

I. Background

On March 12, 2008, EPA promulgated an ozone NAAQS that revised the levels of the primary and secondary 8-hour ozone standards from 0.08 parts per million (ppm) to 0.075 ppm. 1 See 73 FR 16436 (March 27, 2008). Pursuant to CAA section 110(a)(1), within three years after promulgation of a new or revised NAAQS (or shorter, if EPA prescribes), states must submit SIPs that meet the applicable requirements of section 110(a)(2). EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions.

One of the structural requirements of section 110(a)(2) is section 110(a)(2)(D)(i), which generally requires SIPs to contain adequate provisions to prohibit in-state emissions activities from having certain adverse air quality effects on neighboring states due to interstate transport of air pollution. There are four sub-elements, or “prongs,” within section 110(a)(2)(D)(i) of the CAA. CAA section 110(a)(2)(D)(i)(I), also known as the “good neighbor” provision, requires SIPs to include provisions prohibiting any source or other type of emissions activity in one state from emitting any air pollutant in amounts that will contribute significantly to nonattainment, or interfere with maintenance, of the NAAQS in another state. The two provisions of this section are referred to as prong 1 (significant contribution to nonattainment) and prong 2 (interference with maintenance). Section 110(a)(2)(D)(i)(II) requires SIPs to contain adequate provisions to prohibit emissions that will interfere with measures required to be included in the applicable implementation plan for any other state under part C to prevent significant deterioration of air quality (prong 3) or to protect visibility (prong 4). This proposed action addresses only prongs 1 and 2 of section 110(a)(2)(D)(i). All other infrastructure SIP elements for Georgia for the 2008 8-hour ozone NAAQS were addressed in separate rulemakings. 2

On August 15, 2018, the Georgia Environmental Protection Division (GA EPD) provided a SIP submittal to EPA to address the interstate transport requirements of sections 110(a)(2)(D)(i)(I) for the Georgia SIP. 3 Georgia made this submission to certify that its SIP contains adequate provisions to prohibit emissions activities within the State which will contribute significantly to nonattainment or interfere with maintenance of the 2008 8-hour ozone NAAQS in any other state, and therefore, adequately addresses the requirements of CAA section 110(a)(2)(D)(i)(I) for the 2008 8-hour ozone NAAQS. 4 Georgia's certification is based on EPA's air quality modeling and monitoring data, SIP-approved and state provisions regulating emissions of ozone precursors (volatile organic compounds (VOCs) and nitrogen oxides (NO X )) within the State, and an analysis of recent trends in emissions of ozone precursors (VOCs and NO X ) from Georgia sources.

EPA developed technical information and related analyses to assist states with meeting section 110(a)(2)(D)(i)(I) requirements for the 2008 8-hour ozone NAAQS through SIPs and, as appropriate, to provide backstop federal implementation plans (FIPs) in the event that states failed to submit approvable SIPs. 5 On October 26, 2016, EPA took steps to effectuate this backstop role with respect to eastern states  6 by finalizing an update to the 2011 Cross-State Air Pollution Rule (2011 CSAPR) ozone season program that addresses good neighbor obligations for the 2008 8-hour ozone NAAQS (CSAPR Update). 7 The CSAPR Update establishes statewide NO X budgets for certain affected electricity generating units in 22 eastern states for the May through September ozone season to reduce the interstate transport of ozone pollution in the eastern United States, and thereby help downwind states and communities meet and maintain the 2008 8-hour ozone NAAQS. See 81 FR 74506. The rule also determined that emissions from 14 states (including Georgia) will not significantly contribute to nonattainment or interfere with maintenance of the 2008 ozone NAAQS in downwind states. Accordingly, EPA determined that it need not require further emission reductions from sources in those states to address the good neighbor provision as to the 2008 ozone NAAQS. Id.

The CSAPR Update used the same framework that EPA used when developing the original 2011 CSAPR, EPA's interstate transport rule addressing the 1997 8-hour ozone NAAQS as well as the 1997 and 2006 fine particulate matter (PM 2.5 ) NAAQS. This framework established the following four-step process to address the requirements of the good neighbor provision: (1) Identify downwind areas, referred to as receptors, that are expected to have problems attaining or maintaining the NAAQS; (2) determine which upwind states impact these identified problems in amounts sufficient to “link” them to the downwind air quality problems; (3) for states linked to downwind air quality problems, identify upwind emissions, if any, that will significantly contribute to nonattainment or interfere with maintenance of a NAAQS; and (4) reduce the identified upwind emissions for states that are found to have emissions that will significantly contribute to nonattainment or interfere with maintenance of the NAAQS downwind by adopting permanent and enforceable measures in a FIP or SIP. In the CSAPR Update, EPA used this four-step framework to determine whether states in the east will significantly contribute to nonattainment or interfere with maintenance of downwind air quality. As explained below, the CSAPR Update's four-step analysis supports the conclusions provided in GA EPD's August 15, 2018, interstate transport SIP submittal for the 2008 8-hour ozone NAAQS that the state will not significantly contribute to nonattainment or interfere with maintenance of the standard in other states.

In the technical analysis supporting the CSAPR Update, EPA used detailed air quality analyses to determine where projected nonattainment or maintenance receptors would be, at step 1 of the four-step framework, and whether emissions from an eastern state contribute to downwind air quality problems at those projected nonattainment or maintenance receptors, at step 2 of the framework. Specifically, EPA determined whether each state's contributing emissions were at or above a specific threshold. EPA determined that one percent was an appropriate threshold to use in this analysis because there were important, even if relatively small, contributions to identified nonattainment and maintenance receptors from multiple upwind states at that threshold. 8 See 81 FR 74504. For the CSAPR Update, EPA applied an air quality screening threshold of 0.75 ppb (equivalent to one percent of the 2008 8-hour ozone NAAQS of 75 ppb) to identify linkages between upwind states and the downwind nonattainment and maintenance receptors. States with impacts below the one-percent threshold were considered not to contribute to identified downwind nonattainment and maintenance receptors and therefore would not contribute significantly to nonattainment or interfere with maintenance of the standard in those downwind areas. If a state's impact was equal to or exceeded the one-percent threshold, that state was considered linked to the downwind nonattainment or maintenance receptor(s) and the state's emissions were further evaluated, taking into account both air quality and cost considerations, to determine whether any emissions reductions might be necessary to address the state's obligation pursuant to CAA section 110(a)(2)(D)(i)(I).

As discussed in the final rulemaking for the CSAPR Update, the air quality modeling contained in EPA's technical analysis: (1) Identified locations in the U.S. where EPA anticipated nonattainment or maintenance issues in 2017 for the 2008 8-hour ozone NAAQS (these were identified as nonattainment or maintenance receptors, respectively), and (2) quantified the projected contributions from emissions from upwind states to downwind ozone concentrations at the receptors in 2017. See 81 FR 74504 (October 26, 2016). This modeling used the Comprehensive Air Quality Model with Extensions (CAMx version 6.11) to model the 2011 base year and the 2017 future base case emissions scenarios to identify projected nonattainment and maintenance sites with respect to the 2008 8-hour ozone NAAQS in 2017. EPA used nationwide state-level ozone source apportionment modeling (the CAMx Ozone Source Apportionment Technology/Anthropogenic Precursor Culpability Analysis technique) to quantify the contribution of 2017 base case NO X and VOC emissions from all sources in each state to the 2017 projected receptors. The air quality model runs were performed for a modeling domain that covers the 48 contiguous United States, the District of Columbia, and adjacent portions of Canada and Mexico. The updated modeling data released to support the final CSAPR Update inform the Agency's analysis of upwind state linkages to downwind air quality problems for the 2008 8-hour ozone NAAQS for Georgia. See CSAPR Update Modeling TSD.

EPA's air quality modeling for the final CSAPR Update indicated that Georgia's largest impact on any projected downwind nonattainment receptor in 2017 was 0.60 ppb and Georgia's largest contribution to any projected downwind maintenance-only site in 2017 was 0.62 ppb. 9 These values are below the one percent screening threshold of 0.75 ppb, and therefore there are no identified linkages between Georgia and 2017 downwind projected nonattainment and maintenance sites. 10

As mentioned in section I, Georgia's August 15, 2018, submittal certifies that emission activities from the State will not contribute significantly to nonattainment or interfere with maintenance of the 2008 8-hour ozone NAAQS in any other state for the following reasons: (1) Modeling conducted by EPA in support of the CSAPR Update indicates that Georgia's impact on any downwind receptor is less than 1 percent of the standard; (2) NO X and VOC precursor emissions in Georgia have decreased since 1990; and (3) Georgia has in place both SIP-approved and state provisions that regulate ozone precursors in the State. Based on an assessment of this information, EPA proposes to approve Georgia's SIP submission because the State will not significantly contribute to nonattainment in, or interfere with maintenance by, any other state with respect to the 2008 8-hour ozone NAAQS.

Georgia's submittal assessed EPA's CSAPR Update modeling. Georgia cites EPA's August 2016 CSAPR Update Modeling TSD where the modeling indicated that Georgia's largest impact on any projected downwind nonattainment receptor in 2017 was 0.60 ppb and the largest impact on any projected downwind maintenance-only site was 0.62 ppb, both of which are below 0.75 ppb, the one percent threshold for the 2008 ozone NAAQS. EPA concluded that Georgia's emissions will not contribute to downwind nonattainment and maintenance receptors and therefore, did not promulgate a FIP that required additional emission reductions from Georgia. Accordingly, in the CSAPR Update, EPA made a final determination that Georgia emissions will not significantly contribute to nonattainment in, or interfere with maintenance by, any other state for the 2008 ozone NAAQS and that sources in the State are not required to further reduce emissions pursuant to the good neighbor provision with respect to this standard. 11

Georgia's submittal also notes that total annual NO X emissions and total annual VOC emissions in the state have decreased by 58 percent and 49 percent, respectively, between 1990 and 2017. EPA notes that ozone precursor emissions nationally continue to decline from 1990 levels and are largely driven by federal and state implementation of stationary and mobile source regulations. 12 Additionally, nationwide ozone concentrations have also decreased since 1990. Id.

GA EPD identified regulations that have been approved into the Georgia SIP to provide for the control of NO X and VOCs, which are precursors that contribute to ambient ozone concentrations. These regulations include Regulations 391-3-1-.02— Provisions Amended and 391-3-1-.03— Permits, which provide for the implementation of a permitting program for New Source Review and Prevention of Significant Deterioration requirements required under Title I, Parts C and D of the CAA for sources of NO X and VOCs. The permitting requirements help ensure that NO X and VOC emissions from new and modified sources are controlled.

Specifically for the control of NO X , GA EPD identified SIP-approved regulations that establish emission standards and compliance (testing and monitoring) requirements for stationary sources of air pollution: 391-3-1-.02(2)(yy)— Emissions of Nitrogen Oxides from Major Sources, 391-3-1- .02(2)(jjj)— NO X Emissions from Electric Utility Steam Generating Units, 391-3-1-.02(2)(lll)— NO X Emissions From Fuel-Burning Equipment, and Regulation 391-3-1-.02(2)(rrr)— NO X from Small Fuel-Burning Equipment. Georgia also identified Regulation 391-3-20— Vehicle Emissions Inspection and Maintenance (I/M) Program which regulates vehicle emissions in the state. 13

Georgia further identified the following SIP-approved regulations that provide for the implementation of VOC emissions controls by fulfilling RACT requirements for specific source categories: Regulation 391-3-1-.02(2)(t) through (ff), (hh) through (nn), (pp) through (ss), (vv), (ccc) through (eee), (hhh), (kkk), (vvv), and (yyy) through (aaaa). GA EPD further identified Regulation 391-3-1-.02(2)(tt)— VOC Emissions from Major Sources, which outlines the case-by-case RACT regulations in the State.

EPA proposes to approve Georgia's August 15, 2018, SIP submission on grounds that it addresses the State's 110(a)(2)(D)(i)(I) good neighbor obligation for the 2008 8-hour ozone NAAQS because EPA has found that the State will not contribute significantly to nonattainment in, or interfere with maintenance by, any other state.

EPA is proposing to determine that Georgia will not contribute significantly to nonattainment or interfere with maintenance of the 2008 8-hour ozone NAAQS in any other state. Therefore, EPA is proposing to approve Georgia's August 15, 2018, SIP submission as meeting the CAA requirements of prongs 1 and 2 under section 110(a)(2)(D)(i)(I) for the 2008 8-hour ozone NAAQS. EPA requests comment on this proposed approval of Georgia's SIP.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

Throughout this document, the terms “we,” “us,” and “our” refer to the EPA.

Table 1 lists the rule addressed by this proposal with the date it was adopted by YSAQMD and submitted by the California Air Resources Board (CARB), the governor's designee for California SIP submittals. Rule 3.25 contains the District's Nonattainment New Source Review (NNSR) permit requirements applicable to new and modified major sources emitting fine particulate matter (PM 2.5 ) and PM 2.5 precursors.

On June 10, 2019, the EPA notified CARB that its June 4, 2019 submittal of Rule 3.25 met the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review. The submittal includes evidence of public notice and adoption of the regulation.

For areas designated as nonattainment for one or more National Ambient Air Quality Standards (NAAQS), the SIP must include preconstruction permit requirements for new or modified major stationary sources of such nonattainment pollutant(s), commonly referred to as Nonattainment New Source Review (NNSR). YSAQMD Rule 3.25 addresses statutory and regulatory requirements for NNSR permits for major sources of PM 2.5 and PM 2.5 precursors.

On November 13, 2009, the EPA designated the Sacramento Valley Air Basin, including the eastern portions of Yolo and Solano counties, as nonattainment for the 2006 PM 2.5 NAAQS (the Sacramento PM 2.5 nonattainment area). 1 Because the Sacramento PM 2.5 nonattainment area includes areas under YSAQMD's jurisdiction, the District was required to submit, by December 31, 2014, a SIP revision to address NNSR requirements for major sources of PM 2.5 and PM 2.5 precursors. On June 8, 2016, the EPA published in the Federal Register a finding of failure to submit the required SIP revision. 2 On August 16, 2017, YSAQMD submitted Rule 3.25 “New Source Review for New and Modified Major PM 2.5 Sources,” as adopted on July 12, 2017, and on May 16, 2018, the EPA notified the state that its August 16, 2017 submittal of Rule 3.25 addressed the EPA's finding of failure to submit. 3 As noted in Table 1, today's action involves a newly revised version of Rule 3.25, adopted on May 15, 2019 and submitted on June 5, 2019.

The EPA reviewed YSAQMD Rule 3.25 for compliance with CAA requirements for: (1) SIPs in general as set forth in CAA section 110(a)(2); (2) SIP revisions as set forth in CAA section 110(l);  4 (3) stationary source preconstruction permitting programs in CAA Part D, including section 172 and 173(a) through (c) of subpart 1, and subpart 4; and (4) requirements related to the review and modification of major sources in 40 CFR 51.160—51.165 including requirements set forth in the EPA's rule “Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements” (“2016 Implementation Rule”). 5 The 2016 Implementation Rule requires areas classified as nonattainment for any PM 2.5 NAAQS to comply with CAA section 189(e) requirements for control of major stationary sources of PM 10 and PM 2.5 precursors. 6 To implement requirements applicable to major sources of PM 2.5 , the 2016 Implementation Rule also amended 40 CFR 51.165 definitions of the terms (1) Regulated NSR Pollutant; (2) Major Stationary Source; and (3) Significant. Rule 3.25 must be consistent with these recent regulatory requirements.

With respect to procedural requirements, CAA sections 110(a)(2) and 110(l) require that revisions to a SIP be adopted by the State after reasonable notice and public hearing. Based on our review of the public process documentation included in the August 16, 2017 submittal, we find that YSAQMD has provided sufficient evidence of public notice, opportunity for comment and a public hearing prior to adoption and submittal of these rules to the EPA.

With respect to substantive requirements found in CAA sections 172, 173 and 189(e) and 40 CFR 51.160-51.165, we have evaluated YSAQMD Rule 3.25 in accordance with the CAA and regulatory requirements that apply to NNSR permit programs under part D of title I of the Act. We find that Rule 3.25 satisfies the requirements for a PM 2.5 NNSR permit program.

Our Technical Support Document, which can be found in the docket for this rule, contains a more detailed discussion of our evaluation of Rule 3.25.

As authorized in section 110(k)(3) of the Act, the EPA is proposing to approve the submitted rule because it fulfills all relevant requirements. We have concluded that our approval of the submitted rule would comply with CAA sections 110(a)(2), 172, 173 and 189(e), and 40 CFR 51.160-51.165.

In support of this proposed action, we have concluded that our action would comply with section 110(l) of the Act because approval of Rule 3.25 will not interfere with any applicable requirement concerning attainment and reasonable further progress, or any other CAA applicable requirement. If we finalize this action as proposed, our action will be codified through revisions to 40 CFR 52.220 (Identification of Plan-in part).

We will accept comments from the public on this proposal until August 12, 2019.

In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the YSAQMD rule listed in Table 1 of this preamble. The EPA has made, and will continue to make, this document available electronically through https://www.regulations.gov and in hard copy at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide the EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

On August 29, 2018, the District of Columbia Department of Energy and Environment (DOEE) submitted a SIP revision to address all the RACT requirements for VOCs set forth by the CAA under the 2008 8-hour ozone NAAQS (the 2018 RACT Submission). The DOEE also submitted as an amendment to the SIP-approved 2002 MERR rule the updated 2009 MVMERR rule. As previously mentioned, the 2009 MVMERR rule will be addressed in a separate rulemaking notice.

Ozone is formed in the atmosphere by photochemical reactions between VOCs and NO X in the presence of sunlight. In order to reduce these ozone concentrations, the CAA requires control of VOC and NO X emission sources to achieve emission reductions in moderate or more serious ozone nonattainment areas. Among effective control measures, RACT controls significantly reduce VOC and NO X emissions from major stationary sources.

RACT is defined as the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility. 1 Section 172 of the CAA sets forth general requirements for SIPs in nonattainment areas, including a requirement that SIPs must include reasonably available control measures (RACM) for attainment of the NAAQS, including emissions reductions from existing sources through adoption of RACT. CAA section 172(c)(1). Part D, subpart 2 of the CAA sets forth additional provisions for ozone nonattainment areas. CAA sections 181-185B. Sections 182(b)(2) and 182(f)(1) of the CAA require states with moderate (or worse) ozone nonattainment areas to implement RACT controls on all stationary sources and source categories covered by a CTG document issued by EPA, and on all major sources of VOC and NO X emissions located in the area. A major source in a nonattainment area is defined as any stationary source that emits or has the potential to emit NO X or VOC above a certain applicability threshold that is based on the ozone nonattainment classification of the area: Marginal, Moderate, Serious, or Severe. See “major stationary source” in CAA sections 182(c), (d), (e), 184(b) and 302. EPA's CTGs establish presumptive RACT control requirements for various VOC source categories. The CTGs typically identify a particular control level that EPA recommends as being RACT. In some cases, EPA has issued Alternative Control Techniques guidelines (ACTs) primarily for NO X source categories, which in contrast to the CTGs, only present a range for possible control options but do not identify any particular option as the presumptive norm for what is RACT. Section 183(c) of the CAA requires EPA to revise and update CTGs and ACTs as the Administrator determines necessary. EPA issued 11 new CTGs from 2006 through 2008 for a total of 44 CTGs issued since November 1990. States are required to implement RACT for the source categories covered by CTGs through the SIP.

Section 184(a) of the CAA established a single ozone transport region (OTR), comprising all or part of 12 eastern states and the District. 2 The District is part of the OTR and, therefore, must comply with the RACT requirements in section 184(b)(1)(B) and (2) of the CAA. Specifically, section 184(b)(1)(B) requires the implementation of RACT in OTR states with respect to all sources of VOC covered by a CTG. Additionally, section 184(b)(2) states that any stationary source with the potential to emit 50 tons per year (tpy) or more of VOCs shall be considered a major source and subject to the requirements which would be applicable to major stationary sources as if the area was classified as a moderate nonattainment area. A major source in a moderate nonattainment area is defined by section 302(j) as any stationary source that emits or has the potential to emit 100 tpy or more of any air pollutant, including NO X or VOC. Section 182(f) extends the SIP requirements for major sources of VOCs to major sources of NO X , as defined in sections 302 and 182(c), (d), and (e).

The District has been subject to the CAA RACT requirements because of previous ozone designations. The District was designated as a Serious 1-hour ozone nonattainment area. On January 24, 2003, the District's nonattainment classification was “bumped up” from Serious to Severe for the 1-hour NAAQS and the District was required to submit RACT evaluations on point sources with a potential to emit (PTE) 25 tpy for either VOCs or NO X (68 FR 3410). Revisions to the District's VOC RACT provisions to redefine major source thresholds were adopted into the SIP on December 28, 2004 (69 FR 77647) and the final attainment demonstration for the 1-hour NAAQS was approved on March 13, 2005 (70 FR 25688). Under the 1997 8-hour ozone NAAQS, the District was designated as a Moderate nonattainment area. As a result, the District continued to be subject to the CAA RACT requirements. 69 FR 23858, 23931 (April 30, 2004). The District promulgated its RACT regulations, certifying that the previously adapted RACT controls approved under the 1-hour ozone NAAQS continued to represent RACT under the 1997 8-hour ozone standard, and that no facilities existed in the District for several remaining CTG categories. EPA approved the SIP revision on June 16, 2009 (74 FR 28447).

Under the 2008 8-hour ozone standard, EPA designated the District as a marginal nonattainment area. As part of the OTR, the District must, at a minimum, implement more stringent moderate area RACT requirements for: (1) All categories of VOC or NO X sources covered by a CTG; (2) all other major stationary sources of VOC or NO X located in the area. Section 182(b)(2). For the District's 2008 VOC RACT analysis, despite classification as a marginal nonattainment area, the OTR major source thresholds of 50 tpy for VOCs and 100 tpy for NO X apply. Sections 184(b)(2), 182(f)(1).

EPA has provided more substantive RACT requirements through final implementation rules for each ozone NAAQS, as well as guidance. On March 6, 2015, EPA issued its final rule for implementing the 2008 8-hour ozone NAAQS (the 2008 Ozone Implementation Rule). 80 FR 12264, codified at 40 CFR part 51, subpart AA. This rule addressed, among other things, control and planning obligations as they apply to nonattainment areas under the 2008 8-hour ozone NAAQS, including RACT and RACM. In the preamble of the proposed rule, EPA stated that RACT SIPs must contain adopted RACT regulations, certifications where appropriate that existing provisions are RACT, and/or negative declarations that there are no sources in the nonattainment area covered by a specific CTG source category. 78 FR 34178, 34192. Stated differently, states can meet the RACT requirements either through (1) a certification that previously adopted RACT controls in their SIP revisions approved by EPA under a prior ozone NAAQS continue to represent adequate RACT control levels for attainment of the 2008 8-hour ozone NAAQS; (2) through the adoption of new or more stringent regulations or controls that represent RACT control levels; or (3) a negative declaration if there are no source categories subject to certain CTGs within the nonattainment area in lieu of, or in addition to, a certification. A certification must be accompanied by appropriate supporting information such as consideration of information received during the public comment period and consideration of new data. Adoption of new RACT regulations will occur when states have new stationary sources not covered by existing RACT regulations, or when new data or technical information indicates that a previously adopted RACT measure does not represent a newly available RACT control level.

On August 29, 2018, the DOEE submitted a SIP revision to address all the VOC RACT requirements set forth by the CAA for the 2008 8-hour ozone NAAQS. Specifically, the District's 2018 RACT Submission includes: (1) A certification that for certain major sources, previously adopted VOC RACT controls in the District's SIP that were approved by EPA under the 1979 1-hour and 1997 8-hour ozone NAAQS are based on the currently available technically and economically feasible controls, and continue to represent RACT for implementation of the 2008 8-hour ozone NAAQS; (2) a listing of the CTGs already adopted into the District's SIP, and (3) a listing of those categories of sources subject to CTGs which do not exist in the District and the location of prior negative declarations previously submitted and approved by EPA.

The District's Regulations and Statutes, under DMCR Subtitle A (Air Quality), Chapter 7—Volatile Organic Compounds, contain the VOC RACT controls that were implemented and approved into the District's SIP under the 1-hour and 1997 8-hour ozone NAAQS. The District is certifying that these regulations, all previously approved by EPA into the SIP, continue to meet the RACT requirements for the 2008 8-hour ozone NAAQS for major stationary sources of VOCs and CTG-covered sources of VOCs. The District also submitted negative declarations for those sources covered by CTGs and ACT guidelines that have not been adopted due to no affected facilities in the District in their review of applicable 2008 8-hour ozone RACT requirements. Additionally, the District conducted a RACT analysis for each major non-CTG stationary source of VOC. For the 2008 8-hour ozone NAAQS, the District determined that there were three major stationary sources with a PTE of 50 tpy or more of VOCs. The District evaluated the equipment at these sources to determine whether there was any equipment emitting VOCs that were not covered by RACT level controls or a CTG. For equipment at these sources not covered by RACT controls or CTGs, the District determined that the actual emissions of VOCs from this equipment were so small that it would not be cost-effective (economically feasible) to apply controls.

More detailed information on the District's 2018 VOC RACT submission; as well as a detailed summary of EPA's review of the submission, can be found in the Technical Support Document (TSD) for this action, which is available online at www.regulations.gov, Docket number EPA-R03-OAR-2019-0184.

EPA has reviewed the District's 2018 RACT submission and is proposing to approve it as a SIP revision. The District has met the RACT requirements for the 2008 8-hour ozone NAAQS as set forth by sections 182(b) and 184(b)(2) of the CAA. The District's SIP revision satisfies the 2008 8-hour ozone NAAQS RACT requirements through (1) certification that previously adopted RACT controls in the District's SIP for major, non-CTG VOC sources that were approved by EPA under the 1-hour ozone and 1997 8-hour ozone NAAQS continue to be based on the currently available technically and economically feasible controls, and that they continue to represent RACT; (2) a listing identifying those CTGs which the District has already adopted into its SIP, and (3) a listing of the negative declarations previously submitted by the District for those source categories covered by CTGs that do not exist in the District. EPA finds that the District's 2018 RACT Submission demonstrates that the District has adopted air pollution control strategies that represent RACT for the purposes of compliance with the 2008 8-hour ozone standard for all major stationary sources of VOC, it implements RACT with respect to all sources of VOCs covered by a CTG issued prior to July 20, 2014, and has submitted or previously submitted negative declarations for those VOC sources covered by CTGs and ACTs that are not found in the District. EPA is soliciting public comments on the issues discussed in this document relevant to VOC RACT requirements for the District for the 2008 ozone NAAQS. These comments will be considered before taking final action.

In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference source-specific RACT determinations under the 2008 8-hour ozone NAAQS for certain major sources of VOC emissions. EPA has made, and will continue to make, these materials generally available through https://www.regulations.gov and at the EPA Region III Office (please contact the person identified in the “For Further Information Contact” section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this proposed rule, the District's 2008 8-hour ozone RACT SIP revision does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the District, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

Throughout this document, whenever “we,” “us,” or “our” is used, we mean the EPA. This supplementary information section is arranged as follows:

Under section 110(k) of the Clean Air Act (“Act” or CAA), the EPA is required to take action by approving, disapproving, or conditionally approving, in whole or in part, SIPs and SIP revisions submitted by the states. In today's action, the EPA is proposing to conditionally approve a SIP revision titled “Revision to Motor Vehicle Emissions Budgets in Ozone Redesignation Request and Maintenance Plan: Clark County, Nevada” (October 2018) (herein, referred to as the “2018 Ozone Maintenance Plan Revision”), submitted by the Nevada Division of Environmental Protection (NDEP) on October 31, 2018. The 2018 Ozone Maintenance Plan Revision updates certain elements of the maintenance plan for Clark County for the 1997 ozone NAAQS, including the attainment inventory, the maintenance plan, and the motor vehicle emissions budgets (“budgets” or MVEBs). The budgets were updated using the EPA's MOtor Vehicle Emission Simulator emission model released in 2014 (MOVES2014a). If the EPA takes final action to conditionally approve the SIP revision, the updated budgets will replace Clark County's existing budgets for the 1997 ozone NAAQS. At that time, the previously-approved budgets would no longer be applicable for transportation conformity purposes, and the revised budgets would need to be used beginning on the publication date of the EPA's final conditional approval in the Federal Register. 1 The proposed conditional approval is based on commitments from NDEP and the Clark County Department of Air Quality (DAQ) to submit a SIP revision within one year of final conditional approval. 2 The purpose of the future SIP revision is to reduce the safety margin allocations to the budgets to ensure that the 2018 Ozone Maintenance Plan Revision, as revised to reduce the safety margin allocations, will not interfere with reasonable further progress or attainment of the 2008 and 2015 ozone NAAQS.

Under section 109 of the CAA, the EPA promulgates NAAQS for pervasive air pollutants, such as ozone. The NAAQS are concentration levels that, the attainment and maintenance of which, the EPA has determined to be requisite to protect public health and welfare. Once the EPA has established a NAAQS or revised a NAAQS, section 110 of the CAA requires states to adopt and submit to the EPA a plan, referred to as the SIP, that provides for the implementation, maintenance, and enforcement of such NAAQS. As noted previously, the EPA is required to take action to approve, disapprove, or conditionally approve SIPs and SIP revisions under CAA section 110(k).

Under CAA section 107(d), the EPA must designate all areas of the country as attainment, nonattainment or unclassifiable for new or revised NAAQS. States with areas designated as nonattainment must develop, adopt and submit SIP revisions to provide for, among other things, attainment as expeditiously as practicable but no later than certain dates and for reasonable further progress (RFP) towards attainment. 3 Once a nonattainment area has attained the NAAQS, the state may request redesignation of the area from nonattainment to attainment, and the EPA grants such requests if the criteria in CAA section 107(d)(3)(E) are met, including the approval of a maintenance plan (under CAA section 175A) that demonstrates how the area will maintain the NAAQS for at least 10 years after the redesignation. Such former nonattainment areas that have been redesignated to attainment are referred to as “maintenance areas.”

In the State of Nevada, NDEP is the Governor's designee for adoption and submittal of SIPs and SIP revisions to the EPA. NDEP is also responsible for regulation of stationary sources and development of local air quality plans throughout much of the State of Nevada. In Clark County, the Clark County DAQ is responsible under state law for regulation of most types of stationary sources within the county and for development of local air quality plans. Once adopted by the Clark County Board of County Commissioners, such county plans are forwarded to NDEP for adoption and submittal to the EPA as revisions to the Nevada SIP.

The emission control strategy SIP revisions ( e.g., RFP and attainment demonstration SIP revisions) and maintenance plans include budgets of on-road mobile source emissions for criteria pollutants and/or their precursors to address pollution from cars and trucks. The budgets are the portions of the total allowable emissions that are allocated to on-road vehicle use that, together with emissions from other sources in the area, will provide for RFP, attainment or maintenance. The budgets serve as a ceiling on emissions from an area's planned transportation system. 4

The CAA recognizes the connection between air quality planning and transportation planning in nonattainment and maintenance areas and includes specific provisions related to adoption and approval of transportation programs, plans, and projects by Metropolitan Planning Organizations (MPOs) and the U.S Department of Transportation's (DOT's) Federal Highway Administration (FHWA) or Federal Transit Administration (FTA). More specifically, under section 176(c) of the CAA, transportation plans, Transportation Improvement Programs (TIPs), and transportation projects must “conform” to ( i.e., be consistent with) the SIP before they can be adopted or approved. Conformity to the SIP means that transportation activities will not cause new air quality violations, worsen existing air quality violations, or delay timely attainment of the NAAQS or delay an interim milestone. The EPA's transportation conformity rule at 40 CFR part 93, subpart A establishes the criteria and procedures that MPOs and DOT must use to determine whether transportation activities conform to the SIP. Transportation conformity applies to areas that are designated nonattainment and those former nonattainment areas that have been redesignated to attainment and have a CAA section 175A maintenance plan (“maintenance areas”), but does not apply to areas designated as attainment or unclassifiable. 5

Under certain circumstances, MPOs and DOT must determine conformity based, in part, on a “budget test” that involves a comparison between estimates of regional on-road mobile source emissions under a given transportation plan or program with the budgets. 6 Before budgets can be used in conformity determinations, however, the EPA must affirmatively find the budgets adequate. 7 However, adequate budgets do not supersede approved budgets for the same CAA purpose. If the submitted SIP budgets are meant to replace budgets for the same purpose, the EPA must approve the budgets, and can affirm that they are adequate at the same time. Once the EPA approves the submitted budgets, they must be used by state and federal agencies in determining whether transportation activities conform to the SIP as required by section 176(c) of the CAA. The EPA's substantive criteria for determining the adequacy of budgets are set out in 40 CFR 93.118(e)(4).

In Clark County, the area's MPO, the Regional Transportation Commission of Southern Nevada (RTC) and DOT are the relevant transportation agencies that must use approved or adequate budgets in determining the conformity of transportation plans and TIPs within Clark County.

Ground-level ozone pollution is formed from the reaction of volatile organic compounds (VOC) and oxides of nitrogen (NO X ) in the presence of sunlight. These two pollutants, referred to as ozone precursors, are emitted by many types of sources, including on-and off-road motor vehicles and engines, power plants and industrial facilities, and smaller area sources such as lawn and garden equipment and paints. Scientific evidence indicates that adverse public health effects occur following exposure to ozone, particularly in children and adults with lung disease. Breathing air containing ozone can reduce lung function and inflame airways, which can increase respiratory symptoms and aggravate asthma or other lung diseases. 8

As noted previously, the EPA promulgates NAAQS for pervasive air pollutants, such as ozone, under CAA section 109. In 1997, the EPA revised the ozone NAAQS to set the acceptable level of ozone in the ambient air at 0.08 parts per million (ppm), averaged over an 8-hour period (herein referred to as the “1997 ozone NAAQS”). 9 In 2004, the EPA designated and classified all areas with respect to the 1997 ozone NAAQS, and designated Clark County as a “Subpart 1” nonattainment area for the 1997 ozone NAAQS. 10 Later that year, the EPA reduced the geographic extent of the ozone nonattainment area to a portion of Clark County. 11 In 2005, we published a final rule that we would treat the effective date of the partial-county nonattainment area designation the same as the designations for the rest of the country, i.e., June 15, 2004. 12

As a “Subpart 1” area, the Clark County ozone nonattainment area was subject to a number of requirements including the requirement to demonstrate attainment of the 1997 ozone NAAQS as expeditiously as practicable, but no later than five years from the date that the area was designated nonattainment. 13 In 2011, the EPA determined that the Clark County 8-hour ozone nonattainment area had attained the 1997 8-hour ozone NAAQS, based on complete, quality-assured, and certified ambient air monitoring data that showed the area monitored attainment of the 1997 ozone NAAQS for the 2007-2009 monitoring period. 14

In 2011, in light of ambient monitoring data showing that the Clark County ozone nonattainment had attained the 1997 ozone NAAQS, NDEP submitted the “Ozone Redesignation Request and Maintenance Plan, Clark County, Nevada (March 2011)” (herein, the “2011 Ozone Maintenance Plan”) to the EPA for approval as a revision to the Clark County portion of the Nevada SIP. Prepared by the Clark County DAQ, the 2011 Ozone Maintenance Plan includes the various elements found in most maintenance plans, including an attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, contingency plan, and motor vehicle emissions budgets.

For the 2011 Ozone Maintenance Plan, Clark County DAQ selected 2008 as the year for the attainment inventory of ozone precursors ( i.e., VOC and NO X ), and demonstrated maintenance of the 1997 ozone NAAQS through year 2022 by reference to emissions inventories developed for future years 2015 and 2022 that showed that future emissions of VOC and NO X would not exceed the level of the corresponding emissions of the attainment inventory. The 2011 Ozone Maintenance Plan established budgets for NO X and VOC for years 2008, 2015 and 2022. The budgets were derived from the on-road motor vehicle emissions estimates prepared using the EPA's then-current on-road vehicle emissions model, MOBILE6.2, and the most recent vehicle mix and activity data then available from the RTC. In 2013, the EPA approved the 2011 Ozone Maintenance Plan and redesignated the Clark County ozone nonattainment area to attainment for the 1997 ozone NAAQS. 15 The subject of today's proposed action is a revision to the attainment inventory, the maintenance demonstration and budgets of the 2011 Ozone Maintenance Plan to reflect updated emissions models, vehicle mix and speed data, and transportation activity projections. The other elements of the 2011 Ozone Maintenance Plan (monitoring network, verification of continued attainment, contingency plan) are not affected by this action.

Through adoption of the 2011 Ozone Maintenance Plan, Clark County DAQ committed to maintaining an ambient air quality monitoring network to verify the continued attainment of the 1997 ozone NAAQS in the Clark County ozone maintenance area. 16 At the present time, monitors operating at 10 monitoring sites continuously monitor ambient concentrations of ozone within the maintenance area. Since 2008, i.e., the year used for the attainment inventory in the 2011 Ozone Maintenance Plan, Clark County has experienced a decrease in ambient ozone concentrations. As shown in Table 1, 8-hour ozone design values have decreased from 0.082 ppm in 2008 to 0.074 ppm in 2017. 17 In more recent years, the design value has remained relatively steady, varying little from year to year. Table 1 shows that Clark County has maintained the 1997 ozone NAAQS through the first 5 years (2013 through 2017) of the first maintenance period.

Meanwhile, in 2008, the EPA lowered the ozone NAAQS to a level of 0.075 ppm, 8-hour average (herein, the “2008 ozone NAAQS”), 18 and in 2012, the EPA designated all of the hydrographic areas within the State of Nevada as “Unclassifiable/Attainment” for the 2008 ozone NAAQS. 19 Because all the hydrographic areas located entirely, or partially, within Clark County were designated as Unclassifiable/Attainment for the 2008 ozone NAAQS, no RFP or attainment SIP revision was required for any portion of the county, and the transportation conformity requirements did not apply for that ozone NAAQS.

In 2015, the EPA issued a SIP Requirements Rule (SRR) for the 2008 ozone NAAQS (“2008 Ozone SRR”) that addressed implementation of the 2008 standards, including attainment dates, requirements for emissions inventories, attainment and reasonable further progress (RFP) demonstrations, among other SIP elements, as well as the transition from the 1997 ozone NAAQS to the 2008 ozone NAAQS and associated anti-backsliding requirements. 20 The 2008 Ozone SRR revoked the 1997 ozone NAAQS effective April 6, 2015.

The EPA's 2008 Ozone SRR was challenged, and on February 16, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) published its decision in South Coast Air Quality Management District v. EPA (“ South Coast II” ) vacating certain portions of the 2008 Ozone SRR, but upholding the EPA's revocation of the 1997 ozone NAAQS. 21 The only aspect of the South Coast II decision that affects this proposed action is the vacatur of the elimination of transportation conformity in areas that were maintenance areas for the 1997 ozone NAAQS at the time of revocation of the 1997 ozone NAAQS and were designated as attainment for the 2008 ozone NAAQS, which the court referred to as “orphan maintenance areas.” The Clark County 1997 ozone maintenance area is an orphan maintenance area. The 2008 ozone SRR had provided that such areas are no longer required to determine transportation conformity for the 1997 ozone NAAQS after the 1997 ozone NAAQS is revoked. 22 The court, however, held that transportation conformity continues to apply for the 1997 ozone NAAQS in orphan maintenance areas notwithstanding revocation of the 1997 ozone NAAQS.

Following the South Coast II decision, the EPA issued guidance that addresses how transportation conformity determinations can be made for the 1997 ozone NAAQS in orphan maintenance areas, such as the Clark County ozone maintenance area. 23 In the guidance document, the EPA explains that transportation conformity for transportation plans and TIPs for the 1997 ozone NAAQS can be demonstrated without a regional emissions analysis pursuant to 40 CFR 93.109(c). 24 In the case of the Clark County ozone maintenance area, while the transportation conformity requirement continues to apply for the revoked 1997 ozone NAAQS, RTC and DOT do not need to use the approved MOBILE6.2-based budgets from the 2011 Ozone Maintenance Plan in a conformity determination for the revoked 1997 ozone NAAQS because a regional emissions analysis is not required for that determination.

In 2015, the EPA further lowered the ozone NAAQS to 0.070 ppm, eight-hour average (herein the “2015 ozone NAAQS”). 25 In 2018, the EPA designated the Las Vegas Valley portion of Clark County as a “Marginal” nonattainment area for the 2015 ozone NAAQS, effective August 3, 2018. 26 The Clark County nonattainment area for the 2015 ozone NAAQS is about half the size of the Clark County maintenance area for the 1997 ozone NAAQS and includes only hydrographic area 212 (“Las Vegas Valley”).

The nonattainment area designation for Las Vegas Valley for the 2015 ozone NAAQS triggers the requirement for certain SIP revisions, but, under CAA section 176(c)(6) and 40 CFR 93.102(d), transportation conformity does not apply for the 2015 ozone NAAQS for one year following the effective date of the nonattainment area designation (referred to as the “grace period”), or, in this case, does not apply until August 3, 2019. However, to avoid a conformity “lapse,” a MPO and DOT must make a conformity determination for the 2015 ozone NAAQS for the applicable transportation plan and program before the end of the 1-year grace period. 27

Under our Transportation Conformity Rule, the latest approved or adequate emission budgets for a previous ozone NAAQS ( i.e., the 2008 or the 1997 ozone NAAQS) must be used in conformity determinations for the 2015 ozone NAAQS until emission budgets are established and found adequate or are approved for the 2015 ozone NAAQS. 28 Since the latest approved or adequate emission budgets for a previous ozone NAAQS for Clark County are the approved MOBILE6.2-based budgets for the 1997 8-hour ozone NAAQS, the RTC and DOT must use these budgets for conformity determinations for the 2015 ozone NAAQS until they are replaced by updated budgets.

The MOVES model is the EPA's tool for estimating highway emissions. The model is based on analyses of millions of emission test results and considerable advances in the agency's understanding of vehicle emissions. MOVES incorporates the latest emissions data, more sophisticated calculation algorithms, increased user flexibility, new software design, and significant new capabilities relative to those reflected in the EPA's previous motor vehicle emission factor model, MOBILE6.2.

The EPA announced the release of MOVES2010 on March 2, 2010 (75 FR 9411) and approved the use of MOVES2010 in states other than California for official SIP submissions to the EPA and for regional emissions analyses for transportation conformity purposes. The EPA released MOVES2014 on October 7, 2014 (79 FR 60343). MOVES2014 was a major revision to MOVES2010 and incorporated new emissions and fleet data, emission standards and functional improvements and features to the model. The October 7, 2014 notice approved the use of MOVES2014 in states outside of California for official SIP submissions to the EPA and for regional emissions analyses for transportation conformity purposes. In addition, the notice started a two-year grace period before MOVES2014 was required to be used in new regional emissions analyses for transportation conformity determinations outside of California. Since October 7, 2016, MOVES2014 was required to be used for new transportation conformity analyses outside California. In November 2015, the EPA released MOVES2014a, a minor update to MOVES2014. 29

On October 31, 2018, NDEP submitted the 2018 Ozone Maintenance Plan Revision (for the 1997 ozone NAAQS) to the EPA as a revision to the Clark County portion of the Nevada SIP. 30 Earlier that month, on October 16, 2018, the Clark County Board of County Commissioners adopted the 2018 Ozone Maintenance Plan Revision and forwarded the plan to NDEP for adoption and submittal to the EPA. 31 The 2018 Ozone Maintenance Plan Revision updates certain elements of the 2011 Ozone Maintenance Plan for the 1997 ozone NAAQS, including the emissions inventories, the maintenance demonstration, and the MOBILE6.2-derived budgets. The 2018 Ozone Maintenance Plan Revision also includes a technical support document (appendix A of the plan revision) and documentation of the public review process (appendix B of the plan revision). These updated inventories and budgets in the 2018 Ozone Maintenance Plan Revision are based on MOVES2014a. The budgets for the 1997 ozone NAAQS were developed so that the RTC would have updated budgets available to use for transportation conformity determinations with respect to the 2015 ozone NAAQS until budgets developed specifically for the 2015 ozone NAAQS are adopted and found to be adequate or approved.

CAA sections 110(a)(1) and (2) and 110(l) require a state to provide reasonable public notice and opportunity for public hearing prior to the adoption and submittal of a SIP or SIP revision. To meet this requirement, every SIP submittal should include evidence that adequate public notice was given and an opportunity for a public hearing was provided consistent with the EPA's implementing regulations in 40 CFR 51.102.

The Clark County Board of County Commissioners and NDEP have satisfied applicable statutory and regulatory requirements for reasonable public notice and hearing prior to adoption and submittal of the 2018 Ozone Maintenance Plan Revision. In the documentation included as part of the October 31, 2018 SIP revision submittal, 32 Clark County DAQ provided evidence of the required public notice and opportunity for public comment prior to the October 16, 2018 public hearing and adoption of the 2018 Ozone Maintenance Plan Revision. We find, therefore, that the submittal of the 2018 Ozone Maintenance Plan Revision meets the procedural requirements for public notice and hearing in CAA sections 110(a) and 110(l).

CAA section 110(k)(1)(B) requires the EPA to determine whether a SIP submittal is complete within 60 days of receipt. This section also provides that any plan submittal that the EPA has not affirmatively determined to be complete or incomplete will be deemed complete by operation of law six months after the date of submittal. The EPA's SIP completeness criteria are found in 40 CFR part 51, Appendix V. The 2018 Ozone Maintenance Plan Revision submission, dated October 31, 2018, became complete by operation of law on April 30, 2019.

The 2018 Ozone Maintenance Plan Revision is not a required submittal but has been submitted to establish revised budgets reflecting the most recent emissions models and planning estimates and to thereby provide the basis for RTC and DOT to make future transportation conformity determinations for transportation plans, TIPs and projects with respect to the 2015 ozone NAAQS. We have reviewed the 2018 Ozone Maintenance Plan Revision for compliance with the relevant requirements for maintenance plans under CAA section 175A and for noninterference under CAA section 110(l), and we have evaluated the budgets in the 2018 Ozone Maintenance Plan Revision for compliance with the budget adequacy criteria in 40 CFR 93.118(e).

CAA section 175A sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. We interpret this section of the Act to require, in general, the following core elements: Attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and contingency plan. 33 The 2018 Ozone Maintenance Plan Revision updates two of the core elements of the approved 2011 Ozone Maintenance Plan for the 1997 ozone NAAQS, the attainment inventory and maintenance demonstration, and it also updates the budgets.

CAA section 110(l) applies to all SIP revisions, and under that section, the EPA shall not approve any SIP revision if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable requirement of the CAA.

A maintenance plan for the 1997 ozone NAAQS must include an inventory of emissions of ozone precursors (VOC and NO X ) in the area to identify a level of emissions that are sufficient to attain the 1997 ozone NAAQS. This inventory must be consistent with the EPA's most recent guidance on emissions inventories for nonattainment areas available at the time and should represent emissions during the time period associated with the monitoring data showing attainment. The inventory must also be comprehensive, including emissions from stationary point sources, area sources, nonroad mobile sources, and on-road mobile sources, and must be based on actual “ozone season data” ( i.e., summertime) emissions.

Clark County DAQ selected 2008 as the year for the attainment inventory in the 2011 Ozone Maintenance Plan. The attainment year inventory in the 2011 Ozone Maintenance Plan is comprehensive in that it includes estimates of summertime average weekday VOC and NO X emissions from all of the relevant source categories, which the plan divides among point sources, 34 nonpoint sources, 35 commercial aviation, federal aviation ( i.e., Nellis Air Force Base), on-road mobile, nonroad mobile, and biogenic  36 sources. 37 The 2018 Ozone Maintenance Plan Revision includes a comprehensive update to the 2008 attainment inventory but, to the extent that the original estimates ( i.e., from 2011 Ozone Maintenance Plan) are based on actual reported emissions or activity levels for year 2008, there is little change in the related emissions estimate. Appendix A to the 2018 Ozone Maintenance Plan Revision contains source-specific descriptions of emission calculation procedures and sources of input data used for the update.

Table 2 below compares the attainment inventory from the 2011 Ozone Maintenance Plan with the corresponding inventory from the 2018 Ozone Maintenance Plan Revision. As shown in Table 2, the change in the attainment inventory in the 2018 Ozone Maintenance Revision is primarily due to the update to the on-road mobile source category and the nonpoint source category.

With respect to on-road mobile source emissions, Clark County DAQ updated the emissions estimates using the SMOKE-MOVES approach, which incorporates MOVES2014a model emission rates, Sparse Matrix Operator Kernel Emissions (SMOKE) modeling, 38 RTC travel demand modeling, and Highway Performance Monitoring System (HPMS) data from the Nevada Department of Transportation. 39 Clark County DAQ selected the SMOKE-MOVES approach to be consistent with the EPA's approach in developing the National Emissions Inventory (NEI), as well as with the EPA's modeling platform. This approach is also consistent with the one used in Clark County's photochemical modeling applications. In contrast, the 2011 Ozone Maintenance Plan's on-road mobile source emissions were estimated using the CONCEPT MV emissions model  40 and EPA's MOBILE6.2 emissions factors. Generally, on-road mobile source emissions estimates made using MOVES2014a are higher for NO X and lower for VOC relative to those made using MOBILE6.2. With respect to nonpoint emissions sources, the change in the 2008 emissions inventory is largely due to the use of the SMOKE model.

Based on our review of the emissions inventories (and related documentation) from the 2018 Ozone Maintenance Plan Revision, we find that the inventories for 2008 are comprehensive, that the methods and assumptions used by Clark County DAQ to update the 2008 emission inventory are reasonable, and that the inventories reasonably estimate actual ozone season emissions in the 2008 attainment year. Moreover, we find that the 2008 emissions inventories in the Ozone Maintenance Plan reflect the latest planning assumptions and emissions models available at the time the 2018 Ozone Maintenance Plan Revision was developed.

CAA section 175A(a) requires that the maintenance plan “provide for the maintenance of the national primary ambient air quality standard for such air pollutant in the area concerned for at least 10 years after the redesignation.” Generally, a state may demonstrate maintenance of the ozone NAAQS by either showing that future emissions will not exceed the level of the attainment inventory or by modeling to show that the future mix of sources and emissions rates will not cause a violation of the NAAQS.

The 2018 Ozone Maintenance Plan Revision uses the same method as the 2011 Ozone Maintenance Plan to demonstrate continued maintenance of the 1997 ozone NAAQS. The 2018 Ozone Maintenance Plan Revision demonstrates maintenance through the initial 10-year period after redesignation by showing that emissions in 2015 and 2022 would be less than those in the 2008 attainment year.

To provide the basis for the comparison of future emissions with the updated attainment year (2008) emissions, Clark County DAQ updated the 2015 and 2022 emissions inventories using the SMOKE-MOVES approach for the on-road mobile sources as described above for the update to the 2008 attainment year emissions inventory and by incorporating more recent emissions and travel demand data. Tables 3 and 4 below compare the NO X and VOC emissions inventories, respectively, for 2015 and 2022 from the 2018 Ozone Maintenance Plan Revision with the corresponding values from the 2011 Ozone Maintenance Plan.

The State regulations which EPA has determined are no less stringent than the corresponding Federal regulations are:

All interested parties are invited to submit written comments on this determination and may request a public hearing. All comments will be considered; if necessary, EPA will issue a response. Frivolous or insubstantial requests for a hearing may be denied by the Regional Administrator. However, if a substantial request for a public hearing is made by August 12, 2019, a public hearing will be held. A request for public hearing shall include the following: (1) The name, address, and telephone number of the individual, organization, or other entity requesting a hearing; (2) a brief statement of the requesting person's interest in the Regional Administrator's determination and of information that the requesting person intends to submit at such a hearing; and (3) the signature of the individual making the request; or, if the request is made on behalf of an organization or other entity, the signature of a responsible official of the organization or other entity.

Table of Contents I. Introduction II. NPL Deletion Criteria III. Deletion Procedures IV. Basis for Intended Site Deletion I. Introduction

The EPA Region 7 announces its intent to delete the Electro-Coatings, Inc. Superfund Site from the NPL and requests public comment on this proposed action. The NPL constitutes Appendix B of 40 CFR part 300 which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which the EPA promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. The EPA maintains the NPL as those sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in 40 CFR 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.

The EPA will accept comments on the proposal to delete this site for thirty (30) days after publication of this document in the Federal Register .

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Electro-Coatings, Inc. Superfund Site and demonstrates how it meets the deletion criteria.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), the EPA will consider, in consultation with the State, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

Pursuant to CERCLA section 121(c) and the NCP, the EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. The EPA conducts such five-year reviews even if a site is deleted from the NPL. The EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to the deletion of the Site:

(1) The EPA consulted with the State before developing this Notice of Intent for Deletion.

(2) The EPA has provided the state thirty working days for review of this notice prior to publication of it today.

(3) In accordance with the criteria discussed above, the EPA in consultation with the state, has determined that no further response is appropriate.

(4) The State of Iowa, through the Iowa Department of Natural Resources, has concurred with the deletion of the Electro-Coatings, Inc. Superfund Site from the NPL.

(5) Concurrently, with the publication of this Notice of Intent for Deletion in the Federal Register , a notice is being published in The Gazette, a major local newspaper in Cedar Rapids, Iowa. The newspaper announces the thirty-day public comment period concerning the Notice of Intent to Delete the Site from the NPL.

(6) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

If comments are received within the thirty-day comment period on this document, the EPA will evaluate and respond accordingly to the comments before making a final decision to delete the Electro-Coatings Site. If necessary, the EPA will prepare a Responsiveness Summary to address any significant public comments received. After the public comment period, if the EPA determines, in consultation with the State, it is still appropriate to delete the Electro-Coatings Site, the Regional Administrator will publish a final Notice of Deletion in the Federal Register . Public notices, public submissions and copies of the Responsiveness Summary, if prepared, will be made available to interested parties and included in the site information listed above.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter the EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist the EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.

The following information provides the EPA's rationale for deleting the Electro-Coatings, Inc. Superfund Site from the NPL:

The Electro-Coatings, Inc. Site is located at 911 Shaver Road, along the north shoreline of Cedar Lake in the City of Cedar Rapids in Linn County, Iowa. The Site occupies approximately 1.5 acres. Cedar Lake is 150 acres in size and is privately owned by a utility company. A recreational trail is located along Cedar Lake and adjacent to the Site. The Cedar River is located about 0.5 miles to the west of the Site. The immediate area surrounding the Electro-Coatings Site is zoned as industrial. Industrial uses in the vicinity have included rubber manufacturing, scrap metal operations, paper manufacturing, cereal processing, grain alcohol production, and operation of an electric utility. The nearest residential area is approximately 0.25 miles to the east of the Site. Interstate Highway 380 separates the residential area from the Site. The Cedar Rapids Water Department has wells located to the west and north of the Site. The closest city wells are about 2,000 feet to the west of the Site.

Electro-Coatings, Inc. (Electro-Coatings) has operated a facility that performs chromium, cadmium, nickel and zinc plating since 1947.

Groundwater flow at the Site is generally to the west-southwest towards the Cedar River. Groundwater flow in the alluvial deposits is towards the west-southwest, while groundwater flow in the bedrock is towards the southwest. The water level in Cedar Lake is higher than the water levels in all of the alluvial wells except monitoring well (MW) -8, which is located approximately 450 feet to the north of the lake (Remedial Investigation Report, Shive-Hattery 1992). These water levels suggest that the sandy to silty aquifer is not discharging into the lake. A small dam located on the northwest corner of Cedar Lake partially controls the lake level.

In March of 1976, a yellow tinge was noted in the cooling water being discharged to Cedar Lake from the Hawkeye Rubber Manufacturing Company (Hawkeye Rubber), which was located immediately to the west of the Site. This water was found to contain a high concentration of chromium coming from the Hawkeye Rubber production well (PW) -1. The source of chromium was tracked to a leaking concrete tank containing chromic acid at the Electro-Coatings facility. The chromium contamination of groundwater from Electro-Coatings was predominantly in the hexavalent form.

Shortly after the discovery of the chromium release, Electro-Coatings took actions to prevent further releases in response to requirements by the State of Iowa. Electro-Coatings replaced the leaky tank and injected ferrous sulfate and sulfuric acid into the groundwater in an attempt to reduce hexavalent chromium to the less soluble trivalent chromium. Electro-Coatings also implemented a program to upgrade leak prevention facilities throughout their plant and, under order from the State, installed monitoring wells and conducted groundwater monitoring. In addition, Hawkeye Rubber moved its cooling-water discharge from Cedar Lake to the Cedar Rapids sanitary sewer.

On June 24, 1988, the Site was proposed to the NPL (53 FR 23978) and on October 4,1989, the Site was placed on the NPL (54 FR 41015) due to concerns that chromium contamination had the potential to affect the municipal water-supply wells of the City of Cedar Rapids, the closest of which is about 2,000 feet to the west of the Site. No impacts to the city wells from the Site, however, have ever been found. The CERCLIS ID is IAD005279039. The Iowa Department of Natural Resources (IDNR) has served as the lead oversight agency for the CERCLA remedial actions.

In 1991, remedial investigations by Electro-Coatings revealed volatile organic compound (VOC) contamination in groundwater that appeared to be from an off-site source. In October of 1992, the IDNR completed a supplemental investigation of the VOC contamination and concluded that Hawkeye Rubber was the primary source of VOCs. The VOC contamination was attributed to Hawkeye Rubber's vapor degreasing operation which utilized tetrachloroethylene, also known as perchloroethylene (PCE). During the 1991 remedial investigation (RI), and the subsequent 1992 supplemental investigation, it was concluded that the primary source of VOC contamination was attributed to the adjacent Hawkeye Rubber, which used PCE for vapor degreasing (TCE and cis- 1,2-DCE are known breakdown products of PCE under certain geochemical and microbiological conditions). Hawkeye Rubber discontinued use of PCE for degreasing upon its discovery as a groundwater contaminant in 1992. Also, soil sampling during the RI revealed significant VOC contamination in the vicinity of Hawkeye Rubber. Only very low concentrations of VOCs were identified in soils adjacent to the Electro-Coatings facility. Electro-Coatings was determined to be a much smaller source of VOC contamination from previous use of trichloroethylene (TCE) and 1,1,1-trichloroethane (1,1,1-TCA).

In the spring of 1992, Electro-Coatings discovered soil contamination as a chromium dipping tank was being taken out of service. Approximately seventy cubic yards of soil and two-and one-half cubic yards of concrete were removed and disposed of at an off-site hazardous waste facility.

A Baseline Risk Assessment (BLRA) conducted by the IDNR in 1993 identified potentially unacceptable short- and long-term risks to site workers from the use of water from PW-1 for drinking and showering due to hexavalent chromium. Very low levels of chromium (less than 10 percent of the Safe Drinking Water Act Maximum Contaminant Levels(MCLs) were detected in some municipal water-supply wells. It is not known whether these low-level detections were attributed to the Electro-Coatings Site. Although the IDNR initially expressed concern that chromium contamination had the potential to affect municipal water-supply wells, the closest being approximately 2,000 feet west of the Site, the BLRA found no unacceptable risks based on the scenario used. The BLRA scenario found that if all groundwater contamination from the Site was drawn into one city well, the resulting contaminant levels in that well—representing only about 4 percent of the total water supply—would not exceed the Maximum Contaminant Levels (MCLs).

The Record of Decision (ROD) for the Electro-Coatings Superfund Site was signed on September 29, 1994. The ROD addressed potential threats from use of water from the Hawkeye Rubber production well and potential off-site migration of contaminants. The ROD included only one operable unit which addressed groundwater contamination. The remedy selected in the ROD was monitoring with a contingency for groundwater pump and discharge to the publicly-owned treatment works (POTW). Major Components of the selected remedy included:

1. A contingency action if PW-1 ceases pumping or is found to not prevent off-site migration of contaminants. (Note: The remedy contains no requirements for continued operation of PW-1.)

2. If water quality monitoring reveals off-site migration of contaminants above drinking water standards, contingency actions will be required, which would involve installation of a new recovery well or wells to provide adequate containment of groundwater contamination. Treatment of the contaminated groundwater to reduce hexavalent chromium to trivalent chromium by chemical addition would be provided, if necessary, prior to discharge to the sanitary sewer under a pretreatment agreement with the POTW.

3. Testing to determine the effectiveness of PW-1 for containment of groundwater contamination from Electro-Coatings.

4. An evaluation of the adequacy of the existing monitoring well network to identify potential offsite migration of contaminants, other than to PW-1. Additional monitoring wells will be installed if the monitoring well network is found to be inadequate.

5. Develop and implement a monitoring plan to include monitoring procedures, locations of monitoring wells, frequency of sampling, sampling parameters, criteria for termination, and provisions for modification of the plan.

The response action selected in the ROD addressed all principal threats posed by the Site and the potential for direct ingestion of water containing contaminants above health-based levels. The objectives of the response action were to contain the contaminated groundwater and to ensure that groundwater not meeting health-based criteria was not ingested. The remedy prescribed in the ROD addressed this through groundwater monitoring, with a contingency for groundwater pump and discharge to the POTW. The remedy also acknowledged the contribution of PW-1 in providing hydraulic containment and preventing further migration of contaminated groundwater.

In October of 1999, Electro-Coatings and Shaver Road Investments, owner of the property, entered into a consent order with the State for implementation of the ROD. In February 2000, Hawkeye Rubber entered into a similar agreement with the State, and in 2001, Alliant Energy Company assumed Hawkeye Rubber's responsibilities after purchasing the property from Hawkeye Rubber. A joint effort by Electro-Coatings and Hawkeye Rubber, involving continued pumping from PW-1 and groundwater monitoring, was initiated in the spring of 2000.

Operation of the Hawkeye Rubber production well PW-1 continued until August 2006, except for a few months in 2003 due to a fire. Pumping to address the Hawkeye Rubber contamination was reinstated in July of 2008 and terminated again in September of 2009. There have been no detections in water from PW-1 of contaminants associated with the Site since September 2003. The last contaminant detected above an MCL in a Site monitoring well was in October 2005, and that contaminant was associated with Hawkeye Rubber, not Electro-Coatings. As a result of these findings, all active remedial measures ceased with the discontinuation of pumping from PW-1 in August 2006.

Starting in 2007, operation and maintenance activities were limited to semi-annual sampling of on-site monitoring wells MW-7 and MW-9 and this monitoring continued until November 2009 when both wells achieved the State consent order requirements of three consecutive semi-annual sampling events with no exceedance of MCLs.

For the contaminantes listed above, the consent order implementing the remedial measures prescribed in the ROD stated that its requirements would be satisfied when there were no exceedances of the MCLs in at least three consecutive semi-annual sampling events and, if necessary, an appropriate institutional control is in place. All monitoring and production wells had achieved this goal by 2008 except MW-5 and MW-9, which both showed exceedances of TCE and cis-1,2-DCE within the last three sampling events. IDNR determined, however, that this contamination was from the neighboring Hawkeye Rubber site, as indicated below, which is being addressed under a separate action and not the Electro-Coatings, Inc. Site CERCLA response. Therefore, IDNR determined that all monitoring and production wells at the Site had satisfied the MCL requirements in November 2009 (IDNR, 2012). All active remedial measures ceased with the discontinuation of pumping from PW-1 in August 2006.

The RI noted that hexavalent chromium was used at the Electro-Coatings plant, which had a leaking concrete tank determined to be the source of groundwater contamination. However, groundwater monitoring data conducted at the Site from 2000 through 2009 demonstrates that all wells have reached the ROD cleanup level of 100 ug/L, which was selected for total chromium, based on the Federal MCL. As a current drinking water aquifer and in light of new hexavalent chromium toxicity, the EPA evaluated site specific information to determine that groundwater is protective for current and future drinking water purposes. Below is a summary of this analysis.

Most wells were sampled until the pumping well operation ceased in 2006, with the exception of one downgradient well (MW-1) and two wells immediately downgradient of the source area (MW-7 and MW-9), which were sampled beyond 2006. PW-1 as well as MW-2, MW-3, MW-4, MW-5, MW-5D, and MW-10D, had multiple samples collected in FY 2006, with all wells showing total chromium being below the MCL. To provide additional data and a more conservative analysis, a duplicate sample was collected from these wells and results showed that total chromium is at or below 20 ug/L for these locations. For the remaining wells, downgradient well MW-1 was sampled once more in 2007 showing a concentration of total chromium less than 30 ug/L. This data, when compared to previous sampling results, showed that the groundwater continued to attenuate and meet the MCLs after the active treatment was terminated. The two remaining source wells, MW-7 and MW-9, upgradient of the pumping well, required sampling until 2009 to demonstrate compliance with MCLs. For MW-7, quarterly samples collected between 2008 and 2009 showed concentrations ranging from less than 20 ug/L to 100 ug/L, with the last two sampling events being below 20 ug/L, thus demonstrating that the cleanup level had been met. For MW-9, the last two years of sampling showed a decreasing trend, with the last sample collected being less than 20 ug/L.

In summary, the groundwater sample results for all wells sampled showed final total chromium concentrations less than 100 ug/L, and in most cases concentrations less than 20 ug/L or 10 ug/L. The residual levels of total chromium concentrations, specifically the data results from the duplicate samples and the recent source area well analysis conducted at Hawkeye Rubber in 2018 provide the EPA assurance that the impacted groundwater is suitable for drinking water and is protective of human health and the environment for total chromium and hexavalent chromium.

Per EPA policy, if a remedial action is selected that does not result in hazardous substances, pollutants, or contaminants remaining at the site above levels that allow for unlimited use and unrestricted exposure, but will take more than five years to complete, the lead agency shall review such action no less often than every five years after the completion of construction. The EPA Region 7 has conducted the third and most recent FYR of the remedial actions implemented at the Electro-Coatings Site from June 2015 through September 2016. The triggering action for this review was the signature date of the previous FYR Report.

The third FYR was completed on September 22, 2016 and found the remedy to be protective of human health and the environment in the short-term. There was one issue and recommendation, to collect and evaluate additional surface water samples from Cedar Lake to determine if potential ecological threats exist. The EPA Region 7 subsequently collected and analyzed surface water sample for hexavalent chromium. All sample results were below ambient water quality criteria. The EPA subsequently performed a screening level environmental risk assessment and determined that there was no risk to ecological receptors. The one issue and recommendation from the 2016 FYR was resolved. The EPA is completing a memorandum to the file documenting these results and other data associated with the Site to justify discontinuing five-year reviews, as the site has reached UU/UE.

Throughout the CERCLA process from development of the Consent Order to completion of remedial activities, all phases of the remediation have had input from Federal and State regulators and members of the public. Over the life of the project, there have been numerous opportunities for public input to express their opinions.

Public involvement has been sought by IDNR, and EPA on many remediation and operation documents, including Proposed Plans, Decision Documents, and EPA Five-Year Reviews. The last public notice was placed in the Cedar Rapids' newspaper, The Gazette, on July 19, 2015, notifying the public of the start of the third Five-Year Review (FYR) process. The completed FYR report was made available during the public comment period at the EPA Region 7 Records Center, located at 11201 Renner Boulevard, Lenexa, Kansas 66219, and the Cedar Rapids Downtown Public Library, located at 450 Fifth Avenue SE, Cedar Rapids, Iowa 52401.

In accordance with 40 CFR 300.425(e), the EPA Region 7 determined that the response at the Site (the subject of this deletion) meets the substantive criteria for deletion from the NPL. All responsible parties or other persons have implemented all appropriate response actions required, and no further response action by responsible parties is appropriate. The implemented remedies have achieved the degree of cleanup specified in the remedy decisions for all pathways of exposure. All selected remedial action objectives and associated cleanup levels are consistent with agency policy and guidance. No further Superfund response is needed to protect human health and the environment.