[Federal Register Volume 84, Number 130 (Monday, July 8, 2019)]
[Rules and Regulations]
[Pages 32520-32584]
[FR Doc No: 2019-13507]

Vol. 84

Monday,

No. 130

July 8, 2019

Part II

Environmental Protection Agency

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40 CFR Part 60

Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas
Emissions From Existing Electric Utility Generating Units; Revisions to
Emission Guidelines Implementing Regulations; Final Rule

Federal Register / Vol. 84 , No. 130 / Monday, July 8, 2019 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2017-0355: FRL-9995-70-OAR]
RIN 2060-AT67

Repeal of the Clean Power Plan; Emission Guidelines for
Greenhouse Gas Emissions From Existing Electric Utility Generating
Units; Revisions to Emission Guidelines Implementing Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The U.S. Environmental Protection Agency (EPA) is finalizing
three separate and distinct rulemakings. First, the EPA is repealing
the Clean Power Plan (CPP) because the Agency has determined that the
CPP exceeded the EPA's statutory authority under the Clean Air Act
(CAA). Second, the EPA is finalizing the Affordable Clean Energy rule
(ACE), consisting of Emission Guidelines for Greenhouse Gas (GHG)
Emissions from Existing Electric Utility Generating Units (EGUs) under
CAA section 111(d), that will inform states on the development,
submittal, and implementation of state plans to establish performance
standards for GHG emissions from certain fossil fuel-fired EGUs. In
ACE, the Agency is finalizing its determination that heat rate
improvement (HRI) is the best system of emission reduction (BSER) for
reducing GHG--specifically carbon dioxide (CO2)--emissions
from existing coal-fired EGUs. Third, the EPA is finalizing new
regulations for the EPA and state implementation of ACE and any future
emission guidelines issued under CAA section 111(d).

DATES: Effective September 6, 2019.

ADDRESSES: The EPA has established a docket for these actions under
Docket ID No. EPA-HQ-OAR-2017-0355. All documents in the docket are
listed on the https://www.regulations.gov/ website. Although listed,
some information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the internet and will be publicly available only in hard
copy form. Publicly available docket materials are available
electronically through https://www.regulations.gov/ or in hard copy at
the EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution
Ave. NW, Washington, DC. The EPA's Public Reading Room hours of
operation are 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST),
Monday through Friday. The telephone number for the Public Reading Room
is<PHONE_NUMBER>, and the telephone number for the EPA Docket Center
is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For questions about these final
actions, contact Mr. Nicholas Swanson, Sector Policies and Programs
Division (Mail Code D205-01), Office of Air Quality Planning and
Standards, U.S. Environmental Protection Agency, Research Triangle
Park, North Carolina 27711; telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; and email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    Preamble acronyms and abbreviations. The EPA uses multiple acronyms
and terms in this preamble. While this list may not be exhaustive, to
ease the reading of this preamble and for reference purposes, the EPA
defines the following terms and acronyms:

ACE Affordable Clean Energy Rule
AEO Annual Energy Outlook
ANPRM Advance Notice of Proposed Rulemaking
BACT Best Available Control Technology
BSER Best System of Emission Reduction
Btu British Thermal Unit
CAA Clean Air Act
CCS Carbon Capture and Storage (or Sequestration)
CFR Code of Federal Regulation
CO2 Carbon Dioxide
CPP Clean Power Plan
EGU Electric Utility Generating Unit
EIA Energy Information Administration
EPA Environmental Protection Agency
FIP Federal Implementation Plan
GHG Greenhouse Gas
HRI Heat Rate Improvement
IGCC Integrated Gasification Combined Cycle
kW Kilowatt
kWh Kilowatt-hour
MW Megawatt
MWh Megawatt-hour
NAAQS National Ambient Air Quality Standards
NGCC Natural Gas Combined Cycle
NOX Nitrogen Oxides
NSPS New Source Performance Standards
NSR New Source Review
OMB Office of Management and Budget
PM2.5 Fine Particulate Matter
PRA Paperwork Reduction Act
PSD Prevention of Significant Deterioration
RIA Regulatory Impact Analysis
RTC Response to Comments
SIP State Implementation Plan
SO2 Sulfur Dioxide
UMRA Unfunded Mandates Reform Act
U.S. United States
VFD Variable Frequency Drive

    Organization of this document. The information in this preamble is
organized as follows:

I. General Information
    A. Executive Summary
    B. Where can I get a copy of this document and other eelated
information?
    C. Judicial Review and Administrative Reconsideration
II. Repeal of the Clean Power Plan
    A. Background for the Repeal of the Clean Power Plan
    B. Basis for Repealing the Clean Power Plan
    C. Independence of Repeal of the Clean Power Plan
III. The Affordable Clean Energy Rule
    A. The Affordable Clean Energy Rule Background
    B. Legal Authority To Regulate EGUs
    C. Designated Facilities for the Affordable Clean Energy Rule
    D. Regulated Pollutant
    E. Determination of the Best System of Emission Reduction
    F. State Plan Development
    G. Impacts of the Affordable Clean Energy Rule
IV. Changes to the Implementing Regulations for CAA Section 111(d)
Emission Guidelines
    A. Regulatory Background
    B. Provisions for Superseding Implementing Regulations
    C. Changes to the Definition of ``Emission Guidelines''
    D. Updates to Timing Requirements
    E. Compliance Deadlines
    F. Completeness Criteria
    G. Standard of Performance
    H. Remaining Useful Life and Other Factors Provision
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    L. Congressional Review Act (CRA)
VI. Statutory Authority

I. General Information

A. Executive Summary

    With this document, the EPA is, after review and consideration of
public comments, finalizing three separate and distinct rulemakings.
First, the EPA is finalizing the repeal of the CPP which was proposed
at 82 FR 48035 (Oct. 16, 2017) (``Proposed Repeal''). Second, the EPA
is promulgating ACE, which consists of emission guidelines for states
to develop and submit to the EPA plans that establish standards of
performance for CO2 emissions from certain existing coal-
fired EGUs within their jurisdictions. Third, the EPA is finalizing
implementing regulations that provide direction to both the EPA and
states on the implementation of ACE and any future emission guidelines
issued under CAA section 111(d). This document does not include any
final action concerning the New Source Review (NSR) reforms the EPA
proposed in conjunction with the ACE proposal; the EPA intends to take
final action on the proposed NSR reforms in a separate final action at
a later date.
    First, the EPA is repealing the CPP. In proposing to repeal the
CPP, the Agency proposed a change in the legal interpretation of CAA
section 111, on which the CPP was based, to an interpretation of the
CAA that ``is consistent with the CAA's text, context, structure,
purpose, and legislative history, as well as with the Agency's
historical understanding and exercise of its statutory authority.'' \1\
After further review of the EPA's statutory authority under CAA section
111 and in consideration of public comments, the Agency is finalizing
the repeal of the CPP. The discussion of the repeal action, along with
the EPA's explanation that it intends the repeal of the CPP to be
independent from the other final actions in this document, can be found
in section II below.
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    \1\ Proposed Repeal, 82 FR 48036.
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    Second, the EPA is finalizing ACE, which consists of emission
guidelines to inform states in the development, submittal, and
implementation of state plans that establish standards of performance
for CO2 from certain existing coal-fired EGUs within their
jurisdictions. In these emission guidelines, the EPA has determined
that the BSER for existing EGUs is based on HRI measures that can be
applied to a designated facility. ACE also clarifies the roles of the
EPA and the states under CAA section 111(d). With the promulgation of
this action, it is the states' responsibility to use the information
and direction herein to develop standards of performance that reflect
the application of the BSER. Per the CAA, states may also consider
source-specific factors--including, among other factors, the remaining
useful life of an existing source--in applying a standard of
performance to that source. In this way, the state and federal roles
complement each other as the EPA has the authority and responsibility
to determine BSER at the national level, while the states have the
authority and responsibility to establish and apply standards of
performance for their existing sources, taking into consideration
source-specific factors where appropriate. A full discussion of ACE can
be found in section III of this preamble.
    Third, the EPA is finalizing new implementing regulations that
apply to ACE and any future emission guidelines promulgated under CAA
section 111(d). The purpose of the new implementing regulations is to
harmonize aspects of our existing regulations with the statute, in a
new 40 CFR part 60, subpart Ba, by making it clear that states have
broad discretion in establishing and applying emissions standards
consistent with the BSER. The new implementing regulations also provide
changes to the timing requirements for the EPA and states to take
action to more closely align with the CAA section 110 state
implementation plan (SIP) and federal implementation plan (FIP)
deadlines. The discussion of the final revisions to the implementing
regulations is found in section IV below.
    The implementing regulations (and ACE which is promulgated
consistent with those regulations) make clear that the EPA, states, and
sources all have distinct roles, responsibilities, and flexibilities
under CAA section 111(d). Specifically, the EPA identifies the BSER;
states establish standards of performance for existing sources within
their jurisdiction consistent with that BSER and also with the
flexibility to consider source-specific factors, including remaining
useful life; and sources then meet those standards using the
technologies or techniques they believe is most appropriate. As this
preamble explains, in the case of ACE, the EPA has identified the BSER
as a set of heat rate improvement measures. States will establish
standards of performance for existing sources based on application of
those heat rate improvement measures (considering source-specific
factors, including remaining useful life). Each regulated source then
must meet those standards using the measures they believe is
appropriate (e.g., via the heat rate improvement measures identified by
the EPA as the BSER, other heat rate improvement measures, or other
approaches such as CCS or natural gas co-firing).
    These three rules have been informed by more than 1.5 million
public comments on the Proposed Repeal and 500,000 public comments on
the proposals for ACE and the new implementing regulations. Per CAA
section 307(d)(6)(B), the EPA is providing a response to the
significant comments received for each of these actions in the docket.
After careful consideration of the comments, the EPA is finalizing
these three rules, with revisions to what it proposed where
appropriate, to provide states guidance on how to address
CO2 emissions from coal-fired power plants in a way that is
consistent with the EPA's authority under the CAA.

B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this document is available on the internet. Following signature by the
EPA Administrator, the EPA will post a copy of this document at https://www.epa.gov/stationary-sources-air-pollution/electric-utility-generating-units-emission-guidelines-greenhouse. Following publication
in the Federal Register, the EPA will post the Federal Register version
of these final rules and key technical documents at this same website.

C. Judicial Review and Administrative Reconsideration

    Under CAA section 307(b)(1), judicial review of these final actions
is available only by filing a petition for review in the United States
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) by
September 6, 2019. Under CAA section 307(b)(2), the requirements
established by these final rules may not be challenged separately in
any civil or criminal proceedings brought by the EPA to enforce the
requirements.
    Section 307(d)(7)(B) of the CAA further provides that only an
objection to a rule or procedure which was raised with reasonable
specificity during the period for public comment (including any public
hearing) may be raised during judicial review. This section also
provides a mechanism for the EPA to reconsider a rule if the person
raising an objection can demonstrate to the Administrator that it was
impracticable to raise such objection within the period for public
comment or if the grounds for such objection arose after the period for
public comment (but within the time

specified for judicial review) and if such objection is of central
relevance to the outcome of the rule. Any person seeking to make such a
demonstration should submit a Petition for Reconsideration to the
Office of the Administrator, U.S. EPA, Room 3000, WJC South Building,
1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both
the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT
section, and the Associate General Counsel for the Air and Radiation
Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200
Pennsylvania Ave. NW, Washington, DC 20460.

II. Repeal of the Clean Power Plan

A. Background for the Repeal of the Clean Power Plan

1. The Clean Power Plan
    The EPA promulgated the CPP under section 111 of the CAA.\2\
Section 111(b) authorizes the EPA to issue nationally applicable new
source performance standards (NSPS) limiting air pollution from ``new
sources'' in source categories that cause or significantly contribute
to air pollution that may reasonably be anticipated to endanger public
health or welfare.\3\ In 2015, the EPA issued such a rule for GHG
emissions--in particular, CO2--from certain new fossil fuel-
fired power plants \4\ in light of the Agency's assessment ``that GHGs
endanger public health, now and in the future.'' \5\ CAA section 111(d)
provides that, under certain circumstances, when the EPA issues a CAA
section 111(b) standard, the EPA must develop procedures requiring each
state to submit a plan to the EPA that establishes performance
standards for existing sources in the same category.\6\ The EPA relied
on CAA section 111(d) to issue the CPP, which, for the first time,
required states to submit plans specifically designed to limit
CO2 emissions from certain existing fossil fuel-fired power
plants.
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    \2\ 42 U.S.C. 7411.
    \3\ Id. 7411(b)(1).
    \4\ The CPP identified ``[f]ossil fuel-fired EGUs'' as ``by far
the largest emitters of GHGs among stationary sources in the U.S.,
primarily in the form of CO2.'' 80 FR 64510, 64522
(October 23, 2015).
    \5\ Standards of Performance for Greenhouse Gas Emissions from
New, Modified, and Reconstructed Stationary Sources: Electric
Generating Units, 80 FR 64510, 64518 (October 23, 2015); see also
Endangerment and Cause or Contribute Findings for Greenhouse Gases
Under section 202(a) of the CAA, 74 FR 66496 (December 15, 2009)
(2009 Endangerment Finding). The substance of the 2009 Endangerment
Finding, which addressed GHG emissions from mobile sources, is not
at issue in this action.
    \6\ 42 U.S.C. 7411(d)(1) (emphasis added).
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    The CPP established emission guidelines for states to follow in
limiting CO2 emissions from those existing fossil fuel-fired
power plants. Those emission guidelines included both state-specific
``goals'' and alternative, nationally uniform CO2 emission
performance rates for two types of existing fossil fuel-fired power
plants: Electric utility steam generating units and stationary
combustion turbines.\7\
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    \7\ See 80 FR 64707.
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    In the CPP, the EPA determined that the BSER for CO2
emissions from existing fossil fuel-fired power plants was the
combination of: (1) Heat rate (e.g., efficiency) improvements to be
conducted at individual power plants, in combination with (2, 3) two
other sets of measures based on the shifting of generation at the
fleet-wide level from one type of energy source to another. The EPA
referred to these three sets of measures as ``building blocks'': \8\
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    \8\ Id.
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    1. Improving heat rate at affected coal-fired steam generating
units;
    2. Substituting increased generation from lower-emitting existing
natural gas combined cycle units for decreased generation from higher-
emitting affected steam generating units; and
    3. Substituting increased generation from new zero-emitting
renewable energy generating capacity for decreased generation from
affected fossil fuel-fired generating units.
    While building block 1 relied on measures that could be applied
directly to individual sources, building blocks 2 and 3 employed
measures that were expressly designed to shift the balance of coal-,
gas-, and renewable-generated power across the power grid.
2. Legal Challenges to the CPP, Executive Order 13783, and the EPA's
Review of the CPP
    On October 23, 2015, 27 states and a number of other parties sought
judicial review of the CPP in the U.S. Court of Appeals for the D.C.
Circuit.\9\ After some preliminary briefing, the Supreme Court stayed
implementation of the CPP, pending judicial review.\10\ The case was
then referred to an en banc panel of the D.C. Circuit, which held oral
argument on September 27, 2016.
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    \9\ See West Virginia v. EPA, No. 15-1363 (and consolidated
cases) (D.C. Cir. October 23, 2015).
    \10\ West Virginia v. EPA, 136 S. Ct. 1000 (2016).
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    On March 28, 2017, President Trump issued Executive Order 13783,
which affirms the ``national interest to promote clean and safe
development of our Nation's vast energy resources, while at the same
time avoiding regulatory burdens that unnecessarily encumber energy
production, constrain economic growth, and prevent job creation.'' \11\
The Executive Order directs all executive departments and agencies,
including the EPA, to ``immediately review existing regulations that
potentially burden the development or use of domestically produced
energy resources and appropriately suspend, revise, or rescind those
that unduly burden the development of domestic energy resources beyond
the degree necessary to protect the public interest or otherwise comply
with the law.'' \12\ The Executive Order further affirms that it is
``the policy of the United States that necessary and appropriate
environmental regulations comply with the law.'' \13\ Moreover, the
Executive Order specifically directs the EPA to review and initiate
reconsideration proceedings to ``suspend, revise, or rescind'' the CPP
``as appropriate and consistent with law.'' \14\
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    \11\ See Executive Order 13783, section 1(a).
    \12\ Id. section 1(c).
    \13\ Id. section 1(e).
    \14\ Id. section 4(a)-(c).
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    In a document signed the same day as Executive Order 13783 and
published in the Federal Register at 82 FR 16329 (April 4, 2017), the
EPA announced that, consistent with the Executive Order, it was
initiating its review of the CPP and providing notice of forthcoming
proposed rulemakings consistent with the Executive Order.
    In light of Executive Order 13783, the EPA's initiation of a review
of the CPP, and notice of the EPA's forthcoming rulemakings, the EPA
asked the D.C. Circuit to hold the CPP litigation in abeyance, and, on
April 28, 2017, the court (still sitting en banc) granted motions to
hold the cases in abeyance for 60 days and directed the parties to file
briefs addressing whether the cases should be remanded to the Agency
rather than held in abeyance.\15\ Since then, the D.C. Circuit has
issued a series of orders holding the cases in abeyance. While the case
has been in abeyance, the EPA has been reviewing the CPP and providing
status reports to the court describing the progress of its rulemaking.
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    \15\ Order, Document No. 1673071 (per curiam).
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    In the course of the EPA's review of the CPP, the Agency also
reevaluated its interpretation of CAA section 111, and, on that basis,
the Agency proposed to repeal the CPP.\16\
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    \16\ See Proposed Repeal, 82 FR 48035 (October 16, 2017).
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3. Public Comment and Hearings on the Proposed Repeal
    Publication of the Proposed Repeal in the Federal Register opened
comment on the proposal for an initial 60-day

public comment period. The EPA held public hearings on November 28 and
29, 2017, in Charleston, West Virginia, and then extended the public
comment period until January 16, 2018. In response to requests for
additional opportunities for oral testimony, the EPA held three
listening sessions in Kansas City, Missouri; San Francisco, California;
and Gillette, Wyoming. The EPA also reopened the public comment period
until April 26, 2018, giving stakeholders 192 days to review and
comment on the proposal. The EPA received more than 1.5 million
comments on the Proposed Repeal.

B. Basis for Repealing the Clean Power Plan

1. Authority To Revisit Existing Regulations
    The EPA's ability to revisit existing regulations is well-grounded
in the law. Specifically, the EPA has inherent authority to reconsider,
repeal, or revise past decisions to the extent permitted by law so long
as the Agency provides a reasoned explanation. The authority to
reconsider prior decisions exists in part because the EPA's
interpretations of statutes it administers ``[are not] instantly carved
in stone,'' but must be evaluated ``on a continuing basis.'' \17\ This
is true when, as is the case here, review is undertaken ``in response
to . . . a change in administrations.'' \18\ Indeed, ``[a]gencies
obviously have broad discretion to reconsider a regulation at any
time.'' \19\
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    \17\ Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 863-64
(1984).
    \18\ National Cable & Telecommunications Ass'n v. Brand X
internet Services, 545 U.S. 967, 981 (2005).
    \19\ Clean Air Council v. Pruitt, 862 F.3d 1, 8-9 (D.C. Cir.
2017).
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2. Legal Basis for Repeal of the Clean Power Plan
    The CPP departed from the EPA's traditional understanding of its
authority under section 111 of the CAA and promulgated a rule in excess
of its statutory authority. Because the CPP significantly exceeded the
Agency's authority, it must be repealed.\20\ Fundamentally, the CPP
read the statutory term ``best system of emission reduction'' so
broadly as to encompass measures the EPA had never before envisioned in
promulgating performance standards under CAA section 111. In contrast
to its traditional regulations that set performance standards based on
the application of equipment and practices at the level of an
individual facility, the EPA in the CPP set standards that could only
be achieved by a shift in the energy generation mix at the grid level,
requiring a shift from one type of fossil-fuel-fired generation to
another, and from fossil-fuel-fired generation as a whole towards
renewable sources of energy. The text of the CAA is inconsistent with
that interpretation, and the context, structure, and legislative
history confirm that the statutory interpretation underlying the CPP
was not a permissible construction of the Act.
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    \20\ As noted above, the EPA received more than 1.5 million
comments on the Proposed Repeal. The Agency's consideration of and
responses to significant comments are reflected in section II.B.2 of
this preamble.
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a. CAA Requirements and Background
    In 1970, Congress enacted section 111(b) of the CAA, authorizing
the EPA to promulgate ``standards of performance'' for new stationary
sources in certain source categories.\21\ Congress also directed the
EPA, under CAA section 111(d), to ``prescribe regulations which shall
establish a procedure'' \22\ for states to establish standards \23\ for
existing sources of certain air pollutants to which a standard of
performance would apply if such existing source were a new source.\24\
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    \21\ CAA Amendments of 1970, Public Law 91-604, 84 Stat. at
1683-84 (Dec. 31, 1970); see also 42 U.S.C. 7411(b).
    \22\ See section IV (addressing changes to the implementing
regulations).
    \23\ As originally enacted, CAA section 111 required states to
establish ``emission standards'' for existing sources, but Congress
replaced that term with ``standard of performance'' as part of the
CAA Amendments of 1977. See Public Law 95-95, 91 Stat. at 699 (Aug.
7, 1977) (``Section 111(d)(1) . . . is amended by striking out
`emissions standards' in each place it appears and inserting in lieu
thereof `standards of performance' '').
    \24\ CAA Amendments of 1970, 84 Stat. at 1684; see also 42
U.S.C. 7411(d).
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    Since 1990, new- and existing-source CAA section 111 rulemakings
have been governed by the same statutory definitions.\25\ The CAA
defines the term ``standard of performance'' in two sections. CAA
section 111(a)(1) defines it, for purposes of section 111 (which
contains the new- and existing-source performance standard authority
in, respectively, CAA section 111(b) and 111(d)), as:
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    \25\ See infra n.51.

a standard for emissions of air pollutants which reflects the degree
of emission limitation achievable through the application of the
best system of emission reduction which (taking into account the
cost of achieving such reduction and any nonair quality health and
environmental impact and energy requirements) the Administrator
determines has been adequately demonstrated.\26\
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    \26\ 42 U.S.C. 7411(a)(1).

And CAA section 302(l) defines ``standard of performance'' as ``a
requirement of continuous emission reduction, including any requirement
relating to the operation or maintenance of a source to assure
continuous reduction.'' \27\
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    \27\ 42 U.S.C. 7602(l).
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    EPA's role under CAA section 111(d) is narrow. Indeed, CAA section
111(d) tasks states with ``establish[ing] standards of performance for
any existing source'' and ``provid[ing] for the implementation and
enforcement of such standards of performance.'' It requires further
that the regulations the EPA is directed to adopt must permit the state
``to take into consideration, among other factors, the remaining useful
life of the existing source to which such standard [of performance]
applies.'' \28\ After all, Congress found that ``air pollution
prevention . . . and air pollution control at its source is the primary
responsibility of States and local governments.'' \29\
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    \28\ 42 U.S.C. 7411(d)(1).
    \29\ 42 U.S.C. 7401(a)(3).
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    In contrast to CAA section 111(b) (where the EPA may directly
establish performance standards for emissions from new sources), the
EPA implements CAA section 111(d) by issuing regulations that it calls
``emission guidelines'' \30\ These guidelines provide states with
information to assist them in developing state plans establishing
standards of performance for existing designated facilities within
their jurisdiction that are submitted to the EPA for review. Such
information includes the EPA's determination of the ``best system of
emission reduction,'' which is commonly referred to as the BSER.
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    \30\ See American Elec. Power Co. v. Connecticut, 564 U.S. 410,
424 (2011). See generally Section IV, infra (discussing the
promulgation of revised implementing regulations governing the EPA's
issuance of emission guidelines); 40 CFR part 60, subpart B.
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b. The Plain Meaning of CAA Sections 111(a)(1) and (d)
    CAA section 111(d) provides that ``each State shall submit to the
Administrator a plan which (A) establishes standards of performance for
any existing source for [certain air pollutants] . . . and (B) provides
for the implementation and enforcement of such standards of
performance.'' \31\ Given how Congress has defined the phrase
``standard of performance'' for purposes of CAA section 111, the plain
meaning of CAA section 111(d), therefore is that states shall submit a
plan which ``establishes [a standard for

emissions of air pollutants which reflects the degree of emission
limitation achievable through the application of the [BSER] . . .] for
any existing source.''
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    \31\ 42 U.S.C. 7411(d)(1) (emphasis added).
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    While CAA section 111(a)(1) provides that the EPA determines the
BSER upon which existing-source performance standards are based,
Congress expressly limited the universe of systems of emission
reduction from which the EPA may choose the BSER to those systems whose
``application'' to an ``existing source'' will yield an ``achievable''
``degree of emission limitation.'' \32\ ``[W]here . . . the statute's
language is plain,'' courts explain, our `` `sole function . . . is to
enforce it according to its terms.' '' \33\
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    \32\ Id.
    \33\ Air Line Pilots Ass'n v. Chao, 167 F.3d 602, 791 (D.C. Cir.
2018) (quoting United States v. Ron Pair Enterprises, 489 U.S. 235,
241 (1989)).
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    The EPA begins with the meaning of ``application,'' as it appears
in CAA section 111(a)(1). In the absence of a statutory definition, the
term must be construed in accordance with its ordinary or natural
meaning.\34\ Here the ordinary meaning of ``application'' refers to the
``act of applying'' or the ``act of putting to use.'' \35\ Accordingly,
a standard of performance must reflect the degree of emission
limitation that can be achieved by putting the BSER into use.
Furthermore, the ordinary and natural use of the term ``application,''
which is derived from the verb ``to apply,'' requires both a direct
object and an indirect object. In other words, someone must apply
something to something else (e.g., the application of general rules to
particular cases). In the case of CAA section 111, the direct object is
the BSER. CAA section 111(d) also provides that the indirect object is
the ``existing source''--``each State shall submit to the Administrator
a plan which (A) establishes standards of performance for any existing
source'' (emphasis added). The Act further defines an ``existing
source'' as ``any stationary source other than a new source,'' \36\ and
in turn defines a ``stationary source'' as ``any building, structure,
facility, or installation which emits or may emit any air pollutant.''
\37\ Consequently, CAA section 111 unambiguously limits the BSER to
those systems that can be put into operation at a building, structure,
facility, or installation. Such systems include, for example, add-on
controls (e.g., scrubbers) and inherently lower-emitting processes/
practices/designs.
---------------------------------------------------------------------------

    \34\ See Leocal v. Ashcroft, 543 U.S. 1, 10 (2004).
    \35\ Merriam-Webster's Collegiate Dictionary (11th ed. 2003)
(``1: an act of applying: a (1) : an act of putting to use <~ of new
techniques> (2) : a use to which something is put ''). Definitions are also provided from when CAA section
111(a)(1) was last amended, see The Oxford English Dictionary (2d
ed. 1989) (``The action of applying; the thing applied. 1. a. The
action of putting a thing to another, of bringing into material or
effective contact''), and first enacted, see American Heritage
Dictionary of the English Language (2d ed. 1969) (``1. The act of
applying or putting something on. 2. Anything that is applied, such
as a cosmetic or curative agent. 3. The act of putting something to
a special use or purpose.'').
    \36\ 42 U.S.C. 7411(a)(6).
    \37\ 42 U.S.C. 7411(a)(3).
---------------------------------------------------------------------------

    Conversely, the plain language of CAA section 111 does not
authorize the EPA to select as the BSER a system that is premised on
application to the source category as a whole or to entities entirely
outside the regulated source category. First, Congress specified that
``standards of performance'' are established ``for new sources within
such category '' \38\ and ``for any existing source.'' \39\ CAA section
111, therefore, does not allow for the establishment of standards for
the source category or for entities not within the source category.
Instead, CAA section 111 standards must be established for individual
sources. Second, because CAA section 111 standards reflect an
``achievable'' ``degree of emission limitation'' through application of
the BSER, an owner or operator must be able to achieve an applicable
standard by applying the BSER to the designated facility. Accordingly,
the BSER--like standards of performance--cannot be premised on a system
of emission reduction that is implementable only through the combined
activities of sources or non-sources. Thus, the EPA is precluded from
basing BSER on strategies like generation shifting and corresponding
emissions offsets because these types of systems cannot be put into use
at the regulated building, structure, facility, or installation.\40\
---------------------------------------------------------------------------

    \38\ 42 U.S.C. 7411(b)(1)(B) (requiring the Administrator to
establish performance standards ``for new sources within such
category'' rather than for the category itself as a whole) (emphasis
added)
    \39\ 42 U.S.C. 7411(d)(1)(A).
    \40\ The CPP's BSER was in part designed to consist of
generation-shifting. See, e.g., 80 FR 64,776 (final rule)
(describing `building blocks' 2 and 3 as ``processes of shifting
dispatch from steam generators to existing NGCC units and from both
steam generators and NGCC units to renewable generators.'').
---------------------------------------------------------------------------

c. Statutory Structure and Purpose Confirm That a ``System of Emission
Reduction'' Must Be Applied to an Individual Source and That CAA
Section 111 is Intended to Best Design, Build, Equip, Operate, and
Maintain Sources so as To Reduce Emissions
    While the plain meaning of CAA section 111 provides that the BSER
must be applied to a building, structure, facility, or installation,
Congress' intent is also manifest in the statutory structure and
purpose. ``Statutory construction,'' the Supreme Court instructs, ``is
a holistic endeavor.'' \41\ The interpretation of a phrase ``is often
clarified by the remainder of the statutory scheme--because the same
terminology is used elsewhere in a context that makes its meaning
clear, or because only one of the permissible meanings produces a
substantive effect that is compatible with the rest of the law.'' \42\
---------------------------------------------------------------------------

    \41\ Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973, 985
(2017) (citing United Savings Ass'n v. Timbers of Inwood Forest
Associates, 484 U.S. 365, 371 (1988)).
    \42\ Utility Air Regulatory Group v. EPA, 573 U.S. 302, 321
(2014).
---------------------------------------------------------------------------

(1) The Statutory Structure Limits a ``System of Emission Reduction''
to ``Systems'' That Have a Potential for Application to an Individual
Source
    The conclusion that CAA section 111 standards are limited as
described above is confirmed by considering the section's place in the
overall statutory scheme. Congress tied CAA section 111 to the Best
Available Control Technology (``BACT'') provisions in CAA section
165.\43\ Section 165 provides that ``[a]ny major stationary source or
major modification subject to [preconstruction requirements] must
conduct an analysis to ensure the application of [BACT].'' \44\ A
permitting authority must ``conduct a BACT analysis on a case-by-case
basis . . . and must evaluate the amount of emission reductions that
each available emissions-reducing technology or technique would
achieve, as well as the energy, environmental, economic and other costs
. . . .'' \45\ The EPA has long recommended that permitting agencies
conduct this analysis through a top-down assessment of the best
available and feasible control technologies for the emissions subject
to BACT.\46\ ``Based on

this [technology] assessment, the permitting authority must [then]
establish a numeric emission limitation that reflects the maximum
degree of reduction achievable. . . .'' \47\
---------------------------------------------------------------------------

    \43\ 42 U.S.C. 7479(3) (``In no event shall application of `best
available control technology' result in emissions of any pollutants
which will exceed the emissions allowed by any applicable standard
established pursuant to section 7411 or 7412 of this title.'').
    \44\ U.S. EPA, DRAFT New Source Review Workshop Manual:
Prevention of Significant Deterioration and Nonattainment Area
Permitting, B. 1 (October 1990) (``NSR Manual''), available at
https://www.epa.gov/sites/production/files/2015-07/documents/1990wman.pdf. Though the EPA never finalized this draft, it
continues to follow the analytical approach to the BACT analysis
contained within the NSR Manual. See also U.S. EPA, PSD and Title V
Permitting Guidance for Greenhouse Gases (March 2011) (``GHG
Permitting Guidance''), available at https://www.epa.gov/sites/production/files/2015-07/documents/ghgguid.pdf.
    \45\ GHG Permitting Guidance at 17 (emphasis added).
    \46\ See id. at 17-44.
    \47\ Id. at 17, 44-46.
---------------------------------------------------------------------------

    In no event, Congress specified, can application of BACT result in
greater emissions than allowed by ``any applicable standard established
pursuant to section [1]11 or [1]12 . . . .'' \48\ To ensure such an
exceedance does not occur, NSPS serve as the base upon which BACT
determinations are made and are commonly viewed as the BACT ``floor.''
\49\ However, because Congress refers to ``any applicable standard
established pursuant to section [1]11,'' without reference to either
subsection (b) or (d), any applicable existing source standard would
also function as a BACT ``floor.'' \50\
---------------------------------------------------------------------------

    \48\ 42 U.S.C. 7479(3).
    \49\ GHG Permitting Guidance, 25 n.64 (``While this guidance is
being issued at a time when no NSPS have been established for GHGs,
permitting authorities must consider any applicable NSPS as a
controlling floor in determining BACT once any such standards are
final.'').
    \50\ Accordingly, certain commenters incorrectly argue that the
scope of CAA section 169 is irrelevant to regulating existing
sources under CAA section 111(d) because only CAA section 111(b)
standards (i.e., NSPS), not CAA section 111(d) existing-source
standards, apply to sources subject to BACT. However, both CAA
section 111(b) and (d) rely on the same definition of ``standard of
performance'' in CAA section 111(a), and the term's statutory
history (that is, its evolution through repeated acts of Congress
from 1970 to 1990) supports the conclusion that Congress intended
for the term to have the same meaning under both programs. Between
the 1970 and 1977 CAA Amendments, ``standards of performance''
applied only to the regulation of new sources under CAA section
111(b); existing sources, on the other hand, were required to meet
``emission standards,'' which was an undefined term. See Public Law
91-604, 84 Stat. at 1683-84. Between the 1977 and 1990 CAA
Amendments, CAA section 111(a)(1) provided three context-specific
definitions: One definition applied to all new stationary sources
regulated under CAA section 111(b) (basing standards on the best
technological system of continuous emission reduction (``TSCER''));
the second applied only to new fossil-fuel-fired sources regulated
under CAA section 111(b) (basing standards on the TSCER and
requiring a percent reduction in emissions); and a third applied to
existing sources regulated under CAA section 111(d) (basing
standards on the best system of continuous emission reduction). See
Public Law 95-95, 91 Stat. at 699-700. In 1990, however, Congress
replaced the three separate definitions with a singular definition
of ``standard of performance'' under CAA section 111(a)(1), to apply
throughout CAA section 111, based on application of the BSER. See
Public Law 101-549, 104 Stat. at 2631. The legislative history of
CAA section 111 demonstrates that Congress knew full well how to
require either that the regulations applying to new and existing
sources would be different in definition and scope (as in both the
1970 and 1977 versions of the Act) or that they would be the same
and demonstrates that in 1990 they plainly chose the latter course.
---------------------------------------------------------------------------

    The EPA has consistently taken the position that BACT encompasses
``all `available' control options . . . that have the potential for
practical application to the emissions unit and the regulated pollutant
under evaluation.'' \51\ This is so because BACT reflects a level of
control that the permitting agency ``determines is achievable for such
facility through application of production processes and available
methods, systems, and techniques, including fuel cleaning, clean fuels,
or treatment or innovative fuel combustion techniques for control.''
\52\ Put simply, both the statutory text and the EPA's long-standing
interpretation provide that BACT is limited to control options that can
be applied to the source itself and does not include control options
that go beyond the source.
---------------------------------------------------------------------------

    \51\ GHG Permitting Guidance, 24 (emphasis added).
    \52\ 42 U.S.C. 7479(3) (emphasis added).
---------------------------------------------------------------------------

    Because CAA section 111 operates as a floor to BACT, section 111
cannot be interpreted to offer a broader set of tools than are
available under section 165. Also, because BACT is limited to control
options that are applied to an individual source, so too with section
111. The explicit statutory link of CAA section 111 standards to BACT,
the statutory definition of the latter, the Agency's consistent
position that BACT must apply to and be achievable for a particular
facility, and the text of CAA section 111(b) and 111(d), confirm the
conclusion that the text of 111(a)(1) can only be read to mean that
standards of performance (and the BSER on which they are predicated)
are likewise measures applied to individual facilities.
(2) The Purpose of CAA Section 111 is To Design, Build, Equip, Operate,
and Maintain Individual Sources so as To Reduce Emissions
    Congress intended that CAA section 111 would set minimum
requirements \53\ on individual sources to be designed, built,
equipped, operated, and maintained to reduce emissions. This purpose is
evidenced in the history of CAA section 111(a)(1)'s text and
corroborated by legislative history. CAA section 111 was originally
enacted as part of the 1970 CAA Amendments. In that enactment, state
plans under CAA section 111(d) were to establish ``emission standards''
rather than ``standards of performance.'' The EPA's CAA section 111(d)
implementing regulations, issued in 1975, provided that, in the case of
existing sources, the EPA would issue ``emissions guidelines,'' that
these guidelines would ``reflect the degree of emission reduction
achievable through the application of the [BSER] which (taking into
account the cost of such reduction) the Administrator has determined
has been adequately demonstrated for designated facilities,'' and that
state plans establishing standards of performance for existing sources
would be developed in light of these guidelines.\54\ Then in 1977,
Congress replaced the term ``emission standard'' under CAA section
111(d) with the phrase ``standard of performance''--a phrase defined
for all of CAA section 111 in section 111(a)(1). Thus, the history
behind CAA section 111(a)(1) is relevant to understanding EPA's
authority for both sections 111(b) and (d).
---------------------------------------------------------------------------

    \53\ In a 1978 BACT guidance document, the EPA explained that
performance standards reflect emission limits ``which can reasonably
be met by all new or modified sources in an industrial category,
even though some individual sources are capable of lower emissions.
Additionally, because of resource limitations in the EPA, revision
of new source standards must lag somewhat behind the evolution of
new or improved technology. Accordingly, new or modified facilities
in some source categories may be capable of achieving lower emission
levels that [sic] NSPS without substantial economic impacts. The
case-by-case BACT approach provides a mechanism for determining and
applying the best technology in each individual situation. Hence,
NSPS and NESHAP are Federal guidelines for BACT determinations and
establish minimum acceptable control requirements for a BACT
determination.'' U.S. EPA, Guidelines for Determining Best Available
Control Technology, 3 (December 1978).
    Further, while some commenters suggest that the BSER must
reflect the ``greatest degree of emission control,'' citing to
section 113 of Senate bill 4358 (S. 4358, at 6, 1970 Legis. Hist. at
554-55), Congress imposed no such requirement. See Sierra Club, 657
F.2d at 330 (``we believe it is clear that this language is far
different from the words Congress would have chosen to mandate that
the EPA set standards at the maximum degree of pollution control
technologically achievable.'').
    \54\ 40 FR 53346.
---------------------------------------------------------------------------

    The 1970 enactment of CAA section 111 represents a choice between
two alternative approaches to direct federal regulation of stationary
sources. Under the House bill, the Administrator would have been
authorized to establish ``emission standards'' for new sources of
pollutants that may contribute substantially to endangerment of the
public health or welfare. These standards would have ``require[d] that
new sources of such emissions be designed and equipped to maximize
emission control insofar as technologically and economically
feasible.'' \55\ The House bill did not contain any analogous
provisions for existing sources. Nevertheless, the House bill
contemplated that under CAA section 111, individual sources would be
designed to emit less.
---------------------------------------------------------------------------

    \55\ H.R. Conf. Rep. No. 91-1783, 46 (December 17, 1970)
(emphasis added).
---------------------------------------------------------------------------

    Under the Senate approach, the Administrator would have established

``standards of performance'' for new sources based ``on the greatest
emission control possible through application of [the] latest available
control technology.'' \56\ This would have ensured ``that new
stationary sources are designed, built, equipped, operated, and
maintained so as to reduce emission[s] to a minimum.'' \57\
Accordingly, such standards would have reflected ``the degree of
emission control which can be achieved through process changes,
operation changes, direct emission control, or other methods.'' \58\ A
separate provision governing emissions of ``selected agents''
authorized the Administrator to develop ``emission standards'' for both
new and existing sources.\59\ However, the Senate ``recognize[d] that
certain old facilities may use equipment and processes which are not
suited to the application of control technology. The [Administrator]
would be authorized therefore to waive the application of standards . .
. .'' \60\
---------------------------------------------------------------------------

    \56\ Id. (describing the approach under the Senate amendment).
    \57\ S. Rep. No. 91-1196, 15-16 (September 17, 1970) (emphasis
added).
    \58\ Id. at 17.
    \59\ Id. at 18-19.
    \60\ Id. at 19.
---------------------------------------------------------------------------

    The conference substitute settled on the language largely reflected
in the current wording of CAA section 111(a)(1); the differences
between the 1970 enactment and the current version are not relevant to
this discussion. As explained above, both the Senate and House bills
contemplated only control measures that would lead to better design,
construction, operation, and maintenance of an individual source \61\
and, in the case of existing sources under the Senate bill, the waiver
of standards if certain sources could not apply new control
technologies. Accordingly, recognizing that a ``system of emission
reduction'' is limited to control technologies or techniques that can
be integrated into an individual source's design or operation (i.e.,
add-on controls and lower-emitting processes/practices/designs) is the
only interpretation compatible with the fundamental principle,
reflected in the original competing drafts of the provision, that
sources should be designed, built, equipped, operated, and maintained
to reduce emissions.\62\
---------------------------------------------------------------------------

    \61\ References to ``other alternatives,'' ``other means,'' or
``other methods'' in the Senate bill and accompanying report are not
evidence that Congress intended to confer boundless discretion. In
fact, these terms must be interpreted in light of the other
specifically listed control techniques. For example, the Senate
bill's reference to ``control technology,'' ``processes,'' and
``operating methods'' are properly read to denote measures that can
be applied to individual sources--and ``other alternatives'' must be
interpreted ejusdem generis: in the same fashion.
    \62\ To be sure, the Agency does not contend that a ``system of
emission reduction'' is limited to technological improvements.
Indeed, the CAA Amendments of 1990 make clear that CAA section 111
is not to be limited to ``technological systems.'' See supra n. 51
(discussing amendments to CAA section 111(a)(1)). But that does not
mean CAA section 111 therefore authorizes basing BSER on generation
shifting ``measures,'' such as substitute generation from lower- or
non-polluting power plants, which cannot be applied to individual
sources like add-on controls or inherently lower-emitting processes/
practices/designs.
---------------------------------------------------------------------------

d. The CPP Unlawfully Exceeds the Scope of CAA Section 111(a)(1) and
Must Be Repealed
    Before the CPP, the EPA had issued only six CAA section 111(d)
rulemakings, in the form of a ``guideline document'' with corresponding
``emission guidelines.'' \63\ Conversely, the EPA has issued around
seventy CAA section 111(b) rulemakings, including several for new
fossil-fuel-fired steam-generating units.\64\ Every one of those
rulemakings applied technologies, techniques, processes, practices, or
design modifications directly to individual sources.
---------------------------------------------------------------------------

    \63\ (See 1) Phosphate Fertilizer Plants, Final Guideline
Document Availability, 42 FR 12022 (March. 1, 1977) [Final Guideline
Document: Control of Fluoride Emissions from Existing Phosphate
Fertilizer Plants, March 1977, Doc. No. EPA-450/2-77-005]; 2)
Emission Guideline for Sulfuric Acid Mist, 42 FR 55796 (October 18,
1977); 3) Kraft Pulp Mills; Final Guideline Document; Availability,
44 FR 29828 (May 22, 1979) [Kraft Pulping, ``Control of Emissions
from Existing Mills,'' March 1979, Doc. No. EPA-450/2-78-003b]; 4)
Primary Aluminum Plants; Availability of Final Guideline Document,
45 FR 26294 (Apr. 17, 1980) [Primary Aluminum: Guidelines for
Control of Fluoride Emissions from Existing Primary Aluminum Plants,
December 1979, Doc. No. EPA-450/2-78-049b]; 5) Standards of
Performance for New Stationary Sources and Guidelines for Control of
Existing Sources: Municipal Solid Waste Landfills, 61 FR 9905 (March
12, 1996); and 6) Standards of Performance for New and Existing
Stationary Sources: Electric Utility Steam Generating Units, 70 FR
28606 (May 18, 2005) (hereafter, the Clean Air Mercury Rule or CAMR)
(vacated in New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2007)
(reviewing an action that sought to shift regulation of certain
emissions from power plants from the CAA section 112 hazardous air
pollutants regime to the section 111 standards regime and holding
that the EPA failed to comply with the delisting requirements of
section 112(c)(9) and thus vacating the corresponding section 111
standards for electric utility steam generating units). This list of
six CAA section 111(d) rulemakings does not include any guideline
documents mandated by and carried out in compliance with CAA section
129 (governing solid waste incinerator units).
    \64\ See generally 40 CFR part 60, subparts D-TTTT. In fact,
steam-generating units were among the first sources regulated under
section 111(b). See 36 FR 24876 (December 23, 1971) (promulgating
standards for steam generators, portland cement plants,
incinerators, nitric acid plants, and sulfuric acid plants).
---------------------------------------------------------------------------

    In the CPP, the EPA determined that the BSER for reducing
CO2 emissions from existing fossil fuel-fired power plants
was the combination of three ``building blocks'':
    1. Improving heat rate at individual affected coal-fired steam
generating units;
    2. Substituting increased generation from lower-emitting existing
natural gas combined cycle units for decreased generation from higher-
emitting affected steam generating units; and
    3. Substituting increased generation from new zero-emitting
renewable energy generating capacity for decreased generation from
affected fossil fuel-fired generating units.

This was the first time the EPA interpreted the BSER to authorize
measures wholly outside a particular source.\65\ The EPA reached this
determination by interpreting the statutory term ``application'' as if
it instead read ``implementation'' (without pointing to any legal basis
for equating those terms), and interpreting the phrase ``system of
emission reduction'' broadly as ``a set of measures that work together
to reduce emissions and that are implementable by the sources
themselves.'' \66\ ``As a practical matter,'' the Agency continued,
``the `source' includes the `owner or operator' of any building,
structure, facility, or installation for which a standard of
performance is applicable.'' \67\ The EPA then concluded that the
breadth of a dictionary definition of the word ``system'' established
the bounds of its statutory authority, finding that the phrase ``
`system of emission reduction' . . . means a set of measures that
source owners or operators can implement to

achieve an emission limitation applicable to their existing source.''
\68\
---------------------------------------------------------------------------

    \65\ CAMR, which relied in part on a cap-and-trade mechanism,
was still ultimately ``based on control technology available in the
relevant timeframe,'' an approach fundamentally different than the
CPP's second and third ``building blocks,'' which were not based on
systems that could be applied to or at individual sources. Indeed,
the rule explained that the BSER refers to ``the combination of the
cap-and-trade mechanism and the technology needed to achieve the
chosen cap level.'' 70 FR 28620 (emphasis added). Accordingly, the
Agency concluded that it would be ``reasonable to establish a cap on
[the basis of using a particular technology] and require compliance
with that cap at a later point in time when the necessary technology
becomes widely available.'' Id. To the extent that CAMR's BSER
(i.e., the combined control technology and cap-and-trade program) is
premised on application to the source category (as opposed to an
individual source), however, CAMR would be unlawful. Trading as a
compliance mechanism under CAA section 111 is discussed in section
III.F.2.a of this preamble.
    \66\ 80 FR 64762 (citing the Oxford Dictionary of English (3rd
ed.) (2010), among others). The EPA reached this interpretation in
part on the assumption that ``the terms `implement' and `apply' are
used interchangeably.'' See Legal Memorandum Accompanying Clean
Power Plan for Certain Issues at 84 n.175.
    \67\ 80 FR 64762.
    \68\ Id. The EPA acknowledged, nonetheless, that ``regulatory
requirements'' in the CPP would be based ``on measures the affected
EGUs can implement to assure that electricity is generated with
lower emissions'' and that ``do not require reductions in the total
amount of electricity produced.'' Id. at 64778. But the EPA did not
exclude such ``measures'' (i.e., reduced utilization and demand-side
energy efficiency) as being outside the scope of the dictionary
definition of ``system.'' Indeed, the EPA believed they would play
an important compliance role under the CPP. See id. at 64753-657
(discussing reduced utilization and demand-side energy efficiency
measures under rate-based and mass-based state plans). See also n.
83, infra.
---------------------------------------------------------------------------

    In reviewing the CPP, the EPA concludes that the interpretation
relied upon in the CPP ignored or misinterpreted critical statutory
elements and rules of statutory construction. After reconsidering the
relevant statutory text, structure, and purpose, the Agency now
recognizes that Congress ``spoke to the precise question'' of the scope
of CAA section 111(a)(1) and clearly precluded the unsupportable
reading of that provision asserted in the CPP. Accordingly, this action
repeals the CPP.\69\
---------------------------------------------------------------------------

    \69\ One commenter asserted that, rather than repeal the CPP,
the EPA should retain building block 1. As explained in the Proposed
Repeal, however, while heat rate improvement measures may be
considered in a CAA section 111 standard, ``building block 1, as
analyzed, cannot stand on its own. 80 FR 64758 n. 444; see also id.
at 64658 (discussing severability of the building blocks).'' 82 FR
48039 n.5. Accordingly, today's action repeals the whole of the CPP
and does not retain building block 1 as the BSER. In any case, as
discussed in the ACE proposal, ``building block 1, as constructed in
[the] CPP, does not represent an appropriate BSER, and ACE better
reflects important changes in the formulation and application of the
BSER in accordance with the CAA.'' 83 FR 44756 (discussing the EPA's
change in approach to analyzing heat rate improvement measures). See
section III for the EPA's evaluation of heat rate improvement
measures under ACE.
---------------------------------------------------------------------------

(1) The CPP Is Impermissibly Based on ``Implementation'' Rather Than
``Application'' of the BSER
    CAA section 111(a)(1) provides that standards of performance
reflect an emission limitation achievable ``through the application of
the [BSER] . . . .'' In the Legal Memorandum accompanying the CPP, the
Agency stated in a footnote that ``the terms `implement' and `apply'
are used interchangeably.'' \70\ Thus, the Agency decided, ``the system
must be limited to measures that can be implemented--``appl[ied]''--by
the sources themselves . . . .'' \71\ But Congress does not in fact use
these terms interchangeably in the Act, and in CAA section 111(a)(1),
as in other source-focused standard-setting provisions in the Act, used
a term (``application'') meaningfully different than the one CPP read
into that section (``implementation'')--and the term that Congress
actually used is one that reflects the CAA's other source-focused
standard-setting provisions.\72\
---------------------------------------------------------------------------

    \70\ Legal Memorandum Accompanying Clean Power Plan for Certain
Issues at 84 n.175.
    \71\ 80 FR 64720.
    \72\ See, e.g., 42 U.S.C. 7412(d)(2) (describing MACT as
``through application of measures, processes, methods, systems or
techniques including, but not limited to, measures which--(A) reduce
the volume of, or eliminate emissions of, such pollutants through
process changes, substitution of materials or other modifications,
(B) enclose systems or processes to eliminate emissions, (C)
collect, capture or treat such pollutants when released from a
process, stack, storage or fugitive emissions point, (D) are design,
equipment, work practice, or operational standards . . . , or (E)
are a combination of the above;''); id. at 7479(3) (describing BACT
as ``achievable for such facility through application of production
processes and available methods, systems, and techniques, including
fuel cleaning, clean fuels, or treatment or innovative fuel
combustion techniques for control'').
---------------------------------------------------------------------------

    The Act is replete with provisions calling for the
``implementation'' of ``a system,'' \73\ ``control measures,'' \74\
``emission reduction measures,'' \75\ and even ``steps, by owners or
operators of stationary sources,'' \76\ but CAA section 111(a)(1) is
not among them. Congress defines ``implementing'' under CAA section
105(a)(1)(A) as ``any activity related to the planning, developing,
establishing, carrying-out, improving, or maintaining of such programs
[for the prevention and control of air pollution or implementation of
national primary and secondary ambient air quality standards].'' \77\
But again, ``applying'' is not included in this list defining
``implementing.'' In the case of the Act's standard-setting provisions,
on the other hand, BACT and maximum achievable control technology
(MACT) requirements--like CAA section 111--are based on ``application
of'' control measures to individual sources.
---------------------------------------------------------------------------

    \73\ 42 U.S.C. 7412(r)(7)(H)(vii) (``the Administrator . . .
shall develop and implement a system for providing off-site
consequence analysis information'').
    \74\ Id. 7511a(b)(2) (``Such plan provisions shall provide for
the implementation of all reasonably available control measures'').
    \75\ Id. 7412(i)(5)(C) (``prior to implementation of emissions
reduction measures'').
    \76\ Id. 7410(a)(2)(F) (emphasis added) (``require, as may be
prescribed by the Administrator--(i) the installation, maintenance,
and replacement of equipment, and the implementation of other
necessary steps, by owners or operators of stationary sources'').
    \77\ 42 U.S.C. 7405(a)(1)(A).
---------------------------------------------------------------------------

    Functionally, the two terms send different signals.
``Implementation'' requires a subject and direct object (I implement
the plan), whereas ``application'' requires a subject, direct object,
and indirect object (I apply the protocol to the subject). That is, an
owner or operator can implement a system (without anything more and
without any particular object of the system being implied), but an
owner/operator must apply a system to another object (i.e., the
source). CAA section 111 illustrates this distinction. Congress
provided, in CAA section 111(d)(1), that state plans must provide ``for
the implementation and enforcement of such standards of performance,''
but that EPA's regulations must also permit a state ``in applying a
standard of performance to any particular source'' to take into
consideration, among other factors, the remaining useful life of the
existing source to which such standard applies. Thus, whereas state
plans more broadly ``implement'' the CAA section 111(d) program, states
``appl[y]'' standards to individual sources. Congress could have
defined a standard of performance as reflecting the ``implementation of
the BSER by the owner or operator of a stationary source,'' but
Congress did not. Simply put, equating the terms ``implement'' and
``apply'' conflicts with the plain language of CAA section 111(a)(1)
and their use throughout the Act; this conflict is compounded by the
conflation of the source with its owner, different concepts that are
separately defined, see CAA section 111(a)(3), (5).
    Now take generation shifting, the basis for the second and third
``building blocks'' of the CPP's BSER. The CPP recognized that an owner
or operator of a regulated source can ``shift'' power-producing
operations to a different facility, such as a nuclear power plant,
through bilateral contracts for capacity or by reducing utilization.
But just because generation shifting is ``implementable'' by an owner
or operator (i.e., just because an owner or operator of a given source
can subsidize generation elsewhere that will reduce demand for
generation from that) does not mean that generation shifting can be
``applied'' to the source.\78\ And indeed, the CPP shifted generation
from one regulated source category to another and from both those
regulated source categories together to other forms of electricity
generation outside any regulated source category. Because the CPP is
premised on ``implementation of the BSER by a source's owner or
operator'' and not ``application of the [BSER]'' to an individual
source, the rule contravenes the plain language of CAA section
111(a)(1) and must be repealed.
---------------------------------------------------------------------------

    \78\ A contract, for example, is neither a ``system'' nor
``applied to'' a source.

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

(2) Dictionary Definitions Cannot Confer an ``Infinitude'' of
Possibilities
    Although the word ``system'' is not defined in the CAA, ``[t]he
meaning--or ambiguity--of certain words or phrases may only become
evident when placed in context.'' \79\ Thus, the issue is not whether
the dictionary provides a broad definition of the word ``system,'' but
what are the permissible bounds of the legal meaning of the word
``system.'' The precise question in this case is whether the word
``system'' as used in CAA section 111 encompasses any ``set of
measures'' \80\ to reduce emissions, or whether it is limited to lower-
emitting processes, practices, designs, and add-on controls that are
applied at the level of the individual facility.
---------------------------------------------------------------------------

    \79\ King v. Burwell, 135 S. Ct. 2480, 2489 (2015) (quoting FDA
v. Brown & Williamson Corp., 529 U.S. 120, 132 (2000)).
    \80\ 80 FR 64762.
---------------------------------------------------------------------------

    ``System,'' as used in CAA section 111, cannot be read to encompass
any ``set of measures'' that would--through some chain of causation--
lead to a reduction in emissions. As an initial matter, Congress did
not use the phrase ``set of measures'' in CAA section 111. On its own,
this phrase could create unbounded discretion in the Agency. Moreover,
even when the term ``measures'' is used elsewhere in the Act, it is
intended to be limited. For example, CAA section 112 emission standards
are derived ``through application of measures, processes, methods,
systems or techniques.'' ``Measures,'' are further defined to include
measures which:
     Reduce the volume of, or eliminate emissions of, such
pollutants through process changes, substitution of materials or other
modifications,
     enclose systems or processes to eliminate emissions,
     collect, capture or treat such pollutants when released
from a process, stack, storage or fugitive emissions point,
     are design, equipment, work practice, or operational
standards (including requirements for operator training or
certification) as provided in subsection (h) of CAA section 111, or
     are a combination of the above.\81\
---------------------------------------------------------------------------

    \81\ 42 U.S.C. 7412(d)(2).
---------------------------------------------------------------------------

``Measures,'' as Congress provides, are limited to control measures
that can be integrated into an individual source's design or operation.
``Measures'' do not include shifting production away from the regulated
source. The CPP read ``system'' in CAA section 111(a)(1) to mean any
``set of measures,'' relying on the dictionary, and then determined
that there was no limitation on those ``set of measures'' so long as
they were measures that could be implemented through obligations placed
on the owner or operator of a source.\82\ At both steps, the CPP relied
on an absence of an express textual commandment forbidding these open-
ended interpretations. That methodology is untenable.
---------------------------------------------------------------------------

    \82\ The CPP identified purported limitations to the underlying
legal interpretation (e.g., ``system'' does not extend to measures
that directly target consumer behavior), see 80 FR 64776-779, but
those purported limitations still led to an interpretation that far
exceeded the bounds of the authority actually conferred by Congress
on the EPA.
---------------------------------------------------------------------------

    Construing ``system'' to offer such an ``infinitude'' \83\ of
possibilities would have significant implications. The fact is, fossil
fuel-fired EGUs operate within an interconnected ``system.'' Thus, any
action that would affect electricity rates will have generation-
shifting and potentially emission-reduction consequences. By the very
nature of the interconnected grid, EPA's authority to determine the
BSER under CAA section 111 is, under the Agency's prior interpretation,
stretched to every aspect of the entire power sector. This cannot have
been the intent of the Congress that enacted CAA section 111.
---------------------------------------------------------------------------

    \83\ See Cal. Indep. Sys. Operator Corp. v. FERC, 372 F.3d 395,
401 (D.C. Cir. 2004) (``Cal ISO'').
---------------------------------------------------------------------------

    The D.C. Circuit has previously disapproved of a federal agency's
expansive reading of its authority in analogous circumstances. In Cal
ISO, the D.C. Circuit vacated the Federal Energy Regulatory
Commission's (``FERC'') attempt to reform a utility's governing
structure on the theory that FERC's statutory authority over
``practice[s] . . . affecting [a] rate'' gave FERC ``authority to
regulate anything done by or connected with a regulated utility, as any
act or aspect of such an entity's corporate existence could affect, in
some sense, the rates.'' \84\
---------------------------------------------------------------------------

    \84\ Id.
---------------------------------------------------------------------------

    Upholding FERC's interpretation of ``practice'' to include
replacing the governing board of California's Independent System
Operator Corporation, the Court warned, could authorize FERC to
``dictate the choice of CEO, COO, and the method of contracting for
services, labor, office space, or whatever one might imagine . . . .''
\85\ But where ``the text and reasonable inferences from it give a
clear answer . . . that . . . is `the end of the matter.' '' \86\ There
is no need, therefore, to consider ``such parade of horribles.'' \87\
---------------------------------------------------------------------------

    \85\ Id. at 403.
    \86\ Id. at 401 (citing Brown v. Gardiner, 513 U.S. 115, 120
(1994)) (emphasis in original).
    \87\ Id. at 403.
---------------------------------------------------------------------------

    The Court explained that, ``no matter how important the principle
of ISO independence is to the Commission, `[the FERC Order] is merely a
regulation,' and cannot be the basis to override the limitations of
`statutes enacted by both houses of Congress and signed into law by the
president.'' \88\ The court reasoned that both ``the history of the
application of this and similar statutes and by the implications of
FERC's amorphous defining of the term'' firmly barred FERC's attempt to
stretch its authority.\89\ On this point, Congress's intent is
``crystal clear''--FERC had no authority to ``reform and regulate the
governing body of a public utility under the theory that corporate
governance constitutes a `practice' for ratemaking authority
purposes.'' \90\
---------------------------------------------------------------------------

    \88\ Id. at 404.
    \89\ Id. at 402.
    \90\ Id.
---------------------------------------------------------------------------

    The EPA's prior interpretation underlying the CPP is untenable for
the same reasons. The EPA began, like FERC, with an ordinary statutory
term (``system'') and then read into it maximally broad authority to
shift generation away from coal-fired and gas-fired power plants to
other electricity producers on the basis that generation shifting would
cause those regulated sources to be displaced and therefore not be a
source of emissions. But for nearly 45 years prior to the CPP, this
Agency had never understood CAA section 111 to confer upon it the
implicit power to restructure the utility industry through generation-
shifting measures. Indeed, the EPA has issued many rules under CAA
section 111 (both the limited set of existing-source rules under CAA
section 111(d) and the much larger set of new-source rules under CAA
section 111(b)). In all those rules, the EPA determined that the BSER
consisted of add-on controls or lower-emitting processes/practices/
designs that can be applied to individual sources.\91\
---------------------------------------------------------------------------

    \91\ See supra n. 66 (discussing CAMR).
---------------------------------------------------------------------------

    The CPP deviated from this settled understanding of CAA section
111. By embracing an expansive dictionary definition of ``system,''
\92\ the EPA ignored that the text and structure of the Act expressly
limited the scope of the term ``system'' in a way that foreclosed the
CPP's expansive definition. The Agency concluded that actions that
would cause generation to shift from higher-emitting to lower- or non-

emitting power generators represent a means of reducing CO2
emissions from existing fossil fuel-fired electric generating units--
and thus constituted a ``system'' within the meaning of CAA section
111. Taken to its logical end, however, any action affecting a
generator's operating costs could impact its order of dispatch and lead
to generation shifting. This could include, for example, minimum wage
requirements or production caps. It is axiomatic that ``Congress . . .
does not alter the fundamental details of a regulatory scheme in vague
terms or ancillary provisions--it does not, one might say, hide
elephants in mouseholes.'' \93\ Because Congress clearly did not
authorize CAA section 111 standards to be based on any ``set of
measures,'' the EPA need not address the potential consequences of
deviating from our historical practice under CAA section 111 when
determining whether the CPP's interpretation was a permissible reading
of the statute. Like the D.C. Circuit in Cal ISO, the EPA concludes
that the text and reasonable inferences from it give a clear answer:
``system'' does not embody any conceivable ``set of measures'' that
might lead to a reduction in emissions, but is limited to measures that
can be applied to and at the level of the individual source
---------------------------------------------------------------------------

    \92\ 80 FR at 64720 (defined by the Oxford Dictionary of English
as ``a set of things or parts forming a complex whole; a set of
principles or procedures according to which something is done; an
organized scheme or method; and a group of interacting,
interrelated, or independent elements'').
    \93\ Whitman v. American Trucking, 531 US 457, 466 (2001). See
also Letter from Neil Chatterjee, Chairman, Fed. Energy Reg. Comm'n,
to Andrew Wheeler, Administrator, EPA at 5 (Oct. 31, 2018) (Docket
ID# EPA-HQ-OAR-2017-0355-24053) (``The Supreme Court has explained
several times that Congress `does not alter the fundamental details
of a regulatory scheme in vague terms or ancillary provisions--it
does not, one might say, hide elephants in mouseholes.' The
challenges posed by global climate change present `question[s] of
deep `economic and political significance' that [are] central to
[the] statutory scheme[s]' administered by both the Agency and the
Commission.'') (internal citation omitted).
---------------------------------------------------------------------------

(3) Basing BSER on Generation Shifting Is Not Authorized by Congress
    On the question of whether basing BSER on generation shifting is
precluded by the statute, the major question doctrine instructs that an
agency may issue a major rule only if Congress has clearly authorized
the agency to do so. As the Supreme Court has stated, ``We expect
Congress to speak clearly if it wishes to assign to an agency decisions
of vast `economic and political significance.' '' \94\ Although the
Court has not articulated a bright-line test, its cases indicate that a
number of factors are relevant in distinguishing major rules from
ordinary rules: ``the amount of money involved for regulated and
affected parties, the overall impact on the economy, the number of
people affected, and the degree of congressional and public attention
to the issue.'' \95\
---------------------------------------------------------------------------

    \94\ Utility Air Regulatory Group v. EPA, 573 U.S. 302, 324
(2014) (quoting Brown & Williamson, 529 U.S. at 159).
    \95\ U.S. Telecom Ass'n v. FCC, 855 F.3d 381, 422-23 (D.C. Cir.
2017) (internal citations omitted).
---------------------------------------------------------------------------

    While the EPA believes that today's action is based on the only
permissible reading of the statute and would reach that conclusion even
without consideration of the major question doctrine, the EPA believes
that that doctrine should apply here and that its application confirms
the unambiguously expressed intent of CAA section 111. The CPP is a
major rule. At the time the CPP was promulgated, its generation-
shifting scheme was projected to have billions of dollars of impact on
regulated parties and the economy, would have affected every
electricity customer (i.e., all Americans), was subject to litigation
involving almost every State in the Union, and, as discussed in the
following section, would have disturbed the state-federal and intra-
federal jurisdictional scheme. Building blocks 2 and 3 are far afield
from the core activity of CAA section 111--indeed, no section 111 rule
of the scores issued has ever been based on generation shifting since
the enactment of CAA section 111 in 1970. Because the CPP is a major
rule, the interpretative question raised in CAA section 111(a)(1)
(i.e., whether a ``system of emission reduction'' can consist of
generation-shifting measures) must be supported by a clear-statement
from Congress.\96\ As explained above, however, it is not--indeed,
Congress has directly spoken to this precise question and precluded the
interpretation of CAA section 111 advanced by the EPA in the CPP.
---------------------------------------------------------------------------

    \96\ The EPA acknowledges that for the reasons noted above, its
position on this major rule issue has evolved since the EPA
addressed it in the CPP, 80 FR 64,783. See FCC v. Fox Television
Stations, Inc., 556 U.S. 502 (2009).
---------------------------------------------------------------------------

    Further evidence comes from the notable absence of a valid limiting
principle to basing a CAA section 111 rule on generation shifting. In
the CPP, the EPA explained that the Agency ``has generally taken the
approach of basing regulatory requirements on controls and measures
designed to reduce air pollutants from the production process without
limiting the aggregate amount of production.'' \97\ But by shifting
focus to the entire grid (which includes regulated sources and non-
sources), the Agency could empower itself to order the wholesale
restructuring of any industrial sector (whether or not it has authority
to even regulate all the actors within that sector--so long, in keeping
with the interpretation underlying the CPP, as it can place obligations
on the owners and operators over whom it does have authority to carry
out a ``system'' that goes beyond the EPA's actual direct reach).
Appealing to such factors as ``cost'' and ``feasibility'' \98\ as
putative constraints on EPA's authority, furthermore, does not provide
any assurance--indeed, the D.C. Circuit traditionally ``grant[s] the
[A]gency a great degree of discretion in balancing them.'' \99\ Thus,
it is not reasonable to find in this statutory scheme Congressional
intent to endow the Agency with discretion of this breadth to regulate
a fundamental sector of the economy.
---------------------------------------------------------------------------

    \97\ 80 FR 64762.
    \98\ See Legal Memorandum Accompanying Clean Power Plan for
Certain Issues at 117-20.
    \99\ Lignite Energy Council v. EPA, 198 F.3d 930, 933 (D.C. Cir.
1999).
---------------------------------------------------------------------------

    As a final point, the CPP not only advanced a broad reading of CAA
section 111(a)(1), the rule applied that interpretation to ``the source
category as a whole'' \100\ to cause a reduction in coal-fired
generation.\101\ To do so, the CPP relied on ``emission reduction
approaches that focus on the machine as a whole--that is, the overall
source category--by shifting generation from dirtier to cleaner sources
in addition to emission reduction approaches that focus on improving
the emission rates of individual sources.'' \102\ Consequently, it was
designed as ``an emission guideline for an entire category of existing
sources . . . .'' \103\ However, by acting as a guideline for an entire
category, the CPP ignored the statutory directive to establish
standards for sources and overextended federal authority into matters
traditionally reserved for states: ``administration of integrated
resource planning and . . . utility generation and resource
portfolios.'' \104\
---------------------------------------------------------------------------

    \100\ 80 FR 64727.
    \101\ Id. at 64665.
    \102\ 80 FR 64725-726; see also id. at 64726 (noting
``consideration of emission reduction measures at the source-
category level'').
    \103\ CPP RTC Chapter 1A, 170-72.
    \104\ New York v. FERC, 535 US 1, 24 (2002).
---------------------------------------------------------------------------

(4) Basing BSER on Generation Shifting Encroaches on FERC and State
Authorities
    The Federal Power Act (FPA) establishes the dichotomy between
federal and state regulation in the electricity sector by drawing ``a
bright line easily ascertained, between state and federal
jurisdiction.'' \105\ The Supreme Court recently observed that, under
the FPA, FERC has ``exclusive jurisdiction over wholesale sales of
electricity in the interstate market'' and

establishing the associated just and reasonable rates and charges.\106\
However, ``the law places beyond FERC and leaves to the States alone,
the regulation of `any other sale'--most notably, any retail sale--of
electricity.'' \107\ Therefore, under the FPA, Congress limited the
jurisdiction of FERC ``to those matters which are not subject to
regulation by the States,'' including ``over facilities used for the
generation of electric energy.'' \108\ Indeed, ``the States retain
their traditional responsibility in the field of regulating electrical
utilities for determining questions of need, reliability, cost, and
other related state concerns.'' \109\ ``Such responsibilities include
``authority over the need for additional generating capacity [and] the
type of generating facilities to be licensed.'' \110\ Thus, the FPA
``not only establishes an affirmative grant of authority to the federal
government to regulate wholesale sales and transmission of electricity
in interstate commerce, but also draws a line where that exclusive
authority ends and the state's exclusive authority to regulate other
matters . . . begins.'' \111\
---------------------------------------------------------------------------

    \105\ Fed. Power Comm'n v. S. Cal. Edison Co., 376 U.S. 205, 215
(1964).
    \106\ Hughes v. Talen Energy Marketing, LLC, 136 S.Ct. 1288,
1291-92 (2016) (citing 16 U.S.C. 824(b)(1), 824d(a) and 824e(a)).
    \107\ Id. at 1292 (quoting FERC v. Electric Power Supply Assn.,
136 S.Ct. 760, 766 (2016) (EPSA) (quoting 824(b)). The States'
reserved authority includes control over in-state ``facilities used
for the generation of electric energy.'' 824(b)(1); see Pacific Gas
& Elec. Co. v. State Energy Resources Conservation and Development
Comm'n, 461 U.S. 190, 205 (1983) (``Need for new power facilities,
their economic feasibility, and rates and services, are areas that
have been characteristically governed by the States.'').
    \108\ 16 U.S.C. 824(a), 824(b)(1); see also id. 824o(i)(2)
(``This section does not authorize . . . [FERC] to order the
construction of additional generation or transmission capacity'').
There are other jurisdictional limitations under the FPA. For
example, publicly-owned and many cooperatively owned utilities are
subject to only some elements of the FPA. Id. 824(f), 824(b)(2). And
entities not operating in interstate commerce, i.e., entities in
Alaska, Hawaii, and the Electric Reliability Council of Texas
portion of Texas, are also subject to only limited FERC
jurisdiction.
    \109\ Pacific Gas & Elec. Co. v. State Energy Resources
Conservation and Development Comm'n, 461 U.S. 190, 205 (1983).
    \110\ Id. at 212.
    \111\ Dennis, Jeffrey S., et al., Federal/State Jurisdictional
Split: Implications for Emerging Electricity Technologies, 3
(December 2016), available at https://www.energy.gov/sites/prod/files/2017/01/f34/Federal%20State%20Jurisdictional%20Split-Implications%20for%20Emerging%20Electricity%20Technologies.pdf; see
also 16 U.S.C. 824o(i)(2) (``This section does not authorize . . .
[FERC] to order the construction of additional generation or
transmission capacity'').
---------------------------------------------------------------------------

    Courts have observed that regulation of other areas may
incidentally affect areas within these exclusive domains, but there is
no room for direct regulation by States in areas of FERC domain or
vice-versa, and such regulation that would achieve indirectly what
could not be done directly is also prohibited.\112\ Just as ``FERC has
no authority to direct or encourage generation'' \113\ absent clear
authority from Congress, neither does (indeed, a fortiori so much the
less does) the EPA.\114\ The EPA has no more ability to ``do indirectly
what it could not do directly'' than FERC would with respect to matters
that the FPA left to the states. Historically, any traditional
environmental regulation of the power sector may have incidentally
affected these domains without indirectly or directly regulating within
them. For example, an on-site control, such as a scrubber, may affect
rate determinations as it is factored into potentially recovered costs.
The CPP, however, included a BSER that was based largely on measures
and subjects exclusively left to FERC and the states, rather than
inflicting only permissible, incidental effects on those domains.
---------------------------------------------------------------------------

    \112\ Hughes, 136 S. Ct. at 1297-98. See also EPSA, 753 F.3d at
221, 224 (``the Federal Power Act unambiguously restricts FERC from
regulating the retail market'' and quoting Altamont Gas Transmission
Co. v. FERC, 92 F.3d 1239, 1248 (D.C. Cir. 1996)) (noting that
``FERC cannot `do indirectly what it could not do directly' '').
    \113\ CRS, The Federal Power Act (FPA) and Electricity Markets,
9 (March 10, 2017), available at https://www.everycrsreport.com/files/20170310_R44783_dd3f5c7c0c852b78f3ea62166ac5ebdbd1586e12.pdf.
    \114\ See 80 FR 64745 (explaining that ``the BSER also reflects
other CO2 reduction strategies that encourage increases
in generation from lower- or zero-carbon EGUs'') (emphasis added);
cf. 42 U.S.C. 7651(b) (providing that one purpose of Title IV (but
not the CAA overall) is to encourage the ``use of renewable and
clean alternative technologies'').
---------------------------------------------------------------------------

    The CPP identified as part of the BSER generation-shifting
measures. Increased renewable generation capacity, building block 3,
falls within a state's authority to determine its generation mix and to
direct the planning and resource decisions of utilities under its
jurisdiction.\115\ Additionally, increased utilization of natural gas
combined cycle (NGCC) plants, building block 2, falls within that state
authority and within FERC's authority to determine just and reasonable
rates by requiring a conclusion that the associated costs of increased
utilization rates are reasonable, and, further ignores these areas of
exclusive regulation by neglecting to consider changes to regional
transmission organization (RTO) and ISO dispatch procedures necessary
to achieve the increased utilization rates. By including generation-
shifting measures within the states' and FERC's purview in the BSER,
rather than relying on traditional controls within the EPA's purview,
the EPA established a rule predicated largely upon actions in the power
sector outside of the scope of the Agency's authority to compel. Some
generation shifting may be an incidental effect of implementing a
properly established BSER (e.g., due to higher operation costs), but
basing the BSER itself on generation shifting improperly encroaches on
FERC and state authorities.
---------------------------------------------------------------------------

    \115\ See S.Cal. Edison Co., 71 FERC 61,269 (June 2, 1995); see
also Pacific Gas & Elec. Co. v. State Energy Resources Conservation
and Development Comm'n, 461 U.S. 190, 205, 212 (1983).
---------------------------------------------------------------------------

    Further, the actual effect of the CPP as anticipated by the EPA was
that the states would impose standards of performance based on the
EPA's BSER, and sources would largely rely on generation-shifting
measures to comply with those standards. In its analysis of potential
energy impacts associated with the rule, the CPP modeling ``presume[d]
policies that lead to generation shifts and growing use of demand-side
[energy efficiency] and renewable electricity generation out to 2029.''
\116\ In this manner, the CPP could directly shape the generation mix
of a complying state. It is clear from the FPA that Congress intended
the states to have that authority, not the relevant federal agency,
FERC. Given that even FERC would not have such authority, the only
reasonable inference is that Congress did not intend to give the EPA
that authority via CAA section 111.\117\ Federal law ``may not be
interpreted to reach into areas of state sovereignty unless the
language of the federal law compels the intrusion,'' \118\ and, as
discussed above, basing BSER on generation shifting is not authorized
by Congress here. Such an interpretation is also consistent with the
cooperative-federalism framework of the CAA.\119\ While the EPA has
previously asserted that the CPP only provides emissions guidelines,
leaving the states with the flexibility to create their own compliance
measures,\120\ the guidelines are based on actions outside of the EPA's
authority to directly or indirectly compel and the practical effect of

implementing the guidelines is that many of those actions likely must
be taken.
---------------------------------------------------------------------------

    \116\ 80 FR 64927.
    \117\ See Solid Waste Agency of Northern Cook County v. U.S.
Army Corps of Engineers, 531 U.S. 159, 172 (2001) (citing Edward J.
DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades
Council, 485 U.S. 568, 575 (1988)).
    \118\ Am. Bar Ass'n v. FTC, 430 F.3d 457 (D.C. Cir. 2005).
    \119\ See, e.g., 42 U.S.C. 7401(b)(3) and (4), 7402(a) and (b),
and 7416.
    \120\ 80 FR 64762 (``States will have the flexibility to choose
from a range of plan approaches and measures, including numerous
measures beyond those considered in setting the CO2
emission performance rates'').
---------------------------------------------------------------------------

(5) Commenters' Attempt To Recharacterize the BSER in the CPP as
Applying to Sources By Pointing to ``Reduced Utilization'' Is
Unavailing and Clearly Precluded by the CAA
(a) The CPP Rejected ``Reduced Utilization'' as a ``System'' for
Purposes of CAA Section 111.
    Some commenters claim reduced utilization can be ``applied to'' a
source as an ``operational method'' for reducing emissions. In the CPP,
however, the EPA was clear that reduced utilization on its own ``does
not fit within our historical and current interpretation of the BSER.''
\121\ The EPA explained: ``Specifically, reduced generation by itself
is about changing the amount of product produced rather than producing
the same product with a process that has fewer emissions,'' \122\ and
the EPA has historically based pollution control on ``methods that
allow the same amount of production but with a lower-emitting
process.'' \123\ In proposing to repeal the CPP, the EPA noted that,
``[w]hereas some emission reduction measures (such as a scrubber) may
have an incidental impact on a source's production levels, reduced
utilization is directly correlated with a source's output.'' \124\
Accordingly, ``predicating a section 111 standard on a source's non-
performance would inappropriately inject the Agency into an owner/
operator's production decisions.'' \125\ The EPA is finalizing our
proposal that reduced utilization cannot be considered a ``best system
of emission reduction'' under CAA section 111(a)(1) because, as the EPA
said in the CPP, the EPA has never identified reduced utilization as
the BSER and the EPA interprets CAA section 111 to authorize emission
limits based on controls that reduce emissions without restricting
production. In addition, because the CPP was not premised on ``reduced
utilization''--indeed, the EPA expressly renounced that as a basis for
the CPP--commenters' attempt to justify the CPP on that basis is
unavailing.
---------------------------------------------------------------------------

    \121\ 80 FR 64780.
    \122\ Id.
    \123\ 80 FR 64782 n.602.
    \124\ 83 FR 44752.
    \125\ Id.
---------------------------------------------------------------------------

(b) Standards of Performance Cannot Be Based on Reduced Utilization
    Even if the CPP could be reframed as employing reduced utilization,
it would fail to satisfy statutory criteria.
    CAA section 302(l) provides that a ``standard of performance''
means ``a requirement of continuous emission reduction, including any
requirement relating to the operation or maintenance of a source to
assure continuous reduction.'' Previously, the Agency has argued that
the definitions in CAA section 111(a)(1) ``are more specific'' and
therefore controlling,\126\ but, to the extent that section 302(l)
applies, that definition is met when a standard ``applies continuously
in that the source is under a continuous obligation to meet its
emission rate . . . .'' \127\
---------------------------------------------------------------------------

    \126\ See Brief of Respondent at 129-30, New Jersey v. EPA, No.
05-1097 (consolidated) (D.C. Cir. May 4, 2007).
    \127\ 80 FR 64841. See also 70 FR 28617 (``Even if the 302(l)
definition applied to the term `standard of performance' as used in
section 111(d)(1), [the] EPA believes that a cap-and-trade program
meets the definition. . . . That is, there is never a time when
sources may emit without needing allowances to cover those
emissions.'').
---------------------------------------------------------------------------

    Here, the Agency concludes that CAA section 302(l) is relevant to
interpreting CAA section 111.\128\ Statutes should be construed ``so as
to avoid rendering superfluous'' any statutory language: ``a statute
should be construed so that effect is given to all its provisions, so
that no part will be inoperative or superfluous, void or insignificant.
. . .'' \129\ Under the CAA, only section 111 requires the
establishment of ``standards of performance.'' Thus, ignoring the
generally applicable definition in CAA section 302(l) in interpreting
CAA section 111 would read it out of the statute. Nor is this a
situation where Congress provided that the provision-specific
definition in CAA section 111 was to supplant the general definition in
CAA section 302(l). First, the opening phrase of CAA section 302
indicates that the section 302 definitions apply ``[w]hen used in this
chapter.'' By contrast, the definitions provisions in some statutes
begins with text that expressly provides that the general statutory
definitions are supplanted by provision-specific definitions. See,
e.g., Clean Water Act (CWA) section 502 (33 U.S.C. 1362) (which begins
``Except as otherwise specifically provided . . . .''). Second, one of
the CAA section 302 definitions expressly states that it is supplanted
by provision-specific definitions.\130\
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    \128\ Indeed, the provisions of CAA section 302 are supplanted
by provision-specific definitions only to the extent that those
specific provisions ``expressly'' do so. See, e.g., Alabama Power v.
Costle, 636 F.2d 323, 370 (D.C. Cir. 1979) (holding that CAA section
169(1) is controlled by the general definition in CAA section 302(j)
with respect to the ``rule requirement'' in CAA section 302(j) that
is not expressly supplanted by CAA section 169(1)).
    \129\ Hibbs v. Winn, 542 U.S. 88, 101 (2004). Cf. Brief of
Respondent at 129, New Jersey v. EPA (``[s]pecific terms prevail
over the general in the same or another statute which might
otherwise be controlling.'' (citation and quotation marks omitted)).
    \130\ See CAA section 302(j) (which defines ``major stationary
source'' and ``major emitting facility'' and begins ``Except as
otherwise expressly provided, . . . .'').
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    However, the Agency was wrong to conclude that ``a requirement of
continuous emission reduction'' means only that a standard of
performance need apply ``on a continuous basis.'' In fact, Congress
used such phrasing in the preceding definition under CAA section
302(k). The terms ``emission limitation'' and ``emission standard''
mean ``a requirement . . . which limits the quantity, rate, or
concentration of emissions of air pollutants on a continuous basis,
including any requirement relating to the operation or maintenance of a
source to assure continuous emission reduction. . . .'' \131\ Whereas
emission limitations and emission standards apply ``on a continuous
basis, including any requirement . . . to assure continuous emission
reduction,'' standards of performance must impose a ``requirement of
continuous emission reduction.''
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    \131\ 42 U.S.C. 7602(k) (emphasis added). See H.R. 6161, Rep.
No. 95-294, 92 (May 12, 1977) (``Without an enforceable emission
limitation which will be complied with at all times, there can be no
assurance that ambient standards will be attained and maintained.
Any emission limitation under the [CAA], therefore must be met on a
constant basis. . . .'') (emphasis added).
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    When Congress made explicit the requirement for ``continuous
emission reduction,'' it was to ``affirm the decisions of four U.S.
courts of appeals cases that the [A]ct requires continuous emission
reductions to be applied.'' \132\ Thus, as scholar David Currie
observed,

Congress ``intended to forbid reliance on intermittent control
strategies, such as temporary use of low-sulfur fuels or reductions in
plant output . . . .'' \133\ Because standards of performance cannot be
based on intermittent control strategies, basing BSER on reduced
utilization is statutorily precluded for purposes of CAA section 111.
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    \132\ H.R. Conf. Rep. No. 95-564, 514 (Aug. 3, 1977); see also
H.R. No. 95-294, 190 (May 12, 1977) (``To make clear the committee's
intent that intermittent or supplemental control measures are not
appropriate technological systems for new sources (and to prevent
the litigation which has been conducted with respect to use of
intermittent or supplemental systems at existing sources), the
committee adopted language clearly stating that continuous emission
reduction technology would be required to meet the requirements of
this section.''); and id. at 92 (``By defining the terms `emission
limitation,' `emmission [sic] standard,' and `standard of
performance,' the committee has made clear that constant or
continuous means of reducing emissions must be used to meet these
requirements.''). For example, ``The Sixth Circuit has agreed with
the Fifth, upholding the EPA's rejection of a provision that would
have allowed `intermittent' controls when necessary to meet ambient
standards, adding on the basis of a stray remark of the Supreme
Court in Train that `emission standards' were only those limiting
the `composition' of an emission, not restrictions on operation or
on the content of fuels.'' David P. Currie, Federal Air-Quality
Standards and Their Implementation, 365 American Bar Foundation
Research Journal, 376 n.58 (1976).
    \133\ David P. Currie, Direct Federal Regulation of Stationary
Sources Under the Clean Air Act, 128 U. Pa. L. Rev. 1389, 1431
(1980) (emphasis added). Professor Curie also suggests that ``the
requirement of continuous controls . . . may even have been implicit
in the original section 111.'' Id.
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    Finally, basing the BSER on reduced utilization contravenes the
plain meaning of a ``standard of performance.'' As the Supreme Court
held most recently in Weyerhaeuser v. FWS, 139 S. Ct. 361 (2018),\134\
and previously in Solid Waste Agency of Northern Cook County, courts
must give statutory terms meaning, even where they are part of a larger
statutorily defined phrase.\135\ In the phrase ``standard of
performance,'' the term ``performance'' is defined as ``[t]he
accomplishment, execution, carrying out, . . . [or] doing of any action
or work,'' \136\ and thus refers to the source's manufacturing or
production of product. Reduced utilization does not involve
improvements to a source's emissions during ``performance;'' instead it
calls for non-performance--the cessation or limitation of manufacturing
or production --of a source. Accordingly, reduced utilization cannot
form the basis of a ``standard of performance'' under CAA section 111.
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    \134\ 139 S.Ct. at 368-69 (rejecting environmental group's
contention that statutory definition of ``critical habitat'' is
complete and does not require independent inquiry into meaning of
the term ``habitat,'' which the statute left undefined).
    \135\ 531 U.S. at 172 (requiring that the word ``navigable'' in
the Clean Water Act's statutorily defined term ``navigable waters''
be given ``effect'').
    \136\ The Oxford English Dictionary (2d ed. 1989) (1. The
carrying out of a command, duty, purpose, promise, etc.; execution,
discharge, fulfilment. 2. a. The accomplishment, execution, carrying
out, working out of anything ordered or undertaken; the doing of any
action or work; working, action (personal or mechanical'') and
American Heritage Dictionary of the English Language (2d ed. 1969)
(``1. The act of performing, or the state of being performed.''
[perform 1. To begin and carry through to completion]).
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    The definition of ``standard of performance,'' and the scope of the
``best system of emission reduction'' contained within, confers
considerable discretion on the EPA to interpret the statute and make
reasonable policy choices pursuant to Chevron step two as to what is
the best system to reduce emissions of a particular pollutant from a
particular type of source. However, by making clear that the
``application'' of the BSER must be to the source, Congress spoke
directly in Chevron step one terms to the question of whether the BSER
may contain measures other than those that can be put into operation at
a particular source: It may not. The approach to BSER in the CPP is
thus unlawful and the CPP must be repealed.

C. Independence of the Repeal of the Clean Power Plan

    Although this action appears in the same document as the ACE rule
and the revisions to the emission guidelines implementing regulations,
the repeal of the CPP is a distinct final agency action that is not
contingent upon the promulgation of ACE or the new implementing
regulations. As explained above, Congress spoke directly to the
question of whether CAA section 111 authorizes the EPA to issue
regulations pursuant to CAA section 111(d) that call for the
establishment of standards of performance based on the types of
measures that comprised the second and third building blocks of the
CPP's BSER permits the Agency's to consider generation-shifting as a
potential system of emission reduction in developing emission
guidelines. The answer to that question is no.
    The CPP described itself as a ``significant step forward in
reducing [GHG] emissions in the U.S.'' and relied ``in large part on
already clearly emerging growth in clean energy innovation, development
and deployment . . . .'' 80 FR 64663. Market-based forces have already
led to significant generation shifting in the power sector. However,
the fact that those market forces have had that result does not confer
authority on the EPA beyond what Congress conferred in the CAA.
    The EPA does not deny that, if it were validly within the Agency's
authority under the statute, regulations that can only be complied with
through widespread implementation of generation shifting might be a
workable policy for achieving sector-wide carbon-intensity reduction
goals. But what is not legal cannot be workable. The CPP's reliance on
generation shifting as the basis of the BSER is simply not within the
grant of statutory authority to the Agency. The text of CAA section 111
is clear, leaving no interpretive room on which the EPA could seek
deference for the CPP's grid-wide management approach. Accordingly, EPA
is obliged to repeal the CPP to avoid acting unlawfully.
    Because the EPA exceeded its statutory authority when it
promulgated the CPP, the EPA's repeal of that rule will remain valid
even if a future reviewing court were to find fault with the separate
and distinct legal interpretations and record-based findings
underpinning the ACE rule (see Section III) or the new implementing
regulations (see Section IV). The EPA today repeals the CPP as a
separate action, distinct from its promulgation of the ACE rule and of
revisions to its regulations implementing section 111(d). The EPA would
repeal the CPP today even if it were not yet prepared to promulgate
these other regulations, or indeed if it knew that those other
regulations would not survive judicial review.

III. The Affordable Clean Energy Rule

A. The Affordable Clean Energy Rule Background

1. Regulatory Background
    In December 2017, the EPA published an Advanced Notice of Proposed
Rule Making (ANPRM) to solicit comment on what the Agency should
include in CAA section 111(d) emission guidelines, including soliciting
comment on the respective roles of the states and the EPA; what systems
of emission reduction might be available and appropriate for reducing
GHG emissions from existing coal-fired EGUs; and potential
flexibilities that could be afforded under the NSR program to improve
the implementation of a future rule.\137\ The EPA received more than
270,000 comments on the ANPRM.
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    \137\ See 82 FR 61507 (December 28, 2017).
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    Informed by the ANPRM, the EPA then published the ACE proposal,
which consisted of three distinct actions: (1) Emission guidelines for
GHG emissions from existing coal-fired EGUs, based on application of
HRI measures as the BSER; (2) new emission guideline implementation
regulations; and (3) revisions to the NSR program to facilitate the
implementation of efficiency projects at EGUs.\138\
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    \138\ See 83 FR 44746 (August 31, 2018).
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    In this final action, the EPA has determined that the BSER for
CO2 emissions from existing coal-fired EGUs is HRI, in the
form of a specific set of technologies and operating and maintenance
practices that can be applied at and to certain existing coal-fired
EGUs, which is consistent with the legal interpretation adopted in the
repeal of the CPP (see above section II). Also, in this action, the EPA
has provided information for state plan development. The state plan
development discussion is consistent with the new implementing
regulations for CAA section 111(d) emission guidelines discussed
separately in section IV of this preamble.

    As noted above, the EPA also proposed revisions to the NSR program
in parallel with the ACE rule and the new implementing regulations. The
EPA is not finalizing NSR revisions at this time; instead, the EPA
intends to take final action on the proposed revisions at a later date
in a separate notification of final action.
2. Public Comment and Hearing on the ACE Proposal
    The Administrator signed the ACE proposal on August 21, 2018, and,
on the same day, the EPA made this version available to the public at
https://www.epa.gov/stationary-sources-air-pollution/proposal-affordable-clean-energy-ace-rule. The 60-day public comment period on
the proposal began on August 31, 2018, the day of publication in the
Federal Register. The EPA held a public hearing on October 1, 2018, in
Chicago, Illinois, and extended the public comment period until October
31, 2018, to allow for 30 days of public comment following the public
hearing. The EPA received nearly 500,000 comments on the ACE proposal.

B. Legal Authority To Regulate EGUs

    In the CPP, the EPA stated that the Agency's then-concurrent
promulgation of standards of performance under CAA section 111(b)
regulating CO2 emissions from new, modified, and
reconstructed EGUs triggered the need to regulate existing sources
under CAA section 111(d).\139\ In ACE, the EPA is not re-opening any
issues related to this conclusion, but for the convenience of
stakeholders and the public, the EPA summarizes the explanation
provided in the CPP here.
---------------------------------------------------------------------------

    \139\ See 80 FR 64715.
---------------------------------------------------------------------------

    CAA section 111(d)(1) requires the Agency to promulgate regulations
under which the states must submit state plans regulating ``any
existing source'' of certain pollutants ``to which a standard of
performance would apply if such existing source were a new source.''
Under CAA section 111(a)(2) and 40 CFR 60.15(a), a ``new source'' is
defined as any stationary source, the construction, modification, or
reconstruction of which is commenced after the publication of proposed
regulations prescribing a standard of performance under CAA section
111(b) applicable to such source. In the CPP, the EPA noted that, at
that time, the Agency was concurrently finalizing a rulemaking under
CAA section 111(b) for CO2 emissions from new sources, which
provided the requisite predicate for applicability of CAA section
111(d).\140\
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    \140\ Id.
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    The EPA explained in the CAA section 111(b) rule (80 FR 64529) that
``section 111(b)(1)(A) requires the Administrator to establish a list
of source categories to be regulated under section 111. A category of
sources is to be included on the list `if in [the Administrator's]
judgment it causes, or contributes significantly to, air pollution
which may reasonably be anticipated to endanger public health and
welfare.' '' Then, for the source categories listed under CAA section
111(b)(1)(A), the Administrator promulgates, under CAA section
111(b)(1)(B), ``standards of performance for new sources within such
category.'' The EPA further took the position that, because EGUs had
previously been listed, it was unnecessary to make an additional
finding as a prerequisite for regulating CO2. The Agency
expressed the view that, under CAA section 111(b)(1)(A), findings are
category-specific and not pollutant-specific, so a new finding is not
needed with regard to a new pollutant. The Agency further asserted
that, even if it were required to make a pollutant-specific finding,
given the large amount of CO2 emitted from this source
category (the largest single stationary source category of emissions of
CO2 by far) that EGUs would easily meet the standard for
making such a listing. The Agency further took the position that, given
the large amount of emissions from the source category, it was not
necessary in that rule ``for the EPA to decide whether it must identify
a specific threshold for the amount of emissions from a source category
that constitutes a significant contribution.'' \141\
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    \141\ See 80 FR 64531.
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    That CAA section 111(b) rulemaking remains in effect, although the
EPA has proposed to revise it.\142\ That rule continues to provide the
requisite predicate for applicability of CAA section 111(d).
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    \142\ See 83 FR 65424.
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C. Designated Facilities for the Affordable Clean Energy Rule

    The EPA is finalizing that a designated facility \143\ subject to
this regulation is any coal-fired electric utility steam generating
unit that: (1) Is not an integrated gasification combined cycle (IGCC)
unit (i.e., utility boilers, but not IGCC units); (2) was in operation
or had commenced construction on or before January 8, 2014; \144\ (3)
serves a generator capable of selling greater than 25 megawatts (MW) to
a utility power distribution system; and (4) has a base load rating
greater than 260 gigajoules per hour (GJ/h) (250 million British
thermal units per hour (MMBtu/h)) heat input of coal fuel (either alone
or in combination with any other fuel). Consistent with the new
implementing regulations, the term ``designated facility'' is used
throughout this preamble to refer to the sources affected by these
emission guidelines.\145\ For this action, consistent with prior CAA
section 111 rulemakings concerning EGUs, the term ``designated
facility'' refers to a single EGU that is affected by these emission
guidelines.
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    \143\ The term ``designated facility'' means ``any existing
facility which emits a designated pollutant and which would be
subject to a standard of performance for that pollutant if the
existing facility were an affected facility.'' See 40 CFR 60.21a(b).
    \144\ Under CAA section 111, the determination of whether a
source is a new source or an existing source (and thus potentially a
designated facility) is based on the date that the EPA proposes to
establish standards of performance for new sources. January 8, 2014,
is the date the proposed GHG standards of performance for new fossil
fuel-fired EGUs were published in the Federal Register (79 FR 1430).
    \145\ The EPA recognizes, however, that the word ``facility'' is
often understood colloquially to refer to a single power plant,
which may have one or more EGUs co-located within the plant's
boundaries.
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    The EPA's applicability criteria for ACE differ from those in the
CPP because the EPA's determination of the BSER is only for coal-fired
electric utility steam generating units. In the ACE proposal, the EPA
did not identify a BSER for IGCC units, oil- or natural gas-fired
utility boilers, or fossil fuel-fired stationary combustion turbines
and, thus, such units are not designated facilities for purposes of
this action. In the ACE proposal (and previously in the ANPRM), the EPA
solicited information on the cost and performance of technologies that
may be considered as the BSER for fossil fuel-fired stationary
combustion turbines and other fossil-fuel fired EGUs. The EPA currently
does not have adequate information to determine a BSER for these EGUs
and, if appropriate, the EPA will address GHG emissions from these EGUs
in a future rulemaking.
    A coal-fired EGU for purposes of this rulemaking (and consistent
with the definition of such units in the Mercury and Air Toxics
Standards (MATS) (77 FR 9304)) is an electric utility steam generating
unit that burns coal for more than 10.0 percent of the average annual
heat input during the three previous calendar years. Further, for
purposes of this rulemaking, the following EGUs will be excluded from a
state's plan: (1) Those units subject to 40 CFR part 60, subpart TTTT
as a result of commencing

a qualifying modification or reconstruction; (2) steam generating units
subject to a federally enforceable permit limiting net-electric sales
to one-third or less of their potential electric output or 219,000
megawatt-hour (MWh) or less on an annual basis; (3) a stationary
combustion turbine that meets the definition of a simple cycle
stationary combustion turbine, a combined cycle stationary combustion
turbine, or a combined heat and power combustion turbine; (4) an IGCC
unit; (5) non-fossil-fuel units (i.e., units capable of combusting at
least 50 percent non-fossil fuel) that have historically limited the
use of fossil fuels to 10 percent or less of the annual capacity factor
or are subject to a federally enforceable permit limiting fossil fuel
use to 10 percent or less of the annual capacity factor; (6) units that
serve a generator along with other steam generating unit(s) where the
effective generation capacity (determined based on a prorated output of
the base load rating of each steam generating unit) is 25 MW or less;
(7) a municipal waste combustor unit subject to 40 CFR part 60, subpart
Eb; (8) commercial or industrial solid waste incineration units that
are subject to 40 CFR part 60, subpart CCCC; or (9) a steam generating
unit that fires more than 50-percent non-fossil fuels.

D. Regulated Pollutant

    The air pollutant regulated in this final action is GHGs. However,
the standards in this rule are expressed in the form of limits solely
on emissions of CO2, and not the other constituent gases of
the air pollutant GHGs.\146\ The EPA is not establishing a limit on
aggregate GHGs or separate emission limits for other GHGs (such as
methane (CH4) or nitrous oxide (N2O)) as other
GHGs represent significantly less than one percent of total estimated
GHG emissions (as CO2 equivalent) from fossil fuel-fired
electric power generating units.\147\ Notwithstanding the form of the
standard, consistent with other EPA regulations addressing GHGs, the
air pollutant regulated in this rule is GHGs.\148\
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    \146\ In the 2009 Endangerment Finding for mobile sources, the
EPA defined the relevant ``air pollution'' as the atmospheric mix of
six long-lived and directly emitted greenhouse gases: Carbon dioxide
(CO2), methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons (HFCs), perfluorocarbons
(PFCs), and sulfur hexafluoride (SF6). See 74 FR 66497.
Additionally, note that the new CAA section 111(d) implementing
regulations at 40 CFR 60.22a(b)(1) do not change the requirement of
the previous implementing regulations, 40 CFR 60.22(b)(1) that
emission guidelines provide information concerning known or
suspected endangerment of public health or welfare caused, or
contributed to, by the designated pollutant. For this emission
guideline, that information is contained in the 2009 Endangerment
Finding.
    \147\ EPA Greenhouse Gas Reporting Program; www.epa.gov/ghgreporting/.
    \148\ See, e.g., 79 FR 34960.
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E. Determination of the Best System of Emission Reduction

1. Guiding Principles in Determining the BSER
    CAA section 111(d)(1) directs the EPA to promulgate regulations
establishing a procedure similar to that under CAA section 110,\149\
under which states submit state plans that establish ``standards of
performance'' for emissions of certain air pollutants from existing
sources which, if they were new sources, would be subject to new source
standards under CAA section 111(b), and that provide for the
implementation and enforcement of those standards of performance.
Because CAA section 111(a)(1) defines ``standard of performance'' for
purposes of all of section 111, and because federal standards for new