EPA also disagrees with the commenters claim that " EPA's assumption that coal fired units will bear the burden of emission reductions under CAIR is wrong." In support of their claim, the commenter submitted some limited data produced by Entergy modeling. This limited information shows 3 units owned by the commenter projected to emit at levels greater than their projected allocations. However, it is not possible for the commenter to determine their unit level allocations as these States have not finalized their CAIR SIP rules. EPA's comparison of projected emissions to the regionwide and State budgets finalized in CAIR provides a more appropriate measure. In addition, EPA disagrees with the commenter that their claimed demonstration that 3 of their units might have to purchase allowances shows that coal fired generation would not " bear the burden of [ the] emission reductions under CAIR." EPA modeling shows all additional pollution control occurring on coal fired units. From this EPA, believes that coal fired generation would bear the burden of reducing emissions in the CAIR. The commenter has provided no analysis to demonstrate that, as a group, coal fired units would not make the bulk of the significant emission reductions under CAIR. Finally, the commenter did not provide the modeling results, information on the model or its assumptions, or even the name of the model used in reference to this claim. As a result, the commenter has not substantiated the limited results of their analysis and has not demonstrated that it is more valid that EPA modeling that is based upon the IPM model. Again, commenters claim that use of a FAF approach invalidates the air quality modeling. Under a cap and trade approach, the market allows emission reductions take place at the facilities with lowest control costs. This is independent of the original allowance distribution. Whether a unit is avoiding the need to purchase an allowance or freeing up an allowance for sale, the unit has incentive to control its emissions if it can do so for less than the market price for an allowance. As a result, EPA believes the environmental impacts would not differ by the approach taken to develop statewide budgets or unit by unit allocations. EPA's position is based upon experience with the highly successful Acid Rain Program and NOx SIP Call and its modeling has withstood litigation. EPA notes that the modeling, in the context of the NOx SIP Call, has not been challenged on this aspect by anyone but Entergy. Notably, Entergy challenges EPA with rhetorical arguments. The commenter provided no analysis to support their claim or indicate that the selection of any approach for developing the State level budgets would significantly impact the air quality modeling.

EPA disagrees with the comment challenging EPA's decision to base a state's budget on heat input adjusted by fuel type on the basis that the Clean Air Act doesn't authorize this approach. The Clean Air Act does not require a program like CAIR, but EPA believes we have the authority to put it into place as we did in similar circumstances to address ozone problems with the NOx SIP Call. In that case, the also was not an explicit authorization for an allocation methodology to apportion the regionwide budget to the States and the Agency did what makes sense. EPA is doing what makes sense in the CAIR as well. EPA believes the comment doesn't accurately characterize the approach taken by EPA in promulgating the NOx SIP Call and the CAIR. EPA further disagrees with the suggestion that the only approach to developing state budgets authorized by the CAA, is an approach based on heat input, unadjusted by fuel factors. In developing CAIR, EPA examined various methods for allocating shares of the regional cap to the states. For reasons explained in the preamble to the final CAIR and in the Notice of Final Action on Reconsideration, EPA decided to use a method that considered the heat input of sources in each state, adjusted by fuel factors. EPA determined that this approach provides states with allowances more in proportion with their historical emissions. It also provides for a more equitable budget distribution by recognizing that different states are facing the reduction requirements with different starting stocks of generation and different starting emission profiles. EPA further believes that states receiving larger budgets under the fuel factor approach are generally expected to be those having to make the most reductions. ( 70 FR 25231). EPA's decision to use the fuel factor approach to divide the regional cap into state budgets thus was based, in part, on considerations related to the cost burden of installing controls in that state. The Courts have held that " it is only where there is ' clear congressional intent to preclude consideration of costs' that we find agencies barred from considering costs. Michigan v. EPA, 213 F. 3d 663, 687 ( D. C. Cir. 2000); see also, Grand Canyon Air Tour Coalition v. FAA, 154 F. 3d 455, 475 ( D. C. Cir. 1998). Further, commenter has not shown that their preferred method of developing state budgets ( using heat input unadjusted by fuel factor) has any more connection to air quality than EPA's approach. Developing state budgets based on petitioners preferred approach would simply result in a different allocation of the cost burden.

EPA disagrees with the commenters' claim that fuel adjustment factors are inequitable or unfairly impact the citizens of Louisiana, Texas, and Mississippi, simply because they reduce the budgets for States with predominantly oil and gas fired generation. Notably, the State governments representing the citizens of Louisiana, Texas, and Mississippi have not made this argument. As explained in the preamble for today's rule, EPA analysis has demonstrated that the use of an FAF approach reduces the disparity between a States' projected emissions and its budget. In addition, it is appropriate to provide additional allowances to predominantly coalfired States because they are projected make most of the CAIR driven investment in advanced emission controls. Further, EPA analysis presented in the Notice of Reconsideration demonstrates that the States with predominantly non coal generation will have an excess of allowances under either the FAF or simple heat input approaches. The commenter provided no analysis to show that these States would be disproportionately impacts compared to other States. ( The EPA response to comments from the Connecticut Department of Environmental Protection and the Northeast States for Coordinated Air Use Management also discusses this point.)

EPA also disagrees with the commenters assertion that the use of the FAF approach forces States with relatively high gas and oil fired capacity to meet the CAIR obligation by using the EPAadministered cap and trade program. EPA maintains that States have flexibility to attain reductions how they wish. Our analysis indicates the allowance allocations like this have no bearing on fuel choice. Entergy fails to show in any way that it does have an impact   they simply assert. In fact, EPA analysis for the Notice of Reconsideration demonstrated that States with predominantly non coal fired generation would have an excess of allowances relative to their projected emissions. In other words, States with predominantly non coal fired generation would likely a sufficient emissions budget using the EPA administered, regionwide trading program or another mechanism.

Given the sophistication of a major company like Entergy we believe they are simply resorting to a set of rhetorical blasts on an approach that redistributes the wealth gained from allowance holding in a less beneficial way to their company.

Document No.: OAR 2003 0053 2266 Commenter: Environmental Energy Alliance of New York Comment:

The Notice of Reconsideration states " In the absence of other considerations, EPA believes that it is in the public interest to reduce the disparity between the number of allowances in a State budget and total projected State ECU emissions." These comments argue that EPA= s total projected State EGU emissions are not accurate or representative and as a result, fuel adjustment factors exacerbate a potential problem. [[ ( p. 1) ]]

These comments have described several potential problems with CAIR implementation. This is of particular concern because the fuel adjustment factors used by EPA exacerbate the problems identified. The CAIR IPM modeling analyses apparently predict much more optimistic emission reductions in the base case than is likely in the Northeast in general and New York, in particular.

The CAIR baseline appears to inadequately represent typical annual energy use for a majority of sites in the region so more baseline NOX than was modeled is expected. Since the implementation of the Acid Rain Program, there has been a persistent trend of source ownership consolidation and fewer trading entities. For New York sources these factors and the inappropriate fuel adjustment factor adjustment will require more stringent and therefore inequitable control efficiencies or reliance on the market. [[ ( pp. 6 7) ]] Individually, issues raised here may not affect the viability of a future program. However, the overarching concern is that if the effects of these problems turn out to be significant individually and all turn out worse than expected, the combined impact may affect the viability of a robust trading market. If there is not a robust market, sources will be forced into internal control programs stringent enough to meet their level of allotted allowances and at costs significantly higher than expected. The worst case would be if sources cannot implement internal control programs soon enough to meet their compliance obligations and the market has no allowances available. At that point, sources may have no option but to stop operating, putting electric system reliability at risk. [[ ( p. 7) ]]

When the CAIR cap and trade program was developed, it was necessary to project future emissions and energy use. The impact of the trading program was compared to the modeled baseline to predict the emission reductions and cost of the program. In order for those impacts to be accurate, the baseline emission modeling must project a reasonable description of the future. [[ ( pp. 1 2) ]] EPA used ICF= s Integrated Planning Model ( IPM) to evaluate the energy and emissions effects of CAIR. In this evaluation, modelers compared a base case without the proposed trading program to a projected case that includes the proposed trading program. A particular concern for the CAIR analysis is that the CAIR baseline emissions analysis for New York is significantly different and less representative than subsequent IPM modeling performed for the Regional Greenhouse Gas Initiative ( RGGI) recently proposed for 9 Northeast and Mid Atlantic States. [[ ( p. 2) ]]

Many influential assumptions used in the RGGI IPM model runs are not consistent with those used in the CAIR analysis. For example, in the CAIR base case the model predicts that 45.6% of the electric generation capacity has no annual heat input and 22.7% of the capacity will retire. This reduction in generation and the resulting drop in emissions is most likely a modeling artifact. IPM predicts that oil ( dual fueled) units nearly fall out of the generation profile for New York as they are displaced by other sources of new generation or by increases of imported power. Mandatory local reliability rules will not allow that to happen. The RGGI modeling analysis appropriately incorporated the impact of these rules by forcing the model to include oilfired generation based on historical observations when the reliability rules were in effect. As a result, the dual fueled units operated within the model and projected emissions increased. There are probably other local reliability rules in other areas of the CAIR region that were most likely not addressed raising similar concerns.

The predicted loss of oil fired generation in the CAIR analysis represents a significant loss in fuel diversity, which could adversely impact reliability by increasing the likelihood of outages related to gas infrastructure or supply disruptions. We note the New York State Energy Plan explicitly advocates fuel diversity and would discourage the effects shown in the CAIR baseline modeling. [[ ( p. 2) ]] CAIR IPM also predicts that there will be 2,572 MW of new combined cycle generation in the base case and an additional 460 MW of turbine generation for New York. It appears that this generation would be built near the New York City metropolitan area . In the initial RGGI modeling, the IPM model predicted similarly unrealistic results. Stakeholder recommendations for the RGGI modeling of new capacity stated that the modeling should reflect current official future capacity additions with assessment of likelihood of operation. Modeling that accounts for environmental issues in New York State, should be able to address the potential for new facilities to receive regulatory approvals and the likelihood that regulated and nonregulated owners of new facilities will obtain needed financing to build their facility. It is assumed that the IPM modeling for CAIR used the EPA average costs for new construction of power plants, on the order of $ 500  600/ kw. Recent experience in New York City indicates that this value should be at least $ 1300/ kw, and over $ 700/ kw in the upstate area. By significantly underestimating the cost of new builds, the modeling could assume an unrealistic amount of new builds, underestimate future emissions and thereby under predict the difficulty of complying with the new regulations. Final IPM RGGI baseline projections reflecting stakeholder concerns and more realistic $/ kw construction costs resulted in higher predicted emissions than those predicted in the CAIR modeling. [[ ( pp. 2 3) ]]

Finally, analysis of IPM in the RGGI modeling has shown that there are significant implications regarding several other fundamental assumptions. The potential use of natural gas as a compliance strategy is a favored approach by IPM. However, disregarding limitations to increased natural gas use and relying on LNG as a source of the gas needed, while not considering alternate future price curves could significantly change this predicted compliance approach, Additionally, arguable assumptions for load growth and potentially optimistic modeling assumptions regarding nuclear generation up rates and re licensing in New York and New England could have significant ramifications on the IPM results, All these modeling concerns bias the CAIR future projections to lower emissions and imply easier compliance than we can reasonably expect. [[ ( p. 3) ]]

Baseline Energy Projection: The baseline energy projection is one of two parameters used to calculate the emissions cap. The emission cap is calculated by multiplying the target emission rate ( lb/ mmBtu) by the baseline energy ( mmBtu) projection. An analysis of the CAIR energy baseline projection shows how the energy projection component can problematically affect the cap level. EPA calculated the initial CAIR cap by > determining the highest recent Acid Rain Program ( ARP) heat input from years 1999 2002 for each affected State, summing the highest State heat inputs into a region wide heat input, and multiplying the region wide heat input by 0.15 lb/ mmBtu and 0.125 lb/ mmBtu for 2009 and 2015, respectively=. [[ ( p. 3) ]] [[ ( See pp. 3 5 of Docket Number 2266 for a detailed discussion of this issue.) ]]

Other Factors: Although the size of the cap as determined by emissions and energy use is the most important concern for the success of a trading program, there are other factors that can have an effect. The number of trading entities and implementation schedule all affect the availability of allowances. If there are too few entities with surplus allowances available, the sources with surplus allowances can control the market. As in any market, lack of competitive pressure equates with no incentive to lower costs. If a limited number of entities or groups of sources control the market, prices can be set arbitrarily. Because many changes have occurred ( including large mergers) in the electricity generating industry subsequent to the Acid Rain Program, market control is more likely to be a CAIR issue of concern. A company with a large number of sources can develop a strategy to over control at specific plants to provide allowances for other plants that may not have cost effective options. However, this also could affect the overall number of allowances available for the smaller market participants since large companies will likely not invest in control equipment to provide surplus allowances beyond those needed for their system. [[ ( p. 5) ]]

The success of the program requires ample time in the implementation schedule for source owners to evaluate, select, and install the most appropriate and cost effective compliance strategies. If the projected schedule is overly restrictive, source owners will be forced into the market to buy allowances to cover higher than expected emissions. Reliance on the results of the IPM CAIR modeling for the base case likely also influenced the implementation schedule. The modeling predicted that many states were already at the necessary limits so not as much time was needed for implementation. However, as shown below, NY sources will have to exceed the 2015 target rate or rely on the market for allowances needed for compliance. [[ ( p. 6) ]]

Table 2 in the Notice of Reconsideration lists those States in the CAIR region that have significant amounts ( i. e., 40 percent or greater) of generation sources that combust fossil fuels other than coal. EPA asserts NY, while receiving fewer allowances under a fuel factor approach, is provided with a reasonable statewide budget that is comparable to the IPM projected emissions in 2009 and 2015. The CAIR projection for annual 2009 NOX emissions in NY is 45,617 tons. [[ ( p. 6) ]] New York already has an effective annual NOX trading program that has a significantly different budget ( 70,313 tons). The New York Acid Deposition Reduction Program non ozone season budget for EGU units is 39,908 tons. The New York NOX Budget Program ozone season budget from EGU units and others is 30,405 tons. The CAIR baseline aggregated energy use over each state by picking the highest total energy use over four years. An alternative approach would have been to consider individual unit or station energy use, pick the highest year for each, and sum those totals such as New York used in its Acid Deposition Reduction Program ( 6NYCRR Part 237). In this alternate approach the effect of unit outages and state wide climatic effects are reduced. [[ ( p. 6) ]] In fact, the numbers show that the methodology used significantly negatively impacts New York. The New York unweighted heat input estimated using the EPA methodology is 713,705,400 mmBtu and the 2009 NY CAIR allocation is 45,617. The effective emission rate for those values is 0.128. As a result, the CAIR regulation will require NY sources to reduce emissions 15% beyond the 2009 target. Moreover, using a unit by unit maximum and summing the totals generates higher heat inputs that account for changes in unit usage and weather, The NY Part 238 heat input total is 840,900,614. Using that heat input and the NY CAIR allocation yields an effective emission rate of 0.108. In other words, the proposed methodology could require NY sources to reduce emissions in 2009 28% beyond the 0.15 2009 target emission rate . [[ ( p. 6) ]]

Response: The commenter states that " Individually, issues raised here may not affect the viability of a future program. However the concern is that if the effects of these problems turn out to be significant individually and all turn out worse than expected, the combined impact may effect the viability of a robust trading market." As is further explained below, EPA disagrees with most, if not all of the commenters assertions. Therefore EPA believes that the convergence of all of these assertions will not affect the viability of the trading program.

First, EPA disagrees that EPA has picked an inadequate baseline. Despite the fact that the commenter asserts that the CAIR baseline appears to inadequately represent typical annual energy use, the assumptions the commenter bases this on are not average but are worst case. For instance, the commenter suggests the use of a baseline using unit by unit maximums which account for changes in unit usage and weather. The very fact that the commenter wants to sum unit maximums from different years, makes it clear that those unit maximums do not typically occur in the same year. Furthermore, the trading program is designed to handle variations in weather, because allowances can be traded both spatially and temporally ( through banking). All three programs have design features that assure there will be a bank in the early years of the program so that if one of the early years of the program has extreme weather, allowances will be available.

The commenter also seems to insinuate that the CAIR budget for New York is too low because it is lower than the budget for an existing program. The commenter fails to explain why a budget for an unrelated program with unspecified stringency is relevant to the budget that EPA has assigned New York.

The commenter also expressed concern about the feasibility of installing controls, but provided no evidence that they could not be installed. EPA has done extensive analysis of the feasibility of installing controls. See the final CAIR rulemaking.

EPA disagrees with the commenter's claim that IPM has inappropriately projected future emissions in New York. First, EPA believes that we have appropriately considered the constraints on the operation of older gas and oil fired units and the construction of new units. EPA analysis projects that much of the existing oil and gas fired fleet would remain in operation and dispatch. Under the EPA modeling some older oil and gas fired units do retire or remain as reserve capacity. The commenter claims that " mandatory local reliability rules will not allow that to happen." However, the commenter does not indicate what the requirements are and how they would impact the retirement and dispatch of these units and simple states " the Regional Greenhouse Gas Initiative ( REGGI) modeling analysis appropriately incorporated  oil fired generation based on historical observations when the reliability rules were in effect." The commenter has not shown that the EPA modeling is inaccurate but has noted that there are differences between the modeling performed for in the context of the development of the RGGI and the CAIR.

The commenter claims that " the [ EPA] predicted loss of oil fired generation in CAIR analysis represents a significant loss in fuel diversity " EPA modeling projects much of the existing oil and gas fired fleet to remain in operation ( or as reserve capacity) and additional new, gasfired combined cycle turbine capacity to come online. The commenter does not show that this new generation portfolio projected in CAIR modeling does not meet the requirements of local reliability laws and is, therefore, inaccurate.

In addition, the commenter also claims that EPA over projects that amount of new, gas fired combined cycle turbines that would come online because EPA modeling assumptions about the cost of building new combined cycle units are too low. However, EPA modeling assumptions consider location specific aspects of the cost of building new generation. IPM assumes the cost of building new combined cycle units in New York is $ 554/ kw. In support of the commenter's claim, they state the " recent experience in New York City indicates that this value should be at least $ 1,300/ kw, and over $ 700/ kw in the upstate area." However, the commenter does not provide data to demonstrate that the cost assumptions used in the CAIR modeling are inaccurate or specify the type of new unit for which their claimed costs would apply. Further, the commenter does not demonstrate that the IPM assumptions for the cost of building new gas fired combined cycle units are unrepresentative relative to the cost of building other types of units or operating existing units, which may change the results of the projected future dispatch.

The commenter contends that EPA's methodology for determining statewide heat input for use in the apportionment of the region wide NOx budgets to the States is unrepresentative of future operation. EPA believes the method proposed in the CAIR SNPR and the finalized in the CAIR NFR is appropriate. EPA also notes that commenters were provided adequate notice of the State by State heat input that would be used develop statewide budgets and is not reopening this issue for comment in the context of this Notice of Reconsideration.

In addition, the commenter expresses concerns that the CAIR trading markets would be deleteriously impacts by having too few trading entities and the implementation timelines. While the commenter expressed concern, they did not provide analysis to demonstrate that the CAIR markets would not function as EPA expects. There is no reason to believe that the CAIR allowance trading markets would behave differently than the robust trading markets of the title IV and NOx SIP Call programs. The commenter continues by expressing concern that smaller entities would not be able to acquire allowances. For the CAIR NOx programs, States may allocate allowances to any source they wish including small entities. In the context of the CAIR SO2 program, there is not evidence that the SO2 market would not continue to be robust. In addition, new sources could acquire S02 allowances through the title IV allowance action. On the issue of the CAIR implementation timing negatively impacting the trading markets, the commenter has not provided any evidence to counter EPA's demonstration ( presented in the CAIR rulemaking docket) that the CAIR timelines are feasible.

Document No.: OAR 2003 0053 2264 Commenter: Connecticut Department of Environmental Protection ( CTDEP) Comment: The Connecticut Department of Environmental Protection ( CTDEP) is encouraged that the U. S. Environmental Protection Agency ( EPA) is reevaluating certain aspects of the Clean Air Interstate Rule ( CAIR). CTDEP is currently planning to implement emissions reductions necessary to attain the federal 8 hour ozone National Ambient Air Quality Standard ( NAAQS) and thus welcomes federal measures such as CAIR that reduce ozone precursor emissions in upwind states. While CAIR is projected to achieve valuable sulfur dioxide ( SO2) and nitrogen oxides ( NOx) reductions, EPA= s modeling shows that CAIR alone is not likely to allow Connecticut to attain the ozone NAAQS. To maximize the potential benefits of CAIR given the limited number of additional emission reductions that Connecticut may achieve within its borders, CTDEP offers the following comment on the above referenced reconsideration ( CAIR Reconsideration). In short, CTDEP remains concerned that EPA= s use of fuel adjustment factors ( FAFs) to establish state NOX budgets creates an unfair economic and environmental penalty for Northeastern states, thereby adding an unnecessary barrier to CTDEP= s efforts to provide improved air quality for its citizens. [[ ( p. 1) ]] EPA= s application of the FAFs apportions larger NOx budgets to states that have a higher proportion of coal fired electric generating units. EPA speaks of greater burdens on the owners of coal plants to control emissions to justify applying the FAFs, but EPA ignores the inherent burden on cleaner burning plant owners and investors caused by the FAFs. States with a higher proportion of gas fired electric generating units receive fewer allowances as a result of CAIR= s FAF. Gas fired electric generating unit owners have incurred historical costs to burn a cleaner but higher priced fuel. While gas fired plant owners have continually paid the price for cleaner fuel, under CAIR these owners may be penalized with the additional cost of purchasing allowances in order to comply with CAIR. Such costs will be passed on to ratepayers in the form of higher electric rates. [[ ( p. 1) ]]

Just as FAFs may inherently burden the gas fired unit owners, investors and ratepayers, the FAFs also disproportionately burden Northeast states. Citizens in the Northeast now bear the public health and attainment burden of transported air pollution from dirtier coal fired units. Under the FAF methodology, due to the high proportion of gas fired electric generation in the Northeast the citizens in the Northeast also effectively bear the economic burden of paying higher rates for controls installed in Midwest states. Because of the disproportionate burdens described above, EPA should not apply the FAFs in the final CAIR and should instead return to the fuel neutral state NOX budget calculation methodology proposed in the CAIR notice of proposed rulemaking ( 69 FR 4566). CTDEP is not suggesting that EPA in any way reduce the overall air quality benefits possible with CAIR, only that EPA require equitable, cost effective reductions from coal fired electric generating units. [[ ( p. 2) ]]

Response:

EPA disagrees with the commenter that the EPA's analysis of the potential impacts of using the FAF methodology should consider, as the commenter's claim, that " gas fired electric generating unit owners have incurred historical costs to burn a cleaner but higher priced fuel." EPA's analysis of the potential impacts of the CAIR appropriately considers the incremental cost of compliance for CAIR ( i. e., the cost of CAIR less the cost of complying with existing Federal and State environmental regulations). EPA disagrees with commenter's contention that CAIR should consider the " historical" cost of decisions made by owners. These existing units were built based upon the owners consideration of a variety of factors, including the forecasts of fuel costs and potential risk of these units being regulated by future environmental programs, and EPA believes it is inappropriate to consider the a single operational factor ( e. g., fuel costs) as part of the CAIR compliance costs. EPA believes it is appropriate to provide additional CAIR NOx allowances to the coal fired generation in consideration of the potential costs of installing advanced emission controls in response to CAIR.

The commenter claims that the owners of existing gas fired units will have " the additional cost of purchasing allowances in order to comply with CAIR." However, the commenter does not provide any analysis to substantiate this claim. EPA analysis in support of the Notice of Reconsideration shows that States with predominantly non coal fired generation would have an excess of allowances. In fact, gas fired units because non coal fired generation would receive CAIR NOx allowances at levels above their projected emissions, it is likely that, even with the use of the FAF methodology, these units would be in a position to sell excess allowances to higher emitting sources and use the proceeds to offset other operational costs.

The commenter claims that the FAF approach would disproportionately burden Northeast States because they have a greater reliance on oil and gas fired generation than other parts of the CAIR region. EPA notes that, of the States EPA identified as having predominantly gas and oil fired generation, all ( i. e., Florida, Louisiana, Mississippi, and Texas) but the District of Columbia and New York are located in the South. The commenter did not provide analysis to demonstrate the Northeastern States are disproportionately impacted by the use of the FAF approach.

XIX. F. EPA did not properly analyze impacts of modeling using EIA ( i. e., high gas prices) assumptions Document No.: OAR 2003 0053 2271.1 Commenter: National Mining Association Comment: The fuel adjustment factors are not unrelated to the air quality goal of the statute. Entergy is wrong that the fuel adjustment factors are unrelated to air quality considerations. As discussed above, the fuel adjustment factors provide a better approximation of a state= s significant contribution to downwind nonattainment than the simple heat input method. [[ ( 2271.1, p. 14) ]] Moreover, as EPA explains, because of the trading program, emission reductions will not necessarily be made in proportion to the states= emissions budgets. Instead, emissions reductions will be made where it is lowest cost to do so. In this sense, it does not matter what allocation methodology EPA uses in fixing state budgets, since the relative amount of each state= s emission allowances does not determine where emissions actually take place. Accordingly, it was not arbitrary and capricious, as Entergy claims, for EPA not to have re run the IPM model to forecast air quality impacts after deciding to adopt the fuel adjustment factors, since use of those factors will not change emissions sources or downwind impacts. [[ ( 2271.1, p. 14) ]] Entergy claims that trading programs are imperfect and that the allocation methodology therefore could be relevant in determining emissions sources. But in making this claim, Entergy relies solely on rhetoric and provides no factual or technical support. Entergy= s claim belies fifteen years of experience under the highly successful acid rain program. Without more justification, Entergy= s argument cannot stand. [[ ( 2271.1, p. 14) ]]

Response: The commenter generally supports use of the FAF methodology, the approach taken in the CAIR and CAIR FIP.

XIX. G. General Document No.: OAR 2003 0053 2272.1 Commenter: Cinergy Corp Comment: As an initial matter, I affirm Cinergy= s support for the final CAIR. As set forth in the final rule, Phase II of the CAIR within the affected region requires reductions of SO2 equal to 3.8 million tons and of NOx equal to 1.5 million tons relative to EPA= s base case emissions. A significant portion of the foregoing reductions stand to be achieved through a market based system that appropriately leaves to the regulated community important decisions regarding how and where emissions reductions will be attained. At the same time, the program= s absolute caps ensure that significant air quality improvements will be achieved  efficiently and effectively  within the next decade.

We support the CAIR trading program, in part, because it will create incentives for sources to maximize efficient reductions as soon as possible, encourage investment in new control technology, and afford affected sources much needed compliance flexibility. [[ ( 2272.1, p. 2) ]] For these same reasons, Cinergy was a strong supporter of the Clear Skies Act of 2005. The NOx cap and trade language contained in Section 451 of the bill mirrors many parts of the CAIR program. For example, Section 451( 2) provides that NOx allocations would be adjusted based on factors that are nearly identical to the factors contained in the final CAIR. The inclusion of fueltype adjustment factors in the proposed legislation demonstrates that it is reasonable for EPA to apportion NOx allowances to CAIR affected states based on the use of comparable fuel type adjustment multipliers.

We at Cinergy urge EPA to retain this fundamental aspect of the final CAIR. [[ ( 2272.1, p. 2) ]] As you well know, the final CAIR establishes that states will be allocated a percentage of NOx allowances commensurate with the percentage of region wide heat input attributable to the sources within each state. Unlike EPA= s initial proposal to allocate allowances based on unadjusted heat input data, the final CAIR adjusts the allocations according to multipliers that account for the emissions profiles unique to each fuel type. As EPA suggested in its Supplemental Notice of Proposed Rulemaking ( SNPR), EPA= s final CAIR assigns an adjustment factor of 1.0 for coal, 0.6 for oil and 0.4 for gas.

Petitioners complain that EPA= s express reference to the multipliers in the SNPR was insufficient to put them on notice that EPA was considering multipliers for use in the CAIR trading program. Even if Petitioners= argument had merit, EPA= s grant of reconsideration renders it moot. That notwithstanding, EPA has requested comment on the use of fuel adjustment factors in setting state NOx budgets. [[ ( 2272.1, pp. 2 3) ]] In sum, EPA should retain the use of fuel type multipliers for purposes of establishing statewide NOx budgets. The use of adjustment factors will minimize the inequity that would result from allocations based on unadjusted heat input by shifting allowances to sources that most need them. [[ ( 2272.1, p. 5) ]] I appreciate this opportunity to comment on issues raised in the Petitions for Reconsideration. My colleagues at Cinergy and I support EPA= s implementation of a cap and trade alternative for compliance with CAIR emissions limits. In particular, we support EPA= s allocation of statewide NOx budgets based on fuel type multipliers as set forth in the final CAIR. EPA= s fuel factor approach properly minimizes the disproportionate burden on coal fired sources and the corresponding windfall to gas fired units that would result using an allocation methodology based on unadjusted heat input alone. [[ ( 2272.1, p. 5) ]]

Response: The commenter generally supports use of the FAF methodology, the approach taken in the CAIR and CAIR FIP.

Document No.: OAR 2003 0053 2301 Commenter: Pennsylvania Department of Environmental Protection ( PADEP) Comment: The final outcome of EPA= s reconsideration on two aspects of the final rule will have significant impacts on Pennsylvania. The switch to fuel neutral standards rather than fuel adjustment factors is severely detrimental environmentally and economically to CAIR affected sources in the Commonwealth of Pennsylvania and sources in states that burn coal as the primary source of electricity generation. [[ ( p. 1) ]] Fuel adjustment factors provide a good breakdown of state allowance allocations in that they take into account technology and resource differences throughout the CAIR region and prevent Pennsylvania from maintaining dirty air by buying allowances from states that have little impact on its Air Quality. The Commonwealth agrees with EPA= s position to maintain the fuel adjustment factors. [[ ( p. 3) ]]

Response: The commenter generally supports use of the FAF methodology, the approach taken in the CAIR and CAIR FIP.

Document No.: OAR 2003 0053 2271.1 Commenter: National Mining Association Comment: NMA believes that the affected petition for reconsideration misunderstands the purpose of EPA= s use of fuel adjustment factors. Those factors result in much greater assurance that each State= s relative amount of > significant contribution to downwind nonattainment will actually be eliminated as compared with the methodology EPA had initially proposed in its Notice of Proposed Rulemaking ( NOPR=). The final CAIR regulatory scheme for distributing NOx budgets has a reasonable foundation in the statute and cannot be found unlawful merely because it fails to deliver budgets in the amounts desired by some parties. [[ ( 2271.1, p. 3) ]]

Response: The commenter generally supports use of the FAF methodology, the approach taken in the CAIR and CAIR FIP.

XX. PM2.5 Modeling for Minnesota Document No.: OAR 2003 0053 2284.2 Commenter: Minnesota Power Phase: Reconsideration Notes: Docket Number 2284 is the general comment cover letter ( FDMS version). Docket Number 2284.1 is the cover letter. Docket Number 2284.2 is the comment letter. Also submitted were the following attachments: Docket Numbers 2284.3, 2284.5, 2284.6, 2284.7, and 2284.8. Comment: MP is an investor owned utility providing energy services to customers in central and northeastern Minnesota and Wisconsin. The majority of MP= s electrical generation is from combustion of low sulfur, low mercury subbituminous coal. MP= s northern location and high percentage of industrial customers who operate around the clock make MP a winter peaking utility. Thirteen large power customers ( requiring at least 10 megawatts of generating capacity) purchase about half the electricity IMP sells. Because of MP= s high percentage of industrial customers who are high energy users and struggling to compete in a competitive global market economy, we are concerned that any further emission reductions applicable to electric generating units ( EGU) be implemented with reasonable timeframes and cost to minimize the impact to residential and industrial customers alike. [[ ( 2284.2, p. 2) ]] In the August 5, 2005 CAIR Petition for Reconsideration, MP noted concern about several issues related to CAIR, including whether the significance of Minnesota emissions was correctly characterized when EPA made its determination for states that will be subject to the CAIR and whether EPA= s decision to carry over Acid Rain Program sulfur dioxide allowance allocations into the CAIR while applying a greater surrender ratio ( required allowances per ton SO2 emissions) gives equitable treatment for National Ambient Air Quality Standard attainment states like Minnesota, where Acid Rain Program allocations were applied to a baseline in which the majority of coal fired electric generating units were already scrubbed and burning low sulfur coal. These concerns were reinforced when EPA established that Minnesota was the only state that EPA= s air quality modeling had determined to be exhibiting emissions significance on a nonattainment area right at the 0.20 ug/ m3 PM2.5 significant contribution value established by EPA in the final CAIR. [[ ( 2284.2, p. 2) ]] In its November 22, 2005 CAIR reconsideration announcement, EPA noted that it is accepting comments on four issues related to the final rule, including two that relate directly to issues identified in the Minnesota Power August 5, 2005, Petition for Reconsideration ( inequities in sulfur dioxide allocation methodology and certain inputs to the fine particle ( PM2.5) modeling used to determine Minnesota= s inclusion in the CAIR region for PM2.5). EPA also requested comments about EPA= s use of fuel adjustment factors when establishing state nitrogen oxides ( Nox) budgets and EPA= s determination that Florida should be included in the CAIR region. MP is directing our comments to the issues addressed in the MP Petition for Reconsideration. [[ ( 2284.2, p. 2) ]] Modeling used to determine Minnesota= s inclusion in the CAIR region for PM2.5When EPA had begun to make CAIR related modeling available to the public, it became apparent that EPA had not given proper consideration to emissions and emission rates from Minnesota electric generation units. Specifically, 2010 emissions performance from electric generating units ( EGUs) affected by Xcel Energy= s Metropolitan Emission Reduction Program ( MEW) and emission rates for other Minnesota EGUs ( ref. May 20, 2005 letter) had been incorrectly characterized. EPA responded to some of these concerns in its March 9,2005 ( posted incorrectly as 3/ 9/ 2004) Memorandum to the CAIR Docket in which it assessed the impact on Minnesota= s significance calculation from a corrected characterization of MERP emission reductions by applying a Minnesota SO2 and Nox emissions prorating technique to the result of EPA= s CMAQ Version 4.3 modeling results released just before the May 12,2005 posting of the final CAIR in the Federal Register. In this > Emissions in Minnesota: Additional Analysis= memorandum, EPA= s proration methodology estimated that an adjustment of about 16,500 tons of Nox emissions and 5800 tons of SO2 emissions result in a 4.3% to 4.6% reduction in overall Minnesota emissions, which in turn, results in an estimated 0.01 ug/ m3 PM2.5 shift in the significance calculation in the Chicago area, to 0.20 ug/ m3. [[ ( 2284.2, pp. 2 3) ]] Minnesota Power's contractor ( Environ/ AG) modeled Minnesota's emissions impacts on nonattainment areas by obtaining files from EPA used to run CMAQ version 4.3 for the CAIR Final Rule. Environ/ AG CMAQ version 4.3 model run results replicated EPA's Minnesota model run results as characterized in the CAIR Technical Support Document, validating the Environ/ AG modeling as a means for characterizing the impact of Minnesota emissions. However, applying the EPA truncation technique resulted in an Environ/ AG modeled, Minnesota PM2.5 contribution to the Chicago area that is 0.01 ug/ m3 lower than EPA. Environ/ AG also brought to Minnesota Power's attention that EPA had discovered problems with the CMAQ version 4.3 model used to characterize PM2.5 significance, where CMAQ version 4.3 is not stable for mass analysis. Environ/ AG reported that the use of the more stable CMAQ version 4.5 model determined a result for Minnesota's modeled PM2.5 contribution to Chicago that was 0.01 ug/ m3 lower than was determined by Environ/ AG using CMAQ version 4.3 when applying EPA's truncating methodology, which is about a 5% shift. [[ ( See pp. 3 7 of Docket Number 2284.2 for a detailed discussion of this issue.) ]]

Response: The commenter ( Minnesota Power, or MP) asked EPA to reconsider whether emissions from Minnesota significantly contribute to downwind nonattainment of the PM2.5 NAAQS. MP asserts that EPA's modeling failed to account for certain emissions reductions required by State programs ( especially those required under the Minnesota Emissions Reduction Program or MERP). In granting reconsideration, EPA explained that it was aware of the emission reductions in question when it made the significant contribution determinations in the final CAIR. EPA had accounted for these reductions during the rulemaking by conducting a sensitivity analysis ( available in the CAIR docket), but had not conducted revised air quality modeling ( 70 FR at 72279 280). In response to the reconsideration petition, EPA conducted revised air quality modeling which used the inputs reflecting emission reductions required by the MERP. This modeling showed ( consistent with the sensitivity analysis) that Minnesota contributes a maximum of 0.20 ug/ m3 to the downwind PM 2.5 nonattainment area of Chicago Gary Lake County, IL IN. This modeling thus supported EPA's conclusion that Minnesota's contribution met the criteria in CAIR for determining " significant contribution." Id. This revised air quality modeling used the same modeling platform used for all of the air quality modeling in CAIR. In the Notice of Reconsideration, EPA solicited comment on the inputs used to model Minnesota emissions, but declined to reconsider or reopen for public comment issues relating to the air quality modeling platform itself. Id. at 72280.

Most of the comments received on this issue in response to the Notice of Reconsideration supported EPA's conclusion. These include comments from the Minnesota Pollution Control Agency ( MPCA), the entity with the most direct knowledge of emission reductions required by state programs. EPA also received no adverse comments from Xcel Energy, the entity that entered into the MERP with the MPCA and whose projected emission levels were the centerpiece of the reconsideration petition. In fact, no other power generation source in Minnesota besides Minnesota Power offered adverse comments. EPA views these comments as confirmation of the reasonableness of the modeling approach used by EPA to assess significance of contribution of the State. EPA also views these comments as confirmation that its revised modeling accurately accounts for the MERP reductions. Minnesota Power ( MP) did not comment on the revised emissions modeling done for power sector units in Minnesota and instead directed its comments to the original emissions modeling done for the final CAIR that did not fully account for the MERP reductions. MP does not directly challenge EPA's conclusion that the revised modeling accurately accounts for the emission reductions required by the MERP. MP claims, nonetheless, that the model inputs for the final CAIR modeling ( not the modeling done for the Notice of Reconsideration, as just noted) contain errors. To the extent these alleged errors relate to the MERP, EPA has corrected the errors as explained above. The additional " errors" of which MP complains relate to inputs regarding the projected 2010 emissions for certain units in Minnesota. Although MP states that EPA has mischaracterized emissions from some units, EPA believes that the emissions projections done to provide inputs for the revised air quality modeling described in the Notice of Reconsideration are appropriate.

EPA believes its method of projecting power sector emissions for units in Minnesota reflects a more accurate and robust method for projecting emissions than the method used by MP. However, MP claims that if its own lower emissions were used as inputs to the PM2.5 modeling, that modeling would show that Minnesota's contribution is below the PM2.5 significance threshold of 0.2 µ g/ m3. MP was selective in its application of its methodology for projecting emissions and EPA does not believe that it is an appropriate method for projecting emissions.

MP also comments that " EPA had erroneously assigned 2010 sulfur dioxide emission rates on scrubbed Minnesota units at values as much as double that of the performance levels posted in 2001." MP Comment p. 4. After reviewing the modeling results, EPA is unable to find any instances in Minnesota where EPA projected SO2 emission rates of scrubbed units from the revised power sector modeling that are double that of the 2001 performance level.

MP also claims that " NOx emission rates deviated between 2001 and 2010 without supportive operating rationale." The difference in NOx rates that MP alludes to is again based upon the modeling for the Final CAIR, not for the Notice of Reconsideration. In addition, MP's characterization is inaccurate. EPA's 2010 projections of NOx emission rates are generally lower than 2001 NOx emission rate data for Minnesota units. Also, the petitioner has also failed to demonstrate that EPA's projected NOx emission rates are inaccurate.

Another comment from MP stated that " the EPA IPM modeling had shifted heat input from large, lower emission units to higher emission units." Id. A comparison of the historical data from 2001 and 2004 with the revised emissions modeling does not support this broad conclusion. Heat input usage does not change significantly, and although there are some shifts in heat input usage between 2010 EPA projections and the 2001 data, these shifts occur where the IPM projects it will be cost effective to make relatively small changes to where electricity is produced. In addition, EPA does not accept the suggestion that because a certain rate applied in 2001 it should be applied in 2010. This argument is not adequate and ignores the many other factors that may change in the future which could cause a change in the way a unit produces electricity. The power sector is a complicated, interrelated, and interdependent system of operation, and must be looked at holistically to ascertain the sector's response to a certain set of conditions or constraints. The petitioner's approach selectively chooses the methodology for determining emissions at certain units and ignores the changes that may occur at other units as a result. In addition, it is easy to question the choices or assumptions that one makes for selective forecasts of this nature, since methodologies can be developed to support foregone conclusions, like lower emission levels in a future year. For this reason, EPA uses the Integrated Planning Model to develop its power sector emissions projections.

IPM is a detailed, sophisticated, and comprehensive electric power sector model that is used to derive all manner of projections for the power sector and is used to develop the power sector emissions projections that are used in air quality modeling. The model accurately reflects the power sector and contains millions of variables to best ascertain how specific facilities will produce electricity to meet demand in the most cost effective manner possible. The variables are based upon the best available data, both current and anticipated, and include permitted emission rates for units, unit efficiency, cost data, and operational constraints. This model has been used to support the development of Title IV of the Clean Air Act ( the Acid Rain Program), the NOx SIP Call, the Clean Air Interstate Rule, the Clean Air Mercury Rule, and the Clean Air Visibility Rule. In addition, it is used by the Federal Energy Regulatory Commission, private sector, nonprofits research groups, States, and regional planning organizations for power sector projections. The model has undergone extensive peer review and scrutiny, and EPA believes it is an appropriate tool for use in developing power sector emission projections and better accounts for the many dynamics that exist in the power sector ( http:// www. epa. gov/ airmarkets/ epaipm index. html).

MP does not challenge the use of IPM for developing power sector emission projections for certain units, but comments that at other units, a revised methodology should be used. EPA believes that a holistic approach is necessary and using a modeling tool that reflects the integrated nature of the power sector as accurately as possible is the most rational approach to forecasting emissions for all units comprehensively.

To its credit, MP also points out that emissions from the Taconite Harbor Facility ( a facility that was recently converted from an industrial source to an electricity generating source) were not included by EPA in either the power sector emissions data or in other emissions inventory used for CAIR modeling. EPA will include the facility in the next version of the IPM. If the facility had been included in the inventory, emissions in Minnesota would have been higher by almost 2,000 tons of SO2 and about 1,150 tons NOx than what EPA projected ( according to the commenter). Since EPA did not include this facility, EPA believes that its own projections of emissions in Minnesota underestimate likely future emissions.

MP also stated that it is " noteworthy that there are other reductions that Minnesota Power has not modeled that should warrant consideration by EPA, including those resulting from emission controls provided on Minnesota BART eligible units for the regional haze program." MP Comment p. 6. The Regional Haze program requires Best Available Retrofit Technology or BART to be installed and operational on sources that the State finds subject to BART within five years after EPA approves a State's regional haze SIP. These SIPs are due in December, 2007. EPA does not believe that States will require the installation of operation of BART before 2010. Thus it is highly unlikely that 2010 emissions would be affected by the BART requirements. In addition, MP does not quantify any reductions it believes will occur due to the application of BART in Minnesota. Thus, MP has not established that there will be additional reductions due to BART that must be taken into account when projecting 2010 emissions for units in MN. It is also important to note that EPA has determined that CAIR achieves greater progress than BART, and may be used by States in the CAIR region as an alternative to BART.

In sum, EPA continues to believe its emission projections have reasonably accounted for emission trends within Minnesota and fully account for emission reductions attributable to the MERP. EPA believes the inputs used for the modeling discussed in the Notice of Reconsideration are reasonable and rational projections of 2010 emissions in Minnesota. For these reasons, EPA is not making any additional changes to the inputs to the PM2.5 modeling for Minnesota, beyond those changes described in the Notice of Reconsideration. For more detail regarding Minnesota EGUs and EPA modeling, please see Xcel spreadsheet titled " Minnesota EGU Unit Summary_ CAIR Reconsideration. xls" in the CAIR docket.

MP also notes that Environ/ AG's CMAQ version 4.3 modeling shows a PM2.5 contribution to the Chicago area that is 0.01 ug/ m3 lower than EPA's modeling shows. This difference was caused by an error of the petitioners. The petitioner was not properly following EPA's truncation methodology for calculating PM2.5 contributions, as described in the CAIR Air Quality Modeling Technical Support Document ( EPA HQ OAR 2003 0053 2151) ( See pp 21, 41 43). The petitioner corrected this error and submitted revised PM2.5 contributions to Chicago ( EPA HQ OAR 2003 0053 2312) based on petitioner's CMAQ version 4.3 modeling. These results replicate EPA's contribution to Chicago.

MP also raises a new issue in their comments. They argue EPA should use a more recent version of its modeling platform to conduct air quality modeling. However, EPA stated when granting reconsideration that it was not reopening any issues dealing with the modeling platforms used for the CAIR modeling. We reiterate that position here. EPA used CMAQ 4.3 for all of the air quality analyses conducted for the final CAIR, and provided full notice and opportunity to comment on the appropriateness of the model. See 69 FR 47828 ( August 6, 2004)( announcing plan to use CMAQ 4.3 for the final rule); see also 70 FR 25234 36 ( summarizing the use of CMAQ 4.3). There was ample opportunity to comment on any issues regarding the adequacy of the model during the rulemaking. Nor is the existence of a new iteration of the model " grounds for   objection ar[ ising] after the period for public comment" ( CAA section 307 ( d) ( 7) ( B)). Predictive models are of course open to the possibility of updating and so are often adjusted. Such adjustments do not normally occasion new opportunities for comment, particularly after the close of a rulemaking. Indeed, doing so would create a perverse incentive to leave models unadjusted. The ultimate issue is whether the model used in the rulemaking bears a " rational relationship to the characteristics of the data to which it is applied". Appalachian Power v. EPA, 249 F. 3d 1032, 1052 ( D. C. Cir. 2001). There has already been full opportunity to comment on this issue.

For more discussion on all issues related to MP's comments, see the CAIR Notice of Final Action on Reconsideration.

Document No.: OAR 2003 0053 2274 Commenter: Minnesota Pollution Control Agency Phase: Reconsideration Comment: The Minnesota Pollution Control Agency has reviewed the reconsideration notice ( EPA HQOAR 2003 0053 2215) and in particular, the information in this notice relating to itemC. > PM2.5 Modeling for Minnesota=. We have also reviewed and evaluated information related to item C. Contained in the docket. Based on our review, we believe that Xcel Energy= s Metropolitan Emission Reduction Project emission reductions have been accounted for in a reasonable manner in the emission projections EPA used for contribution modeling. [[ ( p. 1) ]]

Response: EPA has performed revised modeling of emission in Minnesota and believes that Minnesota still meets EPA's threshold for inclusion in the Clean Air Interstate Rule. See the CAIR Notice of Final Action on Reconsideration for further discussion.

Document No.: OAR 2003 0053 2268.1 Commenter: Northeast States for Coordinated Air Use Management ( NESCAUM) Phase: Reconsideration Notes: Docket Number 2268 is the cover letter. Docket Number 2268.1 is the comment letter. Comment: Fine particulate matter ( PM2.5) modeling for Minnesota and including Florida in the CAIR region for ozone. EPA has asked for comment on the inclusion of Florida in the CAIR region for ozone and on revised modeling inputs for Minnesota. NESCAUM is not commenting on those specific issues. However, EPA must include States in the CAIR program for which analyses demonstrate that they contribute to non attainment under section 110( a)( 2)( d) of the Clean Air Act. Should EPA choose to remove any jurisdiction from the CAIR program, EPA must reduce the total Nox and SO2 CAIR budgets by amounts equal to that jurisdiction= s Nox and SO2 budgets, respectively. The NESCAUM States cannot attain the eight hour ozone and PM2.5 National Ambient Air Quality Standards without substantial reductions in direct and transported emissions of Nox and SO2 across the Eastern U. S. We urge EPA to ensure that the CAIR program maximizes reductions of transported Nox and SO2 to the extent feasible. [[ ( 2268.1, p. 2) ]]

Response: EPA is including in CAIR all States that it has determined significantly contribute to downwind nonattainment of or interfere with maintenance of the PM2.5 and/ or 8 hour ozone NAAQS. EPA has determined that Minnesota is properly included in the CAIR region for PM2.5 and that Florida is properly included in the CAIR regions for PM2.5 and 8 hour ozone.. See the CAIR Notice of Final Action on Reconsideration for further discussion.

Document No.: OAR 2003 0053 2279.1 Commenter: Midwest Generation Phase: Reconsideration Notes: Docket Number 2279 is the cover letter. Docket Number 2279.1 is the comment letter. Docket Number 2278 is a duplicate of 2279 ( cover letter). Comment: MIDWEST GENERATION SUPPORTS EPAS DETERMINATION THAT PM2.5 EMISSIONS FROM MINNESOTA CONTRIBUTE SIGNIFICANTLY TO NONATTAINMENT IN ILLINOIS. Midwest Generation supports EPA= s conclusion that Minnesota is subject to the final CAIR based on the Agency's most recent analyses confirming that Minnesota contributes significantly to nonattainment of PM2.5 NAAQS in Cook County, Illinois. Generally, Midwest Generation submits that air quality challenges should be addressed just as they develop irrespective of political boundaries. Indeed, Congress recognized as much when it enacted the > good neighbor= provision of the Clean Air Act, CAA ' 110( a)( 2)( D). Section 110( a)( 2)( D) provides that state SIPs must contain adequate provisions prohibiting in state sources from emitting any pollutant in amounts that contribute significantly to nonattainment of NAAQS in a downwind state. Notably, in the preamble to the final CAIR, EPA noted the regional nature of PM2.5 nonattainment, in particular. EPA explained its relatively low air quality impact threshold of 0.20 µ g/ m3 for PM2.5, noting that > PM2.5 nonattainment, like ozone, is caused by many sources in a broad region, and therefore may be solved only by controlling sources throughout the region.= [[ ( 2279.1, p. 7) ]] In response to Petitioners= questions regarding whether EPA= s modeling supporting the final CAIR sufficiently accounted for certain emissions reductions required by Minnesota regulation ( and, thus, whether Minnesota was properly a CAIR affected state), EPA reviewed its prior analysis and concluded that, indeed, the analysis did not fully account for such effects on future PM2.5 emissions. As a result, EPA projected future emissions a second time using inputs revised downward. As revised, EPA= s estimate of statewide Nox emissions was approximately 16,500 tons lower and the estimate for SO2 emissions about 5,800 tons lower relative to EPA= s prior analysis. Even based on these more conservative emissions projections, the same IPM modeling consistently demonstrated that PM2.5 emissions from Minnesota result in an air quality impact in Cook County, Illinois of 0.2 µ g/ m3. [[ ( 2279.1, pp. 7 8) ]] EPA defines > significant contribution= for purposes of the > good neighbor= provision in terms of air quality impact. In the final CAIR, EPA makes clear that any air quality impact on PM2.5 equal to 0.2 µ g/ m3 or higher amounts to > significant contribution,= interfering with attainment or maintenance such that imposition of CAIR is triggered. Because EPA= s IPM modeling showed that emissions within Minnesota= s borders impact air quality in Cook County at the threshold  even after fully accounting for emissions reductions that are expected as a result of state regulation  EPA properly concluded that fine particulate emissions in Minnesota contribute significantly to the nonattainment of the PM2.5 NAAQS in Cook County, Illinois. Sources in Minnesota aggravate air quality problems in the region and, thus, should be required to achieve their fair share of emissions reductions. A decision by EPA to exclude Minnesota from the CAIR region would unfairly burden affected sources in Cook County. Sources in Minnesota would be permitted to benefit from activity that results in the deterioration of air quality in Cook County without being required to ameliorate the damage. Sources in Cook County, on the other hand, would be saddled unfairly with the costs of reducing emissions sufficient to offset out of state emissions in order to bring the area into attainment.[[ ( 2279.1, p. 8) ]] EPA= s determination represents sound policy as it fairly requires sources to whom the exceedance of the relevant NAAQS can fairly be traced to bear a proportionate share of the costs for emissions control. Indeed, it would be unfair for EPA to not include Minnesota within the CAIR region given EPA= s analyses showing that upwind sources cause air quality impacts downwind to a degree that constitutes significant contribution based on EPA= s empirical threshold for regulation. [[ ( 2279.1, p. 8) ]]

Response: EPA is including in CAIR all States that it has determined significantly contribute to downwind nonattainment of or interfere with maintenance of the PM2.5 and/ or 8 hour ozone NAAQS. EPA has determined that Minnesota is properly included in the CAIR region for PM2.5 and that Florida is properly included in the CAIR regions for PM2.5 and 8 hour ozone.. See the CAIR Notice of Final Action on Reconsideration for further discussion.

XXII. IMPACT ON CAIR ANALYSES OF D. C. CIRCUIT DECISION IN NEW YORK VS. EPA ( VACATURE OF NSR PCP EXCLUSION)

XXII. A.   EPA did not provide sufficient analysis of the impacts on CAIR affected sources Document No.: OAR 2003 0053 2303.1 Commenter: Northern Indiana Public Service Utility ( NIPSCO) Comment: " USEPA incorrectly asserts that the Supplemental Petition did not ask USEPA to reconsider implementation dates under CAIR and related timing issues in light of the PCP Exclusion Decision ( 70 FR 77104). [ ] The Reconsideration Decision is deficient to the extent that USEPA has failed to reconsider the potential impact of the PCP Exclusion Decision on the those ( sic) dates and whether those dates should he deferred in light of that decision."

Response: It is EPA's position that NIPSCO did not explicitly request reconsideration of the implementation dates under the CAIR in its petition. Nonetheless, because it was an integral part of the issue, the Agency did analyze the impact of D. C. Circuit Decision in New York v. EPA on timing. The EPA explicitly discussed, and believes it has adequately addressed, the timing implications relating to this issue in the CAIR Supplemental Notice of Reconsideration ( See 70 FR 77107 11). XXI. INCLUSION OF FLORIDA IN THE CAIR REGION FOR OZONE Document No.: OAR 2003 0053 2289.1 Commenter: City of Lakeland, Florida Department of Electric Utilities Phase: Reconsideration Notes: Docket Number 2289 is the cover letter. Docket Number 2289.1 is the comment letter. Comment: The City of Lakeland ( COL) submits the following comments regarding EPA= s notice of reconsideration and request for comment on four specific aspects of the Clean Air Interstate Rule ( CAIR). 70 Fed. Reg. 72268 ( December 2, 2005). [[ ( 2289.1, p. 1) ]]]] The Entire State of Florida should be excluded from the CAIR ozone Program. [[ ( 2289.1, p. 1) ]] [[ ( See pp. 1 3 of Docket Number 2289.1 for a detailed discussion of this issue.) ]] Even if some portion of Florida should be included in the CAIR ozone program, a substantial portion of southern Florida should be excluded. [[ ( 2289.1, p. 3) ]] [[ ( See pp. 3 4 of Docket Number 2289.1 for a detailed discussion of this issue.) ]] Florida emissions do not > interfere with maintenance= in Fulton County. [[ ( 2289.1, p. 4) ]][[ ( See p. 3 of Docket Number 2289.1 for a detailed discussion of this issue.) ]]

Response: EPA considered this issue at length in the CAIR rulemaking, and especially in response to comment C. 17 in the CAIR Response to Comment Document. As stated there, Fulton County remains at risk of nonattainment of the 8 hour ozone NAAQS even in 2015 because projected levels of attainment remain less than the historic levels of ozone variability in Fulton County. Thus, out of state emissions can reasonably be viewed as significantly interfering with maintenance of the NAAQS at that time. The same comment response notes that CAIR is one remedy, not two, so that there is no reason to have to separately justify the 2015 standards.

EPA should revise CAIR to exclude the entire state of Florida from the CAIR ozone program because Florida= s contribution is less than the conservative screening criteria developed by EPA. EPA= s refusal to utilize the precise data it developed for Florida= s average percent contribution to Fulton County, and instead put blinders on until it arbitrarily rounds the number to a value above the screening criteria, is inappropriate, inconsistent with prior practice, arbitrary, capricious and an abuse of discretion.

Response: This comment is addressed in the preamble to the rule as well as in EPA's response to judicial stay motions on the issue ( which response is part of the administrative record to this proceeding). In sum, EPA reasonably used a standard rounding protocol here, and doing so is not inconsistent with past practice or otherwise arbitrary. . Nonetheless, even if EPA= s approach is upheld, EPA should revise CAIR to exclude southern Florida from the CAIR ozone program because unrefuted modeling data demonstrates that southern Florida does not > contribute significantly= to nonattainment or > interfere with maintenance= in another state. [[ ( 2289.1, pp. 4 5) ]] Response: EPA disagrees for the reasons given in the preamble to the final rule and EPA's response to the judicial stay motions. EPA notes further that the commenter has the burden of showing that EPA's use of collective contribution from the entire state is unreasonable, and the comment fails to satisfy that burden. See Appalachian Power Co. v. EPA, 249 F. 3d 1032, 1059 ( D. C. Cir. 2001) ( burden is on entity challenging statewide collective contribution determination to EPA to show that EPA's approach is irrational).

Document No.: OAR 2003 0053 2275.1 Commenter: FPL Group Phase: Reconsideration Notes: Docket Number 2275 is the cover letter. Docket Number 2275.1 is the comment letter. Also included in the submittal where the following attachments: Docket Numbers 2275.2, 2275.3, 2275.4, 2275.5, 2275.6, 2275.7, 2275.8, 2275.9, 2275.10a, 2275.10b, 2275.10c, 2275.10d, and 2275.10e. Comment: Florida should not be included in the CAIR region for ozone, because EPA= s decision to do so is based on a fatally flawed rounding protocol. Even if that rounding protocol could be properly applied to Florida, modeling submitted with the petition shows that the portion of Florida below 28.66 degrees north latitude must be excluded from the CAIR region for ozone because it does not significantly contribute to ozone nonattainment in any downwind area. ( Reconsideration Issue No. 4) [[ ( 2275.1, p. 2) ]] Unlike the other three reconsideration issues, the Notice of Reconsideration provides no guidance as to what concerns EPA wants commenters to address with respect to Reconsideration Issue No 4 It states only that reconsideration is being granted because EPA first included Florida in the CAIR region for ozone in the Final Rule, thus providing no meaningful opportunity for comments on whether doing so was appropriate See 70 Fed Reg 72268,72280. In the absence of guidance, FPL Group and other commenters are forced to address this issue in a vacuum FPL Group has two comments on EPA= s inclusion of Florida in the CAIR region for ozone, which show that all or a significant portion of Florida should be excluded Those comments are discussed below If EPA intends that other concerns be addressed, it needs to state those concerns and then provide a separate opportunity for FPL Group and others to comment on them. ([[ 2275.1, p. 2) ]]

Response: Senior EPA staff met with representatives of the commenter on November 30, 2005 and told them to concentrate comments on the points raised in EPA's response to their stay motion filed in the D. C. Circuit. The comments submitted here appear to have followed that advice.

The entire state of Florida should be excluded from the CAIR region for ozone. Because EPA= s own modeling shows that Florida contributes less than one percent of the total non attainment for ozone. [[ ( 2275.1, p. 2) ]] [[ ( See pp. 2 4 of docket number 2275.1 for a detailed discussion of this issue.) ]] If the entire state of Florida is not excluded from the CAIR region for ozone, the portion of Florida below 28.66 degrees north latitude must be excluded because it does not significantly contribute to ozone non attainment in any downwind area. [[ ( 2275.1, p. 5) ]] [[ ( See pp. 5 7 of docket number 2275.1 for a detailed discussion of this issue.) ]]

Response: See preamble and other comment responses.

Document No.: OAR 2003 0053 2275.1 Commenter: FPL Group Phase: Reconsideration Comment: This comment substantially tracks those of Tampa, Gulf, and FAEU, and EPA's responses to these comments, as well as the preamble discussion and EPA's response to the Florida Utilities' stay motion to the D. C. Circuit serve as the principal response. EPA is responding here only to points raised in this comment not already addressed elsewhere.

1. Inclusion of Florida in the CAIR region for ozone is marginal at best, and cannot be justified by any secondary benefits of helping to achieve regulatory compliance in Florida. If EPA does not remove Florida from the CAIR region for ozone, Florida EGUs will be required to make enormous expenditures on pollution control equipment and/ or purchases of CAIR NOx allowances that otherwise would not be needed or warranted.

Response: Whether or not an upwind emitting state is in attainment or not is not relevant under section 110 ( a) ( 2) ( D), which concerns itself exclusively with whether upwind pollution contributes significantly to downwind nonattainment or maintenance problems. Ambient pollution levels in the upwind state are irrelevant to this inquiry. However, EPA is confused somewhat by this comment, since Florida is in the CAIR region for PM2.5 in any case, and so must control NOx emissions to meet those NOx budgets in any case.

2. EPA ( in its responsive papers in the D. C. Circuit) states that it utilized the same rounding protocol when applying the percent of nonattainment metric in the NOx SIP Call and cited to 63 FR 56377 in support. That page contains no discussion of this issue.

Response: EPA was simply citing to the page in the Federal Register where the NOx SIP Call is located. It remains correct, however, that EPA utilized the identical rounding protocol in the NOx SIP Call. See also Technical Support Document for Air Quality Modeling for CAIR, Docket number 2151 at IV. A p. 26 stating that EPA used the same metrics and technical approach in assessing significant contribution for ozone in both the CAIR and the NOx SIP Call. EPA notes further that its approach to rounding in applying this screening metric, is quite standardized. Under this approach, 1) EPA calculated the relative amount of nonattainment based on the CAIR CAMx modeling, which results in a long decimal number ( as many as 16 significant figures). 2) EPA identified the screening criteria to be " less than 1 percent ...". This threshold has one significant figure.

3) The number of significant figures in the threshold dictates the rounding convention for comparing the modeled value of relative amount of nonattainment, i. e., it must have the same number of significant figures as the criteria.

4) EPA followed the rounding method outlined in ASTM Practice E 29, which is the same as International Standards Organization ( ISO) standard 31 0, Annex B, Rule B to round the relative amount of nonattainment values to one significant figure ( i. e., match the threshold)

x. 0y through x. 4y: round to x x. 5y through x. 9y: round to x+ 1, where " y" is all values from the second decimal on.

This rounding convention is alternatively referred to as the " common" method of rounding, or the " bottom half up" method of rounding. It is a very common rounding technique and is used in most accounting applications.

5) Note that the approach used for rounding this metric in the NOx SIP Call ( and by extension in the CAIR analyses) is the same approach as discussed in the EPA 1998 guidance document: " Guideline on Data Handling Conventions for the 8 Hour Ozone NAAQS" ( EPA 454/ R 98 017) and later codified within 40 CFR 50, Appendix I, 2.3.

3. EPA's approach to rounding is inconsistent with its application of the PM2.5 significant contribution metric, citing to the discussion at 70 FR 25191 and n. 42.

Response: EPA does not perceive the inconsistency pointed to by the commenter. The PM significance of contribution metric assesses magnitude of contribution. The proper ozone contribution metrics for comparison purposes therefore are those which assess magnitude of contribution, not ( as the commenter would have it) the relative contribution to nonattainment metric. In applying the PM2.5 magnitude of contribution metric, EPA applies a truncation protocol. Similarly, in applying the ozone magnitude of contribution metrics ( both the initial screening metrics and the subsequent second step metrics), EPA uses truncation protocols, as explained in the preamble to the final rule; see also 70 FR at 25191 n. 41 making the same point and noting the similarity of approach. Since EPA uses the same protocols when assessing magnitude of contribution for both ozone and PM2.5, EPA does not agree with the commenter tht there is some fundamental inconsistency in approach. See also the preamble discussion on this issue.

4. EPA's true relative amount of contribution metric is .5% due to the rounding convention, not 1%, and EPA has failed to justify why that value is significant. Response: First, the value used in the metric is 1%, using standard rounding conventions to round to the nearest integer, so no independent justification is necessary. Second, even if such justification is deemed necessary, the comment seems not to understand the significance determination process. The significance determination process, as described on pp 32 35 of the CAIR Air Quality Modeling Technical Support Document, contains four steps: 1) evaluation of contributions against screening criteria, 2) evaluation of contributions from zero out modeling, 3) evaluation of contributions from source apportionment modeling, and 4) a final aggregate determination of significance. The purpose of the initial screening ( the only step in the process at issue here) is to distinguish contributions that are clearly small from those which require further analysis to evaluate significance. The >= 1% ( 0.5%, pre rounding) average percent contribution determination is thus not to determine significance, but rather to determine whether further analysis of significance is needed. In the case of the Florida contribution, steps 2 and 3 of the determination process indicated that there are large and frequent contributions from that State to elevated ozone concentrations in Fulton Co., GA. The CAIR modeling estimates that Florida can contribute as much as 3.2  5.5 ppb ( depending on modeling technique) toward modeled eight hour ozone exceedance periods in Fulton Co., GA.. Further, it was determined that between 10  13 percent of the modeled periods above 85 ppb in Fulton Co., GA were affected by at least 2 ppb of ozone that resulted from emissions from Florida. The relative amount of contribution ranges between 0.8  2.2 percent. ( None of these results are questioned by the commenter.) The criteria used to distinguish which values comprise a significant contribution are set out at page 40 of the TSD. Based on these criteria, Florida was determined to have a significant contribution to Fulton Co., GA based on the magnitude and frequency, but not the relative amount of contribution. As explained on p. 33 of the TSD, for linkages in which the three contribution factors were not unanimous, we required that two of the three factors had to indicate high magnitude, frequent, and/ or relatively large contributions in order to find that the linkage was significant. This approach was applied consistently to each of the linkages for which a significance determination was made. In sum, we have concluded that the Florida contribution to Fulton Co., GA represents a significant contribution by any rational measure.

5. EPA did not follow through on its own decision not to include some of southern Florida from the CAIR ozone region.

Response: The comment is mistaken. All of Florida is included in the CAIR ozone region. EPA chose not to model a small bit of southern Florida as part of the modeling exercise supporting the significant contribution analysis. We did so largely because meteorological inputs were lacking for this small part of the state, and because 460.9 of Florida's total of 461.0 2010 based EGU NOx emissions are in the domain of the state which EPA did model ( although other sources, such as mobile sources, contribute NOx from the small region EPA did not model ). EPA's decision not to model the small bit of southern Florida is thus justified by these practical considerations, and indeed, EPA's decision could only work to the commenter's advantage, since EPA's approach actually understates the total NOx contribution from the State.

6. The Commenter states that EPA in its stay papers ( p. 18) argued that Florida should be in the CAIR ozone region because its emission are " material" and " measurable" and that this is not the test under section 110 ( a) ( 2) ( D) ( i), or is a different approach then that set forth in the CAIR rulemaking.

Response: EPA did not intend to enunciate any different test for assessing significance of contribution than that used in the CAIR rulemaking, and believes that the commenter is misinterpreting EPA's response to the stay motion.

7. FPL used a dividing line for northern and southern Florida based on the same intuitive understanding that led EPA to exclude a smaller portion of southern Florida, that an area will have less effect than northern portions of the state. However, FPL's suggested division is not merely intuitive, but grounded in a reasoned modeling exercise.

Response: As noted above, EPA did not exclude any of Florida from the CAIR ozone region. Our response to the modeling submitted by the commenter is set out in the preamble to the final rule and in other comment responses, and states, in brief, that the commenter did not satisfy its burden of showing that EPA's statewide approach to evaluating significant contribution is irrational or otherwise show that areas it would exclude are devoid of material contribution to upwind ozone nonattainment. Further, we sharply disagree that there is any validity in comparing EPA's practical decision to exclude from the modeling analysis a very small part of the total emissions from the State ( i. e. 0.02% of the total Florida EGU NOx emissions inventory) to the commenter's decision to draw a line that distinguishes between portions of the State that contribute 69% and 31 % of Florida's overall contribution to Fulton Co., GA. There are three orders of magnitude difference between the results.

Document No.: OAR 2003 0053 2295.1 Commenter: Tampa Electric Company Phase: Reconsideration Notes: Docket Number 2295 is the cover letter. Docket Number 2295.1 is the comment letter. Comment: The Entire State of Florida should be excluded from the CAIR ozone Program. A) EPA should use the precise data that it generated. Florida should not be included in the CAIR ozone program because Florida= s modeled contribution to Fulton County, Georgia is below EPA= s threshold for a > significant= contribution. Specifically, EPA established three > insignificant= thresholds for automatically excluding a state from the CAIR ozone program  a state is excluded if any one of the three is met. The relevant threshold for Florida is whether the average percent contribution to the nonattainment target is above or below 1 percent, and EPA intended this to be a conservative threshold: > The first step in evaluating the contribution factors is to screen out linkages for which the contribution is clearly small.= EPA has confirmed that its data shows that Florida= s average percent contribution to Fulton County, Georgia ( the only nonattainment target at issue for Florida) is 0.81, and is therefore clearly below EPA= s own conservative, insignificance threshold. Very simply, EPA should honor the precise data that it generated and exclude Florida from the CAR ozone program. [[ ( 2295.1, p. 2) ]]

Response: EPA agrees that it would have been preferable had EPA explicitly stated that it used the standard rounding protocol of rounding up or down to the next significant integer rather than simply applying that rounding protocol uniformly ( both in CAIR and in the NOx SIP Call). EPA has revised Appendix G of the Technical Support Document to make this explicit. However, EPA applied this approach uniformly in both this rule and in the NOx SIP Call, and there is nothing remarkable in rounding 0.81% up to one percent.

b) EPA= s rounding approach is arbitrary, capricious and inconsistent with its own guidance. EPA= s decision to round the > average percent contribution= screening criteria to the nearest whole number before it evaluates the answer is arbitrary, capricious and inconsistent with its own practices and guidance. First, as explained in paragraph 2( a), EPA= s approach fails to recognize the actual value it generated, and this failure creates a nonsense result.

Response: . The fact that Florida concededly fails the other two ozone metrics ( magnitude and frequency of contribution) likewise shows that including Florida within the CAIR ozone region is a reasonable outcome.

Second, EPA= s approach is deceptive and misleading because the actual threshold is actually > less than 0.5 percent,= and not > less than one percent= as EPA states. To require a state= s average percent contribution to actually be less than 0.50 ( or 0.449 if EPA erroneously rounds twice) Response: The commenter is correct, but this point has no practical consequence, because the contribution of Florida to Fulton County 8 hour NOx nonattainment is 0.81 %, not 0.45 %., is a dramatically different threshold than requiring the value to be less than 1.

Response: EPA does not perceive how using the standard rounding protocol of rounding .81 up to one is a dramatically different result. Florida, on its own, is still contributing substantial amounts of the nonattainment ozone to Fulton County. As noted earlier, Florida also concededly contributes significantly to Fulton County nonattainment in terms of magnitude and frequency of ozone contribution. This determination was based on the criteria outlined in the CAIR Air Quality Modeling TSD and is consistent with a rational understanding of significant contribution. Third, EPA= s approach is inconsistent with its truncating approach for the other two screening criteria. EPA= s after the fact explanation for this discrepancy is that the average percent contribution metric is not a concentration measurement that is tied to an ambient standard. But that is exactly how the average percent contribution is calculated: EPA takes the concentration of total ozone in the nonattainment area, and the state= s concentration contribution to that total to determine the percentage. Arguing that one number is a percentage and the other two are concentrations is therefore erroneous and misleading. Response: As stated in the preamble, EPA's approach to rounding here is commonplace, not arbitrary. Nor was EPA arbitrary in choosing to round rather than truncate. The form of the 8 hour NAAQS includes a truncation feature, as set out in Appendix I to Part 50. Significant contribution metrics that are expressed as direct percentages of that NAAQS thus use the same truncation protocol. The relative contribution to nonattainment metric is not one of these . It determines what extent of the downwind area's nonattainment with the 8 hour ozone NAAQS results from upwind state emissions. The metric is not directly derived from the form of the NAAQS, and thus there is no reason to apply truncation protocols that are part of that form. EPA thus did not do so ( either in the CAIR or in the earlier NOx SIP Call), and used the standard, unremarkable rounding protocol of rounding up (. 5% or higher) or down (. 4% of lower) to the closest integer value.

And fourth, EPA= s approach is inconsistent with its own guidance, which requires that standards ( thresholds), as well as the calculated values the agency is comparing them against, contain at least two significant figures. If EPA followed its own guidance, its > less than one percent= threshold would actually be > less than 1.0 percent,= and the calculated value would also need to contain at least two significant figures. Accordingly, Florida= s average percent contribution of 0.81 already contains two significant figures and would not be rounded further; this value should simply be compared to 1.0, and 0.81 is clearly less than 1.0. [[ ( 2295.1, pp 3) ]]

Response: The commenter cites a June 6, 1990 memorandum from William G. Laxton and John S. Seitz to the compliance contacts for New Source Performance Standards ( NSPS) and National Emissions Standards for Hazardous Pollutants ( NESHAPs). The memorandum identified guidelines to be used when calculating emission rates and concentrations when determining compliance with NSPS/ NESHAPs. The issue of how to interpret modeling results to determine whether an upwind State significantly contributes to violations of the eight hour ozone NAAQS is not related to the matters dealt with in the cited 1990 memorandum. The commenter did not explain the relevance of the memorandum ( the comment simply cites language from the memorandum out of context), and no relevance is apparent to EPA.

EPA also confuses the threshold by describing it as > less than 1 percent= in the Technical Support Document ( p. 32) and > had to be greater than 1 percent= in the preamble to the final rule ( 70 Fed. Reg. 2524612). If the threshold is > greater than 1 percent,= EPA should exclude Florida from the CAIR ozone program regardless of the credibility of EPA= s rounding approach. If rounding is appropriate, EPA= s final preamble statement quoted above articulates the proper threshold  it is deceptive, at best, to transform ( via rounding) a number that is clearly > less than 1 percent= ( 0.81 in Florida= s case) to one, and then conclude that because one is not > less than one,= the entire state should be included. [[ ( 2295.1, p. 3) ]]

Response: EPA agrees that the rounding protocol should have been explicitly referred to. In the preamble to the final rule and in these responses, as well as in the revised Appendix G to the Technical Support Document, EPA is making clear that it is applying this usual rounding protocol in computing the amount of contribution ozone metric. EPA reiterates that it followed this protocol uniformly both in the CAIR and in the earlier NOx SIP Call.

c) Additional policy and scientific reasons that justify excluding Florida. There are many additional policy and scientific factors that support Florida= s exclusion from the CAIR ozone program: 1) EPA included Florida in the CAIR ozone program based on its contribution to only one nonattainment county, whereas EPA highlights in the preamble to the final rule the fact that all other states in the CAIR ozone program ( except Louisiana and Arkansas) contribute to more than one nonattainment county.

Response: This comment is not legally relevant, since section 110 ( a) ( 2) ( D) ( i) requires SIPs to prohibit any significant contribution to downwind nonattainment, and does not require that such contribution be to more than one area. EPA also notes that the Delaware New Jersey combined entity, which are considered together for assessing significance of contribution by virtue of other final action taken today, are linked to a single downwind area ( a large metropolitan area, New York County ( New York City), which is similar to the link with Florida and Fulton County, which contains the large metropolitan area Atlanta). Minnesota is likewise included within the CAIR PM region due to a single link with an Illinois nonattainment area.

2) EPA= s modeling shows that Fulton County will achieve attainment by 2015 without any benefit from CAIR. Including Florida in the CAIR ozone program, therefore, will provide a less than one percent benefit to a county that does need assistance to achieve attainment.

Response: First, the 8 hour ozone attainment date is 2009, not 2015. Controls on upwind state emissions which contribute significantly to nonattainment as of that time are the proper trigger for evaluating significance of contribution for purposes of section 110 ( a) ( 2) ( D) ( i). See also response to comment C. 17 to the CAIR Response to Comment Document, explaining first that CAIR is a single remedy which for feasibility reasons occurs in two steps, and second, that even if one does not accept this view, the 2015 CAIR controls are needed to prevent significant interference with maintenance in all linked areas in the CAIR ozone region. This includes Fulton County, where historic ozone variability patterns exceed the amount by which the county is projected to attain the 8 hour NAAQS in both the base and CAIR cases in 2015.

3) Fulton County= s current air quality is primarily a locally caused problem, so limiting emissions from other states will provide minimal benefit. EPA states that 76 percent of the ozone in Fulton County is due to in state emissions, the highest percentage of any of the 40 nonattainment targets.

Response: Nonetheless, the out of state contribution to nonattainment in Fulton County remains nearly 25 % of the total and it reasonably meets the goal of section 110 ( a) ( 2) ( D) to achieve a reasonable balance between in state and out of state controls to control this significant contribution. Fulton County is not projected to attain the 8 hour ozone standard in the 2010 CAIR case ( i. e. after 2009 NOx controls), so that local controls remain necessary for the area to attain.

4) Florida= s average percent contribution to Fulton County= s ozone level is less than the contribution from four states that EPA concluded do not contribute significantly to Fulton County: Arkansas, Indiana, Illinois and Missouri. Response: This is because these other states contribute less than Florida in terms of magnitude and frequency of contribution. 5) Florida is already doing its part as a good neighbor, as evidenced by the fact that Florida is one of only three states east of the Mississippi River in attainment for all criteria pollutants. [[ ( 2295.1, pp. 3 4) ]]

Response: This is not legally relevant in determining whether or not Florida contributes significantly to out of state nonattainment. See CAA section 110 ( a) ( 2) ( D).

Even if some portion of Florida should be included in the CAIR ozone program, a substantial portion of southern Florida should be excluded. Assuming for comment purposes that EPA= s approach to rounding is proper, Section 110( a)( 2)( D) of the Clean Air Act and the [ State of] Michigan case prohibit EPA from including sources in CAIR that do not > contribute significantly= to nonattainment in another state.

Response: This is a misreading of the relevant caselaw, which makes clear that the burden is on a commenter to show why EPA's approach of assessing significant contribution on a statewide, collective contribution basis, is irrational. Appalachian Power, 126 F. 3d at 1050; State of Michigan, 213 F. 3d at 684. Certainly, there is no showing in this comment or any other that the portion of the state they seek to exclude from the CAIR ozone region is " innocent of material contributions". 213 F. 3d at 684. To the contrary. The Ozone Report submitted in comments shows that there are large NOx emitting sources ( both EGUs and others) in the southern portion of the state the commenters would exclude, and that the collective contribution of sources in the southern portion of the state that the commenters would exclude is a substantial fraction ( nearly one third) of the entire state contribution. Rather than showing that the southern portion of the state is " innocent of material contributions", EPA believes these facts demonstrate a classic instance of collective contribution.

These arguments, as well as supporting modeling data, are presented and explained in detail in filings by the Florida Association of Electric Utilities ( FAEU) with the D. C. Circuit. Specifically, FAEU provided detailed modeling data that demonstrates that a substantial portion of southern Florida does not, in fact, contribute significantly to ozone nonattainment in Fulton County, Georgia. Specifically, sources below latitude ( approximately) 28.67 should not be subjected to CAIR because they do not contribute significantly to nonattainment in Fulton County. TEC asks EPA to honor these findings. [[ ( 2295.1, p. 4) ]] Response: See preamble, other comment responses, and EPA's response to the D. C. Circuit to judicial stay motions. In sum, EPA believes the modeling data presented demonstrate state wide significant contribution due to collective contribution and believes further that the comments fall well short of the demonstration required to justify partial state control under both Appalachian Power and State of Michigan.

The Clean Air Act authority upon which EPA relies for CAIR ( Section 110( a)( 2)( D)) is limited to > prohibiting . . . any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will . . . contribute significantly to nonattainment in, or interfere with maintenance by, and other State.= If undisputed data shows that certain sources do not > contribute significantly to nonattainment in= or > interfere with maintenance= in another state, they cannot be regulated under Section 110( a)( a)( D). The modeling data filed by FAEU shows precisely which sources contribute significantly, and which ones do not; using such data to define which sources should be subject to CAIR, and which ones should not, is compelled by the Clean Air Act, rational and objective. [[ ( 2295.1, p. 4) ]]

Response: The argument that significant contribution for purposes of section 110 ( a) ( 2) ( D) must be assessed on a source by source basis was rejected in State of Michigan, 213 F. 3d at 679, and in the closely related context of section 126 in Appalachian Power, 249 F. 3d at 1048 51 ( both cases upholding uniform controls based on collective contribution which overall are significant). Nor did the commenters present any data showing that individual sources do not contribute. Their modeling assessed collective emissions from various geographic divisions of the State.

Also, not subjecting southern Florida to CAIR follows common sense. First, EPA and the D. C. Circuit have recognized the common sense expectation that proximity to a nonattainment area is a key factor in determining the extent of contribution that that area= s sources will have on the nonattainment area. Fulton County is in north central Georgia, a substantial distance from the Florida line and even further from latitude 28.67 ( the boundary demonstrated in FAEU= s modeling). Florida is a peninsular state, oriented essentially north south, and Fulton County is essentially due north of Florida. So the further south a se ource is in Florida, the further away the source is from Fulton County, and the less its emissions are expected to cause an impact. Importantly, latitude 28.67 is approximately the same distance from Fulton County as the states of Arkansas, Indiana, Missouri and Illinois, four states that EPA expressly determined do not contribute significantly to Fulton County.

Response: Even under the commenters' own modeling, ozone emissions from the southern part of the state are nearly a third of the total. Moreover, the maps of model predicted contribution from southern Florida provided in the comments show that southern Florida emissions can impact air quality across Fulton County. See PM Report at Figures 4 1a ( June) and 4 1b ( August) showing that emissions from south Florida reach Atlanta during the summertime ozone season. The magnitude and frequency of contribution from the four states mentioned in the comment are less than those of Florida, and below the relevant metrics, which explains why these states are not linked to nonattainment of the 8 hour ozone NAAQS in Fulton County.

Second, based on the sheer geographic size of Florida ( which is larger than eight states that EPA expressly excluded from CAIR), it makes sense that a group of sources in one portion of Florida will have a different impact from sources in another portion.

Response: The geographic size of a State is not important, in and of itself, as to whether or not the contribution from the State contributes significantly. Rather, the amount, magnitude and frequency of emissions in the State are what matter. Indeed,. as indicated on Table 1 1 of the Ozone Report submitted by commenters, there are States that are larger and smaller than south Florida which make a significant contribution to downwind nonattainment of ozone. There are also States that are larger and smaller than south Florida which were determined not to so contribute. Thus, the geographic size of a State is not the determinant factor in assessing significant contribution.

And third, PM2.5 modeling submitted by FAEU resulted in the same common sense conclusion as the ozone modeling: a substantial portion of Florida does not, in fact, > contribute significantly= to nonattainment in another state. [[ ( 2295.1, pp. 4 5) ]]

Response: EPA is denying the petition to reconsider inclusion of Florida in the CAIR PM2.5 region. This comment is consequently beyond the scope of this proceeding.

As just explained, PM2.5 modeling data submitted by FAEU also demonstrates which sources in Florida contribute significantly to PM2.5 nonattainment in another state, and which ones do not. EPA claims that because the boundary FAEU defined for PM2.5 is slightly different than the boundary FAEU defined for ozone, the boundaries are arbitrary.

Response: The fact that commenters suggested different boundaries for PM and ozone suggests a results oriented approach. In any case, the southern portion of Florida, even under the commenter's definition, contributes roughly a third of the ozone that reaches Fulton County. This is a significant portion of the total Florida contribution and confirms that EPA's statewide collective contribution approach is reasonable.

EPA= s claim is flawed on numerous levels. First, the Clean Air Act ( Section 110( A)( 2)( D)) sets the definition of sources that can be regulated; FAEU= s modeling simply demonstrates where the boundary is in Florida.

Result: Boundary here should be pluralized, since the commenters suggested different boundaries, potentially influenced by the results of the different line drawings for PM2.5 and for ozone. Second, EPA= s own modeling approach dictates that the lines for PM2.5 and ozone must be different. As seen in Figure 1 below ( and reflected in the PM2.5 and ozone modeling reports and other attachments in Section I), EPA= s grid cell layouts for PM2.5 and ozone are different.

Response: A statewide approach based on collective contribution avoids these debates about arbitrary geographic line drawing and whether such divisions should be identical for PM and ozone contribution. This is another reason the statewide approach is reasonable.

Third, EPA= s definition for a > significant= contribution is dramatically different between PM2.5 and ozone.

Response: The commenter is correct that EPA uses different metrics to assess significance of contribution for PM2.5 and for ozone.

Fourth, the PM2.5 and ozone ambient standards are based on different values with different averaging times.

Response: The commenter is correct that the values and averaging time differ for these standards. EPA's approach, however, assesses contribution for each based on the same geographic basis ( i. e. statewide collective contribution).

Fifth, the modeling for PM2.5 is an annual simulation, whereas ozone is measuring an 8 hour contribution.

Response: The commenter correctly notes a difference, although EPA reiterates the overall reasonableness of its approach.

And finally, there are different nonattainment targets for PM2.5 and ozone, in different locations and proximities to northern and southern Florida.

Response: And EPA has assessed these potential links individually, and found that Florida contributes significantly to nonattainment of the 8 hour ozone NAAQS in the downwind receptor Fulton County, Georgia.

EPA is well aware of these factors, and its claim that because FAEU= s boundaries for PM2.5 and ozone are different, they must be arbitrary, is disingenuous. In sum, despite specific requests during the comment period on the proposed rule for EPA to conduct intrastate modeling, EPA did not fulfill its obligations under the Clean Air Act to tailor CAIR to regulate only those sources that > contribute significantly,= and continues to refuse to utilize FAEU= s data which would allow for the appropriate tailoring. [[ ( 2295.1, p. 5) ]]

Response: See preamble, other responses, and EPA's response to motion for a judicial stay. Florida emissions do not > interfere with maintenance= in Fulton County. As demonstrated above, southern Florida does not > contribute significantly= to nonattainment in another state ( using EPA= s own approach), and EPA has implied that it could still subject southern Florida to the CAIR ozone program based on the idea that this area will interfere with Fulton County= s ability to maintain its attainment status ( which it will achieve without benefit from CAIR). But EPA has expressly stated that the same criteria apply to the > interfere with maintenance= prong as apply to the > contribute significantly= prong. And as explained in Section 2 above, modeling data submitted by FAEU shows which portion of Florida meets this > significance= test. [[ ( 2295.1, pp. 5 6) ]] In practice, EPA does not reach the > interfere with maintenance= prong unless it has already concluded that a state contributes significantly to a nonattainment target in another state, and then that target achieves attainment.

Response: This is a correct summary of EPA's position on maintenance, and Fulton County fits this description. It is presently in nonattainment of the 8 hour ozone NAAQS, and is projected to remain in nonattainment in the 2010 base case ( and CAIR case for that matter). 70 FR at 25251 ( Table VI 10). We demonstrated in comment response C. 17 to the CAIR Response to Comments ( summarized in other comment responses here) why further upwind NOx emissions could reasonably be deemed to interfere significantly with Fulton County's ability to maintain the standard thereafter.

In Florida, the position is simply that this same approach should be applied to southern Florida, which does not contribute significantly to nonattainment in Fulton County, and therefore there is no basis to evaluate whether it will > interfere with maintenance.= To act otherwise is contrary to EPA= s own approach, and would be analogous to assessing an excluded state= s impact on maintenance; EPA has not made such assessments in CAIR, and there is no reason to begin now. [[ ( 2295.1, p. 6) ]]

Response: See previous response.

EPA should revise CAIR to exclude the entire state of Florida from the CAIR ozone program because Florida= s contribution is less than the conservative screening criteria developed by EPA. EPA= s refusal to utilize the precise data it developed for Florida= s average percent contribution to Fulton County, and instead put blinders on until it arbitrarily sounds the number to a value above the screening criteria, is inappropriate, inconsistent with prior practice, arbitrary, capricious and an abuse of discretion. Nonetheless, even if EPA= s approach is upheld, EPA should revise CAIR to exclude southern Florida from the CAIR ozone program because unrefuted modeling data demonstrates that southern Florida does not > contribute significantly= to nonattainment or > interfere with maintenance= in another state. [[ ( 2295.1, p. 7) ]]

Response: See preamble, previous comment responses, and EPA's response to motions for a judicial stay by Florida utilities.

Document No.: OAR 2003 0053 2301 Commenter: Pennsylvania Department of Environmental Protection ( PADEP) Phase: Reconsideration Comment: The Commonwealth believes that any state that can contribute to the transport of SO2 or Nox to another state should be included in the CAIR program. [[ ( p. 3) ]]

Response: This overstates the requirements of section 110 ( a) ( 2) ( D), which requires that the contribution be significant.

Document No.: OAR 2003 0053 2268.1 Commenter: Northeast States for Coordinated Air Use Management ( NESCAUM) Phase: Reconsideration Notes: Docket Number 2268 is the cover letter. Docket Number 2268.1 is the comment letter. Comment: Fine particulate matter ( PM2.5) modeling for Minnesota and including Florida in the CAIR region for ozone: EPA has asked for comment on the inclusion of Florida in the CAIR region for ozone and on revised modeling inputs for Minnesota. NESCAUM is not commenting on those specific issues. However, EPA must include States in the CAIR program for which analyses demonstrate that they contribute to non attainment under section 110( a)( 2)( d) of the Clean Air Act. Should EPA choose to remove any jurisdiction from the CAIR program, EPA must reduce the total Nox and SO2 CAIR budgets by amounts equal to that jurisdictions Nox and SO2 budgets, respectively. [[ ( 2268.1, p. 2) ]] The NESCAUM States cannot attain the eight hour ozone and PM2.5 National Ambient Air Quality Standards without substantial reductions in direct and transported emissions of Nox and SO2 across the Eastern U. S. We urge EPA to ensure that the CAIR program maximizes reductions of transported Nox and SO2 to the extent feasible. [[ ( 2268.1, p. 2) ]]

Response: Since no state is being removed from the CAIR region, this comment is moot.

Document No.: OAR 2003 0053 2265 Commenter: Alabama Department of Environmental Management ( ADEM) Phase: Reconsideration Comment: ADEM is submitting comments on the fourth issue under reconsideration by EPA. This issue relates to the inclusion of the State of Florida in the CAIR region for ozone. ADEM believes that the State of Florida should be included in the CAIR region for ozone in addition to fine particles. [[ ( p. 1) ]]

Response: As should be evident, EPA agrees. The basis for the Florida petitioners= argument for the state of Florida to be excluded from the CAIR Region for ozone stems from both the lack of adequate notice that Florida would be found a significant contributor and the lack of opportunity to comment on the modeling inputs that resulted in such a determination. While it is true that Florida was not indicated as a significant contributor for ozone in the proposed rule or the supplemental proposal, the implications of the notice of additional data availability were such that the entire modeling platform changed ( i. e. new model, new meteorology, updated emissions, etc). The notice of additional data availability documents were placed on the docket on or about July 27, 2004 and 30 day comment period was allowed. Many of the details from the proposed rules changed in the final rule as well ( i. e. EGUs only, first phase of Nox begins in 2009, compliance supplement pool added for annual Nox). Current modeling indicates that Florida is a significant contributor to 8 hour ozone in Fulton County, Georgia. Florida= s contribution is more significant than three other states ( West Virginia, Virginia, and Mississippi). [[ ( p. 1) ]]

Response: EPA agrees that it was a close question whether to grant the petition for inclusion of Florida in the CAIR ozone region. EPA has done so, however. On the merits, we agree with the commenter that inclusion of the entire state in the CAIR ozone region is appropriate.

Also, the CAIR ozone season trading system would be made less robust by the exclusion of Florida. Without an emissions cap, Florida sources that would be subject to the CAIR for ozone would not be required to purchase allowances if CAIR emissions levels are exceeded. Even if Nox emissions from Florida sources that would be subject to CAIR do not significantly contribute to downwind ozone nonattainment, these Nox emissions would not be subject to an emissions cap as is the case for sources located in neighboring states that are subject to CAIR.

The lack of an emissions cap on Florida sources that would be subject to CAIR for ozone may impede the ability of neighboring states to meet and maintain the 8 hour ozone NAAQS. [[ ( p. 1) ]]

Response: Florida can only be included in the CAIR ozone region if its emission contribute significantly to nonattainment in a downwind area, or interfere significantly with a downwind area's maintenance of a NAAQS. These are the only grounds EPA has considered in making its decision.

Document No.: OAR 2003 0053 2296 Commenter: Florida Association of Electric Utilities ( FAEU) Phase: Reconsideration Notes: The Reconsideration comment letter is part of docket number 2296, pp. 1 9. Attachment 1: Petition for Reconsideration ( July 11, 2005). See docket number 2296. Attachment 2: Supplement to Petition for Reconsideration, attaching Florida specific PM 2.5 modeling data ( October 11, 2005). See docket number 2296. Attachment 3 : Second Supplement to Petition for Reconsideration, attaching Florida specific ozone modeling data ( October 18, 2005). See docket number 2296. Attachment 4: Motion for Stay Pending Judicial Review, filed in the D . C. Circuit ( August 18, 2005). See docket numbers 2296 2298. Attachment 5 : Reply to Responses in Opposition to Motion for Stay Pending Judicial Review, filed in the D . C. Circuit ( December 2, 2005). See docket number 2298. Attachment 6: Transcript of Testimony of Robert Manning, on behalf of FAEU, at public hearing on Reconsideration ( December 14, 2005). See docket number 2298. Comment: FAEU is focusing its comments on . . . the inclusion of Florida in the CAIR ozone program. 70 Fed. Reg. 72280. [[ p. 1]]. FAEU appreciates this opportunity to comment on the inclusion of Florida in the CAIR ozone program, given that Florida was expressly excluded from the CAIR ozone program until the final rule was published on May 12, 2005, and reiterates its request that EPA re open for comment the other issues raised in FAEU= s Petition for Reconsideration. [[ p. 1]]

Response: EPA is denying these requests by separate action.

II. How can EPA justify including the entire state of Florida in the CAIR ozone program when EPA= s own data shows that Florida= s contribution is less than EPA= s conservative screening criteria for > average percent contribution=? [[ p. 2]] a) EPA should use the precise data that it generated. [[ p. 2]] [[ See docket number 2296, p. 2 for further discussion of this issue.]]

Response: See preamble and other comment responses, especially responses to the Tampa Electric comment, which largely tracks the comments of FAEU.

b) EPA= s rounding approach is arbitrary, capricious and inconsistent with its own guidance. [[ p. 2]] [[ See docket number 2296, pp. 2 4 for further discussion of this issue.]]

Response: See previous response.

c) Additional policy and scientific reasons that justify excluding Florida. To add to and amplify some of the additional reasons supporting Florida= s exclusion from the CAIR ozone program, as presented in the attachments listed in Section I, [[ see docket number 2296, p. 2 for list of attachments.]] FAEU offers the following [[ p. 4]] [[ See docket number 2296, pp. 4 5 for further discussion of this issue]]

Response: See previous response.

III. How can EPA justify subjecting sources in southern Florida to the CAIR ozone program when there is unrefuted data showing that these sources do not > contribute significantly= to nonattainment in another state? [[ p. 5]] [[ See docket number 2296, pp. 5 7 for further discussion of this issue. Also see Figure 1 on p. 8.]] Response: As explained in the preamble and other comment responses, statewide collective contributions contribute significantly to ozone nonattainment in Fulton County, Georgia. EPA thus disagrees that ` unrefuted evidence' shows a lack of contribution.

IV. How can EPA be concerned that southern Florida may > interfere with maintenance= in Fulton County, when it uses the same threshold as for the > contribute significantly= prong, and the unrefuted data shows that southern Florida does not > contribute significantly=? [[ p. 7]] [[ See docket number 2296, p. 7 for further discussion of this issue.]]

Response: See previous responses.

V. ConclusionEPA should revise CAIR to exclude the entire state of Florida from the CAIRozone program because Florida= s contribution is less than the conservative screening criteria developed by EPA. EPA= s refusal to utilize the precise data it developed for Florida= s average percent contribution to Fulton County, and instead arbitrarily round it to a value greater than the screening criteria, is inappropriate, inconsistent with prior practice, arbitrary, capricious and an abuse of discretion. Nonetheless, if EPA= s approach is upheld, EPA should revise CAIR to exclude southern Florida from the CAIR ozone program because unrefuted modeling data demonstrates that southern Florida does not > contribute significantly= to nonattainment or > interfere with maintenance= in another state. [[ p. 9]]

Response: See preamble and other comment responses.

Document No.: OAR 2003 0053 2299 Commenter: Gulf Power Company Phase: Reconsideration Comment: Gulf Power is focusing its comments on . . . the inclusion of Florida in the CAIR ozone program. 70 Fed. Reg. 72280. [[ p. 1]] . I. The Entire State of Florida Should be excluded from the CAIRozone Program. A) EPA should use the precise data that it generated. [[ p. 1]] [[ See docket number 2299, pp. 1 2 for further discussion of this issue.]]

Response: See preamble and other comment responses.

b) EPA= s rounding approach is arbitrary, capricious and inconsistent with its own guidance. [[ p. 2]] [[ See docket number 2299, pp. 2 3 for further discussion of this issue.]]

Response; See preamble and other comment responses.

c) Additional policy and scientific reasons that justify excluding Florida. There are many additional policy and scientific factors that support Florida= s exclusion from the CAIR ozone program [[ p. 3]] [[ See docket number 2299, pp. 3 4 for discussion of the factors.] Response: EPA disagrees for reasons given in the preamble and in other comment responses.

] II. Even if some portion of Florida should be included in the CAIR ozone program, a substantial portion of southern Florida should be excluded. [[ p. 4]] [[ See docket number 2299, pp. 4 5 for further discussion of this issue.]]

Response: See preamble and other comment responses.

III. Florida emissions do not > interfere with maintenance= in Fulton County. [[ p. 5]] [[ See docket number 2299 for further discussion of this issue.]]

Response: See other comment responses.

IV. Conclusion EPA should revise CAIR to exclude the entire state of Florida from the CAIR ozone program because Florida= s contribution is less than the conservative screening criteria developed by EPA. EPA= s refusal to utilize the precise data it developed for Florida= s average percent contribution to Fulton County, and instead put blinders on until it arbitrarily sounds the number to a value above the screening criteria, is inappropriate, inconsistent with prior practice, arbitrary, capricious and an abuse of discretion. Nonetheless, even if EPA= s approach is upheld, EPA should revise CAIR to exclude southern Florida from the CAIR ozone program because unrefuted modeling data demonstrates that southern Florida does not > contribute significantly= to nonattainment or > interfere with maintenance= in another state. [[ p. 6]]

Response: See preamble and other comment responses.

XXII. B.   EPA did not properly analyze the potential impacts on SO3 / H2SO4 emissions Document No.: OAR 2003 0053 2305.1 Commenter: Utility Air Regulatory Group ( UARG) Comment: " In the reconsideration notice, EPA also examines the potential impact of the vacatur of the PCP exclusion on the compliance deadlines in CAIR. In its re analysis of the CAIR deadlines, EPA assumes, as it did in its cost effectiveness re analysis, that EGUs would install wet ESPs to prevent collateral significant emission increases in sulfuric acid mist from CAIR PCPs. [ ] UARG believes that this assumption is wrong. Rather than choosing to install wet ESPs to prevent those emission increases, EGUs would choose to obtain a PSD permit that reflects a determination that BACT for sulfuric acid mist emissions is no additional control ( or, at most, something far less costly than wet ESP or injection technology)."

Response: As mentioned in the CAIR Supplemental Notice of Reconsideration, EPA made the conservative assumptions that all EGUs that will install SCR and/ or wet FGD will experience a significant emissions increase in sulfuric acid mist and that all of those EGUs will install a wet ESP to mitigate those emissions. The Agency agrees with UARG that these assumptions lead to an overestimate of the cost of the decision in New York v. EPA, since the number of EGUs with collateral increases in sulfuric acid mist will be much fewer than the universe assumed in EPA's analysis and that the BACT determination in those cases with significant increases in sulfuric acid mist may not involve the installation of wet ESP due to its high cost. As mentioned in the CAIR Supplemental Notice of Reconsideration, historically, the BACT for affected units has generally involved switching to lower sulfur coal, installation of wet FGD, or no additional controls.

Document No.: OAR 2003 0053 2305.1 Commenter: Utility Air Regulatory Group ( UARG) Comment: UARG believes that the coal switching included in EPA's analysis " typically would not be considered in calculating collateral emission increases, due to application of the fuel switching exclusion in the definition of > major modification.= Specifically, a > major modification= does not include physical changes or changes in the method of operation that involve the use of an alternative fuel which the source was capable of accommodating before January 6, 1975 ( unless prohibited by an NSR permit condition). See 40 C. F. R. ' 52.21( b)( 2) iii)( e)( 1)."

" Although wet FGD will remove some sulfuric acid mist, UARG believes that, for EGUs over about 350 MW that burn coal with sulfur content at or above 2%, wet FGD typically will not reduce the SCR caused sulfuric acid mist emission increase to below the 7 tons per year significance level. Thus, for the control technology category consisting of the installation of SCR and wet FGD without a switch to higher sulfur coal, EPA may have underestimated the amount of EGU capacity that would experience a collateral significant emissions increase in sulfuric acid mist under the NSR regulations."

" EPA makes two unrealistically conservative assumptions in its analysis. First, rather than using its estimate of the amount of EGU capacity that might experience a collateral significant emission increase in sulfuric acid mist as a result of CAIR PCPs, EPA assumes that all EGUs that will install SCR and/ or wet FGD will experience a significant emissions increase in sulfuric acid mist. Second, EPA assumes that all of those EGUs will install a wet ESP to > mitigate= ( prevent) that collateral significant emissions increase. Id. At 77106. UARG has major concerns with these assumptions."

Response: These issues are addressed in the CAIR Notice of Final Action on Reconsideration, Section III. E.

XXII. C.   EPA did not properly analyze the potential impacts on PM emissions Document No.: OAR 2003 0053 2305.1 Commenter: Utility Air Regulatory Group ( UARG) Comment: " UARG also reiterates its comment, made recently in its rulemaking comments on EPA= s proposed rules for implementation of the PM 2.5 national ambient air quality standards, that condensable particulate matter ( including sulfuric acid mist) should not be regulated as a component of particulate matter under the NSR program until EPA develops and adequately justifies a reliable source test method for condensables. [ ] In its comments on the proposed PM 2.5 implementation rule, UARG urges that condensable particulate matter not be regulated under either the SIP or NSR programs at this time. The reason is that no reliable, accurate source test method exists for measuring condensable particulate matter. See Comments of the Utility Air Regulatory Group on EPA= s Proposed Rule to Implement the Fine Particle National Ambient Air Quality Standards ( EPA Document No. EPA HQ OAR 2003 0062 0120.1), at 13 21 ( January 31, 2006), incorporated herein by reference. See also Comments of the PM Group on the Proposed Rule to Implement the Fine Particle National Ambient Air Quality Standards ( EPA Document No. EPA HQ OAR 2003 0062 0096.1), at 39 48 ( January 31, 2006) ( also incorporated herein by reference)."

Response: The EPA is not taking action to change the manner in which the Agency treats condensable emissions and there is no final action on this issue in the CAIR Supplemental Notice of Reconsideration or CAIR Notice of Final Action on Reconsideration. The status of condensable emissions as a regulated NSR pollutant does not change the outcome of the Agency analysis for those reconsideration notices. Contrary to the commenter's assertions, the Agency has long defined particulate matter to include the condensable fraction of particulate emissions ( See 70 FR 66039, Memo from Thompson G. Pace, Acting Chief, Particulate Matter Programs Branch, to Sean Fitzsimmons, Iowa Department of Natural Resources, ( Mar. 31, 1994) http:// www. epa. gov/ region07/ programs/ artd/ air/ nsr/ nsrmemos/ cpm. pdf, 56 FR 65432, and 55 FR 41547).