First, it does not appear that, in developing the variability concept, EPA considered which states export and which states import electricity and how that can affect emissions within groups of states such as when a large EGU shuts down. Likewise, EPA did not seem to take into account to degree to which a given state even needs the extra allowances provided by variability. Secondly, factors such as extended episodes of high temperature often affect large geographic areas and exacerbate ozone formation. While these emission surges may balance out over time, the actual extra emissions are likely to occur at the worst possible times, such as on hot, humid days that already have poor air quality. EPA claims that these assurances are not threatened because limited allowances will maintain the established emissions levels. However, this interpretation dismisses the fact that sources can have significant carryover allowances from year to year and in a short timeframe can accumulate enough allowances to increase overall emissions in any given year. As stated previously, Maryland believes that the NOx budgets are too lenient already and that the variability concept as proposed would not provide the necessary assurances that the current proposed NOx budgets would be met at even a minimum allowable level. [EPA-HQ-OAR-2009-0491-2639.2, p.13; This comment can also be found at IV.F.1 of this comment summary]
Perhaps Maryland's greatest concerns with variability are that it is added on top of the budget that was supposedly determined to be the maximum acceptable emissions, and that it has not been proven acceptable with a photochemical model. Maryland believes that adding variability on top of the budgets is ripe for potential failures. Utilities may operate as if the 10% variability plus the budget level is the real budget and increase emissions up to the 10% limit. MDE believes that variability should be factored into the emissions budgets, not treated as a 10% add-on to a maximum acceptable emissions budget. [EPA-HQ-OAR-2009-0491-2639.2, p.13]
Maryland suggests that the variability concept be applied under the individual state budgets. We propose that, for instances of shutdowns and unexpected outages, EPA develop a process that would utilize allowances from the new source set asides to cover needed interim operations. For other factors, such as extreme weather and increasing demand, potential variability should drive stricter control levels or controls on additional EGU sources, and it should be absorbed under the budget. EPA's second reason for adopting variability states that as baseline emissions are variable, emissions after the elimination of all significant contribution and interference are also variable and thus it is appropriate to take this variability into account. On the other hand, EPA has maintained a strict emission level test, with no variability allowed, as the ultimate standard for approval under their re-designation and maintenance policies. This policy seems fundamentally at odds with EPA's variability concept as enumerated in the proposed rule, which holds that emissions can fluctuate and at the same time maintain assurance of eliminating significant contribution for downwind states. [EPA-HQ-OAR-2009-0491-2639.2, p.13]
Consequently, Maryland requests that EPA maintain assurance through the individual state budget structure proposed in the Transport Rule and address variability from within that construct; not as an add-on. Maryland would like to see EPA produce a modeling demonstration that verifies variability has been fully examined. [EPA-HQ-OAR-2009-0491-2639.2, p.14]
Response:
EPA's modeling of the final Transport Rule remedy directly incorporates the variability limits in each state.  Therefore, EPA's photochemical air quality modeling of the rule's impacts do in fact account for the application of variability limits on top of state budgets to form each state's assurance levels.  As a result, EPA's air quality projections for the impacts of this rule successfully incorporate emission projections including the variability limits allowed in each state.  EPA disagrees with the commenter's characterization of the Transport Rule emission budgets.  A state budget represents the emissions from covered units remaining in that state after the elimination of significant contribution and interference with maintenance in an average year.  This does not take into account the inherent year-to-year fluctuation in state-level EGU emissions that would occur in the future whether or not the Transport Rule was implemented.  Therefore, it is appropriate to apply the variability limits in addition to the state budget to allow for this year-to-year variation.  EPA acknowledges the concern expressed by the commenter regarding the impact of a single EGU failure to increased emissions from EGUs in multiple states, and EPA believes that the final Transport Rule successfully accommodates this potential outcome by applying the maximum historic year-to-year variability observed in any given state from the analyzed 2000-2010 period to all states in the programs.  As EPA explains in the final Transport Rule preamble section VI.E and the Variability Final Rule TSD, EPA observes several factors, including this factor identified by the commenter, that could lead multiple states in the future to experience up to the maximum state-level historic year-to-year variability observed in the data set analyzed from 2000-2010 for the final rule.
Organization: North Carolina Department of Environment and Natural Resources
Comment:
NC beIieves that the 95% confidence interval seems appropriate. [EPA-HQ-OAR-2009-0491-2767.1 p.7]
Although the variability limits may have been calculated in a defensible manner, once the limits are allowed there is no legal assurance that the variability margins will be used by market participants to account for variability. The variability limits are simply a trading budget overage margin and are forever unmoored from their intended purpose. As such, the variability limits, although stemming from a defensible theory, are themselves not consistent with the Clean Air Act. [EPA-HQ-OAR-2009-0491-2767.1 p.7]
Response:
With regard to the commenter's claim that the variability limits "are themselves not consistent with the Clean Air Act", see section VII.J of the preamble to the final Transport Rule.

EPA appreciates North Carolina's support of the 95% confidence interval and has maintained that criteria in the final variability limit analysis.

See also section IV.F.1 of this RTC document.
Organization: Prairie State Generating Company, LLC
Comment:
9. SIZE OF THE VARIABILITY LIMITS
The U.S. EPA requested comment on the size of the variability limits (10% for the 1-year variability limits and a level equal to the square root of the number of years covered by a look-back variability period). p. 45294. PSGC believes that the variability limits should be greater to account for emissions from new units who are not allocated allowances, to account for the variabilities in generation among the states discussed above, and to balance the data used to develop the base-years, i.e., 2009 emissions data when 2009 was an unusually low utilization year because of the economy and the lower than normal temperatures during the summer months in, at least, the Midwest. PSGC supports the U.S. EPA's suggestion that the variability limits should be based on historic heat input data (21% for annual NOx and 28% for SO2), p. 45294, as this level of variability is more representative of realistic conditions while still protecting the environment and would better accommodate new generation. [EPA-HQ-OAR-2009-0491-2842.1, p.7]
PSGC's concern with the proposed variability limit stems largely from the fact that the U.S. EPA did not determine on a state-by-state basis the likely new generation and then set the NUSA for each state consistent with those projections. If one state has a greater than 3% growth in generation, it is more likely that the total emissions in the state could exceed the state's variability limit because of the new generation while another state, even a neighboring state that has no new generation, will have NUSA allowances going unused. Because the assumption that the 3% growth in new generation region-wide is applied evenly in all states regardless of the prognosis for new generation in a state, the artificial constraints of that assumption carryover to the variability limits for each state. Increasing the size of the variability limits, at least in states with greater growth than others, would help to alleviate those unnecessary and unreasonable constraints. [EPA-HQ-OAR-2009-0491-2842.1, p.7]
As the U.S. EPA is aware, the energy from coal resources of states like Illinois is vast. New coal-fired power plants such as PSGC are highly controlled and are extremely efficient compared to the older coal-fired fleet. Arguably, the constraints inherent in the proposed Transport Rule extenuate reliance on older, less efficient plants and create unnecessary and unreasonable barriers to shifting generation to newer, more efficient units. Easing the ability of new plants to operate, rather than constraining them, by providing higher variability limits or excusing new units from compliance with the variability limits or, as suggested earlier, allowing them to become 'existing' units and thereby have a permanent allowance stream would enhance air quality while maintaining and increasing reliable electric service. [EPA-HQ-OAR-2009-0491-2842.1, p.8]
PSGC agrees that the variability limits should first apply in 2014, see pp. 45296, 45306, to provide for a reasonable transition period into the new program. [EPA-HQ-OAR-2009-0491-2842.1, p.8]
Response:
EPA finalized a modified variability limit approach, which simplified the determination of limits by eliminating the tonnage limits and giving all states the same percentage. The percentage variability limits are higher than the 10% limits in the proposal.  See preamble section VI.E and VI.F of the final Transport Rule for more details on variability limits.
The new unit set-aside approach has also been modified in response to this and other similar comments.  See section VII.D.2 of the final Transport Rule preamble for more details on the new unit set aside.

Organization: State of Missouri Department of Natural Resources
Comment:
State of Missouri Department of Natural Resources
EPA based the calculation for states' variability on heat input as a proxy for actual emissions. This seems appropriate as it factors out the effects on emissions of controls going online. The calculation was based on heat input from the Allowance Management System for years 2002 through 2008. A linear regression analysis was used to determine the regression line and coefficient of determination, r2. The difference was then noted between each annual observed heat input and the predicted heat input. The idea behind this was an attempt to quantify the changes to heat input over the study period due to growth or decline. The slope of the regression line would account for the increase or decrease. Limiting the discussion to just the coal-fired units, Missouri's data does not show this assumed linearity. The coefficient of determination was very low, 0.01, implying that the difference between actual and predicted values were due to factors other than heat input and random error. EPA continued with the linear regression in spite of the low r2 value. This leads to large differences between observed and predicted heat inputs, large standard deviation of the differences, and large ninety-five (95%) confidence level in the variability of heat input. EPA may want to consider using a regression method that yields the highest r2 value. As an example, a quadratic regression on Missouri's seven (7) data points yields an r2 value of 0.94. The difference between observed and predicted values is smaller, the standard deviation of the differences is smaller, and the ninety-five percent (95%) confidence level in the variability of heat input is smaller. Examining the regression line and regression quadratic versus the data confirms the data more closely follows the quadratic function and not the linear function. The ninety-five percent (95%) confidence level variability in heat input is combined with modeled emission rates to yield ninety-five (95%) confidence level in variability in emissions. The implication is that Missouri's 1-year variability in emissions, which serves as the basis for their 3-year variability, would be less if EPA used a more appropriate curve-fitting technique. [EPA-HQ-OAR-2009-0491-3806, p.4]
Response:
Thank you for your comment.  You are correct that a quadratic equation is a better fit for Missouri's heat input data for the time period of 2002-2008, than the linear least-squares regression equation.  The r^2 value for the quadratic equation is large (0.942), indicating that the quadratic trend line can "explain" a substantial portion of the heat input pattern for Missouri.  However, it is not clear why there would be a parabolic pattern of heat input for the state, or whether we could expect to see such a quadratic pattern continue in the future.  When we apply a quadratic equation to Missouri's heat input for a larger time period 2000-2010, the r^2 value drops to 0.77.  Moreover, the estimate for 2010 using the quadratic equation for 2010 is going down (it would estimate 2011 as lower than 2010).  However, heat input in Missouri has increased from 2009 through 2010, and it does not seem likely for it to drop below 2009 levels in 2011.
The interpretation that we make for Missouri's heat input over the 2002-2008 time period is that there is substantial year-to-year variation, and essentially no trend over the time period as assessed over the entire time period.  The heat input value in 2002 is fairly close to the value in 2008.  When the regression line is essentially flat, there is no trend and the r^2 values will be very low (since the regression equation does not "explain" a trend).  When we assess the heat input over the 2000-2010 time period using the linear equation, the r^2 is about 0.33.  Given the large year to year variation and lack of consistent overall trend, EPA thinks that a linear equation is the most appropriate for gauging historical variability in heat input for Missouri.
Organization: Utility Air Regulatory Group (UARG)
Comment:
Utility Air Regulatory Group (UARG)
1. Variability Limits.
EPA's explanation in the preamble to the proposed rule, and in the TSD on Power Sector Variability ("Variability TSD"), of its method for selecting the 10 percent uniform emission variability value is less than clear. At a minimum, it does not appear that EPA's analysis precludes a conclusion that a higher uniform percentage is justified. EPA should carefully consider the basis for adopting a higher percentage. [EPA-HQ-OAR-2009-0491-2756.1, p.92]
UARG strongly urges EPA to consider increasing the variability limit. A higher variability limit would encourage emission trading and increased emission reductions at sources where they are most cost-effective to achieve (thus lowering the overall cost of compliance with the program), while still ensuring that substantial emission control levels are maintained within each state. In fact, an analysis conducted by Southern Company and described in its comments on the Proposed Transport Rule indicates that even unrestricted interstate emission trading could yield air quality that is substantially the same as if trading were not allowed under the proposal. [EPA-HQ-OAR-2009-0491-2756.1, p.93, this comment can also be found at section IV.F.6. of the comment summary]
Response:
EPA has used a wider set of data from 2000 - 2010 for analyzing variability in the final rule. As explained in the preamble section VI.E, the resulting  variability limit percentages provide sources with sufficient operational flexibility yet comport with the court ruling in North Carolina v. EPA that requires sources within each state to eliminate their significant contribution or interference with maintenance.

IV.F.3. Alternative Calculation Methods

Organization: Adirondack Council
Comment:
Adirondack Council
EPA also requests comment on an alternative calculation method for variability. The alternative method would use the results of the proposed method but add a ceiling based on the maximum percentage of variability among covered states as observed in the historic heat input data described previously. (p. 351) The Adirondack Council supports the alternative calculation with the ceiling as it would prevent higher levels for some states that may even allow for increases in emissions in some cases. We support the alternative approach as it will ensure all states make significant reductions. [EPA-HQ-OAR-2009-0491-2848.1, p.3]
Response:
EPA has modified the approach to variability limits in the final rule making the alternative maximum percentage approach no longer applicable.  See preamble section VI.E for more details about the final variability limits approach.
Organization: West Virginia Department of Environmental Protection
Comment:
West Virginia Department of Environmental Protection
[[2790.1 p.7]]
Alternative Calculation Method for Variability - EPA also requested comment on an alternative calculation method for variability. The alternative method would use the results of the proposed method, but add a ceiling on the maximum percentage of variability among covered states as observed in the historic heat input data. For both NOx annual and S02' the percentage limits calculated using this alternative methodology are 21 and 28 percent of a state's budget, respectively. Under this alternative calculation methodology, a state's variability limit would be no lower than 10 percent of its budget and no higher than 21 or 28 percent, for NOx and S02' respectively. Because no state varied by more than these percentages, they could serve as reasonable caps on variability limits. These limits would address the issue of small states receiving very large variability limits as a fraction of their budgets. The District of Columbia and Connecticut are the only areas that would be affected by the use of the alternative calculation methodology for S02 variability limits.
WVDAQ supports the use ofEP A's alternative calculation methodology for variability limits, and believes a ceiling on the maximum percentage of variability is appropriate. We also agree that the maximum percentage of variability among covered states as observed in the historic heat input data could serve as reasonable caps on variability limits.
Response:
EPA has modified the approach to variability limits in the final rule making the alternative maximum percentage approach no longer applicable.  See preamble section VI.E for more details about the final variability limits approach.

IV.F.4. Estimating Multi-Year Variability/Determination of 3-Year (and 2-Year) Variability Limits

Organization: Adirondack Council
Comment:
Adirondack Council
Table IV.F-1 shows proposed variability limits by states on SO2 emissions for 2014 and later. Table IV.F-2 shows proposed variability limits by state on NOX annual emissions for 2014 and later. EPA requests comment on the proposed variability limits. (p. 351) The Adirondack Council believes that the 3-year average limit is too high. While we understand the methodology for calculating this figure, we believe that using this type of mathematical formula creates some confusion. A simpler way to calculate the 3-year average would be to divide the 1- year limit by 2. [EPA-HQ-OAR-2009-0491-2848.1, p.3]
Response:
EPA finalized one-year variability limits only in the Transport Rule for reasons explained in preamble section VI.E and in the Power Sector Variability Final Rule TSD.
Organization: Capital Power Corporation
Comment:
Capital Power Corporation
CATR allocations and estimates of variability were made through EPA's use of the Integrated Planning Model (IPM) based on a run of 3-year emissions variability. CPC believes this period is inadequate to appropriately characterize an industry whose productions and emissions vary significantly with economic fluctuations. Given the economic downturn that has occurred over the past two years, CPC believes that EPA should consider modeling a five year period that would better account for the variability that may occur when the economy recovers. [EPA-HQ-OAR-2009-0491-2753.1, p.2]
Response:
Variability limits were updated based on data from 2000 - 2010. This 11-year period includes both years in which heat input was above and below the average.  See preamble section VI.E and the Power Sector Variability Final Rule TSD for more on variability limits and the data used.
Organization: Illinois Environmental Protection Agency
State of Ohio Environmental Protection Agency (Ohio EPA)
Santee Cooper
Comment:
Illinois Environmental Protection Agency
Almost half of Illinois' electric generating capacity is from nuclear power plants. In our opinion, the three-year variability averaging provisions proposed in the Transport Rule do not provide sufficient flexibility in the event of significant downtime of one or more nuclear generating stations. When such shutdowns occur, coal-fired generating stations necessarily ramp up electric generation, thereby causing an increase in S02 and NOx emissions for the duration of the shutdown. U.S. EPA's variability provisions could potentially be a risk to reliability in the event of a long-term shutdown of one or more nuclear power plants. The Illinois EPA recommends that U.S. EPA remove the three-year averaging requirement and provide the variability limit on a year-to-year basis.  [EPA-HQ-OAR-2009-0491-2781.1 p.3]
Santee Cooper
EPA should eliminate the 3-year variability limit on state NOx and S02 budgets because it would make the achievement of the Transport Rule's environmental objectives unnecessarily costly. [EPA-HQ-OAR-2009-0491-2820.1, p.2]
EPA SHOULD ELIMINATE THE 3-YEAR VARIABILITY LIMIT. [EPA-HQ-OAR-2009-0491-2820.1, p.6]
Santee Cooper believes EPA's proposal to impose a 3-year variability limit on state NOx and SO2 budgets is unworkable and would make the achievement of the Transport Rule's environmental objectives unnecessarily costly. EPA developed the concept of the variability limit in order to allow state budgets to accommodate changes in electricity demand, generation outages, and other common factors that influence year-to year emissions. However, EPA calculated the 3-year variability limits on the basis of statistical inference, not historical data. This method offers little protection for states that become subject to unusually large changes in demand for or supply of electricity. Moreover, compliance with the 3-year limit could force states to achieve unusual and abrupt changes in emissions. [EPA-HQ-OAR-2009-0491-2820.1, pp.6-7]
As an example, consider a state with an annual emissions budget of 100,000 tons of SO2 and a 1-year variability limit of 10,000 tons. Using EPA's formula, that state would have a 3-year variability limit of 5,800 tons. If sources within that state emitted 110,000 tons of SO2 in 2014 and 2015 (just within the 1-year variability limit), compliance with the 3-year limit would require the state to emit just 97,000 tons in 2016 - a reduction of approximately 13% relative to the previous two years. Such abrupt changes in emissions would be difficult to achieve, especially given that emissions data for 2015 would not become available until several months into 2016. Moreover, the prospect of such significant swings in emission budgets would create substantial business uncertainty and add to the cost and complexity of planning for compliance with the Transport Rule. [EPA-HQ-OAR-2009-0491-2820.1, p.7]
Santee Cooper believes that the 1-year variability limit is a sufficiently stringent limitation on interstate trading of allowances to comply with the D.C. Circuit's mandate in North Carolina that each state address its own significant contribution to nonattainment in downwind states. The 3-year variability limit is an unnecessary and impractical additional measure that should be discarded in the final version of the Transport Rule. [EPA-HQ-OAR-2009-0491-2820.1, p.7]
State of Ohio Environmental Protection Agency (Ohio EPA)
b. Furthermore, the framework established for the three-year variability limit also unnecessarily inhibits trading of allocations. Using a three-year variability limit that is lower than the sum of the one-year variability limits will create uncertainty, especially in that third year, as to whether enough allocations will be available. Owners will likely bank any left-over allocations to ensure they have sufficient allocations to cover the three-year variability. [EPA-HQ-OAR-2009-0491-2793.2, pp. 6-7]
Response:
EPA is finalizing one-year variability limits only in the Transport Rule.  The three-year variability limits have not been included in the final rule for reasons discussed in the final Transport Rule preamble section VI.E and the Power Sector Variability Final Rule TSD.
Organization: Large Public Power Council (LPPC)
Comment:
Large Public Power Council (LPPC)
A. The Three-Year Variability Limit is Impracticable, Increases the Cost of the Program, and Is Not Required by North Carolina
LPPC urges EPA to eliminate the 3-year variability limit in the final Transport Rule. Unlike CAIR, the proposed Transport Rule sets individual state emission budgets that are based on each state's estimated significant contributions to nonattainment or interference with maintenance in downwind states. EGUs (or EGU owners) within the state would be permitted to submit allowances in excess of the annual budget (either by procuring them through interstate trading or by using banked allowances) only to the extent necessary to accommodate anticipated year-to-year variability in emissions within each state. EPA views these variability limits  -  which inherently restrict the volume of interstate emissions trading  -  as necessary to comply with North Carolina's holding that each state's emission reduction requirements must be tied to its actual level of significant contribution or interference with maintenance. [EPA-HQ-OAR-2009-0491-2667.1, p.11]
1. Impracticability. The 3-year limit is impracticable because it forces emissions within each state to conform to statistically derived three-year averages regardless of actual conditions within the state (or face a penalty in the form of the assurance provisions). As EPA notes in the preamble, the underlying purpose of the variability limit is to allow states limited flexibility in their emissions budgets to accommodate fluctuations in electricity demand, generation outages, and other external factors that influence year-to-year emissions. Although variability averaged over a rolling 3-year period is historically smaller than variability in a single given year, EPA's method for deriving the 3-year variability limits is no more than a statistical prediction of the variability that "should" ordinarily be observed in a 3-year period. 39 This statistical method fails to accommodate actual variability that exceeds levels predicted by EPA's simple statistical estimates. If unusual circumstances  -  such as a surge in electricity demand stemming from unusually hot summer weather  -  nevertheless caused emissions to increase beyond the 3-year rolling average, sources within the state would be penalized for exceeding the 3-year variability limit. In order to avoid the assurance provisions, sources within the state would have to engineer abrupt reductions in emissions to conform to the 3-year limit. 40 [EPA-HQ-OAR-2009-0491-2667.1, pp.11-12]
This hardship would be most acute in 2016, the first year that the proposed 3-year limit would become binding, because the amount of emissions allowable in 2016 in order for a state to remain within the 3-year limit could not be calculated until emissions data for both 2014 and 2015 are available. Since emissions data from 2015 would not likely be available until early 2016, sources within each state would have only a matter of months to curb their emissions to levels commensurate with the 3-year limit  -  a task that would likely be impossible. 41 [EPA-HQ-OAR-2009-0491-2667.1, p.12]
2. Cost. The 3-year limit is also costly, for obvious reasons. A cap-and-trade system is most economically efficient when maximum flexibility is allowed as to the timing and location of emission reductions within the cap. Interstate trading, and banking of emission reductions, are the key mechanisms for ensuring this flexibility. Because the 3-year limit is about 42% lower than the annual variability limit in every state, 42 the effect of the 3-year limit is to significantly constrain the use of interstate and banked allowances even more than would occur with the 1-year limit alone. These constraints could, in many cases, prevent EGUs from minimizing the costs of meeting the environmental objectives of the Transport Rule through the efficient use of traded and banked allowances. [EPA-HQ-OAR-2009-0491-2667.1, p.12]
3. Consistency With North Carolina. The 3-year limit is simply not required to satisfy the D.C. Circuit's instructions in North Carolina. In North Carolina, the D.C. Circuit faulted CAIR for allowing completely unrestricted emissions trading among sources in different states. Whatever its economic and environmental merits, the D.C. Circuit reasoned, such an approach could never ensure the achievement of "something measurable towards the goal of prohibiting sources `within the State' from contributing to nonattainment or interfering with maintenance in 'any other State,' 43 In the case of CAIR, which purported to provide a "complete" remedy to the problem of interstate transport of NOx and SO2, the D.C. Circuit required EPA to demonstrate that each state subject to the rule would effectively eliminate its significant contributions and interference with maintenance. [EPA-HQ-OAR-2009-0491-2667.1, pp.12-13]
Nothing in the D.C. Circuit's opinion mandates that EPA adopt a 3-year limit or comparable approach. EPA's state emission budgets, combined with its proposed 1-year variability limits, satisfy the D.C. Circuit's mandate that the agency quantify and achieve "something measurable" toward eliminating each state's significant contribution to downwind air quality problems. As EPA notes in the preamble to the Transport Rule, the factors that would lead to variability under the Transport Rule are the same factors that would drive variability in a "baseline" scenario absent the Transport Rule. Accordingly, each state can be considered to have eliminated its significant contribution and interference with maintenance even if its emissions reach the 1-year variability limit. Moreover, the magnitude of the 1-year variability limits is small compared to the state emission budgets, and even smaller compared to the overall level of NOx and SO2 emissions from all sources within each state. The 3-year limit is an unnecessary appendage to the proposed rule, and  -  given its significant practical problems and cost impacts  -  should be discarded in the final rule. 44 [EPA-HQ-OAR-2009-0491-2667.1, p.13]
4. Policy Rationale for 3-Year Limit. As a final comment on the 3-year limit, LPPC notes that EPA's stated policy rationale for the 3-year limit is unclear. According to EPA, the 3-year limit is necessary because air quality is assessed under the CAA on a rolling 3-year basis. However, EPA never explains why this method for assessing air quality must also drive variability limits, which are established for a completely distinct purpose: to accommodate natural fluctuations in regional electricity demand. The weak and arbitrary nature of EPA's stated policy rationale for the 3-year limit only adds to the case for eliminating the 3-year limit in the final rule. [EPA-HQ-OAR-2009-0491-2667.1, p.13]

44. As EPA also acknowledges, the variability limits are designed to have no impact on the aggregate quantity of NOx and SO2 emitted among all upwind states. See 75 Fed. Reg. at 45,292. If one state exceeds its budget and reaches its 1-year variability limit, those excess emissions must necessarily be exactly offset by reduced emissions in another state (or in the case of banked allowances, emission reductions occurring in earlier years of the Transport Rule). Because the variability limits are relatively small and because their use is always offset by an emission reduction elsewhere or at a different point in time, the environmental impact of eliminating the 3-year variability limit is likely to be negligible. [EPA-HQ-OAR-2009-0491-2667.1, p.13]
Response:
EPA is finalizing one-year variability limits only in the Transport Rule.  The three-year variability limits have not been included in the final rule for reasons discussed in the preamble section VI.E and the Power Sector Variability Final Rule TSD, such as complexity and lack of air quality benefits.

IV.F.5. Proposed Variability Limits on SO2, NOx, and Ozone Season NOx

Organization: Duke Energy
Comment:
It is not clear from EPA's explanation in the preamble to the PTR, and in the TSD on Power Sector Variability ("Variability TSD"), of its methodology for selecting a variability limit how or why EPA arrived at its proposed 10 percent uniform emission variability value. At a minimum, it does not appear that EPA's variability analysis would not support a higher uniform percentage, such as 20 percent. Duke Energy urges EPA to consider the basis for using a higher variability percentage. [EPA-HQ-OAR-2009-0491-2689.1, p.30]
The Variability TSD describes how EPA performed the variability analysis using two different approaches, each of which examined the effects of variations in SO2 emissions from upwind states on 24-hour PM2.5 concentrations at downwind nonattainment and maintenance monitors. Variability TSD at 43. In the first approach -- intended to replicate "typical" variation -- EPA projected that SO2 emissions in each upwind state in the proposed control region would vary randomly. Id. at 44. In the second approach -- intended to replicate "worst case" variation -- EPA projected, on a monitor-by-monitor basis, that SO2 emissions in the upwind states with the largest air quality impacts per ton on the downwind monitor increased to the maximum amount (up to each state's one year variability limit) and that SO2 emissions in all of the other upwind states decreased to compensate for the increased emissions from the high impact states (so that the region wide emissions in the proposed control region equaled the sum of all state budgets). Id. at 47. EPA reported that "[f]or both approaches, the effects of the inherent variation in emissions on daily PM2.5 concentrations were estimated to be small." Id. at 44. [EPA-HQ-OAR-2009-0491-2689.1, pp.29-30]
That a broader and more robust trading program would have little impact on where emission reductions occur is entirely consistent with what is expected for a well-designed trading program. There will typically be little overall difference in the units that will be controlled under a trading program that is set to meet specific targets. The reductions occur where the opportunities are greatest, and under a tight reduction program, there will be sufficient "opportunities" throughout the control region. What makes a difference is in the success of the trading program is the ability to pool the limited amount of available and unused allowances such that there will be sufficient volume of allowances to establish a viable market that is not subject to great volatility. The result of a limited market is that a viable market may not be established and controls may be added where they don't make sense  -  on smaller units or units that already have relatively low emission rates, and which are likely having less impact on downwind areas. [EPA-HQ-OAR-2009-0491-2689.1, p.30]
Duke Energy agrees generally that the analysis demonstrates that interstate trading does not adversely impact downwind air quality. However, Duke Energy encourages EPA to also perform this analysis using variability limits of 20 to 30 percent to determine if higher limits would also yield small impacts. [EPA-HQ-OAR-2009-0491-2689.1, p.31]
Response:

Thank you for your comments.
Organization: GE Energy Financial Services (GE EFS)
Comment:
GE Energy Financial Services (GE EFS)
GE EFS would also suggest that EPA increase both the one-year and three-year variability limits to 15% and 10%, respectively, of a state's budget. [EPA-HQ-OAR-2009-0491-2701.1,p.6]
Response:
EPA has modified the approach to variability limits in the final Transport Rule to align variability limits with historic heat input variability between  2000 - 2010 for all covered states.  For more on variability limits, see section VI.E of the preamble to the final Transport Rule.
Organization: JEA
Comment:
JEA
However, JEA urges EPA to eliminate the 3-year variability limit in the final Transport Rule. Unlike CAIR, the proposed Transport Rule sets individual state emission budgets that are based on each state's estimated significant contributions to nonattainment or interference with maintenance in downwind states. Sources within the state would be permitted to submit allowances in excess of the annual budget (either by procuring them through interstate trading or by using banked allowances) only to the extent necessary to accommodate anticipated year-to-year variability in emissions within each state. EPA views these variability limits - which inherently restrict the volume of interstate emissions trading - as necessary to comply with North Carolina's holding that each state's emission reduction requirements must be tied to its actual level of significant contribution or interference with maintenance. [EPA-HQ-OAR-2009-0491-2713.1, p.4]
Response:
EPA is finalizing one-year variability limits only in the Transport Rule.  The three-year variability limits have not been included in the final rule for reasons discussed in the preamble section VI.E and the Power Sector Variability Final Rule TSD.
Organization: New Jersey Department of Environmental Protection (NJDEP)
Comment:
A seasonal limitation as proposed in the Transport Rule does not ensure enough reduction of the daily emissions of ozone precursors to prevent an ozone NAAQS violation. New Jersey has adopted its own rules to address NOx emissions on a daily basis. In an analysis the Department conducted for the northeast, we found that on a typical summer day in 2005, the NOx emissions were 551 tons per day, while on a high electric demand day, typically a high temperature day with high ozone, the NOx emissions were 1,349 tons per day. Averaging emissions over the ozone season is insufficient to address such days, where the NOx emissions can be two to three times the typical day. Although the USEP A offered a direct control alternative in the proposed Transport Rule, it is not sufficient to solve the peak ozone day problem because the alternative is an annual performance standard that allows averaging of all the units statewide under one owner and does not address daily emissions. To properly address NOx emissions during high electric delnand days, the USEP A must additionally adopt a rule with daily, or shorter period, performance standards.   [EPA-HQ-OAR-2009-0491-2684.1 p.3]
Response:
Thank you for your comments, EPA's modeling of the Transport Rule suggests that additional pollution control hardware will be installed; thus, it is likely that emissions will be lower under nearly all circumstances, including during the potential peak ozone days cited by the commenter.
Organization: State of Ohio Environmental Protection Agency (Ohio EPA)
Comment:
State of Ohio Environmental Protection Agency (Ohio EPA)
5. Ohio EPA has concerns regarding the variability limit provisions. U.S. EPA should adjust the variability limits as they are not sufficient for some states, while for others they are excessive. [EPA-HQ-OAR-2009-0491-2793.2, p. 6]
a. Given the insufficient S02 emissions budget for Ohio and the fact that 3% is taken off the top for the new unit set aside, Ohio EPA believes it is necessary to provide a greater variability limit. [EPA-HQ-OAR-2009-0491-2793.2, p. 6]
b. Ohio EPA is also concerned, as pointed out by U.S. EPA, that some small states receive very large variability limits as a fraction of their budgets. [EPA-HQ-OAR-2009-0491-2793.2, p. 6]
c. Notwithstanding the fact that Ohio EPA believes the variability limits are insufficient, Ohio EPA disagrees with any approach that would implement those variability limits starting in 2012. Sufficient time is needed in order to allow sources to transition to this new system. [EPA-HQ-OAR-2009-0491-2793.2, p. 6]
Response:
EPA has modified the approach to variability limits in the final rule and has addressed the concern raised in this comment regarding large variability limits for some states.  See preamble section VI.E in the final Transport Rule for more details about the final variability limits approach.
Organization: State of Wisconsin, Department of Natural Resources
Comment:
By 2014, any variance provisions should not allow higher emission levels than the emission budgets that are determined necessary for meeting the determined significant contribution. [EPA-HQ-OAR-2009-0491-2829.2, p.1]
Response:
The commenter mischaracterizes the role of the Transport Rule state budgets, which EPA determined by identifying the cost-effective emission reductions required in an average year, before accounting for the inherent year-to-year variability in state-level EGU emissions.  EPA has determined that compliance with state assurance levels (state budget plus variability limit) under the Transport Rule programs meets the mandate of section 110(a)(2)(D) under the Transport Rule FIPs.
Organization: West Virginia Department of Environmental Protection
Comment:
West Virginia Department of Environmental Protection
Similarly, the ozone season NOx ozone-year variability limit for the District of Columbia is 2000 percent of its proposed budget, and the three-year variability limit is 1154 percent of the proposed budget. The five areas that would be affected by the use of the alternative calculation methodology for ozone season variability limits have proposed one-year variability limits ranging from 29 percent to 2000 percent of the proposed budgets, and three-year variability limits ranging from 17 percent to 1154 percent of the proposed ozone season NOx budgets. WVDAQ believes that as proposed, the variability limits provisions are flawed. We therefore support EPA's alternative calculation method for variability, which contains a ceiling on the maximum percentage of variability. [EPA-HQ-OAR-2009-0491-2790.1, p. 6]
Response:
EPA has modified the approach to variability limits in the final rule and has addressed the concern raised in this comment regarding large variability limits.  See preamble section VI.E for more details about the final variability limits approach.

IV.F.6. Estimate of Effects of Emissions Variability on Downwind Air Quality

Organization: Duke Energy
Utility Air Regulatory Group (UARG)
Comment:
Duke Energy
Duke Energy encourages EPA to also assess the impact on downwind air quality assuming no variability limit. If one or more of these analyses also indicate that the impact of upwind emissions variability on downwind air quality remains small, higher variability limits, or no variability limits, would be justified. A higher variability limit would encourage greater emission trading and increased emission reductions at sources where they are most cost-effective to achieve, while still ensuring that substantial emission control levels are maintained within each state. Duke Energy urges EPA to give serious consideration to increasing the variability limit threshold. [EPA-HQ-OAR-2009-0491-2689.1, p.31]
Utility Air Regulatory Group (UARG)
The Variability Limits and Assurance Provisions Proposed by EPA Are Unduly Stringent and Should Be Adjusted.
The Variability TSD describes an analysis that EPA performed, using its air quality assessment tool, to evaluate the effect of variability in emissions in upwind states on air quality in downwind states. According to this TSD, EPA performed this analysis using two different approaches, each of which examined the effects of variations in SO2 emissions from upwind states on 24-hour PM2.5 concentrations at downwind nonattainment and maintenance monitors. Variability TSD at 43. In the first approach -- intended to replicate "typical" variation -- EPA projected that SO2 emissions in each upwind state in the proposed control region would vary randomly. Id. at 44. In the second approach -- intended to replicate "worst case" variation -- EPA projected, on a monitor-by monitor basis, that SO2 emissions in the upwind states with the largest air quality impacts per ton on the downwind monitor increased to the maximum amount (up to each state's one-year variability limit) and that SO2 emissions in all of the other upwind states decreased to compensate for the increased emissions from the high-impact states (so that the region-wide emissions in the proposed control region equaled the sum of all state budgets). Id. at 47. EPA reported that "[f]or both approaches, the effects of the inherent variation in emissions on daily PM2.5 concentrations were estimated to be small." Id. at 44; see also id. at 46 (reporting that the results of the analysis using the first ("typical" variation) approach indicated that "the combined downwind air quality impacts were essentially negligible"), 47 (reporting that the results of the analysis using the second ("worst case" variation) approach indicated that "the resulting increases in air quality are small relative to other factors (i.e., weather)"). [EPA-HQ-OAR-2009-0491-2756.1, pp.92-93]
UARG commends EPA for conducting this analysis and agrees in broad terms that this analysis demonstrates that interstate trading can play a valuable role in reducing emissions without decreasing downwind air quality. However, it is not apparent, and EPA does not explain, why it chose to perform this analysis using only a variability limit of 10 percent of the state budgets. EPA should perform the analysis using higher variability limits, in the range of at least 20 to 30 percent of each state's budget. If these analyses also indicate that the impact of upwind emissions variability on downwind air quality remains small, higher variability limits would be justified. [EPA-HQ-OAR-2009-0491-2756.1, p.93]
UARG strongly urges EPA to consider increasing the variability limit. A higher variability limit would encourage emission trading and increased emission reductions at sources where they are most cost-effective to achieve (thus lowering the overall cost of compliance with the program), while still ensuring that substantial emission control levels are maintained within each state. In fact, an analysis conducted by Southern Company and described in its comments on the Proposed Transport Rule indicates that even unrestricted interstate emission trading could yield air quality that is substantially the same as if trading were not allowed under the proposal. [EPA-HQ-OAR-2009-0491-2756.1, p.93, this comment can also be found at section IV.F.2. of the comment summary]
Response:
Thank you for your comments.
Organization: State of Delaware Department of Natural Resources & Environmental Control
Comment:
State of Delaware Department of Natural Resources & Environmental Control
Delaware is also concerned with EPA's concept of providing 1-year and 3-year average variability mass emission provisions that could serve to allow upwind states to increase their emissions above the limit that EPA has calculated to be required to fully eliminate that state's significant contribution or interfere with maintenance in a downwind state. It is Delaware's understanding that EPA has considered the use of this variability concept in order to help address concerns regarding the variability in electric demand and to prevent impact on electric grid reliability. While Delaware understands the need to maintain grid reliability, it is Delaware's concern that under this scenario any given upwind state, or group of upwind states, could potentially emit on a routine basis at levels that exceed the values calculated by the EPA as needed to eliminate significant contribution and interference with maintenance in a downwind state. It is Delaware's opinion that the proposed variability concept be eliminated or revised such that any revision would preclude the potential for and upwind state or group of upwind states to significantly contribute to a downwind state's inability to comply with applicable NAAQS, or interfere with maintenance of that NAAQS. [EPA-HQ-OAR-2009-0491-2980.1, pp.4-5; This comment can also be found at section IV.F.1 of this comment summary]
Response:
Thank you for your comments.
IV.G. How the Proposed Approach to Significant Contribution and Interference With Maintenance is Consistent With Judicial Opinions

Organization: American Electric Power
Comment:
American Electric Power
The Analyses Supporting the Transport Rule do not Meet the Requirements of the Court Decision Requiring a Full Impact Analysis
EPA has failed to fully examine the impacts of the utility sources in a given state on downwind nonattainment areas. This is important since the control program embodied in the Proposed Transport Rule is solely focused on utility sources while the impacts on downwind areas are based on all sources in the state. When EPA developed the NOx SIP Call Rule in the late 1990's, the analysis performed did take into account all source categories and the rule regulated emissions from all source categories. Further, the states were given some discretion in how the final budgets were distributed to sources, so long as the overall budget was met. [EPA-HQ-OAR-2009-0491-2665.1, pp.13-14]
In the Proposed Transport Rule, EPA assumes that a single source category is capable of resolving a state's contribution to downwind nonattaimnent and maintenance, and should exclusively bear the entire burden of mitigating that impact, even though it has used all source sectors to determine impacts. Making a single source category effectively responsible for resolving the downwind significant transport contribution is fundamentally unfair and technically flawed as shown using data developed by both EPA and the Midwest Ozone Group (as described above). In addition, MOG modeling also demonstrates that the trading program embodied in the existing CAIR program, with a complete and proper technical analysis, can cure the defects in the record found by the D.C. Circuit in the North Carolina case. [EPA-HQ-OAR-2009-0491-2665.1, p.14]
Response:
EPA disagrees with the commenter's assertion that the analyses supporting the Transport Rule are inconsistent with the decision of the D.C. Circuit in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).  As explained in the preamble, EPA developed the Transport Rule to respond to and be consistent with the decision of the D.C. Circuit in North Carolina.  EPA believes that the Transport Rule and the analyses supporting it are fully consistent with the statutory mandate of section 110(a)(2)(D)(i)(I) as interpreted by the court.
EPA also notes that the comment is premised on the incorrect assumption that, under the Transport Rule, a single source category is made responsible for resolving significant contribution to nonattainment and interference with maintenance that comes from other source categories.  This is not true.  As explained in detail in the preamble to the final rule, EPA's significant contribution analysis is a two part analysis.  In the first part, EPA looks to whether all emissions from a specific state contribute above a threshold amount to downwind nonattainment and maintenance receptors.  In this first step, EPA does consider emissions from all source categories.  However, a determination that the state's emissions exceed the thresholds identified in the rule at specific downwind receptors only means that the state is found "linked" to those receptors and therefore EPA must proceed to the second step to determine what portion, if any, of the state's total contribution is its significant contribution.  In this second step, EPA quantifies the emission reductions available from EGUs at specific cost thresholds.  EPA's analysis in this step only considers EGU emissions because, as explained in section VI of the preamble, EPA verified that there are little or no reductions available from non-EGUs at costs lower than the thresholds used in the final rule. Thus, when quantifying the state's significant contribution, EPA considers only emissions from the source category -- EGUs -- that offered broadly available cost-effective emission reductions at the cost thresholds at which EPA identified the necessary emission reductions in each state.  Further, EPA notes that states retain the discretion to submit to EPA a State Implementation Plan that may use a different regulatory mechanism or regulate different sources in order to prohibit emissions within the state that significantly contribute to nonattainment or interfere with maintenance of the relevant NAAQS in another state.
Finally, EPA disagrees with the commenter's assertion that the trading program as embodied in the existing CAIR program could, with no changes other than changes to the technical analysis supporting the program, cure the defects found by the D.C. Circuit in the North Carolina case.  EPA believes the Transport Rule as finalized is fully consistent with the statutory mandate of section 110(a)(2)(D)(i)(I) as interpreted by the D.C. Circuit.

IV.H. Alternative Approaches for Significant Contribution and Maintenance That EPA Evaluated

Organization: Ohio Valley Electric Corporation and Indiana-Kentucky Electric Corporation
Comment:
Ohio Valley Electric Corporation and Indiana-Kentucky Electric Corporation
E. EPA Should have Evaluated Costs in Terms of the Cost per Unit of Reduction in Ambient Concentration in Nonattainment and Maintenance Areas, and not Cost per Ton of Reduced Emissions at the Source
EPA states, at 75 Fed. Reg. 45,299, that it considered, but rejected, a methodology for quantifying significant contributing emissions that would have assigned costs based upon cost per unit of air quality improvement (cost per ug/m3 or ppm) rather than cost per ton of emission reduction. No explanation is offered as to why this legally and logically preferable approach was not employed, even though it appears from the discussion of the cost/ton approach that EPA had available to it all modeling and analytical tools necessary to conduct such an analysis. EPA chose the units of the NAAQS when they are created, and this choice became the metric for attainment and maintenance required by SIPs or FIPs. If there was a direct correlation between the weight (tons) of emissions per 8 hours, or 24 hours, or per year (the time intervals relevant to the ozone and PM 2.5 NAAQS that the Transport Rule requirements are purportedly designed to attain and maintain), there would be no need for air quality models. EPA uses, and insists that the states use, air quality models to demonstrate the adequacy and appropriateness of their SIP or FIP attainment demonstration strategies. Having made the choice of units in setting the NAAQS, EPA cannot rationally or reasonably ignore those units in promulgating or approving implementation plans to achieve them. [EPA-HQ-OAR-2009-0491-2803.1, p.13]
Cost per ton of emission reduction is an approach that is ill-suited to development of a transport rule. The effect of removing a ton of emissions from a specific source on downwind air quality depends upon a number of factors, especially the distance of the source from the downwind nonattainment or maintenance area. Thus, for a distant source, far more tons of emissions must be removed to have the same effect of reducing the ambient air concentration of a pollutant as compared to a source closer to the impacted area, or, more importantly, sources located within the area. Thus, a more accurate and rational approach, consistent with the requirements of the Clean Air Act, is to determine the cost that a source must incur to produce a given unit of improvement of air quality in the impacted downwind area, rather than the cost per ton of removal, and to employ that cost in the determination of 'significance' for regulatory purposes. [EPA-HQ-OAR-2009-0491-2803.1, p.14]
Utilization of this preferable approach would allow EPA to more accurately assess the degree to which upwind sources are being required to incur high costs to achieve miniscule air quality improvement that sources located within the impacted area could achieve at far lesser cost, and thus avoid placing an unfair burden on distant upwind sources that is more equitably, and less expensively, borne by local sources. [EPA-HQ-OAR-2009-0491-2803.1, p.14]
Although the chosen methodology involves consideration of air quality impact of various emission scenarios, the use of cost/ton as an input into the evaluation rather than cost per ug/m3 (or cost per ppb) is a flawed approach. EPA should either employ the cost per ug/m3 in a reevaluation of the proposed rule, or solicit public comment on a detailed explanation of why that approach was not employed. [EPA-HQ-OAR-2009-0491-2803.1, p.14]
Response:
In section VI of the preamble (as well as in other sections of the preamble), EPA describes the approach to define significant contribution and interference with maintenance.  In sections VI.A, VI.D and VI.G of the preamble, EPA describes its rationale for using both cost and air quality factors and its justification for using a uniform cost.
EPA notes that in the proposed Transport Rule, EPA extensively discusses its assessment of two cost/air quality improvement methodologies in the Technical Support Document for the proposed Transport Rule, called "Alternative Significant Contribution Approaches Evaluated".  The commenter suggests an approach similar to the "first" approach EPA outlined.  In the comment, the commenter does not address the deficiencies EPA identified in the cost per air quality approach described by EPA (and repeated by the commenter).  These included, but were not limited to, requirements of "extremely high level of accuracy in both the emissions modeling...and the air quality modeling" and that "finer-scale emissions data from all sectors....and fine-scale air quality modeling could be needed to resolve differences in cost per air quality impact.." and that "these data and modeling techniques do not exist and/or are too computationally demanding to be operationally implemented".  A second challenge for this approach was to identify a single reduction requirement for a particular upwind state, since the reduction requirements relevant to different downwind receptors would vary significantly.  The commenter did not provide any suggestions as to how EPA would overcome these challenges that prevented the Agency from constructing a rulemaking on this basis.

V.A. Covered Pollutants (SO2 and NOx for PM2.5 and Ozone Season NOx for Ozone)

Organization: Adirondack Council
Comment:
Adirondack Council
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, p.62.]
We support strong nitrogen emission reduction on a year-round basis.
Response:
For states included for PM2.5 under the rule, year-round NOx emissions reductions are required.
Organization: Central Illinois Global Warming Solutions Group
Comment:
Central Illinois Global Warming Solutions Group
[These comments were submitted as testimony at the Chicago, Illinois public hearing on August 19, 2010.  See Docket Number EPA-HQ-OAR-0491-1746, p.124.]
That is the only fault I can find with the Rule. I think that you really need to factor in not just criteria, but all pollutants that are affecting the area to have an understanding in the modeling of the overall burden on communities.
Response:
This rule is designed to address interstate transport of upwind state contributions to ozone and PM2.5 in other states.   Accordingly, it is not designed to assess the overall burden across the spectrum pollutants on communities.
Organization: Group Against Smog and Pollution (GASP)
Comment:
Group Against Smog and Pollution (GASP)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, p.194.]
EPA should also explore the feasibility of establishing caps on ammonia and VOCs, or at least subset of the most reactive VOCs.
Response:
See preamble discussion in section V.A.2 regarding EPA's choice of regulated pollutants.
In addition, EPA extensively discussed its rationale for not including ammonia and VOCs in the CAIR rule.   See discussion of PM2.5 precursors for CAIR 70 FR 25181, May 12, 2005;   see discussion of ozone precursors for CAIR40 FR 25185, May 12, 2005.    This same rationale is appropriate for this Transport Rule.
Organization: Southeastern States Air Resource Managers (SESARM)
Comment:
Southeastern States Air Resource Managers (SESARM)
[These comments were submitted as testimony at the Atlanta, Georgia public hearing on September 1, 2010.  See Docket Number EPA-HQ-OAR-0491-1939, p.43.]
Number one, further control of NOx and SO2 emissions will be necessary for our region to meet federal standards and regulations issued under the authority of the Clean Air Act.
Response:
EPA agrees.

V.B. [Reserved]

V.C. Timing of Proposed Emissions Reductions Requirements (Compliance Deadlines)

Organization: Adirondack Mountain Club
Comment:
Adirondack Mountain Club
While we do applaud any effort to reduce emissions of harmful pollutants, the Clean Air Interstate Rule significantly slowed the country's progress to bring all areas into attainment. Reduction requirements came too late and were not deep enough to meet existing Clean Air Act deadlines. Full-attainment may have been reached through the faithful implementation and enforcement of the existing Clean Air Act, which would allow an SO2 cap of 2 million tons by 2012 and NOX cap of 1.25 million tons by 2010. Thus, ADK is pleased to support CATR's rule which have a much larger reduction at a sooner date. [EPA-HQ-OAR-2009-0491-2761, p.3]
Response:
EPA appreciates the support for the proposed rule.
Organization: American Clean Skies Foundation (ACSF)
Comment:
American Clean Skies Foundation (ACSF)
In addition to supporting the overall goals of CATR, ACSF also supports the timing of CATR's emission caps, under which initial SO2 and NOx limits take effect in 2012, and SO2 caps are tightened in 2014 in certain states that have larger downwind impacts. These timelines allow the prompt achievement of this rule's important public health benefits. [EPA-HQ-OAR-2009-0491-2759.1, p.2]
Response:
EPA agrees with these comments supporting the compliance period in the Transport Rule.
Organization: American Electric Power
Comment:
American Electric Power
AEP believes it is particularly important for our company to comment on the relative merits and concerns with various portions of the Proposed Transport Rule. Unfortunately, EPA's Transport Rule as currently written does not appropriately balance environmental and economic objectives. While we commend EPA for retaining some of the flexibility of intrastate and regional emissions trading of SO2 and NOx, the timing of the reduction requirements, the relative inflexibility of other provisions of the rule, and the stringency of the emission reductions, particularly as it applies to SO2, would substantially increase the cost of compliance and could likely have significant adverse impacts on reliability and the regional economy. [EPA-HQ-OAR-2009-0491-2665.1, pp.2-3]
AEP does not believe that the timelines and stringent budgets within this Proposed Transport Rule are necessary. The modeling data developed by the Midwest Ozone Group (MOG) and its Industrial Modeling Coalition used in conjunction with ambient air quality data collected by USEP A show that not only are transport criteria met by the existing CAIR program, but full compliance with the NAAQS targeted by this rulemaking are satisfied for all be a few areas that have ambient concentrations driven by local sources. [EPA-HQ-OAR-2009-0491-2665.1, p.3]
We believe that EPA should address the specific issues identified by the D.C. Circuit in the North Carolina case, while keeping the timing and reductions the same as is defined in CAIR. [EPA-HQ-OAR-2009-0491-2665.1, p.3] [EPA-HQ-OAR-2009-0491-3719.1_NODA, p.9]
The 2012 program start date is a major issue for compliance entities as it is anticipated there will be only six to eight months after final rule promulgation until the start of the compliance period. This is not enough time to set up the requisite allowance trading system to accompany the rule. This will create considerable uncertainty as to how the allowance market will function for compliance purposes and lead to excessive speculation and turmoil. [EPA-HQ-OAR-2009-0491-2665.1, p.5]
The Proposed Transport Rule does not result in ozone or PM-2.5 NAAQS attainment and maintenance benefits by 2015 beyond those assured by the existing CAIR program. [EPA-HQ-OAR-2009-0491-2665.1, p.25]
For all of these reasons and the additional reasons detailed in the comments, EPA should limit the current rulemaking to providing enhanced technical support for the current CAIR provisions as amended to include narrow corrections specifically required by the North Carolina decision, and otherwise continue to rely upon the current CAIR program budgets, deadlines, trading, and banking until 2015. EPA should address the post-2015 period in a revised proposal that takes into account the states' primacy for SIP formulation, and that takes into account the transport implications of EPA's new ozone and PM-2.5 NAAQS revisions and utility HAP rules, at a minimum. [EPA-HQ-OAR-2009-0491-2665.1, p.26] [EPA-HQ-OAR-2009-0491-3719.1_NODA, p.9]
Response:
See discussion in preamble section VI for EPA's methodology and technical approach to identifying the emissions reductions required by the Transport Rule.
See discussion in preamble section VII.C on EPA's rationale for the compliance deadlines.
Regarding suggestion to leave CAIR in place until 2015, see discussion in preamble section IV.C.2.

Organization: American Lung Association of the Upper Midwest
Comment:
American Lung Association of the Upper Midwest
[These comments were submitted as testimony at the Chicago, Illinois hearing.  See Docket Number EPA-HQ-OAR-0491-1746, p.14.]
Secondly, we have some concern that the City of Chicago will not meet the fine particulate standards by 2014, even with the implementation of this proposed rule.
If the U.S. EPA's aware of this situation, and if expectations prove to be true, we urge U.S. EPA to take the proactive steps right now to address the air quality concerns rather than wait for 2014.
Response:
See preamble section VII.C.1 for discussion of EPA's selection of the 2012 and 2014 deadlines, and the relationship to attainment deadlines for PM2.5 and ozone.

Organization: Attorney General of North Carolina
Stuckey, Richard
Comment:
Attorney General of North Carolina
EPA's concerns appear to be focused on emissions in 2010 and 2011. 75 Fed. Reg. at 45,339/1-3. 2010 is three months from completion, with the ozone season already having ended. The Transport FIP will not even be finalized until the spring of 2011 at the earliest. There is little or nothing that the proposed Transport FIP can do now to influence 2010 emissions. If EPA concludes that the law requires that emissions be limited during the period of 2011 that remains after the Transport FIP is finalized, it can promulgate and implement partial year budgets or directly require that sources continuously operate existing controls (SCRs, scrubbers, low NOX burners, low sulfur fuel, etc.) at covered units for the remainder of 2010 until the budget program begins. What EPA cannot do is allow States in 2012 or thereafter to avoid their statutory obligations. [EPA-HQ-OAR-2009-0491-2685.1]
Stuckey, Richard
[These comments were submitted as testimony at the Chicago, Illinois public hearing on August 19, 2010.  See Docket Number EPA-HQ-OAR-0491-1746, pp.69-70.]
And, also, the most aggressive schedule, which I think you've already heard, attempts to procrastinate and to delay the schedule. I think that is the wrong thing to do. We need to do this as fast as possible because the benefits are so huge and the population is growing older and much more susceptible to the dangers of pollution than it has been in the past.
The costs are going up every day we delay and procrastinate in implementing these rules. And, unfortunately, the power industry, with maybe some exceptions you heard today, has a long track record of procrastination and avoiding implementation of these Clean Air laws.
Response:
These commenters both suggest accelerating the compliance deadlines in the proposed Transport Rule.   EPA believes that the 2012 and 2014 deadlines provide for emissions reductions as expeditiously as practicable.
Organization: Council of Industrial Boiler Owners (CIBO)
Comment:
Council of Industrial Boiler Owners (CIBO)
While EGUs are not covered by the Industrial Boiler MACT, CIBO is concerned that the implementation timelines for both the Industrial Boiler MACT and the Clean Air Transport Rule will occur at approximately the same time (2011-2013). CIBO points out that in addition to these two rules, the new National Ambient Air Quality Standards for Ozone, NO2 and SO2; Regional Haze SIPs; and the forthcoming Utility Boiler MACT will all impact the marketplace at approximately the same time. The combined effects of these rules will dramatically increase the demand for engineering labor, construction labor and fabrication shop space. This will have the effect of dramatically tightening the pollution control market, which will most likely result in significant cost increases and lengthened delivery and installation schedules. These negative outcomes will impact both EGUs and non- EGUs alike. While many EGUs operate in regulated markets and can pass their costs on to consumers, CIBO member companies are not guaranteed a mechanism to recover escalating costs. This could have a significant negative impact on many CIBO member companies, and could force marginal plants to seriously consider shutting down operations. CIBO urges EPA to consider extending the compliance timeframe for the Transport Rule to at least 2017 to minimize the negative economic impact to non- EGUs. [EPA-HQ-OAR-2009-0491-2751.1, p. 12]
Response:
Sections VI and VII of the preamble to the final rule explain the compliance deadlines used in the rule.  Further, this rule does not directly regulate industrial boilers. EPA is conducting a separate notice and comment rulemaking for the Industrial Boiler MACT.
Organization: Entergy Services, Inc.
Comment:
Entergy Services, Inc.
Entergy would also like to comment on the complications associated with the proposed compliance dates of January 1, 2012 for Phase I and January 2, 2014 for Phase II of the rule.  For the reasons stated below Entergy cannot support a compliance date of January 1, 2012 unless the inequities of the allowance allocations to Entergy units caused by the use of the Integrated Planning Model are corrected. [EPA-HQ-OAR-2009-0491-2847.1,p.6]
Response:
See discussion in preamble section VII.C regarding compliance deadlines.
EPA has revised the method for allowances allocations for the final Transport Rule, as is discussed in detail in preamble section VII.D.
Organization: EquiPower Resources Corp.
Comment:
EquiPower Resources Corp.
First, EquiPower encourages EPA to establish Phase I budgets and unit-level allocations that reflect emissions reductions that can actually be achieved. The Transport Rule assumes that compliance with the 2012 cap will only require affected EGUs to (i) operate existing emissions controls year-round, and/or (ii) complete the installation of proposed controls that are scheduled to be online by 2012. But these assumptions are not technically feasible because as explained above, they are premised on the erroneous assumptions. As a result, EPA has overestimated the level of control that can actually be obtained by 2012, and therefore has imposed state-wide Phase I emissions caps, and by extension unit level allocations, that are too restrictive. [EPA-HQ-OAR-2009-0491-2704.1, p.27]
For example, by assuming that existing controls can achieve very low emission levels (levels that EquiPower is not even sure are obtainable on an operational basis using new equipment, let alone older equipment) and allocating allowances on that basis, the Transport Rule effectively penalizes facilities that installed emission controls early. If Transport Rule had in fact been structured such that compliance with the 2012 cap only required sources to operate existing controls, then state and unit level allocations would have been higher then currently proposed. Thus, EquiPower believes that EPA should increase the Phase I compliance caps based on more realistic assumptions about the level of control that can be achieved. At a minimum, all sources with existing controls should have sufficient allocations to cover their emissions. In the alternative, EPA should amend the Proposed Rule to permit affected sources to use previously banked CAIR emissions allowances to comply with Phase I emission caps. [EPA-HQ-OAR-2009-0491-2704.1, p.28]
Response:
See discussion in preamble section VII.C regarding compliance deadlines.
EPA has revised the method for allowances allocations for the final Transport Rule, as is discussed in detail in preamble section VII.D.
Organization: Indiana Manufacturers Association, Inc. (IMA)
Griffin Pipe Products, Inc.
Lakeland Electric
San Miguel Electric Cooperative, Inc.
Cleco Corporation
PPG Industries, Inc.
Old Dominion Electric Cooperative
Manitowoc Public Utilities (MPU)
National Mining Association (NMA)
Missouri Public Utilities Alliance (MPUA)
Midwest Ozone Group
American Municipal Power, Inc. (AMP)
ARIPPA
Consumers Energy
DTE Energy
American Public Power Association (APPA)
Edison Electric Institute (EEI)
Buckeye Power, Inc.
DoubleTree Hotel Roanoke and Conference Center
Ameren Services Company
Duke Energy
Empire District Electric Company (Empire District)
Florida Municipal Electric Association (FMEA)
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
Michigan Department of Natural Resources and Environment
PPL Corporation
Progress Energy Service Company
Santee Cooper
Southern IL Power Cooperative
Utility Air Regulatory Group (UARG)
National Rural Electric Cooperative Association (NRECA)
Pfeiff, Mike
Texas Mining and Reclamation Association
Edison Mission Energy (EME)
Tampa Electric Company
Comment:
Ameren Services Company
EPA should abandon this rule making and allow CAIR to continue until a supportable rule can be developed [EPA-HQ-OAR-2009-0491-2722.1, p.11]
Under the D.C. Circuit court decision that ultimately remanded CAIR to EPA no deadline to replace CAIR was mandated. [EPA-HQ-OAR-2009-0491-2722.1, p.26]
American Municipal Power, Inc. (AMP)
Additionally, EPA's expeditious timelines are unnecessary given the current effectiveness of the CAIR program. [EPA-HQ-OAR-2009-0491-2678.1, p.2]
American Public Power Association (APPA)
3. While APPA appreciates the many conference calls or webinars that were convened by the U.S. EPA, we do not believe that the deadlines are realistic. APPA believes that the PTR should not consider any compliance date earlier than 2015. [EPA-HQ-OAR-2009-0491-2812.1, p.3]
Moreover, despite EPA`s suggestions to the contrary, promulgation of compliance dates later than those that EPA proposes would not result in increased emissions. CAIR would remain in place and would continue to maintain a strong and effective program of emission reductions pending the initial compliance deadline for the Transport Rule. [EPA-HQ-OAR-2009-0491-2812.1, pp.19-20]
ARIPPA
The states and EGUs affected by the Proposed Rule should not be penalized as a result of the delay in the regulatory development process associated with the Court's vacatur of CAIR. Further, the continued emission reductions mandated by CAIR would mitigate any adverse impacts associated with the postponement of the implementation of the Transport Rule. Indeed, the application of CAIR would result in greater NOx emission reductions than the Proposed Rule. [EPA-HQ-OAR-2009-0491-2794.1, p.19]
Buckeye Power, Inc.
For all of the foregoing reasons, Buckeye Power urges EPA to withdraw its proposed CATR program. If it does proceed, EPA should (8) extend the timeline for implementation of CATR. [EPA-HQ-OAR-2009-0491-2710.1, p.13]
Cleco Corporation
There is no reason for EPA to require a 2012 compliance deadline. The D.C. Circuit did not mandate any particular compliance schedule and certainly did not mandate a compliance schedule so compressed that there are few if any compliance options. In fact, EPA requested and received reconsideration by the D.C. Circuit to keep CAIR in place to ensure continued emission reductions under that program while EPA took the time needed to address CAIR's flaws. EPA has taken two years to develop this proposed rule and proposes to take another nine months to finalize it. At the same time, it eliminates time for public comment and time on the back end for state SIP development and compliance planning. Based on a comparison of the CAIR budgets to the proposed 2012 emission budgets under the Transport Rule, CAIR would achieve very similar emission reductions in the near term and enable EPA to take the additional time required for implementation and compliance. Put simply, because EPA prevailed on reconsideration, CAIR is in place, and EPA can take the time needed to implement its replacement. [EPA-HQ-OAR-2009-0491-2859.1 p.3] [[The comment on the state SIP development can also be found in Section VII.C.]]
Consumers Energy
EPA has neither a statutory nor court ordered deadline to complete this specific rulemaking. Yet EPA proposes a schedule that is much more ambitious than the schedule for CAIR, which remains in effect, and serves as the basis for planning by the electric utility industry and the states. [EPA-HQ-OAR-2009-0491-2837.1, p.3]
DoubleTree Hotel Roanoke and Conference Center
As a commercial customer of American Electric Power in Roanoke Valley of VA. I would like to express my sincere concern with the proposed Transport Rule. As a representative of the Hotel Roanoke and Conference Center and a concerned citizen of the communities of Va., I have serious concerns and objections with this upcoming proposal! The rule does not provide enough time for the states to develop their own implementation plans and there is not adequate time built in to the proposal to install new and improved equipment, as necessary, to meet the 2014 emission deadlines without huge financial impacts for customers. [EPA-HQ-OAR-2009-0491-2142, p.1]
DTE Energy
The proposed Transport Rule establishes new reduction requirements that must be met only 6- 12 and 30 months after the final Transport Rule is issued. By contrast, the Phase 1 deadlines for the Clean Air Interstate Rule (CAIR) allowed almost 5 years from promulgation of the final rule until the first compliance year for 502 and almost 4 years for NOx. Last year, the Lake Michigan Air Directors Consortium (LADCO) recommended that any CAIR replacement rule include an initial compliance date no earlier than 2017. [EPA-HQ-OAR-2009-0491-2851.1,p.5]
Duke Energy
Moreover, despite EPA's suggestions to the contrary, promulgation of compliance dates later than those that EPA proposes would not result in increased emissions. CAIR could remain in place and would continue to maintain a strong and effective program of emission reductions pending the initial compliance deadline for the Transport Rule. [EPA-HQ-OAR-2009-0491-2689.1, p.1]
The compliance dates required by whatever rule EPA finalizes should be informed by the stringency of the emission reduction requirements, the date of EPA's promulgation of the rule, and a realistic assessment of the amount of time required to retrofit controls on coal-fired power plants. [EPA-HQ-OAR-2009-0491-2689.1, p.62]
Edison Electric Institute (EEI)
The proposed Transport Rule establishes new reduction requirements that must be met in two phases, 6-12 and 30 months after the final Transport Rule is scheduled to be issued. By contrast, the Phase 1 deadlines for the Clean Air Interstate Rule (CAIR) allowed almost 5 years from promulgation of the final rule until the first compliance year for SO2 and almost 4 years for NOx. Under CAIR, Phase 2 requirements were not imposed until 10 years after promulgation of the final rule. [EPA-HQ-OAR-2009-0491-2697.1, p.8]
The Lake Michigan Air Directors Consortium (LADCO) in a September 10, 2009 letter to EPA, recommended that any CAIR replacement rule include an initial compliance date via regional emission caps no earlier than 2017, and stated that further selective catalytic reduction (SCR) and FGD installations (beyond CAIR Phase 1 controls) could not feasibly be required before 2017. In contrast, a September 10, 2009 letter to EPA from the (Northeast) Ozone Transport Commission (OTC) suggested earlier emission control actions, including "low capital cost NOx controls" to be required by 2015, including selective non-catalytic reduction (SNCR), and that "EPA analyze and determine the state-by-state reductions needed prior to 2017" to address transport. The OTC letter also supported implementing regional trading for SO2 and NOx "as early as possible" (by 2014) to "drive deeper...reductions" than those from statewide caps. [EPA-HQ-OAR-2009-0491-2697.1, pp.8-9]
Edison Mission Energy (EME)
Footnote 50: Increasing the Phase I cap would not be inconsistent with the Agency's overall approach because the Phase I compliance period was never intended to fully meet the § 110(a)(2)(D) goals. 75 Fed. Reg. at 45215. [EPA-HQ-OAR-2009-0491-2707.1, p.22]
Empire District Electric Company (Empire District)
We also recommend that a solution to this problem would be for EPA retain phase 1 of CAIR until 2014 or 2015 and replace CAIR with CATR at that time.  For the years 2012 and 2013, EPA can amend CAIR to meet the requirements of the remand from the US Court of Appeals for the District of Columbia Circuit on 12/23/2008. [EPA-HQ-OAR-2009-0491-2659.1, p.2]
Florida Municipal Electric Association (FMEA)
Accordingly, EPA should leave CAIR in place through Phase I, which should allow sufficient time to develop a more accurate, complete and defensible rule. [EPA-HQ-OAR-2009-0491-2731.1, p. 6]
Griffin Pipe Products, Inc.
The EPA should delay the Transport Rule until it sees the latest modeling based on CAIR compliance. At the least, the EPA should extend the compliance deadline to allow companies time to install the needed retrofits and to allow states to develop their own implementation plans. [EPA-HQ-OAR-2009-0491-2600, p.1] [[These comments can also be found in Section VII.C.]]
Indiana Manufacturers Association, Inc. (IMA)
This error underestimates the cost of compliance and exacerbates another inaccuracy in the EPA's compliance assumptions  -  the time and cost needed to design, permit, fabricate and install control equipment. [EPA-HQ-OAR-2009-0491-1813.1, p. 1]
Under the existing proposal, there is not enough time for power generators to design, permit, fabricate and install pollution control equipment to comply with the new emissions levels established in the rule's second phase. [EPA-HQ-OAR-2009-0491-1813.1, p. 1]
The most significant reductions under the current proposal occur in 2014  -  only two-and-a-half years after the Rule is expected to become effective. Two-and-a-half years are not enough to design, permit, fabricate and install the necessary equipment. This unrealistic deadline could affect grid reliability if power companies are forced to prematurely close generation units to comply. If new scrubber byproduct storage facilities are needed in addition to emissions control equipment, the time line becomes much longer. [EPA-HQ-OAR-2009-0491-1813.1, p. 2]
We applaud the EPA's efforts to improve air quality for all Americans and to address downwind issues. However, we believe the EPA's actions are premature and do not allow enough time for state participation or for industry compliance. Hasty action will have economic consequences for my citizens without any assurance that the rule will deliver the desired results any faster than the nation can achieve on its current path. We urge the EPA to delay the Transport Rule until there is a clear indication that comparable results cannot be achieved through CAIR. The EPA also should establish realistic deadlines that will not punish electricity consumers. [EPA-HQ-OAR-2009-0491-1813.1, p. 3]
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
A. EPA's proposed 2012 annual SO2 and NO, emissions reduction deadline is unrealistic and unnecessary to meet the objectives of the Clean Air Act. [EPA-HQ-OAR-2009-0491-2672.1, pp.3-4]
As noted above, EPA's 2015 deadline for CAIR was rejected in North Carolina because it was established without any regard for CAA attainment deadlines (or other substantive requirements of Title I of the CAA). If EPA allowed EGUs to prepare for compliance and state permitting authorities the opportunity to revise and submit compliant SIPs (as is Congress' clear preference) the Transport Rule could still achieve 'something measurable" towards assisting downwind states in meeting the earlier attainment deadlines, and would probably have no impact on the achievement of the later attainment deadlines. Our recommended deferral period is therefore consistent with North Carolina while striking an appropriate balance between the attainment deadlines of the CAA, feasibility considerations, and the policy of cooperative federalism. [EPA-HQ-OAR-2009-0491-2672.1, p.10] [[These comments can also be found in Section VII.C.]]
Lakeland Electric
EPA's Transport Rule as proposed has an effective compliance start date of January 1, 2012. The Transport Rule may not be final until Summer 2011, leaving regulated entities approximately six months from final rule publication until the effective date. During the rule development process EPA will embark on over the next year, EPA plans on proposing a new Ozone NAAQS somewhere between 60-70 ppb. Once this new Ozone NAAQS has been proposed, EPA is planning on updating the Transport Rule with a sequential rule which has been labeled "CAIR III" which will incorporate the new Ozone NAAQS. [EPA-HQ-OAR-2009-0491-2630.1,p.5]
EPA, by postponing implementation of the Transport Rule until at least 2014, will provide many benefits. This postponement will allow EPA the time which is needed in order to incorporate the new Ozone NAAQS. It will also give regulated CAIR I entities time to utilize their banked allowances, and will help avoid any Constitutional "Takings" arguments made by utilities which have experienced an economic loss by means of the Transport Rule. This additional time will also allow for additional review and comment periods by regulated industry to assist EPA in developing a more accurate regulation. As EPA is aware, EPA is not under any court order to finalize a rule by 2012, and so Lakeland Electric finds this time extension proposal a logical appeal. Therefore, EPA should postpone any compliance measures required under the Transport Rule until 2014. [EPA-HQ-OAR-2009-0491-2630.1,pp.5-6]
Manitowoc Public Utilities (MPU)
 The Proposed Transport Rule should not include an initial compliance deadline of 2012. CAIR could remain in place and would continue to maintain a strong and effective program of emission reductions while allowing the initial compliance deadline for the Proposed Transport Rule to have a reasonable compliance implementation schedule.  [EPA-HQ-OAR-2009-0491-2860.1, p.2]
2012 Compliance Deadline
The Proposed Transport Rule should not include an initial compliance deadline of 2012. It is unreasonable and unrealistic to expect emission reductions required by the Proposed Transport Rule to be achieved by January 1, 2012, barely six months after the date on which EPA expects to issue the final rule. Utilities are currently facing a number of new/revised EPA rules that interact with each other and final implications are not known at this time. Municipal utilities have very limited financial and manpower resources and must make decisions to address all of these issues that are protective of our rate payers and feasible to implement with our very limited resources. CAIR could remain in place and would continue to maintain a strong and effective program of emission reductions pending the initial compliance deadline for the Transport Rule. [EPA-HQ-OAR-2009-0491-2860.1, p.4]
Michigan Department of Natural Resources and Environment
Under CAIR, Michigan and most other states implemented rules that created a tiered or phased approach to the reductions. CAIR Phase One began in 2009 and Phase Two begins in 2015. To avoid unnecessary confusion, the timing of the first phase of the TR should at least coincide with the original CAIR Phase Two, I.e., 2015 versus 2014. [EPA-HQ-OAR-2009-0491-2774.1 p.3]
Midwest Ozone Group
Reliance on existing controls is not inconsistent with the D.C. Circuit's decision in NC v. EPA. [EPA-HQ-OAR-2009-0491-2809.1, p.13]
The continuation of CAIR controls is not inconsistent with the D.C. Circuit's decision in NC v. EPA. Indeed, the D.C. Circuit expressly allowed for the continuation of CAIR control spending EPA's replacement of the CAIR. NC v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008)("Here, we are convinced that, notwithstanding the relative flaws of CAIR, allowing CAIR to remain in effect until it is replaced by a rule consistent with our opinion would at least temporarily preserve the environmental values covered by CAIR. Accordingly, a remand without vacatur is appropriate in this case."). Further, it is undisputed that the 2010 attainment date that the D.C. Circuit focused on in its 2008 decisions has passed, and recent air quality data demonstrates that the transport issue that the CAIR sought to address is fast becoming moot. [EPA-HQ-OAR-2009-0491-2809.1, p.13]
Missouri Public Utilities Alliance (MPUA)
EPA has failed throughout the rule to verbalize or justify the necessity of implementing the rule at the outset of 2012. The deadline, coupled with the prohibition on use of previously issued emission allowances fails to allow some utilities to fully amortize the investments they had made in current pollution control equipment that was to have been paid for with credits to have been issued in the future.  We request that the deadlines be shifted to at least 2015 to allow the federal and state regulatory agencies the time necessary to make the administrative and regulatory changes, including guidance documents, necessary to administer this rule in a consistent manner. [EPA-HQ-OAR-2009-0491-2785.1, p.2]
In the alternative one solution may be to initiate the rule in 2012, but provide for less stringent controls for the first 3-5 years to give industry the time to develop strategies and financing to make the necessary investment. [EPA-HQ-OAR-2009-0491-2785.1, p.2]
3. Because of the short time span on which the current rule is predicated, electric utilities will be forced to seriously consider fuel switching as one option, especially if their generators were constructed to operate on dual fuel (coal and natural gas).  This modification can be done more quickly than installation of other control systems and in a way that significantly reduces emissions during a transition period.  Additionally as utilities evaluate the cost/benefits of various upgrades to meet the necessary emission limits, a switch from coal to natural gas which may require lower investments in control technology would be considered by utility managers. [EPA-HQ-OAR-2009-0491-2785.1, p.2]
The challenge is that studies in which MJMEUC has participated, demonstrate that widespread fuel switching can create additional complications both for electric utilities and for those individuals and industries using natural gas for process heat or as raw product materials.  Additionally MJMEUC cities have anecdotal experience of inability to acquire natural gas for supplemental power production during periods of extreme winter cold because of pipeline capacity is not available.  The study can be accessed at: http://www.appanet.org/files/PDFs/ImplicationsOfGreaterRelianceOnNGforElectricityGeneration.pdf [EPA-HQ-OAR-2009-0491-2785.1, p.2]
National Mining Association (NMA)
As discussed above, the feasibility of the 2012 and 2014 emission reductions required by the proposed rule are assumption and model driven -- if the assumptions are wrong, the feasibility of the whole program is in doubt and the economic cost the program will rise dramatically. EPA has left the public very little time to challenge (or even understand) these assumptions, and it has left almost no time between finalization of the rule and the 2012 compliance deadline for reconsideration of the rule if the assumptions prove to be faulty. Yet EPA already has in place a program that will lead to an acceleration of the emission reductions that the country has made in the last three decades. [EPA-HQ-OAR-2009-0491-2868.1,p.19]
National Rural Electric Cooperative Association (NRECA)
EPA, by postponing implementation of the Transport Rule until at least 2014, will provide many benefits. This postponement will allow EPA the time which is needed in order to incorporate the new Ozone NAAQS. It will also give regulated CAIR I entities time to utilize their banked allowances, and will help avoid any Constitutional "Takings" arguments made by utilities which have experienced an economic loss by means of the Transport Rule. This additional time will also allow for additional review and comment periods by regulated industry to assist EPA in developing a more accurate regulation. As EPA is aware, EPA is not under any court order to finalize a rule by 2012, and so Lakeland Electric finds this time extension proposal a logical appeal. Therefore, EPA should postpone any compliance measures required under the Transport Rule until 2014. [EPA-HQ-OAR-2009-0491-2630.1, pp.5-6]
Old Dominion Electric Cooperative
We find no reason that EPA needs to accelerate the processing of this rule. Further, there were no requirements in the North Carolina decisions to abolish CAIR and expedite this rule. EPA needs to justify why there is a need to accelerate this process. CAIR remains in place until this replacement rule is promulgated; therefore, this approach allows time to ensure this replacement rule addresses the courts comments and provides adequate time for the utilities to comply with the conditions of the rule. At a minimum ODEC recommends that CAIR remain in effect at least until 2013 to allow a reasonable time for utilities to meet requirements focused on demonstrating measurable or reasonable progress towards meeting Clean Air Act S 110(a)(2)(D)(i)(I) goals. [EPA-HQ-OAR-2009-0491-2877.1, p.3]
Pfeiff, Mike
However, as an actual market participant who has studied the EPA's process surrounding the development of this rule I can attest to the fact that from an administrative standpoint the implementation period is unrealistic. From an administrative perspective, I need only offer one example of why the implementation time line is unrealistic: CAIR was vacated by the DC Circuit Court of Appeals on July 11, 2008 and the quickest the EPA was able to officially offer a proposed replacement was August 2, 2010 and remarkably that replacement rule was predicated on base case data from 2005. [EPA-HQ-OAR-2009-0491-2742.1, pp.12-13]
Fortunately, when the DC Circuit Court remanded of its July 11, 2008 vacatur of CAIR, it did not order a firm deadline for which the EPA is obligated to promulgate a replacement rule. With emissions currently very low by all historical standards (likely due to ongoing fuel substitution from coal to natural gas) there is no practical reason to strive for a January 1, 2012 implementation. Instead of racing to implement a rule that is laden with opportunities for further judicial review, the EPA should take additional time to develop a rule that will be operational successful and preserves the values laid out by Congress in Title IV of the CAA. Even if an entity petitions the DC Circuit Court of Appeals to set a deadline, the EPA has a strong argument to justify the additional time since it can provide tangible evidence of measured progress. Further, many other commenter's have seemingly raised very good issues surrounding the assumptions in the EPA's modeling, that if sincerely addressed, would ultimately produce a better rule. Even though the EPA had previously indicated to the Court and Congress that it expected a replacement rule to take two years, the agency should not feel compelled to lock into this self prescribed timeline since there is a reasonable justification extending its implementation. [EPA-HQ-OAR-2009-0491-2742.1, p.13]
I request that the EPA delay the first compliance obligation period by a full year to January 1, 2013. [EPA-HQ-OAR-2009-0491-2742.1, p.13]
PPG Industries, Inc.
EPA has indicated a need for acting quickly on this rulemaking citing the courts desire to replace CAIR. PPG would like to remind EPA that there is not a court ordered deadline to finalize this rulemaking. EPA's reason for not allowing extensions, as posted on the website, cites the need to ?develop a final rule in time to obtain needed emissions reductions?. EPA does not need to rush this rule at the expense of defensibility in order to obtain needed emissions reductions. The court remand of the CAIR rule leaves CAIR and its associated emission reductions in place through the year 2014 while EPA is doing rulemaking on CATR. If EPA insists on forcing the CATR, PPG is concerned subsequent litigation will add further uncertainty to an already stressed business climate. This uncertainty could result in facilities postponing projects, therefore stifling economic and job growth. [EPA-HQ-OAR-2009-0491-2763.1, p. 18]
PPL Corporation
Since the rule will not be finalized until 2011, under the proposed schedule there would be less than a year for sources to make the necessary operational adjustments. This seems to be impractical; PPL recommends that the 2012 date be extended to 2013. This does not postpone addressing interstate transport because the Clean Air Interstate Rule (CAIR) is already place and will stay in place until replaced by the Transport Rule. [EPA-HQ-OAR-2009-0491-2739.1, p.9]
Progress Energy Service Company
EPA has not explained adequately why it proposes to require compliance beginning in 2012, particularly because the CAIR will remain in effect until the Transport Rule or similar program replaces it at an appropriate time. [EPA-HQ-OAR-2009-0491-2831.1 p.3]
San Miguel Electric Cooperative, Inc.
The 2012 deadline is in itself unnecessary and the 2014 deadline is premature.   [EPA-HQ-OAR-2009-0491-2641.1, p.6]
Santee Cooper
This implies extending the proposed Transport Rule's compliance deadlines from 2012 and 2014, to at least 2013 and 2015 respectively. Such a compliance deadline extension is consistent with past D.C. Circuit decisions, which have held that EPA must 'reset' deadlines in the Act in the event that necessary EPA policy guidance has not been provided in a timely manner. In Natural Resources Defense Council v. EPA, for example, the D.C. Circuit held that states should be permitted to submit vehicle inspection and maintenance standards after a deadline in the statute provided in the CAA, on the grounds that EPA delays in issuing necessary guidance had prevented states from meeting the statutory deadline. [EPA-HQ-OAR-2009-0491-2820.1, p.16]
In addition, nothing in the North Carolina decision bars an outer compliance deadline to 2015. Rather, the court held that EPA 'must decide what date, whether 2015 or earlier, is as expeditious as practicable for states to eliminate their significant contributions to downwind nonattaimnent.' For the reasons discussed above, the Agency should detennine that 2015 is the date that is 'as expeditions as practicable.' [EPA-HQ-OAR-2009-0491-2820.1, p.16]
Southern IL Power Cooperative
CAIR need not be replaced by 2012. There are no legal mandates to replace CAIR by a date certain, thus making the proposed 2012 CATR deadline unnecessary. [EPA-HQ-OAR-2009-0491-2863.1 p.2]
Tampa Electric Company
Although EPA proposes 2012 as the first year of the program, Tampa Electric encourages continuing the current Clean Air Interstate Rule through 2015. [EPA-HQ-OAR-2009-0491-2745.1 p.2]
Texas Mining and Reclamation Association
Overly complicated compliance deadlines and little advance notice of changing regulatory requirements is a recipe for disaster given the current economic conditions. Put simply, the regulated community needs as much advance notice and flexibility as possible in times like these when capital is hard to come by and sensitivity to increased residential and industrial utility bills is at its highest. While it may be cumbersome to match compliance dates on a state and federal level, EPA should at a minimum extend the compliance deadlines beyond 2012. [EPA-HQ-OAR-2009-0491-2734.1 p.2]
Utility Air Regulatory Group (UARG)
Nor did the court include in its opinion any mandate that the replacement rule for CAIR must include a compliance date in 2012 or within any period of time as short as six months after final rule promulgation. [EPA-HQ-OAR-2009-0491-2756.1, pp.20-21]
EPA should not adopt the 2012 compliance deadline in the Proposed Transport Rule and should not in any event consider any compliance date earlier than 2015. 15 In any event, if EPA promulgates a Transport Rule that, like the proposed rule, includes requirements more stringent than CAIR, the compliance deadline must reflect the degree of stringency of those requirements. [EPA-HQ-OAR-2009-0491-2756.1, p.22]
Despite EPA's suggestions to the contrary, promulgation of compliance dates later than those that EPA proposes would not result in increased emissions. CAIR could remain in place and would continue to maintain a strong and effective program of emission reductions pending the initial compliance deadline for the Transport Rule. In fact, electric generating companies will continue to have an obligation to achieve CAIR emission reduction requirements, including the phase II requirements, pending implementation of the Transport Rule. [EPA-HQ-OAR-2009-0491-2756.1, p.23]
EPA should take the time necessary to correct the many errors in the proposed rule, as described in these comments, and allow adequate time for states to develop SIPs and for sources to make the adjustments necessary to comply with the rule, rather than rushing to implementation as it proposes to do. [EPA-HQ-OAR-2009-0491-2756.1, p.24] [[These comments can also be found in Section VII.C.]]
In light of this, EPA should decide not to call for the steep additional emission reductions demanded by the PTR because, as discussed elsewhere in these comments, such additional reductions are not needed to reduce significant regional contributions to downwind nonattainment and interference with maintenance. In the alternative, EPA should extend the PTR's emission reduction deadlines by at least a two-year period beyond the proposed 2014 compliance date (plus an additional interval of time that reflects (i) any additional time that EPA takes to complete this rulemaking beyond mid-2011 and (ii) the reasonable period of time needed by states to implement emission budgets through SIP revisions after final promulgation of EPA's rule). The following subsections of this part of UARG's comments provide more detailed information on the unreasonableness of the emission reduction requirements that EPA has proposed. [EPA-HQ-OAR-2009-0491-2756.1, pp.35-36] [[These comments can also be found in Section VII.C.]]
Response:
See discussion of EPA's rationale for compliance deadlines in preamble section VII.C.
Regarding the comments from MPUA regarding fuel switching, as discussed in preamble section VII.C.2, the flexibility of the rule provides for a wide range of compliance options.
Organization: Southeastern States Air Resource Managers (SESARM)
Comment:
Southeastern States Air Resource Managers (SESARM)
[These comments were submitted as testimony at the Atlanta, Georgia public hearing on September 1, 2010.  See Docket Number EPA-HQ-OAR-0491-1939, p.44.]
Number four, deadlines for achieving mandated emission reductions should be designed to support the attainment deadlines prescribed for the standards. At the same time, the regulated community must be granted the required time to design and implement control equipment and operational changes necessary to meet the emission limits.
Response:
EPA agrees, and we believe the Transport rule accomplishes these objectives.
Organization: Southern Company
Comment:
Southern Company
EPA's rush to develop the Transport Rule and its failure to obtain stakeholder input has resulted in a proposed rule that suffers from numerous errors in methodologies and numerous incorrect assumptions. These flaws impact every aspect of this rule: the determination of which states are included in which programs; individual state budgets; unit allocations; timing of emission controls; etc. Although the court did not grant an 'indefinite stay' of its CAIR decision, it also expressly declined to impose a schedule on remand. EPA's forsaking quality for purported timeliness is unjustified in light of the fact that CAIR is still in place and the emission reductions mandated by CAIR are providing the intended environmental benefits, as well as helping states attain the NAAQS. For example, Birmingham, Alabama is now attainment for both the ozone and daily PM2.5 NAAQS and very close to attaining the annual PM2.5 NAAQS. [EPA-HQ-OAR-2009-0491-2864.1, p. 5]
For these reasons and the reasons explained below, EPA must issue a corrected supplemental proposal with adequate time for public comment. The compliance date should be no earlier than 2015, with CAIR remaining in place until the compliance date. Further information on the compliance timing, as well as other important issues that must be resolved before issuance of the final Transport Rule, are discussed in the comments below. [EPA-HQ-OAR-2009-0491-2864.1, p. 6]
A. EPA Should Discard the 2012 Compliance Date
The January 1, 2012 compliance date is only a mere 6 months after the anticipated issuance of the final Transport Rule. Most states, if not all, will not have time to develop a SIP to replace the PIP proposed by this rule; utilities will be faced with the extremely difficult task of developing and implementing several entirely new allowance strategies in unknown new allowance markets  [EPA-HQ-OAR-2009-0491-2864.1, pp. 8-9] [[These comments can also be found in Section VII.C.]]
It will also allow new allowance markets to develop and allow utilities to properly evaluate and implement possible compliance options. Further, allowing additional implementation time for the Transport Rule will not significantly alter or delay expected environmental benefits, as CAIR is still achieving important emission reductions and the absence of any court-ordered remand schedule enables EPA to exercise its discretion to set reasonable compliance dates. Finally, a compliance date any earlier than 2015 (the CAIR Phase II compliance date) is not justified since CAIR Phase I is achieving virtually the same benefit as the proposed under the Transport Rule (see Section IV). [EPA-HQ-OAR-2009-0491-2864.1, p. 9]
Response:
EPA issued a NODA which requested and received comments on input data used in our analysis.   Based on this review EPA made a number of corrections for the analysis used for the final rule.
See discussion in preamble section VII.C related to compliance deadlines.
See discussion in preamble section X related to State Implementation Plans.

Organization: Xcel Energy Inc.
Comment:
Xcel Energy Inc.
The responsible regulatory agency needs to issue these permits in an expeditious manner to allow for installation of equipment to satisfy CATR. Otherwise, companies will be unable to meet CATR's aggressive compliance schedule. We encourage EPA to work cooperatively with the state permitting agencies to prepare a plan that will allow companies to meet the CATR deadlines and to provide compliance extensions for facilities that experience permitting delays beyond the owner's control. [EPA-HQ-OAR-2009-0491-2728.1, p.6]
Response:
See discussion of permitting issues in preamble section VII.I.

V.C.1. Coordination With NAAQS Deadlines/Addressing Court's Concern About Timing

Organization: Edison Electric Institute (EEI)
Comment:
Edison Electric Institute (EEI)
Many companies consider the compliance timeline to be the one of, if not the most, important factor(s) in complying with new regulations. For example, the proposed Transport Rule and MACT rule will not be finalized until mid- and late-2011, respectively. These rules both will influence company decisions regarding SO2, NOx, particulate matter and other controls. Final compliance with the Transport Rule is required by 2014 (30 months after a final rule), while MACT controls are expected to be required starting in 2015 (36 months after a final rule). Many companies believe that both compliance windows are too short, and that it would be more efficient for power companies to plan for compliance if both rules were to be finalized contemporaneously. [EPA-HQ-OAR-2009-0491-2697.1, p.6]
Finally, there is some uncertainty regarding whether the Agency reasonably established the dates for emission reductions in relation to Clean Air Act (CAA) deadlines for attaining and maintaining the 1997 annual PM2.5 NAAQS and the 2006 24-hour fine particulate matter (PM2.5), as well as the 1997 ozone NAAQS. 3 [EPA-HQ-OAR-2009-0491-2697.1, p.10]

Footnote 3: Regarding the PM2.5 NAAQS, EPA appears to have merged consideration of these two separate NAAQS into a justification for the 2012 and 2014 compliance deadlines. EPA's legal theory appears to be that 2012 and 2014 reductions will "help" such areas and, by virtue of this assistance, can be broadly justified under CAA § 110(a)(2)(D)(i)(I). However, such a standard of "help" provides no guidepost for the acceptable range of action under the CAA; almost any action to reduce air pollution could potentially "help" some area reach attainment. The CAA scheme enshrined within CAA § 110 directs EPA to base additional state controls on "significant contribution" and "interference" with maintenance which will occur over many years. With regard to the ozone NAAQS, nonattainment areas for the 1997 standard, areas not attaining the standard have maximum attainment dates ranging from 2010 to 2018. As a result of other decisions by the D.C. Circuit (vacating EPA's implementation rules for the 1997 standard) EPA proposed to classify 8-hour ozone nonattainment areas in accordance with Subpart II. 74 Fed. Reg. 2946. In this rule, EPA indicates that the 2012 compliance date is based on CAA requirements to attain "as expeditiously as practicable." However, since EPA has failed to finalize the 2009 proposed rule and to classify certain ozone nonattainment areas (i.e., areas formerly classified under Subpart I), EPA has not determined a date for attainment for such areas or whether such date is "as expeditious as practicable" under CAA § 172(a)(2), or responded to potential state requests for deadline extensions. Otherwise, EPA has indicated that the 2012 Proposed Rule deadline is coordinated with the June 2013 maximum attainment deadline for serious ozone nonattainment areas. Thus, control period dates in the proposed Transport Rule do not directly correspond to the Agency's assessment of what attainment dates should apply to certain areas in nonattainment of the 1997 ozone standard.
Response:
See discussion in preamble section VII.C.1
Organization: Maryland Department of Environment (MDE)
Comment:
Maryland Department of Environment (MDE)
In the future Maryland urges EPA to propose a Transport SIP Call and FIP concurrently with any future NAAQS proposals. This would result in the transport SIP being due 3 years after NAAQS promulgation, or the FIP would become final. Maryland recommends the following changes to EPA's proposed timetable below, with changes and additions in bold/italics: [EPA-HQ-OAR-2009-0491-2639.2, p.2]
Response:
EPA will consider this recommendation.   Given that certain technical analyses are dependent on the selected level of the NAAQS, it may be difficult to provide transport requirements concurrently.   EPA intends, however, to address transport requirements as quickly as possible to assist states in developing their transport SIPs by the statutory deadline 3 years after the NAAQS are promulgated.
Organization: Michigan Municipal Electric Association (MMEA)
Comment:
Michigan Municipal Electric Association (MMEA)
4.) EPA's Transport Rule Could Impose Pollution Control Requirements and Deadlines That Could Become Almost Immediately Outdated
For the Michigan public power units commenting here, the 2012 Transport limits and allocations will require almost immediate installation of pollution controls, followed by other, more stringent actions to meet 2014 Transport obligations. This may shortly be followed by additional NOx SIP calls or FIPs from EPA to implement revised ozone NAAQS standards. Requiring municipal utilities to stutter-step through these ongoing NOx regulations will not be feasible to achieve. The following, oft-cited charge shows the difficulties facing municipal electric utilities with respect to pending EPA compliance obligations: [EPA-HQ-OAR-2009-0491-2828.1, p.10]
[See page 10 of this comment for the figure that follows the above text.]
MMEA urges EPA to harmonize these pending NOx, SO2 and PM compliance obligations in a way that allows public power utilities to plan to meet these rules, by dropping the fast-approaching 2012 deadline and harmonizing the deadline with the SIP Call obligations that may result from the adoption of more stringent primary and secondary ozone NAAQS, projected by EPA beginning in 2014 (although EPA has already missed its projected deadline for finalization of that ozone NAAQS). [EPA-HQ-OAR-2009-0491-2828.1, p.10]
Response:
See discussion in preamble section VII.C regarding EPA's rationale for the 2012 compliance deadline.
EPA notes that there is a long-overdue obligation regarding CAA requirements to address significant contribution to ozone nonattainment and interference with maintenance under the 1997 standards.     Dropping the 2012 deadline in order to harmonize the deadline with future ozone NAAQS would lead to an unacceptable delay in meeting current obligations.
Organization: National Rural Electric Cooperative Association (NRECA)
Pennsylvania Department of Environmental Protection
National Association of Clean of Air Agencies (NACAA)
State of Ohio Environmental Protection Agency (Ohio EPA)
Northeast States for Coordinated Air Use Management (NESCAUM)
Attorney General of North Carolina
Exelon
E.ON U.S.
Alcoa Power Generating Inc. - Warrick Power Plant
Large Public Power Council (LPPC)
Ohio Utility Group (OUG)
Associated Electric Cooperative, Inc. (AECI)
Environmental Defense Fund (EDF)
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
Southern Company
Comment:
Alcoa Power Generating Inc. - Warrick Power Plant
The 2010 attainment date that the D.C. Circuit focused on in its 2008 decisions with respect to CAIR has passed, and recent air quality data demonstrates that the transport issue that CAIR sought to address is fast becoming moot. By no later than 2014, all ozone nonattainment areas achieve attainment, all annual PM2.5 nonattainment areas except Allegheny County, PA. achieve attainment, and all 24-hour PM2.5 nonattainment areas except Allegheny County, PA, and Brooke County, WV (both of which are local and not transport related) achieve attainment. Plainly, the additional stringent emission reductions EPA is proposing are not needed to achieve attainment and maintenance of the NAAQS. The underlying rationale for a transport rule of prohibiting significant contribution to nonattainment is soon to be a largely academic issue that no longer needs to be addressed for the 1997 ozone and PM NAAQS or the 2006 24-hour PM2.5 NAAQS. [EPA-HQ-OAR-2009-0491-3648, p.2]
Associated Electric Cooperative, Inc. (AECI)
EPA has proposed an overly aggressive timeline to implement the Transport Rule at a time of uncertainty. A near term final Transport Rule will likely be superseded in the near-future due to developments in new NAAQS. The implementation of new standards for PM2.5, PM10, NOx, and ozone will fall squarely in the middle of when EPA would implement the CATR. Consider: [EPA-HQ-OAR-2009-0491-2845.1 p.2]
:: PM2.5 - EPA commented that the final Transport Rule will need to be amended to address wintertime emissions related to attaining the existing 24-hour PM2.5 standard;
:: PM2.5, PM10  -  New, more stringent NAAQS coming in late 2011; :: NOx - EPA will issue a proposal to address NOx emissions related to the 1997 ozone standard;
:: The forthcoming ozone standard due out in October 2010 may cause EPA to issue a "Transport Rule II";
:: These rules are in addition to the electric utility MACT rule, which is set to be finalized in late-2011  -  just six months after the final Transport Rule is scheduled to be issued. The MACT rule will significantly influence how utility companies invest in scrubber equipment to control emissions of hazardous air pollutants as well as SO2.
CAIR need not be replaced by 2012. There are no legal mandates to replace CAIR by a date certain, thus making the proposed 2012 CATR deadline unnecessary. Extending CAIR would allow CATR implementation to be postponed and the reduction goals more realistically obtainable .[EPA-HQ-OAR-2009-0491-2845.1 p.2]
Request: Associated requests that EPA delay the implementation of the Transport Rule until such time as these forthcoming standards are finalized, and allow states to develop SIPs. Again, nothing in the court mandate requires or compels EPA to abruptly end the CAIR program in favor of a Transport Rule FIP. Issuing the FIP with a 2012 compliance date leaves EPA vulnerable to legal challenges that would likely delay implementation of the rule beyond 2012. Associated strongly urges EPA to observe the orderly process and statutory timelines of Clean Air Act Section 110 for development of State Implementation Plans (see discussion/comments below). [EPA-HQ-OAR-2009-0491-2845.1 p.2]
Attorney General of North Carolina
In North Carolina, the D.C. Circuit held that EPA failed to properly implement the phrase in §110(a)(2)(D)(i)(I) requiring controls for interstate pollutants to be "consistent with the provisions of [Title I]." In the Court's view, this phrase requires EPA to coordinate the timing of controls on upwind sources with the attainment deadlines for downwind areas affected by those sources. 531 F.3d at 911-12. In CAIR, the deadlines for implementing controls were several years removed from the downwind attainment dates, virtually guaranteeing that the downwind areas would not get the full help from upwind sources in the time that Congress had commanded. [EPA-HQ-OAR-2009-0491-2685.1]
In the proposed Transport FIP, EPA has tacitly recognized that for some areas that are in need of assistance from upwind reductions the controls under the Transport FIP will come too late to help them attain in a timely manner. See 75 Fed. Reg. at 45,300/3-01/1. However, EPA argues that the controls are being implemented as expeditiously as practicable. EPA also contends that the 2012 and 2014 implementation dates are coordinated with the extended attainment deadlines for those areas that have already missed their attainment dates and with the deadlines for other nonattainment areas whose attainment dates have not yet arrived. Id. at 45,300/3-01/2. [EPA-HQ-OAR-2009-0491-2685.1]
E.ON U.S.
Further, it is unclear whether EPA has established reasonable dates for emission reductions in relation to Clean Air Act deadlines for attaining NAAQS. EPA appears to have combined the 1997 annual PM2.5 NAAQS and the 2006 24-hr PM2.5 NAAQS as justification for the 2012 and 2014 deadlines under Section 110(a)(2)(D)(i)(I). However, this section does not provide specific guidelines for deadlines. [EPA-HQ-OAR-2009-0491-2797.1, p.3]
Environmental Defense Fund (EDF)
d. The Statute Calls for EPA to Ensure That Downwind States Attain the NAAQS "As Expeditiously As Practicable"
The agency's failure to establish a compliance schedule to ameliorate the "significant contribution" of upwind emissions to downwind nonattainment consonant with the NAAQS attainment deadline for downwind states was one of the central defects with CAIR identified by the D.C. Circuit in North Carolina v. EPA.18 To comply with the statutory mandate, EPA has a responsibility to carry out the prohibition on interstate air pollution under section 110(a)(2)(D) of the Clean Air Act not only by the outermost statutory deadlines for NAAQS attainment but "as expeditiously as practicable." The duty to attain the NAAQS "as expeditiously as practicable" and no later than the timetables delineated by law is an enduring framework of the statute.19 EPA has recognized that this rigorous, normative standard  -- to attain the NAAQS "as expeditiously as practicable"  -- is plainly intended to operate as the "overarching requirement for attainment."20  [EPA-HQ-OAR-2009-0491-2834.1 p.8]
Consistent with the natural, ordinary meaning of "expeditious," EPA must determine whether the emission reductions under the Transport Rule can be advanced to ensure speedy attainment of the NAAQS. Reviewing courts have interpreted the statutory admonition "as expeditiously as practicable" under the CAA to require compliance at the earliest possible date. By requiring compliance as expeditiously as practicable, "Congress made it clear that the states were to embark on the task of improving air quality as quickly as they could."21 [EPA-HQ-OAR-2009-0491-2834.1 p.8]
Further, courts have consistently recognized that the statute calls for expeditious attainment to fulfill the congressional imperative to protect human health, even when the phrase is coupled with an explicit deadline that sets an outer limit on compliance. [EPA-HQ-OAR-2009-0491-2834.1 p.8]
The Act's requirements with respect to SIPs emphasize that this purpose -- healthy air -- is to be attained "as expeditiously as practicable," but, in any event, no later than the attainment deadlines. Although [the defendants] focus[] on Congress' extension of the deadlines, the legislative history underscores that Congress regarded them as outside limits. 22 [EPA-HQ-OAR-2009-0491-2834.1 p.8]
In the NAAQS context these outer limit compliance deadlines are "certainly not a license for [a] state to take its time in complying with the NAAQS. The new attainment date is simply an outside date, and the CAA [amendment] explicitly reaffirms the Act's primary legislative purpose of attaining NAAQS `as expeditiously as practicable.'"23 [EPA-HQ-OAR-2009-0491-2834.1 p.9]
The proposed Transport Rule fails to meet the statutory exhortation to ensure attainment "as expeditiously as practicable." According to the agency's own projections, several downwind areas will fail to achieve or maintain the 1997 annual PM2.5 NAQQS, at least 14 downwind areas will fail to achieve or maintain the 2006 24-hour PM2.5 NAAQS, and several downwind areas will fail to achieve or maintain the admittedly inadequate 1997 ozone NAAQS.24 To demonstrate that the Transport Rule will prohibit interstate air pollution in accordance with the congressional mandate to restore healthy air expeditiously, EPA must show, on the administrative record, that the pace of reductions under the final rule will in fact sufficiently limit pollution to achieve the NAAQS "as expeditiously as practicable" and in no instance beyond the outermost statutory deadlines. [EPA-HQ-OAR-2009-0491-2834.1 p.9]
Exelon
The court in North Carolina also ruled that the 2015 deadline set by CAIR for upwind states to eliminate their "significant contribution" to downwind nonattainment ignore the plain language of CAA Section 110(a) requiring that attainment be achieved as expeditiously as practicable, but no later than five years from the date that the area was designated as nonattainment. The court ruled CAIR's 2015 compliance deadline was unlawful, because it resulted in downwind areas being required to attain NAAQS for ozone and PM2.5 without requiring upwind states to eliminate their significant contributions to downwind nonattainment. As a result, downwind states were forced to make reductions that exceeded the requirements of Section 110(a) solely to account for the additional pollutants that interfere with maintenance form upwind states. With the proposed Transport Rule, EPA addressed the issue of the CAA's compliance deadlines by coordinating the Transport Rule's deadlines for emissions reduction with the attainment deadlines for the relevant NAAQS. Considering the 2010 deadline will have passed prior to the proposed Transport Rule's adoption, EPA aligned the deadline for eliminating"significant contribution" under the proposed Transport Rule with respect to the 1997 PM2.5 NAAQS with the April 2015 deadline that is applicable to areas that will require an extension to the 2010 deadline. For areas designated as nonattainment with respect to the 2006 24-hour PM2.5 NAAQS, the attainment deadline must be met as expeditiously as practicable, but not later than December 2014. This 2014 deadline is consistent with the December 2014 attainment deadline for areas designated nonattainment for the 2006 PM2.5 NAAQS. The proposed Transport Rule Requires compliance with the limits on ozone-season NOX emissions by setting a 2012 deadline for compliance in coordination with the June 2013 maximum attainment deadline for serious ozone nonattainment areas. [EPA-HQ-OAR-2009-0491-2666.1, p.11]
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
Third, EPA errs in arguing that reductions in 2012 and 2014 are necessary to coordinate with NAAQS attainment deadlines under the D.C. Circuit's opinion in North Carolina. [EPA-HQ-OAR-2009-0491-2672.1, pp.3-4]