there can be variations in the expected response in U.S. O3 by
scenario and across models and years, within the overall signal of
higher summer O3 concentrations in a warmer climate.
    \56\ U.S. Global Change Research Program (USGCRP), 2016: The
Impacts of Climate Change on Human Health in the United States: A
Scientific Assessment. Crimmins, A., J. Balbus, J.L. Gamble, C.B.
Beard, J.E. Bell, D. Dodgen, R.J. Eisen, N. Fann, M.D. Hawkins, S.C.
Herring, L. Jantarasami, D.M. Mills, S. Saha, M.C. Sarofim, J.
Trtanj, and L. Ziska, Eds. U.S. Global Change Research Program,
Washington, DC, 312 pp. https://dx.doi.org/10.7930/J0R49NQX.
    \57\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United
States: Fourth National Climate Assessment, Volume II [Reidmiller,
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018.
    \58\ Fann NL, Nolte CG, Sarofim MC, Martinich J, Nassikas NJ.
Associations Between Simulated Future Changes in Climate, Air
Quality, and Human Health. JAMA Netw Open. 2021;4(1):e2032064.
doi:10.1001/jamanetworkopen.2020.32064
    \59\ Christopher G Nolte, Tanya L Spero, Jared H Bowden, Marcus
C Sarofim, Jeremy Martinich, Megan S Mallard. Regional temperature-
ozone relationships across the U.S. under multiple climate and
emissions scenarios. J Air Waste Manag Assoc. 2021 Oct;71(10):1251-
1264. doi: 10.1080/10962247.2021.1970048.
    \60\ Nolte, C.G., P.D. Dolwick, N. Fann, L.W. Horowitz, V. Naik,
R.W. Pinder, T.L. Spero, D.A. Winner, and L.H. Ziska, 2018: Air
Quality. In Impacts, Risks, and Adaptation in the United States:
Fourth National Climate Assessment, Volume II [Reidmiller, D.R.,
C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, pp. 512-538. doi: 10.7930/
NCA4.2018.CH13
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2. Ozone Transport
    Studies have established that ozone formation, atmospheric
residence, and transport occur on a regional scale (i.e., thousands of
kilometers) over much of the U.S.\61\ While substantial progress has
been made in reducing ozone in many areas, the interstate transport of
ozone precursor emissions remains an important contributor to peak
ozone concentrations and high-ozone days during the summer ozone
season.
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    \61\ Bergin, M.S. et al. (2007) Regional air quality: Local and
interstate impacts of NOX and SO2 emissions on
ozone and fine particulate matter in the eastern United States.
Environmental Sci & Tech. 41: 4677-4689.
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    The EPA has previously concluded in the NOX SIP Call,
CAIR, CSAPR, the CSAPR Update, and the Revised CSAPR Update that a
regional NOX control strategy would be effective in reducing
regional-scale transport of ozone precursor emissions. NOX
emissions can be transported downwind as NOX or as ozone
after transformation in the atmosphere. In any given location, ozone
pollution levels are impacted by a combination of background ozone
concentration, local emissions, and emissions from upwind sources
resulting from ozone transport, in conjunction with variable
meteorological conditions. Downwind states' ability to meet health-
based air quality standards such as the NAAQS is challenged by the
transport of ozone pollution across state borders. For example, ozone
assessments conducted for the October 2015 Regulatory Impact Analysis
of the Final Revisions to the National Ambient Air Quality Standards
for Ground-Level Ozone \62\ continue to show the importance of
NOX emissions for ozone transport. This analysis is included
in the docket for this rulemaking.
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    \62\ Available in the docket for the October 2015 Revisions to
the National Ambient Air Quality Standards for Ground-Level Ozone at
https://www.regulations.gov/docket/EPA-HQ-OAR-2008-0699.
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    Further, studies have found that EGU NOX emissions
reductions can be effective in reducing individual 8-hour peak ozone
concentrations and in reducing 8-hour peak ozone concentrations
averaged across the ozone season. For example, a study of the EGU
NOX reductions achieved under the NOX Budget
Trading Program (i.e., the NOX SIP Call) shows that
regulating NOX emissions in that program was highly
effective in reducing ozone concentrations during the ozone season.\63\
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    \63\ Butler, et al., ``Response of Ozone and Nitrate to
Stationary Source Reductions in the Eastern USA.''Atmospheric
Environment, 2011.
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    Previous regional ozone transport efforts, including the
NOX SIP Call, CAIR, CSAPR, the CSAPR Update, and the Revised
CSAPR Update, required ozone season NOX reductions from EGU
sources to address interstate transport of ozone. Together with
NOX, the EPA has also identified VOCs as a precursor in
forming ground-level ozone. Ozone formation chemistry can be
``NOX-limited,'' where ozone production is primarily
determined by the amount of NOX emissions or ``VOC-
limited,'' where ozone production is primarily

determined by the amount of VOC emissions.\64\ The EPA and others have
long regarded NOX to be the more significant ozone precursor
in the context of interstate ozone transport.\65\
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    \64\ ``Ozone Air Pollution.'' Introduction to Atmospheric
Chemistry, by Daniel J. Jacob, Princeton University Press,
Princeton, New Jersey, 1999, pp. 231-244.
    \65\ 81 FR 74514.
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    The EPA has determined that the regulation of VOCs as an ozone
precursor is not necessary to eliminate significant contribution of
ozone transport to downwind areas in this rule. As described in section
V.A of this document, the EPA examined the results of the contribution
modeling performed for this rule to identify the portion of the ozone
contribution attributable to anthropogenic NOX emissions
versus VOC emissions from each linked upwind state to each downwind
receptor. Our analysis of the ozone contribution from upwind states
subject to regulation demonstrates that regional ozone concentrations
affecting the vast majority of the downwind areas of air quality
concern are NOX-limited, rather than VOC-limited. Therefore,
the rule's strategy for reducing regional-scale transport of ozone
targets NOX emissions from stationary sources to achieve the
most effective reductions of ozone transport over the geography of the
affected downwind areas. The potential impacts of NOX
mitigation strategies from other sources are discussed in section V.B
of this document.
    In section V of this document, the EPA describes the multi-factor
test that is used to determine NOX emissions reductions that
are cost-effective and reduce interstate transport of ground-level
ozone. Our analysis indicates that the EGU and non-EGU control
requirements included in this rule will provide meaningful improvements
in air quality at the downwind receptors. Based on the implementation
schedule established in section VI.A of this document, the EPA finds
that the regulatory requirements included in the rule are as
expeditious as practicable and are aligned with the attainment schedule
of downwind areas.
3. Health and Environmental Effects
    Exposure to ambient ozone causes a variety of negative effects on
human health, vegetation, and ecosystems. In humans, acute and chronic
exposure to ozone is associated with premature mortality and certain
morbidity effects, such as asthma exacerbation. In ecosystems, ozone
exposure causes visible foliar injury, decreases plant growth, and
affects ecosystem community composition. See EPA's October 2015
Regulatory Impact Analysis of the Final Revisions to the National
Ambient Air Quality Standards for Ground-Level Ozone \66\ in the docket
for this rulemaking for more information on the human health and
ecosystem effects associated with ambient ozone exposure.
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    \66\ Available at https://www.epa.gov/sites/default/files/2016-02/documents/20151001ria.pdf.
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    Commenters on prior ozone transport rules have asserted that VOC
emissions harm underserved and overburdened communities experiencing
disproportionate environmental health burdens and facing other
environmental injustices. The EPA acknowledges that VOCs can contain
toxic chemicals that are detrimental to public health. The EPA
conducted a demographic analysis as part of the regulatory impact
analysis for the 2015 revisions to the primary and secondary ozone
NAAQS. This analysis, which is included in the docket for this
rulemaking, found greater representation of minority populations in
areas with poor air quality relative to the revised ozone standard than
in the U.S. as a whole. The EPA concluded that populations in these
areas would be expected to benefit from implementation of future air
pollution control actions from state and local air agencies in
implementing the strengthened standard. This rule is an example of air
pollution control actions implemented by the Federal Government in
support of the more protective 2015 ozone NAAQS, and populations living
in downwind ozone nonattainment and maintenance areas are expected to
benefit from improved air quality that will result from reducing ozone
transport. Further discussion of the environmental justice analysis of
this rule is located in section VII of this document and in the
accompanying regulatory impact analysis, titled ``Regulatory Impact
Analysis for Final Federal Good Neighbor Plan Addressing Regional Ozone
Transport for the 2015 Ozone National Ambient Air Quality Standard''
[EPA-452/D-22-001], which is available in the docket for this
rulemaking.
    The Agency regulates exposure to toxic pollutant concentrations and
ambient exposure to criteria pollutants other than ozone through other
sections of the Act, such as the regulation of hazardous air pollutants
under CAA section 112 or the process for revising and implementing the
NAAQS under CAA sections 107-110. The purpose of the subject rulemaking
is to protect public health and the environment by eliminating
significant contribution from 23 states to nonattainment or maintenance
of the 2015 ozone NAAQS to meet the requirements of the CAA's
interstate transport provision. In this rule, the EPA continues to
observe that requiring NOX emissions reductions from
stationary sources is an effective strategy for reducing regional ozone
transport in the U.S.
    The EPA responds to other comments received on the health and
environmental impacts of ozone exposure in section 11 of the RTC
document.

B. Final Rule Approach

1. The 4-Step Interstate Transport Framework
    The EPA first developed a multi-step process to address the
requirements of the good neighbor provision in the 1998 NOX
SIP Call and the 2005 CAIR. The Agency built upon this framework and
further refined the methodology for addressing interstate transport
obligations in subsequent rules such as CSAPR in 2011, the CSAPR Update
in 2016, and the Revised CSAPR Update in 2021.\67\ In CSAPR, the EPA
first articulated a ``4-step framework'' within which to assess
interstate transport obligations for ozone. In this rule to address
interstate transport obligations for the 2015 ozone NAAQS, the EPA is
again utilizing the 4-step interstate transport framework. These steps
are: (1) identifying downwind receptors that are expected to have
problems attaining the NAAQS (nonattainment receptors) or maintaining
the NAAQS (maintenance receptors); (2) determining which upwind states
are ``linked'' to these identified downwind receptors based on a
numerical contribution threshold; (3) for states linked to downwind air
quality problems, identifying upwind emissions on a statewide basis
that significantly contribute to downwind nonattainment or interfere
with downwind maintenance of the NAAQS, considering cost- and air
quality-based factors; and (4) for upwind states that are found to have
emissions that significantly contribute to nonattainment or interfere
with maintenance of the NAAQS in any downwind state, implementing the
necessary emissions reductions through enforceable measures.
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    \67\ See CSAPR, Final Rule, 76 FR 48208, 48248-48249 (August 8,
2011); CSAPR Update, Final Rule, 81 FR 74504, 74517-74521 (October
26, 2016).
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    Comment: The EPA received comments supporting the Agency's use of
the 4-step interstate transport framework as a permissible method for
assigning the required amount of

emissions reductions necessary to eliminate upwind states' significant
contribution. Commenters also noted that the 4-step interstate
transport framework was reviewed by the Supreme Court in EPA vs. EME
Homer City Generation, 572 U.S. 489 (2014), and upheld. However, other
commenters took exception to the overall approach of this proposed
action. These commenters alleged that the EPA is ignoring the
``flexibility'' in addressing good neighbor obligations that it had
purportedly suggested to states would be permissible in memoranda that
the EPA issued in 2018. Commenters also raised concerns that the air
quality modeling (2016v2) the EPA used to propose to disapprove SIP
submittals and as the basis for the proposed FIP was not available to
states at the time they made their submissions and that the changes in
results at Steps 1 and 2 from prior rounds of modeling rendered the new
modeling unreliable. Commenters also raised a number of arguments that
the EPA should allow states an additional opportunity to submit SIPs
before promulgating a FIP, advocated that the EPA should issue a ``SIP
call'' under CAA section 110(k)(5), asked for the EPA to issue new or
more specific guidance, or otherwise suggested that the EPA should
defer acting to promulgate a FIP at this time.
    Response: As an initial matter, comments regarding the EPA's basis
for disapproving SIPs are beyond the scope of this action.\68\ To the
extent these comments relate to the legal basis for the EPA to
promulgate a FIP, the EPA disagrees that it is acting in a manner
contrary to the memoranda it released in 2018 related to good neighbor
obligations for the 2015 ozone NAAQS. Arguments that the EPA must or
should allow states to re-submit SIP submissions based on the most
recent modeling information before the EPA promulgates a FIP ignore the
plain language of the statute and relevant caselaw. CAA section 110(c)
authorizes the EPA to promulgate a FIP ``at any time within 2 years''
of a SIP disapproval. No provision of the Act requires the EPA to give
states an additional opportunity to prepare a new SIP submittal once
the EPA has proposed a FIP or proposed disapproval of a SIP submittal.
Comments regarding the timing of the EPA's actions and calls for the
EPA to allow time for states to resubmit SIPs are further addressed in
RTC sections 1.1 and 2.4.
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    \68\ We nonetheless further respond to comments regarding the
timing and sequence of the EPA's SIP and FIP actions, the relevance
of judicial consent decrees, the requests for a SIP call, and
related comments--to the extent any of these issues are within scope
of the present action--in Sections 1 and 2 of the RTC document
located in the docket for this action.
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    With regard to the need for the EPA to develop and issue guidance
in addressing good neighbor obligations, in EPA v. EME Homer City
Generation, L.P., the Supreme Court held that ``nothing in the statute
places the EPA under an obligation to provide specific metrics to
States before they undertake to fulfill their good neighbor
obligations.'' \69\ While we have taken a different approach in some
prior rulemakings by providing states with an opportunity to submit a
SIP after we quantified the states' budgets (e.g., the NOX
SIP Call and CAIR \70\), the CAA does not require such an approach.
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    \69\ 572 U.S. 489, 510 (2014). ``Nothing in the Act
differentiates the Good Neighbor Provision from the several other
matters a State must address in its SIP. Rather, the statute speaks
without reservation: Once a NAAQS has been issued, a State `shall'
propose a SIP within three years, Sec.  [thinsp]7410(a)(1), and that
SIP `shall' include, among other components, provisions adequate to
satisfy the Good Neighbor Provision, Sec.  [thinsp]7410(a)(2).'' EPA
v. EME Homer City Generation, L.P., 572 U.S. at 515.
    \70\ For information on the NOX SIP call see 63 FR
57356 (October 27, 1998). For information on CAIR see 70 FR 25162
(May 12, 2005).
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    2018 Memoranda. As commenters point out, the EPA issued three
``memoranda'' in 2018 to provide some assistance to states in
developing these SIP submittals.\71\ Each memorandum made clear that
the EPA's action on SIP submissions would be through a separate notice-
and-comment rulemaking process and that SIP submissions seeking to rely
on or take advantage of any so-called ``flexibilities'' in these
memoranda would be carefully reviewed against the relevant legal
requirements and technical information available to the EPA at the time
it would take such rulemaking action. Further, certain aspects of
discussions in those memoranda were specifically identified as not
constituting agency guidance (especially Attachment A to the March 2018
memorandum, which comprised an unvetted list of external stakeholders'
ideas). And, although outside the scope of this action, as the EPA has
explained in disapproving states' SIP submittals, those submittals did
not meet the terms of the August 2018 or October 2018 memoranda
addressing contribution thresholds and maintenance receptors,
respectively.
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    \71\ See Information on the Interstate Transport State
Implementation Plan Submissions for the 2015 Ozone National Ambient
Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)
(March 27, 2018) (``March 2018 memorandum''); Analysis of
Contribution Thresholds for Use in Clean Air Act Section
110(a)(2)(D)(i)(I) Interstate Transport State Implementation Plan
Submissions for the 2015 Ozone National Ambient Air Quality
Standards, August 31, 2018) (``August 2018 memorandum'');
Considerations for Identifying Maintenance Receptors for Use in
Clean Air Act Section 110(a)(2)(D)(i)(I) Interstate Transport State
Implementation Plan Submissions for the 2015 Ozone National Ambient
Air Quality Standards, October 19, 2018 (``October 2018
memorandum''). These are available in the docket or at https://www.epa.gov/airmarkets/memo-and-supplemental-information-regarding-interstate-transport-sips-2015-ozone-naaqs.
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    Commenters mistakenly view Attachment A to the March 2018
memorandum as constituting agency guidance. This memorandum was
primarily issued to share modeling results for 2023 that represented
the best information available to the Agency as of March 2018, while
Attachment A then listed certain ideas from certain stakeholders that
the EPA said could be further discussed among states and stakeholders.
The EPA disagrees with commenters' characterization of the EPA's stance
regarding these so-called ``flexibilities'' listed (without analysis)
in Attachment A. The March 2018 memorandum provided, ``While the
information in this memorandum and the associated air quality analysis
data could be used to inform the development of these SIPs, the
information is not a final determination regarding states' obligations
under the good neighbor provision.'' The EPA again affirms that the
concepts listed in Attachment A to the March 2018 memorandum require
unique consideration, and these ideas do not constitute agency guidance
with respect to transport obligations for the 2015 ozone NAAQS.
Attachment A to the March 2018 memorandum identified a ``Preliminary
List of Potential Flexibilities'' that could potentially inform SIP
development. However, the EPA made clear in both the March 2018
memorandum \72\ and in Attachment A that the list of ideas was not
endorsed by the Agency but rather ``comments provided in various
forums'' on which the EPA sought ``feedback from interested
stakeholders.'' \73\ Further, Attachment A stated, ``EPA is not at this
time making any determination that the ideas discussed below are
consistent with the requirements of the CAA, nor are we specifically
recommending that states use these approaches.'' \74\ Attachment A to
the March 2018 memorandum, therefore, does not

constitute agency guidance, but was intended to generate further
discussion around potential approaches to addressing ozone transport
among interested stakeholders. The EPA emphasized in these memoranda
that such alternative approaches must be technically justified and
appropriate in light of the facts and circumstances of each particular
state's submittal. To the extent states sought to develop or rely on
one or more of these ideas in support of their SIP submissions, the EPA
reviewed their technical and legal justifications for doing so.\75\
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    \72\ ``In addition, the memorandum is accompanied by Attachment
A, which provides a preliminary list of potential flexibilities in
analytical approaches for developing a good neighbor SIP that may
warrant further discussion between EPA and states.'' March 2018
memorandum at 1.
    \73\ March 2018 memorandum, Attachment A at A-1.
    \74\ Id.
    \75\ E.g., 87 FR 64423-64425 (Alabama); 87 FR 31453-31454
(California); 87 FR 9852-9854 (Illinois); 87 FR 9859-9860 (Indiana);
87 FR 9508, 9515 (Kentucky); 87 FR 9861-9862 (Michigan); 87 FR 9869-
9870 (Ohio); 87 FR 9798, 9818-9820 (Oklahoma); 87 FR 31477-31481
(Utah); 87 FR 9526-9527 (West Virginia).
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    Regarding the October 2018 memorandum, that document recognized
that states may be able to demonstrate in their SIPs that conditions
exist that would justify treating a monitoring site as not being a
maintenance receptor despite results from our modeling methodology
identifying it as such a receptor. The EPA explained that this
demonstration could be appropriate under two circumstances: (1) the
site currently has ``clean data'' indicating attainment of the 2015
ozone NAAQS based on measured air quality concentrations, or (2) the
state believes there is a technical reason to justify using a design
value from the baseline period that is lower than the maximum design
value based on monitored data during the same baseline period. To
justify such an approach, the EPA anticipated that any such showing
would be based on an analytical demonstration that (1) meteorological
conditions in the area of the monitoring site were conducive to ozone
formation during the period of clean data or during the alternative
base period design value used for projections; (2) ozone concentrations
have been trending downward at the site since 2011 (and ozone precursor
emissions of NOX and VOC have also decreased); and (3)
emissions are expected to continue to decline in the upwind and
downwind states out to the attainment date of the receptor. Although
this is beyond the scope of this action, the EPA explained in its final
SIP disapproval action that no state successfully demonstrated that one
of these alternative approaches is justified. In this action, our
analysis of the air quality data and projections in section IV of this
document indicate that trends in historic measured data do not
necessarily support adopting a less stringent approach for identifying
maintenance receptors for purposes of the 2015 ozone NAAQS. In fact, as
explained in section III.B.1.a and IV.D of this document, the EPA has
found in its analysis for this final rule that, in general, recent
measured data from regulatory ambient air quality ozone monitoring
sites suggest that a number of receptors with elevated ozone levels
will persist in 2023 even though our traditional methodology at Step 1
did not identify these monitoring sites as receptors in 2023. Thus, the
EPA is not acting inconsistently with that memorandum--the factual
conditions that would need to exist for the suggested approaches of
that memorandum to be applicable have not been demonstrated as being
applicable or appropriate based on the relevant data.
    Regarding the August 2018 memorandum, as discussed in section
IV.F.2 of this document, for purposes of Step 2 of our ozone transport
evaluation framework, we are applying a 1 percent of NAAQS threshold
rather than a 1 ppb threshold, as this memorandum had suggested might
be appropriate for states to apply as an alternative. The EPA is
finalizing its proposed approach of consistently using a 1 percent of
the NAAQS contribution threshold at Step 2 to evaluate whether states
are linked to downwind nonattainment and maintenance concerns for
purposes of this FIP.
    The approach of this FIP ensures both national consistency across
all states and consistency and continuity with our prior interstate
transport actions for other NAAQS. Further, in this action the EPA is
promulgating FIPs under the authority of CAA section 110(c). In doing
so, the EPA has exercised its discretion to determine how to define and
apply good neighbor obligations in place of the discretion states
otherwise would exercise (subject to the EPA's approval as compliant
with the Act). In general, the EPA is applying the 4-step interstate
transport framework it devised over the course of its prior good
neighbor rulemakings, including applying a consistent definition of
nonattainment and maintenance-only receptors, and applying the 1
percent of NAAQS threshold at Step 2. The basis for these decisions is
further explained in sections IV.F.1 and IV.F.2 of the document. These
policy judgments reflect consistency with relevant good neighbor case
law and past agency practice implementing the good neighbor provision
as reflected in the original CSAPR, CSAPR Update, Revised CSAPR Update,
and related rulemakings. Nationwide consistency in approach is
particularly important in the context of interstate ozone transport,
which is a regional-scale pollution problem involving the collective
emissions of many smaller contributors. Effective policy solutions to
the problem of interstate ozone transport dating back to the
NOX SIP Call (63 FR 57356 (October 27, 1998)) have
necessitated the application of a uniform framework of policy
judgments, and the EPA's framework applied here has been upheld as
ensuring an ``efficient and equitable'' approach. See EME Homer City
Generation, LP v. EPA, 572 U.S. 489, 519 (2014).
    Updated modeling. The EPA had originally provided 2023 modeling
results in its March 2018 memorandum, which used a 2011-based platform.
Many states used this modeling in providing good neighbor SIP
submittals for the 2015 ozone NAAQS. While our action on the SIP
submittals is not within scope of this action, commenters claim the use
of new modeling or other information not available to states at the
time they made their submittals renders this action promulgating a FIP
unlawful. Notwithstanding whether that is an accurate characterization
of the EPA's basis for disapproving the SIPs, we note that the court in
Wisconsin rejected this precise argument against the CSAPR Update FIPs
as a collateral attack on the SIP disapprovals. 938 F.3d at 336 (``That
is the hallmark of an improper collateral attack. The true gravamen of
the claim lies in the agency's failure to timely act upon the States'
SIP submissions and, relatedly, its reliance on data compiled after the
SIP action deadline. Both go directly to the legitimacy of the SIP
denials.'').
    Nonetheless, we offer the following explanation of the evolution of
the EPA's understanding of projected air quality conditions and
contributions in 2023 resulting from the iterative nature of our
modeling efforts. These modeling efforts are further addressed in
section IV of this document. We acknowledge that to evaluate transport
SIPs and support our proposed FIP the EPA reassessed receptors at Step
1 and states' contribution levels at Step 2 through additional modeling
(2016v2) before proposing this action and have reassessed again to
inform the final action (2016v3). At proposal, we relied on CAMx
Version 7.10 and the 2016v2 emissions platform to make updated
determinations regarding which receptors would likely exist in 2023 and
which states are projected to contribute above the contribution
threshold to those receptors. As explained in the preamble of the EPA's
proposed FIP and further detailed in the ``Air Quality

Modeling Technical Support Document for the Federal Implementation Plan
Addressing Regional Ozone Transport for the 2015 Ozone National Ambient
Air Quality Standards Proposed Rulemaking'' (Dec. 2021), hereinafter
referred to as Air Quality Modeling Proposed Rule TSD, and the
``Technical Support Document (TSD): Preparation of Emissions
Inventories for the 2016v2 North American Emissions Modeling Platform''
(Dec. 2021), hereinafter referred to as the 2016v2 Emissions Inventory
TSD, both available in the docket for this action (docket ID no. EPA-
HQ-OAR-2021-0668), this modeling built off of previous modeling
iterations used to support the EPA's action on interstate transport
obligations. The EPA periodically refines its modeling to ensure the
results are as indicative as possible of air quality in future years.
This includes making any necessary adjustments to our modeling platform
and updating our emissions inventories to reflect current information,
including information submitted during public comments on proposed
actions.
    For this final rule, the EPA has evaluated a raft of technical
information and critiques of its 2016v2 modeling provided by commenters
on this action (as well as comments on the SIP actions) and has
responded to those comments and incorporated updates into the version
of the modeling used to support this final rule (2016v3). As explained
in section IV.B of the document, in response to additional information
provided by stakeholders following a solicitation of feedback during
the release of the 2016v2 emissions inventory and during the comment
periods on the proposed SIP actions, the EPA has reviewed and revised
its 2016v2 modeling platform and input since the platform was made
available for comment. The new modeling platform 2016v3 was developed
from this input, and the modeling results using platform 2016v3 are
available with this action. See section IV of this document for further
discussion. Thus, the EPA's final rule is based on a comprehensive
record of data and technical evaluation, including the updated modeling
information used at proposal (2016v2), the comments received on that
modeling, and the latest modeling used in this final rule (2016v3).
    The changes in projected outcomes at Steps 1 and 2 are a product of
these changes; these updates between the data released in 2018 to now
are an outgrowth of this iterative process, including updating the
platform from a 2011 to a 2016 base year, updates to the emissions
inventory information and other updates. It is reasonable for the
Agency to improve its understanding of a situation before taking final
action, and the Agency uses the best information available to it in
taking this action.
    Further, these modeling updates have not uniformly resulted in new
linkages--the 2016v2 modeling, for instance, corroborated the proposed
approval of Montana and supported approval of Colorado's SIP in October
of 2022.\76\ Although some commenters indicate that our modeling
iterations have provided differing outcomes and are therefore
unreliable, this is not what the overall record indicates. Rather, in
general, although the specifics of states' linkages may have changed to
some extent, our modeling on the whole has provided consistent outcomes
regarding which states are linked to downwind air quality problems. For
example, the EPA's modeling shows that most states that were linked to
one or more receptors using the 2011-based platform (i.e., the March
2018 data release) are also linked to one or more receptors using the
newer 2016-based platform. Because the new platform uses different
meteorology (i.e., 2016 instead of 2011), it is not unexpected that an
upwind state would be linked to different receptors using 2011 versus
2016 meteorology. In addition, although a state may be linked to a
different set of receptors, those receptors are within the same areas
that have historically had a persistent air quality problem. Only three
upwind states included in the FIP went from being unlinked to being
linked in 2023 between the 2011-based modeling provided in the March
2018 memorandum and the 2016v3-based modeling--Alabama, Minnesota, and
Nevada.
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    \76\ 87 FR 6095, 6097 at n. 15 (February 3, 2022) (Montana
proposal); 87 FR 27050, 27056 (May 6, 2022) (Colorado, proposal), 87
FR 61249 (October 11, 2022) (Colorado, final).
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    Additionally, we disagree with commenters who claim that the 2016v2
modeling results were sprung upon the states with the publication of
the proposed SIP disapprovals. In fact, states had prior access to a
series of data and modeling releases beginning as early as the
publication of the 2016v1 modeling with the proposed Revised CSAPR
Update in October 2020. States could have reviewed and used this
technical information to understand and track how the EPA's modeling
updates were affecting the list of potential receptors and linkages for
the 2015 ozone NAAQS in the 2023 analytic year.
    The 2016-based meteorology and boundary conditions used in the
modeling have been available through the 2016v1 platform, which was
used for the Revised CSAPR Update (proposed, 85 FR 68964; October 30,
2020). The updated emissions inventory files used in the current
modeling were publicly released September 21, 2021, for stakeholder
feedback, and have been available on our website since that time.\77\
The CAMx modeling software that the EPA used has likewise been publicly
available for over a year before this final rule was proposed on April
6, 2022. CAMx version 7.10 was released by the model developer,
Ramboll, in December 2020. On January 19, 2022, we released on our
website and notified a wide range of stakeholders of the availability
of both the modeling results for 2023 and 2026 (including contribution
data) along with many key underlying input files.\78\
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    \77\ See https://www.epa.gov/air-emissions-modeling/2016v2-platform.
    \78\ See https://www.epa.gov/scram/photochemical-modeling-applications.
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    By providing the 2016 meteorology and boundary conditions (used in
the 2016v1 version) in fall of 2020, and by releasing updated emissions
inventory information used in 2016v2 in September of 2021,\79\ we gave
states and other interested parties multiple opportunities prior to
proposal of this rule on April 6, 2022, to consider how our modeling
updates could affect their status for purposes of evaluating potential
linkages for the 2015 ozone NAAQS. In this final rule, we have updated
our modeling to 2016v3, incorporating and reflecting the feedback and
additional information we received through the multiple public comment
opportunities the EPA made available on the 2016v2 modeling.
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    \79\ https://www.epa.gov/air-emissions-modeling/2016v2-platform.
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    The EPA's development of and reliance on newer modeling is
reasonable and is simply another iteration of the EPA's longstanding
scientific and technical work to improve our understanding of air
quality issues and causes going back many decades.
    Comment: Commenters asserted that the EPA lacks authority under the
good neighbor provision to do more than establish state-wide emissions
budgets, which states may then implement through their own choice of
emissions controls. The commenters claim that the EPA lacks authority
to directly regulate emissions sources under the good neighbor
provision, and they cite to case law that they view as establishing a
``federalism bar'' to direct Federal regulation. Commenters assert that
the

term ``amounts'' as used in the good neighbor provision prevents the
agency from establishing emissions limits at individual sources, such
as the non-EGU industrial units that the EPA proposed to regulate or
implementing ``enhancements'' in its mass-based emissions trading
approach for EGUs as it had proposed. Commenters claim these aspects of
the rule are an unlawful or arbitrary and capricious departure from the
EPA's prior transport rulemakings, which they claim only set mass-based
emissions budgets as the means to eliminate ``significant
contribution.''
    Response: To the extent these comments challenge the EPA's
disapproval of states' 2015 ozone NAAQS good neighbor SIP submissions,
they are out of scope of this action, which promulgates a FIP under the
authority of CAA section 110(c)(1). To the extent commenters assert
that the EPA does not have the authority to directly implement source-
specific emissions control requirements or other emissions control
measures, means, or techniques, including emissions trading programs,
in the exercise of that FIP authority, the EPA disagrees. While the
courts have long recognized that the states have wide discretion in the
design of SIPs to attain and maintain the NAAQS, see, e.g., Union
Electric Co v. EPA, 427 U.S. 246 (1976), when the EPA promulgates a FIP
to cure a defective SIP, the Act, including the definition of a FIP in
section 302(y), provides for the EPA to directly implement the Act's
requirements. The EPA is granted authority to choose among a broad
range of ``emission limitations or other control measures, means, or
techniques (including economic incentives, such as marketable permits
or auctions of emissions allowances) . . . .'' CAA section 302(y); see
also CAA section 110(a)(2) (empowering states to implement an identical
set of emissions control mechanisms).
    The courts have also recognized that the EPA has broad authority to
cure a defective SIP, that the EPA may exercise its own, independent
regulatory authority in implementing a FIP in accordance with the CAA,
and that the EPA in effect steps into the shoes of a state when it
promulgates a FIP. See, e.g., Central Ariz. Water Conservation Dist. v.
EPA, 990 F.2d 1531 (9th Cir. 1993); South Terminal Corp. v. EPA, 504
F.2d 646 (1st Cir. 1974). Accord Virginia v. EPA, 108 F.3d 1397, 1406-
07 (D.C. Cir. 1997) (``The Federal Plan `provides an additional
incentive for state compliance because it rescinds state authority to
make the many sensitive and policy choices that a pollution control
regime demands.''') (quoting Natural Resources Defense Council v.
Browner, 57 F.3d 1122, 1124 (D.C. Cir. 1995)). Cf. District of Columbia
v. Train, 521 F.2d 971 (D.C. Cir. 1975), vacated sub nom. EPA v. Brown,
431 U.S. 99 (1977) (``[W]here cooperation [from states] is not
forthcoming, we believe that the recourse contemplated by the commerce
clause is direct federal regulation of the offending activity . . .
.'').
    These same principles apply where the EPA must promulgate a FIP to
address good neighbor requirements under CAA section
110(a)(2)(D)(i)(I). The EPA has promulgated a series of FIPs in the
past to address the relevant requirements for prior ozone and PM NAAQS.
See, e.g., CAIR FIP, 71 FR 25328 (April 28, 2006); CSAPR, 76 FR 48208
(August 8, 2011); the CSAPR Update, 81 FR 74504 (October 26, 2016); and
the Revised CSAPR Update, 86 FR 23054 (April 30, 2021). Courts have
upheld the EPA's exercise of this authority. See EME Homer City
Generation v. EPA, 572 U.S. 489 (2014); Wisconsin v. EPA, 938 F.3d 303
(D.C. Cir. 2019). Indeed, in EME Homer City, the U.S. Supreme Court
held that the EPA is not obligated to provide guidance to states before
acting on their good neighbor submissions or give states a second
chance at correcting the deficiencies before promulgating a FIP, and
the EPA may promulgate a FIP at any time after finalizing its
disapproval of SIP submissions. 572 U.S. at 508-11.
    The cases cited by commenters, which they refer to as establishing
the Train-Virginia federalism bar, were not reviewing the exercise of
the EPA's authority in promulgating a FIP under CAA section 110(c)(1)
but rather were describing the scope of the EPA's authority in acting
on SIP submissions under CAA section 110(k)(3) or in issuing a ``SIP
call'' under section 110(k)(5). In those latter contexts, the courts
have held that the EPA may not dictate the specific control measures
states must implement to meet the Act's requirements. See Virginia, 108
F.3d at 1409-10. In Michigan, the D.C. Circuit upheld the EPA's
exercise of CAA section 110(k)(5) authority in issuing the
``NOX SIP Call,'' because, ``EPA does not tell the states
how to achieve SIP compliance. Rather, EPA looks to section
110(a)(2)(D) and merely provides the levels to be achieved by state-
determined compliance mechanisms. . . . However, EPA made clear that
states do not have to adopt the control scheme that EPA assumed for
budget-setting purposes.'' Michigan v. EPA, 213 F.3d 663, 687-88 (D.C.
Cir. 2000).
    Commenters' position that the EPA must provide similar flexibility
to the states in this action (i.e., only provide a general emissions
reduction target and leave to states how to meet that target) is a non
sequitur. The EPA is implementing a FIP in this action and must
directly implement the necessary emissions controls. The EPA is not
empowered to require states to implement FIP mandates. Such an approach
would conflict with constitutional anti-commandeering principles, is
not provided for in the Act, and would only constitute a partial
implementation of FIP obligations in contravention of the holding in
Wisconsin v. EPA, 938 F.3d at 313-20.
    Commenters' attempt to contrast the implementation of source-
specific emissions limitations at industrial sources with the
establishment of a specific mass-based budget (as the EPA has set for
power plants in prior good neighbor FIPs) is unavailing. CAA section
110(c)(1) and 302(y) authorize the EPA in promulgating a FIP to
establish ``enforceable emission limitations'' in addition to other
types of control measures like mass-based trading programs. Further, in
this action, the EPA has developed an emissions control strategy that
prohibits the ``amount'' of pollution that significantly contributes to
nonattainment and/or interferes with maintenance. We determine that
amount, as we have in prior transport actions, at Step 3 of the
analysis, by applying a multifactor analysis that includes considering
cost and downwind air quality effects. See section V.A of this
document. With the implementation of the selected controls (at Step 4)
through both an emissions trading program for power plants and source-
specific emissions limitations for industrial sources, those
``amounts'' that had been emitted prior to imposition of the controls
will be eliminated.
    The Act does not mandate that the EPA must set a specific mass-
based budget for each state to eliminate significant contribution based
on the use of the term ``amounts'' in CAA section 110(a)(2)(D)(i). As
the Supreme Court recognized, the statute ``requires States to
eliminate those `amounts' of pollution that `contribute significantly
to nonattainment' in downwind States,'' and it delegates to states or
EPA acting in their stead discretion to determine how to apportion
responsibility among those upwind states. 572 U.S. at 514 (emphasis
added). The statute does not define the term ``amount'' in the way
commenters suggest (or in any other way), and neither the Agency nor
any court has reached that conclusion. The

Supreme Court itself has recognized that the language of the good
neighbor provision is amenable to different types of metrics for
quantification of ``significant contribution.'' See EME Homer City
Generation, L.P., 572 U.S. at 514 (``How is EPA to divide
responsibility among the . . . States? Should the Agency allocate
reductions proportionally . . ., on a per capita basis, on the basis of
the cost of abatement, or by some other metric? . . . The Good Neighbor
Provision does not answer that question for EPA.''); see also Michigan
v. EPA, 213 F.3d 663, 677 D.C. Cir. 2000) (``Nothing in the text of . .
. the statute spells out a criterion for classifying `emissions
activity' as `significant.' ''); id. at 677 (``Must EPA simply pick
some flat `amount' of contribution . . . ?''). When the State of
Delaware petitioned the Agency under CAA section 126(b) to establish
daily emissions rates for EGUs to remedy what it saw as continuing
violations of the good neighbor provision for the 2008 ozone NAAQS,
neither the EPA nor the reviewing court questioned whether the Agency
had the statutory authority to do so. The EPA's decision not to was
upheld on record grounds. See Maryland v. EPA, 958 F.3d 1185, 1207 D.C.
Cir. 2020) (``In other words, Delaware's concern makes sense but has
not been observed in practice.'').\80\
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    \80\ The Agency's view of the basis for backstop daily emissions
rates for certain EGUs within the trading program has changed since
the time of its action on Delaware's petition, as explained in
section VI.B.
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    The term ``amounts'' can be interpreted to refer to any number of
metrics, and in fact the CAA uses the term in several contexts where it
is clear Congress did not intend the term to refer to a fixed, mass-
based quantity of emissions. For example, in the definition of ``lowest
achievable emission rate'' (LAER) in CAA section 171, the Act provides
that the application of LAER shall not permit a proposed new or
modified source to emit any pollutant in excess of ``the amount
allowable under applicable new source standards of performance
[NSPS].'' NSPS may be, and usually are, set as emissions standards or
limitations that are rate- or concentration-based. See, e.g., 40 CFR
part 60, subpart KKKK, table I (establishing concentration-based and
rate-based emissions limits for stationary combustion turbines).\81\
Congress has elsewhere used the term ``amount'' in the CAA to refer to
concentration-based standards. For example, in CAA section 163(b),
Congress provided that maximum allowable increases in concentrations of
certain pollutants ``shall not exceed the following amounts,'' with a
list of allowable increases provided that are expressed in micrograms
per cubic meter.\82\ As a third example, in the 1990 CAA Amendments,
Congress provided that ozone nonattainment areas classified as Serious
must provide a reasonable further progress demonstration of reductions
in VOC emissions ``equal to the following amount,'' which is then
described as a percentage reduction from baseline emissions. CAA
section 182(c)(2)(B). These examples illustrate that the word
``amounts'' is amenable to a variety of meanings depending on what is
being measured or quantified. It would therefore be highly unlikely
that Congress could have intended that ``amount'' as used in the good
neighbor provision must signify only a fixed mass budget of emissions
for each state expressed as total tons per ozone season.
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    \81\ The EPA has interpreted the term ``amount'' as used in CAA
section 111(a)(4) in the definition of the term ``modifications'' as
an increase in a rate of emissions expressed as kilograms per hour.
40 CFR 60.14(b).
    \82\ Notably, both the provisions of CAA section 171 and section
163 given as examples here were added by the CAA Amendments of 1977,
in the same set of amendments that Congress first strengthened the
good neighbor provision and added the term ``amounts.'' See Public
Law 95-95, 91 Stat. 685, 693, 732, 746.
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    Such an approach would, in fact, fail to address an important
aspect of the problem of interstate transport. As explained in sections
III.B.1.d, V.D.4, and VI.B.1, the EPA in this rule seeks to better
address the need for emissions reductions on each day of the ozone
season, reflecting the daily, but unpredictably recurring, nature of
the air pollution problem, short-term health impacts, and the form of
the 2015 ozone NAAQS, wherein nonattainment for downwind areas (and
thus heightened regulatory requirements) could be based on ozone
exceedances on just a few days of the year. The expression of the
``amount'' of pollution that should be eliminated to address upwind
states' ``significant contribution'' to that type of air pollution
problem may appropriately take into account those aspects of the
problem, and the EPA may appropriately conclude, as we do here, that a
single, fixed, emissions budget covering an entire ozone season is not
sufficient to the task at hand.
    In this action, the EPA reasonably applies the good neighbor
provision, including the term ``amount,'' through the 4-step interstate
transport framework. Under this approach, the EPA here, as it has in
prior transport rulemakings for regional pollutants like ozone,
identifies a uniform level of emissions reduction that the covered
sources in the linked upwind states can achieve that cost-effectively
delivers improvement in air quality at downwind receptors on a regional
scale. The ``amount'' of pollution that is identified for elimination
at Step 3 of the framework is therefore that amount of emissions that
is in excess of the emissions control strategies the EPA has deemed
cost-effective. Contrary to commenters' views, in prior transport rules
utilizing emissions trading, the mass budgets through which the
elimination of significant contribution was effectuated did not
constitute the ``amounts'' to be eliminated but rather the residual
emissions remaining following the elimination of significant
contribution through the control stringency selected based on our
multifactor assessment at Step 3. Nor did the EPA consider a mass-based
budget to be the sole expression, even indirectly, of what constituted
``significant contribution.'' See, e.g., CSAPR, 76 FR 48256-57
(discussing the evaluation of the control strategies that would
eliminate significant contribution for the 1997 ozone NAAQS, including
combustion controls, and explaining, ``[I]t would be inappropriate for
a state linked to downwind nonattainment or maintenance areas to stop
operating existing pollution control equipment (which would increase
their emissions and contribution).'').
    In other actions the EPA has taken to implement good neighbor
obligations, the EPA has required or allowed for reliance on source-
specific emissions limitations rather than defining significant
contribution as a mass-based budget. For example, the EPA imposed unit-
specific emissions limitations in granting a CAA section 126(b)
petition from the State of New Jersey in 2011. Final Response to
Petition From New Jersey Regarding SO2 Emissions From the
Portland Generating Station, 76 FR 69052, 69063-64 (Nov. 7, 2011)
(discussing the analytical basis for the establishment of emissions
limits at specific units). This action was upheld by the Third Circuit
in Genon Rema LLC v. EPA, 722 F.3d 513, 526 (3d. Cir. 2013).\83\
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    \83\ In CAA section 126(c), Congress provided for the EPA to
directly impose ``emission limitations'' to eliminate prohibited
significant contribution. Notably, the statute affords the EPA and
states flexibility in how an ``emissions limitation'' may be
expressed, including as a ``quantity, rate, or concentration,'' see
CAA section 302(k). It would make little sense that the EPA could
only establish a mass-based definition of ``amounts'' under CAA
section 110(a)(2)(D)(i)(I), when the statute provides for rate- or
concentration-based limitations in CAA section 126, which directly
incorporates 110(a)(2)(D)(i)(I). (In observing this, we do not
concede that an ``emissions limitation'' itself could not also be
expressed through a mass-based approach, which may be read as
authorized by the term ``quantity,'' a term also used in CAA section
302(k).)

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    Even where the EPA has provided for implementation of good neighbor
requirements through mass-based budgets, it has recognized that other
approaches may be acceptable as providing an equivalent degree of
emissions reduction to eliminate significant contribution. See, e.g.,
NOX SIP Call, 63 FR 57378-79 (discussing approvability of
rate-based emissions limit approaches for implementing NOX
SIP Call and providing, ``the 2007 overall budget is an important
accounting tool. However, the State is not required to demonstrate that
it has limited its total NOX emissions to the budget
amounts. Thus, the overall budget amount is not an independently
enforceable requirement.''); CAIR, 70 FR 25261-62 (discussing ways
states could implement CAIR obligations, including through emission-
rate limitations, so long as adequately demonstrated to achieve
comparable reductions to CAIR's emissions budgets).
    Finally, as it has in its prior transport FIP actions, the EPA has
in this action provided guidance for states on methods by which they
could replace this FIP with SIPs, and in so doing, continues to
recognize substantial state flexibility in achieving an equivalent
degree of emissions reduction that would successfully eliminate
significant contribution for the 2015 ozone NAAQS. See section VI.D of
this document. While the EPA has exercised the responsibility it has
under CAA section 110(c)(1) to step into the shoes of the covered
states and directly implement good neighbor requirements through a
particular set of regulatory mechanisms in this action, we anticipate
that states may identify alternative, equivalent mechanisms that we
would be bound to evaluate and approve if satisfactory, should states
seek to replace this FIP with a SIP.
    For these reasons, the EPA disagrees with the contention that it is
constrained by the good neighbor provision to define upwind state
obligations solely by reference to a fixed, mass budget. We find it
reasonable in this action to again determine the amount of
``significant contribution'' at Step 3 by reference to uniform levels
of cost-effective emissions controls that can be applied across the
upwind sources. And, we find it appropriate to implement those
emissions reductions at Step 4 through mechanisms that go beyond fixed,
mass-based, ozone-season long budgets.
    The EPA's authority for its industrial source control strategies is
further discussed in sections II.C. and III.B.1.c of this document. The
relationship of the control strategy to the assessment of overcontrol
is discussed in section V.D.4 of this document. The relationship of our
FIP authority to state authorities and SIP calls under CAA section
110(k)(5) is further discussed in RTC sections 1 and 2.
a. Step 1 Approach
    As proposed, the EPA applies the same basic method of the CSAPR
Update and the Revised CSAPR Update for identifying nonattainment and
maintenance receptors. However, we received comments arguing that the
outcome of applying our methodology to identify receptors in 2023
appears overly optimistic in light of current measured data from the
network of ambient air quality monitors across the country. These
commenters suggest that the EPA give greater weight to current measured
data as part of the method for identifying projected receptors. As
discussed further in section IV.D of this document, the EPA has
modified its approach for identifying receptors for this final rule in
response to these comments.
    This concern is more evident given that the 2023 ozone season is
just a few months away, and the most recent measured ozone values in
many areas strongly suggest that these areas will not likely see the
substantial reduction in ozone levels that the 2016v2 and 2016v3
modeling continue to project.
    It would not be reasonable to ignore recent measured ozone levels
in many areas that are clearly not fully consistent with certain
concentrations in the Step 1 analysis for 2023. Therefore, the EPA has
developed an additional maintenance-only receptor category, which
includes what we refer to as ``violating monitor'' receptors, based on
current ozone concentrations measured by regulatory ambient air quality
monitoring sites. We acknowledge that the traditional modeling plus
monitoring methodology we used at proposal and in prior ozone transport
rules would otherwise have identified such sites as being in attainment
in 2023. Despite the implications of the current measured data
suggesting there will be a nonattainment problem at these sites in
2023, we cannot definitively establish that such sites will be in
nonattainment in 2023 in light of our modeling projections. In the face
of this uncertainty, we regard our ability to consider such sites as
receptors for purposes of good neighbor analysis under CAA section
110(a)(2)(D)(i)(I) to be a function of the requirement to prohibit
emissions that interfere with maintenance of the NAAQS; even if our
transport modeling projects that an area may reach attainment in 2023,
we have other information indicating that there is an identified risk
that attainment will not in fact be achieved in 2023. The EPA's
analysis of these additional receptors further is explained in section
IV.D of this document.
    However, because we did not identify this basis for receptor-
identification at proposal, in this final action we are only using this
receptor category on a confirmatory basis. That is, for states that we
find linked based on our traditional modeling-based methodology in
2023, we find in this final analysis that the linkage at Step 2 is
strengthened and confirmed if that state is also linked to one or more
``violating monitor'' receptors. If a state is only linked to a
violating-monitor receptor in this final analysis, we are deferring
promulgating a final FIP (and we have also deferred taking final action
on that state's SIP submittal). This is the case for the State of
Tennessee. Among the states that previously had their transport SIPs
fully approved for the 2015 ozone NAAQS, the EPA has also identified a
linkage to violating-monitor receptors for the State of Kansas. The EPA
intends to further review its air quality modeling results and recent
measured ozone levels, and we intend to address these states' good
neighbor obligations as expeditiously as practicable in a future
action.
b. Step 2 Approach
    The EPA applies the same approach for identifying which states are
contributing to downwind nonattainment and maintenance receptors as it
has applied in the three prior CSAPR rulemakings. CSAPR, the CSAPR
Update, and the Revised CSAPR Update used a screening threshold of 1
percent of the NAAQS to identify upwind states that were ``linked'' to
downwind air pollution problems. States with contributions greater than
or equal to the threshold for at least one downwind nonattainment or
maintenance receptor identified in Step 1 were identified in these
rules as needing further evaluation of their good neighbor obligations
to downwind states at Step 3.\84\ The EPA evaluated each state's
contribution based on the average relative downwind impact calculated

over multiple days.\85\ States whose air quality impacts to all
downwind receptors were below this threshold did not require further
evaluation for measures to address transport. In other words, the EPA
determined that these states did not contribute to downwind air quality
problems and therefore had no emissions reduction obligations under the
good neighbor provision. The EPA applies a relatively low contribution
screening threshold because many downwind ozone nonattainment and
maintenance receptors receive transport contributions from multiple
upwind states. While the proportion of contribution from a single
upwind state may be relatively small, the effect of collective
contribution resulting from multiple upwind states may substantially
contribute to nonattainment of or interference with maintenance of the
NAAQS in downwind areas. The preambles to the proposed and final CSAPR
rules discuss the use of the 1 percent threshold for CSAPR. See 75 FR
45237 (August 2, 2010); 76 FR 48238 (August 8, 2011). The same metric
is discussed in the CSAPR Update, see 81 FR 74538, and in the Revised
CSAPR Update, see 86 FR 23054. In this final rule, the EPA has updated
the air quality modeling data used for determining contributions at
Step 2 of the 4-step interstate transport framework using the 2016v3
modeling platform. The EPA continues to find that this threshold is
appropriate to apply for the 2015 ozone NAAQS. This rule's application
of the Step 2 approach is comprehensively described in section IV of
this document.
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    \84\ For ozone, the impacts include those from VOC and
NOX from all sectors.
    \85\ The number of days used in calculating the average
contribution metric has historically been determined in a manner
that is generally consistent with the EPA's recommendations for
projecting future year ozone design values. Our ozone attainment
demonstration modeling guidance at the time of CSAPR recommended
using all model-predicted days above the NAAQS to calculate future
year design values (https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf). In 2014, the EPA issued draft revised
guidance that changed the recommended number of days to the top-10
model predicted days (https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf). For the CSAPR Update,
the EPA transitioned to calculating design values based on this
draft revised approach. The revised modeling guidance was finalized
in 2019 and, in this regard, the EPA is calculating both the ozone
design values and the contributions based on a top-10 day approach
(https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf).
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    Many commenters challenged the use of a 1 percent of NAAQS
threshold or otherwise raised issues with the EPA's Step 2 methodology.
These comments are addressed in section IV.F of this document and in
the RTC document.
c. Step 3 Approach
    The EPA continues to apply the same approach as the prior three
CSAPR rulemakings for evaluating ``significant contribution'' at Step
3.\86\ For states that are linked at Step 2 to downwind air quality
problems, CSAPR, the CSAPR Update, and the Revised CSAPR Update
evaluated NOX reduction potential, cost, and downwind air
quality improvements available at various mitigation technology
breakpoints (represented by cost thresholds) in the multi-factor test.
In CSAPR, the CSAPR Update, and the Revised CSAPR Update, the EPA
selected the technology breakpoint (represented by a cost threshold)
that, in general, maximized cost-effectiveness--i.e., that achieved a
reasonable balance of incremental NOX reduction potential
and corresponding downwind ozone air quality improvements, relative to
the other emissions budget levels evaluated. See, e.g., 81 FR 74550.
The EPA determined the level of emissions reductions associated with
that level of control stringency to constitute significant contribution
to nonattainment or interfere with maintenance of a NAAQS downwind.
See, e.g., 86 FR 23116. This approach was upheld by the U.S. Supreme
Court in EPA v. EME Homer City.\87\
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    \86\ For simplicity, the EPA (and courts) at times will refer to
the Step 3 analysis as determining ``significant contribution'';
however, the EPA's approach at Step 3 also implements the
``interference with maintenance'' prong of the good neighbor
provision by also addressing emissions that impact the maintenance
receptors identified at Step 1. See 86 FR 23074 (``In effect, EPA's
determination of what level of upwind contribution constitutes
`interference' with a maintenance receptor is the same determination
as what constitutes `significant contribution' for a nonattainment
receptor. Nonetheless, this continues to give independent effect to
prong 2 because the EPA applies a broader definition for identifying
maintenance receptors, which accounts for the possibility of
problems maintaining the NAAQS under realistic potential future
conditions.''). See also EME Homer City, 795 F.3d 118, 136
(upholding this approach to prong 2).
    \87\ EPA v. EME Homer City Generation, L.P., 572 U.S. 489
(2014).
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    In this action, the EPA applies this approach to identify EGU and
non-EGU NOX control stringencies necessary to address
significant contribution for the 2015 ozone NAAQS. The EPA applies a
multifactor assessment using cost-thresholds, total emissions reduction
potential, and downwind air quality effects as key factors in
determining a reasonable balance of NOX controls in light of
the downwind air quality problems. The EPA's evaluation of available
NOX mitigation strategies for EGUs focuses on the same core
set of measures as prior transport rules, and the EPA finalizes a
control stringency for EGUs from these measures that is commensurate
with the nature of the ongoing ozone nonattainment and maintenance
problems observed for the 2015 ozone NAAQS. Similarly, in this action,
the EPA includes other industrial sources (non-EGUs) in its Step 3
analysis and finalizes emissions limitations for certain non-EGU
sources as needed to eliminate significant contribution and
interference with maintenance. The available reductions and cost-levels
for the non-EGU stringency is commensurate with the control strategy
for EGUs.
    In CSAPR, the CSAPR Update, and the Revised CSAPR Update, the EPA
focused its Step 3 analysis on EGUs. In the Revised CSAPR Update, in
response to the Wisconsin decision's finding that the EPA had not
adequately evaluated potential non-EGU reductions, see 938 F.3d at 318,
the EPA determined that the available NOX emissions
reductions from non-EGU sources, for purposes of addressing good
neighbor obligations for the 2008 ozone NAAQS, at a comparable cost
threshold to the required EGU emissions reductions (for which the EPA
used an adjusted representative cost of $1,800 per ton), and based on
the timing of when such measures could be implemented, did not provide
a sufficiently meaningful and timely air quality improvement at the
downwind receptors before those receptors were projected to resolve.
See 86 FR 23110. On that basis, the EPA made a finding that emissions
reductions from non-EGU sources were not required to eliminate
significant contribution to downwind air quality problems under the
interstate transport provision for the 2008 ozone NAAQS. In this rule,
the EPA's ``significant contribution'' analysis at Step 3 of the 4-step
framework includes a comprehensive evaluation of major stationary
source non-EGU industries in the linked upwind states. The EPA finds
that emissions from certain non-EGU sources in the upwind states
significantly contribute to downwind air quality problems for the 2015
ozone NAAQS, and that cost-effective emissions reductions from these
sources are required to eliminate significant contribution under the
interstate transport provision. Therefore, this rule requires emissions
reductions from non-EGU sources in upwind states to fulfill interstate
transport obligations for the 2015 ozone NAAQS. This analysis is
described fully in section V of this document.
    In this rule, the EPA also continues to apply its approach for
assessing and avoiding ``over-control.'' In EME Homer

City, the Supreme Court held that ``EPA cannot require a State to
reduce its output of pollution by more than is necessary to achieve
attainment in every downwind State or at odds with the one-percent
threshold the Agency has set.'' 572 U.S. at 521. The Court acknowledged
that ``instances of `over-control' in particular downwind locations may
be incidental to reductions necessary to ensure attainment elsewhere.''
Id. at 492.

    Because individual upwind States often `contribute
significantly' to nonattainment in multiple downwind locations, the
emissions reductions required to bring one linked downwind State
into attainment may well be large enough to push other linked
downwind States over the attainment line. As the Good Neighbor
Provision seeks attainment in every downwind State, however,
exceeding attainment in one State cannot rank as `over-control'
unless unnecessary to achieving attainment in any downwind State.
Only reductions unnecessary to downwind attainment anywhere fall
outside the Agency's statutory authority.

Id. at 522 (footnotes omitted).

    The Court further explained that ``while EPA has a statutory duty
to avoid over-control, the Agency also has a statutory obligation to
avoid `under-control,' i.e., to maximize achievement of attainment
downwind.'' Id. at 523. Therefore, in the CSAPR Update and Revised
CSAPR Update, the EPA evaluated possible over-control by considering
whether an upwind state is linked solely to downwind air quality
problems that can be resolved at a lower cost threshold, or if upwind
states would reduce their emissions at a lower cost threshold to the
extent that they would no longer meet or exceed the 1 percent air
quality contribution threshold. See, e.g., 81 FR 74551-52. See also
Wisconsin, 938 F.3d at 325 (over-control must be proven through a ``
`particularized, as-applied challenge' '') (quoting EME Homer City
Generation, 572 U.S. at 523-24). The EPA continues to apply this
framework for assessing over-control in this rule, and, as discussed in
section V.D.4 of this document, does not find any over-control at the
final control stringency selected.
    This evaluation of cost, NOX reductions, and air quality
improvements, including consideration of whether there is proven over-
control, results in the EPA's determination of the appropriate level of
upwind control stringency that would result in elimination of emissions
that significantly contribute to nonattainment or interfere with
maintenance of the NAAQS in downwind areas.
    Comment: Commenters alleged that the EPA lacks authority to
regulate EGUs under the good neighbor provision of the CAA, or at least
in the manner proposed, because in their view, this regulation would
intrude into areas of regulation that are reserved to other Federal
agencies or are beyond the EPA's expertise. They focused in particular
on the EGU trading program enhancements, which they alleged would
threaten electric grid reliability, and asserted that EPA lacks
authority or expertise to dictate the mix of electricity generation in
the country.
    Response: The EPA disagrees that the regulation of EGUs in this
action is unlawful or unsupported. The Agency has consistently and
successfully regulated EGUs' ozone season NOX emissions
under the good neighbor provision for over 25 years, beginning with the
1997 NOX SIP Call. This action does not intrude on other
Federal agencies' authorities and responsibilities with respect to
managing the electric power grid and ensuring reliable electricity.
While other agencies such as the Federal Energy Regulatory Commission
(FERC) have primary responsibility for ensuring reliability of the bulk
electric system, the EPA has ensured that its final rule here will not
create electric reliability concerns. See section VI.B.1.d of this
document. Thus, to the extent commenters are raising a record-based
issue that the EPA through this action has created a reliability
concern, we disagree. The EPA engaged in a series of stakeholder
meetings with Reliability Coordinators who commented on the proposed
rule, including several Regional Transmission Organizations (RTOs) as
well as non-RTO entities throughout the rulemaking process.\88\
---------------------------------------------------------------------------

    \88\ See Documents no. EPA-HQ-OAR-2021-0668-0938, EPA-HQ-OAR-
2021-0668-0940, EPA-HQ-OAR-2021-0668-0941, EPA-HQ-OAR-2021-0668-
0942, EPA-HQ-OAR-2021-0668-0943, EPA-HQ-OAR-2021-0668-0944, and EPA-
HQ-OAR-2021-0668-0945 in the docket for this rulemaking.
---------------------------------------------------------------------------

    To the extent commenters maintain that--despite this record of
collaboration and sensitivity to the need to ensure reliability in the
implementation of its mandates, including in this rule--the EPA
nonetheless fundamentally lacks authority to regulate the electric-
power sector in any way that ``impact[s] national electricity and
energy markets,'' the EPA disagrees. The EPA has successfully regulated
interstate ozone-precursor emissions from the power sector since the
NOX SIP Call and the establishment of the NOX
Budget Trading Program. See generally Michigan v. EPA, 213 F.3d 663
(D.C. Cir. 2000); Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C.
Cir. 2001). In fact, each of the EPA's interstate ozone transport
rulemakings has focused on the regulation of ozone-precursor emissions
from the power sector (all but the NOX SIP Call
exclusively), because substantial, cost-effective reductions in ozone-
precursor emissions have been and continue to be available from fossil-
fuel fired EGUs. See, e.g., 63 FR 57399-400 (NOX SIP Call);
70 FR 25165 and 71 FR 25343 (CAIR and CAIR FIP); 76 FR 48210-11
(CSAPR); 81 FR 74507 (CSAPR Update); 86 FR 23061 (Revised CSAPR
Update).\89\
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    \89\ There are myriad other examples of effective power sector
regulation under the CAA and other environmental statutes, including
for example, new source performance standards (NSPS), best available
retrofit technology (BART) requirements, and mercury and air toxics
standards (MATS) under the CAA; effluent limitation guidelines
(ELGs) under the Clean Water Act; and coal combustion residuals
(CCR) requirements under the Resource Conservation and Recovery Act.
Whether implemented through unit- or facility-level pollution
control requirements or through emissions-trading or other market-
based programs, these regulations have been effective in reducing
air and water pollution while not intruding into the regulatory
arenas of other state and Federal entities. See Section 1 of the RTC
for further discussion.
---------------------------------------------------------------------------

    This rule, like all prior EPA ozone-transport rulemakings,
regulates only one aspect of the operation of fossil-fuel fired EGUs,
that is, the emissions of NOX as an ozone-precursor
pollutant during the ozone season. This rule limits EGU NOX
emissions that interfere with downwind states' ability to attain and
maintain the 2015 ozone NAAQS. The rule does not regulate any other
aspect of energy generation, distribution, or sale. For these reasons,
the rule does not intrude on FERC's power under the Federal Power Act,
16 U.S.C. 791a, et seq. And, as in prior transport rules, the EPA
implements this regulation through a proven, flexible mass-based
emissions trading program that integrates well with, and in no way
intrudes upon, the management of the power sector under other state and
Federal authorities. This rule will not alter the procedures system
operators employ to dispatch resources or force changes to FERC-
jurisdictional electricity markets, nor have commenters offered any
explanation in this regard themselves.
    The actual compliance requirement that the EGUs must meet in the
allowance trading system finalized here--just as in all prior
interstate transport trading programs--is simply to hold sufficient
allowances to cover emissions during a given control period, not to
undertake any specific

compliance strategy.\90\ The owner or operator of an EGU has
flexibility in determining how it will meet this requirement, whether
through the add-on emissions controls that the EPA has selected in our
Step 3 analysis, or through some other method or methods of compliance.
The costs of meeting this allowance-holding requirement--just like the
cost associated with meeting any other regulatory requirements--could
possibly then be factored into what that unit bids in the wholesale
electricity market (or in regulated jurisdictions, would factor into
utility regulators' determinations of what can be cost-recovered).
---------------------------------------------------------------------------

    \90\ The EPA has included in this trading program certain
``enhancements'' to ensure that the program continues to eliminate
the emissions the EPA has determined constitute ``significant
contribution'' over the entire life of the trading program. While
one of the enhancements elevates a type of conduct that was already
strongly discouraged into an enforceable violation, the other
enhancements all simply modify the traditional allowance-based
program structure to revise how the specific quantities of
allowances that must be surrendered or the specific quantities of
allowances available for surrender are determined. In finalizing
this rule, the EPA has made a number of changes to its proposed
enhancements to the trading program in response to comment and in
part to ensure no impact on system reliability. Nonetheless, with
these changes, the EPA has determined that the enhanced trading
program can be implemented without impacting grid reliability. See
section VI.B.1.d of this document.
---------------------------------------------------------------------------

    Those costs could, in turn, result in a reduction in electricity
generation from higher-emitting sources and an increase in electricity
generation from lower-emitting or zero-emitting generators, but that
kind of generation shifting (not mandated but occurring as an economic
choice by the regulated sources) is consistent, and in no way
interferes with, the existing security-constrained economic dispatch
protocols of the modern electrical grid. Further, this type of
``impact'' on electricity markets--merely incidental, not mandated or
even intended--is of the same type that results from any other kind of
regulation, environmental or otherwise. Indeed, the U.S. Supreme Court
recognizes that regulatory actions that may have some ``effect,'' or
impact, in electricity markets do not on that basis alone intrude into
authorities reserved to electricity rate-setting regulators by the
Federal Power Act. See FERC v. Electric Power Supply Ass'n, 577 U.S.
260, 282-84 (2016) (distinguishing between actions that have an effect
on retail rates and actual intrusion into retail rate-setting itself);
see also Hughes v. Talen, 578 U.S. 150, 166 (2016). The Supreme Court
again recognized this distinction between ``incidental'' effects caused
by lawfully issued environmental regulations and attempts to mandate a
particular energy mix in West Virginia v. EPA. See 142 S. Ct. 2587,
2613 n.4 (2022) (``[T]here is an obvious difference between (1) issuing
a rule that may end up causing an incidental loss of coal's market
share, and (2) simply announcing what the market share of coal, natural
gas, wind, and solar must be . . . .'').
    This rule is squarely in the former camp; as the most stringent
component of its emissions controls strategy for EGUs, the EPA has
determined that to eliminate significant contribution to harmful levels
of ozone in other states, certain fossil-fuel fired EGUs in ``linked''
upwind states that do not already have selective catalytic reduction
(SCR) post-combustion control technology, should install it (or achieve
emissions reductions commensurate with that technology). SCR is a well-
established at-the-source NOX control technology already in
use by EGUs representing roughly 60 percent of the existing coal-fired
generating capacity in the United States. This technology can be
installed and operated to reduce NOX emissions without
forcing the retirement or reduced utilization of any EGU. However, if
market conditions are such that an EGU faced with this mandate (again,
as expressed through an emissions trading budget) finds it more
economic to comply with the mandate through the purchase of allowances,
installation of other types of pollution control, reduced utilization,
and/or retirement, rather than installing SCR technology, that is a
choice that the EGU owner/operator can freely make under this rule.\91\
Security constrained economic dispatch is thereby maintained and is in
no way interfered with.
---------------------------------------------------------------------------

    \91\ As explained in section V.B of this document, the
imposition of a backstop emissions rate beginning in 2030 for units
that do not already have SCR installed could lead the owner of a
given unit to decide that the unit's continued operation would be
uneconomic without installation of SCR, but the establishment of
technology-based emissions rates that require such decisions is
consistent with decades of the EPA's rulemaking and permitting
actions requiring source-specific pollution controls. Further, the
backstop rate in this program is implemented through an enhanced
allowance-surrender ratio, thus preserving some degree of
flexibility through the emissions-trading program as the mechanism
of compliance.
---------------------------------------------------------------------------

    The EPA recognizes that cost to operate generators is one of the
major factors that system operators utilize to determine ``merit''
order in dispatching resources. However, this rule does not intrude in
any way into that process. To the extent that compliance with
environmental regulations is a kind of cost that may need to be
factored into generators' bids, this rule is no different than many
other such requirements EGUs are already subject to. Further, as in
prior transport rules, this rule applies a uniform control stringency
to EGUs within the covered upwind states. EGUs that may have enjoyed a
competitive advantage in the past through not bearing the costs of
installing and running state-of-the-art emissions control technology
now must bear that cost just as their competitors with that technology
already are. Cf. EME Homer City, 572 U.S. 489, 519 (CSAPR is
``[e]quitable because, by imposing uniform cost thresholds on regulated
States, EPA's rule subjects to stricter regulation those States that
have done relatively less in the past to control their pollution.
Upwind States that have not yet implemented pollution controls of the
same stringency as their neighbors will be stopped from free riding on
their neighbors' efforts to reduce pollution. They will have to bring
down their emissions by installing devices of the kind in which
neighboring States have already invested.'').
    Finally, we note that this final rule does not include ``generation
shifting'' as a component of the budget-setting process, even in the
limited way that it had been used in prior transport rules like CSAPR
and the CSAPR Update, i.e., to ensure the budget provided adequate
incentive to ensure implementation of the selected emission-control
strategy. See section V.B.1.f of this document. Further comments
regarding legal authority for ``generation shifting,'' relationship to
state authorities, and expertise associated with grid reliability are
addressed in section 1.3 of the RTC. We further discuss our
consideration of grid reliability concerns and adjustments in the
approach to the EGU emissions trading program from proposal in section
VI.B.1.d of this document.
    Comment: Commenters generally challenged the EPA's authority to
establish emissions control requirements for non-EGU industrial sources
in this action, or argued that such controls are unnecessary or
unsupported, or run contrary to the EPA's prior actions under the good
neighbor provision.
    Response: The states and the EPA have authority under CAA section
110(a)(2)(D)(i)(I) to prohibit emissions from ``any source or other
type of emissions activity'' that are found to significantly contribute
to nonattainment or interfere with maintenance of the NAAQS in downwind
states. This language is not limited only to power plant emissions, nor
is it limited only to ``major'' sources or ``stationary'' sources.
Thus, as a legal

matter, the emissions control requirements for certain large ``non-
EGU'' industrial sources in this action are grounded in unambiguous
statutory authority, in particular the statute's use of the broad term
``any source.'' Whereas the Act elsewhere includes definitions of
``major stationary source,'' ``small source,'' and ``stationary
source,'' see, e.g., CAA section 302(j), (x), and (z), no such
qualifying terms are used with respect to the term ``any source'' at
CAA section 110(a)(2)(D)(i). Rather, the scope of authority in this
provision expands to encompass ``other type of emissions activity'' in
addition to ``any source.'' The EPA has previously included non-EGU
industrial sources in findings quantifying states' obligations under
the good neighbor provision, in the 1998 NOX SIP Call, see
63 FR 57365.\92\ See also Michigan v. EPA, 213 F.3d 663, 690-93
(upholding the inclusion of certain non-EGU boilers in the
NOX SIP Call). The EPA's determinations in prior transport
rules not to regulate sources beyond the power sector were grounded in
considerations not related to the Agency's statutory authority. For
example, in the original CSAPR rulemaking, the EPA determined that the
analytical effort needed to regulate non-EGU industrial sources would
substantially delay the implementation of emissions reductions from the
power sector. See, e.g., 76 FR 48247-48 (``[D]eveloping the additional
information needed to consider NOX emissions from non-EGU
source categories to fully quantify upwind state responsibility with
respect to the 1997 ozone NAAQS would substantially delay promulgation
of the Transport Rule. . . . [W]e do not believe that effort should
delay the emissions reductions and large health benefits this final
rule will deliver[.]''). The EPA acknowledged that by not addressing
non-EGUs, it may not have promulgated a complete remedy to good
neighbor obligations in CSAPR, id. at 48248. Nonetheless, the EPA went
on to explain that there were limited emissions reductions available
from non-EGUs at the cost thresholds the EPA determined would deliver
substantial reductions from power plants. See id. at 48249 (the EPA's
``preliminary assessment in the rule proposal suggested that there
likely would be very large emissions reductions available from EGUs
before costs reach the point for which non-EGU sources have available
reductions . . . . EPA revisited these non-EGU reduction cost levels in
this final rulemaking and verified that there are little or no
reductions available from non-EGUs at costs lower than the thresholds
that EPA has chosen . . . .''). The EPA noted in CSAPR that states
retained the authority to regulate non-EGUs as a method of addressing
their good neighbor obligations. Id. at 48320. The EPA also noted in
CSAPR that ``potentially substantial'' non-EGU emissions reductions
could be available in future rulemakings applying a higher cost
threshold. See id. at 48256.
---------------------------------------------------------------------------

    \92\ Specifically, in the NOX SIP Call, the EPA set
statewide budgets while states could determine which sectors to
regulate. The EPA recommended that states regulate certain types of
non-EGUs and quantified the statewide budgets based in part on the
emissions reductions from those types of non-EGUs. In the parallel
rule that followed under the EPA's CAA section 126(b) authority to
directly regulate emissions to eliminate significant contribution,
we promulgated an emissions trading program that would have included
these same types of non-EGUs. Before this rule was implemented, all
states adopted equivalent state trading programs using the
NOX SIP Call model rule.
---------------------------------------------------------------------------

    Similarly, in the CSAPR Update, which addressed good neighbor
obligations for the 2008 ozone NAAQS, the EPA found that regulation of
non-EGUs was not warranted as the analysis required could delay the
expeditious implementation of power plant reductions. The EPA found
that the availability and cost-effectiveness of non-EGU reductions was
uncertain and further analysis could delay implementation of the EGU
strategy beyond 2017. The EPA acknowledged that it was not promulgating
a complete remedy for good neighbor obligations for the 2008 ozone
NAAQS and indicated its intention to further review emissions-reduction
opportunities from non-EGU and EGU sources. 81 FR 74521-22.
    In Wisconsin, the court held that the EPA's deferral of a complete
good neighbor remedy by 2017, on the basis, among other things, of
uncertainty regarding non-EGU emissions reductions and the need for
further regulatory analysis, was unlawful. 938 F.3d at 318-19. The
court noted that `` `the statutes and common sense demand regulatory
action to prevent harm, even if the regulator is less than certain.' ''
Id. at 319 (quoting Ethyl Corp. v. EPA, 541 F.2d 1, 24-25 (D.C. Cir.
1976)), and that agencies can only avoid meeting their statutory
obligations where ``scientific uncertainty is so profound that it
precludes EPA from making a reasoned judgment.'' Id. (citing
Massachusetts v. EPA, 549 U.S. 497, 534 (2007)). Further, the court
rejected the EPA's argument that it would have delayed its rulemaking
if the EPA needed to complete a non-EGU analysis in a timely manner,
holding that ``administrative infeasibility'' is not sufficient to
``justify . . . noncompliance with the statute.'' Id. Rather, the
Agency would need to ``meet the `heavy burden to demonstrate the
existence of an impossibility.' '' Id. (quoting Sierra Club v. EPA, 719
F.2d 436, 462 (D.C. Cir. 1983)).
    Following the remand of the CSAPR Update in Wisconsin, in the
Revised CSAPR Update, the EPA conducted an analysis of non-EGUs to
ensure it had implemented a complete remedy to eliminate significant
contribution for the covered states for the 2008 ozone NAAQS. While
acknowledging uncertainty in the datasets for non-EGUs, the EPA
concluded: ``[U]sing the best information currently available to the
Agency, . . . the EPA is concluding that there are relatively fewer
emissions reductions available at a cost threshold comparable to the
cost threshold selected for EGUs. In the EPA's reasoned judgment, the
Agency concludes such reductions are estimated to have a much smaller
effect on any downwind receptor in the year by which the EPA finds such
controls could be installed.'' 86 FR 23059. Therefore, the EPA
determined control of non-EGU emissions was not required to eliminate
significant contribution for the 2008 ozone NAAQS.
    The circumstances that led the EPA to defer or decline regulation
of non-EGU sources in CSAPR, the CSAPR Update, and the Revised CSAPR
Update, are not present here, and the EPA's determination in this
action that prohibiting certain emissions from certain non-EGU sources
is necessary to eliminate significant contribution for the 2015 ozone
NAAQS is a logical extension of the analyses and evolution of
regulatory policy development spanning its prior good neighbor rules,
now applied to implement this more protective NAAQS. As the EPA
explained at proposal, unlike in CSAPR and the Revised CSAPR Update, in
this action the EPA finds that available reductions and cost-levels for
the non-EGU stringency are commensurate with the control strategy for
EGUs. Following consideration of comments and after some adjustments in
the non-EGU analysis and control strategy, in this final rule, the EPA
continues to find this to be the case. See sections V.C and V.D of this
document.
    In particular, the EPA continues to find that cost-effective
emissions reductions are available for non-EGUs at a representative
cost-threshold that is lower than the cost-threshold the EPA is
applying for EGUs. See section V.C. of this document. These emissions
control strategies are generally comparable to the emissions reduction
requirements that similar sources in downwind states

are already required to meet. See section V.B.2 of this document. The
EPA finds that the implementation of these emissions control strategies
at non-EGUs, in conjunction with the strategies for EGU, will make a
cost-effective and meaningful improvement in air quality through
reducing ozone levels at the identified downwind receptors, and,
therefore, the EPA has determined that these strategies will eliminate
the amount of upwind emissions needed to address significant
contribution under the good neighbor provision. The EPA's action here
is focused on the most impactful industries and emissions units as
determined by our evaluation of the power sector and the non-EGU
screening assessment prepared for the proposal; indeed, of the 41
industries, as identified by North American Industry Classification
System codes, we analyzed, only nine industries met the criteria for
further evaluation of significant contribution. See section V.B.2 of
this document. Further, the EPA finds that these strategies do not
result in ``overcontrol.'' See section V.D.4 of this document. As such,
the EPA maintains that its final determinations regarding non-EGUs and
its inclusion of non-EGU emissions sources within this final rule are
statutorily authorized and lawful.\93\
---------------------------------------------------------------------------

    \93\ Certain changes in the emissions control strategies for
non-EGUs reflecting comments and updated information are explained
in section VI.C of this document.
---------------------------------------------------------------------------

    The EPA disagrees that it should defer regulation of industrial
sources to the NSPS program under CAA section 111(b). CAA section
111(b) does not expressly provide for the elimination of ``significant
contribution'' as is required under CAA section 110(a)(2)(D)(i)(I). In
particular, commenter's statement that NSPS rulemakings under section
111(b) will appropriately address the emissions that we find must be
eliminated in this action is not correct. Standards under section
111(b) apply only to new and modified sources, not existing sources.
This action, however, finds that reductions in ongoing emissions from
existing sources are needed to eliminate significant contribution. An
NSPS standard for new and modified sources would not address such
emissions from existing sources. To the extent that covered sources in
this action also may be covered by an older NSPS, these sources
nonetheless continue to have emissions that the EPA finds significantly
contribute and can be eliminated through further emissions control as
determined in this action. We further disagree with commenter's
separate suggestion that the EPA use section 111(b) and (d) to regulate
both new and existing sources of ozone season NOX, which is
premised on the incorrect notion that the EPA's action here is an
attempt to regulate entire source categories nationwide, rather than to
eliminate significant contribution pursuant to CAA section
110(a)(2)(D)(i)(I). This action applies only to the extent a state is
``linked'' to downwind receptors, and therefore this action only
regulates covered non-EGU industrial sources in 20 states. Further,
this comment ignores that the regulation of criteria pollutant
emissions from existing sources under CAA section 111(d) is limited by
the criteria pollutant exclusion in CAA section 111(d)(1)(A)(i).
    The EPA agrees with the commenters who assert that the EPA's
authority to regulate non-EGUs under the good neighbor provision is
well-grounded in administrative precedent and case law. Our previous
discussion briefly recites several of the most salient aspects of that
history. We also agree that the statutory language is not limited only
to those sources that emit above 100 tons per year. The EPA's Step 3
and Step 4 analyses in this regard, which establish certain thresholds
based on historical actual emissions, potential to emit and/or metrics
for unit design capacity, reflect a reasoned judgment by the Agency
regarding which emissions can be cost-effectively eliminated to address
significant contribution, under the facts and circumstances of this
action. That these thresholds are designed to exclude certain smaller
or lower-emitting units does not reflect a determination that the EPA
lacks legal authority to regulate such sources under different facts
and circumstances.
    The EPA identified two industry tiers of potential non-EGU
emissions reductions in its non-EGU screening assessment at proposal,
based on screening metrics intended to capture different kinds of
impacts that non-EGU sources may have on identified receptors. The EPA
agrees that it is only authorized to prohibit emissions under the good
neighbor provision that significantly contribute to nonattainment or
interfere with maintenance in downwind states, and we determined that
these industries did so. The EPA sought comment on whether additional
non-EGU industries significantly contributed to nonattainment or
interfered with maintenance in downwind states. The EPA did not receive
comments identifying other industrial stationary sources that are more
impactful that should be regulated instead of those the EPA identified.
We believed at proposal and confirm here in our final rule that the
methodology used in the screening assessment comported with the factors
that we consider at Step 3. Further, the EPA's 4-step interstate
transport framework, including the Step 3 analysis and an overcontrol
assessment, ensure that the emissions reductions achieved at each
source covered by this rule are in fact justified as part of an
overall, complete remedy to eliminate significant contribution for the
covered states for the 2015 ozone NAAQS. The EPA has decided to
finalize emissions limitations for all of the non-EGU industries, with
some modifications from proposal reflecting public input, as discussed
in section VI.C of this document. The Agency's authority to establish
unit- and/or source-specific emissions limitations in exercising our
FIP authority is further discussed in section III.B.1 of this document.
    Comment: Commenters raise additional issues with the overall
approach of the rule at Step 3 to address significant contribution
through our evaluation of EGU and non-EGU strategies through parallel
but separate analyses. They stated that the EPA failed to establish
that the identified non-EGU emissions reductions are needed to
eliminate significant contribution. Commenters stated that the
identified non-EGU emissions reductions are not impactful of air
quality at receptors or that they are much less cost-effective than the
EGU emissions reductions. Commenters stated that the EPA grouped all
non-EGU emissions reductions together in making a cost-effectiveness
determination that is only an average and ignores significant variation
in costs associated with controls on different types of non-EGU
emissions units. They also stated the EPA did not assess multiple
control technologies in the way that it did for EGUs, and they argued
there is great variation in the profile of non-EGU industries and
emissions unit types in the different upwind states or that individual
emissions units do not contribute to an out-of-state air quality
problem at all. Commenters argued that certain non-EGU controls were
not feasible, or that the EPA had applied a different standard for
``feasibility'' for non-EGUs than it did for EGUs. Commenters stated
that the EPA should have provided a mass-based trading option for non-
EGUs just as it had for EGUs. By contrast, other commenters supported
the regulation of non-EGUs in this action as necessary to ensure a
complete remedy to good neighbor obligations, since the statute is not
limited to regulating power plants.

Some commenters further stated that EGUs should not face any further
emissions reduction obligation because all cost-effective controls have
already been identified through prior transport rules, and that any
further regulation of EGUs would only lead to the retirement of coal
plants, which they believe is the EPA's true objective. Finally, some
commenters argued that the EPA had not ensured that it only regulated
up to the minimum needed for downwind areas to come into attainment.
    Response: Issues related to the specific technical bases for the
Agency's determinations of what emissions constitute ``significant
contribution'' at Step 3 of the 4-step framework are addressed in
section V of this document. Here, we evaluate commenters' more general
assertions that this action addresses non-EGU or EGU emissions in an
inconsistent way. First, the EPA agrees with commenters that the task
of evaluating significant contribution from the non-EGU industries is
complex compared to EGUs in light of the much greater diversity in
industries and emissions unit types. This, however, is not a valid
basis to avoid emissions control requirements on such sources if needed
to eliminate significant contribution. In this respect, the EPA's
analysis in this final rule is that the 4-step framework, as upheld by
the Supreme Court in EME Homer City, can be adequately applied even to
this more complex set of sources in a way that parallels the analysis
previously conducted only for EGUs. This analysis relies on evaluation
of uniform levels of control stringency across all upwind states to
find a level of emissions control that is cost-effective and
collectively delivers meaningful downwind air quality improvement. For
non-EGUs, the EPA identified the most impactful industries and
emissions unit types and evaluated emissions control strategies for
these units that have been demonstrated or applied across many similar
facilities and emissions units. The EPA has evaluated whether these
strategies are cost-effective on a cost-per-ton basis, and in
particular has compared these strategies to those selected for EGUs.
This analysis is set forth in sections V and VI of this document and
associated technical support documents.
    Commenter's statement that the establishment of a uniform level of
control for each group of industrial units across the linked upwind
states fails to assess with greater precision or define a state-
specific proportion of emissions reduction that is needed for each
downwind receptor is effectively an attempt to relitigate EME Homer
City. The Court in that case rejected that the EPA must define
significant contribution by reference to a specific quantum of
reductions that each state must achieve that is proportional to its
impact at a downwind receptor. The Court agreed with the EPA's concerns
as to why that approach would be problematically complicated or even
impossible to apply in light of the complex set of linkages among
states for a regional pollutant like ozone. See 572 U.S. at 515-17. The
Court found that the use of uniform cost thresholds to allocate
responsibility for good neighbor obligations to be efficient and
equitable, in that it requires those sources that have done less to
reduce their emissions to come up to a minimum level of performance to
what other sources are already achieving. Id. at 519. The EPA's
analysis in this action in section V of this document establishes that
this continues to be an appropriate means of delivering meaningful air
quality improvement to downwind receptors, taking into consideration
the complexities of interstate pollution transport.
    Not every upwind state has the same mix of non-EGU industries and
emissions unit types, and it is also the case that the costs for
installation of the selected level of control technology will vary from
facility to facility based on site-specific considerations. This is
also true for the set of EGU sources regulated here and in previous
CSAPR rulemakings. These real-world complexities do not obviate the
broader policy and technical judgements that the EPA makes at Step 3
regarding what level of emissions control performance can be achieved
on a region-wide basis to resolve significant contribution for a
regional-scale pollutant like ozone. The EPA's design of cost
thresholds derives from the identification of discrete types of
NOX emissions control strategies. The EPA then identifies a
representative cost-effectiveness on a per ton basis for that
technology. In the Step 3 analysis, it is not the cost per ton value
itself that is inherently meaningful, but rather how that cost-
effectiveness value relates to other control stringencies, how many
emissions reductions may be obtained, and how air quality is ultimately
impacted. The selected level of control stringency reflects a point at
which further emissions mitigation strategies become excessively costly
on a per-ton basis while also delivering far fewer additional emissions
reductions and air quality benefits. This is often referred to as a
``knee in the curve'' analysis. There are always inherent uncertainties
in identifying a representative cost per ton value for any particular
control stringency, but this in itself does not upset the EPA's ability
to render an overall policy judgment based on the Step 3 factors as to
a set of emissions control strategies that together eliminate
significant contribution. See 86 FR 23054, 23073 (responding to similar
comments on the Revised CSAPR Update).
    We note that the EPA has made a number of adjustments to the non-
EGU emissions limits identified at Step 4 to accommodate legitimate
concerns regarding the ability of certain non-EGU facilities to meet
the emissions control requirements that the EPA had proposed. The
Agency's determinations regarding feasibility and installation timing
for pollution controls are comparable and not inconsistent between EGUs
and non-EGUs. The EPA is not establishing a trading program for non-
EGUs because the Agency does not have adequate baseline emissions data
and information on monitoring currently at many of these emissions
units to develop emissions budgets that could reliably implement the
Step 3 determinations made in this action. However, for most of the
non-EGU industries,\94\ the EPA is not mandating a specific control
technology and is instead establishing numeric emissions limits that
are uniform across the region and that allow sources to choose how to
comply. The EPA's analysis, including review of RACT determinations,
consent decrees, and permitting actions, shows that these emissions
limits and control requirements are achievable by existing units in the
non-EGU industries covered by this final rule. This rule will therefore
bring all of these impactful industries and unit types across the
region of linked upwind states up to this standard of performance, and
thus will result collectively in a relatively substantial decrease in
ozone-season NOX emissions, with associated reductions in
ozone levels projected to result at the downwind receptors. This is
further discussed in section V.D.
---------------------------------------------------------------------------

    \94\ For reheat furnaces in the Iron and Steel Mills and
Ferroalloy Manufacturing industry, the EPA is establishing
requirements to operate low-NOX burners achieving a
specified level of emissions reduction; this approach is needed to
allow for unit-specific testing before an appropriate emissions
limitation can be set. See section VI.C.3 of this document.
---------------------------------------------------------------------------

    Some commenters alleged that the EPA's EGU control strategy goes
beyond the cost-effectiveness determinations of prior transport rules,
and they believe that the EPA's true objective is to force the
retirement of coal plants. First, we note that the EGU emissions
control strategy is premised entirely on at-the-

source emissions control technologies that are widely available and in
use across the EGU fleet. It is not the EPA's intention in this rule to
force the retirement of any EGU or non-EGU facilities or emissions
units but to identify and eliminate significant contribution under CAA
section 110(a)(2)(D)(i)(I) based on cost-effective and proven control
technologies that are appropriate in relation to address the problem of
interstate transport for the 2015 ozone NAAQS. Further, determinations
of cost-effectiveness must be made in relation to the particular
statutory provision and its purpose. The EPA recognized in CSAPR, for
example, that additional emissions reductions beyond what were
determined to be cost-effective in that action could be required to
implement good neighbor obligations if a NAAQS were revised to a more
protective level. See 76 FR 48210. Here it is not surprising that a
more stringent level of control could be found justified in
implementing transport obligations for the more protective 2015 ozone
NAAQS. Those reductions are projected to deliver meaningful air quality
improvement to downwind receptors, as discussed in section V.D of this
document. Those air quality benefits continue to compare favorably to
the air quality benefits that will be delivered through the combined
non-EGU emissions limits, which apply to nine non-EGU industries (see
section V.C of this document). We find that the implementation of both
the EGU and non-EGU strategies identified in section V of this document
together represent the appropriate level of emissions control
stringency to eliminate significant contribution under CAA section
110(a)(2)(D)(i)(I).
    Finally, the EPA also analyzed for overcontrol and does not
identify any. Some commenters misstate the purpose of this rule as
bringing downwind receptors into attainment. In line with the statutory
directive in CAA section 110(a)(2)(D)(i)(I), this rule eliminates
``significant contribution'' from upwind states; while the rule has
substantial air quality benefits for downwind receptors, in many cases
we project that a nonattainment or maintenance problem will continue to
persist through 2023 and 2026 despite the emissions reductions achieved
by this rule. Commenters alleging overcontrol have not met the
requirement that overcontrol be established by particularized evidence
through as-applied challenges. The Supreme Court has recognized that
the EPA also has an obligation to avoid under-control and must have
some leeway in fulfilling the good neighbor mandate of the Act given
uncertainty in making forward projections of air quality and the
efficacy or impact of emissions control determinations. See EME Homer
City, 572 U.S. at 523. This is further addressed in section V.D.4 of
this document.
d. Step 4 Approach
    The EPA is finalizing an approach similar to its prior transport
rulemakings to implement the necessary emissions reductions through
permanent and enforceable measures. The EPA is requiring EGU sources to
participate in an emissions trading program and is making additional
enhancements to the trading regime to maintain the selected control
stringency over time and improve emissions performance at individual
units, offering a necessary measure of assurance that emissions
controls will be operated throughout the ozone season. For non-EGUs,
the EPA is finalizing permanent and enforceable emissions rate limits
and work practice standards, and associated compliance requirements,
for several types of NOX-emitting combustion units across
several industrial sectors. The measures for both EGUs and non-EGUs are
required throughout the May 1-September 30 ozone season of each year.
The EGU program will begin with the 2023 ozone season, and the non-EGU
implementation schedule is targeted to the 2026 ozone season. Refer to
section VI.A of this document for details on the implementation
schedule.
    Based on the EPA's experience in implementing prior transport
rulemakings, the Agency is making several enhancements to its trading-
program approach for implementing good neighbor requirements for EGUs.
In CSAPR, the CSAPR Update, and the Revised CSAPR Update, the EPA
established interstate trading programs for EGUs to implement the
necessary emissions reductions. In each of these rules, EGUs in each
covered state are assigned an emissions budget in each control period
for their collective emissions. Emissions allowances are allocated to
units covered by the trading program, and the covered units then
surrender allowances after the close of the control period, usually in
an amount equal to their ozone season EGU NOX emissions.
While these programs have been effective in achieving overall
reductions in emissions, experience has shown that these programs may
not fully reflect in perpetuity the degree of emissions stringency
determined necessary to eliminate significant contribution in Step 3
and may not adequately ensure the control of emissions throughout all
days of the ozone season. At the same time, the EPA continues to find
that an interstate-trading program approach delivers substantial
benefits at Step 4 in terms of affording an appropriate degree of
compliance flexibility, certainty in emissions outcomes, data and
performance transparency, and cost-effective achievement of a high
degree of aggregate emissions reductions. As such, the EPA is retaining
an interstate trading program approach while making several
enhancements to that approach.
    Thus, in this rulemaking, the EPA is including dynamic budget-
setting procedures in the regulations that will allow state emissions
budgets for control periods in 2026 and later years to reflect more
current data on the composition and utilization of the EGU fleet (e.g.,
the 2026 budgets will reflect recent data through 2024 data, the 2027
budgets will reflect data through 2025, etc.). These enhancements will
enable the trading program to better maintain over time the selected
control stringency that was determined to be necessary to address
states' good neighbor obligations with respect to the 2015 ozone NAAQS.
In prior programs, where state emissions budgets were static across
years rather than calibrated to yearly fleet changes, the EPA has
observed instances of units idling their emissions controls in the
latter years of the program. To provide greater certainty regarding the
minimum quantities of allowances that will be available for compliance
for the control periods in 2026 through 2029, the EPA is also
establishing preset state emissions budgets for these control periods,
and a dynamic state emissions budget determined for one of these
control periods will apply only if it is higher than the state's preset
budget for the control period.
    In the trading programs established for ozone season NOX
emissions under CSAPR, the CSAPR Update, and the Revised CSAPR Update,
the EPA included assurance provisions to limit state emissions to
levels below 121 percent of the state's budget by requiring additional
allowance surrenders in the instance that emissions in the state exceed
this level. This limit on the degree to which a state's emissions can
exceed its budget is designed to allow for a certain level of year-to-
year variability in power sector emissions to account for fluctuations
in demand and EGU operations and is responsive to previous court
decisions (see discussion in section VI.B.5 of this document). In this

action, the EPA is maintaining the existing assurance provisions that
limit state emissions to levels below a percentage of the state's
budget by requiring additional allowance surrenders in any instance
where emissions in the state exceed the specified level, but with
adjustments that allow the level to exceed 121 percent of a state's
budget in a given control period if necessary to account for actual
operational conditions in that control period. In addition, the EPA is
also making several additional enhancements to the EGU trading program
in this action, including routine recalibrations of the total amount of
banked allowances, unit-specific backstop daily emissions rates for
certain units, and unit-specific secondary emissions limitations for
certain units that contribute to exceedances of the assurance levels,
to ensure EGU emissions control operation and associated air quality
improvements. Implementation of the EGU emissions reductions using a
CSAPR NOX trading program is further described in section
VI.B of this document.
    In this rule, the EPA is also establishing emissions limitations
for the non-EGU industry sources listed in Table II.A-1. The EPA has
the authority to require emissions limitations from stationary sources,
as well as from other sources and emissions activities, under CAA
section 110(a)(2)(D)(i)(I). The EPA finds that requiring NOX
emissions reductions through emissions rate limits and control
technology requirements for certain non-EGU industrial sources that the
EPA found at Step 3 to be relatively impactful \95\ on downwind air
quality is an effective strategy for reducing regional ozone transport.
Therefore, the EPA is establishing NOX emissions limitations
and associated compliance requirements for non-EGU sources to ensure
the elimination of significant contribution of ozone precursor
emissions required under the interstate transport provision for the
2015 ozone NAAQS.
---------------------------------------------------------------------------

    \95\ Section III of the Non-EGU Screening Assessment memorandum
in the docket for this rulemaking describes the EPA's approach to
evaluating impacts on downwind air quality, considering estimated
total, maximum, and average contributions from each industry and the
total number of receptors with contributions from each industry.
---------------------------------------------------------------------------

    Finally, the EPA finds that the control measures determined to be
required for the identified EGU and non-EGU sources apply to both
existing units and any new, modified, or reconstructed units meeting
the applicability criteria established in this final rule. This is
consistent with the EPA's transport actions dating back to the
NOX SIP Call and the NOX Budget Trading Program.
In all CSAPR EGU trading programs, for instance, new EGUs are subject
to the program, and the EPA has established provisions for the
allocation of allowances to such units through ``new unit set asides.''
See, e.g., 86 FR 23126. In the NOX SIP Call, the EPA
required that states cover new and existing units in the relevant
source sectors through an enforceable cap or other emissions
limitation. See 40 CFR 51.121(f). The EPA's approach of including new
units in the NOX Budget Trading Program promulgated under
the EPA's CAA section 126 authority was upheld by the D.C. Circuit in
Appalachian Power v. EPA, 249 F.3d 1032 (2001). As the court noted, the
EPA explained in its action:

    Once EPA has determined that the emissions from the existing
sources in an upwind State already make a significant contribution
to one or more petitioning downwind States, any additional emissions
from a new source in that upwind State would also constitute a
portion of that significant contribution, unless the emissions from
that new source are limited to the level of highly effective
controls.

Id. at 1058 (quoting EPA 1999 RTC at 39). The court affirmed this
approach: ``Indeed, it would be irrational to enable the EPA to make
findings that a group of sources in an upwind state contribute to
downwind nonattainment, but then preclude the EPA from regulating new
sources that contribute to that same pollution.'' Id. at 1057-58. The
EPA is implementing the same court-affirmed approach in this action
because this reasoning is equally applicable to addressing interstate
transport obligations under CAA section 110(a)(2)(D)(i)(I) for the 2015
ozone NAAQS.
    Comment: Commenters took issue with aspects of the EPA's proposed
Step 4 approach. Commenters argued the EPA could not set unit- or
source-specific emissions limits or other control requirements, for
EGUs or non-EGUs. Commenters argued that various aspects of the non-EGU
emissions control strategy would not be feasible for their facilities
or were otherwise flawed. Many industrial-source and EGU commenters
argued that the EPA had not provided sufficient time for sources to
come into compliance. Commenters also challenged the EGU trading
program ``enhancements'' as unnecessary or beyond the EPA's authority.
In this regard, commenters argued that these changes deviated from the
EPA's prior approach, were unnecessary overcontrol, constituted a
command-and-control approach, could not be supported on the basis of
environmental justice benefits, or were otherwise unlawful for other
reasons. These commenters argue that the EPA's Step 4 dynamic budget
approach for EGU regulation purportedly re-defines each state's
``significant contribution'' annually and independent of any impact (or
lack thereof) on air quality. They further argue that under this
dynamic budgeting approach, even if a state eliminates the ``amount''
the EPA has identified as the state's significant contribution by
respecting a given control period's emissions budget, sources within
that state are expected to continue to make further reductions by
operating their controls in a particular manner in subsequent control
periods under potentially lower emissions budgets, which these
commenters argue is inconsistent with case law on prior CSAPR rules.
    Response: Many of these comments regarding Step 4 issues are
addressed elsewhere in this document or in the RTC document. The EPA's
authority to establish unit- or source-specific emissions rates is
addressed in section IV.B.1 of this document. Responses to comments and
adjustments in the timing requirements of the final rule compared to
proposal are discussed in VI.A. Responses to comments and adjustments
in emissions control requirements for non-EGUs in the final rule
compared to proposal are in section VI.C of this document.
    Responses to comments on the EGU trading program enhancements and
adjustments in the final rule are contained in section VI.B of this
document. However, here, in light of the changes in the emissions
trading program for EGUs that we are finalizing in this action as
compared to prior EGU emissions trading programs promulgated to address
good neighbor obligations under other NAAQS, we set forth responses to
comments specific to this topic.
    The EPA finds that these comments confuse Step 3 emissions
reduction stringency determinations with Step 4 implementation program
details. In this rulemaking's Step 3 analysis, the EPA is measuring
emissions reduction potential from improving effective emissions rates
across groups of EGUs adopting applicable pollution control measures
and selecting a uniform control level whose effective emissions rates
deliver an acceptable outcome under the multifactor test (including a
finding of no overcontrol at the selected control stringency level).
The ``amounts'' defined as significant contribution to nonattainment
and interference with maintenance are

emissions that occur at effective emissions rates above the control
stringency level selected at Step 3. That is, if a state's affected
EGUs fail to reduce their effective emissions rates in line with the
widely available and cost-effective control measures identified, they
have therefore failed to eliminate their significant contribution to
nonattainment and interference with maintenance of this NAAQS.
    In this rule, the EPA is finalizing several ``enhancements'' to its
existing Group 3 emissions trading program for ozone season
NOX, for reasons explained in section VI.B.1 of this
document. In general, these changes will ensure that the emissions
control program promulgated for EGUs at Step 4 of the EPA's 4-step
interstate transport framework is in alignment with the emissions
control stringency determinations the EPA made at Step 3. These
enhancements reflect lessons learned through the EPA's experience with
prior trading programs implemented under the good neighbor provision
and ensure that the implementation of the elimination of significant
contribution through an emissions trading program remains durable