To fully eliminate significant contribution and interference with maintenance by upwind states, EPA must require a second phase of ozone season NOx reductions from states that are linked to the New York, Houston, and Baton Rouge areas. EPA successfully used its authority to delineate a group of states from which further S02 emission reductions will be required in 2014 ('While we continue to believe that under certain circumstances it may be appropriate for us to use a single uniform cost per ton threshold to quantify significant contribution for all states, we believe it is also important to retain the flexibility to use multiple cost thresholds' (75 FR 4527)). A similar course of action is logical and necessary for ozone season NOx emissions. [EPA-HQ-OAR-2009-0491-2730.1, p.6]
EPA's Cost Effectiveness Thresholds
EPA states that it 'intends to proceed with additional rulemaking to address fully the residual significant contribution to nonattainment and interference with maintenance with the ozone standard as quickly as possible,' and that it is 'expeditiously conducting further analysis of NOx control costs, emissions reductions, air quality impacts, and the nature of the residual air quality issues' (75 FR 45213). New York believes that a greater cost threshold must be set for ozone-season NOx controls. While the $500 per ton value in the proposed rule was established only to maintain the operation of already installed SCR units, the large NOx emission reductions that will be required will necessitate the actual installation of new control equipment. Additionally, section 110(a)(2)(D) does not restrict EPA to regulation of the power sector alone; non-EGU stationary sources are some of the biggest emitters of NOx (and S02) in the region. These units would greatly benefit from emissions controls and such reductions would aid in solving the residual effects from upwind states. The cost effectiveness of combustion controls from non-EGUs is often in the range of $500 to $1,000 per ton of NOx removed and, therefore, would be cost effective for reducing and/or eliminating transported air pollution. It is certainly reasonable to require more effort from upwind states than the current $500/ton threshold requires, particularly when downwind states such as New York have required NOx emissions reductions at values up to ten times of this amount and more for purposes of attaining the NAAQS. EPA's statement that its methodology 'assumes controls at the same cost per ton level in the downwind state as in the upwind contributing states,' (75 FR 45272), is therefore not borne out in reality. [EPA-HQ-OAR-2009-0491-2730.1, p.12]
Enforcing a cut-off of only $500/ton is unfair to facilities that have already installed controls, which end up footing the burden for upwind reductions (however inadequate), while those that have gone uncontrolled in the past continue to have no control requirements under this low threshold. EPA's basis for costs, then, should not be limited to the operation of existing controls when additional controls can be put in place for costs that are very close to $500 per ton. This is especially important given that EPA has not set budgets in upwind states at levels that adequately address SC/IM for all areas, including New York City. [EPA-HQ-OAR-2009-0491-2730.1, p.12]
EPA also notes that 'a downwind state must adopt controls to demonstrate timely attainment of the NAAQS despite any pollution transport from upwind states that is not eliminated under section 110(a)(2)(D)' (75 FR 45271). EPA has introduced a qualifier into its section [EPA-HQ-OAR-2009-0491-2730.1, p.12] 110(a)(2)(D) responsibilities, however, in that only transported emissions that can be eliminated through 'cost-effective controls' are actually prohibited. In other words. NOx emissions that cost more than $500/ton to remove will still be allowed to impact downwind ozone nonattainment areas such as the New York metropolitan area. The downwind states cannot ignore these emissions simply because the cost of eliminating the emissions would exceed the costeffectiveness threshold determined by EPA. The downwind state has to account for local emissions in addition to these residual transported emissions, which can lead to inequities in allocating the responsibility for reaching attainment. [EPA-HQ-OAR-2009-0491-2730.1, p.13]
As further evidence of our concerns with EPA's budget and allocations. in examining the data in the tables in Section IV of the proposed Transport Rule, it is apparent that some states (AL. AR, GA, LA, MI, OK and TX) are allocated near their base case emissions and significantly over the emissions associated with a $500 per ton level-- while other states (CT, DE, DC, IL, MD, NJ, NY, NC, TN and VA) are allocated budgets that are lower than the emissions associated with a $5,000 per ton cost. Also, it should be noted that the $5,000 per ton level of emissions for Illinois is higher than those at the $500 per ton level (please explain this error). EPA states in the proposed Transport Rule that, for states linked to ozone air quality problems in Houston or Baton Rouge, EPA has not yet identified a final cost threshold for eliminating significant contribution. EPA does, however, propose to find that those states (AL, AR, FL, GA, IL, KY, LA, MS, TN, and TX) must make at least all of the NOx reductions that can be achieved for $500 per ton in 2012. The Department questions how the allocation of extra NOx allowances beyond the $500 per ton threshold to states whose significant contributions to those two cities have not been eliminated (in AL, AR, GA, LA and TX) fits with this statement. The Department also questions why many other states, including New York, are allocated fewer allowances. [EPA-HQ-OAR-2009-0491-2730.1, p.13]
Texas Commission on Environmental Quality
The TCEQ disagrees with the EPA's assumed $500 per ton cost effectiveness calculation for NOx reductions from EGUs in Texas and believes this amount to be based on an assumption of an uncontrolled baseline. Texas, however, has implemented substantial NOx controls on new and existing EGU facilities, and as a result, the TCEQ believes the EPA's cost assumptions to underestimate the true cost effectiveness of a control strategy. [EPA-HQ-OAR-2009-0491-2857.1, p.2]
EGU NOx Controls
The TCEQ disagrees with the EPA's assumed $500 per ton cost effectiveness for NOx reductions from EGUs in Texas. Despite the volume of discussion regarding cost that the EPA provided in the Technical Support Documents, the TCEQ has be unable to identify any substantive detail in the docket on how the EPA actually determined the threshold. The Technical Support Documents and preamble of the propose rule indicate that this control level is based on the installation of low NOx burners or similar NOx control techniques and not on the installation of new selective catalytic reduction (SCR) systems. The TCEQ agrees with the EPA that installation of new SCR systems could not be achieved by 2012. However, the TCEQ does not agree that significant ozone season NOx reductions, approximately 12,000 tons (75 FR 45268), can be achieved at the EPA's assumed $500 per ton cost effectiveness value. Based on prior experience with EPA cost effectiveness approaches, the TCEQ suspects this cost effectiveness threshold for low NOx burners is based on assuming an uncontrolled baseline and applying this cost effectiveness to any case that the technology is applied, regardless of the starting control level. The TCEQ has found this approach unreliable and typically underestimates the true cost effectiveness of a control strategy. The cost effectiveness on a cost per ton of pollution reduced basis for a control strategy should be based on actual costs and actual reductions to account for the incremental cost effectiveness of implementing reductions from one controlled level to another. While the EPA's assumption about a $500 per ton cost effectiveness might be valid for states that have implemented little or no EGU NOx control strategies in the past, it is certainly not valid for Texas. Texas has implemented substantial NOx controls on new and existing EGU facilities through legislative, rulemaking, and permitting actions. [EPA-HQ-OAR-2009-0491-2857.2,p.11]
As discussed in other TCEQ comments, the assumed starting NOx control level for the EGUs in Texas in the EPA's base case parsed data files is not accurate. EPA's assumptions about potential NOx reductions and the cost effectiveness of those reductions are not reliable if the EPA does not have accurate information about the current NOx control level. [EPA-HQ-OAR-2009-0491-2857.2,p.11]
Response:
As described in section VI of the preamble, EPA updated its assessment of ozone season and annual NOX reductions for the final Transport Rule.  Details on EPA's analysis for the final Transport Rule with respect to costs of NOX controls, estimates of downwind air quality impacts, and determinations of NOX  budgets for elimination of significant contribution to non-attainment and interference with maintenance can be found in sections VI.B, VI.C, and VI.D of the preamble for the final Transport Rule respectively.
Regarding baseline emissions, EPA took comment and updated baseline emissions inventories and assumptions for the final Transport Rule.  Details on this topic can be found in Documentation Supplement for EPA Base Case v.4.10_FTransport  -  Updates for Final Transport Rule.
With respect to NOX emissions in Texas, the updates to emissions inventories and model assumptions between the proposed and final Transport Rule resulted in lower projected EGU base case emissions in the final rule compared to the proposal.  Specifically, 2012 base case ozone-season NOX emissions for fossil fuel-fired EGUs are projected to be about 13,000 tons lower and annual NOX  emissions about 23,000 tons lower, in the final rule compared to the proposal (see the IPM run titled "TR_Base_Case_Final" in the docket).  Regarding the magnitude of ozone-season NOx reductions available from Texas EGUs at $500 per ton, EPA's analysis for the final rule identified approximately 2,000 tons at that cost level (see section VI.B in the preamble; see also IPM run titled "TR_NOX_OS_500_Final" in the docket).
With respect to elimination of significant contribution to nonattainment and interference with maintenance for the ozone standard, EPA believes it can best serve states with ozone non-attainment problems by quickly finalizing the ozone season NOX reductions under this rule and seeking further ozone season NOX reductions in subsequent rulemakings.  Additionally, air quality modeling results provided in section VIII.B indicate that only 1 area (Houston, TX) is expected to have remaining non-attainment problems for the ozone standard and only 1 area (Baton Rouge, LA) is expected to have remaining maintenance problems for the ozone standard.
For the annual and 24-hour PM2.5 standards, EPA finds, for the states covered by this rule for the 1997 PM2.5 NAAQS or the 2006 PM2.5 NAAQS, that the final Transport Rule emission reductions of annual NOX (coupled with SO2 reductions) successfully address significant contribution to nonattainment and interference with maintenance with respect to the NAAQS for which they are covered. Air quality modeling results provided in section VIII.B indicate that the final transport rule will resolve non-attainment with all PM2.5 standards for all receptors with the exception of 1 receptor with remaining nonattainment problems for the 24-hour PM2.5 standard in the Liberty-Clairton area--which EPA has noted is heavily influenced by a local source of organic carbon (75 FR 45281).
IV.D.5.b. Specific Application of Overall Approach to Ozone: Modeling Methods/ Air Quality Assessment Tool/ Results of Evaluation With Detailed Air Quality Model (CAMx)/ New York City

Organization: Adirondack Council
Comment:
Adirondack Council
EPA is taking comment on whether it should consider and analyze the NOX reductions that can be achieved for greater than $500/ton in states that are linked to the New York area sites. (p. 324) The Adirondack Council believes that EPA should consider further reductions to NOX emissions that contribute to nonattainment in the New York City area. As mentioned above, EPA should consider reductions up to the $3,200/ton level to help New York meet National Ambient Air Quality Standards. [EPA-HQ-OAR-2009-0491-2848.1, p.3]
Response:
EPA updated the analysis used to identify nonattainment and maintenance receptors in response to comments and to reflect updates to numerous modeling inputs including emissions inventories.  As indicated in section V.C of the preamble for the final Transport Rule, the final rule modeling demonstrates that New York area monitors are not projected to have non-attainment or maintenance problems with any of the evaluated standards in the 2012 base case under final Transport Rule modeling.
Organization: Kansas Department of Health and Environment
Comment:
Kansas Department of Health and Environment
The approach EPA uses to assess the effect NOx reductions will have on downwind ozone is fundamentally flawed. The use of an assessment tool that assumes a linear relationship between the reduction in an upwind state's NOx emissions and that state's contribution to downwind ozone levels is flawed. The production of ozone is well understood to be a nonlinear process, thus the need to perform photochemical modeling that takes into account many of the nonlinear variables affecting ozone production. [EPA-HQ-OAR-2009-0491-2606.1, p.6]
This assessment tool, as described by EPA in the proposed rule and TSD, also does not differentiate between emissions reductions of low-level sources and elevated sources of NOx. For transport at large distances, the impacts of elevated sources versus low-level sources are likely different for varying reasons, including plume chemistry and physical location both in the vertical layer of the atmosphere and with the source-receptor relationship. Again, this is another nonlinear problem that should not be assumed to be linear in an assessment tool. While this flawed approach does not appear to directly impact the initial 'linkage' contribution assessment, it does potentially impact other conclusions drawn from this tool's use. [EPA-HQ-OAR-2009-0491-2606.1, pp.6-7]
KDHE understands the need for a tool that can conveniently be used for multiple scenarios; however, using a tool with fundamental flaws in the basic underlying assumption for the pollutants of concern is troublesome to KDHE. KDHE recommends a tool that can better account for a response to emissions changes, possibly even the same tool but modified to better account for a state's unique characteristics as identified by photochemical modeling. So, rather than assuming a linear response to all emissions reductions for all states, perhaps CAMx could be used to inform a tool that would have varying responses to emissions changes based on source receptor proximity, type of source reduction, etc., while retaining the needed benefits of speed in analysis.[EPA-HQ-OAR-2009-0491-2606.1, p.7]
Response:
For the final Transport Rule, for reasons more fully described in Section VI of the preamble for the final Transport Rule, EPA was able to use CAMx modeling to evaluate NOx reductions for both ozone and the nitrate component of PM2.5.  The CAMx modeling accounts for any nonlinearity between NOx emissions and ozone formation as well as differential impacts between ground level and elevated sources of NOx emissions.
Organization: Louisiana Chemical Association (LCA)
Comment:
Louisiana Chemical Association (LCA)
LCA also believes that EPA should reevaluate whether Louisiana sources are significantly contributing to nonattainment of the 1997 8-hour ozone NAAQS in the Dallas-Ft. Worth ('DFW') area and the Houston-Galveston-Brazoria ('HGB') area or interfering with maintenance in those areas. Again, we believe that Louisiana's emission inventory is overestimated by EPA and for that reason alone, new modeling should be performed. Further, the HGB area achieved attainment in 2009 with a design value of 84 ppb and that value has dropped to only 82 ppb year to date. I The DFW design values have dropped over the last several years to a present value of 86 ppb, just above the standard.2 The actual design values now are so much lower than EPA's projections for just two years from now, and with EPA projecting declining emissions of NOx and VOC even without the Transport Rule, there is significant question about the model procedures and inputs. EPA technical support documents also suggest that EPA may have modeled emissions from some large EGUs in Louisiana as the annual emissions from such units occurred only during ozone season. Thus, the projected impacts may be unrealistically high. However, further review of the underlying technical support documents and other data is necessary to confirm these concerns and to prepare comments for EP A's appropriate consideration. [EPA-HQ-OAR-2009-0491-1925.1, p. 2]
EPA's IPM v. 4.10 Has Projected That There Will Be No Significant Contribution or Interference With Maintenance of the 1997 8-Hr. Ozone NAAQS From Louisiana Sources. As noted above, LCA has not been able to complete its review of the changes to the TR Base Case v. 4.1094 compared to TR Base Case v. 3.02, nor to the evaluation of different Transport Rule FIP options using version 4.10, but a comparison of the IPM Base Case 2012 projections clearly shows that the total ozone season NOx estimates under the TR Base Case v. 4.10 have dropped significantly when compared to the TR Base Case v. 3.02. The reduction is greater than the difference between the TR Base Case v. 3.02 and the IPM v. 3.02 run for the TR SB Limited Trading Values and is below the stated budget allocation. [EPA-HQ-OAR-2009-0491-3527.1, p. 35]
In the Preamble to the CATR/FIP, EPA stated: A state's emissions budget is the quantity of emissions that would remain in that state from covered sources after elimination of that portion of each state's significant contribution and interference with maintenance that EPA has identified in today's proposal, before accounting for the inherent variability in power system operations....In other words, it provides a quantity of emissions to use in developing a remedy (e.g., the remedy should be designed to achieve the budget in an average year. Because the budget represents emissions that would remain without accounting for var1ability, it also represents the amount of emissions that would remain after significant contribution and interference with maintenance have been addressed, in an average year. [EPA-HQ-OAR-2009-0491-3527.1, p. 35]
Thus, when the Base Case v. 4.10 projection shows a value below the budget, it is clear that significant contribution and interference no longer exist. In short, this means that EPA projects with the updated version of the IPM v.4.10 that by 2012, the total reduction required in order to prevent any significant contribution or interference with maintenance with the 1997 ozone NAAQS has already been achieved without the Transport Rule/FIP. [EPA-HQ-OAR-2009-0491-3527.1, p. 36; see p. 36 for Table 6, Comparison of TR Base Case v. 3.02 to 4.10 for Louisiana EGUs.]
Because "significant contribution" and "interference with maintenance" have been removed with this revised IPM modeling, there is no basis for a Transport Rule or FIP for Louisiana EGUs, as the levels required to remove significant contribution and interference with maintenance will have already been achieved. In summary, EPA's IPM modeling provides no rational basis for the FIP proposed for Louisiana. It supports a conclusion that any potential Louisiana impact on either annual PM2.5 or 8-hour ozone NAAQS in Texas will be removed through factors other than the Transport Rule and CAIR. [EPA-HQ-OAR-2009-0491-3527.1, p. 36]
Response:
EPA updated its significant contribution analysis for the final rule to take into account extensive comments and new data on emissions inventories.  This method and its results can be found in section V and VI of the preamble for the final Transport Rule.
With respect to "attainment" in 2009 of the Houston-Galveston-Brazoria ozone area, please refer to section V of the preamble for the final Transport Rule for a discussion of the appropriate air quality data on which EPA based the rule.
With respect to EPA's determination of elimination of significant contribution to non-attainment or interference with maintenance, EPA uses a multi-step process described in sections V and VI of the preamble for the final Transport Rule.  It is not sufficient to compare emission projections made under different iterations of IPM modeling (as the commenter does) without further taking into account revised air quality modeling of downwind impacts, which EPA proceeded to do using updated inputs for the final Transport Rule.  For a complete assessment of Louisiana and its role in the final Transport Rule, please refer to the preamble for the final rule.
Organization: New York State Department of Environmental Conservation
Comment:
New York State Department of Environmental Conservation
Lastly, in the Air Quality Modeling Technical Support Document (Table F-5), EPA stated that it modeled using 585,584 tons of NOx for EGU emissions in the ozone season for the 26 states. This compares to the $500/ton level of 610,454 tons and the amount EPA allocated, 641,614 tons. If the latter allocated value was used in the modeling, it is very possible that more areas aside from Houston, Baton Rouge and New York City would continue to show SC/IM. Still, the use of the lower emissions in the modeling could invalidate EPA's conclusions regarding SC/IM. [EPA-HQ-OAR-2009-0491-2730.1, p.7] EPA should adjust its budgets to fit its analysis. [EPA-HQ-OAR-2009-0491-2730.1, p.8]
Response:
EPA adopted a modified method for determining budgets under the final Transport Rule that EPA believes is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.

IV.D.6. Non-EGU Emissions Sources and Control Costs

Organization: Central Illinois Global Warming Solutions Group
City of Philadelphia, Department of Public Health, Air Management Services
Comment:
Central Illinois Global Warming Solutions Group
[These comments were submitted as testimony at the Chicago, Illinois public hearing on August 19, 2010.  See Docket Number EPA-HQ-OAR-0491-1746, pp.124-125.]
I also think that the Rule needs to look at all industries, not just power generation, and I hope that in future versions it can be expanded to do so.
City of Philadelphia, Department of Public Health, Air Management Services
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, p.219.]
EPA should include all categories in the proposed rule, not just EGUs that contribute significantly to interstate transport of NOX and SO2 in the jurisdictions covered.
Response:
EPA intends to address the appropriateness of controls for additional industries in a separate rulemaking.
Organization: Clean Air Task Force
Comment:
Clean Air Task Force
In fact, the emission budgets in the NOx SIP Call were calculated on the basis of reductions not only from power plants, but also from large industrial, commercial and institutional boilers; cement kilns; and large stationary reciprocating internal combustion engines. 103 Notwithstanding EPA's assertion that including non-EGU reductions in this TR rulemaking would delay finalization of the TR beyond spring 2011, we do not believe that is necessarily so. NOx emissions from these additional source categories have been regulated in conjunction with the NOx SIP Call and other programs for over a decade, and EPA should by now have sufficient cost and other information available to analyze in a timely fashion the impact of regulation of these sources under the proposed TR. 104 [EPA-HQ-OAR-2009-0491-2738.1, p.18]
Tighter Control on Regional Power Plant Emissions are Feasible and can be Implemented without Threatening the Economy or the Electric Power System.
As EPA found in conjunction with the CAIR rulemaking, emissions control technology for SO2 emissions is well demonstrated and well established, and has been commercially available for decades. 111 Wet and dry flue gas desulfurization (FGD) technologies have been available for over 30 years, and routinely achieve SO2 control efficiencies of 90 to 98+%. 112In conjunction with its 1999 regional haze rulemaking, EPA proposed in its 2001 BART Guidelines a presumption that 'an SO2-control level in the 90 -- 95% range is generally achievable' for uncontrolled boilers and thus should be considered to be best available retrofit technology for purposes of controlling visibility-impairing SO2 emissions. 113 [EPA-HQ-OAR-2009-0491-2738.1, p.19; For additional comments pertaining to Tighter Control on Regional Power Plant Emissions are Feasible and can be Implemented without Threatening the Economy or the Electric Power System see pages 19-21 of this comment.]

Footnotes:
104 For example, NESCAUM has published an in-depth report on emission controls for ICI boilers. See NESCAUM (2008, revised 2009), Application and Feasibility of NOx, SO2, and PM Emissions Control Technologies for Industrial, Commercial, and Institutional (ICI) Boilers, available at: http://www.nescaum.org/topics/air-pollution-control-technologies.
Response:
EPA was mindful of the information developed in the NOx SIP call, and in the NESCAUM report in its evaluation of nonEGU controls for this rule, and in forming its conclusions regarding nonEGU reductions at cost per ton values for NOx and SO2.
While additional technically feasible reductions may be possible for EGUs, technical feasibility is not a sufficient grounds for imposing controls under this Transport Rule.  Under this rule, requirements for emissions reductions for EGUs must be justified based on a state's significant contribution to nonattainment or interference with maintenance.
Organization: Council of Industrial Boiler Owners (CIBO)
MeadWestvaco Corporation (MWV)
American Forest & Paper Association (AF&PA)
American Chemistry Council
Comment:
American Chemistry Council
We believe it is appropriate and necessary for EPA to continue to focus on the power sector (EGUs) to ensure that the largest contributors to NOX and SO2 emissions are reducing those emissions. Moreover, EGUs are able to do so in a more cost-effective manner than other industrial sectors. A continued focus on EGUs also keeps the number of covered sources to a manageable number. EPA has correctly assessed that it would not be cost-effective to extend the Transport Rule to non-EGUs. [EPA-HQ-OAR-2009-0491-2716.1, p.1]
ACC urges EPA to continue to exempt non-EGU emission sources from the Transport Rule. The exemption should extend to industrial boilers and turbines. Industrial boilers will be subject to a final National Emission Standard for Hazardous Air Pollutants (NESHAP) in January 2011, which will require a number of boilers to install additional control technologies in order to comply with strict emissions standards. Many non-EGU sources already have or will soon apply additional emission controls, and the next incremental step cost of controls significantly exceeds the $500/ton NOX and $2000/ton SO2 emission control measures that can be achieved by EGUs. [EPA-HQ-OAR-2009-0491-2716.1, p.1]
B. Particulate Matter
In the preamble, EPA states that it does not believe that other source categories beyond EGUs have emissions that are currently significantly contributing to non-attainment or interfering with maintenance of the 1997 and 2006 PM2.5 NAAQS. (75 Fed. Reg. at 45289.) [EPA-HQ-OAR-2009-0491-2716.1, p.2]
ACC agrees with EPA's assessment that, with respect to the 1997 and 2006 PM2.5 NAAQS, emissions reduction requirements should not be applicable to non-EGU sources. We do not believe that there are any < $500/ton PM2.5 emission reduction measures that can be implemented by 2012 for non-EGU point sources. [EPA-HQ-OAR-2009-0491-2716.1, p.2]
American Forest & Paper Association (AF&PA)
AF&PA supports EPA's decision to exempt emissions from non-EGU sources from Transport Rule regulation. We completely agree with EPA's conclusion that emissions from such sources cannot be cost-effectively controlled. Indeed, we think that EPA has underestimated the costs of such controls, although there is no need to address the issue in detail at present. [EPA-HQ-OAR-2009-0491-2643.1, pp.1-2]
II. EPA Properly Proposed to Exempt Non-EGUs from Transport Rule Coverage
The proposed Transport Rule concludes that EGUs (Electric Generating Units) can control their emissions cost-effectively, which results in achieving air quality goals with the least burden on society. [EPA-HQ-OAR-2009-0491-2643.1, p.2]
According to EPA's proposal the Agency "has not identified SO2 reductions for sources other than EGUs at $2000/ton or less" (75 Fed. Reg. 45289). The notice goes on to summarize the available data on non-EGU controls and to conclude that:
This information shows that few if any SO2 reductions are available from other source categories [besides EGUs] and [this], along with other information available to EPA, supports EPA's proposal not to include non-EGU SO2 reduction requirements ...for the proposed rule. (id.)  [EPA-HQ-OAR-2009-0491-2643.1, p.2]
For NOx, EPA concluded even more categorically that it "has not identified additional non-EGU controls that can be achieved at $500/ton or less" (75 Fed. Reg. 45290). In reaching this conclusion, EPA finds, categorically, that emission reductions from industrial sources cannot be achieved cost effectively within these thresholds. AF&PA fully supports EPA's analysis and conclusions. [EPA-HQ-OAR-2009-0491-2643.1, pp.2-3]
This conclusion is particularly important to manufacturing industry, which is exposed to constant and increasing international competition, and is less able to absorb the cost of pollution control programs than utility sources operating in an almost purely domestic market. Instead, increased costs can lead to reduced employment and reduced production. Utilities will likely pass their control costs on to their customers, including manufacturers, while non-EGUs would find such pass-through difficult in the highly competitive global marketplace. Further, EPA's analysis correctly identifies that the most significant emission sources are EGUs, which would also have a much greater impact on ambient air improvement if better controlled. These considerations further support EPA's proposed limitation of Transport Rule coverage to EGUs. [EPA-HQ-OAR-2009-0491-2643.1, p.3]
In closing, we support EPA's findings that non-EGU sources are not highly cost effective to control and should be excluded from the Transport Rule. Thank you for the opportunity to comment. [EPA-HQ-OAR-2009-0491-2643.1, p.9]
Council of Industrial Boiler Owners (CIBO)
EPA proposes to regulate EGUs under the rule, and as indicated in Footnote 77, does not define Industrial, Commercial, and Institutional (ICI) Boilers as covered sources in the Proposed Rule: "Certain non- EGUs and smaller EGUs were included in the CAIR NOx ozone season program in some CAIR states. EPA proposes that such units would not be covered by the Transport Rule requirements.' 75 FR 45299 at fn 77. However, EPA has requested comments on 'whether non- EGU emissions reductions should be required and on the specific control measures that would serve as the basis for those reductions.' 75 FR 45289-90.
CIBO supports the proposal to regulate only EGUs under this rule. As EPA concluded, non- EGUs would not be able to implement the emissions reductions mandated by this rule in an effective and cost efficient manner. As EPA points out in the Proposed Rule, ' EGUs can reduce SO2 and NOx emissions more cost-effectively than other source categories.' 75 FR 45299-300. EPA completed a study to this effect, which analyzed the 'costs of EGU and non-EGU controls [and] resulted in a conclusion that substantial SO2 and NOx reductions from EGUs are available at a cost per ton that is lower than the cost per ton of non-EGU controls.' 75 FR 45300. This fact is primarily driven by economies of scale (utility boilers typically 1 to 2 orders of magnitude larger than typical ICI boilers) and differences in operating characteristics such as capacity factor (many ICI boilers routinely operate with low annual capacity factors); both of these drive up the resultant cost per ton for emissions controls.
EPA also notes that compared to EGUs, ICI boilers are lower SO2 emitters, and that because of 'variability in operations, it is difficult to identify precise cost per ton estimates' for implementing control technologies. 75 FR 45289. EPA also has recognized that additional controls on NOx emissions from ICI boilers would be unjustifiably expensive and unnecessary for the purposes of the transport rule. 75 FR 45290. CIBO supports these conclusions regarding non- EGUs.[EPA-HQ-OAR-2009-0491-2751.1 p.6]
MeadWestvaco Corporation (MWV)
The proposed Transport Rule correctly concludes that EGUs (Electric Generating Units) can control their emissions cost-effectively, which results in achieving air quality goals with the least burden on society. In the proposal, EPA has determined that it is not cost effective to control emissions of nitrogen oxides (NOx) and sulfur dioxide (S02) from industrial sources. [EPA-HQ-OAR-2009-0491-2650.1, p. 2]
According to EPA's proposal, the Agency 'has not identified 802 reductions for sources other than EGUs at $2000/ton or less.' 75 Fed. Reg. 45289. For NOx, EPA concluded that it 'has not identified additional non-EGU controls that can be achieved at $500/ton or less.' 75 Fed. Reg. 45290. EPA finds, categorically, that emission reductions from industrial sources cannot be achieved cost effectively within these thresholds. MWV fully supports EPA's conclusions with respect to this issue. [EPA-HQ-OAR-2009-0491-2650.1, p. 2]
EPA's conclusion is particularly important to the manufacturing industry, which is exposed to constant and increasing international competition, and is less able to absorb the cost of pollution control programs than utility sources operating in an almost purely domestic market. Instead, increased costs can lead to reduced employment and reduced production. Utilities/EGUs will likely pass their control costs on to their customers, including manufacturers, while non-EGUs would find such pass-through difficult in the highly competitive global marketplace. Further, EPA's analysis correctly identifies that the most significant emission sources are EGUs, which would also have a much greater impact on ambient air improvement if better controlled. These considerations further support EPA's proposed limitation of Transport Rule coverage to EGUs.  [EPA-HQ-OAR-2009-0491-2650.1, p. 2]
Response:
In the final rule, EPA retains its proposed conclusions regarding nonEGU source controls.
Organization: Eco Power Solutions (USA) Corp.
Comment:
Eco Power Solutions (USA) Corp.
Because, according to the analyses EPA has relied upon, capital costs are a major element of costs in the non-EGU applications, EPA needs to reconsider its conclusion that for the non-EGU sector, control technology is not available below the cost-thresholds that EPA has identified (75 Federal Register No. 147 at 45289-90). [EPA-HQ-OAR-2009-0491-2692.1, p. 1]
EPA, however, did not consider innovative technology such as Eco Power's COMPLY 2000(R) units. The combination of higher cost thresholds and the dramatically lower capital costs for Eco Power's technology in non-EGU applications (due to heat recapture) would likely result in a reconsideration of the decision not to require compliance by non-EGUs as to SO2 and a potential reconsideration as to NOx, depending on the stringency of the final Ozone rule. The cost issues are discussed in more detail below. [EPA-HQ-OAR-2009-0491-2692.1, p. 3] [See 2692.1, pp. 2-7 for extensive discussion of Eco Power's technology.]
Response:
EPA looks forward to additional information on this technology as further efforts proceed to demonstrate its effectiveness.
Organization: Kentucky Division for Air Quality
Comment:
Kentucky Division for Air Quality
Emissions of Other Sources Also Need to Be Reduced to Eliminate Transport
Pursuant to the rule preamble Section V.B.2., Other Source Categories Are Not Included (75 FR 45300), the Transport Rule fails to include all sources that contribute significantly to transport. Given that EPA's new 8-hour ozone standard will be more stringent and a more difficult standard for states to attain and maintain, the Division requests that EPA obtain additional emission reductions from other relevant source categories especially from onroad mobile sources. Onroad mobile source emissions remain a significant source of ozone precursor emissions that have contributed to many areas' previous ozone nonattainment problems. EPA could assist state and local agencies by requiring additional emissions reductions from other source categories that are significant contributors of ozone and PM2.5 precursor emissions, such as onroad vehicles, locomotives, oceangoing marine engines, and nonroad vehicles. If EPA does not incorporate emission reductions for the aforementioned source categories in the proposed Transport Rule, then the Division requests that EPA consider these other source category emission reductions, especially for onroad mobile vehicles, when EPA proposes its Transport Rule II. [EPA-HQ-OAR-2009-0491-2805.1, p.5]
Response:
This rule addresses the 1997 ozone standards, and does not address any newer ozone standards.   EPA agrees that additional efforts will be needed to necessary emissions reductions under newer standards.   EPA continues achieve substantial mobile source reductions from existing mobile source standards, and we will be continually evaluating ways to update those standards over time.
Organization: Maryland Department of Environment (MDE)
Comment:
Maryland Department of Environment (MDE)
In working with other states and EPA we have identified 6 priority source categories which we believe should be targeted first for the state-of-the-art, multi-pollutant national controls. These are; EGUs, on- and off-road mobile sources, industrial, commercial and institutional boilers, cement kilns, marine engines and locomotives. These six categories represent about 85% of the SO2 that is left to regulate, 75% of the NOx that is left to regulate and 75% of the 2005 national Hg emissions. [EPA-HQ-OAR-2009-0491-2639.2, pp.1-2]
State-of-the-art, multi-pollutant controls on these six categories would move the Country far down the road to clean air and result in tens of thousands of lives being saved and huge additional health benefits linked to reduced respiratory illness. These controls would also dramatically help the states as they struggle to develop new SIPs for ozone, fine particles, NO2 and SO2 and new WIPs to address nitrogen and mercury related water quality problems. Maryland is one of the Co-Chairs for the EPA/NACAA retreat follow up workgroup on Multi-Pollutant, Sector-Based strategies. We look forward to working with EPA on this issue. [EPA-HQ-OAR-2009-0491-2639.2, p.2]
Maryland believes that the inclusion of non-EGU sources is a critical component of any pollution transport regulation promulgated by EPA. Maryland views emissions reductions from non-EGU sources as essential to the ability of the state to meet the upcoming EPA ozone and particulate matter NAAQS. Many non-EGUs contribute significantly to NOx emissions levels. Their inclusion would enable additional cost effective NOx emission reductions. [EPA-HQ-OAR-2009-0491-2639.2, p.9]
Maryland, working with NACAA, has identified six high priority categories as large contributors to NOx emissions. Based on EPA's projected 2020 emission inventory, the national emission inventory for NOx will no longer be dominated by power plants (see table below [See EPA-HQ-OAR-2009-0491-2639.2, p.9 for table]). [EPA-HQ-OAR-2009-0491-2639.2, p.9]
The inclusion of non-EGUs in the Transport Rule would provide a much needed boost in NOx reductions, especially in areas having difficulty attaining the NAAQS. Previous OTC modeling has shown that inclusion of non-EGU sources will help states come into attainment with air quality standards. The University of Maryland, College Park (UMD) completed a screening modeling simulation for OTC, to demonstrate the level of emission reductions needed to show compliance with the 8-hour ozone NAAQS of 75 ppb. The screening modeling simulation covered the time period of May 17  -  August 31, 2007, and was completed using the CMAQ model, 2007 meteorological data, and a 2007 proxy emissions inventory. The emissions reductions for the screening modeling simulation were based on OTC's recommendation for critical national reductions combined with local OTR measures. The emissions reductions included the following:  [EPA-HQ-OAR-2009-0491-2639.2, p.9]
Domain-Wide, including the OTR, Southeast, and Midwest
NOx
Point Sources: -65% (Represents reductions from ICI boilers, cement kilns, and a 900,000 ton regional trading cap on EGUs)
On-road Sources: -75% (Approximates a 2020 national Low-Emission-Vehicle (LEV) III Program)
Non-road Sources: -35% (Includes reductions from marine and locomotive engines)
VOCs
All Source Sectors: -30% OTR States
NOx
All Sectors: -5% (Additional reductions only in the OTR)  [EPA-HQ-OAR-2009-0491-2639.2, pp.9-10]
Results of the screening modeling simulation showed that targeted reductions among these source sectors were more effective at lowering ozone and particulate matter than deeper across-the-board cuts in NOx levels across all sectors. Only one monitor in the OTR had a future-year design value over the 8-hour ozone NAAQS of 75 ppb. Maryland believes that inclusion of non-EGUs is more cost effective than other measures that OTC states have already implemented to achieve the 85 ppb ozone NAAQS and current particulate matter standard. Therefore, Maryland recommends that EPA include non-EGU sources in the proposed Transport Rule.  [EPA-HQ-OAR-2009-0491-2639.2, p.10]
Maryland has experienced, with great pride, the dramatic improvements in ozone and fine particle air quality associated with the recent implementation of regional NOx and SO2 control programs. Our research (see Appendix F and G [See EPA-HQ-OAR-2009-0491-2639.2, p.49 for comments pertaining to Appendix F and p.50 for comments pertaining to Appendix G]) told us that the regional, elevated reservoir of ozone, created by regional emission sources, was contributing significantly to our ground level ozone problem. Our data shows that this elevated reservoir mixes down around 10:00 in the morning on bad ozone days and is responsible for up to two thirds of the daily maximums we record.  [EPA-HQ-OAR-2009-0491-2639.2, p.10]
The 2004 NOx SIP Call, the acid rain program and early CAIR provided us with a real world test case to see if reducing regional emissions would reduce the pollution in the elevated reservoir and ultimately lead to lower air pollution at ground level. The results have been dramatic. As emissions have gone down, the pollution measured in the reservoir has been reduced and ground level monitors have recorded much cleaner air. Our aloft measurements show an approximate 25% reduction in ozone in the elevated reservoir after 2004. Maryland is currently measuring ground level ozone and fine particle levels that are below the annual and daily fine particle standard and the old 1-hour ozone standard. 8-hour ozone levels have also dropped dramatically.  [EPA-HQ-OAR-2009-0491-2639.2, p.10]
Regional NOx and SO2 reductions have clearly worked.  [EPA-HQ-OAR-2009-0491-2639.2, p.10]
Maryland supports EPA's focus on reducing NOx and SO2 emissions from EGUs but we believe that EPA should also look into reductions from non-EGU sources as a means of controlling transported pollution. In the first of the three remedies, the "State Budgets/Limited Trading Proposed Remedy", sources would receive allocations based on state budgets alone (variability would not be included). There would be four trading groups established and banking of allowances would be permitted. EPA states that trading and banking "accounts for variability in the electricity sector". EPA is also proposing to impose assurance provisions starting in 2014. The assurance provisions will result in allowance surrender only if:
1. a state exceeds its budget plus variability in a given year or on average triennially AND
2. an owner's unit's emissions exceed the owner's share of the state budget PLUS variability limit [EPA-HQ-OAR-2009-0491-2639.2, pp.14-15; This comment can also be found at V.D.2.d. of this comment summary]
Response:
EPA appreciates this information, and we look forward to continuing discussions on relevant information for evaluating the priorities for addressing newer air quality standards.
Organization: National Association of Clean of Air Agencies (NACAA)
Comment:
National Association of Clean of Air Agencies (NACAA)
Emissions of Other Sources Also Need to Be Reduced to Eliminate Transport
The Transport Rule fails to include all sources that contribute significantly to transport, such as industrial, commercial and institutional boilers, and cement kilns. These additional source categories represent a significant percentage of the states' NOx and SO2 emissions inventories and also contribute to interstate transport problems. We recognize that to include these sources, EPA believes it would need to repropose Transport Rule I, which, in the interest of time, we do not support. Thus, EPA must address these source categories as well when it proposes its Transport Rule II. In addition, EPA could assist state and local agencies by requiring substantial emissions reductions from other source categories that are significant contributors of ozone and PM2.5 precursor emissions, including, but not limited to, on-road light duty vehicles, locomotive and oceangoing marine engines, and nonroad vehicles. [EPA-HQ-OAR-2009-0491-2771.1, p.3]
[These comments were submitted as testimony at the Chicago, Illinois public hearing on August 19, 2010.  See Docket Number EPA-HQ-OAR-0491-1746, pp.105-109.  These comments were also submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, p.83.]
Like the power plants, the sources proposed to be controlled under the Transport Rule are significant contributors to ozone and PM2.5 pollution.
In addition, the Transport Rule fails to include all sources that contribute significantly to transport such as industrial, commercial and institutional boilers and cement kilns.
These additional source categories represent a significant percentage of the states' NOx and SO2 emissions inventories and also contribute to interstate transport problems.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, pp.83-84.]
We recognize that to include these sources, EPA would need to repropose Transport Rule l, which, in the interest of time, we do not support.
Response:
EPA agrees with the need to evaluate these additional source categories in future efforts.
Organization: New York State Department of Environmental Conservation
Comment:
New York State Department of Environmental Conservation
The second method by which to rectify residual transport issues is to require non-EGU and small EGU units to take part in the trading program as discussed on page 10 of these comments. [EPA-HQ-OAR-2009-0491-2730.1, p.6]
Omission of Non-EGU Sources and Small EGU Sources
In the development of this proposal, EPA indicated that non-EGU sources such as industrial, commercial and institutional boilers, and cement kilns were not included because of the likely delay in the release of the rule for such an evaluation. Additionally, EPA conducted an assessment of reductions available for source categories other than EGUs through which it determined that there likely would be large emissions reductions available from EGUs before costs reach the point for which non-EGU sources have available reductions. Based on the resulting cost curves, EPA determined that there were little or no reductions available from non-EGUs at costs lower than the thresholds that EPA had chosen. However, as discussed elsewhere in these comments, the use of the $500 is an inadequate approach to assessing the reasonability of control costs. Additionally, a number of non-EGUs and smaller EGUs were included in the CAIR NOx ozone season program in some states, indicating that EPA recognized the benefit of controlling non-EGU sources. The same should apply to the present proposal as well as to Transport Rule II. New York State recently revised its regulations to require greater reductions from boilers, glass plants and cement kilns. As the Department continues to require greater emissions reductions from sources within the state, it expects upwind sources to eliminate SC/IM. EPA must fully address the contribution of these sources in this rule making or in the very least when it proposes Transport Rule II. method by which to rectify residual transport issues is to require non-EGU and small EGU units to take part in the trading program as discussed on page 10 of these comments. [EPA-HQ-OAR-2009-0491-2730.1, p.14]
Another problem with failing to include non-EGU sources is the 'orphaning' of these sources in terms of meeting the requirements of the NOx SIP Call. The NOx SIP Call contained emission reduction requirements for industrial boilers, Portland cement kilns and internal combustion engines. Many states, including New York, met these requirements by including these sources with the requisite emission reduction requirements in their ozone season NOx budget trading programs. These sources and the emission reduction requirements were subsequently carried over to the CAIR ozone season NOx program. As EPA noted in the proposal, many of these sources did not choose to control, but instead opted to utilities the emission trading option to comply with the emission requirements. By not including these sources in the FIP, states will likely need to embark on specific rulemaking and SIP revisions to assure these sources are complying with the transport provisions of the NOx SIP Call individually. This is an additional administrative burden that EPA is imposing on states that can easily be avoided by continuing to include these sources in the new ozone season trading program. [EPA-HQ-OAR-2009-0491-2730.1, p.14]
In addition to not addressing non-EGU sources, this proposal does not address smaller EGUs (15 to 25 MW). New York and other Ozone Transport Commission (OTC) states have included these sources in their ozone season trading program since the beginning of the OTC NOx Budget trading Program in 1999. These sources are significant emission sources in the summer season and especially on high electricity demand days when the potential for ozone formation is greatest. Not including these sources in the ozone season program will remove an important tool towards reducing overall NOx emissions during the summer months. [EPA-HQ-OAR-2009-0491-2730.1, p.14]
Response:
See discussion in preamble section VI related to the choice of dollar per ton thresholds for NOx.
EPA notes that the $500/ton threshold does not establish a precedent for future rulemakings, which would need to evaluate the impacts of higher-cost control measures for NOx.
See discussion in preamble IX.B related to SIP provisions for NOx SIP call sources not covered by this Transport Rule.
See discussion in preamble section VII.B on applicability related to the issue of including smaller EGUs below 25 MW in the program.
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
Northeast States for Coordinated Air Use Management (NESCAUM)
EPA has indicated that it did not include non-EGU sources because it did not want to delay release of the rule for such an evaluation. While we appreciate EPA's efforts to release the rule as soon as possible, we are concerned that the omission of non-EGU sources compromises EPA's framework by proposing only a partial solution to transport. In addition, states in the NESCAUM region that opted non-EGUs into their CAIR programs now must develop separate and distinct regulatory programs for these sources, which no longer enjoy the advantages of inclusion in a trading program. We expect that, when EPA develops responses to fully address significant contribution, it will consider all cost-effective controls from upwind areas, and not just those from a single source sector.  [EPA-HQ-OAR-2009-0491-2694.1 p.8]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, pp.11-12]
Fourth, EPA has indicated that it did not include non-EGU sources because it did not want to delay release of the rule for such an evaluation. We appreciate the EPA's efforts to release the rule as soon as possible, but the omission of non-EGU sources results in only a partial solution to transport, which underlies our concerns in my previous comments. Going forward, we expect the EPA to consider all cost-effective controls from upwind areas, and not just those from a single source sector.
Response:
In the analysis for the final Transport Rule, the rule provides a complete solution to transport for the northeast US.   This is in contrast to the analysis for the proposal, where it appeared that the proposed rule may not provide for a complete solution for some receptor locations in the New York City area.
Organization: Ozone Transport Commission (OTC)
Comment:
Ozone Transport Commission (OTC)
[[2737.1 p.3]]
Finally, OTC is disappointed that EPA chose to exclude non-EGU sources in the remedy outlined in the proposed rule. OTC provides analyses in the attached comments to support their inclusion in the final Transport Rule, based on work conducted jointly with the Lake Michigan Air Di rectors Consortium (LADCO) and the OTC states' own experiences in adopting controls from non-EGU sources. 1t is our expectation that non-EGU sources wi ll be included in Transport 2.
[[2737.1 p.17-18]]
OTC notes with concern that EPA has excluded non-EGU sources in the remedy outlined in the proposed rule, and urges EPA to consider including them in the final Transport Rule. OTC has long held the position that the inclusion of non-EGU sources is a critical component in any pollution transport regulation promulgated by EPA. OTC views reductions from non-EGU sources as a critical component to allowing OTC's member states the ability to meet the upcoming EPA ozone NAAQS, as well as a forthcoming PM standard. Inclusion of non-EGUs would add flexibility and allow for additional cost effective emission reductions. If non-EGU sources excluded in the final rule, OTC expects that they will be included in Transport 2 for the new ozone NAAQS when it is final, and any future transport rules designed for other future NAAQS.
Based on EPA's projected 2020 emission inventory, the national emission inventory for NOx will no longer be dominated by power plants. Emissions of NOx from EGUs will make up approximately 17 percent of the national emission inventory. On-road mobile emissions will make up about 22 percent of the national NOx emissions, and industrial, commercial and institutional (ICI) boilers and cement kilns will make up a combined 13 percent of the national inventory of NOx emissions. The inclusion of non- EGUs into the proposed Transport Rule will provide a much needed boost in NOx reductions, especially in critical locations. In a joint OTC-LADCO evaluation of emission controls for ICI boilers emissions from these sources are found to be significant. Therefore OTC and LADCO worked together to outline proposed levels of control that can be achieved through existing and reasonable technologies to reduce NOx and SO2 from this category of non-EGU sources (attached as Appendix 7).
The inclusion of non-EGU sources into a transport rule provides a needed boost in the reduction of air pollution transport into the hard-to-attain portions of the Northeast. In previous work, OTC modeling showed that inclusion of non-EGU source controls produced significantly more benefits and brought more downwind relief, and predicted attainment with air quality standards for many areas.
The University of Maryland College Park (UMD) completed a screening modeling simulation for OTC to illustratively demonstrate the necessary level of emission reductions needed to show compliance with the 8-hour ozone NAAQS in the potential range for the new ozone NAAQS (60 - 70 ppb). This screening modeling simulation covered a time period from May 17 through August 31, 2007, and used a 2007 proxy emissions inventory with the CMAQ model. The emissions reductions for the screening modeling simulation are based on OTC's recommendation for critical national reductions combined with local Ozone Transport Region (OTR) measures (see OTC Resolution dated 6/3/10, Appendix 8). The emissions reductions were applied across the full modeling domain and include emission reductions taken across entire source sectors as specified below:
Domain-Wide NOx Point Sources: -65% (Represents reductions from ICI boilers, cement kilns, and a 900,000 ton regional trading cap on EGUs) On-road Sources: -75% (Approximates a 2020 national LEV3) Non-road Sources: -35% (Includes reductions from marine and locomotive engines)
VOCs All Source Sectors: -30%
OTC States NOx All Sectors: -5% (Additional reductions only in the OTC states)
future year design value over the 2008 8-hour ozone NAAQS of 75 ppb (a summary of the OTC screening modeling analysis is attached as Appendix 9). OTC believes that inclusion of non-EGUs would be more cost effective than other measures that OTC states have already implemented to achieve the 85 ppb ozone NAAQS and current PM2.5 standard. OTC recommends that EPA seriously consider including non-EGU sources into the proposed Transport Rule.
Response:
As noted in the preamble, this rule address transport under the 1997 ozone standards, and the 1997 and 2006 PM2.5 standards.    Additional future efforts will be needed to address transport under future NAAQS.   EPA appreciates the information on control measures, and we will be reviewing this an other information in those future efforts.
EPA notes that, in contrast to the proposal, EPA considers the final Transport Rule to be a complete solution to addressing ozone transport for the 1997 ozone standards for all of the states in the Ozone Transport Commission region.
Organization: Pennsylvania Department of Environmental Protection
Comment:
Pennsylvania Department of Environmental Protection
Sources other than EGUs represent a significant percentage of the states' NOx and SO2 emissions and contribute to interstate transport problems. Industrial/commercial/institutional (ICT) boilers and cement kilns are the major stationary sources, while highway vehicles, marine engines, and locomotives also provide significant emissions and should be: addressed. EPA should examine all of its authority under the CAA to promulgate: national rules for these sources and any others for which controls at least as effective as those on EGUs can be identified. The OTC and the LADCO have provided an evaluation of potential emission limits and costs for ICT boilers. [EPA-HQ-OAR-2009-0491-2660.1, p.9]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, p.54.]
EPA must also address emissions from non-EGU sources including glass melting furnaces, cement kilns and industrial, commercial, institutional boilers in the 2011 proposal.
We urge EPA to also adopt and implement additional measures to reduce emissions from on-road and off-road vehicles, which account for approximately 52 percent of the NOx emissions in Pennsylvania.
Response:
EPA looks forward to further discussions on priorities for possible emissions reductions to address transport under newer air quality standards.
EPA continues to achieve substantial and continuing reductions from on the books mobile source standards, and EPA is also continually seeking ways to update those mobile source standards.
Organization: State of Delaware Department of Natural Resources & Environmental Control
Comment:
State of Delaware Department of Natural Resources & Environmental Control
Non-EGU Emission Reductions. EPA has requested comments on whether non-EGU emissions reductions should be required and on the specific control measures that would serve as the basis for those reductions. It is Delaware's opinion that EPA should consider requiring emissions reductions for some non-EGU categories. Included in this view are fossil-fuel fired electric generating units with a nameplate rating between 15 MW and 25 MW, fossil -fuel fired co-generation units serving a generator with a nameplate rating of 15 MW or greater, and fossil-fuel fired industrial and commercial (ICI) boilers with a heat input capacity rating of 250 MMBTU/hr or greater. It appears that these categories of units can contribute to air quality excursions and impact a downwind state's ability to attain NAAQS. It is Delaware's experience that the small EGUs (<25MW nameplate) tend to operate most during periods of high electric demand which often coincide with ambient air quality excursions in downwind states. While co-generation units tend to operate with a more constant capacity, there is some data that indicates those units' loading may increase during periods of high electric demand to capitalize on opportunities for increased income from electric sales during high cost periods or to offset the purchase of additional electric at high relative cost. The large ICI boilers also tend to operate with a relatively constant capacity factor, which would also include operation during the periods of high electric demand that may coincide with air quality excursions in downwind states. [EPA-HQ-OAR-2009-0491-2980.1, pp.8-9]
It is Delaware's opinion that cost-effective emissions reduction technologies are proven and commercially available for these types of units. For boilers serving EGUs with nameplate ratings of 15 MW or larger (including co-generation units) or ICI applications, commercially available cost effective controls for retrofit include fuel switching in some cases for S02 and NOx reduction, low-NOx burners and SNCR and SCR for NOx control, and wet and dry scrubbers and sorbent injection for S02 controls. For combustion turbines driving generators with nameplate ratings greater than 15 MW, including both EGU and co-generation application, commercially available cost effective controls for retrofit include fuel switching in some cases for S02 and NOx control, and dry low-NOx burners, water injection, and SCR for NOx reduction. The March 2006 STAPPA/ALAPCO document 'Controlling Fine Particulate Matter under the Clean Air Act: A Menu of Options' provides considerable discussion regarding the applicability of emissions controls for these units.[EPA-HQ-OAR-2009-0491-2980.1, p.9]
Delaware has also experienced some considerable success with its state rulemakings that resulted in control installations similar to those discussed above. One such rulemaking resulted in the addition of water injection for NOx control on all fossil-fired combustion turbines driving electric generators with a nameplate rating greater than 15 MW (but less than 25 MW) that had not been previously controlled. The affected units tend to operate as peaking units and operate primarily during periods of high electric demand. Post installation testing indicated significant NOx emission rate reductions were achieved by all of the affected units. [EPA-HQ-OAR-2009-0491-2980.1, p.9]
Response:
See discussion in preamble section VII.B regarding treatment of small EGUS (less than 25 MW) in revised applicability provisions.
Organization: State of Wisconsin, Department of Natural Resources
Comment:
State of Wisconsin, Department of Natural Resources
While noting the strong need for additional transport remedy, Wisconsin agrees that the current proposed Transport Rule should only apply to the EGD sector. Although additional remedy affecting non-EGU sectors should be committed and scheduled within this federal plan, any such actions should be implemented separate from the EGU sector. This ensures that the proposed transport rule is finalized as expeditiously as practicable and that legal concerns, especially related to non-EGU programs, do not further delay the installation of EGU controls in upwind states. [EPA-HQ-OAR-2009-0491-2829.2, pp.2-3]
Response:
EPA agrees.
Organization: Texas Chemical Council
Comment:
Texas Chemical Council
Furthermore, the EPA proposal states, "if a more protective ozone NAAQS is issued in August, EPA would plan to propose and interstate pollution transport rule for the NAAQS in 2011." 75 Fed. Reg. at 45,228. TCC believes there should not be a rush to promulgate a new Transport Rule for "other sources" because:
- The decision on a revised ozone NAAQS standard has been delayed until October/November 2010 time frame. A thorough analysis of the non-EGU sources in relation to a lower standard would need to be conducted before issuing a new Transport Rule that includes non-EGU sources.
- The same methodology applied to the EGU sources in this proposal will not work for "other sectors." The chemicals sector contains much more diverse emissions sources and emissions profiles than EGUs. [EPA-HQ-OAR-2009-0491-2815.1, p.5]
Response:
EPA agrees that further analysis of non-EGU sources is needed.   Such analysis would be provided before any future rulemakings addressing these non-EGU sources.
Organization: West Virginia Department of Environmental Protection
Comment:
West Virginia Department of Environmental Protection
[[2790.1 p2-3]]
Non-EGU ICI Boilers - West Virginia's non-EGU industrial, commercial and institutional boilers have participated in a seasonal EPA market trading program since 2004. The ICI boiler sources in West Virginia have been good players under the NOx Budget Trading Program, and through their participation under CAlR. Under the proposed Transport Rule, non-EGU sources are not included, nor are EPA's plans to continue similar regulation for these significant sources. It is generally understood that non-EGU ICI boilers and perhaps other non-EGU sources will be addressed by EPA in Transport Rule II.
Because West Virginia repealed its NOx SIP Call rules when transitioning to CAIR (with the full knowledge and consent ofEPA's Region III and Clean Air Markets Division), there appears to be no mechanism that will ensure that seasonal NOx reductions from ICI boilers and continued reporting of NOx emissions under 40 CFR Part 75 will occur in 2012-2014. It should be noted that future emissions reductions from ICI boilers have been accounted for in West Virginia's submitted attainment demonstrations and SIP-approved maintenance plans. WVDAQ believes it is important that ICI boilers continue reporting NOx emissions under 40 CFR Part 75, and that the EPA prevent backsliding from the non- EGU sectors. Such a mechanism will also ensure continuity of data if EPA for some reason does not finalize Transport Rule II. WVDAQ does not consider the opt-in provisions of the proposed Transport Rule to be an appropriate mechanism to define a clear regulatory path or ensure continuity of Part 75 emissions data for non-EGU ICI boilers.
WVDAQ believes that EPA should squarely address the immediate need for guidance or rulemaking which provides a clear regulatory path for large ICI boilers, and their role in interstate transport and significant contribution mitigation issues. If CAIR provisions must cease in 2012, at a minimum, EPA should provide a mechanism to ensure that ICI boilers continue reporting their NOx emissions under Part 75.
Response:
See discussion in preamble section IX.B related to nonEGU NOx SIP call sources that are not covered by this Transport Rule.

IV.D.6.a. Non-EGU SO2 Emissions Sources and Costs

Organization: Council of Industrial Boiler Owners (CIBO)
Comment:
Council of Industrial Boiler Owners (CIBO)
EPA indicates that this Proposed Rule is round one for utilities, based on the 1997 ozone standard. There is currently a newer ozone standard, with another, more stringent standard expected imminently. EPA has stated that it plans for future rounds of emission reductions to meet these tighter standards. EPA announced in this rule that round 2 of the Transport Rule would be proposed in 2011, and finalized in 2012. Round 2 will increase reduction requirements, and unlike this rule, may mandate reductions for industrial boilers. [EPA-HQ-OAR-2009-0491-2751.1]
In this rule, EPA assumes that $500/ton of NOx and $2000/ton of SO2 for annualized costs is considered highly cost effective and should be met by sources. These numbers are already significantly higher than what sources consider to be appropriate costs, and creates a large amount of uncertainty as to what EPA will presume is highly cost effective in, not only round 2, but potential rounds beyond that. EPA has further said that it will use the same methodology used for utilities, when it determines appropriate levels for ICI boilers. This does not appropriately take into account the major differences between the purposes and uses of electric utilities versus ICI boilers. In addition, most utilities are much larger and can pass their costs through to customers, both features that are not shared by ICI boilers. [EPA-HQ-OAR-2009-0491-2751.1]
Response:
EPA believes that these $/ton values are generally considered to be highly cost-effective.    However, any decision on the use of these or other cost cutoffs to evaluate non-utility sources would be accomplished in a separate notice-and-comment rulemaking.
Organization: Massachusetts Department of Environmental Protection
Comment:
Massachusetts Department of Environmental Protection
SO2 Emission Reductions
EPA also seeks comment on whether non-EGU S02 emissions reductions should be required and on the specific control measures that would serve as the basis for those reductions using the $2,000/ton removed cost threshold EPA has applied.5 EPA acknowledges that ICI boilers are among the highest emitting categories  non-EGU S02 emissions.6 However, it discounts the potential emissions reductions from residual or distillate oil-fired boilers, asserting variability in operations makes it difficult to 'identify precise cost per ton estimates for fuel switching.' Non-EGU S02 emissions rival EGU emissions in many states within the Transport Rule region. Residual oil-fired industrial boilers represent 16.5% of the entire 2012 anthropogenic S02 emissions inventory for Massachusetts. [EPA-HQ-OAR-2009-0491-2787.2]
Response:
EPA continues to believe that additional information may be needed to identify precise cost estimates of cost per ton for fuel switching, including fuel switching options for distillate and residual oil-fired industrial boilers.   In addition, EPA notes that this issue for oil-fired boilers is most significant in northeast states such as Massachusetts which are no longer covered by this Transport Rule.

IV.D.6.b. Non-EGU NOx Emissions Sources and Costs

Organization: Massachusetts Department of Environmental Protection
Comment:
Massachusetts Department of Environmental Protection
NOx Emission Reductions For NOx,
EPA assess that it has not been able to identify significant reductions for Industrial, Commercial and Institutional (ICI) boilers and other non-EGU industrial point sources that can be achieved at the $500 per ton cost threshold it is proposing for EGU reductions. (45290) MassDEP believes that EPA has overlooked a significant opportunity to achieve additional emission reductions from ICI boilers and encourages EPA to reconsider the exclusion of these sources. [EPA-HQ-OAR-2009-0491-2787.2]
Response:
EPA intends to evaluate the availability and appropriateness of additional NOx controls for non-EGU source categories in a separate rulemaking.
Organization: Texas Chemical Council
Comment:
Texas Chemical Council
Additionally, the EPA proposal states, "for ozone, EPA determined that a number of states can eliminate their significant contribution and interference with maintenance by installing controls at this same $500/ton cost threshold." 75 Fed. Reg. at 45,290. TCC believes EPA has grossly underestimated the current cost of NOx controls. For example, in the proposal for the new ozone standard, EPA estimated that it could cost anywhere from between $15,000 to $30,000 a ton to make further NOx reductions to meet a lower standard. This is a huge discrepancy in EPA's estimates for NOx controls that needs to be addressed. [EPA-HQ-OAR-2009-0491-2815.1, p.5]
Response:
EPA's conclusion was based upon contributions to the 1997 ozone standard, and did not addressed more recent or anticipated ozone standards.    EPA intends to evaluate NOx control costs and impacts for newer ozone standards in a separate notice and comment rulemaking.

IV.E. State Emissions Budgets (Before Accounting for Variability)

Organization: Adirondack Council
Comment:
Adirondack Council
We believe that it is necessary and appropriate for EPA to adopt state-by-state budgets based upon each upwind state's significant contribution to nonattainment and interference with maintenance and that EPA has chosen the correct levels for determining these criteria. [EPA-HQ-OAR-2009-0491-2848.1, p.2]
Response:
EPA final Transport Rule determines state budgets using a state-by-state analysis to determine each state's significant contribution.
In the final Transport Rule, EPA does not use historic emissions data to set the Transport Rule state budgets, but instead relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule on all pollutants analyzed (including ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
Organization: Alliance for Industrial Efficiency
Comment:
Alliance for Industrial Efficiency
First, states should be allowed to receive credit under the Federal EPA plan for industrial energy efficiency measures that they take. We urge EPA to include output-based emissions standards in the Federal Plan. By setting pollution limits based on each unit of energy produced, rather than the amount of fuel consumed, such standards provide greater incentives for pollution prevention, energy efficiency, and emissions reduction.11 [EPA-HQ-OAR-2009-0491-2682.1 [EPA-HQ-OAR-2009-0491-2682.1 p.2]
Response:
See section VII.D of the preamble for a description of why EPA finalized a historic heat input allocation methodology, and determined that such an approach was reasonable.  EPA also noted that there were certain data limitations that impeded the implementation of a generations based approach such as that described by the commenter.  Furthermore, EPA notes that the initial allocation under a heat input based approach closely tracks that which would be observed under a generation based approach.
Organization: American Clean Skies Foundation (ACSF)
Comment:
American Clean Skies Foundation (ACSF)
EPA should consider the role of fuel-switching as a control technology, whether it is cost effective, and whether state budgets should be accordingly adjusted. The extent to which EPA has sufficiently assessed fuel switching from coal to gas is not clear from the record. For instance, EPA makes a vague reference to looking at control technology cost curves to see how reductions at various cost levels reflect changes in the generation mix, e.g., "dispatch changes, fuel use changes, or installation or operation of controls." [EPA-HQ-OAR-2009-0491-2759.1, p.7]
EPA should explicitly address the costs of fuel switching from coal to gas, which is a vital control technology. In particular, EPA should consider whether there are cost-effective emission reductions from fuel switching that are above the Proposed Rule cost cutoffs: e.g., $500 per ton for NOx. By comparison, EPA previously considered $2,000/ton to be cost-effective for NOx controls under the NOx SIP call. EPA should carefully assess the benefits and costs of fuel-switching from coal to gas, particularly for states that have significant downwind impacts. Tightened budgets in high-emitting states may incentivize cost-effective fuel switching by either increasing the dispatch of existing natural gas units, or removing a subsidy for existing coal units and allowing otherwise economical gas plants to be built. And by tailoring and tightening emission budgets in coal-heavy, high-polluting upwind states, EPA will better meet Congress' statutory directive to address upwind pollution. Such tiering of states by needed emission reductions is already done under CATR for SO2 (with 'Group 1' and 'Group 2' states), and EPA should fully take advantage of cost-effective fuel switching to reduce emissions from high emitting upwind states. [EPA-HQ-OAR-2009-0491-2759.1, p.7]
In the midst of this CATR comment period, EPA released new modeling with updated natural gas supply assumptions that reflect dramatic increases in domestically available natural gas. This new modeling shows that significantly reduced natural gas prices increase natural gas generation and reduce coal generation. EPA has not revised the emission budgets based on these modeling runs, despite the impact that lower gas prices may have on increased fuel-switching in states that have substantial coal-fired generation, particularly those states with old, low-efficiency coal plants that lack modern pollution controls and are the most likely candidates for retirement. With lower natural gas prices and a substantial natural gas resources base, more utilities are expected to switch from coal-fired generation to natural gas. This should lower CATR caps that are set by projecting emission levels and cost-effective emission reductions. [EPA-HQ-OAR-2009-0491-2759.1, p.9]
Response:
EPA's IPM modeling has allowed generation to shift from coal to gas within a state or region to comply with budgets.  Additionally, it has updated its IPM model to reflect the coal to gas conversion at individual units as a compliance option.  See EPA IPMv.4.10 documentation for more discussion on this addition to the IPM modeling and the cost assumptions underlying it.  EPA also re-conducted is multi-factor analysis for final Transport Rule using the updated IPM modeling with the revised gas price assumptions.  The state budgets determined in the final Transport Rule reflect these updates to the modeling assumptions (see section VI.D of the Transport Rule preamble).
Organization: American Electric Power
Comment:
American Electric Power
EPA has understated the direct costs of complying with the budgeted caps, ignoring some of the significant direct costs, including output capacity deratings, and landfill development. EPA has also ignored entirely the enormous indirect costs of its caps, including the indirect costs of fuel switching, unit retirements, and increased energy costs to consumers. [EPA-HQ-OAR-2009-0491-2665.1, p.26]
Response:
EPA has updated its IPMv.4.10 modeling assumptions in response to comments.  Specifically, it has made changes which include cost adders to reflect output capacity deratings that may occur as a consequence of fuel switching.  See EPA IPM.v.4.10 documentation for a full description of the modeling assumptions and updates made in response to comments.  Additionally, see the final Transport Rule RIA for discussion of costs, including social cost, of the final rule.
Organization: ARIPPA
Comment:
ARIPPA
B. EPA's stated basis for determining unit-specific allowance allocations under the Proposed FIP is inappropriate and inequitable as applied to the ARIPPA plants.
As explained above, ARIPPA believes that its facilities should not be subject to the Proposed Rule, on the basis that EPA has not adequately justified a finding of significant contribution as to these sources. Further, to the extent that EPA identifies a justifiable basis to regulate the ARIPPA facilities under the Proposed Rule, EPA's proposed basis for determining unit-specific allowance allocations under the proposed FIP is inappropriate and inequitable. [EPA-HQ-OAR-2009-0491-2794.1, p.7]
EPA has proposed that each state's emission budget would be constructed from a combination of reported data and projected emissions data for the EGUs in that state. See "State Budgets, Unit Allocations, and Unit Emissions Rates", Technical Support Document ("TSD") for the Transport Rule, Dkt. ID No. EPA-HQ-OAR-2009-0491, EPA, Office of Air and Radiation, July 2010, at *3. In turn, each EGU's contribution to the state's budget forms the basis of its specific allowance allocation. Id. [EPA-HQ-OAR-2009-0491-2794.1, p.7]
In determining the proposed allowance allocations for affected EGUs in Pennsylvania, EPA relied on several considerations, including projected emissions. EPA attempts to project emission rates based upon its own assessment, reflective of integration between different modeled projections, of anticipated generating rates in the future. EPA's projections for future generating rates are closely linked to its assumptions concerning the future cost of electricity generation, focusing principally on fuel cost. Relative to the ARIPPA facilities, EPA's consideration of fuel cost is flawed in two important respects. First, EPA incorrectly estimates the cost of coal refuse as a fuel, as reflected by current fuel costs incurred at the point of fuel production. For example, an evaluation of current actual fuel costs for five representative ARIPPA plants yields an average cost of $1.48/MMBtu. One of these plants reports a current actual fuel cost as low as $0.82/MMBtu. These fuel costs are somewhat inflated insofar as they include, in some cases, costs not directly attributable to the cost of fuel, including ash disposal. Nonetheless, these cost figures are still meaningfully lower than the cost estimates relied upon by EPA to project future fuel costs for waste coal. [EPA-HQ-OAR-2009-0491-2794.1, p.7]
Second, EPA's reliance on fuel cost as the primary basis for projecting future generating rates fails to adequately account for numerous other factors affecting generating rates. For example, in Pennsylvania, electricity distribution facilities and suppliers are required to supply a certain percentage of energy from Tier I or Tier II renewable energy sources, irrespective of electricity prices. Therefore, distribution of the generation of electricity will not strictly adhere to lowest cost of generation, as other operative criteria dictate distribution. Because waste coal-generated electricity qualifies as a renewable energy source, waste coal-fired sources will operate at a higher generating rate than cost alone would suggest. [EPA-HQ-OAR-2009-0491-2794.1, p.8]
Additionally, the ARIPPA facilities are subject to contractual agreements pursuant to PPAs and other legal vehicles which dictate minimum or required energy generation and purchase rates, as between these generating facilities and electricity supply and distribution utilities. Pursuant to these agreements, subject to certain allowances for maintenance and downtime, these waste coal-fired EGUs will operate at a certain rate and supply a certain baseload quantity of electricity to the grid, regardless of relative costs of generation. [EPA-HQ-OAR-2009-0491-2794.1, p.8]
These factors, among others, measurably affect generating rates. It does not appear that EPA adequately (if at all) considered these factors in its projections of future generating rates for purposes of determining allowance allocations under the Proposed Rule. [EPA-HQ-OAR-2009-0491-2794.1, p.8]
Further, EPA apparently "predicts" a substantial decline in operating rates for virtually all the ARIPPA facilities, and then uses these predictions to determine allowance allocations for the facilities. By contrast, EPA projects that many larger traditional coal-fired EGUs will increase generating rates in the future, in some cases, substantially. In all cases, these projections are directly inconsistent with the operating history for these plants. This disparity between actual operating rates and those projected by EPA are reflected in the following table: [EPA-HQ-OAR-2009-0491-2794.1, p.8]
[Table 1 can be found on pages 8-10 of this comment.]
Relative to the ARIPPA plants, for the reasons stated above, EPA's projected rates of generation clearly understate reasonable estimations of future operations based on consideration of all relevant factors. Indeed, in many cases, EPA's projections directly conflict with specific contractual obligations undertaken by the plants pursuant to PPAs to supply alternative energy to utility companies at a fixed price. In other words, operation at the rates projected by EPA for purposes of the Proposed Rule would cause certain ARIPPA facilities to breach their contractual obligations. [EPA-HQ-OAR-2009-0491-2794.1, p.10]
C. EPA's approach for determining state emissions budgets overstates the projected downwind impact of Pennsylvania's emissions.
In North Carolina v. EPA, 531 F.3d 896, modified on reh'g, 550 F.3d 1176 (2008), the D.C. Circuit Court of Appeals concluded that Title I of the Clean Air Act requires EPA to develop a regulation addressing the interstate transport of air pollution that is reasonably designed to eliminate significant contribution and interference with maintenance of the National Ambient Air Quality Standards ("NAAQS") from emissions generated in upwind states. See also 75 Fed. Reg. 45271 (EPA recognizes that "reductions required pursuant to section 110(a)(2)(D)(i)(I) must be related to the goal of eliminating upwind state emissions that significantly contribute to nonattainment or interfere with maintenance of the NAAQS in downwind areas"). Indeed, the Court determined to vacate CAIR, in significant part because the Court determined that EPA's proposed regulatory scheme was not reasonably related nor designed to eliminate emissions significantly contributing to downwind nonattainment with the NAAQS. EPA suggests that the Proposed Rule would remedy the deficiencies of CAIR enumerated by the Court. In fact, however, the Proposed Transport Rule is equally suspect when evaluated against the standard articulated by the North Carolina Court. [EPA-HQ-OAR-2009-0491-2794.1, p.14]
Response:
EPA has modified its allocation methodology to existing units in the final Transport Rule to be based on unit-level historic data.  See section VII.D of the preamble for a detailed explanation of how EPA allocates allowances under the Federal Implementation Plans (FIPs) in the final rule.
In regards to concerns about overstating the impact of state budgets on downwind air quality (listed in comment section C), see section IV of the preamble for a discussion of EPA's legal authority for the Transport Rule and how it is responsive to the Court's decision on CAIR.
Organization: Clean Air Task Force
Calpine Corporation
Wisconsin Power and Light Company
Entergy Services, Inc.
Fond du Lac Reservation
Clean Air Board of Central Pennsylvania
National Tribal Air Association (NTAA)
Comment:
Calpine Corporation
The proposed emissions caps are stringent yet attainable. [EPA-HQ-OAR-2009-0491-3614, p.2]
Regarding the individual state emissions caps, we consider it fair to base the individual state caps on historic and projected emissions as determined through dispatch modeling. [EPA-HQ-OAR-2009-0491-3614, p.2]
Clean Air Board of Central Pennsylvania
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, pp.58-59.]
The proposed EPA rule aims to remedy the identified flaws. We hope this proposed rule, as administered, will set real emission reductions for each state.
In implementing this proposal, EPA must ensure that there are tangible emission reductions by electric generating units and reduced levels of ambient fine particulate and ozone.
Clean Air Task Force
EPA must tighten the stringency of the proposed state budgets. The Clean Air Act requires, and the record abundantly supports, more substantial SO2 and NOx reductions from the electric power sector.
We urge the Agency to issue a rule that includes that following adjustments to its August 2 proposal: :reduces the 2014 annual control region NOx cap in to about 900,000 tons (including Texas) [EPA-HQ-OAR-2009-0491-2738.1, p.30]
Entergy Services, Inc.
We support EPA's preferred approach that sets a pollution limit (or budget) for each of the 31 states and the District of Columbia.   [EPA-HQ-OAR-2009-0491-2847.1 ,p.1]
Fond du Lac Reservation
The Band agrees with the more stringent nitrogen oxides ('NOx') and sulfur dioxide ('SO2') standards proposed under the Transport Rule. However, rather than the 1.4 million ton cap on NOx emissions and 2.6 million ton cap on SO2 emissions that the rule currently requires (for the Eastern U.S only), the Band supports a 900,000 ton cap on NOx emissions and 1.75 million cap on SO2 emissions for the entire nation . The ability to limit emissions to these lower amounts exists and would further increase the Rule's benefits which already substantially outweigh its costs. The American Lung Association and Clean Air Task Force also support these tighter limits. [EPA-HQ-OAR-2009-0491-3707, p.1]
National Tribal Air Association (NTAA)
Generally speaking, the NTAA agrees with the calls by other organizations such as the American Lung Association and Clean Air Task Force to establish more stringent nitrogen oxides (NOx) and sulfur dioxide (SO2) standards under the Transport Rule.  Specifically, our organizatin supports a 900,000 ton cap on NOx emissions and 1.75 million cap on SO2 emissions for the entire nation versus what the rule currently requires -- i.e., a 1.4 million ton cap on NOx emissions and a 2.6 million ton cap on SO2 emission, but only for the Eastern U.S. The ability to limit emissions to the former amounts exists and would further increase the Rule's benefits which already substantially outweigh its costs by a substantial degree. [EPA-HQ-OAR-2009-0491-2688.1, p. 2]
Wisconsin Power and Light Company
WPL requests that EPA's final rule evaluation use the highest four consecutive quarters of actual emissions during the 2007-2009 time period, rather than the most recent emissions data. EPA's use of the most recent consecutive actual emissions does not consider EGU outages or extraordinary events that could have affected operation of electric generation units. [EPA-HQ-OAR-2009-0491-2844.1 p.4]
Response:
The final Transport Rule reflects updates to EPA modeling analysis and emissions inventories.  These updates influenced both the final Transport Rule geography and the state budgets ultimately set.  The sum of the state budgets set in the final Transport Rule is less than (tighter) the sum of state budgets in the proposal (for states included in both the proposal and final rule geography.  See section VI of the preamble for how EPA used a multi-factor analysis to determine these budgets.
In the final Transport Rule, EPA does not use historic emissions data to set the Transport Rule state budgets, but instead relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule on all pollutants analyzed (including ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
Organization: Cleco Corporation
Comment:
Cleco Corporation
A. EPA Should Use Reported Data from a Typical Three Year Period to Establish State Budgets and Unit Allocations.
EPA defines state budgets as the quantity of emissions remaining in a state from covered sources after elimination of that state's significant contribution to nonattainment and maintenance problems in an "average" year. EPA's attempts to define this "average" year are fundamentally flawed.  [EPA-HQ-OAR-2009-0491-2859.1 p.8]
Under the proposed rule, EPA sets state budgets based on the lower of total adjusted reported emissions or total adjusted projected emissions from all covered sources in the state. With respect to reported data, EPA uses the most recent "non-null" data for each quarter (first through fourth quarter) from 2007 through third quarter 2009. Louisiana's "average" year for SO2 is essentially reported data from the fourth quarter 2008 to third quarter 2009.16 This period is far from an average year. Beginning in 2008 though 2009, energy demand was down due to the worst economic downturn since the great depression. Further, natural gas prices were extraordinarily low. These facts can dramatically impact fuel choice and dispatch and result in atypical operations. [EPA-HQ-OAR-2009-0491-2859.1 p.8]
Instead of selecting a single year to represent average operations and emissions, consistent with past practice, EPA should use a three year period. It is mathematically impossible to get an average year from a single year's worth of data. A three year period would provide more representative data and would incorporate two full operational cycles for a typical EGU. Given the severe recession which began in 2008 and continued through 2009, we recommend that EPA rely on reported data from 2005 thorough 2007. [EPA-HQ-OAR-2009-0491-2859.1 p.8]
Response:
In the final Transport Rule, EPA does not use historic emissions data to set the Transport Rule state budgets, but instead relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule on all pollutants analyzed (including ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
Organization: Dominion
Comment:
Dominion
EPA's Justification for the 2012 Budgets is Ouestionable
In any event, EPA has not provided reasonable justification for a 2012 initial compliance date for the proposed rule. The emission levels required purportedly are intended to reflect the reductions that would occur anyway (and according to EPA's assertion, evenin the absence of CAIR), although as noted in Section III, serious inaccuracies in EPA assumptions have yielded state emission budgets and unit allocations that significantly overestimate expected reductions. This raises question as to why the 2012 budgets arenecessary since in actuality, CAIR currently remains in place. Furthermore, EPA has not shown that emission reductions beyond those already required by CAIR are necessary by 2012. As noted earlier, EPA's own air quality trend data show that existing controls are working to reduce emissions and improve air quality. In addition, the D.C. Circuit's remand of CAIR did not include or remotely suggest that the overall degree of emission reductions required under CAIR was less than necessary to comply with the requirements of Section 110(a)(2)(D)(i)(I) of the Clean Air Act. [EPA-HQ-OAR-2009-0491-2715.1, p.14-15]
Response:
See preamble section VII.C for more detailed discussion on why EPA finalized budgets for 2012.  EPA disagrees with the commenter's interpretation of the Court's opinion in North Carolina and notes that the Court specifically found the state budgets under CAIR to be flawed, notwithstanding their ability to generally improve air quality.  EPA believes its analysis as presented in section VI of the preamble supports the determination of state budgets for 2012 under the final Transport Rule, and the discussion in preamble section VII.C clearly demonstrates the feasibility of meeting those state budgets by 2012.  Furthermore, EPA disagrees with the commenter that these reductions would occur "in the absence of CAIR."  Section V.B of the final rule's preamble explains why EPA cannot legally rely on CAIR-driven emission reductions when determining the emission reductions legally required by the Transport Rule.
Organization: Duke Energy
Comment:
Duke Energy
EPA Has Failed To Explain Why It Did Not Use 2008 Heat Input Data in Calculating SO2 Emission Budgets.
EPA proposes to set state emission budgets for annual and ozone season NOx and for SO2 based on the quantity of emissions that remain after elimination of significant contribution to nonattainment and interference with maintenance, but before accounting for variability. 75 Fed. Reg. at 45290/2. In its TSD addressing state budgets, EPA explains that it calculated 2012 state budgets using a combination of emissions and heat input data reported to EPA as of 2009 and IPM projections for 2012, each adjusted to reflect emissions control equipment projected by EPA to be in place by 2012. See State Budgets TSD at 3, 5.  [EPA-HQ-OAR-2009-0491-2689.1, p.16]
In that TSD, EPA notes that in creating the state budgets for annual and ozone season NOx, it "rebased" annual and ozone season NOx emissions for units reporting emission data to EPA by using 2008 rather than 2009 heat input. Id. at 9. According to EPA, this adjustment was made "to account for unusually low utilization (or heat input) in 2009." Id. During a conference call on August 30, 2010, however, EPA staff offered a different explanation for this adjustment. EPA staff indicated that the reason EPA used 2008 data was that the IPM projection of how sources operated their NOx controls in 2012 did not align well with the 2009 data but aligned more closely with the 2008 data. [EPA-HQ-OAR-2009-0491-2689.1, p.16]
EPA proposes to set state emission budgets for annual and ozone season NOx and for SO2 based on the quantity of emissions that remain after elimination of significant contribution to nonattainment and interference with maintenance, but before accounting for variability. 75 Fed. Reg. at 45290/2. In its TSD addressing state budgets, EPA explains that it calculated 2012 state budgets using a combination of emissions and heat input data reported to EPA as of 200913 and IPM projections for 2012, each adjusted to reflect emissions control equipment projected by EPA to be in place by 2012. See State Budgets TSD at 3, 5.  [EPA-HQ-OAR-2009-0491-2689.1, p.16]
In that TSD, EPA notes that in creating the state budgets for annual and ozone season NOx, it "rebased" annual and ozone season NOx emissions for units reporting emission data to EPA by using 2008 rather than 2009 heat input. Id. at 9. According to EPA, this adjustment was made "to account for unusually low utilization (or heat input) in 2009." Id. During a conference call on August 30, 2010, however, EPA staff offered a different explanation for this adjustment. EPA staff indicated that the reason EPA used 2008 data was that the IPM projection of how sources operated their NOx controls in 2012 did not align well with the 2009 data but aligned more closely with the 2008 data.   [EPA-HQ-OAR-2009-0491-2689.1, p.16]
Whatever the reason or reasons EPA used 2008 instead of 2009 heat input data for NOx, EPA did not make a similar adjustment for unit-reported SO2 emissions. EPA does not provide any explanation for this differential treatment of the issue between the two pollutants. EPA does, however, state repeatedly in the preamble that it developed the state budgets based on projected emissions "in an average year." See, e.g., 75 Fed. Reg. at 45214/2 ("A state's emissions budget is the quantity of emissions that would remain after elimination of the part of significant contribution and interference with maintenance the EPA has identified in an average year."); id. at 45271/2 (A state's budget "represent[s] the remaining emissions for the state in an average year."); id. at 45292/1 ("EPA has . . . developed state budgets based on its projections of state emissions in an average year."). Both the explanation in the TSD and the explanation offered on the August 30 conference call seem to indicate that 2009 heat input was not an average year, at least for NOx budget purposes. It is far from apparent why, if 2009 heat input was not average for -- and therefore was not used for -- NOx budget purposes, there would be any reason to use it for SO2 budget purposes. Before it proceeds further with this rulemaking, therefore, EPA will need to clarify and provide an adequate explanation for its decision to use 2009 emissions data for SO2. Prior to taking any final action to promulgate a rule, EPA should provide an opportunity for the public to comment on this important matter in light of an adequate explanation by the Agency. [EPA-HQ-OAR-2009-0491-2689.1, p.17]
Duke Energy Recommends that EPA Increase All State Budgets by 3 Percent for the Initial Year of the Program to Offset the Effect of the New Source Set-Aside
If EPA retains the proposed accelerated compliance schedule and continues to overstate the ability of existing emission controls to reduce emissions, Duke Energy recommends that the Agency increase state budgets across the board for NOx and SO2 for 2012 by at least 3 percent. The initial year of any new market based program like the Transport Rule is always challenging as was demonstrated by the Acid Rain, NOx Budget and other programs. This rule will be no exception. The unreasonable compliance schedule and the fact that EPA is currently counting on more emission reductions from existing emission controls than they will be able to deliver will make 2012 exceedingly challenging. As has been demonstrated in the past, sources need to over comply in order to develop some compliance margin to guard against the penalties of non-compliance. This has been the case with Acid Rain, NOx Budget and CAIR. However in each of those programs, there has been a mechanism for sources to earn early reduction credits or some other mechanism to ease the transition into the new program. Because of the haste that it has drafted this rule, and the speed at which it intends to impose it, EPA has unfortunately not developed such an option in this rule making, making matters worse. The 3 percent new source set-aside will further contribute to the stringency of the program for existing sources. Increasing NOx and SO2 state budgets across the board for 2012 will offset the adverse impact of the new source set-aside on existing units. [EPA-HQ-OAR-2009-0491-2689.1, pp.23-24]
EPA Should Use the Average of 2006 - 2008 Reported Heat Input/Emissions on a Unit-By-Unit Basis For Determining Adjusted Reported Emissions.
As discussed in section III E of these comments, in determining adjusted reported emissions which EPA then compares at a state level to projected 2012 emissions to establish state budgets for annual and ozone season NOx and for SO2 for 2012 for all states, EPA utilized 2008 reported heat input and 2009 ozone season emission rates for NOx, and the most recent reported non-null quarter 1; quarter 2, quarter 3, and quarter 4 emissions for SO2 (the most recent reported non-null quarter 1; quarter 2, quarter 3, and quarter 4 emissions for SO2 emissions is typically the 4th quarter of 2008 and the first 3 quarters of 2009).  [EPA-HQ-OAR-2009-0491-2689.1, p.27]
As EPA acknowledges in its TSD addressing state budgets, 2009 was an unusually low utilization, or heat input year.  Duke Energy agrees and believes that the use of 2009 data for determining reported NOx emissions would not have been appropriate. Duke Energy also believes that EPA's use of the most recent non-null quarter 1; quarter 2, quarter 3, and quarter 4 2009 reported SO2 emissions data to determine adjusted reported emissions is not appropriate. Contrary to EPA statements in the preamble that it developed the state budgets based on projected emissions "in an average year," (See, e.g., 75 Fed. Reg. at 45214/2, 2012) state budgets based on the most recent non-null quarter 1, quarter 2, quarter 3, and quarter 4 of reported emissions are anything but average. If EPA's intent is to develop budgets that represent an average year, then it should truly use average reported emissions and heat input data to determine each unit's adjusted reported emissions. Duke Energy recommends that EPA do this by modifying its method of determining adjusted reported emissions for SO2 and for annual and ozone season NOx. [EPA-HQ-OAR-2009-0491-2689.1, p.27]
For purposes of establishing a unit's adjusted reported annual SO2 emissions and adjusted annual and ozone season NOx emissions, and therefore for establishing each state's adjusted reported emissions which are compared to projected emissions, Duke Energy recommends that EPA look across three years of reported data, 2006, 2007, and 2008, and select for each unit the average of the reported data across this period (average annual emissions for SO2 and average non ozone season and ozone season annual heat input for annual and ozone-season NOx). This approach would be much more representative of normal utility operation than the method EPA used to determine adjusted reported SO2 and NOx emissions and would be better described as average than using a single year's data, either 2008 or 2009.15  [EPA-HQ-OAR-2009-0491-2689.1, p.28]
In developing state budgets under the NOx SIP Call and CAIR rules, EPA looked at multiple historical years of reported heat input data. EPA clearly believed this to be appropriate, to minimize unusual operations in any one year. It is therefore confusing why for the PTR, EPA decided to base every unit's reported emissions, and therefore each state's adjusted reported SO2 and NOx emissions, on a single 12 months of data. Due to the severe limitations on trading in the PTR, it is even more important that the budgets and resulting allocations to units must be based on accurate and representative data. That is, the more trading is limited, the more similar the program becomes to a hard cap or command and control program, and improperly set budgets will have significant consequences on individual units that would be less significant under a robust trading program.  [EPA-HQ-OAR-2009-0491-2689.1, p.28]
Footnote 15: While the method of using reported 2008 heat input for NOx is preferable to EPA having used the most recent non-null quarter 1; quarter 2, quarter 3, and quarter 4 of reported emissions, the use of average heat input data over 2006-2008 would yield results more representative of typical operations than using only 2008 data. [EPA-HQ-OAR-2009-0491-2689.1, p.28]
Response:
In the final Transport Rule, EPA does not use historic emissions data to set the Transport Rule state budgets, but instead relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule on all pollutants analyzed (including ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
  Furthermore, any unused new source set-aside allowances will be reallocated to existing sources two weeks before the allowance transfer deadline.  Therefore, they will be available for compliance for their vintage year.  Additionally, as described in section VII.C of the preamble, EPA believes there are multiple ways in which states will be able to comply with their budgets.  EPA has also adjusted its control removal efficiencies which addresses concerns raised by commenter that they were overstated in the proposed modeling.
Organization: Dynegy, Inc.
Comment:
Dynegy, Inc.
Second, by EPA's own admission, if the proposed Transport Rule is finalized in mid- 2011 , no new scrubbers or SCRs could be built and placed into service by 2012. Without the ability to install new controls, compliance options for affected EGUs are limited to unit shutdowns and allowance purchases. Further, while EPA states 'it takes approximately 27 months to build a flue gas desulfurization unit (FGD, or 'scrubber')' and 'approximately 21 months to construct a selective catalytic reduction (SCR) unit', 75 Fed. Reg. at 45273, Dynegy believes that material and skilled labor shortages and outage scheduling issues would significantly lengthen those estimates if dozens of FGDs and SCRs had to be constructed in the near term. A Transport Rule with a start date of no earlier than 30 to 36 months after the rule is finalized would provide affected sources a broader range of compliance options -- including the time needed to install scrubbers and/or SCRs -- and a better chance of achieving compliance in a cost effective manner. [EPA-HQ-OAR-2009-0491-2698.1,p.2]
Response:
See section VII.C of the preamble for a discussion of the compliance options available in 2012 (which include, but are not limited to, those listed above by commenter).  This section of the preamble also discusses the feasibility of advanced pollution control installation for the 2014 compliance period.  Additionally, EPA notes that it does not project any SCR retrofits in response to the final Transport Rule.
Organization: Edison Electric Institute (EEI)
Comment:
Edison Electric Institute (EEI)
The electric power industry already has made significant progress in reducing emissions in NOx and SO2, according to EPA data, even while the nation has consumed more energy and the economy has grown. In fact, national SO2 emissions from power plants in 2009 were 67 percent lower than in 1980, and NOx emissions declined 72 percent over the same time period. Even more impressive is the 80 percent reduction in ozone season NOx emissions in the East. The Proposed Rule will lead to SO2 in most states being reduced by 80-90 percent since 1980. What is truly remarkable is that as these emissions reductions were taking place, the demand for electricity grew 75 percent. [EPA-HQ-OAR-2009-0491-2697.1, pp.3-4]
Response:
The final rule analysis relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule for all pollutants analyzed (ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is preferable to the approach in the proposal which relied on a combination of adjusted historic emissions data and projected emission data.  It is preferable because it more directly links the air quality modeling used to determine at what point significant contribution is eliminated to the budget formation process that limits emissions to those precise levels that would remain following such eliminations.  By directly basing budgets on the emission levels from the final cost threshold arrived at through the multi-factor analysis, the elimination of significant contribution is more accurately reflected in state budgets as opposed to the budget formation method used at proposal.  Additionally, it is more clear and easier to understand and provides a more accurate reflection of the emissions that will remain in the state following the elimination of all emissions identified by EPA as significantly contributing to nonattainment or interfering with maintenance of the relevant NAAQS in another state.  EPA made significant updates to IPM between proposal and final which addressed the concerns expressed by EPA in the proposal regarding the use of projected data for setting the 2012 state budgets.   For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
Organization: Edison Mission Energy (EME)
Comment:
Edison Mission Energy (EME)
[See EPA-HQ-OAR-2009-0491-2707.1, pp.17-22 for additional comments pertaining to EPA's Phase I NOx and SO2 Caps Are Premised On Incorrect Assumptions About The Level Of Emissions Controls Actually Achieved By Existing Emission Controls]
Based on the time available from the start of the comment period, let alone the date EPA proposes to finalize the Transport Rule, there is plainly not enough time for sources to install such upgrade and/or retrofits by 2012, and therefore compliance with the 2012 deadline is not technically feasible. As explained in Section III.B.4 below, EME generally supports EPA's stated objective of establishing Phase I emissions caps that are obtainable using existing controls, but notes that despite its stated objective EPA's Phase I caps do not actually reflect what is attainable with existing controls, and therefore the Transport Rule's Phase I caps should be increased.
Response:
In the final Transport Rule, EPA does not use historic emissions data to set the Transport Rule state budgets, but instead relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule on all pollutants analyzed (including ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
Organization: Environmental Defense Fund (EDF)
Comment:
Environmental Defense Fund (EDF)
e. EPA's Remedial Action under Section 110(a)(2)(D) Must Prohibit Interstate Air Pollution that Contributes Significantly to Nonattainment with or Interferes with Maintenance of the Ozone NAAQS Promulgated in March 2008
EPA must prohibit interstate air pollution on the basis of the 8-hour ozone NAAQS adopted in March 2008. The plain language of section 110(a)(2)(D) is capacious, instructing the Agency to prohibit the covered interstate air pollution "with respect to any such national or secondary ambient air quality standard." 42 U.S.C. § 7410(a)(2)(D)(I) (emphasis added). The term "such" in turn refers to section 110(a)(1) which triggers delineated state planning obligations under section 110 "after the promulgation of a national primary ambient air quality standard (or any revision thereof) under section 7409 of this title for any air pollutant." 42 U.S.C. § 7410(a)(1). Accordingly, the promulgation or revision of a NAAQS under section 109 for any air pollutant brings into force the prohibitions on interstate spillovers with respect to any such NAAQS. See also New York v. EPA, 443 F.3d 880, 885-86 (D.C. Cir. 2006) (holding the customary usage of the word "any" is to give the terms it modifies expansive meaning). EPA may not, by contrast, strip away the basic human health protections associated with the March 2008 NAAQS by ignoring its force. EPA must also be prepared to take prompt action to carry out the prohibitions under section 110(a)(2)(D) based on any decision to strengthen or revise the March 2008 ozone NAAQS. [EPA-HQ-OAR-2009-0491-2834.1 p.9]
Though EPA has stayed the 2008 ozone NAAQS for the purpose of attainment and nonattainment area designations during the interim reconsideration period,25 EPA itself has determined that such designations are unnecessary for carrying out EPA's remedial authority pursuant to CAA § 110(a)(2)(D). The promulgation of the revised NAAQS alone triggers states' rights and responsibilities under these protections. [EPA-HQ-OAR-2009-0491-2834.1 p.9]
Both the language and purpose of the statute support this interpretation. First, § 110(a)(1) requires all states to adopt and submit SIPs "within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof)."26 Every SIP must conform to the requirements of § 110(a)(2),27 including § 110(a)(2)(D)(i)(I). Because sections 110(a)(1) and (a)(2) apply to all states, regardless of their designation status, states' duty to comply with § 110(a)(2)(D) must be triggered simply by the promulgation of a new or revised NAAQS rather than the process of attainment and nonattainment area designations. This interpretation of § 110(a)(2) is bolstered by the fact that those sections of the CAA that take effect only after nonattainment area designations have been made explicitly mention such designations as a necessary condition to their operation.28 [EPA-HQ-OAR-2009-0491-2834.1 p.10]
Additional textual support for this interpretation of § 110(a)(2)(D) can be found in the language of § 110(a)(2)(D)(i)(I). Under § 110(a)(2)(D)(i)(I), states are required to submit SIPs containing adequate provisions prohibiting emissions activity within the state that will "contribute significantly to nonattainment in . . . any other State."29 When Congress intended a particular provision of the CAA to apply only to areas that have been formally designated nonattainment under § 107, they used the term "nonattainment area."30 The use of the word "nonattainment" in § 110(a)(2)(D)(i)(I) rather than the term "nonattainment area" suggests that this section does not depend on an area's formal designation status, but rather the actual air quality of the area. [EPA-HQ-OAR-2009-0491-2834.1 p.10]
This understanding of § 110(a)(2)(D) comports with the underlying purpose of the provision, which is to ensure that downwind states are not unfairly burdened in their attempt to attain NAAQS by pollutants emitted by upwind states. The formal nonattainment designation process triggers SIP requirements under § 172(c) for the states in which those nonattainment areas are located. If these areas are unable to attain solely as a result of emissions from upwind states, their efforts to comply with § 172(c) will represent precisely the kind of unfair burden on downwind states that § 110(a)(2)(D) was meant to alleviate. [EPA-HQ-OAR-2009-0491-2834.1 p.10]
EPA itself recognized the expansive protections under § 110(a)(2)(D) in carrying out its defense of its actions under the NOx SIP Call Rule,31 noting that "no air quality purpose will be served (32) by waiting for nonattainment designations and that "taking action now is necessary to protect the public health."33 Accordingly, EPA must address the 2008 ozone NAAQS in determining the necessary emissions reductions under the Transport Rule and take expeditious action to address interstate air pollution upon the promulgation of any new or revised ozone NAAQS in the pending reconsideration proceeding. [EPA-HQ-OAR-2009-0491-2834.1 p.10]
Response:
On January 19, 2010, EPA proposed revisions to the 8-hour ozone NAAQS that the Agency had issued March 12, 2008 (75 FR 2938); the Agency intends to finalize its reconsideration in the summer of 2011.  EPA intends to propose a rule to address transport with respect to the reconsidered 2008 ozone NAAQS as expeditiously as possible after reconsideration is completed. See section III of the preamble for additional discussion.
Organization: Environmental Law & Policy Center
Comment:
Environmental Law & Policy Center
[These comments were submitted as testimony at the Chicago, Illinois public hearing on August 19, 2010.  See Docket Number EPA-HQ-OAR-0491-1746, p.78.]
We also urge EPA to go even further. The Rule seems to lessen the pollution-control obligations of several states in the midwest as compared CAIR.
Iowa, Missouri and Wisconsin will have sulfur dioxide and annual nitrogen oxide reductions, not seasonal reductions, and this seems counterintuitive.
Response:
See EPA response to commenter concern over potential backsliding in section VI.D of the preamble.
Organization: Exelon
Comment:
Exelon
EPA SHOULD REDUCE ANY STATE BUDGET UNDER THE TRANSPORT RULE TO THE LEAST OF (1) HISTORICAL EMISSION LEVELS, (2) THE STATE'S EXISTING CAIR BUDGET, OR (3) THE LEVEL ACHIEVABLE BASED ON EPA'S RECENTLY REVISED IPM MODELING ASSUMPTIONS.
In some cases, the budgets under the proposed Transport Rule are less stringent than those established under the rule that is being replaced. At the Philadelphia public hearing on the Transport Rule proposal, a representative of the PADEP testified that the technical support document that sets forth state emissions budgets establishes budgets for Pennsylvania that exceed those established and currently in effect under CAIR for annual and ozone-season NOX and for 2012-2013 SO2. Indeed, a comparison of Transport Rule budgets with CAIR budgets shows that this is the case for many proposed state NOX and SO2 budgets. CAIR presently remains in effect, and fossil fuel EGU owners have certainly been planning to comply with its limitations. Therefore, it is presumably feasible and cost effective for each CAIR state to achieve emissions budgets under the Transport Rule that it is already committed to achieving under CAIR. [EPA-HQ-OAR-2009-0491-2666.1, pp.27-28]
As noted above, EPA is legally obliged to establish state budgets that will eliminate upwind contribution to downwind nonattainment "as soon as practicable." It is clearly practicable to achieve historical emission levels, which have, by definition, already been achieved. It is clearly practicable to achieve budgets established under CAIR, which has been the law for five years. It is clearly practicable to achieve lower emission budgets developed using EPA's most current set of modeling assumptions. Each of these budget options is practicable, but only the lowest budget will comply with the court's demand that EPA's program achieve attainment "as soon as practicable." 53 EPA should, therefore, reduce the 2012 and 2014 budgets where they exceed the lowest of these three options. [EPA-HQ-OAR-2009-0491-2666.1, p.29]
[For additional comments pertaining to EPA SHOULD REDUCE ANY STATE BUDGET UNDER THE TRANSPORT RULE TO THE LEAST OF (1) HISTORICAL EMISSION LEVELS, (2) THE STATE'S EXISTING CAIR BUDGET, OR (3) THE LEVEL ACHIEVABLE BASED ON EPA'S RECENTLY REVISED IPM MODELING ASSUMPTIONS, see pp.27-29 of this comment summary]

53 Individual unit allowance allocations should be reduced pro rata to reflect the additional reductions required. With the alternative compliance mechanism and the alternative allocation mechanism, these reductions can readily be implemented within the existing framework of the Transport Rule.
Response:
EPA has revised its process for determining state budget.  As suggested by the commenter, EPA used its recently revised IPM model with updated assumptions for determining the final state emission budgets.
In the final Transport Rule, EPA does not use historic emissions data to set the Transport Rule state budgets, but instead relies on projected emissions data under the marginal cost thresholds selected to define significant contribution and interference with maintenance.  EPA uses the same budget-setting methodology in the final rule on all pollutants analyzed (including ozone-season NOx, annual NOx, and SO2).  EPA believes this budget-setting methodology is more clear and easier to understand in connection with the Agency's modeling projections.  EPA believes the state budgets set under the final Transport Rule are an accurate reflection of its modeling of the removal of emissions identified as significant contribution and interference with maintenance from the states controlled.  For a discussion of this method and its results, please refer to section VI of the preamble for the final Transport Rule as well as the Significant Contribution and State Emissions Budgets Final Rule Technical Support Document.
Organization: Exxon Mobil Corporation
Comment:
Exxon Mobil Corporation